The court turned away an appeal from the Christian Legal Society, which sued to get funding and recognition from the University of California's Hastings College of the Law.
The CLS requires that voting members sign a statement of faith and regards "unrepentant participation in or advocacy of a sexually immoral lifestyle" as being inconsistent with that faith.
But Hastings said no recognized campus groups may exclude people due to religious belief or sexual orientation.
The court on a 5-4 judgment upheld the lower court rulings saying the Christian group's First Amendment rights of association, free speech and free exercise were not violated by the college's decision.
"In requiring CLS - in common with all other student organizations - to choose between welcoming all students and forgoing the benefits of official recognition, we hold, Hastings did not transgress constitutional limitations," said Justice Ruth Bader Ginsburg, who wrote the 5-4 majority opinion for the court's liberals and moderate Anthony Kennedy. "CLS, it bears emphasis, seeks not parity with other organizations, but a preferential exemption from Hastings' policy."
Justice Samuel Alito wrote a strong dissent for the court's conservatives, saying the opinion was "a serious setback for freedom of expression in this country."
"Our proudest boast of our free speech jurisprudence is that we protect the freedom of express 'the thought that we hate,'" Alito said. "Today's decision rests on a very different principle: no freedom of expression that offends prevailing standards of political correctness in our country's institutions of higher learning."
In Other Supreme Court News Today:
• The Court ruled thatas a restraint on the ability of the federal, state and local governments to substantially limit its reach.
The court's conservative wing prevailed by a narrow 5-4 margin, but signaled that less severe restrictions could survive legal challenges.
The decision by Justice Samuel Alito said the Second Amendment right "applies equally to the federal government and the states."
Two years ago, in a ruling that applied only to federal laws, the court struck down a District of Columbia ban on handguns and a trigger lock requirement, declaring the Second Amendment protects an individual's right to possess guns, at least for purposes of self-defense in the home. Gun rights proponents almost immediately filed a federal lawsuit challenging gun control laws in Chicago and its suburb of Oak Park, Ill, where handguns have been banned for nearly 30 years.
• Without comment, the court turned down appeals by both the Obama administration and the nation's largest tobacco companies to get involved in.
The court's action leaves in place court rulings that the tobacco industry illegally concealed the dangers of smoking for decades, but also prevents the government from trying to extract billions of dollars from the industry.
• The Court also announced, agreeing to hear a challenge from business and civil liberties groups to an Arizona law that cracks down on employers who hire undocumented workers.
The justices on Monday accepted an appeal from the Chamber of Commerce, American Civil Liberties Union and others to a lower court ruling that upheld Arizona's law.
The measure requires employers to verify the eligibility of prospective employees through a federal database called E-Verify and imposes sanctions on companies that knowingly hire undocumented workers.
• The court refused to hear an appeal from the Holy See to stop a lawsuit that accuses the Vatican of transferring a priest from city to city despite repeated accusations of sexual abuse.
Sovereign immunity laws hold that a sovereign state - including the Vatican - generally is immune from lawsuits. But a judge had ruled that there was enough of a connection between the Vatican and the Rev. Andrew Ronan (who was transferred from Ireland to Chicago to Portland, Ore.) for him to be considered a Vatican employee under Oregon law; that ruling was upheld by the 9th U.S. Circuit Court of Appeals in California.
According to court documents, Ronan began abusing boys in the mid-1950s as a priest in the Archdiocese of Armagh, Ireland. He was transferred to Chicago, where he admitted to abusing three boys at St. Philip's High School. Ronan later was moved to St. Albert's Church in Portland, where he was accused of abusing the person who filed the lawsuit now under appeal. Ronan died in 1992.
• The court rejected an appeal by the publisher of a financial newsletter found guilty of securities fraud. Pirate Investor LLC (now known as Stansberry and Associates Investment
Research) and Frank Porter Stansberry had sold a report purporting to offer a "Super Insider Tip" relating to a still-unannounced deal between USEC, an American company that enriches uranium and the Russian government.
In 2002 Stansberry wrote a newsletter saying he had interviewed a company executive who told him to watch their stock on May 22; the executive later denied saying that, but the e-mail solicitation predicted USEC's stock price would more than double. Stansberry's company made hundreds of thousands of dollars from selling reports. Within two weeks trading in shares of USEC rose from 189,000 shares a day to an average of 3.3 million.
News organizations, including The Associated Press, said the prosecution is in violation of the First Amendment. But federal judges have upheld the conviction.
• The court struck down part of the anti-fraud law enacted in response to Enron and other corporate scandals, but said its decision has limited consequences.
Under the 2002 the Sarbanes-Oxley law, Congress created the Public Company Accounting Oversight Board to replace the accounting industry's own regulators amid scandals at Enron Corp., WorldCom Inc., Tyco International Ltd. and other corporations. The board has power to compel documents and testimony from accounting firms, and the authority to discipline accountants.
The justices voted 5-4 that a provision of the law violates the Constitution's separation of powers mandate. Sarbanes-Oxley will remain in effect, but the Securities and Exchange Commission now will be able to remove board members at will.