The Supreme Court on Thursday weighed in on the continuing tension between religious freedom and LGBT equality in Fulton v. City of Philadelphia, holding unanimously that a Philadelphia anti-discrimination law does not bar a Catholic foster care agency from discriminating against same-sex couples.

On one read, Fulton is decidedly narrow and preserves a path forward for LGBT rights litigants. The decision effectively dodges the real clash between religious liberty and anti-discrimination statutes, just as the Masterpiece Cakeshop Court did in 2018. On another read, Fulton represents a subtle expansion of the scope of religious freedom by implicitly affirming Free Exercise’s favored status among competing rights. The Court held that the existence of possible discretionary exceptions in a Philadelphia anti-discrimination statute meant that the statute is neither neutral nor generally applicable. In so holding, the Court effectively concluded that the very possibility of the enforcement of statutory exceptions meant that the law could unfairly burden religious liberty, independent of whether or how those exceptions are actually enforced. And when the very possibility of burdening religious liberty clashes with LGBT equality, the former prevails.

The Fulton case was brought by Catholic Social Services, a government-funded foster care agency in Philadelphia. The agency, which has performed foster care services for the city for over two hundred years, sought an exemption from a Philadelphia ordinance that prohibits discrimination on the basis of various protected classes, including sex and sexual orientation. The city failed to renew CSS’s contract because the agency refused to certify same-sex couples to be foster parents due to its religious beliefs about marriage. CSS thus brought suit. The district court denied relief to CSS and the Third Circuit affirmed, finding that Philadelphia’s Fair Practices Ordinance was both neutral and generally applicable because the city did not “treat CSS worse than it would have treated another organization that did not work with same-sex couples as foster parents but had different religious beliefs.” The Supreme Court reversed.

Litigators and commentators hail Fulton as a narrow ruling; this view would explain why the opinion earned support even among the most liberal justices on the Court. Some speculate that Justice Alito’s 77-page concurrence, a sweeping opinion that expresses a strong willingness to overturn Employment v. Division v. Smith (a reversal that would have meant any law burdening religion needs to survive strict scrutiny), was initially assigned majority status. But behind-the-scenes coalition-building by Chief Justice Roberts, some believe, spurred a realignment. If the liberal justices swung aboard the majority – as they ultimately did – then the Chief could assign himself the opinion and pen a narrower decision that does not go so far as to overturn Smith.

This view potentially preserves a path forward for LGBT rights litigants. The Court did not issue a sweeping decision with broad pronouncements granting individuals or agencies license to discriminate against LGBT people for religious reasons; rather, it clarified that what doomed this particular claim was the lack of neutrality and general applicability of the Philadelphia anti-discrimination ordinance. The Court even recognized Philadelphia’s “weighty” interest in equal treatment of LGBT individuals. The claim instead merely fell short because of issues unique to the Philadelphia law. The law notably carves out various discretionary exceptions, including one that permits the city commissioner to, at his or her “sole discretion,” grant exemptions at will. The Court considered this provision problematic insofar as it appeared carve out the possibility of discriminatory enforcement against religious interests.

LGBT rights advocates have cause to hope for two main reasons. The first is due to the unique deficiencies of the Philadelphia ordinance. If the Chief Justice is to be read at his word, then an anti-discrimination law that is genuinely neutral and generally applicable (i.e., contains no discretionary exceptions) would have been handled differently. Second, the Chief underscored that “[n]o same-sex couple has ever approached CSS.” The Court may genuinely believe that this case presented no actual harm to same-sex couples because of the availability of reasonable alternatives: under Fulton, LGBT individuals may still adopt through the many other foster care agencies in the city who do certify same-sex couples. Indeed, Justice Kavanaugh echoed this concern at oral argument: “If a same-sex couple ever came to Catholic Social Services, [CSS] would refer that couple to another agency that works with same-sex couples so that the couple could participate and be foster parents. . . . And no same-sex couple has ever come to Catholic Social Services for participation in this program, and, therefore, [CSS’s] policy has never actually denied any same-sex couple the opportunity to be foster parents in Philadelphia.”

This claim is notable for several reasons: it discounts the potential deterrent effect that CSS’s policy has on prospective gay couples in the first instance, and ignores the fact that past is not always prologue—same-sex couples in Philadelphia may very well ask CSS for adoption certification in the future. But of particular importance for LGBT rights advocates, the Court’s claim is significant because Catholic Social Services does not operate exclusively in Philadelphia. According to the Department of Health and Human Services, there are more than 8,000 faith-based child placing agencies across the country. Though the facts of Fulton indicate that a same-sex couple had never been denied participation in Philadelphia’s foster care system, one would be hard-pressed to argue that this holds true nationwide. It is not difficult to imagine a case in which a Catholic LGBT person wants to adopt exclusively from a Catholic foster care agency but is turned away because of her sexual orientation, or a case in which a Catholic agency is the only citywide foster care provider, thus creating an absolute deprivation of the right for LGBT individuals. A case raising these issues may thus necessarily force the high court to engage with these issues for the first time.

Yet Fulton should still give LGBT rights litigants pause. Fulton comes as a logical extension of the string of recent religious liberty holdings: last term, the high court sided with religious interests in three significant cases involving discrimination suits at religious schools, religious groups seeking to deny contraceptive coverage to employees, and taxpayer funding for religious schools. And on this term’s shadow docket, the Court adopted expansive religious protections in the face of state-imposed COVID-19 restrictions.

Fulton not only affirms this streak but validates the notion that religious liberty deserves “favored” status in a hierarchy of competing rights. The statutory protections afforded by the Philadelphia anti-discrimination ordinance were insufficient to curb religious freedom, the Court said, because of the existence of the discretionary exceptions within the law. In other words, the mere potential of enforcement of the existing exceptions was enough for the Court to conclude that free exercise of religion was unfairly burdened. The Court thus sends a message that not just a burden on free exercise, but the possibility of a burden on free exercise, can overcome statutory civil rights protections. Though the court does not explicitly overturn Smith here, Fulton may nevertheless eat the Smith rule because of the sheer number of laws that include similar exceptions. Indeed, as Douglas Laycock has observed, “if a law with even a few secular exceptions isn’t neutral and generally applicable, then not many laws are.”

Moreover, the Fulton court sidestepped the fact that the Catholic agency contracts with the government to provide these foster care services. Because Catholic Social Services agrees to perform a function on behalf of the government, there is a world in which CSS is inherently subjected to governmental restrictions. The Court ignored that possibility and in effect permitted publicly-funded discrimination.

On either view, Fulton’s practical significance lies in the message it sends to LGBT children and parents. Most affected by the decision are the estimated 1,000 to 1,500 LGBT youth involved in Philadelphia’s foster care system. Data indicates that the exclusion of same-sex couples from foster parenthood diminishes the pool of families willing to care for LGBT-identified youth, since LGBT parents are more likely than others to take in LGBT children (studies also indicate that same-sex couples are more likely to care for older children and children with disabilities, two groups that are statistically less likely to be adopted). Allowing a government-funded agency performing a vital service like foster care placement to discriminate against LGBT people sends a message to LGBT youth that they do not deserve equal protection under the law.

The stigmatic and psychological harms here ring similar to the prevailing arguments made by Chief Justice Earl Warren in Brown v. Board of Education. A citywide regime in which LGBT parents cannot participate in Catholic social services but must pursue the same services elsewhere boils down to “separate but equal.” As Chief Justice Warren once wrote, to treat individuals differently on account of protected status “generates a feeling of inferiority as to their status in the community that may affect their hearts and minds in a way unlikely to be undone.” This is the real harm done by Fulton.

Ultimately, the ongoing tug-of-war between free exercise and anti-discrimination principles is far from resolved. Though the opinion’s limitations may permit LGBT rights litigants a sigh of relief, the Court’s subtle expansion of religious liberty should give anti-discrimination advocates cause for concern. By punting on the core issue, the Court saves the essential clash between free exercise and anti-discrimination principles for another day.