The Trinity Lutheran Church Child Learning Center in Missouri is a preschool and daycare center, operating with Trinity Lutheran Church on its property. In 2012, the Center sought to replace the gravel on its playground with a rubber surface by participating in Missouri’s Scrap Tire Program. The Program, run by the State’s Department of Natural Resources, offered grants to qualifying nonprofit organizations that install playground surfaces made from recycled tires. Due to limited grant money, the Department awards the grants on a competitive basis to nonprofit organizations scoring highest based on several criteria. The Trinity Lutheran ranked fifth among the 44 applicants. Despite its high score, the Trinity Lutheran was deemed ineligible to receive a grant because of the Department’s policy of denying grants to any applicant owned or controlled by a religious entity.
Trinity Lutheran sued in Federal District Court, alleging that the Department’s policy violated the Free Exercise Clause of the First Amendment. The District Court dismissed the suit, holding that, while the Free Exercise Clause prohibits the State from restricting religious exercise, it did not require the State to fund programs at religious institutions. The Court of Appeals for the Eighth Circuit affirmed.
The Supreme Court reversed the judgment, holding that the Department’s policy violated the rights of Trinity Lutheran under the Free Exercise Clause. Importantly, the parties agreed that the State could have provided the grant without running afoul of the Establishment Clause — the question was limited to whether the State could consider religious status in its grant program. The Supreme Court held that the State could not. It reasoned that the Free Exercise Clause prohibits states from denying a generally available benefit solely on account of religious status. To do otherwise imposes a penalty on the free exercise of religion and thereby discriminates against religious exercise. The Supreme Court distinguished cases in which the Court rejected free exercise challenges to neutral laws which do not single out the religious for different treatment. Missouri’s policy here penalized entities solely because they were religious.