ESPINOZA et al. v. MONTANA DEPARTMENT OF REVENUE et al.

Certiorari To The Supreme Court Of Montana

No. 18-1195. Argued January 22, 2020--Decided June 30, 2020

The Montana Legislature established a program that grants tax credits to those who donate to organizations that award scholarships for private school tuition. To reconcile the program with a provision of the Montana Constitution that bars government aid to any school “controlled in whole or in part by any church, sect, or denomination,” Art. X, §6(1), the Montana Department of Revenue promulgated “Rule 1,” which prohibited families from using the scholarships at religious schools. Three mothers who were blocked by Rule 1 from using scholarship funds for their children’s tuition at Stillwater Christian School sued the Department in state court, alleging that the Rule discriminated on the basis of their religious views and the religious nature of the school they had chosen. The trial court enjoined Rule 1. Reversing, the Montana Supreme Court held that the program, unmodified by Rule 1, aided religious schools in violation of the Montana Constitution’s no-aid provision. The Court further held that the violation required invalidating the entire program.

Held: The application of the no-aid provision discriminated against religious schools and the families whose children attend or hope to attend them in violation of the Free Exercise Clause of the Federal Constitution. Pp. 6–22.

 (a) The Free Exercise Clause “protects religious observers against unequal treatment” and against “laws that impose special disabilities on the basis of religious status.” Trinity Lutheran Church of Columbia, Inc. v. Comer, 582 U. S. ___, ___. In Trinity Lutheran, this Court held that disqualifying otherwise eligible recipients from a public benefit “solely because of their religious character” imposes “a penalty on the free exercise of religion that triggers the most exacting scrutiny.” Id., at ___. Here, the application of Montana’s no-aid provision excludes religious schools from public benefits solely because of religious status. As a result, strict scrutiny applies. Pp. 6–12.

 (b) Contrary to the Department’s contention, this case is not governed by Locke v. Davey, 540 U. S. 712. The plaintiff in Locke was denied a scholarship “because of what he proposed to do—use the funds to prepare for the ministry,” an essentially religious endeavor. Trinity Lutheran, 582 U. S., at ___. By contrast, Montana’s no-aid provision does not zero in on any essentially religious course of instruction but rather bars aid to a religious school “simply because of what it is”—a religious school. Id., at ___. Locke also invoked a “historic and substantial” state interest in not funding the training of clergy, 540 U. S., at 725, but no comparable tradition supports Montana’s decision to disqualify religious schools from government aid. Pp. 12–16.

 (c) The proposed alternative approach involving a flexible case-by-case analysis is inconsistent with Trinity Lutheran. The protections of the Free Exercise Clause do not depend on a varying case-by-case analysis regarding whether discrimination against religious adherents would serve ill-defined interests. Pp. 16–18.

 (d) To satisfy strict scrutiny, government action “must advance ‘interests of the highest order’ and must be narrowly tailored in pursuit of those interests.” Church of Lukumi Babalu Aye, Inc. v. Hialeah, 508 U. S. 520, 546. Montana’s interest in creating greater separation of church and State than the Federal Constitution requires “cannot qualify as compelling” in the face of the infringement of free exercise here. Trinity Lutheran, 582 U. S., at ___. The Department’s argument that the no-aid provision actually promotes religious freedom is unavailing because an infringement of First Amendment rights cannot be justified by a State’s alternative view that the infringement advances religious liberty. The Department’s argument is especially unconvincing because the infringement here broadly burdens not only religious schools but also the families whose children attend them. The Department suggests that the no-aid provision safeguards public education by ensuring that government support is not diverted to private schools, but that interest does not justify a no-aid provision that requires only religious private schools to bear its weight. Pp. 18–20.

 (e) Because the Free Exercise Clause barred the application of the no-aid provision here, the Montana Supreme Court had no authority to invalidate the program on the basis of that provision. The Department argues that the invalidation of the entire program prevented a free exercise violation, but the Department overlooks the Montana Supreme Court’s threshold error of federal law. Had the Montana Supreme Court recognized that the application of the no-aid provision was barred by the Free Exercise Clause, the Court would have had no basis for invalidating the program. The Court was obligated to disregard the no-aid provision and decide this case consistent with the Federal Constitution. Pp. 20–22.

393 Mont. 446, 435 P. 3d 603, reversed and remanded.

 Roberts, C. J., delivered the opinion of the Court, in which Thomas, Alito, Gorsuch, and Kavanaugh, JJ., joined. Thomas, J., filed a concurring opinion, in which Gorsuch, J., joined. Alito, J., and Gorsuch, J., filed concurring opinions. Ginsburg, J., filed a dissenting opinion, in which Kagan, J., joined. Breyer, J., filed a dissenting opinion, in which Kagan, J., joined as to Part I. Sotomayor, J., filed a dissenting opinion.


UNITED STATES PATENT AND TRADEMARK OFFICE et al. v. BOOKING.COM B. V.

Certiorari To The United States Court Of Appeals For The Fourth Circuit

No. 19-46. Argued May 4, 2020--Decided June 30, 2020

A generic name—the name of a class of products or services—is ineligible for federal trademark registration. Respondent Booking.com, an enterprise that maintains a travel-reservation website by the same name, sought federal registration of marks including the term “Booking.com.” Concluding that “Booking.com” is a generic name for online hotel-reservation services, the U. S. Patent and Trademark Office (PTO) refused registration. Booking.com sought judicial review, and the District Court determined that “Booking.com”—unlike the term “booking” standing alone—is not generic. The Court of Appeals affirmed, finding no error in the District Court’s assessment of how consumers perceive the term “Booking.com.” The appellate court also rejected the PTO’s contention that, as a rule, combining a generic term like “booking” with “.com” yields a generic composite.

Held: A term styled “generic.com” is a generic name for a class of goods or services only if the term has that meaning to consumers. Pp. 6–14.

  (a) Whether a compound term is generic turns on whether that term, taken as a whole, signifies to consumers a class of goods or services. The courts below determined, and the PTO no longer disputes, that consumers do not in fact perceive the term “Booking.com” that way. Because “Booking.com” is not a generic name to consumers, it is not generic. Pp. 6–7.

  (b) Opposing that determination, the PTO urges a nearly per se rule: When a generic term is combined with a generic Internet-domain-name suffix like “.com,” the resulting combination is generic. The rule the PTO proffers is not borne out by the PTO’s own past practice and lacks support in trademark law or policy. Pp. 7–14.

   (1) The PTO’s proposed rule does not follow from Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598. Goodyear, the PTO maintains, established that adding a generic corporate designation like “Company” to a generic term does not confer trademark eligibility. According to the PTO, adding “.com” to a generic term—like adding “Company”—can convey no source-identifying meaning. That premise is faulty, for only one entity can occupy a particular Internet domain name at a time, so a “generic.com” term could convey to consumers an association with a particular website. More- over, an unyielding legal rule that entirely disregards consumer perception is incompatible with a bedrock principle of the Lanham Act: The generic (or nongeneric) character of a particular term depends on its meaning to consumers, i.e., do consumers in fact perceive the term as the name of a class or, instead, as a term capable of distinguishing among members of the class. Pp. 8–11.

   (2) The PTO’s policy concerns do not support a categorical rule against registration of “generic.com” terms. The PTO asserts that trademark protection for “Booking.com” would give the mark owner undue control over similar language that others should remain free to use. That concern attends any descriptive mark. Guarding against the anticompetitive effects the PTO identifies, several doctrines ensure that registration of “Booking.com” would not yield its holder a monopoly on the term “booking.” The PTO also doubts that owners of “generic.com” brands need trademark protection in addition to existing competitive advantages. Such advantages, however, do not inevitably disqualify a mark from federal registration. Finally, the PTO urges that Booking.com could seek remedies outside trademark law, but there is no basis to deny Booking.com the same benefits Congress accorded other marks qualifying as nongeneric. Pp. 11–14.

915 F. 3d 171, affirmed.

 Ginsburg, J., delivered the opinion of the Court, in which Roberts, C. J., and Thomas, Alito, Sotomayor, Kagan, Gorsuch, and Kavanaugh, JJ., joined. Sotomayor, J., filed a concurring opinion. Breyer, J., filed a dissenting opinion.