Klein v. BOLI ( 2022 )

138
Argued and resubmitted on remand from the United States Supreme Court
January 9, 2020; reversed as to BOLI’s conclusion that the Kleins violated ORS
659A.409 and the related grant of injunctive relief, reversed and remanded as
to damages, otherwise affirmed January 26, 2022
Melissa Elaine KLEIN,
dba Sweetcakes by Melissa;
and Aaron Wayne Klein,
dba Sweetcakes by Melissa,
and, in the alternative, individually as an
aider and abettor under ORS 659A.406,
Petitioners,
v.
OREGON BUREAU OF
LABOR AND INDUSTRIES,
Respondent.
Oregon Bureau of Labor and Industries
4414, 4514; A159899
506 P3d 1108
On remand from the United States Supreme Court, Klein v. Oregon Bureau
of Labor and Industries, ___ US ___, 139 S Ct 2713, 204 L Ed 2d 1107 (2019), the
Oregon Court of Appeals adhered to its prior decision upholding a determination
by the Bureau of Labor and Industries (BOLI) that petitioner Aaron Klein unlaw-
fully discriminated against the complainants, the Bowman-Cryers, by refusing
to bake them a wedding cake because of their sexual orientation, in violation
of ORS 659A.403, and that neither the state constitution nor the federal con-
stitution precludes the enforcement of the statute against him. In particular,
the court rejected the argument that the Supreme Court’s decision in Fulton v.
Philadelphia, ___ US ___, 141 S Ct 1868, 210 L Ed 2d 137 (2021), changed the
analysis of what a “generally applicable” law is for purposes of the free exercise
analysis under Employment Div., Dept. of Human Resources of Ore. v. Smith, 494
US 872, 110 S Ct 1595, 108 L Ed 2d 876 (1990), in a way that makes application of
ORS 659A.403 to Aaron’s conduct violative of the First Amendment. However, on
the issue of damages to be assessed for that discrimination, the Court of Appeals
concluded that BOLI’s handling of the damages portion of the case did not com-
port with the First Amendment’s requirement of strict neutrality toward religion
as described in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Comm’n, 584
US ___, 138 S Ct 1719, 201 L Ed 2d 35 (2018), and it set aside the damages award
and remanded the decision to BOLI for further proceedings on remedy.
Reversed as to BOLI’s conclusion that the Kleins violated ORS 659A.409
and the related grant of injunctive relief; reversed and remanded as to damages;
otherwise affirmed.
Cite as 317 Or App 138 (2022) 139
On remand from the United States Supreme Court, Klein
v. Oregon Bureau of Labor and Industries, ___ US ___, 139
S Ct 2713, 204 L Ed 2d 1107 (2019).
Adam R.F. Gustafson, Washington, DC, argued the cause
for petitioners. Also on the opening and reply briefs were
Tyler Smith, Anna Harmon, and Tyler Smith & Associates;
Herbert G. Grey; C. Boyden Gray, Derek S. Lyons, and
Boyden Gray & Associates, Washington, DC; and Matthew
J. Kacsmaryk, Kenneth A. Klukowski, Cleve W. Doty, and
First Liberty Institute, Texas. Also on the supplemental
opening brief were Herbert G. Grey; C. Boyden Gray, James
R. Conde, and Boyden Gray & Associates, Washington, DC;
and Kelly J. Shackelford, Hiram S. Sasser, III, Kenneth
A. Klukowski, Michael D. Berry, Stephanie N. Taub, and
First Liberty Institute, Texas. Also on the supplemental
reply brief were Herbert G. Grey; C. Boyden Gray, James R.
Conde, and Boyden Gray & Associates, Washington, DC; and
Kelly J. Shackelford, Hiram S. Sasser, III, Michael D. Berry,
Stephanie N. Taub, and First Liberty Institute, Texas.
Carson L. Whitehead, Assistant Attorney General, argued
the cause for respondent. Also on the answering brief were
Ellen F. Rosenblum, Attorney General, Benjamin Gutman,
Solicitor General, and Leigh A. Salmon, Assistant Attorney
General. Also on the supplemental brief were Ellen F.
Rosenblum, Attorney General, and Benjamin Gutman,
Solicitor General.
Stefan C. Johnson, Jennifer C. Pizer, and Lambda Legal
Defense and Education Fund, Inc., California; and Paul A.
Thompson filed the brief amici curiae for Rachel Bowman-
Cryer, Laurel Bowman-Cryer, and Lambda Legal Defense
and Education Fund, Inc.
P. K. Runkles-Pearson and Miller Nash Graham & Dunn
LLP; and Kelly K. Simon and ACLU of Oregon, Inc., filed
the brief amicus curiae for ACLU Foundation of Oregon, Inc.
Before James, Presiding Judge, and Lagesen, Chief Judge,
and DeVore, Senior Judge.
LAGESEN, C. J.
Reversed as to BOLI’s conclusion that the Kleins violated
ORS 659A.409 and the related grant of injunctive relief;
reversed and remanded as to damages; otherwise affirmed.
140 Klein v. BOLI
LAGESEN, C. J.
This case is on remand to us from the United States
Supreme Court. The Court vacated and remanded our pre-
vious decision, Klein v. BOLI, 289 Or App 507, 410 P3d 1051
(2017), rev den, 363 Or 224 (2018) (Klein I), “for further con-
sideration in light of Masterpiece Cakeshop, Ltd. v. Colorado
Civil Rights Comm’n, 584 US ___, 138 S Ct 1719, 201 L Ed 2d
35 (2018).” Klein v. Oregon Bureau of Labor and Industries,
___ US ___, 139 S Ct 2713, 2713, 204 L Ed 2d 1107 (2019)
(Klein II). It subsequently decided Fulton v. Philadelphia,
___ US ___, 141 S Ct 1868, 210 L Ed 2d 137 (2021), and peti-
tioners argue that Fulton, too, requires reconsideration of
our prior analysis.
Given this procedural history, the particular issue
before us is whether the Supreme Court’s approach to the
Free Exercise Clause of the First Amendment to the United
States Constitution in Fulton and Masterpiece Cakeshop
calls into question our previous determinations that (1) peti-
tioner Aaron Klein, who operates a bakery, unlawfully
discriminated against complainants Rachel and Laurel
Bowman-Cryer based on their sexual orientation, in viola-
tion of ORS 659A.403, when he refused to provide them with
a wedding cake because of his religious beliefs about mar-
riage of couples of the same sex; (2) the Free Exercise Clause
does not bar the enforcement of that statute against Aaron;
and (3) the Bureau of Labor and Industries (BOLI) permis-
sibly awarded noneconomic damages to Rachel and Laurel
based in part on a conversation about faith between Aaron
and Rachel’s mother, Cheryl McPherson, that, according to
BOLI’s factual findings, Cheryl recounted inaccurately to
Rachel and Laurel.1
Ultimately, we reaffirm our prior decision except
insofar as it upheld the damages award. Specifically, we
adhere to our prior decision upholding BOLI’s determina-
tions that Aaron unlawfully discriminated against the
1
In our prior decision, we also concluded that BOLI erred when it deter-
mined that petitioners Aaron and Melissa Klein violated a different statute, ORS
659A.409, through statements that they made after Aaron refused to supply
the Bowman-Cryers with a wedding cake. No party suggests that the Supreme
Court’s recent decisions displace that aspect of our previous decision.
Cite as 317 Or App 138 (2022) 141
Bowman-Cryers based on sexual orientation, in violation of
ORS 659A.403, and concluding that neither the state consti-
tution nor the federal constitution precludes the enforcement
of the statute against Aaron, even though the enforcement
of the statute burdens Aaron’s practice of his faith. We reach
a different conclusion with respect to our prior affirmance of
BOLI’s noneconomic damages award.
In so doing, we conclude that Fulton does not dis-
place our previous conclusion that ORS 659A.403 is a gen-
erally applicable and neutral law and, consequently, that,
under Employment Div., Dept. of Human Resources of Ore. v.
Smith, 494 US 872, 110 S Ct 1595, 108 L Ed 2d 876 (1990),
the Free Exercise Clause does not preclude its enforcement
even where, as here, a person’s failure to comply with the
law stems from the person’s adherence to faith obligations.
We conclude further, though, that, when viewed in the light
of Masterpiece Cakeshop, BOLI’s handling of the damages
portion of the case does not reflect the neutrality toward
religion required by the Free Exercise Clause. We therefore
set aside the damages portion of the order and remand for
further proceedings related to remedy.
I. FACTUAL BACKGROUND
The first time it was before us, this case required
us to resolve a range of issues. Now, the procedural history
has landed our focus on a narrower question: whether the
agency order on review comports with the Free Exercise
Clause, in view of the Supreme Court’s later decisions in
Fulton and Masterpiece Cakeshop.
To provide context for our analysis, we set forth the
substantive and procedural facts relevant to that question.
As is our usual practice, we draw the substantive facts from
the unchallenged factual findings in the order on review,
“together with facts in the record consistent with those find-
ings.” OR-OSHA v. United Parcel Service, Inc., 312 Or App
424, 425 n 2, 494 P3d 959 (2021); see Klein I, 289 Or App
at 511 n 1 (explaining that, under Oregon law, an agency’s
unchallenged factual findings supply the facts for the pur-
pose of judicial review). When drawing facts from the testi-
mony at the damages hearing, some of which was conflicting,
we do so in a manner that resolves conflicts in accordance
142 Klein v. BOLI
with the express credibility findings contained in the order
on review.
This matter arose after petitioners Melissa and
Aaron Klein, doing business as a bakery called Sweetcakes
by Melissa, declined to provide a wedding cake to the
Bowman-Cryers. The Kleins did so in accordance with their
religious beliefs, which do not recognize marriages between
two persons of the same sex and treat the celebration of
marriages between two persons of the same sex as sinful.
The Bowman-Cryers met in college in 2004 and soon
became a couple. In 2011, they became foster parents to two
children and, in 2012, they decided to get married. Excited
about getting married, they began to plan their wedding.
Sometime after getting engaged, Rachel and her mother,
Cheryl, attended a bridal show in Portland. Melissa had a
booth for Sweetcakes by Melissa, advertising the bakery’s
wedding cakes. Two years earlier, Sweetcakes by Melissa
had made the wedding cake for Cheryl’s wedding; Rachel
liked the cake. Rachel told Melissa that she wanted to order
a wedding cake from her and, following the show, made an
appointment for a cake tasting at Sweetcakes by Melissa.
Both Rachel and Laurel were excited about getting a cake
from Sweetcakes by Melissa because of how much they liked
the cake that the bakery had made for Cheryl’s wedding.
On the scheduled date, Rachel and Cheryl went to
Sweetcakes by Melissa for the tasting. At the time, Aaron
and Melissa had infant twins and, that day, had arranged
for Aaron to handle the cake tasting while Melissa cared for
the twins at home. During the tasting, Aaron asked for the
names of the bride and the groom. Rachel responded that
there would be two brides and their names were “Rachel
and Laurel.”
Upon hearing that, Aaron, because of his religious
beliefs, apologized and stated that they “do not do cakes for
same-sex weddings.” Rachel started to cry. She felt that she
had humiliated her mother, and worried that her mother
was ashamed of her, because Cheryl had believed that being
gay was wrong until a few years earlier. Cheryl took Rachel
by the arm and walked her to the car; Rachel remained
distraught and kept apologizing to her mother. Once in the
Cite as 317 Or App 138 (2022) 143
car, Cheryl hugged Rachel and told her that they would find
someone to make a wedding cake. They drove a short dis-
tance away, but then Cheryl decided she wanted to return
to the bakery to talk to Aaron about the change in her own
religious perspective. Although Rachel did not want her to
do so, Cheryl wanted to make it, in her words, a “teaching
moment” because “but for the grace of God, that was me just
a few years ago.”
On returning to the bakery, Cheryl went in by her-
self while Rachel remained in the car. Cheryl explained
to Aaron that she used to share his views, but that her
truth had changed when God gave her two gay children. In
response, Aaron asked about what the Bible said on the topic
and then quoted Leviticus 18:22 to Cheryl: “You shall not lie
with a male as one lies with a female; it is an abomination.”
Recognizing that Aaron was “not ready to hear [her]
truth,” Cheryl left the bakery. She returned to the car and
reported to Rachel that Aaron had said that “her children
were an abomination unto God.”
Hearing that Aaron had called her “an abomina-
tion,” Rachel cried harder. Rachel, who had been raised
Southern Baptist, felt “like they were saying God made a
mistake when he made me, that I wasn’t supposed to be,
that I wasn’t supposed to love or be loved or have a family or
live a good life and one day go to heaven.”
Rachel and Cheryl returned home, where Rachel
immediately went to her bedroom crying. Cheryl told
Laurel what had happened, including that Aaron had said
“your children are an abomination.” Laurel, who was raised
Catholic, recognized Aaron’s statement as a reference to
Leviticus. She took it as an assertion that “this is a crea-
ture not created by God, not created with a soul; they are
unworthy of holy love; they are not worthy of life.” Laurel felt
shame and anger and was unable to console Rachel.
Laurel submitted a consumer complaint to the
Oregon Department of Justice. Later, Rachel filed a verified
complaint with BOLI, alleging that Sweetcakes by Melissa
had discriminated against her based on her sexual orien-
tation, in violation of ORS 659A.403. A few months after
144 Klein v. BOLI
Rachel, Laurel filed her own BOLI complaint, also alleging
discrimination based on sexual orientation.
BOLI investigated the complaints. Upon complet-
ing the investigation and determining the complaints to
be supported by evidence, it filed formal charges against
the Kleins. The charges alleged violations of both ORS
659A.403, which prohibits a place of public accommodation
from discriminating based on sexual orientation, and ORS
659A.409, which, generally speaking, prohibits a place of
public accommodation from publishing any notice “to the
effect” that the place will deny services for impermissibly
discriminatory reasons, or otherwise engage in unlawful
discrimination. The charges also alleged that Aaron had
aided and abetted unlawful discrimination by Melissa, in
violation of ORS 659A.406.
The case was assigned to the Office of Administrative
Hearings for a contested case hearing. On cross-motions for
summary determination, an administrative law judge (ALJ)
determined that the undisputed facts demonstrated, as a
matter of law, that Aaron had violated ORS 659A.403, but
had not violated ORS 659A.409. The ALJ determined that
Melissa had not violated either statute and, further, that
Aaron, consequently, had not aided and abetted Melissa, in
violation of ORS 659A.406. In making those determinations,
the ALJ rejected the Kleins’ contentions that the speech and
religion clauses of the First Amendment precluded them
from being held liable under Oregon’s antidiscrimination
laws. The ALJ similarly rejected a contention that three
provisions of the Oregon Constitution, Article I, sections 2
and 3, which protect religious rights, and Article I, section 8,
which protects speech rights, precluded the application of
Oregon’s antidiscrimination laws to the Kleins’ conduct.
Having resolved the issue of liability on summary
determination, the case proceeded to a six-day contested
hearing on damages. BOLI sought a minimum of $150,000
in noneconomic damages against the Kleins, at least $75,000
each for Rachel and Laurel.
One disputed factual issue at the damages hearing
was what Aaron had said to Cheryl when she returned to the
bakery to tell him about how her views had changed. Cheryl
Cite as 317 Or App 138 (2022) 145
testified that Aaron had said, “Well, I’m sorry, ma’am, but
your children are an abomination.” Aaron, in contrast, tes-
tified that, in response to Cheryl’s explanation as to how her
religious views had changed, he “simply stated, ‘Why would
the Bible say’—and I quoted Leviticus. I did not say it to
harm her kids. I did not say it to belittle anybody.”
In closing argument, the parties addressed the
role of the Kleins’ religious views, and, in particular, what
damages, if any, should be awarded in connection with
Aaron’s quotation of Leviticus. Addressing the issue of the
Kleins’ right to hold their own religious beliefs, the prosecu-
tor asserted that the public accommodations law was not a
restriction on the freedom to have “prejudices” but, instead,
a restriction on acting on those “prejudices” in providing a
public accommodation:
“I wanted to end on talking about public accommodation,
in general. This was enacted in 1953 in an effort to end a
long history of racial segregation in Oregon. And when I was
looking through the history, I came across a quote that was
cited to an editorial by an unknown author called ‘Missing
the Point on “Freedom” ’ and appeared in ‘The Oregonian’
on May 21st, 1953, and it said, ‘Oregonians are free to har-
bor whatever prejudices they choose. The civil rights law
does not attempt to control prejudice, rather it outlaws
overt acts of discrimination in public accommodation.’
“That’s exactly what’s going on in this case. The Kleins,
of course, are allowed to feel and hold whatever beliefs they
hold dear to them. But when they operate in a public place
and provide goods and services to the public, they have to
do so without discrimination.”
Both sides also addressed the issue of what dam-
ages, if any, should be awarded based on the emotional dis-
tress that Rachel and Laurel suffered upon Cheryl’s recount-
ing of Aaron’s alleged statement. With respect to Rachel, the
prosecutor argued that the conversation “made her feel like
she was a mistake, that she wasn’t entitled to love, that she
wasn’t entitled to a family, and that she’d be barred from
heaven.” With respect to Laurel, the prosecutor argued:
“When I asked her how it made her feel to hear the word
‘abomination,’ she said she couldn’t imagine someone who
146 Klein v. BOLI
didn’t know them basically saying they were unworthy of
love and unworthy of life. She also feared that it would
affect this tenuous new relationship with Cheryl and hav-
ing Cheryl in their lives.”
Responding to the point, the Kleins’ lawyer pointed
out both that neither Rachel nor Laurel had been present
when Aaron made the statement and that, according to
Aaron, he had not made the statement that Cheryl reported.
Instead, Aaron “quot[ed] a scripture verse.”
In rebuttal, the BOLI prosecutor disputed that
Aaron had quoted a Bible verse but asserted that it “doesn’t
really matter” what he actually said. The prosecutor argued
that what mattered was that Aaron used the word “abomi-
nation,” and how that word affected Rachel and Laurel:
“The reference to ‘abomination.’ We specifically asked
what that word made them feel like, and that’s important
because how it was couched doesn’t really matter; the word
is what resonated with the Complainants.”
In his proposed order, the ALJ credited Aaron’s
testimony about what he had said to Cheryl. The ALJ did
so based on the fact that he had previously determined the
content of Aaron’s statement during the summary deter-
mination phase of the case, something that, in the ALJ’s
view, obviated the need to address the conflict presented
by Cheryl’s testimony. The ALJ, in addition, made explicit
credibility findings. Regarding Aaron, the ALJ found that
he was a credible witness in all but the part of his testi-
mony that addressed a Facebook post made after the date he
refused service to the Bowman-Cryers. Regarding Cheryl,
the ALJ declined to credit portions of her testimony, explain-
ing that because of “exaggerations” in her testimony, “the
forum has only credited [Cheryl’s] testimony when it was
either (a) undisputed, or (b) disputed but corroborated by
other credible testimony.”
Despite those credibility findings, the ALJ, never-
theless, proposed awarding damages in part to compensate
Rachel and Laurel for the emotional distress that they expe-
rienced upon Cheryl telling them that Aaron had said that
her children were abominations. Discussing the emotional
suffering that it caused Rachel, the ALJ determined:
Cite as 317 Or App 138 (2022) 147
“When [Cheryl] told her that [Aaron] had called her ‘an
abomination,’ this made [Rachel] cry even more. [Rachel],
who was brought up as a Southern Baptist, interpreted
[Aaron’s] use of the word ‘abomination’ [to] mean that God
made a mistake when he made her, that she wasn’t sup-
posed to exist, and that she had no right to love or be loved,
have a family, or go to heaven.”
Discussing the emotional suffering that it caused Laurel,
the ALJ determined:
“When [Cheryl] and [Rachel] arrived home on January 17,
2013, after their cake tasting at Sweetcakes, [Cheryl]
told [Laurel] that [Aaron] had told them that Sweetcakes
did ‘not do same-sex weddings’ and that [Aaron] had told
Cheryl that ‘your children are an abomination.’ [Laurel]
was ‘flabbergasted’ and she became very upset and very
angry. [Laurel], who was raised as a Roman Catholic, rec-
ognized [Aaron’s] statement as a reference from Leviticus.
She was ‘shocked’ to hear that [Aaron] had referred to her
as an ‘abomination.’ Based on her religious background,
she understood the term ‘abomination’ to mean ‘this is a
creature not created by God, not created with a soul. They
are unworthy of holy love. They are not worthy of life.’ Her
immediate thought was that this would never have hap-
pened, had she not asked [Rachel] to marry her. Because of
that, she felt shame. Like [Rachel], she also worried about
how it would affect [Cheryl’s] relatively recent acceptance
of [Rachel’s] sexual orientation.”
Ultimately, the order proposed awarding a total of $135,000
in noneconomic damages, $75,000 to Rachel and $60,000 to
Laurel.
The Kleins and BOLI both filed numerous excep-
tions to the proposed order with the BOLI commissioner.
Among other things, the Kleins asserted that damages were
not appropriate for the distress caused by Cheryl’s report
about what Aaron had said, considering that the ALJ’s own
factual findings determined that Aaron had not said what
Cheryl reported he had:
“Finally, the findings concerning [Cheryl’s] false state-
ment attributed to [Aaron] ‘that your children are an
abomination’ and [Laurel’s] reactions to it, are not a result
of the denial of cake services and are therefore irrelevant
in their entirety, especially since they are inconsistent with
148 Klein v. BOLI
the earlier finding that [Aaron] made no such statement to
[Cheryl]. Even worse, it was error for the ALJ to attribute
legal responsibility to [Aaron and Melissa] for the false
statement by Cheryl, an intervening cause which could not
conceivably result in damage to Complainants, who weren’t
present to hear it.”
(Record citations omitted.)
The commissioner largely adopted the ALJ’s order
as BOLI’s final order, including the proposed damages
award, although he rejected the ALJ’s determination on
summary determination that the Kleins had not violated
ORS 659A.409. On that point, BOLI determined to the con-
trary that both Aaron and Melissa violated that statute by
making certain statements during a television interview
about the case, and by taping a statement addressing their
intent to adhere to their religious beliefs to the door of the
bakery.
On the disputed point of what Aaron had said to
Cheryl, BOLI adopted the finding that Aaron had quoted
Leviticus to Cheryl. In so doing, BOLI eliminated the state-
ment, contained in the ALJ’s proposed order, that suggested
the summary determination ruling obviated the need to
resolve the conflict between Cheryl’s version of events and
Aaron’s.
BOLI also adopted credibility findings that the ALJ
had made, including the ones specifically addressing the
credibility of Aaron and Cheryl. Finally, BOLI adopted the
ALJ’s determinations about the emotional distress suffered
by Rachel and Laurel upon being told by Cheryl of Aaron’s
statement.
The Kleins petitioned our court for judicial review of
the final order, as permitted by the Oregon Administrative
Procedures Act (APA). On review, we upheld BOLI’s deter-
mination that Aaron engaged in unlawful discrimination,
in violation of ORS 659A.403, by refusing to provide a cake
to Rachel and Laurel on account of their sexual orienta-
tion. Klein I, 289 Or App at 510-11. In so doing, we rejected
a range of arguments asserting that the speech and free
exercise clauses of the First Amendment, and Article I, sec-
tions 2, 3, and 8, of the Oregon Constitution precluded the
Cite as 317 Or App 138 (2022) 149
application of the statute to the Kleins because of the bur-
den that it imposed on their ability to express and practice
their religious views. Id. We reversed the final order insofar
as it concluded that the Kleins violated ORS 659A.409 by
making the statements identified by the commissioner as
the basis for liability. Id. at 511.
We also rejected the Kleins’ argument that the
order did not satisfy the substantial evidence or substantial
reason standards imposed by ORS 183.482(8)(c). Id. at 559.
In particular, we rejected the Kleins’ argument that the
order lacked substantial reason because it awarded dam-
ages “for harm attributable to being called ‘abomination[s],’ ”
but had found, as fact, that Aaron had not said that. Id.
Pointing to the fact that the BOLI prosecutor had argued in
closing that it did not matter exactly how it was “couched,”
as well as aspects of the final order that appeared focused
on the effect of the word “abomination” on the Bowman-
Cryers, we reasoned that BOLI’s order was not premised on
a finding that Aaron had, in fact, called Rachel and Laura
“abomination[s].” Id. (alterations in Klein I). Rather, we con-
cluded, it was based on a finding that Aaron had used the
term “abomination” in the course of explaining why he was
denying service to the complainants on account of their sex-
ual orientation, and that his use of the word caused harm,
regardless of what he had actually said to Cheryl. Klein I,
289 Or App at 559-60. Relying on that line of reasoning, we
rejected the Kleins’ contention that the damages award was
inconsistent with BOLI’s credibility determinations, and
that it otherwise was not supported by substantial reason.
Id.The Kleins petitioned the Oregon Supreme Court
for review of our decision but that court denied review. Klein
v. Bureau of Labor and Industries, 363 Or 224, 434 P3d 25
(2018). They then petitioned the United States Supreme
Court for certiorari. That court granted certiorari, vacated
our decision, and remanded to us for reconsideration in light
of its decision in Masterpiece Cakeshop. Klein II, ___ US at
___, 139 S Ct at 2713.
On remand, the parties submitted supplemental
briefs and provided oral argument, addressing what bearing
150 Klein v. BOLI
Masterpiece Cakeshop has on our review on reconsideration
of BOLI’s final order. Following the United States Supreme
Court’s decision in Fulton, the Kleins moved for leave to
file a memorandum of additional authorities to address the
potential application of the Free Exercise Clause analysis in
that case. We allowed the motion.
II. ANALYSIS
This procedural history gives us two related Free
Exercise Clause issues to resolve: (1) whether, in view of
Fulton, ORS 659A.403 is a “generally applicable” law for
purposes of the Smith framework; and (2) whether, in view
of Masterpiece Cakeshop, the order on review comports with
the First Amendment’s requirement that government action
be neutral toward religion. Both questions are legal ques-
tions, implicating the agency’s interpretation and appli-
cation of the requirements of the First Amendment. That
means our review is for errors of law.2 ORS 183.482(8)(a);
Green Thumb Landscape and Maintenance v. BOLI, 304 Or
App 349, 350, 467 P3d 43, rev den, 366 Or 826 (2020).
A. Fulton
We start with the Kleins’ argument that Fulton
requires reversal. In our original opinion, we rejected the
Kleins’ contention that the application of ORS 659A.403 to
their conduct violated their rights under the Free Exercise
Clause of the First Amendment, as it applies to the states
via the doctrine of incorporation. Relying on Smith, we con-
cluded that ORS 659A.403 is a “neutral” and “generally
2
Although the Kleins’ briefing before BOLI and in their initial briefing to
us did not fully anticipate the direction the law would take in either Fulton or
Masterpiece Cakeshop, this case, from the start, has centered on the question of
whether the application of the law to the Kleins’ conduct is consistent with their
rights under the First Amendment, including the Free Exercise Clause. In par-
ticular, the Kleins asserted in their opening brief to us that BOLI’s application of
ORS 659A.403 to the Kleins “was, at best, discretionary and done for the specific
purpose of forcing business owners with moral reservations about same-sex mar-
riage to either violate their consciences or go out of business. That is impermissi-
ble targeting.” (Emphasis in original.) They also questioned whether the law, as
written or as applied, was neutral and generally applicable for purposes of the
Free Exercise Clause. Under those circumstances, we consider it appropriate to
consider the Kleins’ arguments on remand about how Fulton and Masterpiece
Cakeshop bear on the Free Exercise Clause issues that they raised in their initial
appellate brief to us.
Cite as 317 Or App 138 (2022) 151
applicable” law and, consequently, did “not offend the Free
Exercise Clause simply because” of its incidental effect of
burdening the Kleins’ practice of religion. Klein I, 289 Or
App at 544-45.
In their memorandum of additional authorities, the
Kleins argue that Fulton requires a different conclusion. In
particular, they assert that, under Fulton, ORS 659A.403
is not a “generally applicable” law for purposes of the Free
Exercise Clause analysis under Smith.
We disagree. In Fulton, the Court considered a free
exercise challenge to the City of Philadelphia’s foster-care
contract policy, which prohibited discrimination based on
sexual orientation. Under the policy, the city required an
organization contracting with the city to provide foster care
services to agree to a standard contractual provision stat-
ing that the organization “ ‘shall not reject a child or fam-
ily including, but not limited to, * * * prospective foster or
adoptive parents, for Services based upon * * * their * * * sex-
ual orientation * * * unless an exception is granted by the
Commissioner or the Commissioner’s designee, in his/her
sole discretion.’ ” Fulton, ___ US at ___, 141 S Ct at 1878.
The plaintiff, Catholic Social Services (CSS), a foster care
agency in the city, argued that the policy, as applied to it,
violated its free exercise rights because CSS’s religious
views prohibited it from certifying married couples of the
same sex as foster care providers. Id. at ___, 141 S Ct at
1875-76.
The Court agreed with CSS. It reasoned that the
policy’s allowance of discretionary exceptions to the nondis-
crimination bar meant that the policy was not “generally
applicable” for purposes of Smith. Id. at ___, 141 S Ct at 1878.
In other words, under Fulton, to be “generally applicable,” a
law cannot have carved-out individual exceptions; individ-
ual exceptions defeat the notion of generality. Further, when
a law “incorporates a system of individual exemptions” that
are discretionary, the Free Exercise Clause mandates the
provision of a religious-hardship exemption, unless there
is a compelling reason not to supply a religious-hardship
exemption. Id. The Court concluded that the city had iden-
tified no such compelling interest in that case. Id. at ___,
152 Klein v. BOLI
141 S Ct at 1881-82. It reasoned that the city’s interest “in
the equal treatment of prospective foster parents and foster
children,” although a “weighty one,” was not an interest that
could justify the denial of a religious-hardship exemption to
CSS in light of the exceptions available to others. Id. at ___,
141 S Ct at 1882.
In their memorandum of additional authorities, the
Kleins urge us to conclude that Fulton controls this case.
Notably, however, the Kleins do not argue—and could not
argue—that the prohibition on discrimination based on sex-
ual orientation by places of public accommodation in ORS
659A.403 allows for individual exceptions. As written, ORS
659A.403 (2011),3 without exception or allowances for dis-
cretionary exceptions, bars discrimination based on sexual
orientation by places of public accommodation:
“(1) Except as provided in subsection (2) of this sec-
tion, all persons within the jurisdiction of this state are
entitled to the full and equal accommodations, advantages,
facilities and privileges of any place of public accommoda-
tion, without any distinction, discrimination or restriction
on account of race, color, religion, sex, sexual orientation,
national origin, marital status or age if the individual is
18 years of age or older.
“(2) Subsection (1) of this section does not prohibit:
“(a) The enforcement of laws governing the consump-
tion of alcoholic beverages by minors and the frequenting
by minors of places of public accommodation where alco-
holic beverages are served; or
“(b) The offering of special rates or services to persons
50 years of age or older.
“(3) It is an unlawful practice for any person to deny
full and equal accommodations, advantages, facilities and
privileges of any place of public accommodation in violation
of this section.”
ORS 659A.403 (2011).
Faced with this exception-free statute when it
comes to the prohibition on discrimination based on sexual
3
The legislature has amended ORS 659A.403 several times since BOLI ini-
tiated this case; none of the amendments bears on the issues presented here.
Cite as 317 Or App 138 (2022) 153
orientation,4 the Kleins look elsewhere for exceptions: the
Oregon Constitution. They point out—correctly—that the
Oregon Supreme Court has stated in several cases, originat-
ing with Cooper v. Eugene Sch. Dist. No. 4J, 301 Or 358, 368-
69, 723 P2d 298 (1986), that Article I, sections 2 and 3, of the
Oregon Constitution allow for an individual claim to a reli-
gious exemption from the application of a general law: “With
regard to rules that are generally applicable and neutral
toward religion, however, the only issues for us to consider
are whether there was ‘statutory authority to make such a
regulation,’ or whether we should grant ‘an individual claim
to exemption on religious grounds.’ ” See State v. Hickman,
358 Or 1, 15-16, 358 P3d 987 (2015) (quoting Cooper, 301
Or at 368-69); State v. Brumwell, 350 Or 93, 108, 249 P3d
965 (2011) (reiterating that where a law is neutral toward
religion and generally applicable, the only issues under
Article I, sections 2 and 3, are the authority to promulgate
the law and an individual claim to an exemption on reli-
gious grounds). From that Oregon Supreme Court mention
of individual claims to exemptions on religious grounds, the
Kleins reason that (1) ORS 659A.403 allows for exceptions
by way of Article I, sections 2 and 3, if not its own text; and
(2) under Fulton, a religious exemption to ORS 659A.403
must be extended to them because, also under Fulton, the
state’s interest in nondiscrimination is insufficient to justify
the denial of a religious exemption.
We do not read Cooper, Hickman, Brumwell, or any
of the other cases that have quoted Cooper on the point, to
stand for the proposition that Article I, sections 2 and 3,5
grant Oregon courts the discretion to grant religious exemp-
tions from generally applicable, neutral statutes that do not
4
We acknowledge that the text of the statute contains exceptions to the pro-
hibition on age discrimination. See Dalbeck v. Bi-Mart Corp., 315 Or App 129,
131-40, 500 P3d 711 (2021) (analyzing the scope of the statutory exceptions to the
bar on age discrimination contained in ORS 659A.403). The Kleins do not suggest
that the exceptions to the bar on age discrimination supply an exception to the
bar on discrimination based on sexual orientation and, in any event, any such
suggestion would be implausible as a textual matter.
5
Article I, section 2, of the Oregon Constitution states: “All men shall be
secure in the Natural right, to worship Almighty God according to the dictates
of their own consciences.” Article I, section 3, of the Oregon Constitution states:
“No law shall in any case whatever control the free exercise, and enjoyment of
religeous [sic] opinions, or interfere with the rights of conscience.”
154 Klein v. BOLI
contain their own, legislatively crafted exceptions. That
would be a potentially vast, and unusual, conferral of legis-
lative authority on the courts, and is not something that fol-
lows in any obvious way from the text of Article I, sections 2
and 3, or the structure of the government under the Oregon
Constitution.
Instead, we read the Oregon Supreme Court’s cases
to stand for the proposition that an individual may be able to
make a case that those provisions, as a matter of law, require
the grant of a religious exemption to a generally applicable
and neutral law. To make a case that either Article I, sec-
tion 2, or Article I, section 3, compelled the recognition of
individual religious exemptions from a generally applicable,
neutral statute, an individual would need to demonstrate,
under Oregon’s well-established methodology for construing
the original provisions of our state constitution, that one or
both of those provisions require an individual exemption to
a generally applicable law. See generally Priest v. Pierce, 314
Or 411, 416, 840 P2d 65 (1992). That is, the individual would
need to demonstrate that, in light of “[i]ts specific wording,
the case law surrounding it, and the historical circum-
stances that led to its creation,” either Article I, section 2,
or Article I, section 3, requires a grant of an individual
religious exemption under the circumstances present here.
Id. at 415-16; see Hon. Jack L. Landau, An Introduction to
Oregon Constitutional Interpretation, 55 Willamette L Rev
261, 318 (2019) (explaining that Oregon courts discern the
meaning and application of state constitutional provisions
through “analysis of the text of a provision in its historical
context, with a view to discerning how that provision would
have been understood at the time of its adoption and what
general principles animated that understanding”).
In this case, as we observed in our original opin-
ion, the Kleins have not developed an argument under the
Priest framework that Article I, sections 2 and 3, require the
grant of a religious exemption from ORS 659A.403. Klein I,
289 Or App at 549 (“The Kleins have not offered a focused
argument for why the Oregon Constitution requires an
exemption in this case, under the methodology for interpret-
ing our constitution.”). They did not do so in their original
briefs to us, and they have not done so now. Beyond that, if
Cite as 317 Or App 138 (2022) 155
the Kleins had developed and prevailed on an argument in
accordance with the Priest framework that Article I, section
2 or 3, requires that they be granted an exemption from ORS
659A.403, then there would be no need to consider Fulton or
the First Amendment at all. That is, if the Kleins had shown
under the applicable interpretive framework that those pro-
visions require the grant of an individual exemption, then
the Kleins would have obtained the relief they sought under
the provisions of the Oregon Constitution, without regard to
Fulton.6
For those reasons, the Kleins have not demonstrated
that Fulton alters our prior conclusion that ORS 659A.403
is a “generally applicable” law for purposes of Smith, nor
our related conclusion that, under Smith, the application
of the law to Aaron’s conduct of denying cake-making ser-
vices based on sexual orientation does not violate the Kleins’
rights under the Free Exercise Clause. Klein I, 289 Or App
at 543-50.
B. Masterpiece Cakeshop
The remaining question is how, if at all, the
Supreme Court’s decision in Masterpiece Cakeshop bears on
our assessment of the order on review. Before addressing the
parties’ competing arguments about how that case affects
this one, we set forth the key facts of that case and, then, our
understanding of the job the United States Supreme Court
has given us.
Much like this case, Masterpiece Cakeshop involved
a Colorado agency’s determination that a baker, Phillips,
and his bakery, Masterpiece Cakeshop, violated the state’s
antidiscrimination laws by refusing to supply a wedding
6
By omitting to develop state constitutional analysis in presenting their
claims to us, the Kleins overlooked Oregon’s longstanding and preferred
approach to constitutional questions, under which claims are to be addressed
under the state constitution before they are addressed under the federal constitu-
tion. Although preferred, Oregon’s approach to resolving constitutional questions
under the state constitution before considering the federal constitution generally
is not a basis on which to depart from “the bedrock principle of appellate jurispru-
dence that courts generally should decide cases as framed by the parties’ properly
raised and preserved arguments,” particularly where an appellant has multiple
opportunities to develop the state constitutional argument but has not done so.
State v. Link, 367 Or 625, 640-42, 482 P3d 28 (2021).
156 Klein v. BOLI
cake to a same-sex couple. Masterpiece Cakeshop, 584 US at
___, 138 S Ct at 1723. As here, the agency rejected Phillips’s
claim that the application of the state’s prohibition on dis-
crimination violated his free exercise rights, relying on
Smith. Id. at ___, 138 S Ct at 1726. The Colorado Court of
Appeals affirmed, also relying on Smith, and the Colorado
Supreme Court denied review. Id. at ___, 138 S Ct at 1727.
On Phillips’s petition, the United States Supreme
Court granted certiorari. Id. Ultimately, though, the Court
never addressed the question of the legal correctness of the
agency’s (and the court’s) ruling. Id. at ___, 138 S Ct at 1729.
Instead, the Court set aside the agency’s decision based on its
determination that the agency’s “treatment of Phillips’ case
violated the State’s duty under the First Amendment not to
base laws or regulations on hostility to a religion or religious
viewpoint.” Id. at ___, 138 S Ct at 1731. The court explained
that the “requisite religious neutrality * * * must be strictly
observed,” and determined that “the Commission’s consider-
ation of Phillips’ case was neither tolerant nor respectful of
Phillips’ religious beliefs.” Id. at ___, 138 S Ct at 1731-32.
In reaching that conclusion, the Court stressed that
“[t]he Free Exercise Clause bars ‘even subtle departures
from neutrality’ on matters of religion,” and cautioned that
“[t]he Constitution ‘commits government itself to religious
tolerance, and upon even slight suspicion that proposals for
state intervention stem from animosity to religion or dis-
trust of its practices, all officials must pause to remember
their own high duty to the Constitution and the rights it
secures.’ ” Id. at ___, 138 S Ct at 1731 (quoting Church of
Lukumi Babalu Aye, Inc. v. Hialeah, 508 US 520, 534, 547,
113 S Ct 2217, 124 L Ed 2d 472 (1993)).
The Court expanded on its decision in Church of
Lukumi Babalu Aye, Inc. That case addressed whether a
legislative decision—a city ordinance—comported with the
First Amendment’s neutrality requirement. In Masterpiece
Cakeshop, the Court projected the principles of Church of
Lukumi Babalu Aye, Inc. onto a different field: direct appel-
late review of an adjudicative decision. The Court explained
that in evaluating the religious neutrality of a legislative
or adjudicative action, “[f]actors relevant to the assessment
Cite as 317 Or App 138 (2022) 157
of government neutrality include ‘the historical background
of the decision under challenge, the specific series of events
leading to the enactment or official policy in question, and
the legislative or administrative history, including contem-
poraneous statements made by members of the decision-
making body.’ ” Id. at ___, 138 S Ct at 1731 (quoting Church
of Lukumi Babalu Aye, Inc., 508 US at 540).
Considering the whole record of the proceedings,
the Court determined that “[t]he Civil Rights Commission’s
treatment of [Phillips’s] case has some elements of a clear
and impermissible hostility toward the sincere religious
beliefs that motivated his objection.” Id. at ___, 138 S Ct at
1729. The Court identified two primary things that led it to
“draw the inference that Phillips’ religious objection was not
considered with the neutrality that the Free Exercise clause
requires”: (1) statements by the commissioners during the
proceedings that were dismissive of the baker’s religious
beliefs and that were not discussed or disavowed on review by
the Colorado Court of Appeals; and (2) the commission’s dif-
ferential treatment and allowance of other conscience-based
objections to application of the antidiscrimination law. Id. at
___, 138 S Ct at 1730-32.
As to statements, the Court observed that, during
the course of the proceedings, members of the commission
“endorsed the view that religious beliefs cannot legitimately
be carried into the public sphere or commercial domain,
implying that religious beliefs and persons are less than
fully welcome in Colorado’s business community.” Id. at ___,
138 S Ct at 1729. It supported that observation by pointing
to statements by some of the commissioners during the pub-
lic hearings on the case. At the first hearing,
“One commissioner suggested that [the baker] can believe
‘what he wants to believe,’ but cannot act on his religious
beliefs ‘if he decides to do business in the state.’ A few
moments later, the commissioner restated the same posi-
tion: ‘[I]f a business man wants to do business in the state
and he’s got an issue with the—the law’s impacting his
personal belief system, he needs to look at being able to
compromise.’ ”
Id. (record citations omitted). The Court noted that although
those statements were susceptible to a benign interpretation,
158 Klein v. BOLI
they also “might be seen as inappropriate and dismissive
comments showing lack of due consideration for [the baker’s]
free exercise rights and the dilemma he faced.” Id. Then, at
the second hearing, another commissioner said “far more”
disparaging things about Phillips’s beliefs:
“ ‘I would also like to reiterate what we said in the hear-
ing or the last meeting. Freedom of religion and religion has
been used to justify all kinds of discrimination throughout
history, whether it be slavery, whether it be the holocaust,
whether it be—I mean, we—we can list hundreds of situ-
ations where freedom of religion has been used to justify
discrimination. And to me it is one of the most despicable
pieces of rhetoric that people can use to—to use their reli-
gion to hurt others.’ ”
Id.The Court explained that the statement dispar-
aged the baker’s “religion in at least two distinct ways: by
describing it as despicable, and also by characterizing it
as merely rhetorical—something insubstantial and even
insincere.” Id. Noting that none of the other commissioners
objected to those statements, and that the state appellate
court neither mentioned nor expressed concern about their
content, the Court could not “avoid the conclusion that these
statements cast doubt on the fairness and impartiality of
the Commission’s adjudication of [the baker’s] case.” Id. at
___, 138 S Ct at 1729-30.
As for differential treatment, the Court noted that
the commission on three prior occasions had “considered the
refusal of bakers to create cakes with images that conveyed
disapproval of same-sex marriage, along with religious
text,” and, on each occasion, determined that the bakers
were justified in refusing service based on their views that
the messages they were asked to convey were hateful and
discriminatory. Id. at ___, 138 S Ct at 1730. In contrast, in
Phillips’s case, the commission ruled that he was not jus-
tified in refusing to provide the wedding cake, taking the
opposite view: “that any message the requested cake would
carry would be attributed to the customer, not to the baker.”
Id. Although Phillips pointed out that difference in treat-
ment to the Colorado Court of Appeals, that court addressed
Cite as 317 Or App 138 (2022) 159
the differential treatment only “in passing,” and accepted
the rationale that the difference in treatment was warranted
because the bakers in the prior cases had denied service
based on the offensiveness of the message that they were
being asked to convey, not based on impermissible discrim-
ination. Id. at ___, 138 S Ct at 1730-31. That analysis was
problematic as a constitutional matter because it was not
viewpoint neutral: “The Colorado court’s attempt to account
for the difference in treatment elevates one view of what is
offensive over another and itself sends a signal of official
disapproval of Phillips’s religious beliefs.” Id. at ___, 138
S Ct at 1731.
Because of those features of the Colorado adjudi-
cation, the Court held that the commission’s decision was
the product of a hostility that “was inconsistent with the
First Amendment’s guarantee that our laws be applied in
a manner that is neutral toward religion.” Id. at ___, 138
S Ct at 1732. It emphasized “that the government, if it is to
respect the Constitution’s guarantee of free exercise, cannot
impose regulations that are hostile to the religious beliefs
of affected citizens and cannot act in a manner that passes
judgment upon or presupposes the illegitimacy of religious
beliefs and practices.” Id. at ___, 138 S Ct at 1731. The Court
concluded by observing:
“The outcome of cases like this in other circumstances
must await further elaboration in the courts, all in the con-
text of recognizing that these disputes must be resolved
with tolerance, without undue disrespect to sincere reli-
gious beliefs, and without subjecting gay persons to indigni-
ties when they seek goods and services in an open market.”
Id. at ___, 138 S Ct at 1732.
From the perspective of an intermediate appel-
late court called upon to apply the holding of Masterpiece
Cakeshop on direct judicial review of an agency adjudication,
it is difficult to discern, precisely, the rule of law announced
or how to apply it. The Court did not identify an applicable
standard of review, and its opinion poses different alterna-
tives. Those range from a “slight suspicion” that the pro-
ceeding was not neutral to religious beliefs, to “elements of
a clear and impermissible hostility” to religious beliefs, to
160 Klein v. BOLI
indications of “subtle departures from neutrality.” Id. at ___,
___, 138 S Ct at 1729, 1731. The Court also did not iden-
tify what party bears the burden of persuasion on a claim
that an adjudication was not neutral when the case is in a
direct review posture.7 It did not explain whether the ques-
tion is primarily one of law or one of fact. To the extent the
issue presents a factual question, the Court did not identify
a standard of proof, or explain how factfinding accords with
the usual role of an appellate court, a role that typically does
not encompass factfinding. Must the government persuade
the court that it acted in compliance with the neutrality
requirement, or must the party claiming the lack of neutral
treatment persuade the court of the non-neutral treatment?
How convinced must a reviewing tribunal be of the presence
or absence of non-neutrality to set aside or sustain an agen-
cy’s decision?
Despite all these questions about how to conduct
the review required under Masterpiece Cakeshop, we discern
three principles to guide our review on remand. The first is
that, in evaluating on direct review a litigant’s claim that an
adjudication is premised, in whole or in part, on unconstitu-
tional hostility to religious beliefs, a reviewing court must
examine the entire record of the case, including each stage of
the case. The second is that, where, as here, a governmental
adjudicator is called upon to determine whether a person’s
conduct violates a generally applicable, neutral law, and that
conduct was motivated by a religious belief, the adjudicator
must walk a tightwire, acting scrupulously to ensure that the
adjudication targets only the unlawful conduct, and is not, in
any way, the product of the adjudicator’s hostility toward the
belief itself. Third, and finally, because even “subtle depar-
tures” from neutrality violate the First Amendment, even
“subtle departures” require some form of corrective action
from a reviewing court. Id. at ___, 138 S Ct at 1731.
7
In Church of Lukumi Babalu Aye, Inc., the Court confronted a claim of non-
neutrality in a different procedural posture. The plaintiffs in that case brought
a civil rights action under 42 USC § 1983 to challenge the ordinance at issue,
and they requested a number of remedies, including a declaration that the ordi-
nance unlawfully targeted their religion, in violation of the Free Exercise Clause.
Church of Lukumi Babalu Aye, Inc., 508 US at 528-29. The trial court held a 9-day
bench trial to develop the factual record related to the plaintiffs’ claim that the
ordinance was not religiously neutral. Id. at 528.
Cite as 317 Or App 138 (2022) 161
When the whole record of this case is considered
in light of those principles, and the specific aspects of the
Colorado adjudication that the Supreme Court deemed
problematic in Masterpiece Cakeshop, one portion of it evi-
dences the type of subtle departure from neutrality that the
Supreme Court identified in that case.8 For reasons that
we elaborate on, the prosecutor’s closing argument appar-
ently equating the Kleins’ religious beliefs with “prejudice,”
together with the agency’s reasoning for imposing damages
in connection with Aaron’s quotation of Leviticus, reflect
that the agency acted in a way that passed judgment on the
Kleins’ religious beliefs, something that is impermissible
under Masterpiece Cakeshop.
First, the prosecutor’s closing argument suggests
that the Kleins’ religious beliefs equate to “prejudice,” in a
way that resembles how one of the Colorado commissioners
equated Phillips’s religious beliefs to “rhetoric.” The pros-
ecutor discussed the history of the public accommodations
law, and how it left Oregonians “ ‘free to harbor whatever
prejudices they choose’ ” but simply outlawed acts of dis-
crimination in public accommodations. She then asserted:
“That’s exactly what’s going on in this case. The Kleins,
of course, are allowed to feel and hold whatever beliefs they
hold dear to them. But when they operate in a public place
and provide goods and services to the public, they have to
do so without discrimination.”
(Emphasis added.)
One way to understand that line of argument is as
identifying the Kleins’ religious beliefs with the pejorative
term “prejudice.” In that way, the argument appears to pass
judgment on the Kleins’ beliefs, treating the beliefs as the
equivalent of mere prejudice, and dismissing the dilemma
of conscience faced by persons who believe that their faith
demands one thing of them, while the law demands another.
Although the BOLI prosecutor’s statements were made in
8
In their supplemental briefing, the Kleins discuss a range of things that,
in their view, demonstrate that the proceeding was not religiously neutral. We
address only those that, upon our whole record review, have convinced us that
BOLI handled this matter in a way that deviated from the strict neutrality
required under Masterpiece Cakeshop.
162 Klein v. BOLI
closing argument, and the BOLI commissioner, not the pros-
ecutor, ultimately rendered the final order on review, the
prosecutor was acting on behalf of BOLI in making those
statements, and the commissioner did nothing to disavow
them in the final order that he issued on behalf of the
agency. Cf. Masterpiece Cakeshop, 584 US at ___, 138 S Ct
at 1729-30 (observing that Colorado Court of Appeals did
not mention troubling statements or express concern, and
that briefs to the Supreme Court did not disavow or express
concern about troubling statements).
In cases in which a prosecutor is independent from
the ultimate adjudicator, we do not think there would be a
basis to attribute the prosecutor’s statements to the adjudi-
cator. For example, if an executive-branch prosecutor made
a disparaging statement about religion in a criminal case
tried in a judicial-branch court, because of the independence
of the branches, there likely would not be a basis to attribute
the executive-branch actor’s potential hostility to religion to
the judicial-branch actor, even if the judicial-branch actor
did not specifically disavow the executive-branch actor’s
statement. But under BOLI’s statutory structure, BOLI’s
prosecutor is not independent of the final adjudicator, the
commissioner. By statute, the commissioner is the head of
BOLI. ORS 651.030(1) (“[BOLI] shall be under the control
of the Commissioner of [BOLI] which office hereby is cre-
ated.”). By statute, the commissioner also is the one who has
the authority to initiate the formal charges that start a case
like this one. ORS 659A.845. By statute, even when the case
is tried to the Office of Administrative Hearings initially, as
it was here, the commissioner retains full control over the
content of the order that results: “The commissioner may
affirm, reverse, modify or supplement the determinations,
conclusions or order of any special tribunal or hearing offi-
cer appointed under this subsection.” ORS 659A.850(1)(a).
Because the BOLI prosecutor acts on behalf of
BOLI, which is under the control of the commissioner, absent
a disavowal by the commissioner of a prosecutor’s position
in the context of deciding a contested case, it is inferable
that the prosecutor’s position is the position of the agency,
including its commissioner. Our initial decision in this case
underscores that lack of independence. There, we implicitly
Cite as 317 Or App 138 (2022) 163
relied on the interdependence of BOLI and its prosecutor
in rejecting the Kleins’ substantial-reason argument when
we pointed to the prosecutor’s closing argument as indic-
ative of BOLI’s reasoning, although BOLI’s order did not
make the reasoning explicit. Klein, 289 Or App at 557-60.
In so doing, we effectively recognized that the prosecutor
represented the agency’s viewpoint. In any event, given the
agency’s structure, that the prosecutor took that position,
and the commissioner did not disavow it, gives rise to at
least a “slight suspicion” that the position is one shared by
the agency, including its head and final adjudicator, the
commissioner.
Similarly to what happened in Masterpiece Cakeshop,
that specter of non-neutrality materializes into the affirma-
tive conclusion that BOLI at least subtly departed from prin-
ciples of neutrality when it awarded noneconomic damages
based on Aaron’s quotation of Leviticus. BOLI found as fact
that Aaron quoted Leviticus during a discussion with Cheryl
about their differing religious perspectives on marriage by
couples of the same sex. It also found as fact that Aaron’s
testimony about what he said in that discussion, and his
intention in saying it, was credible. Cheryl had returned to
the store in the hopes of a “teaching moment” to share with
Aaron how she used to share his beliefs but, as a result of
her experience, no longer believes the same things. It was in
response to Cheryl’s sharing of her perspective that Aaron
asked why the Bible states what it does, and he quoted
Leviticus. Aaron testified that he did not call Cheryl’s chil-
dren abominations or make the statement with the inten-
tion of doing so, testimony that BOLI credited over Cheryl’s
competing version of events. Cheryl nonetheless told Rachel
and Laurel that Aaron had said that her children were
abominations, and BOLI sought and imposed noneconomic
damages based on the distress that Rachel and Laurel suf-
fered upon hearing Cheryl’s characterization of what Aaron
had said. As we recognized the first time this matter was
before us, in so doing, BOLI adopted the perspective of its
prosecutor that it did not really matter what Aaron actually
had said, because of the distress caused by Aaron’s use of
the word “abomination,” and because Aaron had made those
statements in the course of denying services.
164 Klein v. BOLI
BOLI’s determination that it did not matter whether
Aaron had, in fact, called Cheryl’s children abominations
or, instead, quoted Leviticus in response to Cheryl’s expla-
nation of her change in perspective, could be understood
to indicate the same kind of dismissiveness the Supreme
Court found impermissible. Taking the position that it did
not matter factually what Aaron had said tends to sug-
gest hostility or dismissiveness because it is not typical to
hold someone liable in damages for something they did not,
in fact, say or do. On the contrary, the facts matter when
imposing liability for damages, and there is a significant
difference, factually, between a person who quotes a topi-
cally relevant Bible passage that contains an inflammatory
word to respond to a suggestion that they might change
their beliefs, and a person who calls another person a name
using that same inflammatory word. Although that hos-
tility could be a general hostility toward Aaron based on
the harm his words caused, rather than hostility toward
his religious beliefs, the prosecutor’s prior apparent equa-
tion of Aaron’s religious beliefs with prejudice, points at
least somewhat in the direction of the latter. Additionally,
BOLI never distinguished or explained why it was equating
Aaron’s identification of a portion of the Bible that informs
his religious beliefs—in the context of a discussion explic-
itly about religious beliefs—with calling the other person’s
children a horrible name. Instead, BOLI rested its deci-
sion on the fact that in his conversation with Cheryl, Aaron
uttered the inflammatory word “abomination.” Similar to
what happened in Masterpiece Cakeshop, BOLI appears to
have treated Aaron’s expression of his beliefs as something
closer to “rhetoric” than an attempt to explain the source
for his beliefs, even though it credited Aaron’s version of the
exchange with Cheryl.
Ultimately, what indicates that BOLI at least sub-
tly departed from the requirement of strict neutrality in its
damages award is the fact that it expressly awarded dam-
ages in part based on what it found as fact to be Aaron’s
expression of his views in the context of a religious dialogue.
The conversation that Cheryl and Aaron had when she
returned to the store is a conversation that is dividing faith
communities. See, e.g., Campbell Robertson & Elizabeth
Cite as 317 Or App 138 (2022) 165
Dias, United Methodist Church Announces Plan to Split Over
Same-Sex Marriage, NY Times (Jan 3, 2020), https://www.
nytimes.com/2020/01/03/us/methodist-split-gay-marriage.
html (accessed Jan 18, 2022) (reporting that leaders of the
United Methodist Church, “the second-largest Protestant
denomination in the United States,” had announced “a plan
that would formally split the church, citing ‘fundamental
differences’ over same-sex marriage after years of division”).
According to BOLI’s findings and the evidence in the record
consistent with those findings, Cheryl and Aaron were
talking about their respective religious beliefs when Aaron,
in response to Cheryl’s explanation about why her religious
perspective had changed, asked why the Bible says what it
does in Leviticus. Given that circumstance, to the extent
that it both pleaded (as prosecutor), then proved to itself
and ordered the Kleins to pay monetary damages based on
Aaron’s statements in that conversation, BOLI effectively
took a side in an ongoing religious discussion. That does not
square with the obligation of government to remain strictly
neutral toward religion and strictly neutral toward partic-
ular religious beliefs. Rather, given BOLI’s overarching and
multifaceted role in this case, it directly suggests a govern-
mental preference for one faith perspective over another
in what remains an ongoing, emotionally hard discussion
within American communities of faith.
In reaching this conclusion, we do not mean to sug-
gest that the use of a Bible quote immunizes a speaker from
liability for emotional distress damages. It is easy to envi-
sion circumstances in which, as a factual matter, a speaker
might employ biblical references to engage in name-calling
and inflict emotional distress. We also do not mean to sug-
gest that Aaron’s statement, as recounted to them, did not
cause the Bowman-Cryers the severe emotional distress that
BOLI found it caused them. The record amply supports the
finding that Aaron’s statement, as communicated to them by
Cheryl, made the Bowman-Cryers feel alienated from their
faith, causing them significant emotional distress. But, in
this instance, according to BOLI’s factual findings, in the
context of a conversation about religious beliefs, Aaron did
not say what Cheryl reported him saying, and did not intend
to communicate to that effect when he quoted Leviticus to
166 Klein v. BOLI
her. Yet BOLI awarded damages based on the use of the
term “abomination” without engaging with, or even recog-
nizing, Aaron’s right to express his own belief within the
specific context of a conversation that Cheryl, having expe-
rienced her own change in religious perspective, initiated
with the hope that Aaron could learn from her experience
and see that a change in religious perspective is possible.
In view of the foregoing, we conclude that, under
Masterpiece Cakeshop, the damages portion of the pro-
ceedings before BOLI did not comport with the First
Amendment’s requirement of strict neutrality toward reli-
gion. The remaining question is disposition.
As for the issue of liability—our conclusion that
BOLI properly determined that Aaron violated ORS
659A.403 by refusing service to the Bowman-Cryers and
that neither the state nor federal constitution prohibits the
application of that neutral, generally applicable law to his
conduct of denying cake-making services based on sexual
orientation—we adhere to our prior decision in its entirety.
We do so for two reasons.
First, the liability issues were resolved on summary
determination before the agency on undisputed facts. As a
result, any non-neutrality on the part of the agency did not
affect a factfinding process.
Second, as for the law, our court reviewed all the
legal questions concerning liability for legal error. Applying
the operative standard of review under the APA, we did so
without deference to BOLI on those questions of law, and we
do not understand the Kleins to contend that we conducted
that nondeferential review in a non-neutral way. In that
regard, by noting in Masterpiece Cakeshop that the Colorado
Court of Appeals failed to address the statements by the
members of the Colorado Civil Rights Commission that the
Court found concerning, the Court implicitly indicated that,
at times, appellate-level review can ensure that a proceed-
ing is neutral in the face of potential non-neutrality by an
agency adjudicator. See Masterpiece Cakeshop, 584 US at
___, 138 S Ct at 1729-30 (“And the later state-court ruling
reviewing the Commission’s decision did not mention those
comments, much less express concern with their content.”).
Cite as 317 Or App 138 (2022) 167
We recognize that when this case was first before us,
we, like the Colorado Court of Appeals, did not address the
aspects of the agency adjudication that we have determined
to be non-neutral on remand. That is because the signifi-
cance of those aspects of the adjudication to the Kleins’ free
exercise claim was not readily apparent until the Supreme
Court’s decision in Masterpiece Cakeshop provided a lens to
see that significance. Although throughout this entire case
the Kleins have challenged BOLI’s award of damages based
on Aaron’s quotation of Leviticus, and also have argued that
BOLI’s order reflected unconstitutional targeting of religion,
it was not until their supplemental briefing on remand that
they first linked the two arguments and pointed to the dam-
ages award as indicative of that targeting. Along the same
lines, as noted, Masterpiece Cakeshop appears to represent
an expansion of Church of Lukumi Babalu Aye, Inc., advanc-
ing the analysis in that case, which involved a claim of non-
neutrality that was adjudicated on its facts in a trial court,
to the context of direct appellate review of agency adjudica-
tions. As a result, it would not have been readily apparent
to the parties when they briefed this case initially to frame
their arguments in that way, or to us that we should con-
duct that type of religious-neutrality review the first time
we saw this case. In other words, we do not view the failure
to anticipate the approach taken by Masterpiece Cakeshop,
and to conduct the review that case now appears to require,
as indicative of non-neutrality.
We reverse and remand the order’s damages award.
For the reasons identified above, the damages portion of the
case had the same or similar hallmarks of non-neutrality
that caused the Supreme Court to set aside the Colorado
order at issue in Masterpiece Cakeshop, and we read that
case to require us to take appropriate corrective action to
address that non-neutrality. In contrast with the liability
portion of the case, which turns on questions of law, any
non-neutrality in the damages portion of the decision is not
something we can remedy through appellate review. The
appropriate amount of damages is something highly fact-
intensive and we are not, in this instance, empowered to
engage in factfinding ourselves. On remand, BOLI should
conduct any further proceedings on the remedy for Aaron’s
168 Klein v. BOLI
violation of ORS 659A.403 in a manner consistent with
Masterpiece Cakeshop and this decision. In that regard, we
take note that BOLI now has a different commissioner, so
there is no reason to think that any hostility toward the
Kleins’ religious beliefs reflected in the prior decision will
affect the remedy case on remand.
Reversed as to BOLI’s conclusion that the Kleins
violated ORS 659A.409 and the related grant of injunctive
relief; reversed and remanded as to damages; otherwise
affirmed.