The U.S. Supreme Court heard oral arguments on Wednesday in a foster care case that could result in a landmark ruling with widespread implications for both religious freedom and LGBTQ rights.

The case requires justices to weigh in on the conflict between the rights of married LGBTQ couples — which the Supreme Court recognized in a 2015 decision — and the First Amendment religious exercise rights of religious objectors to same-sex marriage. A ruling by the solidly conservative court could tip the delicate balance between the two.

The case, Fulton vs. the City of Philadelphia, began in 2018, when the city said it would no longer refer foster children to Catholic Social Services because the agency refused to evaluate foster homes headed by same-sex couples. The agency, which said such evaluations would violate its beliefs against same-sex marriage, sued. The lead plaintiff is Sharonell Fulton, a woman who, through Catholic Social Services, was a foster parent to dozens of children over the course of two decades.

The municipality says that it isn’t targeting Catholic Social Services, it is simply enforcing its nondiscrimination ban for all its contractors, including those affiliated with churches. Two lower courts sided with the city, so attorneys representing Catholic Social Services appealed to the Supreme Court.

Sharonell Fulton, along with one other foster mom and Catholic Social Services, sued the city of Philadelphia after officials began refusing to contract with faith-based foster care agencies that won’t serve LGBTQ couples. | Becket Fund for Religious Liberty

But on Wednesday morning, some of the justices expressed confusion as to why they were hearing the case at all — several pointed out that Catholic Social Services had never actually turned a single same-sex couple away because none had ever approached the agency about fostering children to begin with. They noted that LGBTQ couples who serve as foster parents have successfully turned to dozens of other agencies for their eligibility evaluations.

“If we are honest about what’s really going on here, it’s not about ensuring that same-sex couples in Philadelphia have the opportunity to be foster parents,” Justice Samuel Alito said to Neal Katyal, the attorney representing the city. “It’s the fact the city can’t stand the message that Catholic Social Services and the archdiocese are sending by continuing to adhere to the old fashion view about marriage. Isn’t that the case?”

“Absolutely not,” Katyal replied, pointing out that the city pays “$26 million a year for foster care” work to Catholic Social Services, “that very entity ... which you’re saying we can’t stand.”

But Alito pushed back, reminding Katyal that no same-sex couples had approached Catholic Social Services and that the city was preventing the agency from placing children in much-needed homes.

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Justice Brett Kavanaugh suggested the city was “looking for a fight.” He spoke of the “need to find a balance that also respects religious beliefs ... and what I fear here is that the absolutist and extreme position that you’re articulating would require us to go back on the promise of respect for religious believers.”

Katyal responded, “I don’t think the framing of this as religion versus same-sex equality is the right one. The way the city sees this is actually a case about religion versus religion.”

Granting an exemption to Catholic Social Services, Katyal explained, and allowing them to exclude same-sex couples would allow other agencies to “say ‘we won’t allow Baptists, we won’t allow Buddhists’ ... and in that sense, religion will be pitted against religion. Foster care agencies will be balkanized. And this will be true not just in foster care but in any number of other areas in which the government contracts.”

Kaytal added that granting an exemption to one agency would open the door to endless exemptions. In his closing remarks, Kaytal emphasized that the case “radiates far beyond foster care to all government contracts in all 50 states.”

President Donald Trump watches as Supreme Court Justice Clarence Thomas administers the constitutional oath to Amy Coney Barrett on the South Lawn of the White House in Washington on Monday, Oct. 26, 2020, after Barrett was confirmed by the Senate earlier in the evening. Jesse Barrett holds the Bible. | Patrick Semansky, Associated Press

Also at stake was a 30-year precedent penned by the late Justice Antonin Scalia that says generally applicable laws that are neutrally enforced do not infringe on religious liberty. Lower courts found that the city met that standard in enforcing its nondiscrimination policy in contracts with outside providers, including Catholic Social Services.

But in its petition to the high court, Catholic Social Services asked justices to not only overrule these earlier decisions, but scrap Scalia’s precedent, commonly referred to as “Smith,” and come up with new standard for deciding whether government should grant religious exemptions.

“Philadelphia won’t place children with Sharonell Fulton, Toni-Simms Busch, or Catholic Social Services unless their church changes or violates its beliefs. In our pluralistic society, a properly functioning free exercise clause is supposed to prevent this kind of unnecessary and harmful conflict,” Lori Windham, an attorney representing Catholic Social Services, told the justices. “There are children in need and loving homes are waiting for them. Neither Philadelphia nor Smith should stand in the way.” 

Throughout the hearing, comparisons were also made between race-based discrimination and discrimination on the basis of sexual-orientation. Justices also seemed to be wrestling with the idea of Smith being overturned. “What would you replace Smith with?” asked newly-appointed Justice Amy Coney Barrett, who clerked for Scalia.

Windham listed cases where courts have settled similar disputes using a different standard than Smith as a guide. “But, in other cases, I think the question should be pretty simple: ... Is the free exercise of religion being prohibited and, if so, does the government have a compelling reason for doing so? Here, the government does not.”

While the justices’ decision, which is expected to come by the end of June, could be a landmark ruling redefining how courts handle religious exemption cases, they could also issue a narrower ruling that would apply only to this specific case — sidestepping the thornier questions about Smith altogether as well as the bigger implications for religious freedom and LGBTQ rights.