Finley v. NEA challenged the decency provision in government grants to artists through the National Endowment for the Arts (NEA).

In September 1990, the Center for Constitutional Rights (CCR) and co-counsel filed a First Amendment lawsuit challenging the constitutionality of a 1990 law requiring the National Endowment for the Arts (NEA) to consider “general standards of decency and respect” in the awarding of federal arts grants on behalf of performance artist Karen Finley and others artists, whose applications for NEA funding were denied because of the decency standards.

Throughout the 1980s there was great controversy surrounding the public funding of artists, such as the 1989 exhibit of homoerotic photographs by Robert Mapplethorpe and Andres Serrano’s “Piss Christ” photography, which was exhibited at an art show receiving partial NEA funding. These issues came to a head in 1990 when, after Congress amended the statute instructing the NEA on what criteria to use in awarding federal arts grants, the NEA rejected the grants of several artists based on the new requirement that the NEA consider “general standards of decency and respect for the diverse beliefs and values of the American public,” in addition to the previous criteria of artistic excellence and merit.

In 1989, controversial photographs that appeared in two NEA-funded exhibits prompted public outcry over the agency's grant-making procedures. Congress reacted to the controversy by inserting an amendment into the NEA's 1990 reauthorization bill. The amendment became § 954(d)(1), which directs the chairperson to ensure that "artistic excellence and artistic merit are the criteria by which [grant] applications are judged, taking into consideration general standards of decency and respect for the diverse beliefs and values of the American public."

In 1990 the plaintiffs’ application for NEA funding was denied by the NEA because of the “decency standards” statute, violating the First Amendment. Additionally, the NEA released private information about the artists to the public, violating their Fifth Amendment privacy rights.

On June 25, 1998, the Supreme Court ruled in an 8-1 opinion that the 1990 “standards of decency” statute is constitutional. The Court held that the law in question is not an example of direct government regulation of speech, but is merely a lawful example of congressional authority to set spending priorities that may indirectly affect certain forms of expression while still not violating the First Amendment. According to the opinion by Justice O’Connor, the choice to fund one artist based on public interest criteria, while denying another artist funding based on that same criteria, does not constitute viewpoint discrimination. Moreover, the funding guidelines are not impermissibly vague because the government is under no compulsion to provide the selective subsidies and the statute.

CCR maintained that Congress need not fund the arts but that if it decides to fund private artistic expression, as it did in creating the NEA in 1965, it could not impose ideological viewpoint-based restrictions on the art that it funds and that the decency and respect clause is such a prohibition.