The Liberty Institute is a religious liberty advocacy and legal defense organization founded in 1972 under the name Free Market Foundation. Liberty Institute is headed by Kelly Shackelford, one of the top-25 Texas attorneys in the past 25 years. Liberty Institute has since shifted focus to providing pro bono legal assistance to people of faith and organizations that they believe are suffering religious persecution in the United States, such as students, veterans, and pastors whose religious free exercise rights they believe are being violated.
Among Liberty Institute's most prominent cases are the "Candy Cane Case"; the veterans memorial cross cases, in which several veterans memorials in the shape of a cross have been challenged by the Freedom From Religion Foundation and the ACLU; legal actions taken to stop a report on an investigation into Sarah Palin being published, and numerous legal cases filed in Texas courts concerning First Amendment and religious freedom issues.
The "Candy Cane Case" began in 2004 after a student in Plano, Texas was prohibited by school officials from distributing candy canes with a religious story attached at his school's Christmas party. In 2011, the U.S. Court of Appeals for the Fifth Circuit granted two school principals immunity in the case against the Plano Independent School District. The Liberty Institute appealed the case to the U.S. Supreme Court, which refused to hear the case in 2012, upholding the decision of the U.S. Court of Appeals for 5th Circuit.
In 2011 it filed a lawsuit against the U.S. Department of Veterans Affairs alleging that the department had censored prayers and the use of the words 'God' or 'Jesus'. The Department's response was that its regulations stated that there is no censorship but that the religious preferences of the families of the deceased are respected and that at times families have complained about volunteers and the Veterans of Foreign Wars had included religious references in services even though the families had requested that there be none. The Department's response said "Defendants believe that it should be the family’s choice and decision what to have read in accordance with their faith tradition, if any, because it would be improper for others to impose their own religious preferences on a Veteran’s family, especially during this meaningful event.". The case was settled in September 2012 after mediation by former Texas Supreme Court Chief Justice Thomas R. Phillips.
Liberty Institute's "Don't Tear Me Down" campaign works to bring awareness to Establishment Clause challenges against veterans memorials with Christian symbolism. They were unsuccessful in defending the Mt. Soledad Cross near San Diego, California when the Supreme Court refused to hear the case in 2012, allowing a prior 9th Circuit Court ruling to stand. Liberty Institute filed an Amicus curiae in the case of the Mojave Memorial Cross in California which was settled to the satisfaction of the Liberty Institute in April 2012.
- Ann Southworth, 'Lawyers of the right: professionalizing the conservative coalition', Chicago: University Of Chicago Press, 2008, pp. 30;196  
- Cal Jillson, Texas Politics: Governing the Lone Star State, Routledge, 2011, p. 60 
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- Morgan, et al. v. Swanson, et al. (U.S. Court of Appeals for 5th Circuit 27 September 2011 url=http://www.ca5.uscourts.gov/opinions/pub/09/09-40373-CV3.wpd.pdf)+(“the views of the majority of the en banc Court granting qualified immunity to the principals and the judgment reversing the district court.”).
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- "Don't Tear Me Down". Retrieved 27 May 2012.