On Wednesday, Justice Brett Kavanaugh suggested that the Supreme Court and state governments “should be looking, where possible, for win-win answers” in situations where religious freedom and same-sex marriage laws seem to be in conflict, “recognizing that neither side is going to win completely on these issues given the First Amendment on the one hand and given Obergefell [the Supreme Court’s 2015 same-sex marriage decision] on the other.”

Justice Kavanaugh’s comment was part of Supreme Court oral arguments in Fulton v. City of Philadelphia. This case involves foster parents who worked with Catholic Social Services (CSS) and challenged a city decision to stop placing foster children through CSS because when asked, CSS indicated it would refer same-sex couples to another provider for foster placements.

Unlike the more free-form approach of arguments in the pre-COVID era, Wednesday’s hearing argument involved a formal process where each justice, in order of seniority, asked questions of the attorneys on both sides of the issue.

Oral arguments take place after all of the written legal arguments have been submitted to the justices. They allow the justices to seek clarification on specific points or concessions from the attorneys that could affect the final decision that justice makes. For observers, they offer an opportunity to speculate on what the justices might be thinking about the appropriate final outcome. This is tricky because a justice could be trying out an argument or just sharpening their thinking by presenting a view they do not actually hold to see how the attorneys will respond. Commentary on oral arguments tends to assume the former.

To aid in speculation, the court releases a transcript of the argument on its website.

Four attorneys made arguments in Wednesday’s hearing: Lori Windham, from the Becket Fund (a religious liberty organization) who represented the foster parents; Hashim Mooppan, from the solicitor general’s office in the Department of Justice (the federal government is siding with the foster parents); Neal Katyal, a former acting solicitor general who represented the city; and Jeffrey Fisher, a Stanford law professor, who argued in behalf of advocacy organizations that support the city’s position.

Although lots of topics were discussed, a couple of major themes dominated.

First, the argument that the city is singling out CSS for disfavored treatment because of its religious beliefs about marriage. If this is true, the city’s action would be unconstitutional even under the relatively deferential approach the court has used to weigh state and local government actions that impact religious exercise. Thus, the attorneys promoting this argument focused on the idea that the city allows exemptions from other nondiscrimination provisions (like race and disability) in foster parents but punishes CSS for engaging in what the city believes is sexual orientation discrimination.

The city’s response is a little complicated. It characterizes the foster process as having two steps – the initial intake and the specific placement. The city admits it allows exemptions at the second stage but says it does not at the first. According to the city, the exemption CSS would be asking for is at the first stage, where it says no exemptions are allowed. If this distinction is legally sound, there city argues, there is actually no differential treatment.

Second, the nature of the relationship between the city and CSS. Attorneys promoting the city’s position characterized CSS as a contractor for the city because previous cases give governments very broad discretion in the requirements they impose on contractors. Some of the justices and the attorneys supporting the parents took issue with this, arguing that the relationship looks more like a government licensing scheme where the government gets to decide which agencies can participate in a certain field – which, in this case, CSS has done for a very long time.

Third, the status of a 1990 Supreme Court decision, Employment Division v. Smith. This issue is not actually necessary for deciding this case, as Windham stressed, but the Smith decision has been an obstacle for religious freedom claims, and advocates of those claims would be thrilled to see the court abandon or overturn it.

The Smith case basically interprets the free exercise of the First Amendment to require only that a government action limiting religious exercise be neutral as to religious and secular people. In other words, if a law or action limits what religious people may do and creates the same limitation for people acting without any religious motive, then the law is assumed to be constitutional. (If the law treats them differently, as the foster parents argue to be true in this case, it is unconstitutional.)

This approach creates an obstacle for religious groups whose beliefs may require them to do or not do things that are not a problem for secular organizations or people. Examples include working on the Sabbath, wearing religious clothing, or making distinctions based on religious teachings about marriage. For religious people, this approach does not reflect the specific protection intended by the First Amendment’s guarantee that religious exercise should not be prohibited.

In the arguments on Wednesday, the advocates for the position of the foster parents argued that Smith limits the protection due to religious people but made clear that they believed that even if the ruling in that case was used here, they would still win because the city’s policy targeted religious practice. The advocates for the city, and the questions of some of the justices, raised the specter of a flood of religious liberty claims paralyzing normal government functions if Smith is abandoned.

In the next few months, the court is expected to issue its ruling in this case. The ruling may offer the justices the chance to settle some of these important questions about the prerogatives of state and local government when dealing with religious organizations, the potential coexistence of the principles of nondiscrimination and religious freedom, and the legal effect of the First Amendment’s free exercise clause. Only time will tell whether the court avails itself of the opportunity.