U.S. Supreme Court Holds that Constitution Prohibits City of Philadelphia from Refusing to Contract with Private Foster Care Agency that Would Not Place Children with Married Same-Sex Couples

In many jurisdictions, including Philadelphia, the government relies on private foster care agencies to place foster children with suitable families.  However, the City of Philadelphia (the “City”) had a policy of refusing to contract with private foster care agencies that will not place children with same-sex couples. Catholic Social Services (“CSS”), a private foster care agency, refuses to place children with same-sex married couplies.  So, what wins out – religious freedom or the goal of preventing discrimination based upon sexual orientation?  The United States Supreme Court answered that question — kind of — in Fulton v. City of Philadelphia, No. 19-123 (Jun. 17, 2021).

There, CSS and three affiliated foster parents filed suit seeking to enjoin the City’s refusal to place children with CSS on the grounds that the City’s policy violated the Free Exercise and Free Speech Clause of the First Amendment.  Catholic Social Services (“CSS”) holds a religious belief that marriage is a sacred bond between a man and a woman, and that certification of prospective foster families is an endorsement of their relationship. Therefore, CSS will not certify unmarried couples, regardless of their sexual orientation, or same-sex married couples, as foster parents. CSS did not object to certifying gay or lesbian individuals as single foster parents or to placing gay and lesbian children with foster families. No same-sex couple has ever sought certification from CSS. If one did, CSS would direct the couple to one of the more than 20 other agencies in the City, all of which currently certify same-sex couples. For over 50 years, CSS successfully contracted with the City to provide foster care services while holding to these beliefs. As a result of CSS’s policy, the City refused to contract with CSS as a private foster care agency, after such policy came to light through a newspaper article.  The City defended arguing that CSS’s policy violated the non-discrimination provision in CSS’s contract with the City and also violated the non-discrimination provision in the City’s Fair Practices Ordinance.  The United States District Court for the Eastern District of Pennsylvania and United States Court of Appeals for the Third Circuit both sided with the City on the basis that the contractual provision and ordinance were facially neutral and generally applicable and, therefore, did not violate the First Amendment pursuant to precedent established in Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U. S. 872 (1990).

The Supreme Court, in a unanimous decision issued on June 17, 2021 (although with several four separate opinions by the justices), disagreed and reversed the decision of the Third Circuit. The Court explained that its prior decision in Smith was inapplicable because the City has burdened CSS’s religious exercise through policies that were not neutral and generally applicable.  The Court explained that a law is not generally applicable if it invites the government to consider the particular reasons for a person’s conduct by creating a mechanism for individualized exemptions. The Court held that the City’s position was not generally applicable because the contract at issue permitted exceptions, at the sole discretion of the City, to the requirement that private foster care agencies may not discriminate based on parents’ sexual orientation. Moreover, the Court held that the City’s Fair Practices Ordinance did not apply because the ordinance only applies to “goods, services, facilities, privileged, advantages or accommodations [that] are extended, offered sold, or otherwise made available to the public,” and certification as a foster parent is not readily accessible to the public since it involves a customized and selective assessment.

Since Smith did not apply, the Court held that the City’s position was subject to “the most rigorous of scrutiny,” such that the City must show that its position is supported by a “compelling interest” and is “narrowly tailored to achieve those interests.”  The Court explained that the City’s actions burdened CSS’s religious exercise by forcing it to either curtail its mission or to certify same-sex couples as foster parents in violation of its religious beliefs, and held that the City failed to meet its burden because it did not have a compelling reason to refuse to contract with CSS.  Attempting to prevent discrimination on the basis of sexual orientation was insufficient.

It is unclear what would occur if the City removed the discretionary exception language from its contract. Would the City’s policy then be fully “generally applicable” under Smith and not a violation of the First Amendment?  According to opinions concurring in the judgment submitted by Justices Gorusch, Thomas and Alito, it shouldn’t make a difference and, moreover, the decision in Smith was wrong in any event and should be “corrected.”  The five-justice majority of Justices Breyer, Sotomayor, Kagan, Kavanaugh, and Barrett may disagree, although Justices Barrett, Kavanaugh and Breyer, who were in the majority, submitted a concurring opinion stating that they are currently unsure whether Smith was correctly decided or not.  Only time will tell.