Subscribe for legal news in infographics!

Espinoza v. Montana Department of Revenue (Decision June 30, 2020)

Justices to address Montana’s efforts to keep state funds from religious schools

In the United States Supreme Court

ArgumentJanuary 22, 2020
DecisionJune 30, 2020
Petitioner BriefKendra Espinoza, et al.
Respondent BriefMontana Department of Revenue, et al.
Opinion BelowCourt below: Supreme Court of the State of Montana
Supreme Court of the State of Montana

Case Decision

On June 30, 2020, the Supreme Court ruled in favor of Espinoza, reversing the ruling of the Montana Supreme Court. The Montana constitutional provision cannot prohibit the school scholarship program from benefiting religious schools.

Scroll down for our Decision Analysis.

January 20, 2020

Montana established a tax credit program that allows people to donate to a scholarship fund for students attending private schools. In return, the taxpayer receives a matching tax credit of up to $150. The scholarship fund provides scholarships to private school students, including those who attend religious private schools.

Montana’s Department of Revenue was tasked with administering the tax credit program. When it began working to carry out the program, it realized the program — as written by Montana’s legislature — came into conflict with the Montana Constitution.

The Montana Constitution includes a provision called the “Blaine Amendment.” The Blaine Amendment prohibits the state from using any state funds to “directly or indirectly” benefit a sectarian/religious purpose. The tax credit program planned to disburse scholarships to be used at private religious schools, which would indirectly benefit sectarian purposes.

To address the conflict with the Montana Constitution, the Montana Department of Revenue issued a rule, called “Rule 1.” Rule 1 said that the scholarship program could not fund scholarships at religious schools. The tax credit program would fund scholarships at nonreligious private schools only.

The lawsuit

Parents of children who attend religious private schools sued the Montana Department of Revenue. They argued that Rule 1 violates the U.S. Constitution. Rule 1 acts with hostility towards religion, which the Constitution does not allow. Of course, the plaintiffs admit, the Establishment Clause says the government cannot endorse religion or any particular religion, but the government can act neutrally towards religion. That’s what the tax credit program did originally, by not making a distinction of religion at all.

Plaintiffs continue that the First Amendment contains another requirement to ensure the Free Exercise of religion. Ensuring free exercise, thus, means the government cannot single out religious schools and forbid the tax program from benefiting them. Rule 1 does just that, whereas the original tax program acted neutrally towards religion.

The plaintiffs point to the Equal Protection clause too: the government cannot treat religious groups differently than non-religious groups. When the Blaine Amendment goes so far as to prohibit a neutral tax program from benefiting people based on their religion, then it has been used unconstitutionally. The United States Constitution prevails over the Montana Constitution, which means, as the plaintiffs argue, Montana’s Rule 1 is invalid.

Tension between the Free Exercise Clause and the Establishment Clause

The Establishment Clause requires the government to stay out of religion, and the Free Exercise Clause tells the government to ensure people can practice freely. How can the government both avoid religion and uphold it at the same time?

Artboard 3150.png

The answer depends on how strictly one interprets the Establishment Clause. How strong must the “wall of separation” between the government and religion be?


The government cannot sponsor “excessive entanglement” with religion, but does that mean the government can’t ever indirectly benefit any religious purposes?

The Blaine Amendment

Montana’s Blaine Amendment imposes a strong interpretation of the wall between the government and religion. No government money can cross the wall.


Is it possible that the wall of separation required by the Blaine Amendment is so strong as to come into conflict with Free Exercise and other parts of the Constitution? The plaintiffs are not asking the Supreme Court to invalidate the Blaine Amendment entirely, but they argued to the trial court that the Montana Department of Revenue’s use of the Blaine Amendment to make the tax program “hostile” towards religion was unconstitutional.

Procedural history

In the trial court, the plaintiffs won. The Montana trial court ruled that the Department of Revenue’s Rule 1 violated the U.S. Constitution by excluding religious schools from the tax credit program.

However the Montana Supreme Court reversed the ruling. The Montana Supreme Court ruled that the tax credit program as originally written violated the Blaine Amendment. Thus, the court invalidated the original tax credit program. It said the Montana Department of Revenue didn’t even have the authority to create Rule 1 because Rule 1 was a significant departure from what the legislature intended. The Montana Supreme Court left the state without a tax program to fund school scholarships at all. Not for religious schools and also not for nonreligious schools.

Question in the Supreme Court

The plaintiffs were not happy with the ruling by the Montana Supreme Court. They appeal now to the Supreme Court, saying the Montana Supreme Court’s ruling is also hostile towards religion. The Montana Supreme Court invalidated an entire tax program — a religiously-neutral one — just because students have the choice to use the scholarships at religious schools. Like Rule 1, that action is hostile towards religion, the plaintiffs claim, and they petition the Supreme Court for help.

Defending the Montana Supreme Court ruling, the Montana Department of Revenue says the plaintiffs cannot complain of being treated unfairly because now no one has a tax program. It’s not discriminatory towards religion because the program is erased. It can’t violate the Equal Protection clause because the non-program treats everyone equally.

This is different than the situation in Trinity Lutheran Church v. Comer, Montana argues, where the Supreme Court invalidated a Missouri rule prohibiting public funds from resurfacing a playground at a church daycare. In Trinity Lutheran, the public funds were going to resurface playgrounds at some schools, just not religiously-affiliated ones. In contrast, in this case, there’s no money going anywhere, so the current state does not offend the Constitution.

The Supreme Court will hear arguments on January 22, 2020.



Montana cannot strictly ban state funds from benefiting religious schools

On June 30, 2020, the Supreme Court ruled that a Montana constitutional provision functioned in violation of the U.S. Constitution. The Montana provision was used to block a state scholarship program from benefiting private religious schools while private non-religious schools could receive the funds. In a 5-4 decision, the Supreme Court held that the exemption of religious schools from receiving funds violated families’ rights to free exercise of religion.


Montana created a school scholarship program to help students attend private schools in the state. The state incentivized donations into the program by offering tax credits to donors.

Several students wished to use the scholarships to attend private religious schools. However, once the state realized the program would direct funds to religious schools, it determined the program conflicted with a provision in the Montana State Constitution called the “no-aid” provision.

The no-aid provision does not allow any state funds to “directly or indirectly” benefit a sectarian/religious purpose. Since the scholarship program would dispatch funds to religious schools, it would indirectly benefit a religious purpose. Thus, Montana amended the scholarship program and would not allow students to use the funds to attend religious schools.

The students who wished to use the scholarship funds to attend religious schools, one of whom already had received a scholarship under the program, sued. They argued the program’s exception of religious schools violated their rights to Free Exercise of Religion under the U.S. Constitution. They should be able to choose the school of their choice, the students argued, and the state discriminated against them based on their choice to attend religious schools.

The Supreme Court accepted the case to review whether the exemption of religious schools violates the Free Exercise clause of the U.S. Constitution.

The majority opinion

Chief Justice Roberts wrote the 5-member majority opinion. The Court held that the no-aid provision cannot be used to exempt religious schools from receiving the scholarship funds while non-religious schools can receive the funds. The no-aid provision’s strict prohibition against awarding funds to religious schools violated the U.S. Constitution.

Roberts stated that the First Amendment allows people to freely exercise religion. The Free Exercise clause prohibits the state from discriminating against people based on their religious views. Following from the Free Exercise clause, Roberts said, is that a state may not specifically exempt a person from benefiting from an otherwise generally applicable state program just because that person chooses to attend a religious school.

The opinion relied on a Supreme Court decision from 2017. In Trinity Lutheran Church v. Comer, the Court ruled that a state program which provided funds to nonprofits to resurface school playgrounds could not exempt religious schools from getting playground resurfacing aid. The Court said the law functioned to discriminate against a church simply because it was a church, a religious institution. In Trinity Lutheran, the Court applied the “strictest scrutiny to evaluate whether the prohibition could stand. Like in that case, the Court would apply the strictest scrutiny here.

To defeat the strictest scrutiny review, the Court stated, the government action “must advance ‘interests of the highest order’ and must be narrowly tailored in pursuit of those interests.” Roberts rejected the state’s contention that its exemption of religious schools from the program served the purpose of actually advancing religious liberty (i.e. that by separating church and state, the state advances a policy of religious neutrality and encourages freedom of religion). Roberts also considered whether the state’s purpose could be to advance Montana’s interests in public education by ensuring that funds go to state schools. But the program does benefit other private schools, Roberts said. Thus, once it does that, it must remain neutral toward religion and allow religious private schools to participate just like non-religious ones.

Lastly, the Court considered the current condition of the program. Before reaching the Supreme Court, the Montana Supreme Court actually struck the scholarship program in its entirety. It ruled that the no-aid provision did not allow the program to exist in its original form — the form that allowed religious schools to participate. So, given that the program benefits no schools, not religious ones, and not non-religious ones, isn’t it now religiously neutral?

Not so, the majority ruled. The only reason the program was stricken was because of the no-aid provision, an action this Court rules invalid based on the U.S. Constitution. So the rationale of the Montana Supreme Court in striking the original program cannot stand.

Based on the majority decision, the program exists in its original form. And the state cannot use the no-aid provision of the Montana Constitution to amend the program to exclude religious schools.


Justice Thomas concurred in the majority opinion and wrote a separate opinion joined by Justice Gorsuch. Thomas wrote to clarify his interpretation of the Establishment clause and his concern for the Court’s current precedent on the conflict between Establishment and Free Exercise.

Justice Alito concurred in the majority opinion and wrote separately to note the history of the no-aid provision, which emerged from a period of discrimination against religious practices.

Justice Gorsuch concurred in the majority opinion and wrote separately to parse through the basis of religious discrimination in this case and in Trinity Lutheran: between discrimination based on religious status and discrimination based on religious use.

Dissent: Ginsburg

Justice Ginsburg wrote a dissent on behalf of herself and Justice Kagan. She argued that the Montana Supreme Court’s decision invalidating the program entirely should stand. The program does not exist after the Montana Supreme Court decision, and so the state treats religious and non-religious schools neutrally. The government cannot be faulted for neutral governmental action just because it fails to benefit religious exercise.

Ginsburg addressed the majority’s point that the Montana Supreme Court relied on the invalid no-aid provision to strike the program, which was an improper move and cannot be left to stand. But, Ginsburg points out, the no-aid provision was not invalid on its face. It was only invalid as used to create an exemption for religious schools. The Montana Supreme Court, however, did not use it to give differential treatment. It used the no-aid provision only to strike the law entirely, from its original neutral state. Thus, no differential treatment was caused pursuant to the Montana Supreme Court’s decision. The exemption of religious schools had not yet been implemented from where the Montana Supreme Court struck it.

Dissent: Breyer

Justice Breyer wrote a dissent on behalf of himself and Kagan. Breyer acknowledged that it’s very complicated for the government to both support religious exercise and also to remain neutral towards religion as the Establishment Clause demands.

Breyer argues that, in a state’s efforts to be neutral toward religion, it should be allowed to exempt certain especially religious endeavors — like religious education — from funding. He points to a different Supreme Court case: Locke v. Davey that he argues applies instead of Trinity Lutheran. In Locke v. Davey, the state of Washington was allowed to fund scholarships for college with the exception of degrees that were “devotional in nature or designed to induce religious belief.” The Supreme Court allowed Washington to create that exception, and Breyer argues the case is applicable here.

Breyer argues that the discrimination in this case is not actually status-based (being a religious school) like the majority characterizes it, but it’s about what the schools do with the state support. In this case, unlike in Trinity Lutheran, the schools would use it for religious education, which is something states may exempt from receiving state grants. He clarifies that he still believes that schools can fund certain elements of religious education, if they do so correctly. But they are not mandated to fund religious education just because they fund non-religious education, as the majority rules.

Dissent: Sotomayor

Justice Sotomayor dissents, arguing that the majority should not have addressed the constitutionality of the no-aid provision as a whole because the parties in the case did not request facial challenge. The petitioners only requested the Court to review the application of the no-aid provision. The Montana Supreme Court did not use the no-aid provision to mandate differential treatment for religious schools; it used the clause to strike the program entirely, which is valid. The Free Exercise clause does not require a state to enact a program just because it might benefit religious schools, she argues.

Sotomayor also argues that the majority is wrong to say that a state program that funds non-religious institutions cannot exempt a religious one just based on its religious status. She says governments have always been able to single out religious purposes from receipt of state aid, in respect of the Establishment Clause. “[A] State’s decision not to fund religious activity does not disfavor religion; rather, it represents a valid choice to remain secular in the face of serious establishment and free exercise concerns.”

Espinoza v. Montana Department of Revenue (Decision June 30, 2020)

Share your Thoughts

About the Author

Mariam Morshedi

Mariam Morshedi

Mariam Morshedi is the Founder and Executive Director of Subscript Law. Before starting Subscript Law, she practiced civil rights law for AARP Foundation, where she litigated housing, consumer and disability rights issues.

Share this Article

Share on facebook
Share on twitter
Share on linkedin
Share on email

Latest Articles

Interested in becoming a contributor?

We’re on the lookout for lawyers who share our passion for teaching legal issues. Write about the Supreme Court case or legal topic of your expertise. We’ll provide the infographic, and you’ll get the recognition.