The panel upholds the 2017 decision over a refusal to bake a cake for a same-sex couple, but overturns $135,000 award.

PMG FILE PHOTO - Aaron and Melissa Klein behind a sign for their former bakery.The Oregon Court of Appeals has added a twist in its latest decision in the long-running case of a Gresham baker's refusal to bake a wedding cake for a same-sex couple back in 2013.

In an opinion released Wednesday, Jan. 26, the court upheld its original 2017 decision against the couple — Aaron and Melissa Klein, then doing business as Sweetcakes by Melissa — based on a 2015 determination by the Bureau of Labor and Industries that they violated Oregon's 2007 law barring discrimination based on sexual orientation. The couple argued that doing so would infringe on their religious rights.

But the court also overturned its previous approval of $60,000 in noneconomic damages to Laurel Bowman-Cryer and $75,000 to Rachel Bowman-Cryer, both awarded by an administrative law judge in the bureau. The court found that the awards were based partly on a conversation about beliefs between Aaron Klein and Cheryl McPherson, Rachel's mother, who the court found relayed it inaccurately to the couple.

The court sent that part of the case back to the bureau for a re-examination of the remedy for damages.

Rachel Bowman-Cryer offered her reaction in a statement released by Lambda Legal Defense and Education Fund, which filed a brief on the couple's behalf:

"It's been nine years since we asked for a cake, a simple cake that we were going to decorate ourselves. We would never have set foot in Sweetcakes had we known the humiliation Aaron Klein would subject us to, simply because of who we are.

"But we also know that no one else should ever be treated that way, so we continue to stand up for what is right, even though the process has taken years and been extremely stressful. Our daughters deserve no less from us."

The business closed in 2016. The Kleins pursued the case on grounds of religious rights. A lawyer for the group that represented the Kleins said they will appeal again to the Oregon Supreme Court, and potentially, the U.S. Supreme Court, because they failed to prevail on the issue of religious beliefs.

Oregon is among 21 states, plus Washington, D.C., where public accommodation laws bar discrimination based on sexual orientation.

Federal decisions

The latest decision was written by Erin Lagesen, now chief judge of the Court of Appeals. Others on the panel were Judge Bronson James and now-Senior Judge Joel DeVore, who retired on Dec. 31. The court considered the arguments back on Jan. 9, 2020.

Appeals of most state agency decisions go to the Court of Appeals.

The court had to reconsider the case in the aftermath of two U.S. Supreme Court decisions in 2017 and 2021.

The case attracted national attention. The Kleins were represented by the First Liberty Institute, based in Texas, and the law firm of C. Boyden Gray, White House counsel for President George H.W. Bush and a diplomat for President George W. Bush. Friend-of-the-court briefs were filed by the Lambda Legal Defense and Education Fund and the ACLU Foundation of Oregon.

Both sides found something to cheer about in the latest decision.

Although the Oregon Supreme Court declined to hear the Kleins' appeal of the original decision in 2018, the Kleins appealed to the U.S. Supreme Court. At the end of 2017, the U.S. Supreme Court ruled narrowly in a similar case that the Colorado Commission on Civil Rights did not employ "religious neutrality" and reversed that state's decision against the bakery owner. It sent the Oregon case back to the state appeals court.

"We conclude … BOLI's handling of the damages portion of the case does not reflect the neutrality toward religion required by the free-exercise (of religion) clause," Lagesen wrote for the appeals court. "We therefore set aside the damages portion of the order and remand for further proceedings related to remedy."

Stephanie Taub is senior counsel for First Liberty Institute, based outside Dallas, which specializes in religious cases that critics say oppose gay rights. Boyden Gray's law firm was the lead appellate counsel.

Taub said in a statement:

"Oregon is trying to have its cake and eat it, too. The court admits the state agency that acted as both prosecutor and judge in this case was biased against the Kleins' faith. Yet, despite this anti-Christian bias that infected the whole case, the court is sending the case back to the very same agency for a do-over. Today's opinion should have been the end of this 10-year-long saga. It's time for the state of Oregon's hostility toward Aaron and Melissa to end."

State law upheld

On June 21, 2021, the U.S. Supreme Court decided that Philadelphia violated Catholic Social Services' constitutional right to free exercise of religion when the city barred it from participating in a foster-care program, based on the organization's refusal to certify same-sex couples. There were discretionary exemptions in the Philadelphia rule.

But the Oregon Court of Appeals said Oregon's 2007 law is constitutional.

"Neither the state constitution nor the federal constitution precludes the enforcement of the statute against Aaron (Klein), even though the enforcement of the statute burdens Aaron's practice of his faith," Lagesen wrote.

"In so doing, we conclude that (the 2021 federal decision) does not displace our previous conclusion that it is a genuinely applicable and neutral law," which does not provide for discretionary exemptions.

Jennifer Pizer is senior counsel at Lambda Legal, and offered this reaction:

"In 2017, the Oregon Court of Appeals issued a thorough and thoughtful decision explaining that our precious freedoms of religion and speech are not licenses for businesses to ostracize LGBT people. Oregon law guarantees equality, not being sent elsewhere as second-class pariahs.

"The court was right five years ago and is still right today. The Kleins' faith does not give them a pass to ignore Oregon's public accommodation law."

She and Portland lawyer Paul Thompson represented the Bowman-Cryers.

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Link to text of decision by Oregon Court of Appeals in Klein v. Oregon Bureau of Labor and Industries:

NOTE: Adds reactions from Lambda Legal Defense and Education Fund; Rachel Bowman-Cryer, via the fund, and First Liberty Institute. Adds that Oregon is among 21 states, plus Washington, D.C. whose public accommodation laws bar discrimination based on sexual orientation. Adds link to Court of Appeals decision.

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