Religious Institutions Update: May 2025

Key Cases

Privacy

Federal Trade Commission Protects Worship Location Data

Shannon Britton Hartsfield and Bess Hinson-Greenspan

Recent Federal Trade Commission (FTC) enforcement activity signals that companies need to protect consumer location data that could reflect sensitive locations, including the consumer's place of worship. The FTC views consumer location data as information that must be protected, particularly when it signals that an individual visits a church or similar locations. In January 2025, the FTC finalized two separate orders relating, in part, to this type of data.

Complaint Against Gravy Analytics and Venntel

One order resulted from a complaint against Gravy Analytics and its subsidiary Venntel. The FTC's complaint alleged that these companies acted unfairly and in violation of the FTC Act by selling sensitive location data and collecting and using such data "without obtaining verifiable consent for government and commercial uses." The business practices of Gravy Analytics and Venntel involved mobile phone data. The complaint observed that "[m]ost consumers report keeping their phones near them at all times, meaning that their phones go everywhere that they go." In fact, these companies asserted in their marketing materials that "where we go is who we are." These companies did not interact with consumers directly. Instead, the FTC alleged that the companies collected and used mobile location data from other data suppliers, compiled it and then sold it to third parties even after learning that consumers did not consent to the collection of that data. Gravy Analytics focused on selling the data to commercial customers, while Venntel focused on selling the data to public sector customers. The precise geolocation data could be used to track consumers to places of worship and other sensitive locations.

The FTC views location data obtained through mobile phone data as personal information that can expose sensitive information, including religious beliefs. In the complaint, the FTC discussed examples of situations where entities used precise geolocation data to identify consumers and their activities. In one example, a Catholic priest was forced to resign after geolocation data revealed he visited LGBTQ+-associated places. Another example related to journalists who were able to identify a consumer attending a church prayer service. Gravy Analytics marketed the data to its customers as useful to understand consumers' "values, interests, [and] lifestyles." Gravy Analytics was able to geofence specific churches and provided customers with information regarding church attendees and how many times they frequented particular churches.

Although Gravy Analytics and Venntel asked data suppliers whether they were obtaining affirmative, express consent to collect sensitive information, the complaint alleged that they did not take reasonable steps to confirm such consent. In some cases, they continued to use location data even after learning that the consumers did not consent. Additionally, location information was used for purposes unrelated to the purposes disclosed to consumers.

Complaint Against Mobilewalla

A separate order involved a data broker, Mobilewalla Inc. With respect to religious institution data, the complaint included allegations that Mobilewalla had helped its clients target Hispanic churchgoers. Mobilewalla used location information to identify consumer segments that attended rallies and protests. For example, it published a report analyzing individuals who protested the death of George Floyd. The report included racial demographics of the protesters, using information (including places of worship) that individuals had previously visited.

The complaint alleged that Mobilewalla obtained personal data from brokers and aggregators without contractually requiring its suppliers to obtain consumer consent, and instead relied on contractual provisions stating that the supplier's sale of the data complied with law. The FTC complaint further alleged that "Mobilewalla's collection and sale of consumers' precise geolocation data to its clients to identify and target consumers based on sensitive characteristics causes or is likely to cause substantial injury in the form of stigma, discrimination, physical violence, emotional distress, and other harms." Mobilewalla also obtained data from real-time bidding (RTB) exchanges. The RTB exchanges are designed to deliver advertisements to a consumer's device instantly, such as when they are using an app or visiting a website. The advertisers bid to place advertisements based on consumer information included in the bid request. Even if they do not have a winning bid, the advertisers can allegedly see and collect consumer information, including geolocation information, in the bid request, and Mobilewalla allegedly obtained personal data through this method. The complaint also alleged that Mobilewalla indefinitely retained sensitive consumer information.

Final Orders

Both of the final orders against these companies prohibited them from selling, disclosing or using sensitive location data without the consumer's "affirmative express consent" or confirmation that the consumers specifically consented to the collection, use and disclosure of their geolocation data, except in circumstances relating to national security. "Affirmative Express Consent," according to the final orders, must meet several criteria, including providing clear and conspicuous disclosure of the information to be collected, used and disclosed, as well as hyperlinks to descriptions of the recipients and a means to withdraw consent.

Lessons for Religious Institutions

These two enforcement actions indicate that the FTC views geolocation data as sensitive when it reveals an individual's religious practices. Religious institutions should be aware that third parties, such as mobile applications, may collect location data about their staff, parishioners and other visitors, and that data may be shared with additional third parties, such as data brokers. Religious institutions may consider advising their constituents to pay attention to opportunities to consent to or to opt out of the collection and sharing of data such as precise geolocation data. Data brokers should ensure that they and their customers provide clear and conspicuous disclosure of the information to be collected, used and disclosed, and also provide methods for consumers to withdraw consent to the collection of sensitive information such as geolocation information.

Free Exercise

Church Lacks Standing to Challenge Washington Reproductive Parity Act

Nathan A. Adams IV

In Cedar Park Assembly of God of Kirkland, Wash. v. Kreidler, 130 F. 4th 757 (9th Cir. March 6, 2025), the plaintiff challenged the Washington Reproductive Parity Act (WRPA), which requires insurance carriers to provide coverage for all federally approved contraceptives and, if maternity care is covered, abortions. The court ruled (2-1) that the plaintiff lacked standing because the plaintiff's injury is not traceable to the WRPA and the plaintiff's injury would not be redressed if the court struck the WRPA. The WRPA, its implementing regulation and Washington state's conscientious-objection statute, Wash. Rev. Code. s. 48.43.065(3)(a), enable "no-abortion group health coverage." Therefore, an insurance company's independent business decision not to offer such a plan is not traceable to the WRPA. The court also rejected the plaintiff's claim that it indirectly facilitated abortion in violation of the First Amendment. The plaintiff does not need to purchase abortion coverage from an insurer for its employee benefits package under the WRPA, but the insurer must still provide coverage of and timely access to abortions as part of the plaintiff's health plan. Nevertheless, according to the court, "The general disapproval of the actions that others might decide to take does not create standing, even when some tenuous connection may exist between the disapproving plaintiff and the offense-creating action." Judge Consuelo Callahan dissented. He wrote, "[T]he majority never comes to grips with the fact that the [WRPA] requires insurers to cover abortion in Cedar Park's health plan." Moreover, the court previously held that the plaintiff had standing, on remand the district court agreed and the issue was not briefed on appeal.

California Nonsectarian Requirement to Provide FAPE to Students Overturned

Nathan A. Adams IV

In Loffman v. Cal. Dep't of Educ., 119 F. 4th 1147 (9th Cir. 2024), the court of appeals ruled that California's requirement that nonpublic schools (NPS) with which it contracted to provide students with disabilities a free appropriate public education (FAPE) under the Individuals with Disabilities Education Act (IDEA) be nonsectarian violated the Free Exercise Clause. "[A]ny religiously affiliated school … must choose whether to maintain its religious affiliation or to serve as an NPS eligible for consideration by the LEA [Local Educational Agency] in determining whether it may be in the best position to provide an IEP [Individualized Education Program] for an individual child." The court determined that the nonsectarian requirement was not narrowly tailored to the state's interest in maintaining neutrality required by the Establishment Clause. "Specifically, the State Appellee fails to address 'by reference to historical practices and understandings,' why the applicable Federal regulations that govern religious entities performing government contracts are insufficient to address the State's neutrality concerns."

Injunction Against Healthcare Sharing Ministry Affirmed

Nathan A. Adams IV

In Renteria v. New Mexico Office of the Superintendent of Ins., No. 23-2123, 2025 WL 635754 (10th Cir. Feb. 27, 2025), Gospel Light Mennonite Church Medical Aid Plan d/b/a Liberty HealthShare appealed denial of a preliminary injunction against a final order obtained by the New Mexico Office of the Superintendent of Insurance (OSI), requiring Liberty HealthShare to cease operating as a healthcare sharing ministry in New Mexico. The court of appeals affirmed the denial of the preliminary injunction, ruling that Liberty HealthShare failed to show that OSI's motivations were based on religious animus, rather than enforcement of the New Mexico Insurance Code (NMIC). OSI warned New Mexico consumers in a consumer advisory about "scammers trying to lure people into purchasing low-quality health insurance," but the court found that Liberty HealthShare also acknowledged the existence of fraudulent health share organizations. Liberty HealthShare argued that the NMIC is not generally applicable because it provides exceptions for fraternal benefit organizations and labor organizations, but the court ruled that those activities were not comparable to Liberty HealthShare's religious activity. The court concluded that the final order enforcing the NMIC satisfies the rational basis test and rejected Liberty HealthShare's argument that the Affordable Care Act and Internal Revenue Code preempt OSI's enforcement of the NMIC. Judge Joel Carson dissented, arguing that the government had shown hostility toward Liberty HealthShare, had created a "religious gerrymander" by punishing it while allowing secular organizations to escape the same level of regulation through various exemptions and had shown preemption.

Plaintiffs Lacked Standing to Challenge Inclusion of Caste as a Protected Class

Nathan A. Adams IV

In Kumar v. Koester, 131 F. 4th 746 (9th Cir. 2025), professors alleged that a state university's inclusion of caste as a protected class in its anti-discrimination and harassment policy stigmatized their Hindu religion and caused them to self-censor certain religious practices in violation of the Free Exercise, Due Process and Establishment Clauses. Likewise, in Bagal v. Sawant, No. 24-1488, 2025 WL 251427 (9th Cir. Jan. 21, 2025), the appellant asserted a facial challenge to the City of Seattle's Anti-Caste Discrimination Ordinance as in violation of the Free Exercise and Establishment Clauses. The court of appeals concluded in both cases that the plaintiffs failed to establish standing to bring the claims. The professors in Kumar failed to show that they intended to engage in any religious practice that could reasonably constitute caste discrimination or harassment such that the policy would be enforced against them. Furthermore, the policy defined caste without reference to Hinduism and there was no evidence that the university, faculty or students who supported the policy expressed anti-Hindu sentiments. Plaintiff Abhijit Bagal was a resident of North Carolina and failed to offer a plausible connection between his decision to refrain from engaging in certain Hindu practices in North Carolina and a Seattle ordinance prohibiting none of those activities.

Religious Employers State Expressive Association Claim Against New York Employment Discrimination Statute

Nathan A. Adams IV

In Compasscare v. Hochul, 125 F. 4th 49 (2d Cir. 2025), religious employers alleged that a New York statute prohibiting employment discrimination based on an employee's reproductive health decision making violated their First Amendment rights. N.Y. Lab. Law s. 203-e. The court of appeals ruled that the employers plausibly pled a claim that the statute violated their freedom of expressive association by prohibiting them from terminating or refusing to hire a person who has used contraception or had an abortion in conflict with their beliefs, but rejected their free speech, free exercise rights and compelled speech claim, dependent upon their having to notify employees in their employee handbooks of the employees' rights and remedies under the statute. As to the surviving claim, the court instructed the district court that on remand it must evaluate whether each plaintiff has separately plausibly alleged that the statute burdens its distinct associational rights by forcing it to "employ individuals who act or have acted against" its "very mission," and whether it has plausibly alleged that the statute burdens its associational rights with respect to specific employment decisions.

Faith-Based Group Fails to State a Claim Against Anti-Conversion Therapy Regulation of Mental Health Professionals

Nathan A. Adams IV

In Catholic Charities of Jackson v. Whitmer, No. 1:24-cv-718, 2025 WL 369743 (W.D. Mich. Jan. 28, 2025), the plaintiff challenged an amendment to Michigan's Mental Health Code, prohibiting Michigan-licensed mental health professionals from engaging in conversion therapy with minors. The district court ruled that the plaintiff was not likely to succeed on its free speech, free exercise or due process challenges to the amendment and denied an injunction. According to the court, the amendment is facially neutral and prohibits course of conduct and treatment rather than speech and thus was subject to rational basis review. Furthermore, the court decided that the legislature "acted rationally when it decided to protect the psychological wellbeing of its minors … ." To the extent it implicated a therapist's First Amendment rights, it was only as part of the practice of a profession subject to reasonable licensing and regulation by the state. According to the court, regulations of professional conduct fall within an exception to heightened scrutiny.

Churches Cannot Be Excluded from New Jersey's Historical Preservation Grant Program

Nathan A. Adams IV

In Mendham Methodist Church v. Morris Cnty., N.J., No. 23cv2347, 2024 WL 4903677 (D.N.J. Nov. 27, 2024), two churches applied for and were denied historical preservation grants for church repairs because in 2018, the New Jersey Supreme Court decided that grants to repair churches would violate the New Jersey Constitution's Religious Aid Clause. It states, "No person shall … be obliged to pay … taxes, or other rates for building or repairing any church or churches, place or places of worship, or for the maintenance of any minister or ministry." N.J. Const. Art. I ¶ 3. The court decided that the exclusionary rule (Rule 5.6.4), stating that "[a]ny property that is currently used for religious purposes or functions is ineligible for Historic Preservation grant funding," violates the Free Exercise Clause and enjoined it.

Employment Discrimination

Program Manager States Sexual Orientation Claim Against Religious Institution

Nathan A. Adams IV

In Doe v. Catholic Servs., No. 1:20-cv-01815-JRR, 2025 WL 1158695 (D. Md. April 21, 2025), the district court applied the results of certifying three questions to the Supreme Court of Maryland: 1) whether the prohibition against sex discrimination in the Maryland Fair Employment Practices Act (MFEPA) prohibits discrimination on the basis of sexual orientation; 2) whether MFEPA applies to a religious corporation with respect to the employment of individuals of a particular sexual orientation or gender identity to perform work connected with all activities of the religious entity or only those that are religious in nature, and 3) whether the prohibition against sex discrimination in MFEPA prohibits discrimination on the basis of sexual orientation. The Supreme Court of Maryland answered "no" to the first and third questions, but concluded in response to the second question that the language of the exemption is ambiguous and "the General Assembly intended to exempt religious organizations from these kinds of MFEPA claims brought by employees who perform duties that directly further the core mission (or missions) of the religious entity." The district court concluded that John Doe, in his role as gateway manager II and global monitoring, evaluation, accountability and learning (MEAL) advisor, program manager I, did not fit this profile, notwithstanding that the defendant "uses Gateway for important data collection and coordination, tracking funding opportunity data and tracking and managing CRS's institutional donor relationships" and "MEAL is an important (indeed, required) framework utilized in CRS's [Catholic Relief Services'] Changing the Way We Care Team." The district court also concluded that the MFEPA is neutral and generally applicable in its application to the plaintiff.

Transgendered Employee States Claim Against Religious University

Nathan A. Adams IV

In Zinski v. Liberty Univ., Inc., No. 6:24-cv-00041, 2025 WL 1005818 (W.D. Va. April 3, 2025), the plaintiff underwent a sex transition from man to woman and was terminated from employment as a full-time information services apprentice on the university's Information Technology Helpdesk. The court rejected the university's defenses, including the: 1) religious exceptions in Sections 702 and 703 of Title VII, 2) Religious Freedom Restoration Act (RFRA), 3) ministerial exception, 4) First Amendment freedom of expressive association and 5) ecclesiastical abstention doctrine. The court ruled that "Sections 702 and 703 must be narrowly construed so as to permit discrimination only on the basis of an employee's espoused religious belief or practice, such that religious employers have no license to discriminate on the basis of any other protected class. Where a religious employer discriminates on the basis of any other protected class in a but-for fashion, a statutory violation occurs, even if the decision was religiously motivated." The court decided that RFRA is not actionable between private parties. In addition, the court decided that the plaintiff was not a minister, as the plaintiff had an "entirely secular" title and exclusively technological and administrative duties. Also, the plaintiff did not purport to be a minister. The court concluded that, although the university engages in protected First Amendment activity, the burden imposed by Title VII on its expressive interest is minimal and satisfies the rational basis test. Last, the court decided that it was not required to interpret scripture to determine whether Title VII prohibits the university from firing the plaintiff and, thus, the ecclesiastical abstention doctrine does not apply. The district court certified its order for interlocutory appeal and, simultaneously, the rulings under Sections 702 and 703 of Title VII have been appealed as of right.

Church Autonomy

School Entitled to Participate in Universal Preschool Program with Discrimination Exception

Nathan A. Adams IV

In Darren Patterson Christian Acad. v. Roy, No. 1:23-cv-01557-DDD-STV, 2025 WL 700268 (D. Colo. Feb. 24, 2025), a private religious preschool alleged that a condition for participating in the state's universal preschool program that the school not discriminate on the basis of religion, sexual orientation or gender identity violated its religious autonomy rights. The district court agreed that the state failed to provide a compelling interest, justifying not extending an exception to the preschool even though it granted an exception to other institutions. The court found certain claims moot because the defendant withdrew provisions from the application.

Ministerial Exception

Ministerial Exception Doctrine Bars Mashgiach's Employment Claims

Nathan A. Adams IV

In Markel v. Union of Orthodox Jewish Congregations of Am., 124 F. 4th 796 (9th Cir. 2024), the court of appeals ruled that a mashgiach, who supervised food preparation to ensure kosher compliance, was a minister within the meaning of the ministerial exception doctrine, barred from stating wage and hour, unfair business practice, fraud and negligent misrepresentation claims against his former employer, a not-for-profit corporation that operated a kosher certification program to serve the Orthodox Jewish community, its supervisors and religious leaders. The court determined that the not-for-profit was a religious corporation based on a four-part test. An entity is "religious" if: 1) "it is organized for a religious purpose," 2) it "is engaged primarily in carrying out that religious purpose," 3) it "holds itself out to the public as an entity for carrying out that religious purpose" and 4) it "does not engage primarily or substantially in the exchange of goods or services for money beyond nominal amounts." The plaintiff challenged the applicability of the fourth prong because the not-for-profit generated revenue, but the court emphasized that the organization is nonprofit. The plaintiff also invited the court to rule that if a religious purpose did not animate the relevant employment decision, then the ministerial exception should not apply, but the court declined the invitation due to potential excessive entanglement between church and state, and the reality that "religious institution's decisions, even if facially secular, are often intertwined with religious doctrine." A 2-1 majority added that the U.S. Supreme Court "has taken a 'broad' view of who counts as a minister."

RFRA

USCIS May Exclude Nonimmigrant Religious Workers from Concurrent Filing Opportunity

Nathan A. Adams IV

In Soc'y of the Divine Word v. U.S. Citizenship and Immigration Servs., 129 F. 4th 437 (7th Cir. 2025), religious employers sued U.S. Citizenship and Immigration Services (USCIS) for allowing some categories of nonimmigrant workers, excluding nonimmigrant religious workers, to file applications for special immigrant worker status and permanent resident status concurrently. 8 C.F.R. s. 245.2(a)(2)(i)(B). The plaintiffs argued that the regulation violates RFRA because it substantially burdens their ability to select and retain ministers of their choice. The court of appeals disagreed, ruling that the plaintiffs failed to identify any religious belief they are required to violate to comply with the regulation. "At most, the regulation 'requires employers to plan the timing of employment decisions based on immigration status, and potentially limits the pool of qualified applicants that plaintiffs can choose from if they fail to plan accordingly.'" Furthermore, the court of appeals affirmed the district court's decision to dismiss the plaintiff's Free Exercise Clause claim on the basis of its RFRA analysis. Last, the court ruled that the regulation did not violate the Establishment Clause.

Challenges to Rescission of "Sensitive Locations" Immigration Policy Have Mixed Results

Nathan A. Adams IV

In Philadelphia Yearly Meeting of the Religious Soc'y of Friends v. U.S. Dep't of Homeland Sec., No. 25-0243-TDC, 2025 WL 585768 (D. Md. Feb. 24, 2025) and Mennonite Church USA v. U.S. Dep't of Homeland Sec., No. 25-cv-00403 (DLF), 2025 WL 1094223 (D.D.C. April 11, 2025), religious organizations sought injunctive relief against the defendant after it rescinded its "sensitive locations" policy, which previously directed immigration officers to avoid enforcement actions in or near places of worship. The plaintiffs argued that the rescission violates RFRA. In Mennonite Church, the district court ruled that the plaintiffs failed to establish standing to assert a pre-enforcement challenge, absent evidence of specific directives to immigration officers to target the plaintiffs' places of worship or a pattern of enforcement actions. The plaintiffs established one enforcement action at a plaintiff church, two at non-plaintiff churches and four reports of surveillance at or near members' premises. Furthermore, the court ruled that the plaintiffs failed to show that the rescission was a but-for cause of alleged declines in attendance, reinstating the 2021 guidance would redress the attendance decline or that a "conscious injury" was enough.

In contrast, in Philadelphia Yearly Meeting, the court considered a decline in attendance, together with members' stated discomfort about the potential for armed law enforcement officers inside their places of worship, sufficient for standing and to state a claim under RFRA. According to the court, "A government policy may burden associational rights by deterring attendance at religious activities." The fact that the defendant was previously able to carry out its mission without impinging on places of worship established for the court that the rescission is not the least restrictive means of achieving the government's interests. The court enjoined the defendant from carrying out potential or actual immigration enforcement actions in or near any place of worship owned, operated, occupied or used by one of the plaintiffs or their agents except in compliance with the 2021 enforcement guidelines on the grounds that the plaintiffs are likely to succeed on their claims that the rescission substantially burdens their expressive association and RFRA rights.

RFRA Does Not Apply to Suits Between Private Parties

Nathan A. Adams IV

In Ermold v. Davis, 130 F. 4th 553 (6th Cir. 2025), the court ruled that Kentucky's RFRA does not apply in suits between private parties and did not provide the county clerk of the court with a defense to liability for refusing to issue marriage licenses to same-sex couples despite their eligibility for them. The court also ruled that the clerk could not raise the Free Exercise Clause as a defense to liability because it protects "private conduct," not "state action."

RLUIPA

Organizations State Claim Under RLUIPA for Discriminatory Hazardous Industrial Development

Nathan A. Adams IV

In Inclusive Louisiana v. St. James Parish, No. 23-30908, 2025 WL 1064847 (5th Cir. 2025), faith and community-based organizations and a church brought an action against the parish, parish council and parish planning commission, alleging that they discriminated against them by directing hazardous industrial facility developments towards majority-Black districts and Black churches, and that the parish authorized industrial development that desecrated, destroyed and restricted access to cemeteries of their enslaved ancestors. The court of appeals ruled that the plaintiffs had standing to assert their religious discrimination claims for property-based damages under the Religious Land Use and Institutionalized Persons Act (RLUIPA), the Louisiana Constitution's preservation of linguistic and cultural origins provision, and stigmatic injury under the Equal Protection Clause. Specifically, the plaintiffs pled the parish's approval of a land use permit for construction of a polyurethane manufacturing facility within 1 mile of a historically majority-Black Baptist church and for a methanol production plant in the district in which Black churches were located.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.