February 25, 2020

Espinoza v. Montana Department of Revenue


Did the Montana Supreme Court Violate the Constitution When It Struck a State Program That Offered Montanans Dollar-for-Dollar Tax Credits for Donations to Private Schools, Including Religious Schools, for the Purpose of Paying Student Tuition?


In 2015, the Montana legislature enacted a program that provided a dollar-for-dollar tax credit for taxpayers who made a donation to a Student Scholarship Organization. The Student Scholarship Organization, in turn, would provide scholarships to students to attend private schools, including private schools affiliated with a religion. The Montana Supreme Court ruled that the program violated a state constitutional provision that bans the use of public funds to support religious activities. The court struck the program, and this appeal followed.

Docket No. 18-1195
Argument Date: January 22, 2020
From: The Montana Supreme Court
by Steven D. Schwinn
University of Illinois Chicago John Marshall Law School, Chicago, IL


The plaintiffs argue that the Montana Supreme Court ruling violates the Religion Clauses in the First Amendment and the Equal Protection Clause in the Fourteenth Amendment. In particular, they claim that the ruling discriminates against religion in violation of the Free Exercise Clause; that its purpose and effect discriminate against religion in violation of the Establishment Clause; and that it is based on impermissible animus against religion in violation of the Equal Protection Clause.


Did the Montana Supreme Court violate the Free Exercise Clause, the Equal Protection Clause, or the Establishment Clause when it struck a state program because the program provided dollar-for-dollar tax credits for donations to private schools, including religious schools, to pay for students’ tuition?


In 2015, the Montana legislature enacted a measure that provided dollar-for-dollar tax credits to taxpayers who donate to certain educational programs in Montana. As relevant here, the program, called “Tax Credit for Qualified Education Contributions,” provides dollar-for-dollar tax credits to taxpayers who donate up to $150 to a Student Scholarship Organization (SSO). SSOs are charitable organizations that provide tuition scholarships to students who attend private schools that meet the definition of Qualified Education Provider (QEP). Taxpayers donate to an SSO generally; they do not direct or designate their contributions to a particular student or school.

Most qualifying private schools in Montana (about 69 percent) are affiliated with a religion. That means that at least some of the SSO funds could go to support religiously affiliated education. (This, of course, would depend on the individual students’ choices.) But at the same time, the Montana constitution prohibits the state from using public funds “for any sectarian purpose or to aid any church, school, academy, seminary, college, university, or other literary or scientific institution, controlled in whole or in part by any church, sect, or denomination.” Montana Const. Art. X, Sec. 6(1). (Montana calls this the “No-Aid Clause.” We will, too.)

In order to resolve this conflict, the Montana Department of Revenue, which implements the program, adopted an administrative rule that prohibits families from using SSO scholarships at religious schools. Specifically, Rule 1 changed the definition of “qualified education provider” to exclude any organization “owned or controlled in whole or in part by any church, religious sect, or denomination.”

Three low-income mothers whose children attended Stillwater Christian School, a nondenominational religious school in Kalispell, Montana, sued. They lodged three arguments. First, they argued that the Department lacked authority to adopt Rule 1. Next, they contended that the state constitutional bar on the use of public funds to support religious activities did not apply to the program, because that provision restricts the use of only public funds, not private donations incentivized by tax credits. Finally, they claimed that the Department’s interpretation of the state constitutional provision (to bar the use of SSO funds for religiously affiliated schools) violated the Religion Clauses and the Equal Protection Clause of the U.S. Constitution.

The trial court agreed with the plaintiffs and preliminarily enjoined Rule 1. But the Montana Supreme Court reversed. The state high court ruled that while the Department lacked authority to adopt Rule 1 (because it exceeded the Department’s rulemaking authority under the program), the No-Aid Clause nevertheless barred the use of SSO funds for religiously affiliated schools. The court further ruled that the inclusion of religious schools was not severable from the rest of the program, so it invalidated the entire program. Finally, the court held that its interpretation of the No-Aid Clause did not conflict with the federal Constitution.

The court partially stayed its judgment and allowed Big Sky Scholarships, the only SSO operating in the state, to award scholarships in the summer of 2019. Big Sky had funds for around 40 students and awarded scholarships last summer. But the court denied the plaintiffs’ request to allow Big Sky to resume fundraising for tax-creditable donations.

This appeal followed.


The plaintiffs argue first that the Montana Supreme Court’s ruling violates the Free Exercise Clause, which prohibits the government from discriminating against religion. They contend that the decision discriminates against the religious “beliefs,” “conduct,” and “status” of religious families who elect to use scholarship funds at schools that align with their faiths. Moreover, they say that the decision discriminates against the “status” of the religiously affiliated schools themselves. And finally they claim that the ruling discriminates against the religious “use” of the funds.

The plaintiffs argue next that the Montana Supreme Court ruling violates the Equal Protection Clause. They claim that the No-Aid Clause is a “Blaine Amendment” that was originally motivated by anti-Catholic bigotry. The plaintiffs say that this kind of “animosity” runs headlong into the Equal Protection Clause, as the Court itself has ruled. (The plaintiffs cite Romer v. Evans, 517 U.S. 620 (1996), as one example. In that case, the Court struck a Colorado constitutional provision that prohibited the state or local governments from enacting nondiscrimination laws on the basis of sexual orientation. The Court ruled that the provision was “born of animosity” and therefore failed even the bare “rational basis review.”) The plaintiffs assert, however, that the Court need not strike the No-Aid Clause. Instead, they contend that the Court should simply read the Clause as not barring the use of scholarship funds for religiously affiliated schools.

Finally, the plaintiffs argue that the Montana Supreme Court ruling violates the Establishment Clause, which prohibits both certain government support of religion and (as relevant here) government hostility toward religion. The plaintiffs contend that the ruling is not neutral with regard to religion, because it holds the program unconstitutional due only to its funding of religiously affiliated schools. Alternatively, they say that the ruling lacks a secular purpose (indeed, it is based only on religion) and has a “principal or primary effect” that inhibits religion. (This is the so-called Lemon test, named after Lemon v. Kurtzman, 403 U.S. 602 (1971).) On the other hand, they claim that the program itself (without the Rule 1 modifier) comports with the Establishment Clause, because it gives families a free hand in determining how to use their scholarships between secular and religiously affiliated schools. (The plaintiffs cite Zelman v. Simmons-Harris, 536 U.S. 639 (2002), in support of these arguments. The Court in Zelman upheld a publicly funded school voucher program, even though families could use vouchers at religious schools, because (1) the program was neutral and even-handed between secular and religious schools, and (2) the program granted families, not the government, the choice to use the vouchers between secular and religious schools.)

The government weighs in as amicus in support of the plaintiffs and raises substantially similar arguments, but only as to the Free Exercise Clause. The government also contends that the state is wrong to argue that the Montana Supreme Court ruling, in striking the entire program, does not discriminate based on religion. According to the government, that’s because “Montana focuses on the wrong link in the chain”: “Regardless of whether the remedy discriminates on account of religion, the no-aid provision certainly does, by subjecting religious schools alone to a special disability.” It also contends that the state is wrong to argue that the ruling promotes its interest in avoiding religious establishments: “the Establishment Clause generally does not require a State to subject religious adherents to special disabilities because of their religious status.”

The state counters first that the Montana Supreme Court ruling did not violate the Free Exercise Clause. The state says that the ruling did not coerce or penalize religion, because it invalidated the program as to both religious and nonreligious schools. Moreover, it claims that the No-Aid Clause was not the product of anti-religious animus; instead, it says that the state added the Clause in 1972 in order to protect religious liberty by “prevent[ing] the government from gaining undue influence over religious schools, preserv[ing] funding for public schools, and protect[ing] the rights of taxpayers with religious objections to state aid.” (An amicus brief by Montana Constitutional Convention Delegates supports this point.) It asserts that the No-Aid Clause itself is in line with similar provisions in 36 other states, dating back to 1835, and thus part of a “national tradition” to which the Court should defer. The state contends that the Montana Supreme Court ruling is in line with all of these principles.

The state argues that the Montana Supreme Court ruling is also consistent with Court precedent on the Free Exercise Clause. In particular, it says that the ruling is consistent with Locke v. Davey, 540 U.S. 712 (2004), which upheld a state scholarship program that, out of concern about using state funds to support religious education, excluded students studying to become members of the clergy. It also says that the ruling does not present the question reserved in Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017), of whether a state violates the Free Exercise Clause when it excludes religious use, as opposed to religious people, from a generally available program. The state asserts that if that distinction matters here, “the best reading…is that the No-Aid Clause bars aid to religious education. It does not bar aid to secular education at religiously affiliated schools.”

Moreover, the state argues that the plaintiffs’ position is inconsistent with federalism principles. The state maintains that the Religion Clauses say nothing about taxpayer support of religious institutions—that, if anything, founding-era evidence supports its view that a state may bar taxpayer support of religious institutions—and that they therefore leave that question to the people. But the state says that the plaintiffs’ position would take this decision away from the people, and from the states. Even more, the state claims that the plaintiffs’ position would force a state to enforce a statute that is void under its own constitution, thus further encroaching on state sovereignty.

The state argues next that the Montana Supreme Court’s ruling does not violate the Equal Protection Clause. It says that neither the No-Aid Clause nor the court’s ruling is grounded in animus against religion. It claims that, if anything, the No-Aid Clause protects religious people from discrimination (in contrast to Colorado’s constitutional provision in Romer).

Finally, the state argues that the ruling does not violate the Establishment Clause. It claims that the ruling might provide greater separation of church and state than required by the Establishment Clause, but that it does not create an establishment of religion. Moreover, it says that “the No-Aid Clause exhibits no hostility toward religion.”


This case follows closely on the heels of Trinity Lutheran, mentioned above, and, like that case, tests the interplay between the Free Exercise Clause and a state’s interest in not promoting religion by funding religion. The Court in Trinity Lutheran held that Missouri violated the Free Exercise Clause when it excluded churches, pursuant to a constitutional provision like the No-Aid Clause in Montana’s constitution, from a program that provided grants to nonprofits to resurface their playgrounds. The Court held that “[t]he Department’s policy expressly discriminates against otherwise eligible recipients by disqualifying them from a public benefit solely because of their religious character.” A plurality added a curious footnote, however, apparently attempting to limit the ruling. Footnote 3 read, “This case involves express discrimination based on religious identity with respect to playground resurfacing. We do not address religious uses of funding or other forms of discrimination.”

Despite this attempt to cabin the case, many saw Trinity Lutheran as a significant expansion of the Free Exercise Clause and a significant limitation on governments when they act out of concern for supporting religion. Among other things, Trinity Lutheran seems to mark a change to the Court’s approach to the interplay between the Free Exercise Clause and a state’s interest in not promoting religion by funding it. The Court previously held in Locke v. Davey, also mentioned above, that a state did not violate the Free Exercise Clause when it excluded from a state scholarship program students pursuing a degree in theology. The Court in that case held that there is “play in the joints” between the two Religion Clauses. This means that the state could have, but wasn’t required to, include theology students in the scholarship program and that the state did not violate the Free Exercise Clause when it elected not to include them out of concern for supporting religion. Trinity Lutheran seems to narrow this play in the joints.

This case could narrow that play even further, requiring states to treat the religious on par with the secular in their school-choice programs, or even programs across the board. If so, the ruling in this case would follow the Court’s recent trend line expanding the Free Exercise Clause.

Alternatively, the Court could rule more narrowly, simply applying Zelman. As described above, the Court in Zelman upheld a school voucher program, because the parents’ choice where to use the voucher (at a secular school or a religious one) broke the chain between the government and religion. As a result, the Court held that the program did not represent government support for religion.

The issue is obviously hotly controversial, especially in school-choice programs. As the plaintiffs argued in their petition for certiorari, as it stands, a student’s ability to use state funds for a private, religiously affiliated school depends on the state and the federal circuit where the student lives. Thirty-seven states have Blaine Amendments that flatly prohibit the use of public funds for religiously affiliated education, and, according to the plaintiffs, the circuits are deeply split on whether states can exclude religiously affiliated schools from their funding programs consistent with the Religion Clauses. This case will bring some measure of certainty and uniformity in the law.

Steven D. Schwinn is a professor of law at the University of Illinois Chicago John Marshall Law School and coeditor of the Constitutional Law Prof Blog. He specializes in constitutional law and human rights. He can be reached at 312.386.2865 or sschwinn@jmls.edu.

PREVIEW of United States Supreme Court Cases 47, no. 4 (January 13, 2020): 30–33. © 2020 American Bar Association


  • For Petitioner Kendra Espinoza (Richard Donen Komer, 703.682.9320)
  • For Respondent Montana Department of Revenue (Adam G. Unikowsky, 202.639.6041)


In Support of Petitioner Kendra Espinoza

  • 131 Current and Former State Legislators (Steven Werner Fitschen, 757.463.6133)
  • Alliance for Choice in Education (Ian Seth Speir, 719.428.4937)
  • American Center for Law and Justice (Jay Alan Sekulow, 202.546.8890)
  • Americans for Prosperity and yes. every kid. (Cynthia Fleming Crawford, 571.451.0352)
  • Arizona Christian School Tuition Organization and Immaculate Heart of Mary Catholic School (Allyson Ho, 214.698.3100)
  • Becket Fund for Religious Liberty (Diana Marie Verm, 202.955.0095)
  • Billy Graham Evangelistic Association, et al. (Frederick W. Claybrook Jr., 202.250.3883)
  • Cato Institute (Ilya Shapiro, 202.842.0200)
  • Center for Constitutional Jurisprudence (Anthony Thomas Caso, 877.855.3330)
  • Center for Education Reform (Paul D. Clement, 202.389.5000)
  • Christian Legal Society, United States Conference of Catholic Bishops, et al. (Kimberlee Wood Colby, 703.894.1087)
  • EdChoice (Leslie Davis Hiner, 317.681.0745)
  • Forge Youth Mentoring (Joshua Daniel Davey, 704.343.2167)
  • Foundation for Moral Law (John Allen Eidsmoe, 334.262.1245)
  • Georgia Goal Scholarship Program, Inc. (James Patrick Kelly III, 770.828.4625)
  • Honorable Scott Walker (Richard Michael Esenberg, 414.727.9455)
  • Independence Institute (David Benjamin Kopel, 303.279.6536)
  • Jerry and Kathy Armstrong, Lashawn Robinson, Gwendolyn Samuel, Yi Fang Chen, and Pacific Legal Foundation (Ethan Winfred Blevins, 916.419.7111)
  • Jewish Coalition for Religious Liberty (Parker Douglas, 801.699.7746)
  • Justice and Freedom Fund, et al. (James L. Hirsen, 714.614.0401)
  • Liberty Justice Center and American Federation for Children (Brian Kirk Kelsey, 312.263.7668)
  • Mackinac Center for Public Policy (Patrick J. Wright, 989.430.3912)
  • Montana Catholic School Parents, et al. (Andrea Marie Picciotti-Bayer, 571.201.6564)
  • Montana Family Foundation (Anita Yvonne Milanovich, 406.589.6856)
  • Oklahoma, et al. (Mithun Mansinghani, 405.522.4392)
  • Opportunity Scholarship Fund (Fred A. Leibrock, 405.235.4100)
  • Pioneer Institute (Dwight Gerard Duncan, 508.985.1124)
  • Rusty Bowers, Speaker of the Arizona House of Representatives, et al. (John Joseph Park Jr., 470.892.6444)
  • Rutherford Institute (Jason Peter Gosselin, 215.988.2700)
  • Senators Steve Daines, Tim Scott, John Kennedy, and Marsha Blackburn and Representative Greg Gianforte (Sarah Michelle Harris, 202.434.5000)
  • United States (Noel J. Francisco, Solicitor General, 202.514.2217)

In Support of Respondent Montana Department of Revenue

  • American Federation of Teachers, National Education Association, Montana Federation of Public Employees, and Montana Quality Education Coalition (Kevin K. Russell, 202.362.0636)
  • Baptist Joint Committee for Religious Liberty, et al. (Steven Keith Green, 503.370.6732)
  • Colorado, et al. (Eric Reuel Olson, 720.508.6548)
  • Freedom From Religion Foundation, et al. (Andrew Lewis Seidel, 608.256.8900)
  • Maine (Sarah Ann Forster, 207.626.8866)
  • Montana Association of Rabbis (Charles Rothfeld, 202.263.3233)
  • Montana Constitutional Convention Delegates (Hyland Hunt, 202.868.6915)
  • Montana-Northern Wyoming Conference, United Church of Christ (Tillman J. Breckenridge, 202.759.6925)
  • National Disability Rights Network, et al. (Gregory M. Lipper, 202.996.0919)
  • National School Boards Association, et al. (Francisco Maria Negron Jr., 703.838.6710)
  • Public Funds Public Schools (Tamerlin Jane Godley, 213.683.9232)
  • Religion Law Scholars (Kirti Datla, 202.637.6583)
  • Religious and Civil-Rights Organizations (Alex J. Luchenitser, 202.466.3234)
  • Tennessee Education Association (Richard L. Colbert, 615.742.4800)