Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—9th Cir.: Preliminary injunction largely denied in case concerning religious youth group funding, (Aug 20, 2025)

By Todd Harrison, J.D.

Oregon added a new grant eligibility rule prohibiting grantees from discriminating based on religion and subsequently withdrew a conditional grant awarded to a Chrisitan youth organization.

Largely affirming a district court’s decision not to enjoin the Oregon Department of Education’s Youth Development Division from enforcing a grant eligibility rule prohibiting grantees from discriminating based on religion, the Ninth Circuit found that a Christian youth group that had its conditional grant award withdrawn was unlikely to succeed on the merits of its claim that the rule violated the First Amendment right to the free exercise of religion because it was neutral and generally applicable, and likely satisfied rational-basis review. However, to the extent that the rule restricted the organization’s selection of speakers to spread its Christian message through initiatives that received no division funding, the rule likely imposed an unconstitutional condition (Youth 71Five Ministries v. Williams, No. 24-4101 (9th Cir. Aug. 18, 2025)).

Oregon’s Department of Education, through its Youth Development Division, runs a Youth Community Investment Grant Program that funds community organizations serving at-risk youth.

Christian organization. Since 2017, Youth 71Five Ministries (71Five) has received funding from the division for several of its initiatives. While it serves all youth who wish to participate, 71Five’s “primary purpose” is “to teach and share about the life of Jesus Christ.” To effectuate its mission, 71Five requires that its board members, employees, and volunteers agree to a Christian statement of faith and to be involved in a local church.

Antidiscrimination policy. 71Five’s hiring practices violate the division’s antidiscrimination policy. As such, the division withdrew its conditional award of a grant for 2023-2025. Subsequently, 71Five sued for equitable and monetary relief, and sought a preliminary injunction, arguing that the division’s enforcement of the antidiscrimination policy violated its free-exercise, religious-autonomy, and expressive-association rights under the First Amendment.

The district court declined to grant the preliminary injunction and dismissed 71Five’s claims based on qualified immunity. This appeal followed.

Free exercise. First, the court addressed 71Five’s likelihood of success on the merits of its First Amendment claims, starting with whether the rule was likely to prohibit 71Five’s free exercise of religion. It was undisputed that the rule burdens 71Five’s religious exercise. Thus, the court’s analysis turned on whether the rule was both neutral and generally applicable.

Religious hostility. As to whether the rule was likely neutral, 71Five did not contend that the events leading to the division’s adoption of the rule showed any signs of religious hostility. Instead, it argued that the division’s hostility toward religion was reflected in its “target[ed]” enforcement of the rule against 71Five while excepting secular groups, which operated to “single out the ministry’s religious beliefs and practices.” Further, 71Five asserted that the division “went out of its way to scrutinize 71Five’s website” without inspecting secular organizations’ websites, showing animus toward religion. However, 71Five conceded that the division first reviewed its website based on an anonymous complaint, and there was no evidence the division received similar complaints about any secular grantee.

71Five went on to argue that the rule was hostile towards religion because disqualifying otherwise eligible recipients from a public benefit based solely on their religious character imposes a penalty on the free exercise of religion that is not neutral. The court was not convinced.

In this instance, the rule does not deny funding based on a practice exclusive to religious organizations, said the court, going on to state that, “Government agencies, secular corporations, and religious ministries alike might engage in religion-based employment discrimination.” As such, the rule does not discriminate based on religious status or exercise. It merely disqualifies a class of potential grantees—those who discriminate based on religion—that includes both secular and religious organizations.

No individualized exemptions. Turning to the question of whether the rule is likely to be generally applicable, the court noted that 71Five had failed to show that the rule contained any “mechanism for individualized exemptions” giving the division discretion to discriminate against religious conduct.

Comparable treatment. It was also within the district court’s discretion to find that, in enforcing the rule, the division did not treat 71Five’s religious exercise less favorably than comparable secular activity.

“Neither 71Five’s complaint nor its motion for a preliminary injunction identified any secular activity funded by the Division that undermines the Division’s commitment to equity and inclusion like 71Five’s religious hiring practices do,” said the court.

Secular websites. In asking for a reversal of the district court’s decision, 71Five pointed to a new argument and new factual assertions in its reply brief in district court in support of the motion for a preliminary injunction. There, for the first time, 71Five attached screenshots of several secular grantees’ websites purporting to serve certain groups, such as Black students and those exploring their gender identity.

Based on these screenshots, 71Five raised a new argument that the division allows secular grantees to categorically deny services to particular demographic groups and faulted the district court for rejecting its belated argument. However, as the court here pointed out, a district court need not consider arguments raised for the first time in a reply brief.

Even if the district court had considered those arguments, it would not have changed the outcome, explained the appellate court. Nothing contained in the screenshots conclusively showed that the secular grantees deny service based on protected characteristics, said the court, nor did the record reflect that the division ever treats service-tailoring as contrary to its interests, let alone a violation of the rule. Indeed, the division took no issue with 71Five’s tailoring of its services to promote uniquely Christian values, and revoked funding only after learning 71Five denies employment and volunteer opportunities to non-Christians.

On the record before it, the court here affirmed the district court’s conclusion that the rule is likely generally applicable.

Rational basis review. Because the rule is neutral and generally applicable, it was subject only to rational basis review. The division adopted the rule to better reflect its commitment to equity, and the rule rationally furthered that interest by ensuring that division-funded initiatives are equally open to employees, volunteers, and other participants regardless of religious beliefs. Thus, the district court did not abuse its discretion in determining that 71Five was unlikely to succeed on the merits of its free exercise claim.

Religious autonomy claims. Next, the court considered the likelihood of success of 71Five’s religious autonomy claims. 71Five argued that the doctrines of ecclesiastical abstention and the ministerial exception prevented the division from conditioning grant funding on compliance with the rule. The district court declined to address the merits of these arguments, explaining that these doctrines were affirmative defenses and not standalone rights.

Here, 71Five failed to point to any legal authority suggesting otherwise and, without more, the appellate court could not say that the district court abused its discretion in concluding that these claims were unlikely to succeed.

Expressive association. The court did find that the rule likely burdens 71Five’s expressive association, observing that 71Five “wants its spokespeople to affirm the very message they are tasked with communicating on its behalf,” yet the rule likely prohibits it from doing so.

That said, the court found that the rule is likely a permissible regulation of 71Five’s expressive association within division-funded initiatives, but was likely an unconstitutional condition on 71Five’s expressive association outside of division-funded initiatives because 71Five seeks division funding for only some of its projects, and requiring it to certify that it does not discriminate in any of its projects is likely to be an unconstitutional burden. Accordingly, the court found 71Five was entitled to a preliminary injunction on the limited basis that its expressive-association claim was likely to succeed only as much as it challenged the rule’s application to its expressive association in initiatives that receive no division funding.

Qualified immunity. Finally, the court turned to 71Five’s motion for a preliminary injunction to the defendants’ motion to dismiss, challenging the district court’s dismissal of all its claims—both for declaratory and injunctive relief and for damages—based on qualified immunity.

Here, the court found that because 71Five’s complaint did not allege a violation of any clearly established right under the First Amendment, the defendants were entitled to qualified immunity and the district court did not err in dismissing 71Five’s damages claims with prejudice.

Concurrence. Concurring in the judgment only because of the court’s truncated review of a district court’s decision granting or denying injunctive relief, Judge Rawlinson wrote that he would otherwise conclude that the rule violated 71Five’s right to free exercise of religion, declining to join the majority’s analysis because it relied heavily on the premise that 71Five’s website evidenced discrimination, while websites devoted to secular groups did not.

The case is No. 24-4101.

Judge: Johnstone, A.

Attorneys: James A. Campbell (Alliance Defending Freedom) for Youth 71Five Ministries. Kirsten Mieko Naito, Oregon Department of Justice, for Charlene Williams and Brian Detman.

Companies: Youth 71Five Ministries

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