On June 14, 2004, the Supreme Court held Michael Newdow, as a non-custodial parent, did not have standing to bring the suit on his daughter's behalf. The Ninth Circuit's decision was thus reversed as a matter of procedural law.
Thus, the Court also did not consider the constitutional question raised by the case.
On January 3, 2005, a new suit was filed in the U.S. District Court for the Eastern District of California on behalf of three unnamed families. On September 14, 2005, District Court Judge Lawrence Karlton ruled in favor of Newdow. Citing the precedent of the 2002 ruling by the Ninth Circuit Court of Appeals, Judge Karlton issued an Order stating that, upon proper motion, he will enjoin the school district defendants from continuing their practices of leading children in pledging allegiance to "one Nation under God." The case was later appealed to the Ninth Circuit under Newdow v. Carey and is awaiting judgment.
A three-judge panel of the Court unanimously found Mr. Newdow had standing as a parent to challenge a practice that interferes with his right to direct the religious education of his daughter. On the merits of the case, the Court reversed the trial court decision on a 2 to 1 vote, on June 26, 2002. The majority opinion was written by Judge Alfred T. Goodwin with a partial concurrence and partial dissent written by Judge Ferdinand F. Fernandez. In reviewing the case, the Court applied the Lemon test, the Endorsement Test, and the Coercion Test. In doing so, the Court concluded recitation of the Pledge with the words "under God" included violated the Establishment Clause.
In Judge Fernandez's partial dissent, he asserts that the religious content of the 'under God' addition is so small that it is de minimis - so trivial as to be properly beneath judicial notice.
Public and Congressional reaction to the Ninth Circuit's decision was decidedly negative. About 150 Members of Congress stood on the front steps of the Capitol and recited the Pledge including the words under God; and the Senate passed a non-binding resolution (S. 2690) affirming the presence of under God by a unanimous vote (99, with one Senator absent).
After the June opinion was issued, Sandra Banning - the mother of the child in question (Newdow and Banning were not married) filed a motion to intervene or, alternatively, to dismiss Newdow's complaint. She declared that although she and Newdow shared actual custody of their daughter, a California court order granted her exclusive legal custody of the child, including the sole right to represent her legal interests and make all decision[s] about her education" and welfare. Banning further stated that her daughter is a Christian who believes in God and has no objection either to reciting or hearing others recite the Pledge of Allegiance, or to its reference to God. Banning expressed the belief that her daughter would be harmed if the litigation were permitted to proceed, because others might incorrectly perceive the child as sharing her father's atheist views. Banning accordingly concluded, as her daughter's sole legal custodian, that it was not in the child's interest to be a party to Newdow's lawsuit.
The Court's second published opinion noted that Newdow no longer claimed to represent his daughter, but the judges unanimously concluded that Banning's sole legal custody of the child did not deprive Newdow, as a noncustodial parent, of Article Three standing to object to unconstitutional government action affecting his child. The court further held that under California law Newdow retained the right to expose his child to his particular religious views even if those views contradicted the mother's, and that Banning's objections as sole legal custodian did not defeat Newdow's right to seek redress for an alleged injury to his own parental interests.
Defendants sought en banc review. This was denied and an amended order and opinion was issued in February, 2003. The amended opinion omitted the initial opinion's discussion of Newdow's standing to challenge the 1954 Act and declined to determine whether Newdow was entitled to declaratory relief regarding the constitutionality of that Act.
On September 11, 2003 Newdow was awarded partial custody of his daughter, including joint legal custody.
From the 9th circuit hearing:
Justice Antonin Scalia recused himself from the case after a request by Newdow that cited Scalia's disapproval of the Ninth Circuit decision in a public speech. According to Scalia, many lower courts often misinterpret the Establishment Clause, extending its proscription of religiosity in the public sphere.
On June 14, 2004, in an opinion written by Justice John Paul Stevens, five of the remaining eight justices - Stevens, Anthony Kennedy, Stephen Breyer, David Souter, and Ruth Bader Ginsburg - found Michael Newdow lacked standing to bring the case as "next friend" to his daughter, because Sandra Banning had sole legal custody of the child at the time - including exclusive authority over the girl's education. The majority also found that Michael Newdow lacked prudential standing to bring the case on behalf of himself due to the custody arrangement. This resulted in reversal of the Ninth Circuit's decision as a matter of procedural law.
The other three justices concurred in the judgment reversing the Ninth Circuit, but dissented on the issue of standing. They found Michael Newdow did have standing to bring the suit. Thus, they proceeded to examine the constitutional question, and in doing so they found it did not offend the Constitution. Chief Justice William Rehnquist wrote an opinion in which the other two joined in part; and both justice Sandra Day O'Connor and Justice Clarence Thomas wrote their own separate opinions.
The Chief Justice's opinion asserts the term "under God" does not endorse or establish religion but it actually asserts that the term merely acknowledges the nation's religious heritage, in particular the role of religion for the Founding Fathers of the United States. Thus, according to the opinion, the Pledge is a secular act rather than an act of indoctrination in religion or expression of religious devotion.
Justice Thomas, by contrast, asserts that finding the Pledge unconstitutional is an unjustifiable expansion of the meaning of "coercion" as that term is used in legal precedent: to prohibit compelling students in a "fair and real sense" by "subtle and indirect public and peer pressure" (see, Lee v. Weisman, 505 U.S. 577 (1992)) to be prayerful, as well as prohibiting actual coercion by force of law and threat of penalty. Further, he argues that the Establishment Clause ought not be considered a right that attaches to individuals pursuant to the Incorporation Doctrine, because he believes the clause only prohibits interference by the federal government in the right of individual states to establish their own official religions - notwithstanding current majority opinion on the question is against states having such a right, as a result of the Incorporation Doctrine.