(CN) - A Ninth Circuit panel issued a mixed ruling on Monday in the legal fight between Oregon's Department of Education and Youth 71Five, a Christian youth ministry that it claims discriminates through hiring practices by imposing religious requirements on all employees and volunteers.

The panel upheld the lower court's finding that Oregon could enforce its grant rule against programs that receive grant funding but said applying the rule to programs with no grant funding likely violated the ministry's First Amendment right of expressive association.

"Even absent discrimination, however, the Constitution does not permit the Division to leverage its grants to restrict 71Five's expression in initiatives that receive no public funds," U.S. Circuit Judge Anthony D. Johnstone, a Joe Biden appointee, said.

The panel said the lower court abused its discretion by denying the injunction and ordered it to block the rule for initiatives that do not receive funding from the Oregon Education Department's Youth Development Division.

The case centers around a fight between the Oregon Department of Education's Youth Development Division and Youth 71Five, a youth ministry that has historically received funding from the division.

71Five is suing the Youth Development Division for pulling its grant funding after instituting a new grant eligibility rule that forbids grantees from discriminating based on religion.   

While it does serve all youth who choose to participate, the ministry requires that its board members, employees and volunteers agree to a Christian statement of faith and be involved in a local church.

The division withdrew 71Five's conditional grant award in 2023 after discovering the religious requirements it imposed on employees and volunteers.

In its 42-page order, the panel said the division's new grant rules were a permissible burden on the ministry's religious rights because they are neutral and generally applicable.

The panel also said the lower court correctly dismissed the ministry's damages claims, citing qualified immunity because the ministry failed to show a clearly established right was violated.

"71Five's complaint does not allege a violation of any clearly established right under the First Amendment, so the defendants are entitled to qualified immunity, and the District Court did not err in dismissing 71Five's damages claims with prejudice," Johnstone said.

U.S. Circuit Judge Johnnie B. Rawlinson, a Bill Clinton appointee, concurred but declined to join the majority opinion, stating that she believed the panel was mistaken that Youth 71Five's website evidenced discrimination more than other grant applicants.

Attorneys for both sides did not immediately respond to a request for comment.

Youth 71Five received grant funding through Oregon's Youth Community Investment Grant Program as far back as 2017, until an anonymous complaint about its hiring process landed on the desk of the Youth Development Division of the Oregon Department of Education, which oversees the program, in September 2023.

The complaint accused the ministry of discriminatory hiring by requiring its employees to agree with its statement of faith. To be eligible for grant funding, organizations must comply with the nondiscrimination policy, which includes hiring practices. The Youth Development Division revoked the ministry's award in November 2023.

The ministry sued the division in March 2024, accusing it of violating its expressive association and free exercise rights under the First Amendment, and asked a federal court to issue a preliminary injunction to stop the division from requiring the ministry to comply with the policy as a condition to receive funding.

The lower court denied the ministry's motion for a preliminary injunction in June 2024 and dismissed the case, citing qualified immunity. A motions panel then stepped in and granted the ministry's injunction while the case was appealed, effectively keeping it in the grant program.

On appeal, 71Five told the Ninth Circuit that it was unfairly targeted and that the division made exceptions for secular groups that also have discriminatory practices.

Oral arguments on the case's appeal issues were held in November 2024.

U.S. Circuit Judge Morgan B. Christen, a Barack Obama appointee, rounded out the panel.

This case was filed in the District of Oregon.

Source: Courthouse News Service