Neutral, Generally Applicable Funding Conditions: Tenth Circuit Upholds Colorado’s UPK Nondiscrimination Rule and Limits Expressive Association in Preschool Admissions

Introduction

In St. Mary Catholic Parish in Littleton v. Roy, the United States Court of Appeals for the Tenth Circuit addressed whether Colorado may condition participation in its Universal Preschool Program (UPK) on adherence to an equal-opportunity nondiscrimination requirement that forbids participating preschools from discriminating in enrollment based on several protected characteristics, including sexual orientation and gender identity. Plaintiffs—two Catholic parishes and their preschools, the Archdiocese of Denver, and two parents—argued that the requirement violates the Free Exercise and Free Speech (expressive association) clauses of the First Amendment. They sought an injunction barring the State from enforcing the nondiscrimination condition against them.

After a bench trial, the district court denied injunctive relief on the sexual orientation and gender identity provisions, concluding the requirement is a neutral, generally applicable condition and that the expressive association claim fails; it temporarily enjoined enforcement of the religious-affiliation component because a then-existing “congregation preference” created an inconsistency. On appeal, the Tenth Circuit affirmed the denial of injunctive relief on the Free Exercise and expressive association theories, declined to reach the Archdiocese’s standing, and underscored a key principle: where a state program invites both religious and secular providers and imposes a uniform nondiscrimination condition without individualized exemption mechanisms, strict scrutiny is not triggered and the condition is reviewed under rational basis.

Summary of the Opinion

The panel (Judges Phillips, Rossman, and Federico; opinion by Judge Federico) affirmed the district court’s denial of a permanent injunction.
The court distinguished the Supreme Court’s “religious status/use” funding cases (Trinity Lutheran, Espinoza, Carson) because Colorado did not exclude religious preschools; it applied the same nondiscrimination condition to all providers.
Applying Employment Division v. Smith and its progeny (including Fulton and Lukumi), the court held the UPK nondiscrimination requirement is neutral and generally applicable:
- No evidence of religious hostility or targeting.
- No system of individualized exemptions: the algorithmic “preference system,” including its catchall preference, could not override the statutory nondiscrimination requirement; temporary waivers do not apply to nondiscrimination.
- No comparable categorical secular exceptions: preferences to facilitate compliance with IDEA and Head Start do not undermine the state’s interest in the same way as a requested religious exception to sexual-orientation and gender-identity nondiscrimination.
The expressive association claim fails: Runyon v. McCrary forecloses a right to discriminate in student admissions; Dale and Hurley are inapposite; Rumsfeld confirms that the mere presence of others in a shared setting does not inherently alter an organization’s message. Conditioning public funds on nondiscrimination does not compel expressive association.
Rational basis review applies; the requirement easily satisfies it given the state’s weighty interest in equal access to preschool.
The court declined to decide the Archdiocese’s standing because other plaintiffs had standing and the outcome would be the same.

Factual and Program Background

Colorado voters approved a dedicated revenue source for voluntary, universal preschool in 2020. The legislature enacted the Early Childhood Act, tasking the Department of Early Childhood with implementing UPK through a mixed-delivery system that includes public and private providers. To receive UPK funds, providers must sign an agreement to follow uniform “quality standards,” including a nondiscrimination requirement: providers must offer eligible children an equal opportunity to enroll and receive services regardless of race, ethnicity, religious affiliation, sexual orientation, gender identity, lack of housing, income level, or disability, as those characteristics apply to the child or the child’s family.

Families select up to five UPK-registered preschools on an online portal and rank them; an algorithm matches families to providers. To make matching more effective, the Department created a preference system allowing providers to set programmatic preferences (for example, to serve children within school-district boundaries, to keep siblings together, to ensure continuity of care, to comply with IDEA or Head Start obligations). A “catchall” allowed providers to request additional matching preferences, but the regulations expressly required continued compliance with the nondiscrimination provision.

The Archdiocese directed most Catholic preschools under its Office of Catholic Schools not to register for UPK to avoid agreeing to the nondiscrimination condition, though Catholic Charities-affiliated programs serving low-income families did participate. The Department initially tried to accommodate faith-based participation through a “congregation preference,” but the district court enjoined the state from enforcing religious-affiliation nondiscrimination so long as that preference existed; the Department subsequently removed that preference by regulation.

Issues Presented

Free Exercise: Does UPK’s nondiscrimination requirement (sexual orientation and gender identity) violate the Free Exercise Clause by excluding religious providers “because of their religious character” (Carson/Espinoza/Trinity Lutheran) or by being non-neutral or not generally applicable (Smith/Fulton/Lukumi)?
Free Speech/Expressive Association: Does requiring UPK-funded preschools to accept eligible students regardless of sexual orientation or gender identity impermissibly force expressive association and alter the school’s message?
Standing (Archdiocese): Should the court reach whether the Archdiocese has standing?

Standard of Review

The court reviews the denial of a permanent injunction for abuse of discretion but conducts an independent review of the whole record in First Amendment cases, reviewing constitutional facts and conclusions de novo. The parties briefed merits only; the panel accordingly addressed the First Amendment merits and, upon finding no violation, did not need to reach the additional injunction factors.

Detailed Analysis

1) The “Status/Use” Funding Cases Do Not Apply

Plaintiffs argued that Carson v. Makin, Espinoza v. Montana Department of Revenue, and Trinity Lutheran Church v. Comer controlled, because conditioning funds on nondiscrimination about sexual orientation and gender identity allegedly penalizes their religious exercise. The Tenth Circuit disagreed:

In Carson, Espinoza, and Trinity Lutheran, the states excluded religious schools because of their religious status or religious use of funds. Colorado did not exclude religious schools; it invited them to participate subject to neutral conditions applicable to all providers.
UPK funds can be used for religious instruction; the condition regulates enrollment conduct, not religious identity or curriculum.
Because the state did not single out religion, the analysis proceeds under Smith’s neutrality and general applicability framework rather than the “status/use” line.

2) Neutrality: No Targeting, No Hostility

A law is not neutral if its object is to infringe or restrict religious practices, or if the government shows hostility toward religion (Lukumi; Masterpiece Cakeshop). The court found:

The nondiscrimination requirement is facially neutral and applies to all providers; it mentions religion only to prohibit discrimination based on religious affiliation.
The record showed outreach to faith-based providers, including a working group in which St. Mary’s participated, and the Department’s repeated attempts to accommodate faith participation consistent with the statute. This was the opposite of hostility.
References to Runyon or to the harms of discrimination appeared in legal argument and policy rationale, not disparagement of religious beliefs. There were no “hostile” statements akin to those condemned in Masterpiece Cakeshop.

3) General Applicability: No Individualized Exemptions; No Comparable Secular Exceptions

a) No “Individualized Exemptions” Mechanism (Fulton / Sherbert)

A law lacks general applicability if it invites discretionary exemptions for secular reasons but denies religious exemptions. Plaintiffs pointed to two alleged mechanisms:

The “catchall” preference. The catchall allows providers to request additional matching preferences. But by regulation, providers “must still comply with” the nondiscrimination requirement. The catchall tweaks the matching algorithm; it does not authorize rejecting applicants based on protected traits. The Department had approved 17 catchall requests (e.g., teen parents at a given site, fully vaccinated children, families in a specific subdivision); none concerned sexual orientation or gender identity or otherwise conflicted with the nondiscrimination rule. Hypothetical testimony about possible requests did not overcome the regulatory text or actual practice.
Temporary waivers. Statute allows temporary waivers of “quality standards” to ensure a mixed-delivery system, for providers “working toward compliance”; it forbids waiving health and safety standards. The panel concluded no waiver could reasonably extend to nondiscrimination from the outset: a school can comply instantly by changing admissions practices; “working toward” nondiscrimination is not coherent. The court therefore did not need to resolve whether nondiscrimination is categorically a “health and safety” standard, as the district court held.

Because neither mechanism empowered officials to excuse nondiscrimination in admissions, the program did not create a system of individualized exemptions that would require strict scrutiny under Fulton.

b) No Comparable Secular Exceptions That Undermine the State’s Interest (Tandon)

A law is not generally applicable if it allows comparable secular conduct that undermines the state’s asserted interests in a similar way while prohibiting religious conduct. Plaintiffs pointed to:

IEP preference. A preference allowing providers to reserve placements for students with Individualized Education Programs to satisfy IDEA and state-law obligations.
Head Start preference. A preference that permits Head Start grantees to comply with federal eligibility rules favoring low-income children.

The court rejected the comparability argument for two independent reasons:

No violation at all. The nondiscrimination rule protects disabled and low-income children from adverse treatment; it does not protect non-disabled or high-income children by guaranteeing them access to specialized services designed for others. The preferences implement federal and state mandates to expand access for children with disabilities and for low-income families—categories the Supreme Court has long treated differently from suspect classifications. Framing those preferences as “discrimination” against non-disabled or higher-income children is inapt.
Not comparable in how they undermine the state’s interest. Even if one assumed some “differential treatment,” the preferences do not comparably undermine the state’s interest in removing barriers rooted in stigma against LGBTQ families. The asserted interest—equal access free from exclusion based on sexual orientation or gender identity—would be distinctly undermined by religious exemptions permitting exclusion on those grounds. The IEP/Head Start preferences do not have that effect.

The panel distinguished Fellowship of Christian Athletes (9th Cir.), where the school district granted discretionary secular exemptions from its nondiscrimination policy that directly undermined the policy’s goals; by contrast, Colorado’s Department lacked discretion to excuse nondiscrimination and the preferences served different, legally mandated access goals.

4) Expressive Association: No Right to Discriminate in Student Admissions to Receive Funding

Plaintiffs argued that being compelled to enroll children of same-sex couples or transgender parents would alter the message of Catholic preschools. The court rejected that claim, drawing three interlocking lines:

Runyon v. McCrary controls: private schools have no First Amendment right to discriminate in admissions. The Court distinguished the freedom to teach a viewpoint from a purported right to exclude students.
Boy Scouts v. Dale / Hurley are inapposite: those cases involved leaders or expressive participants whose presence would directly alter a group’s message (a scoutmaster activist; parade marchers behind a banner). Preschoolers are not analogous: “No one would reasonably mistake the views of preschool students for those of their school.” The law here concerns student admissions, not leadership or core expressive members.
Rumsfeld v. FAIR: the mere presence of others in a shared space does not inherently compel a message or expressive association; facilitating access does not make the third parties “part of” the speaker.

Finally, the court noted that this case involves conditions on public funds. While the government may not deny a benefit on a basis that infringes protected speech, the Supreme Court has repeatedly recognized that funding conditions operate differently from compelled association or direct speech mandates (see Christian Legal Society v. Martinez; Rumsfeld). On these facts, the nondiscrimination condition does not violate expressive association.

5) Standard Applied and Disposition

Because the nondiscrimination requirement is neutral and generally applicable and the expressive association claim fails, rational basis applies. The state’s interest in ensuring equal access to universal preschool is not merely legitimate but “extraordinarily weighty.” Applying the nondiscrimination requirement to all UPK providers is rationally related to that interest. The court affirmed the denial of injunctive relief. It declined to decide the Archdiocese’s standing because other plaintiffs had standing and the outcome was unaffected.

Precedents Cited and Their Role

Trinity Lutheran; Espinoza; Carson: Prohibit exclusion from generally available public benefits based on religious status or religious use. Distinguished here because Colorado invited religious schools to participate and imposed uniform conduct conditions unrelated to religious identity.
Employment Division v. Smith: Neutral, generally applicable laws that incidentally burden religious exercise are reviewed under rational basis.
Church of the Lukumi Babalu Aye: Targeted laws or covert religious suppression destroy neutrality/general applicability. No similar targeting or hostility here.
Fulton v. City of Philadelphia; Sherbert v. Verner: Systems of individualized exemptions require strict scrutiny. No such system exists in UPK’s nondiscrimination regime.
Tandon v. Newsom: Comparability is judged against the state’s asserted interest; secular conduct that undermines that interest in a similar way cannot be treated more favorably. The IEP/Head Start preferences did not comparably undermine Colorado’s interest.
Masterpiece Cakeshop: Government religious hostility can destroy neutrality. The record here showed outreach and accommodation, not hostility.
Runyon v. McCrary: No expressive association right to discriminate in student admissions.
Boy Scouts v. Dale; Hurley: Expressive association protects a group’s message when compelled inclusion of expressive members alters the group’s message. Not applicable to preschool student admissions.
Rumsfeld v. FAIR: Allowing third-party access (military recruiters) does not compel expressive association or speech.
Christian Legal Society v. Martinez; Norwood v. Harrison: Funding conditions can require nondiscrimination; the state is not obligated to subsidize private discrimination.
Grace United Methodist Church v. City of Cheyenne; Does 1-11 v. Bd. of Regents (10th Cir.): Elaborate Smith’s neutrality/general applicability framework and comparability analysis.
Harris v. McRae; City of Cleburne: Income and disability classifications are treated differently doctrinally than suspect classifications and can be the object of targeted access-expansion policies.

Legal Reasoning Explained

The court’s reasoning proceeds in nested steps:

Identify the governing Free Exercise framework. Because Colorado did not exclude religious schools based on religious identity or prohibit religious use of funds, Carson/Espinoza/Trinity Lutheran do not control; Smith’s neutrality/general applicability framework does.
Assess neutrality. Both facially and in practice, the nondiscrimination rule is not aimed at religion; the state courted religious providers and eliminated a preference once a court found it inconsistent with statutory nondiscrimination.
Assess general applicability. There is no official discretion to exempt providers from nondiscrimination (catchall and waivers cannot override statute), and no comparable secular exceptions that undermine Colorado’s equal-access interest in the same way as a requested religious exemption for sexual orientation and gender identity.
Address expressive association. The admissions context is governed by Runyon; preschoolers are not expressive leaders akin to Dale; Rumsfeld confirms no compelled message arises from the presence of others in a shared institutional setting. Funding conditions further diminish any compelled association concern.
Apply rational basis. The uniform nondiscrimination condition rationally advances an “extraordinarily weighty” interest in universal, barrier-free preschool access.

Impact and Practical Implications

This published Tenth Circuit decision offers concrete guidance for governments designing universal-choice or mixed-delivery education programs, and for religious providers considering participation.

For states and agencies:
- Uniform, written nondiscrimination conditions that apply to all providers—without discretionary exemption mechanisms—are likely to be upheld under Smith.
- Algorithmic or programmatic “preference systems” to improve matching are permissible if expressly subordinated to statutory nondiscrimination and administered consistently.
- Avoid ad hoc or discretionary waivers that could be construed as individualized exemptions (Fulton risk).
- If a preference later proves inconsistent with nondiscrimination (e.g., congregation preference), removing it eliminates the defect and preserves general applicability.
For religious schools:
- Carson/Espinoza/Trinity Lutheran do not give a right to participate while declining to accept neutral conduct conditions that apply to all. The key is whether the state targets religion or allows comparable secular exemptions.
- Expressive association does not extend to excluding students in the admissions context as a condition of receiving public funds (Runyon); curriculum and religious formation remain protected.
Doctrinal landscape:
- The decision fits comfortably within Smith and Fulton, and it narrows attempts to stretch Carson into a general veto on funding conditions. It also clarifies the comparability inquiry under Tandon in the education context.
- By reaffirming Runyon’s application to school admissions (including LGBTQ nondiscrimination), the opinion provides a strong precedent in the Tenth Circuit for K-12 and early childhood programs that combine public funds and private providers.
Future litigation:
- A pending district-court case (Darren Patterson Christian Academy v. Roy) reached a contrary result; its appeal may prompt further refinement or potential Supreme Court interest depending on outcomes and inter-circuit developments.
- States building universal pre-K or voucher programs can look to this decision for drafting: codify nondiscrimination in statute, constrain agency discretion, and expressly subordinate any matching preferences to nondiscrimination.

Complex Concepts Simplified

Neutral and generally applicable law: A rule that doesn’t target religion and applies across the board. Such a rule gets deferential review, even if it incidentally burdens religious conduct.
Individualized exemptions: A law lets officials grant case-by-case exceptions. If that happens for secular reasons, the government may need to offer comparable religious exemptions unless it can satisfy strict scrutiny.
Comparable secular activity (Tandon): To show a policy isn’t generally applicable, religious claimants must identify secular conduct the state allows that undermines the state’s interest in the same way as the prohibited religious conduct.
Status/use funding cases (Trinity Lutheran/Espinoza/Carson): The government can’t exclude religious organizations from public benefits because they are religious or because they would put funds to religious use. But neutral, across-the-board conditions on participation are different.
Expressive association vs. admissions: Groups can resist forced inclusion of leaders or participants that would change their message. But schools have no First Amendment right to exclude students in admissions, especially as a condition for public funds (Runyon).
Rational basis vs. strict scrutiny: Strict scrutiny is the toughest standard and applies when laws target religion or allow discretionary secular exemptions without religious accommodation. Otherwise, rational basis asks only whether the law reasonably serves a legitimate purpose.
IEP/Head Start preferences: Mechanisms to comply with federal mandates and expand access for children with disabilities or low-income families. They do not authorize discrimination against protected groups; they are tailored tools to implement separate legal obligations.

Conclusion

St. Mary Catholic Parish v. Roy establishes a clear rule in the Tenth Circuit: a statewide nondiscrimination requirement for participation in a universal preschool funding program—applied uniformly to all providers, containing no individualized exemptions, and untainted by religious hostility—does not trigger strict scrutiny under the Free Exercise Clause. Nor does it violate expressive association where the condition concerns student admissions, an area governed by Runyon, and the program involves public funds. The opinion carefully distinguishes the Supreme Court’s religious “status/use” funding cases and provides a sound roadmap for legislatures and agencies designing mixed-delivery education programs. Its practical message is straightforward: if public money supports truly universal access, program doors must be open to all. The court’s reasoning is likely to influence the design and defense of early childhood and K-12 choice programs across the Tenth Circuit and beyond.