In a suit brought by Youth 71Five Ministries alleging that the Oregon Department of Education, through its Youth Development Division, violated 71Five’s First Amendment rights when the Division withdrew its conditional award of a grant to 71Five, the panel affirmed in part and reversed in part the district court’s denial of 71Five’s request for a preliminary injunction and its dismissal of 71Five’s claims based on qualified immunity.

The Division added a new grant eligibility Rule that prohibits grantees from discriminating based on religion, and withdrew 71Five’s conditional grant award after discovering that 71Five imposes religious requirements on all employees and volunteers.

The panel affirmed the district court’s decision not to enjoin the Division’s enforcement of the Rule as to 71Five’s grant-funded initiatives. 71Five was unlikely to succeed on the merits of its claim that the Rule violates the First Amendment right to the free exercise of religion because the Rule is neutral and generally applicable, and likely satisfies rational-basis review. Nor was 71Five likely to succeed on the merits of its novel religious autonomy claims that conditioning grant funding on compliance with the Rule impermissibly interferes with its choice of ministers and faith-based hiring of non-ministers.

Addressing 71Five’s claim that the Rule abridges its expressive association by requiring it to accept employees and volunteers who disagree with its message, the panel held that the Rule was likely permissible as a reasonable and viewpoint-neutral regulation as to Division-funded initiatives. But to the extent that Rule restricts 71Five’s selection of speakers to spread its Christian message through initiatives that receive no Division funding, the Rule likely imposes an unconstitutional condition. Accordingly, the panel directed the district court to enter an order enjoining enforcement of the Rule as to initiatives that do not receive grant funding from the Division.

The panel affirmed the district court’s dismissal of 71Five’s claims for damages because 71Five did not allege any violation of a clearly established right, and therefore defendants were entitled to qualified immunity. However, the panel reversed the district court’s dismissal of 71Five’s claims for declaratory and injunctive relief, against which qualified immunity does not protect.

Judge Rawlinson concurred in the judgment only because of this court’s truncated review of a district court’s decision granting or denying injunctive relief, and obligatory deference to a district court’s discretionary decision to decline consideration of the arguments and evidence presented in a Reply Brief. Otherwise, she would conclude that the State of Oregon’s application of the rules governing its grant program violated 71Five’s right to the free exercise of religion.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/08/18/24-4101.pdf