Trinity Lutheran is highly important for all religious institutions. True, the immediate issue in the case was mundane: whether a church-owned school could compete on equal terms for a state grant that would reimburse it for resurfacing its playground with rubber from recycled tires. But the core, underlying question for religious institutions was how broadly or narrowly the Court would construe its prior decision in Locke v. Davey. In Locke, the Court in that case sustained against a free exercise challenge a Washington policy that denied generally available scholarship money to a student who wanted to use it for a theology degree as a prelude to becoming a minister.
Although Locke could be read narrowly—as allowing governments to discriminate against people and institutions of faith only when such discrimination was supported by a long-standing tradition dating to the founding era—some lower courts had read the decision more broadly, specifically, as allowing religious discrimination whenever the government had any legitimate “anti-establishment interest” in avoiding the funding. And some of those decisions had sanctioned religious discrimination directed at religious education. One of those, by the Kentucky Supreme Court, in University of the Cumberlands v. Pennybacker, denied otherwise generally available state bond financing to a religious college on the basis of Locke.
As Justice Thomas pointed out in his concurrence, Trinity Lutheran construed Locke “narrowly.” In so doing, it articulated a free exercise-based neutrality principle that will be very helpful to religious institutions in the future: A government, the Court held, cannot discriminate against religious institutions based solely upon the institution's “religious character.” Thus, for example, although the Court didn't specifically single out Pennybacker, the reasoning in that decision was effectively invalidated by the analysis in Trinity Lutheran.
The Court thus made it very difficult for any government to engage in the kinds of discrimination against religious education at issue in Pennybacker and in other situations affecting religious colleges and universities. Those situations include anti-religious discrimination in such things as:
- allocation of scholarship funds (other than use of scholarships specifically to train ministers, as in Locke);
- credit transfer policies;
- tax exemptions; and
- government contracts.
Indeed, even the dissenting Justices – in an opinion written by Justice Sotomayor and joined by Justice Ginsburg – didn't dispute the application of the majority's anti-discrimination principle to separately incorporated religious educational institutions. The dissent's only beef with the majority's rule was that it may sometimes result in governments providing funds directly to “churches.”
Trinity Lutheran leaves open the important question of whether and to what extent religious institutions can be discriminated against based upon religiously motivated conduct: The Chief Justice's majority opinion – on behalf of six Justices – is expressly limited to discrimination based on religious status. (That's the main point of his much-discussed footnote 3, which technically isn't part of the Court's decision.) But as Justice Gorsuch's concurring opinion notes—without contradiction from the other Justices—the First Amendment also imposes severe constraints on a government's ability to discriminate based on religiously motivated conduct. And given the context of lower court decisions that had over-read Locke to permit a wide range of religious discrimination, the Court's denunciation of status-based discrimination in Trinity Lutheran will be very relevant in future cases regarding governmental discrimination based in any way on religion.