Youth 71Five's main vocational training center on Almond Street in Medford.

A panel of Ninth Circuit appellate judges in Southern California scrutinized lawyers representing Youth 71Five Ministries and the Oregon Department of Education during oral arguments Wednesday in a case focused on hiring policies.

At issue is whether the Southern Oregon faith-based nonprofit that serves at-risk youths violated a state grant nondiscrimination clause by committing to hiring only people of Christian faith.

Appellate judges Morgan Christen of Anchorage, Anthony Johnstone of Missoula, Montana, and Johnnie Rawlinson of Las Vegas heard arguments from the state and from a religious freedom-focused legal nonprofit representing Youth 71Five during an oral arguments hearing in a Ninth Circuit Court of Appeals courtroom in Pasadena, California.

The judges kept calm as they pinpointed specific issues in each side’s case to determine whether a judge in a lower court erred when he dismissed Youth 71Five’s lawsuit filed in U.S. District Court in Medford earlier this year. Youth 71Five sued the Department of Education for $410,000 in grants the state agency rescinded in late 2023 after an investigation spurred by an anonymous complaint determined that the nonprofit did not adhere to a newly implemented non-discrimination clause.

Judge Christen told Jeremiah Galus, senior counsel at the Alliance Defending Freedom, that she was most interested in hearing his strongest arguments on claims that Youth 71Five was treated differently from other faith-based groups that received awards.

Much of her time questioning Galus, however, was spent on more technical matters related to evidence presented in reply briefs that was not included in the original complaint.

“There’s a significant fork in the road at the top of the decision tree about considering evidence that wasn’t presented,” Christen said.

Galus in his oral arguments brought up secular organizations that received grants through the same Oregon Department of Education Youth Development Division grants, including nonprofits focused on empowering girls: Ophelia’s Place and Girls Inc. of the Pacific Northwest.

Johnstone stopped Galus when he said the organizations exclusively serve girls and youth identifying as girls. “Do they serve ‘only’?” Galus asked.

Galus highlighted a frequently asked questions section of one of the organization’s websites answering the question “Why not boys?”

“These are not our words. These are the grantees’ words,” Galus said.

Johnstone highlighted that the Oregon Department of Education rescinded the grants based on an investigation and a candid admission. Comparing Youth 71Five to other organizations’ websites may not be “apples to apples,” he said.

Later in the hearing, Johnstone pressed Oregon Assistant Attorney General Kirsten Nato on the limits of the state’s nondiscrimination policy. He asked her whether it relates solely to the portions of the program funded by the grant.

“Does the government’s nondiscrimination policy extend to those unfunded programs in the same organization?” Johnstone asked Nato.

He noted that the question was not before the judge in the original case filed in U.S. District Court in Medford but relates to some of the precedent cases highlighted in the state’s brief.

Galus at the end of the hearing told the judges that Youth 71Five would continue to have “to continue paying out of pocket” if they are kicked back out of the program.

“It’s gonna jeopardize their program, hamper their ministry and at the end of the day, that doesn’t just hurt a nonprofit ministry, it hurts the kids of Oregon,” Galus said.