June 23, 2025 | Volume 32, Issue 14
This Report summarizes opinions issued on June 5, 2025 (Part I).
Opinions
Catholic Charities Bureau, Inc. v. Wisconsin Labor and Industry Review Comm’n, 24-154.
The Court unanimously held that Wisconsin violated the First Amendment when it denied a tax exemption to Catholic Charities of the Diocese of Superior and several sub-entities controlled by the church on the ground that they are not “operated primarily for religious purposes.” Catholic Charities and the sub-entities (petitioners) are organizations controlled by the Roman Catholic Diocese of Superior, Wisconsin. They provide a range of charitable services to local communities across Wisconsin, such as helping individuals with disabilities obtain employment and providing daily living services to persons with developmental or mental health disabilities. They do not proselytize and do not distinguish based on “race, sex, or religion in reference to clients served, staff employed and board members appointed.” Wisconsin law provides an exemption to the law requiring employers to contribute to the state’s unemployment fund for nonprofit organizations “operated, supervised, controlled, or principally supported by a church or convention or association of churches,” but only if they are “operated primarily for religious purposes.” Wis. Stat. §108.02(15)(h)(2). Petitioners sought a determination from respondents that they qualified for this exemption. The Wisconsin Department of Workforce Development denied that request, determining that petitioners are not “operated primarily for religious purposes” within the meaning of the statute. Eventually, the Wisconsin Supreme Court agreed.
The Wisconsin Supreme Court concluded that whether a nonprofit is “operated primarily for religious purposes” depends not only on an organization’s “motivations” but also its “activities.” And in assessing the organization’s activities, courts should “focu[s] on whether an organization participated in worship services, religious outreach, ceremony, or religious education.” The court held that petitioners’ activities are “secular in nature,” not religious, because they “neither attempt to imbue program participants with the Catholic faith nor supply any religious materials to program participants or employees,” and they are “open to participants regardless of religion.” The court found the statute did not violate the First Amendment because the exception “neither regulates internal church governance nor mandates any activity,” and there was “no risk of excessive government entanglement.” In an opinion by Justice Sotomayor, the Court reversed and remanded.
The Court reiterated that the First Amendment mandates government neutrality between religions; any state-sponsored denominational preference is subject to strict scrutiny. The Court held that the Wisconsin Supreme Court’s interpretation of the state tax exemption imposes a denominational preference by differentiating between religions that have different practices. “Put simply,” said the Court, “petitioners could qualify for the exemption while providing their current charitable services if they engaged in proselytization or limited their services to fellow Catholics. Petitioners’ Catholic faith, however, bars them from satisfying those criteria.” Other religions, by contrast, “have adopted a contrary approach.” Thus, the Court held, “Wisconsin’s exemption, as interpreted by its Supreme Court, [] grants a denominational preference by explicitly differentiating between religions based on theological practices. Indeed, petitioners’ eligibility for the exemption ultimately turns on inherently religious choices (namely, whether to proselytize or serve only co-religionists), not secular criteria that happen to have a disparate impact upon different religious organizations.” (Quotation marks omitted.)
The Court next held that the statute cannot survive strict scrutiny. Wisconsin “argue[d] that the law serves a compelling state interest in ‘ensuring unemployment coverage for its citizens.’ Yet the State fails to explain how the theological lines drawn by §108.02(15)(h)(2) are narrowly tailored to advance that asserted interest, particularly as applied to petitioners,” who “operate their own unemployment compensation system for employees.” (Citation omitted.) The Court also found that Wisconsin’s unemployment tax regime is “vastly underinclusive when it comes to ensuring unemployment coverage for its citizens. Wisconsin exempts over 40 forms of ‘employment’ from its unemployment compensation program.” Finally, the Court rejected Wisconsin’s contention that “the Wisconsin Supreme Court’s interpretation of §108.02(15)(h)(2) is ‘narrowly tailored to avoid entangling the state with employment decisions touching on religious faith and doctrine.’” The Court reasoned that, “[t]o the extent the State seeks to avoid opining on employee compliance with religious teachings, it does not explain why it declined to craft an exemption limited to employees who are in fact tasked with inculcating religious doctrine. Instead, the exemption here functions at an organizational level, covering both the janitor and the priest in equal measure.”
Justice Thomas authored a concurring opinion. He agreed with the Court’s opinion in full and wrote to express his belief that the Wisconsin Supreme Court also violated the church autonomy doctrine. He explained that the church autonomy doctrine leaves it to religious institutions to define their internal structure for themselves. For that reason, he said, the Wisconsin Supreme Court should have deferred to the Bishop of Superior’s religious view that petitioners are an arm of the church itself and found them exempt. Simply put, Justice Thomas maintained, petitioners are corporate entities created by the Diocese to carry out its religious mission, and the lower court violated the church autonomy doctrine in ruling otherwise.
Justice Jackson also authored a concurring opinion. In her view, neither “the how” or “the way” accurately captures what Congress intended when it wrote the federal statute to allow an exemption for church-affiliated entities that are “operated primarily for religious purposes.” She said that it relates solely “to what” the entity does; the religious-purposes exception “is not applicable to general charitable organizations” such as “soup kitchens, hospitals, or orphanages,” but designed “to capture a much narrower category of employers: church-affiliated entities that exist to perform religious functions.”
Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos, 23-1141.
The Court unanimously held that Mexico’s complaint against defendant gun manufacturers does not plausibly allege that they aided and abetted downstream gun dealers’ unlawful sales of firearms to Mexican traffickers. The Protection of Lawful Commerce in Arms Act (PLCAA) bars certain lawsuits against manufacturers and sellers of firearms. The PLCAA provides that a suit may not be brought against a manufacturer or seller arising from “the criminal or unlawful misuse” of a firearm by “a third party.” That bar does not apply when a manufacturer or seller “knowingly violated a State or Federal statute applicable to the sale or marketing” of the firearms and that “violation was a proximate cause of the harm for which relief is sought.” At issue was whether the predicate exception applied here.
The Government of Mexico brought this lawsuit against seven American gun manufacturers. Mexico sought to show that the defendant manufacturers aided and abetted unlawful sales and routing of guns to Mexican drug cartels. Mexico has a gun violence problem that it views is caused by American gun manufacturers. According to the Mexican government, 90% of the guns recovered at crime scenes in Mexico come from the United States. Their lawsuit alleges that the defendants failed to exercise “reasonable care” to prevent trafficking of their guns into Mexico and are thus responsible for the harms that result from their use. The parties agreed that the theory falls into PLCAA’s general prohibition, but Mexico alleges that the exception to the bar should apply because third-party misuse of the guns resulted from the manufacturers’ knowing violations of gun laws. The primary complaint is that manufacturers sell to dealers who make unlawful sales with the manufacturers’ knowledge of the “bad apple dealers.” Next, Mexico argues that the manufacturers have failed to impose controls on distribution networks to prevent illegal sales. And finally, Mexico alleges that the manufacturers’ “design and marketing decisions” intend to stimulate cartel members to purchase their products. The defendant manufacturers moved to dismiss Mexico’s complaint based on the PLCAA prohibition. The district court granted that motion. The First Circuit reversed, finding that Mexico’s complaint plausibly “allege[]d that defendants have been aiding and abetting the [illegal] sale of firearms by dealers.” In an opinion by Justice Kagan, the Court reversed and remanded.
The Court began by explaining federal aiding-and-abetting law, which “reflects a centuries-old view of culpability: that a person may be responsible for a crime he has not personally carried out” if he deliberately “helps another to complete its commission.” The Court noted “several ancillary principles.” First, aiding and abetting is most commonly “a rule of secondary liability for specific wrongful acts.” Second, it usually “requires misfeasance rather than nonfeasance.” Third, activity that “incidentally” assists in a crime “is unlikely to count as aiding and abetting.” The Court held that Mexico had not adequately pleaded what it needed to under its precedents, specifically, that “the manufacturers ‘participated in’ those [illegal gun] sales ‘as in something that [they] wish [] to bring about,’ and ‘seek by [their] action to make succeed.”
The Court found that the complaint failed to pinpoint any specific criminal transactions that the manufacturers assisted. The Court noted that while this was not fatal, for its claim to survive, Mexico needed to allege “pervasive, systemic, and culpable assistance.” And it failed to do so. The Court found that Mexico’s claim that the manufacturers elect to sell guns to rogue dealers “fails to clear that bar.” The Court also found that the manufacturers sell firearms to middlemen distributors, not directly to dealers, and Mexico “has never claimed the middlemen lack independence.” Further, the Court found that Mexico failed to name “bad apple” dealers or provide grounds that anyone up the supply chain knew that information. The Court also held that the manufacturers’ potential “omissions” and “inactions” in regulating dealer practices are “rarely the stuff of aiding-and-abetting,” and “nothing special in Mexico’s allegations makes them so.” The Court held that the allegations that the manufacturers marketed assault weapons and Spanish-language names could not pass muster because law-abiding persons were also being targeted by such marketing.
Ultimately, the Court held that Mexico’s allegations cannot satisfy the demands of the statute’s predicate exception: that the suit be brought against manufacturers who aided and abetted a firearms violation. It noted that the purpose of the statute was to prevent manufacturers from being held “liable for the harm caused by those who criminally or unlawfully misuse firearm[s].” The Court found that Mexico’s suit “closely resembles the ones” Congress had in mind to prohibit. Thus, it held the suit was barred by the PLCAA.
Justice Thomas authored a concurrence to note that the Court did not resolve what a plaintiff must show to establish that the defendant committed a “violation” under the exception. He said that in his view, “the PLCAA at least arguably requires not only a plausible allegation that a defendant has committed a predicate violation, but also an earlier finding of guilt or liability in an adjudication regarding the ‘violation.’” Justice Jackson authored a concurrence to note that the complaint’s “core flaw is its failure to allege any nonconclusory statutory violations.”
Ames v. Ohio Dep’t of Youth Services, 23-1039.
The Court unanimously rejected the rule, applied by the Sixth Circuit here, that to establish a prima facie case of discrimination under Title VII “a plaintiff who is a member of a majority group must also show ‘background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.’” Marlean Ames is a heterosexual woman who worked for the Ohio Department of Youth Services, first as a secretary and later as a program administrator. In 2019, she applied and was interviewed for a management position. Ames did not get the job; the agency instead hired a lesbian woman. It then demoted Ames back to secretary and hired a gay man to fill Ames’ old, now-vacant position of program administrator. Ames filed a Title VII suit, alleging that the agency had discriminated against her based on sexual orientation. The district court granted summary judgment to the agency, and the Sixth Circuit affirmed. Both courts applied circuit precedent holding that if a Title VII plaintiff is a member of a majority group, he or she must present additional evidence of “background circumstances” to suggest her employer is “the rare employer who discriminates against members of a majority group.” The Sixth Circuit explained that Ames, as a straight woman alleging sexual orientation discrimination, needed―but failed―to make that additional showing. In an opinion by Justice Jackson, the Court vacated and remanded.
The Court concluded that the background-circumstances rule “flouts” the “basic principle” that the “standard for proving disparate treatment under Title VII does not vary based on whether or not the plaintiff is a member of a majority group.” It explained that Title VII’s disparate-treatment provision protects “any individual” against discrimination based on the individual’s race, color, religion, sex, or national origin. Thus, “[a]s a textual matter, [the] provision draws no distinctions between majority-group plaintiffs and minority-group plaintiffs.” Because the background-circumstances rule imposes a heightened burden on majority-group plaintiffs for making a prima facie case, it is inconsistent with Title VII. The Court rejected the state agency’s characterization of the background-circumstances rule as being something other than an additional requirement for majority-group plaintiffs. The Court added that it “has long rejected” “inflexible” formulations of the prima facie standard in disparate-treatment cases. The background-circumstances rule contravenes that practice by effectively imposing a blanket requirement on majority-group plaintiffs making a prima facie case. The Court reaffirmed that the requirements for making a prima facie case should not be rigid, mechanized, or ritualistic.
Justice Thomas, joined by Justice Gorsuch, wrote separately to “highlight the problems that arise when judges create atextual legal rules and frameworks,” including the Sixth Circuit’s background-circumstances rule and the McDonnell Douglas three-step, burden-shifting framework for disparate-treatment cases. See McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). He opined that such judge-made doctrines are often vague, ill-defined, and thus difficult to apply. In his opinion, the difficulty of applying the background-circumstances rule is partly due to the need for courts to define what constitutes the “majority.” Justice Thomas stated that the term’s meaning has evolved and will vary by context. He noted as an example that “American families have become increasingly multicultural,” which will affect what is meant by the “majority” in the racial context. Regarding the McDonnell Douglas framework, Justice Thomas asserted that it has “no basis in the text of Title VII or any other source of law.” For various reasons, he doubted the framework is a “suitable tool for evaluating Title VII claims at summary judgment.” He thus criticized the majority for assuming the framework applies in the context of summary judgments.
BLOM Bank SAL v. Honickman, 23-1259.
The Court unanimously held that a movant seeking “to reopen a case for the purpose of filing an amended complaint” must show “extraordinary circumstances” to obtain relief under Federal Rule of Civil Procedure 60(b)(6). A group of victims and the families of victims of Hamas’ terrorist attacks in 2001 through 2003 sued BLOM Bank in district court. They alleged BLOM had aided and abetted Hamas in committing the terrorist attacks “by providing financial services to customers who were allegedly affiliated with Hamas and who had helped further Hamas’s goals.” BLOM moved to dismiss the complaint, arguing in part that it failed to state a claim of aiding and abetting under the Justice Against Sponsors of Terrorism Act (JASTA). Prior to the district court ruling on the motion, the plaintiffs—on three separate occasions—informed the district court that they did not intend to amend the complaint, even if the complaint were to be dismissed. The district court later granted BLOM’s motion to dismiss because, in relevant part, the complaint did not plausibly allege aiding and abetting under JASTA. And, considering the plaintiffs had repeatedly asserted that they did not intend or want to amend the complaint, the district court declined to grant the plaintiffs leave to amend. The Second Circuit affirmed. The plaintiffs returned to the district court and moved under Federal Rule of Civil Procedure 60(b)(6) “to vacate the then-affirmed judgment so that they could file an amended complaint.” The district court denied the motion, finding the plaintiffs had not shown the extraordinary circumstances needed for Rule 60(b)(6) relief. The Second Circuit reversed. It stated that when a party seeks vacatur under Rule 60(b) “to obtain leave to file an amended complaint, special considerations come into play’”; “the district court must give ‘due regard’ to ‘both [Rule 60(b)’s] philosophy favoring finality of judgments . . . and the liberal amendment policy of Rule 15(a),’” which requires courts to “freely give leave” to amend pleadings before trial “when justice so requires,” Fed. Rule Civ. Proc. 15(a)(2). In other words, held the Second Circuit, courts must “balance” the competing standards by “consider[ing] Rule 60(b) finality and Rule 15(a) liberality in tandem.” In an opinion by Justice Thomas, the Court vacated and remanded.
The Court reaffirmed that “[r]elief under Rule 60(b)(6) requires extraordinary circumstances”―and that is so even if the relief sought is to reopen a case for the purpose of amending a complaint. The Court explained that Rule 60(b) “allows a party to seek relief from final judgment and reopen a case” based on the circumstances enumerated in the rule. And Rule 60(b)(6) is a catchall provision available only when Rule 60(b)(1) through (b)(5) do not apply. “[S]hortly after” Congress adopted the catchall provision, the Court held that only “extraordinary circumstances” justify reopening a case under that provision. The Court has reaffirmed the extraordinary-circumstances standard numerous times and has emphasized that that standard is “’essential if the finality of the judgments is to be preserved.’” The Court reaffirmed that standard again here and found the Second Circuit’s reasoning “incompatible” with its “long line of precedents.” The Rule 60(b)(6) standard “does not change when a party seeks to reopen his case to amend his complaint.”
The Court explained that, when tasked with deciding such a motion, a court must first determine whether the moving party has satisfied Rule 60(b)(6) before it may consider applying Rule 15(a). Rule 15(a) governs “pretrial amendments.” As such, Rule 15(a)’s “liberal amendment policy” “does not govern when, following a final judgment, the case is closed and there is no pending pleading to amend.” In short, the extraordinary-circumstances standard remains the “only” standard applicable to motions seeking relief from a final judgment under Rule 60(b)(6). The Court noted that a court may still consider a “movant’s desire to amend his complaint” when deciding whether extraordinary circumstances exist. For these reasons, the Court concluded that the district court had properly treated the plaintiffs’ motion to vacate and amend as “’calling for two distinct analyses,’ with the question of vacatur under Rule 60(b)(6) preceding that of repleading under Rule 15(a).” The Court additionally concluded that the district court’s finding of no extraordinary circumstances did not constitute an abuse of discretion. The district court offered substantial justification for its conclusion, including the plaintiffs’ “’series of deliberate choices not to cure the deficiencies identified in their pleading.’”
Justice Jackson wrote a separate concurrence. She joined in the Court’s opinion in all respects but one. She believed the district court was wrong to fault the plaintiffs for choosing to appeal the complaint’s dismissal rather than amend the complaint pre-dismissal. In her opinion, declining to amend a complaint does not categorically preclude Rule 60(b)(6) relief and courts should refrain from denying Rule 60(b)(6) relief on only that basis. She cautioned that endorsing the district court’s reasoning could risk undermining a party’s right to appeal and may disincentivize parties from seeking an appeal under circumstances analogous to those here.
CC/Devas (Mauritius) Ltd. v. Antrix Corp. Ltd., 23-1201.
The Court unanimously held that a showing of “minimum contacts” is not required to establish personal jurisdiction under §1330(b) of the Foreign Sovereign Immunities Act of 1976 (FSIA). Generally, the FSIA makes foreign states and their instrumentalities immune from suit. The FSIA, however, contains exceptions to that rule that, if applicable, waive immunity. One exception applies to suits brought “to confirm arbitration awards.” The FSIA further provides that once an exception to foreign sovereign immunity applies, “[p]ersonal jurisdiction over a foreign state shall exist” if the foreign defendant has been properly served. 28 U.S.C. §1330(b). At issue here was whether the FSIA additionally requires a showing of minimum contacts to establish personal jurisdiction under that provision.
This case arose from a contract dispute between two foreign companies, Devas Multimedia Private Limited and Antrix Corporation Limited. Antrix “is owned by the Republic of India for use by its Department of Space.” Antrix terminated the parties’ contract in 2011. Devas sued Antrix for “the financial fallout,” prevailed in arbitration, and was awarded damages. After successfully confirming the arbitration award in several countries, Devas sought to confirm it in the United States. As a basis for federal jurisdiction over Antrix, Devas cited the FSIA’s arbitration-award exception. The District Court of the Western District of Washington found jurisdiction proper under that exception, confirmed the arbitration award, and entered a monetary judgment against Antrix. The Ninth Circuit reversed and dismissed for lack of personal jurisdiction. While it found an applicable exception to waive Antrix’s immunity and proper service, it further found that “Antrix lacked sufficient suit-related contacts with the United States” to satisfy the minimum-contacts test set forth in International Shoe Co. v. Washington, 326 U.S. 310 (1945). And circuit precedent held that the FSIA required that showing. In an opinion by Justice Alito, the Court vacated and remanded.
The Court concluded that §1330(b) of the FSIA imposes only two requirements for personal jurisdiction to exist over a foreign state, neither of which is minimum contacts. Section 1330(b) provides: “Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have [subject-matter] jurisdiction under subsection (a) where service has been made under section 1608 of this title.” Absent from that language, the Court noted, “is any reference to ‘minimum contacts.’” Thus, the Court found that the “most natural” and “straightforward” reading of §1330(b) is that personal jurisdiction automatically exists “when any of the FSIA’s immunity exceptions applies” and “service of process has been accomplished.” The Court acknowledged that the immunity exceptions have built-in requirements of “varying degrees of suit-related domestic contact.” But that simply shows that Congress chose to “deliberately” link jurisdiction to the waiver of immunity in a “’carefully calibrated’” manner. The Court refused to upset that system by reading a separate minimum-contacts requirement into §1330(b).
NAAG Center for Supreme Court Advocacy Staff
- Dan Schweitzer, Director and Chief Counsel
- Lauren Campbell, Supreme Court Fellow
- Gracynthia Claw, Supreme Court Fellow
The views and opinions of authors expressed in this newsletter do not necessarily state or reflect those of the National Association of Attorneys General (NAAG). This newsletter does not provide any legal advice and is not a substitute for the procurement of such services from a legal professional. NAAG does not endorse or recommend any commercial products, processes, or services. Any use and/or copies of the publication in whole or part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in the publications.
