A federal appeals court has ruled that Maine may exclude Christian schools from public funding if they refuse to comply with the state’s gender- and sexuality-related nondiscrimination laws, Catholic World Report reports.

The U.S. Court of Appeals for the First Circuit on July 2 denied an injunction sought by St. Dominic Academy in the Diocese of Portland, which had objected to requirements that it facilitate student “gender transitions” and compel staff to use opposite-sex pronouns. A similar suit by Bangor’s Crosspoint Church, which runs a K–12 Christian school, was partly combined into the ruling.

The court held that “combatting sexual-orientation and gender-identity discrimination” is a “legitimate governmental pursuit” and that conditioning public funds on compliance “rationally relates” to that goal. The ruling was not a total loss for the schools: the court found Maine cannot dictate faith-based hiring practices or restrict religious expression on campus.

The decision comes four years after the Supreme Court held in Carson v. Makin (2022) that Maine could not exclude religious schools from its tuition assistance program. Attorneys with the Becket Fund for Religious Liberty, which represents St. Dominic Academy, say the state responded by rewriting its funding rules knowing the new conditions “would be a red line” for religious schools. Becket argues the ruling conflicts with Carson and the 2025 Mahmoud v. Taylor decision, and the schools may appeal to the Supreme Court, which takes up a related religious-school funding case in October.