IN THE COURT OF APPEALS FOR THE STATE OF OREGON

BLACHANA, LLC, dba Twilight room

Annex aka The P Club, and Christopher
Penner,
Petitioners,
v.
OREGON BUREAU OF LABOR AND
INDUSTRIES,
Respondent.

)
) Oregon Bureau of Labor and
) Industries Case No. 25-13
)
) Court of Appeals No. A155228
)
)
)
)

PETITIONERS' PETITION FOR RECONSIDERATION

Jonathan M. Radmacher, OSB #924314

McEWEN GISVOLD LLP
1100 SW Sixth Avenue, Suite 1600
Portland, Oregon 97204
Telephone: 503-226-7321
Facsimile: 503-243-2687
Email: jonathanr@mcewengisvold.com
Of Attorneys for
Petitioners

Denise G. Fjordbeck
Department of Justice
1162 Court Street NE
Salem, Oregon 97301
Telephone: 503-378-4402
Facsimile: 503-378-6306
Email: denise.fjordbeck@doj.state.or.us
Of Attorneys for
Respondent

October 2015

Petitioners (referred to by the Court and parties, and thus herein as

Respondents), request that the Court reconsider its decision of September 23, 2015,
in three respects: (1) that the Court reconsider its conclusion that Respondent did
not challenge a finding of fact, because the First Assignment of Error expressly and
implicitly challenged BOLI's reversal of the ALJ's credibility finding; (2) that the
Court reverse on the merits based upon that credibility finding; and (3) that the
Court reverse on the claim brought under ORS 659A.409, because a private
communication would not constitute publication of an intent to discriminate, as
that argument was articulated by the ALJ and reiterated on appeal.
1.

The Court erred in finding that Appellant did not challenge

BOLI's findings of fact.

In stating that Respondents did not challenge the findings of fact, this Court
erred pursuant to ORAP 6.25(1)(a) and (b). This Court held that:
Because respondents do not challenge BOLI's findings of
fact, those findings are the facts for purposes of judicial
review.
273 Or App 806, 809.
Respondent's First Assignment of Error made just such a factual challenge:
The Agency erred in finding that Mr. Penner's request
that the T-Girls not come to the Bar on Friday nights any
longer was discrimination under ORS 659A.403, where
there was no finding that Mr. Penner intended to exclude
or refuse to serve any person or group on account of their
sexual orientation.
[Opening Brief at 10]
The Standard of Review identified that the assignment of error could include

a substantial evidence evaluation of BOLI's findings:

The question of whether the statute requires a finding of
intentional discrimination, by finding an intent to refuse
or deny service, is a question of statutory interpretation,
which is reviewed de novo; if the Court finds that BOLI
has misinterpreted the law, it should set aside the order.
ORS 183.482(8)(a)(A). To the extent that the question
rests on any factual finding of the Agency, "The court
shall set aside or remand the order if the court finds that
the order is not supported by substantial evidence in the
record. Substantial evidence exists to support a finding of
fact when the record, viewed as a whole, would permit a
reasonable person to make that finding." ORS
183.482(8).
[Opening Brief at 11-12]
In Reply, Respondents further clarified their challenge to the Agency's effort
to change the Hearings Officer's finding of fact about Mr. Penner's credibility the
person who heard Mr. Penner testify found that he was credible except for his
opining about the loss of business on Friday nights. That credibility finding, made
by the only person imbued with the power to make a credibility finding the
person who took the testimony was central to Respondents' First Assignment of
Error: BOLI had no factual basis for denying that Mr. Penner did not intend to
exclude anyone and did not intend to discriminate, regardless of the aggrieved
persons' subjective view on those subjects.
In making its argument, however, BOLI fails to note for
this Court that the person who observed Mr. Penner
testify did not make the factual finding about credibility
on which BOLI now relies. It was not the Hearings
Officer who made that finding relied upon by BOLI, but
Ms. Hammond, Mr. Avakian's deputy, who made a
credibility decision even though she did not observe the

testimony. Far from insulating BOLI's ruling from

appeal, it should cast serious doubt on the legitimacy of
BOLI's decision and the administrative process that gave
rise to that decision BOLI should be held to the
credibility decision made by the Administrative Law
Judge that BOLI assigned to hear the case.
[Reply Brief at 2]
The ALJ's finding that Mr. Penner was credible was reversed without basis
or justification by the Agency's Deputy, who was not the finder of fact who heard
Mr. Penner testify. BOLI's reversal of that finding was error, appropriately
challenged on review.
2.

This Court should not give credence to the Complainant's

Deputy's changing of a credibility finding.

In the context of Respondents' factual challenge, supra, the Court erred in

finding that Mr. Penner intended to discriminate, i.e. once the factual issue about
credibility is taken into account, the Court is left with a finding that Mr. Penner did
not intend to discriminate when he left the voicemails, and so BOLI's decision
should be reversed on the First Assignment of Error.
The bench and bar understand the notion of trying to "bulletproof" a
decision from appeal. In particular, where the outcome depends upon a
determination of credibility, an appellate court will always defer to the credibility
finding of the person charged with hearing the testimony and assessing the witness'
demeanor, so that by making a credibility decision adverse to an appellant, the
finder of fact can essentially preclude any successful challenge. See, e.g., Larson
v. Trachsel, 282 Or 274, 250, 577 P2d 928 (1978) ("In such a case the trial judge,

having had the opportunity to observe the demeanor of the witness, is in a much
better position than in this court to determine the credibility of the witnesses.") In
this case, the Court erred by adopting the Deputy Commissioner's finding of fact
on credibility, which changed the ALJ's finding of credibility.
The ALJ's finding about credibility was that Mr. Penner was credible except
with regard to his testimony about a loss of business on Friday nights, which the
ALJ found was exaggerated:
60) Chris Penner was a credible witness except for his
testimony that the P Club's business dropped "20
percent" on Friday nights while the T-Girls were in
attendance, as the revenue figures offered and received
into evidence by Respondents showed that Penner's
testimony was exaggerated.
[Proposed Order, ER-52] Implicit (if not express) in that finding is that Mr.
Penner's testimony in other respects was credible. Yet Mr. Avakian's Deputy, who
did not act as the ALJ who heard the testimony, tried to bulletproof her decision in
favor of the Commissioner, holding that his testimony was disingenuous:
60) Chris Penner's testimony was not credible in two
respects. First, his testimony that the P Club's business
dropped "20 percent" on Friday nights while the T-Girls
were in attendance was not borne out by revenue figures
offered and received into evidence by Respondents
showed that Penner's testimony was exaggerated.
Second, his testimony that his voicemail was only a
"request" and that the sexual orientation of the T-Girls
was not a factor in his request for them to not come back
on Fridays was disingenuous. The forum has only
credited his testimony when it was undisputed or
corroborated by other evidence.
[SER-27 to 28]

Or to put it another way, to preserve his objections to the Proposed Findings

and Conclusions, Mr. Penner and Blachana, LLC provided objections, which noted
the credibility issue in his favor. BOLI's response was not to defer to that
credibility finding, but was to simply change the credibility finding. That's not a
finding of historical fact, but a factual issue uniquely decided by the person hearing
the testimony. Allowing BOLI to bulletproof a decision from appeal, with the
Deputy Commissioner finding in favor of the Commissioner, strips all sense of
fairness from the process, and should not be condoned by this Court.
3.

The Court erred in failing to address the Second Assignment of

Error.

This Court erred in rejecting the Second Assignment of Error without

discussion, ORAP 6.25(1)(b), "because it is insufficiently developed for our
review." Blachana, LLC v. Oregon Bureau of Labor and Industries, 273 Or App
at 816. While that phrase has been used on a very few occasions in Oregon's
courts to dismiss assignments of error without discussion,1 the fact that
Respondents' Second Assignment of Error was straightforward should not be
construed as meaning that it was undeveloped.
First, Respondents' Second Assignment of Error tracked the decision of the
Administrative Law Judge, asking that this Court adopt the ALJ's rationale that
rejected BOLI's claim Mr. Penner leaving a private voicemail should not be
construed as constituting the publication of a notice of an intent to discriminate.
1

See State v. Rogers, 352 Or 510, 513 n2, 288 P3d 544 (2012); Neidhart v. Page,
271 Or App 139, 141, 351 P3d 67 (2015).

[ER-45-47] The ALJ made that application of fact to law after analyzing relevant
definitions of publish and notice, and on appeal Respondents adopted that
evaluation.
Second, Respondents expounded on the importance of giving independent
meaning to the notice provisions of ORS 659A.409, otherwise, any communication
that is found to constitute discrimination under ORS 659A.403 would
automatically constitute a violation of ORS 659A.409, thus not giving any
independent meaning or application to ORS 659A.409:
The Hearings Officer found that Mr. Penner's voice mails
were private, and that although he may have intended that
she might circulate them, he himself did not circulate
them. Nor, the Hearings Officer found, did Mr. Penner
publish or display any notice of an intent to discriminate.
Although the Deputy Commissioner found in favor of her
boss by reversing the Administrative Law Judge, this
Court should adopt the Administrative Law Judge's
concise and appropriate analysis.
Under BOLI's theory of interpretation, every
communication that might constitute actionable
discrimination under ORS 659A.403 would necessarily
constitute actionable discrimination under ORS
659A.409, an outcome that renders ORS 659A.409
duplicative of ORS 659A.403. Because each provision
of each statute should be given independent meaning (as
opposed to being interpreted as being duplicative),
BOLI's interpretation is unreasonable, and the ALJ's
interpretation is correct.
[Reply Brief at 8]
Conclusion
Respondents request that this Court reconsider its decision, as follows:

1.

Reversing BOLI's finding of no credibility, because the finder of fact

found Mr. Penner to be credible in every respect except for whether he exaggerated
claims about lost sales on Friday night. Implicitly, then, the Court would reverse
BOLI's finding of discrimination, because Mr. Penner was credible when he
testified that he did not intend to exclude the complainants.
2.

Reversing the finding against Respondents under ORS 659A.409,

because the ALJ's analysis correctly concluded that Mr. Penner's private voice
mails did not constitute the publication of a notice that he intended to discriminate.
Respectfully submitted this 7th day of October, 2015.

MCEWEN GISVOLD LLP

By: s/ Jonathan M. Radmacher
Jonathan M. Radmacher, OSB No. 924314
Of Attorneys for Appellant

806

September 23, 2015

No. 438

IN THE COURT OF APPEALS OF THE

STATE OF OREGON
BLACHANA, LLC,
dba Twilight Room Annex,
aka The PClub;
and Christopher Penner,
Petitioners,
v.
OREGON BUREAU OF
LABOR AND INDUSTRIES,
Respondent.
Oregon Bureau of Labor and Industries
2513; A155228
Argued and submitted April 8, 2015, Madras High
School, Madras.
Jonathan M. Radmacher argued the cause for petitioners. With him on the briefs was McEwen Gisvold LLP.
Leigh A. Salmon, Assistant Attorney General, argued
the cause for respondent. With her on the brief were Ellen F.
Rosenblum, Attorney General, and Anna M. Joyce, Solicitor
General.
Before Sercombe, Presiding Judge, and Hadlock, Judge,
and Tookey, Judge.
TOOKEY, J.
Affirmed.
Case Summary: The Rose City T-Girls is an informal social group that
includes straight people, married couples, nonmarried couples, males who
identify as females, cross-dressers, males who have physically transitioned to
females, lesbians, and gay males. Respondents, Blachana, LLC, and Christopher
Penner, own and manage a bar in North Portland formerly known as the PClub.
Respondents seek judicial review of an order of the Commissioner of the Bureau
of Labor and Industries (BOLI) concluding that they denied equal accommodations to the T-Girls at the PClub because of their sexual orientation, in violation
of ORS 659A.403, ORS 659A.406, and ORS 659A.409, when Penner left two voicemails for Cassandra Lynn, the founder of the T-Girls, in which he asked Lynn
and the T-Girls not to come back to the PClub on Friday nights. Respondents
challenge BOLIs conclusion that they violated ORS 659A.403 and ORS 659A.409
and contend that BOLIs order violated their free speech rights under ArticleI,

Cite as 273 Or App 806 (2015) 807

section 8, of the Oregon Constitution. Held: All of respondents arguments are
unpreserved, undeveloped, or unavailing in light of BOLIs factual findings.
Affirmed.

808

Blachana, LLC v. BOLI

TOOKEY, J.

The Rose City T-Girls is an informal social group
that includes straight people, married couples, nonmarried
couples, males who identify as females, cross-dressers, males
who have physically transitioned to females, lesbians, and
gay males. Respondents,1 Blachana, LLC, and Christopher
Penner, own and manage a bar in North Portland formerly known as the PClub.2 Respondents seek judicial
review of an order of the Commissioner of the Bureau of
Labor and Industries (BOLI) concluding that they denied
equal accommodations to the T-Girls at the PClub because
of their sexual orientation, in violation of ORS 659A.403,3
ORS 659A.406,4 and ORS 659A.409,5 when Penner left two
1
In accordance with our rule governing the designation of parties in briefs,
ORAP 5.15, we refer to Blachana, LLC, and Penner as respondents because they
were respondents in the proceedings below.
2
Blachana, LLC, owns the PClub, later known as the Twilight Room Annex.
Penner is a member of Blachana, LLC, and manages the PClub.
3
ORS 659A.403 provides:

(1) Except as provided in subsection (2) of this section [(which does not
apply here)], 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 accommodation, without any distinction, discrimination
or restriction on account of *** sexual orientation[.]

*****
(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.
BOLI has defined sexual orientation to mean
an individuals actual or perceived heterosexuality, homosexuality, bisexuality, or gender identity, regardless of whether the individuals gender identity, appearance, expression or behavior differs from that traditionally associated with the individuals assigned sex at birth.
OAR 839-005-003(16). That provision has been renumbered since the relevant
time; however, because its text remains the same, we cite the current version.
4
ORS 659A.406 provides, with an exception not relevant here, that
it is an unlawful practice for any person to aid or abet any place of public
accommodation, as defined in ORS 659A.400, *** to make any distinction,
discrimination or restriction on account of *** sexual orientation[.]
5
ORS 659A.409 provides, with exceptions not relevant here, that
it is an unlawful practice for any person acting on behalf of any place of public accommodation as defined in ORS 659A.400 to publish, circulate, issue or
display, or cause to be published, circulated, issued or displayed, any communication, notice, advertisement or sign of any kind to the effect that any
of the accommodations, advantages, facilities, services or privileges of the

Cite as 273 Or App 806 (2015) 809

voicemails for Cassandra Lynn, the founder of the T-Girls, in
which he asked Lynn and the T-Girls not to come back to the
PClub on Friday nights. Respondents challenge BOLIs conclusion that they violated ORS 659A.403 and ORS 659A.409
and contend that BOLIs order violated their rights under
ArticleI, section 8, of the Oregon Constitution.6 Because all
of respondents arguments are unpreserved, undeveloped, or
unavailing in light of BOLIs factual findings, we affirm.

Because respondents do not challenge BOLIs findings of fact, those findings are the facts for purposes of judicial review. ORS 183.482(7) ([T]he court shall not substitute its judgment for that of the agency as to any issue of
fact ***.); Meltebeke v. Bureau of Labor and Industries, 322
Or 132, 134, 903 P2d 352 (1995). The T-Girls gather regularly on Friday nights. They began frequenting the PClub
on Friday nights around July 2010, when they were asked
not to gather at another club where they had previously met.
Between September 2010 and January 2011, the T-Girls
gathered intermittently on Friday nights at the PClub
as they explored possible new Friday gathering spots. In
January 2011, the T-Girls decided to make the PClub their
regular Friday nightspot. From eight to 54 T-Girls gathered at the PClub every Friday night between January 2011
and June 18, 2012. As BOLI explained in the final order:
On June 18, 2012, Penner telephoned C. Lynn and left
the following voicemail message:
Hello, my name is Chris, Im the owner of the PClub
Bar and Grill on North Lombard. Um, unfortunately, uh
due to circumstances beyond my control I am going to have
to ask for you, Cass, and your group not to come back on
Friday nights. Um, I really dont like having to do that but
unfortunately its the area were in and its hurting business a lot. If you have any questions, please feel free to give
me a call ***. Again Im really sorry about having to do
this but yeah give me a call. Thanks, bye.
place of public accommodation will be refused, withheld from or denied to, or
that any discrimination will be made against, any person on account of ***
sexual orientation[.]
6
Article I, section 8, provides, No law shall be passed restraining the free
expression of opinion, or restricting the right to speak, write, or print freely on
any subject whatever; but every person shall be responsible for the abuse of this
right.

810

Blachana, LLC v. BOLI

In response to Penners voicemail, C. Lynn telephoned

Penner and left a message asking what the real reason
was for Penners request that the T-Girls not come back on
Friday nights.
On June 21, Penner telephoned C. Lynn and left the
following voicemail message:
Hello Cassandra, this is Chris from the PClub. Sorry
it took me awhile to return your phone call. There is no
underlying reason for asking you folks not to come back
other than money. Um, sales on Friday nights have been
declining at the bar for the last 18 months. Uh, about a
year ago I was looking at asking you folks not to come in
anymore and the girls said, No, no, no dont, so I gave it a
while longer. Um, I own another bar in north Portland; sales
are doing great on Fridays, and so Ive done some investigating as to why my sales are declining and theres two
things I keep hearing: People think that (a) were a tranny
bar or (b) that were a gay bar. We are neither. People are
not coming in because they just dont want to be there on
a Friday night now. In the beginning sales were doing fine
but theyve been on a steady decrease so I have to look at
what the problem is, what the reason is, and take care of it;
thats my job as the owner. So unfortunately, I have to do
what I have to do and that is the only reason. Its all about
money. So Ill be back in town tonight; if you want to give
me a call I should be answering my phone; Ive been out of
town for the past few days. So, there we are, take care. Bye
bye.
C. Lynn understood Penners voicemails to mean that
the PClub wasnt a tranny bar and were not allowed in
there.
None of the aggrieved persons[, who are all members of
the T-Girls,] visited the PClub after June 18, 2012.

(Paragraph numbers, footnotes, and citations omitted.)

After C. Lynn received the voicemails, she posted a note
on the T-Girls website stating that Penner had asked the
T-Girls not to come back to the PClub. Subsequently, she
posted a transcription of the voicemails, [and] then the
actual voicemails[,] on the website. The 11 aggrieved persons in this case are members of the T-Girls who attended
the Friday night gatherings before June 18, 2012, learned of
and eventually heard the voicemails through Lynn and the

Cite as 273 Or App 806 (2015) 811

T-Girls website, and did not return to the PClub because of
the voicemails.

On November 18, 2011, after the commissioner filed
a complaint against respondents and BOLIs Civil Rights
Unit found substantial evidence to support the complaint,
BOLI formally charged both respondents with violating
ORS 659A.403(3) and ORS 659A.409, and also charged
Penner with violating ORS 659A.406 by aiding and abetting Blachana. BOLI sought damages of at least $50,000
for each of the aggrieved persons and a civil penalty of
$1,000 per violation against each respondent. After resolving discovery disputes that are not relevant to this appeal,
an administrative law judge (ALJ) employed by BOLI heard
the case in May 2013.

Because our resolution of respondents contentions
on review turns on their arguments before BOLI, we explain
those arguments in some detail. Before doing so, however,
we provide some background on the Supreme Courts interpretation of ArticleI, section 8.
In State v. Robertson, 293 Or 402, 649 P2d 569
(1982), the Supreme Court established three categories for
analyzing a law under ArticleI, section 8. The court recently
summarized those categories as follows:
Under the first category, the court begins by determining
whether a law is written in terms directed to the substance
of any opinion or any subject of communication. If it is,
then the law is unconstitutional, unless the scope of the
restraint is wholly confined within some historical exception that was well established when the first American
guarantees of freedom of expression were adopted and
that the guarantees then or in 1859 demonstrably were not
intended to reach. If the law survives that inquiry, then
the court determines whether the law focuses on forbidden
effects and the proscribed means of causing those effects
include speech or writing, or whether it is directed only
against causing the forbidden effects. If the law focuses
on forbidden effects, and the proscribed means of causing
those effects include expression, then the law is analyzed
under the second Robertson category. Under that category,
the court determines whether the law is overbroad, and,
if so, whether it is capable of being narrowed. If, on the

812

Blachana, LLC v. BOLI

other hand, the law focuses only on forbidden effects, then

the law is in the third Robertson category, and an individual can challenge the law as applied to that individuals
circumstances.

State v. Babson, 355 Or 383, 391, 326 P3d 559 (2014) (citations, internal quotation marks, and brackets omitted).

We return to respondents arguments before BOLI.
In their answer to the formal charges, respondents asserted
a constitutional affirmative defense based on ArticleI, section 8. In their case summary, submitted before the hearing,
they argued that they have a right under ArticleI, section
8, of the Oregon Constitution to speak freely *** on any
subject whatever. Application of ORS 659A.400, etseq, in
this case, violates Respondents rights thereunder.7

The ALJ allowed the parties to submit memoranda on that defense after the hearing. In its memorandum, BOLI argued that, under the Robertson framework,
ORS 659A.403 is directed against causing forbidden effects
rather than expressly or obviously proscribing expression, that is, that the statute does not fall into the first
Robertson category. Furthermore, BOLI asserted, because
the provision does not mention speech, it falls into the third
Robertson category and, accordingly, is not subject to facial
challenges. BOLI further contended that ORS 659A.403
was not unconstitutional as applied to respondents because
respondents were being punished only because [respondents] committed the proscribed act of affirmatively barring
the T-Girls from the club on the basis of their sexual orientation. BOLI explained that respondents argumentthat
they were being sanctioned based on the content of Penners
speechmisconstrues the distinction between the content
of speech impermissibly forming an element of an offense,
Respondents supported that text with the following citations:
State v. Johnson, 345 Or 190, 191 P3d 665 (2008) (striking down statute
that restrained abusive speech); State v. Ciancanelli, 339 Or 282, 121 P3d
613 (2005) (striking down statutes that restrained nude dancing); State v.
Robertson, 293 Or 402, 649 P2d 569 (1982) (striking down anti-coercion
statute). See State v. Stone, 84 Or App 575, 578, 735 P2d 7, revden, 303 Or
700 (1987) (describing how legislative revisions to the anti-coercion statute
passed constitutional muster because they required that the fear instilled
by words be objectively reasonable, the physical injury feared is objectively
reasonable, and a specific person to be harmed is identified).

Cite as 273 Or App 806 (2015) 813

and using the content of speech to prove an element of an
offense. The former may be unconstitutional, the latter is
not. See State v. Plowman, 314 Or 157, 167, [838 P2d 558
(1992)].

In their response, respondents asserted that they
had a right to express their desiremotivated by business interestthat the Rose City T-Girls no longer meet at
Respondents place of business on Friday nights. Rather
than addressing ORS 659A.403, 659A.406, or 659A.409
under the Robertson framework, they argued that Penners
voicemail messages were less serious than the types of
speechincluding threats and demandsthat were prohibited under the coercion statute at issue in Robertson.
Respondents contended:
It cannot be disputed that Respondents did not demand
anything. It cannot be disputed that Respondents did not
threaten anything. And while some of the witnesses testified that they interpreted those words as a denial of service, it clearly was not a denial of serviceno one came
and attempted to be served. The refusal to return to
Respondents place of business, as the witnesses described
it, was due to their anger at Respondents.
Or to put it a different way, Respondents did not refuse
to provide service to anyone. Respondents request that
the group not return amounted to the free expression of
Respondents desire that the group stop coming on Friday
nights. Respondents had a constitutional right to express
that desire. Unless or until Respondents refused service
they did not and would not haveRespondents statements
cannot be used to punish them, as the Commissioner seeks
to do.

(Underscoring in original.)

In its reply, BOLI argued that respondents had
misunderstood the holding of Robertsonspecifically, it
contended that Robertson is directed toward statutory construction and facial challenges to laws, not to what types
of speech may or may not ever form the basis of an adverse
state action. BOLI also argued:
A review of the key factual disputes in this case illustrates that ORS 659A is constitutional as applied to this

814

Blachana, LLC v. BOLI

case. Respondents claim that the voice messages were only

an expression of desire. The Agency claims that the voice
messages were denials of service. A denial of service may
be sanctioned under ORS 659A; an expression of desire
likely would not be. Sanctioning a denial of service is constitutional; sanctioning an expression of desire is generally not. If a fact finder rules in favor of the Agency that, as
a matter of fact, the voice messages were denials of service,
ORS 659A may be constitutionally enforced. If a fact finder
rules in favor of Respondents that the voice messages were
not denials of service, then ORS 659A may not be applied
to the case and, therefore, there can be no constitutional
issue.
In short, if the facts are as Respondents say they are,
it would be unconstitutional for the state to take adverse
action against Respondents. The Agency agrees with
Respondents on that point. However, the agency points out
that ORS 659A could not (by its own terms) be applied to
this case if the facts are as Respondents claim they are.
The constitutional issues raised by Respondents only serve
to outline the contours of ORS 659As application and to
frame the factual determination upon which this matter
actually hinges.

The ALJ issued a proposed order in which it concluded that respondents had violated ORS 659A.403 and
ORS 659A.406, but not ORS 659A.409. Both parties submitted objections.

BOLI then issued a final order in which it concluded that respondents had violated ORS 659A.403, ORS
659A.406, and ORS 659A.409. It found that [a]ll of the
aggrieved persons listened to the voicemails and understood
Penners voicemails to be a message that the T-Girls were
not welcome in the PClub any night of the week because
Penner thought their presence was causing customers to perceive the PClub as a tranny club or gay bar. It also noted,
[T]he forum interprets Penners request for the T-Girls
not to come back on Friday nights as a statement that they
were not welcome at the PClub on Friday nights, the same
conclusion reached by the aggrieved persons.

Based on that interpretation of the voicemails, BOLI
concluded that they constituted a denial of equal accommodations to the aggrieved persons under ORS 659A.403.

Cite as 273 Or App 806 (2015) 815

Contrary to respondents arguments, BOLI concluded that
the aggrieved persons were not required to visit the PClub
and request to be served in order to be denied equal accommodations. Rather, Penners statements, which meant that
the aggrieved persons were not welcome at the PClub on
Friday nights, constituted a denial in themselves. BOLI also
concluded that the denial was on account of the T-Girls
sexual orientation.

As to ORS 659A.409, BOLI concluded that Penner
had issue[d] a notice and communication by leaving
the voicemails for Lynn. It noted that, although BOLI has
been delegated statutory authority to define those terms by
rule, it has not done so. After considering dictionary definitions, it concluded that respondents had violated ORS
659A.409.

Finally, BOLI concluded that respondents ArticleI,
section 8, defense was conditionalthat is, respondents
intended to assert that ORS 659A.403, ORS 659A.406, and
ORS 659A.409 were unconstitutional only if the voicemails
were merely requests and not a denial of service:
In their post-hearing brief, Respondents make it clear that
this defense is based on their contention that Respondents
only made a request that the T-Girls not return, that
Respondents never refused to provide or denied service
to the T-Girls, and that to punish Respondents for making a request violates Respondents constitutional free
speech rights. In contrast, the forum has concluded that
Respondents request was not just Penner freely speaking
his mind, but an actual denial of service. Respondents do
not contend that the constitution protects them from actually denying service. Under these circumstances, neither
the state nor [f]ederal constitutions protect Respondents
actions that the forum has found to violate ORS 659A.403,
ORS 659A.406, and ORS 659A.409.

BOLI ordered respondents to pay damages of $400,000 to

the 11 aggrieved persons and imposed $3,000 in civil penalties on Blachana, LLC, and $2,000 in civil penalties on
Penner.

Respondents seek judicial review, raising three
assignments of error. We review for legal error. ORS

816

Blachana, LLC v. BOLI

183.482(8)(a), (b)(C) (setting out standards of review for a

contested case proceeding for erroneous interpretation of a
provision of law and for impermissible exercise of discretion
in violation of constitution); Meltebeke, 322 Or at 138-39.
Below, we discuss, and ultimately reject, their first and third
assignments of error. We reject their second assignment of
error without further discussion because it is insufficiently
developed for our review.

In their first assignment of error, respondents assert
that BOLI erred in finding that Mr.Penners request that
the T-Girls not come to the Bar on Friday nights any longer
was discrimination under ORS 659A.403, where there was
no finding that Mr.Penner intended to exclude or refuse to
serve any person or group on account of their sexual orientation. Respondents do not dispute that Penners conduct
was on account of the T-Girls sexual orientation. Rather,
they contend that BOLI failed to make an explicit finding
that Penner intended to exclude the T-Girls, or otherwise
suggest that he would refuse them service and that, in the
absence of an intention to deny service, respondents did not
violate ORS 659A.403.

We reject that argument because, as noted above,
BOLI expressly interpreted Penners request for the T-Girls
not to come back on Friday nights as a statement that they
were not welcome at the PClub on Friday nights. In other
words, BOLI found that Penner communicated his intention
to exclude the T-Girls on Friday nights by telling them that
they were not welcomethat is, by telling them that they
would not be allowed to meet at the PClub on Friday nights
because of their sexual orientation.8 BOLIs interpretation
of Penners statement necessarily includes a finding that
Penner intended to exclude the T-Girls from the PClub on
Friday nights. Given that factual finding, by which we are
bound, ORS 183.482(7); Meltebeke, 322 Or at 134, respondents argument is unavailing.

We turn to respondents third assignment of error,
in which they reiterate their contention that, under Article I,
8
We note that, contrary to respondents assertion in their reply brief, the
ALJ interpreted the voicemails the same wayas a statement by Penner that the
T-Girls were not welcome at the PClub on Friday nights.

Cite as 273 Or App 806 (2015) 817

section 8, they had a right to express their desire to the Rose
City T-Girls, that the association no longer use Respondents
place of business as their Friday night gathering place.
Respondents first assert that ORS 659A.403 and ORS
659A.409 fall in the first Robertson category because they
are both directed at the substance of a defendants communication. Second, they assert that those provisions are overbroad if they fall in the second Robertson category. Third,
they argue that, in any event, under the third Robertson
category, the provisions are unconstitutional as applied to
respondents.

We reject respondents facial challengetheir first
and second assertionswithout extended discussion. As
explained above, before BOLI, respondents did not advance
any argument under the Robertson framework. Moreover,
on judicial review, in arguing that ORS 659A.403 and ORS
659A.409 fall in the first or second Robertson categories,
respondents still do not cite or discuss the text of those
provisions; instead, they contend that the purpose of this
enforcement action was to punish respondents for Penners
use of the terms tranny bar and gay bar rather than for a
denial of service. That contention does not address the questions that inform a determination of whether a statute falls
within either of the two first Robertson categories: whether
the terms of the provision are directed at the substance
of a communication or whether the law proscribes speech or
writing. Babson, 355 Or at 391. Rather, respondents argument, which focuses not on statutory text but on its application to a set of factual circumstances, informs the Robertson
category three analysis.

We turn to that category three question, that is,
respondents as-applied challenge to BOLIs enforcement of
the statutes against respondents in these circumstances.
In that challenge, respondents argue that BOLIs application of ORS 659A.403 and ORS 659A.409 to Penners conduct is unconstitutional here because the focus of the case
was Penners speech. They point out that [t]he forbidden
effects would be whether [the T-Girls] were, in fact, denied
service and assert that [t]he evidence on that subject was
scant, at best, because, after hearing the voicemails, none
of the T-Girls returned to the club.

818

Blachana, LLC v. BOLI

That argument is unavailing given BOLIs factual
findings and legal conclusion. As noted above, BOLI determined that [r]espondents request was not just Penner
freely speaking his mind, but an actual denial of service.
As we understand it, that statement includes a finding that,
through the voicemails, Penner was not just stating his opinion, but was actually informing the T-Girls that they would
not be served if they came to the PClub on Friday nights.
That finding is supported by substantial evidence. See ORS
183.482(8)(c) (appellate court shall set aside or remand an
order that is not supported by substantial evidence in the
record); ORS 183.482(7) ([T]he court shall not substitute its
judgment for that of the agency as to any issue of fact ***.).
BOLI was not required to believe Penners testimony that the
voicemails were not intended to, and therefore did not, communicate that the T-Girls would not be served if they came to
the PClub on a Friday night. Rather, it couldand didfind
that the voicemails expressed that the T-Girls would not be
served if they came to the PClub on a Friday night.

We turn to BOLIs legal conclusion. We agree with
respondents that the forbidden effect at issue here is a
denial of full and equal accommodationsin this case, a
denial of service. See ORS 659A.403. BOLI concluded that
Penners speech itself constituted that forbidden effect: When
Penner left the voicemails for Lynn, he was verbally barring
her and the T-Girls from the PClub on Friday nights.

As noted above, respondents assert that the evidence [that the T-Girls were denied service] was scant, at
best, and they place significance on the fact that the T-Girls
did not return to the PClub after hearing the voicemails.
But, as noted above, BOLI concluded that Penners speech
the voicemails themselvesconstituted the forbidden denial
of service. That is, the denial of service was complete when
Penner left the voicemails. In light of that legal conclusion,
to which respondents raise no preserved challenge, the fact
that none of the T-Girls returned to the club after hearing the messagesthat is, after the denial of service took
placeis immaterial.

We have considered the remaining arguments that
respondents make in support of their third assignment of

Cite as 273 Or App 806 (2015) 819

error and reject them as unpreserved, not adequately developed for our consideration, or both.
Affirmed.

CERTIFICATE OF FILING AND SERVICE

I hereby certify that I served the foregoing APPELLANT'S PETITION
FOR RECONSIDERATION on October 7, 2015,
by e-filing the same with the
Oregon Court of Appeals thru
OJIN OnLine Services at
1163 State Street
Salem, Oregon 97301-2563
I further certify that I served the within APPELLANT'S PETITION FOR
RECONSIDERATION on October 7, 2015, on the parties listed below by e-filing
a true copy thereof to the attorney at the electronic mail address of record to the
following address:
Denise G. Fjordbeck
Department of Justice
1162 Court Street NE
Salem, Oregon 97301
Email: denise.fjordbeck@doj.state.or.us
MCEWEN GISVOLD LLP
By: s/ Jonathan M. Radmacher
Jonathan M. Radmacher, OSB No. 924314
Of Attorneys for Appellant