Religious Institutions Update: August 2026

Key Cases

Church Autonomy Doctrine

Neutral Principles of Law Not Applicable to Church Governance Dispute

In Lutheran Church v. Christian, No. 25-50130, 2026 WL 1597600 (5th Cir. June 4, 2026), the Lutheran Church-Missouri Synod (LCMS), a Missouri nonprofit corporation, brought a lawsuit against Concordia University, seeking a declaration and asserting state law claims such as breach of contract and breach of fiduciary duty after the university rejected church authority over its governance. The university countersued. Reflecting the "two kingdoms" doctrine, the plaintiff was incorporated by the identically named Lutheran Church-Missouri Synod (Church), an unincorporated association, to handle the Church's civil affairs while the Church handles its spiritual affairs. LCMS bought and conveyed property in trust to Concordia, reserving restrictions and reversionary rights. In 2022, Concordia voted unilaterally to change its governing documents to reject LCMS authority. The Church voted Concordia's action null and void and elected board members that Concordia refused to seat. The district court granted Concordia's motion to remand to state court, based on a finding that the Church, as an unincorporated association, was a resident of Texas, and the real party in interest that should have been joined to the lawsuit, defeating federal diversity jurisdiction. LCMS argued that these conclusions amounted to questioning the religious body's own understanding of its structure and, thus, violated the church autonomy doctrine. The court of appeals agreed the neutral principles of law exception does not apply to allow adjudication of the governance structure of the church and nonprofit. The court of appeals said the stakes were grave: 1) religious institutions may be coerced into embracing a polity that is less susceptible to judicial reorganization, as opposed to a structure that aligns with their religious doctrines; 2) authorizing the judiciary to assign legal status to religious entities presents establishment clause issues; and 3) religious institutions structured similar to the Church/LCMS with a national membership will be excluded from federal court on diversity grounds. Judge James E. Graves dissented, arguing that the neutral principles of law approach should be followed.

Free Exercise

Rescission of Competitive Award of Property to Church Was Not a Free Exercise Violation

In Calvary Chapel Belfast v. Univ. of Maine Sys., 180 F.4th 13 (1st Cir. 2026), the court of appeals ruled against a church when it sued the state university system for violation of its free exercise and equal protection rights after the university system rescinded the award of former educational property to the church pursuant to a competitive procurement process for $1 million. The church began liquidating assets, including its current property to finance the acquisition. Meanwhile, the award attracted community opposition and administrative appeals by disappointed bidders. The university decided its evaluative criteria was flawed, initiated a new public procurement and awarded the property to one of the church's competitors for $3.06 million. The church argued that when the community protest is relentless enough, it is virtually impossible for the government to make a decision that is not impermissibly tainted by that public pressure. But the court of appeals agreed with the district court that the standard is stricter. The plaintiff must provide evidence that the government actually bowed to the pressure. The court of appeals determined there was no basis for overturning the district court's finding that the church failed to adduce sufficient evidence that the university's decision to rescind the award of the first request for proposal (RFP) to the church and to start a new RFP process was attributable to religious animosity.

Antidiscrimination Laws Linked to State Tuition Assistance Partially Upheld as Applied to Religious Schools

In St. Dominic Acad. v. Makin, 181 F. 4th 11 (1st Cir. 2026), a Catholic school and a student's parents alleged that application of the Maine Human Rights Act (MHRA) antidiscrimination provisions to religious schools participating in the state tuition assistance program violated the free exercise clause. The MHRA's nondiscrimination-in-education rule covers schools that receive public funding (excluding postsecondary institutions), but its employment provisions apply to all employers with carve-outs for religious employers. New as of 2021 (before the U.S. Supreme Court struck a nonsectarian requirement in the state tuition assistance program), MHRA provides "to the extent that an educational institution permits religious expression, it cannot discriminate between religions in so doing." Reversing the district court, the court of appeals ruled that the school was likely to succeed on its claim that this provision violates the free exercise clause. Affirming the district court, the court of appeals ruled that the school was unlikely to succeed on its challenge to MHRA's sexual orientation or gender identity nondiscrimination rule or MHRA's provision prohibiting K-12 schools from discriminating on the basis of religion in admissions and financial aid. The court characterized the latter as neutral and generally applicable and, thus, constitutional. Due to carve-outs in the law, the court ruled that the plaintiff lacked standing to challenge other MHRA provisions and ruled that its claim was not ripe. The case was remanded.

A related case is Crosspoint Church v. Makin, 180 F. 4th 354 (1st Cir. 2026), where the court of appeals ruled in the same manner as to a church-run school. In particular, the court ruled that the church failed to show that certain amendments to the MHRA targeted it in violation of the free exercise clause or that MHRA's prohibition against educational discrimination based on sexual orientation or gender identity amounted to content- or viewpoint-based regulation of speech.

Virginia May Exclude Students Majoring in Religious Vocational Programs from Tuition Assistance

In Hall v. Fleming, 175 F. 4th 510 (4th Cir. 2026), the court of appeals ruled that excluding an undergraduate student at a private religious university majoring in religious vocational programs from a state tuition assistance program known as the Virginia Tuition Assistance Grant (VTAG) Program does not violate the student's free exercise rights. VTAG limits eligibility to "nonprofit private institutions of higher education whose primary purpose is to provide collegiate, graduate or professional education and not provide religious training or theological education." Va. Code Ann. § 23.1-628 (2016). The student qualified while her major was "Music Education: Choral," but not after she changed her major to "Youth Ministries." She also considered and would not have qualified as a "Music & Worship" major. The court of appeals affirmed the district court's dismissal of the student's case under Locke v. Davey, 540 U.S. 712 (2004).

School Denied Injunction After Law Amended to Eliminate Tuition Payments

In Mid Vermont Christian Sch. v. Saunders, 2026 WL 1296339 (D. Vt. May 12, 2026), the school alleged that the legislature retaliated against it and thereby violated the free exercise and equal protection clauses after a preliminary injunction restored its membership in an athletic league from which it was expelled after the school's forfeiture of a girls' basketball game because the opposing team included a transgender player. Act 73 became law the same year, resulting in elimination of tuition payments to the plaintiff and other independent schools, excluding "therapeutic schools." The district court determined that Act 73 is neutral and generally applicable and, thus, subject to rational basis review, which it satisfied. The court rejected the plaintiff's argument that Act 73 was the result of anti-religious bias. The plaintiff proffered statements by nine legislators, most in response to an opinion survey rather than in floor debate, critical of public funding of religious education. One legislator drew a comparison "with Afghanistan where (one assumes) religious education is the norm and argu[ed] that religious schools were intolerant of LGBTQ people." Instead, the court focused on the following aspects of Act 73, saying that the Act: 1) "is a complex funding and organizational measure driven by long-standing concerns about the cost, equity and efficient delivery of public education"; 2) excludes "payments to all independent schools when a public school is present in the same district"; 3) imposes "limits on class size that are consistent with the limits it imposes on public schools"; 4) "impos[es] requirements for the minimum percentage of students eligible for town tuition payments"; and 5) "foreclose[es] the admission of new schools to the program."

Parent's Free Exercise Rights Violated for Lack of School Opt-Out Notice

In Alan L. v. Lexington Pub. Schs., 2026 WL 2098341 (D. Mass. July 21, 2026), the district court ruled the plaintiff stated a claim for violation of the free exercise clause, procedural due process clause and Article 46, Section 1 of the Massachusetts Constitution due to the defendant's alleged failure to notify him before books concerning sexual orientation and gender identity were shown to J.L. In addition, the court ruled that the principal and director of elementary education for the school are not entitled to qualified immunity due to a controlling U.S. Supreme Court decision. However, the court dismissed the plaintiff's claims for violation of the substantive due process clause and Massachusetts Civil Rights Act, and dismissed the superintendent for lack of specific factual allegations about her role in the matter.

Restrictions on Foster Care Licenses Linked to Plaintiff's Refusal to Use a Child's Self-Identified Pronouns Violate the Free Exercise Clause

In Degross v. Hunter, 2026 WL 1091288 (W.D. Wash. April 22, 2026), foster care license applicants sued the defendants, alleging violations of their free exercise, free speech and equal protection rights, arising from issuance of foster care licenses with restrictions due to their refusal to use a child's self-identified pronouns as required by state regulation per the plaintiffs' religious convictions. The district court ruled that the applicants plausibly alleged the regulation was not neutral or generally applicable and, thus, subject to strict scrutiny under the free exercise clause. In addition, the court ruled that the applicants plausibly alleged the regulation was facially invalid because of viewpoint discrimination and subject to strict scrutiny for this additional reason. The applicants failed to state an equal protection and freedom of association claim, and the secretary could not be held liable in his personal capacity under Section 1983, because he left his role before the plaintiffs submitted a license waiver.

COVID-19

Religious Accommodation Claims Dismissed

In Seagraves v. Wash. State Dep't of Children Youth and Families, 2026 WL 2093894 (9th Cir. July 21, 2026), the court of appeals affirmed dismissal of the plaintiffs' claims that defendants violated their free exercise, equal protection and procedural due process rights under the federal and state constitutions by denying the employee's requests for religious accommodations from the COVID-19 vaccination mandate. In particular, the court of appeals rejected the plaintiffs' claim that the requirement was motivated by religious animus and found no evidence that the defendants singled out religiously motivated objections for special treatment. The court of appeals considered it pertinent that nearly half of the 216 employees whose religious accommodation requests were processed were accommodated, and just over half of the 22 employees whose medical accommodation requests were processed were granted.

In Vesterman v. N.Y. City Dep't of Educ., 2026 WL 1580250 (2d Cir. June 3, 2026), the court of appeals affirmed dismissal of the plaintiff's claim that the defendant violated her free exercise rights by denying her a religious exemption from the COVID-19 vaccine mandate, then violated her procedural due process rights by placing her information in the "problem code database" without first providing her with a name-clearing hearing. The court ruled that the defendant's rationale based on "undue hardship" was subject to rational basis review and that plaintiff failed properly to allege her procedural due process claim. In any event, the court found that the plaintiff did not plausibly allege that her problem code designation was more than an accurate reflection of her noncompliance with the mandate.

Disfavored Religions Class Certified

In Phillips v. Rector and Visitors of the Univ. of Va., 2026 WL 1103282 (W.D. Va. April 23, 2026), the district court granted the plaintiffs' motion for class certification with respect to a "Disfavored Religions Class" but denied it as to an "Abortion Objectors Class" and "Failure-to-Accommodate Class." The first class is defined as "UVA Health employees who (1) requested a religious accommodation from COVID vaccination, (2) were not members of UVA's 'established religions,' and (3) suffered adverse employment action from UVA as a result of being unvaccinated." The established religions class included six faiths with "known prohibition[s] against vaccination," entitled to exemption as long as there was no reason to suspect dishonesty, whereas members of other religions were subject to "Religious Exemption Committee" review.

Other

Administrative Challenge to Religious Liberty Commission Dismissed

In Interfaith Alliance v. Trump, 2026 WL 2149836 (S.D. N.Y. July 27, 2026), the district court dismissed plaintiffs' challenge under the Federal Advisory Committee Act to the religious makeup of the 14 voting members of the Religious Liberty Commission (RLC), an advisory committee established by the president, tasked with producing a report on the foundations of religious liberty in the U.S. and the current threats to its exercise. Dismissal was on the basis of standing for an individual plaintiff and failure to state a claim for the organizational defendants. The court ruled that the RLC's membership "has a fair balance of viewpoints given the functions it performs" from the public, private and nonprofit sectors and based on life experiences "from a former host of a popular television show to a State Lieutenant Governor," religious leaders and congregants and adherents of five religions. In addition, only President Donald Trump is responsible for selecting RLC members; he is not an agency suable under the Administrative Procedure Act and plaintiffs failed to show that he violated the sort of clear nondiscretionary duty, which would entitle them to mandamus. The plaintiffs also argued that the RLC made insufficient disclosure of its activities. The court dismissed this argument as well because of defendants' mid-litigation disclosures.

Court Dismisses Homeschool Parents' Lack of Public School Athletic Eligibility Claim

In Palmer v. Va. High Sch. League, 2026 WL 1481944 (W.D. Va. May 27, 2026), the district court denied the plaintiffs' equal protection claim and declined to exercise supplemental jurisdiction over their Virginia state-law religious freedom claims related to their allegations that the defendants' policy barring homeschooled students from participating in public school athletics unlawfully discriminates against them primarily for religious reasons. The court considered persuasive defendants' arguments regarding the logistical and competitive challenges associated with permitting homeschooled students to participate in public school athletics.

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