A federal appeals court ruled (by a 2-1 vote) that the annual display of a nativity scene in Chicago's city hall violated the first amendment's nonestablishment of religion clause.
For 30 years the city of Chicago had displayed the scene, which consisted of twelve-inch figures, in the lobby of city hall. The display had been donated to the city, and no public funds were expended in maintaining or installing it. The display contained 6 disclaimer notices which recited that the display had been donated and that it was in no way sponsored or endorsed by the city government.
The American Jewish Congress challenged the display on the ground that it constituted the establishment of religion. In agreeing that the display violated the nonestablishment of religion clause, the court distinguished a 1984 Supreme Court ruling upholding the validity of a nativity scene in Pawtucket, Rhode Island. Unlike the Chicago display, the Pawtucket display was "only one element in a larger display that consisted in large part of secularized symbols and decorations" (e.g., a Santa Claus, reindeer, Christmas trees, lights).
The Chicago display was not a part of a larger, secularized display. Further, the Pawtucket display, while sponsored by the city government, was situated in a park owned by a private nonprofit organization. The Chicago display was situated in "the official headquarters building of the municipal government." Under these circumstances, the Chicago nativity scene impermissibly "advanced religion by sending a message to the people of Chicago that the city approved of Christianity." American Jewish Congress v. City of Chicago, 827 F.2d 120 (7th Cir. 1987)