The court on Monday refused to hear an appeal from San Diego-area Boy Scouts who have traditionally leased Balboa Park camp space.
Federal judges have said the Scouts are a religious organization and the lease violated federal law that prohibits the government promotion of religion.
The American Civil Liberties Union sued San Diego and the Boy Scouts in August 2000 on behalf of a lesbian couple and an agnostic couple, each with scouting-age sons. They filed the lawsuit after the City Council voted to extend the group's 50-year lease for another 25 years.
The Boy Scouts say they have no theology and only hold the position that children should "do duty to God" to become productive citizens.