The President, not the Congress, gets to decide whether a person born in Jerusalem can have his place of birth listed on his passport as Israel.

Here's the PDF of Zivotofsky v. Kerry, which just came out. There's a majority opinion, written by Justice Kennedy, with 5 votes. The Chief Justice writes a dissenting opinion, joined by Justice Alito. Justice Scalia has a dissenting opinion, joined by the Chief and Justice Alito. And Justice Thomas concurs in part and dissents in part.

Justice Kennedy uses the 3 categories from Justice Jackson's opinion in Youngstown. This is a category 3 case, where the President and Congress are in disagreement, but the President's position prevails when the court finds the President's power "exclusive" and "conclusive." That was the case here, Kennedy writes, where the issue is the formal recognition of a foreign sovereign, and Congress was trying to require the President to "issue a formal statement that contradicts the earlier recognition."

The text and structure of the Constitution grant the President the power to recognize foreign nations and governments. The question then becomes whether that power is exclusive. The various ways in which the President may unilaterally effect recognition—and the lack of any similar power vested in Congress—suggest that it is. So, too, do functional considerations. Put simply, the Nation must have a single policy regarding which governments are legitimate in the eyes of the United States and which are not. Foreign countries need to know, before entering into diplomatic relations or commerce with the United States, whether their ambassadors will be received; whether their officials will be immune from suit in federal court; and whether they may initiate lawsuits here to vindicate their rights. These assurances cannot be equivocal.

Recognition is a topic on which the Nation must “‘speak . . . with one voice.’ ” ... That voice must be the President’s.

Justice Breyer, who joins the majority, has a 2-sentence concurring opinion saying still thinks (as he said the last time Zitofsky came to the Supreme Court) that the political question doctrine puts this matter outside of the set of things courts get to decide.

Justice Thomas's opinion is very long, and I haven't read every word of it yet, obviously. But his bottom line is:

Listing a Jerusalem-born citizen’s place of birth as “Israel” cannot amount to recognition because the United States already recognizes Israel as an international person. Rather than adopt a novel definition of the recognition power, the majority should have looked to other foreign affairs powers in the Constitution to resolve this dispute.

He votes with the majority because of the Presidents power over passports.

Chief Justice Roberts begins by declaring this case "a first": "Never before has this Court accepted a President’s direct defiance of an Act of Congress in the field of foreign affairs." He points to Justice Scalia's opinion as the "principal dissent," so let's go there first.

Justice Scalia (joined by the Chief and Justice Alito) cites Congress’s power, specified in the Constitution, to “establish an uniform Rule of Naturalization”:

The naturalization power also enables Congress to furnish the people it makes citizens with papers verifying their citizenship—say a consular report of birth abroad (which certifies citizenship of an American born outside the United States) or a passport (which certifies citizenship for purposes of international travel). As the Necessary and Proper Clause confirms, every congressional power “carries with it all those incidental powers which are necessary to its complete and effectual execution.” Cohens v. Virginia, 6 Wheat. 264, 429 (1821). Even on a miserly understanding of Congress’s incidental authority, Congress may make grants of citizenship “effectual” by providing for the issuance of certificates authenticating them.

One would think that if Congress may grant Zivotofsky a passport and a birth report, it may also require these papers to record his birthplace as “Israel.” The birthplace specification promotes the document’s citizenship- authenticating function by identifying the bearer, distinguish- ing people with similar names but different birthplaces from each other, helping authorities uncover identity fraud, and facilitating retrieval of the Government’s citizenship records. See App. 70. To be sure, recording Zivotovsky’s birthplace as “Jerusalem” rather than “Israel” would fulfill these objectives, but when faced with alternative ways to carry its powers into execution, Congress has the “discretion” to choose the one it deems “most beneficial to the people.” McCulloch v. Maryland, 4 Wheat. 316, 421 (1819). It thus has the right to decide that recording birthplaces as “Israel” makes for better foreign policy. Or that regardless of international politics, a passport or birth report should respect its bearer’s conscientious belief that Jerusalem belongs to Israel.

No doubt congressional discretion in executing legislative powers has its limits; Congress’s chosen approach must be not only “necessary” to carrying its powers into execution, but also “proper.” Congress thus may not transcend boundaries upon legislative authority stated or implied elsewhere in the Constitution. 

But there are no boundaries stated or implied elsewhere, Scalia says. The majority makes too much out of the President's power of recognition, which is, he says, "a type of legal act, not a type of statement." Scalia calls it "a leap worthy of the Mad Hatter to go from exclusive authority over making legal commitments about sovereignty to exclusive authority over making statements or issuing documents about national borders."

The Court may as well jump from power over issuing declaratory judgments to a monopoly on writing law-review articles.

But what about the notion that in foreign affairs, the nation needs to speak with "one voice," and that means it's got to be the President doing the speaking? Scalia disparages such "functional considerations" in constitutional analysis and not just because they go beyond textualism: Functionalism of the sort the Court practices today will systematically favor the unitary President over the plural Congress in disputes involving foreign affairs. It is possible that this approach will make for more effective foreign policy, perhaps as effective as that of a monarchy. It is certain that, in the long run, it will erode the structure of separated powers that the People established for the protection of their liberty....

A President empowered to decide all questions relating to these matters, immune from laws embodying congressional disagreement with his position, would have uncontrolled mastery of a vast share of the Nation’s foreign affairs.

Yes, that's the point, so we're forced to asked whether or not it's good — "beneficial to the people"  McCulloch v. Maryland — to have one voice in foreign affairs, understood this broadly. Scalia's way of answering this question is to do separation-of-powers functionalism from the perspective of original meaning:

That is not the chief magistrate under which the American People agreed to live when they adopted the national charter. They believed that “[t]he accumulation of all powers, legislative, executive, and judiciary, in the same hands, . . . may justly be pronounced the very definition of tyranny.” The Federalist No. 47, p. 301 (Madison). For this reason, they did not entrust either the President or Congress with sole power to adopt uncontradictable policies about any subject—foreign-sovereignty disputes included. They instead gave each political department its own powers, and with that the freedom to contradict the other’s policies. Under the Constitution they approved, Congress may require Zivotofsky’s passport and birth report to record his birthplace as Israel, even if that requirement clashes with the President’s preference for neutrality about the status of Jerusalem.