On March 5, 1984, the U.S. Supreme Court decided Lynch v. Donnelly, 465 U.S. 668 (1984). The Court granted certiorari to determine whether the First Amendment’s Establishment Clause prohibits a municipality from including a nativity scene, also known as a creche, in its annual Christmas display. The Court held that a state body (e.g. city, township, etc.) can display a nativity scene on public property – but this must be based on a fact-specific inquiry.

In Lynch, the City of Pawtucket, Rhode Island, erected a Christmas nativity scene in a public park. The display contained many decorations traditionally associated with Christmas, including a Santa Clause house, reindeer pulling Santa's sleigh, a Christmas tree, carolers, hundreds of colored lights, cutout figures representing a clown, an elephant, and others, a large banner that read "SEASONS GREETINGS," and the nativity scene with the traditional figures of baby Jesus, Mary, Joseph, angels, shepherds, kings, and animals.

The American Civil Liberties Union (ACLU) of Rhode Island and others filed a federal lawsuit against the city arguing that the display of the nativity scene violated the First Amendment’s Establishment Clause. In short, the ACLU argued that a public body (such as a city, township, state, etc.) could not endorse a religion on public property through the use of religious displays like a nativity scene.

The U.S. Supreme Court struck down the ACLU’s argument and allowed the city to continue displaying the nativity scene. However, the Court held this was a fact-specific inquiry (and subsequent cases by the Court attempted to explain what should be taken into consideration with religious displays on public property).

On March 5, 1984, the Court explained that the purpose of the Establishment and Free Exercise Clauses of the First Amendment is "to prevent, as far as possible, the intrusion of either [the church or the state] into the precincts of the other." Citing, Lemon v. Kurtzman, 403 U.S. 602, 614 (1971). However, the Court recognized that "total separation is not possible in an absolute sense. Some relationship between government and religious organizations is inevitable." Id.

The Court then gave multiple examples as to how Church and State overlap at times. In the same week that Congress approved the Establishment Clause as part of the Bill of Rights in 1789, Congress also enacted legislation that paid Chaplains for the House and Senate. Presidential Executive Orders and other official announcements have proclaimed both Christmas and Thanksgiving as legal national holidays in religious terms.  The Court mentioned the nation’s religious toned national motto "In God We Trust," as used on national currency, and in the language "One nation under God," as part of the Pledge of Allegiance. The Court also noted that many government galleries have bought religious artwork, and even the chamber of the U.S. Supreme Court displays Moses and the Ten Commandments.

However, after the decision in Lynch, the Court decided multiple cases dealing with similar issues with seemingly confusing results. For example, in 1989, the Court held in Allegheny County v. ACLU that a nativity scene on the main staircase of the county courthouse was unconstitutional. The Court emphasized that this nativity scene was unaccompanied by Santa or secular animals and included a religious banner that read "Gloria in Excelsis Deo" ("Glory to God in the Highest"). So, what does this all mean?

Well, determining the constitutionality of religious displays by public bodies on public property nativity is very "fact-specific." In other words, there is no clear cut line on what constitutes a permissive religious display. With that said, Supreme Court case decisions seem to indicate some patterns and factors that are worth mentioning.

The Court seems to consider the following factors: (i) context – what and how things are displayed; (ii) "secular" versus "religious" – certain things are considered secular such as Santas, elves, and reindeer, while other things are considered religious symbols such as crèches and menorahs; (iii) Government versus private parties – i.e. whether the party displaying the nativity scene is the government or a private party; (iv) the "reasonable observer" test – how a reasonable person would interpret a particular display; and (v) signs – religious toned signs such as "Gloria in Excelsis Deo" have been denied by the Court, while the Court has allowed signs like "Happy Holidays."