Why It Matters
Establishment Clause rules that limit government support of religion are unsettled after the Supreme Court's 2022 Kennedy v. Bremerton School District decision abandoned the Lemon test, but did not overrule prior cases that applied it, according to a new Congressional Research Service (CRS) report. That unsettled state of the law can make it difficult to assess how courts might review existing federal laws or any new laws that arguably support religion.
The Department of Justice's Office of Legal Counsel (OLC) issued an opinion on Aug. 25 taking the position that certain federal funding restrictions on religious use violate the Free Exercise Clause, and that government may pay religious institutions to deliver civil services on neutral terms without establishing religion.
The Big Picture
For decades, courts applied Lemon v. Kurtzman's three-prong test, asking whether a challenged government action had a secular purpose, a primary effect that neither advanced nor inhibited religion, and no excessive entanglement with religion. Kennedy declared that test abandoned and directed courts to interpret the Establishment Clause by "reference to historical practices and understandings," but did not conduct the stare decisis inquiry the Court ordinarily performs before expressly overruling a prior case.
Lower courts have since divided: some apply a historical-hallmarks test drawn from Kennedy, while others continue to follow pre-Kennedy Supreme Court precedent as binding until expressly overruled. The only post-Kennedy Supreme Court Establishment Clause merits ruling, Catholic Charities Bureau v. Wisconsin LIRC (2025), applied strict scrutiny to a denominational preference and did not cite Kennedy.
Lower courts have split over Ten Commandments display laws: the Fifth Circuit upheld Texas's school-display requirement in Nathan v. Alamo Heights Independent School District, holding that Stone v. Graham had been abrogated, while a federal district court in Arkansas reached the opposite conclusion in Stinson v. Fayetteville School District No. 1, treating Stone as still binding. The OLC opinion's legal footing turns on the same unsettled questions, and the Seventh Circuit in Childs v. Webster treated Nyquist-line precedent against direct funding of religious activities as binding "[u]nless and until expressly overruled."
The Bottom Line
The Supreme Court certiorari petition in Nathan, No. 26-257, filed Aug. 27, remained pending as of Oct. 16, when respondents had moved only to extend their response time and the Court had taken no action on the petition. An Eighth Circuit appeal in Stinson, No. 26-1722, was docketed April 17.
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