Oregon Appeals Court Affirms Damages Award Against Bar That Ousted LGBT Social Club

The Court of Appeals of Oregon has affirmed an award of $405,000 against a North Portland bar and the bar’s owner, Chris Penner, upon a finding by the Oregon Bureau of Labor and Industries (OBLI) that they violated the state’s public accommodations law by denying “equal accommodations” to an informal social club that included gay and transgender people. Blachana, LLC v. Oregon Bureau of Labor and Industries, 273 Ore. App. 806, 2015 Ore. App. LEXIS 1116, 2015 WL 5595483 (Sept. 23, 2015). The court rejected the petitioners’ outlandish argument that they hadn’t discriminated and their conduct was protected by the 1st Amendment freedom of speech.

The case involves an informal social group called Rose City T-Girls that met in bars on Friday nights. The membership was diverse, including lesbians, gay men, transgender people, transvestites, and straight people as well. For a time they were meeting in a bar then called P Club in North Portland. On June 18, 2012, the proprietor of the bar phoned one of the “regulars” of the club and left a voicemail, asking that they not come to his bar on Friday nights. As transcribed by the recipient, the call stated: “Hello, my name is Chris, I’m the owner of the P Club 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 don’t like having to do that but unfortunately it’s the area we’re in and it’s hurting business a lot. If you have any questions, please feel free to give me a call. . . Again I’m really sorry about having to do this but yeah give me a call. Thanks, bye.”

The recipient of this call left a voicemail for Chris Penner, asking the “real reason” for his request, and received the following voice mail: “Hello Cassandra, this is Chris from the P Club. 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 don’t,” so I gave it a while longer. Um, I own another bar in north Portland; sales are going great on Fridays, and so I’ve done some investigating as to why my sales are declining and there’s two things I keep hearing: People think that (a) we’re a tranny bar or (b) that we’re a gay bar. We are neither. People are not coming in because they just don’t want to be there on a Friday night now. In the beginning sales were doing fine but they’ve been on a steady decrease so I have to look at what the problem is, what the reason is, and take care of it; that’s my job as the owner. So unfortunately, I have to do what I have to do and that is the only reason. It’s all about money.”

Cassandra Lynn recorded and transcribed the calls and shared them with the other members of the group, and none of them returned to P Bar. Instead, they filed complaints with BOLI, which enforces the state’s public accommodations law. That law bans discrimination because of sexual orientation and gender identity. BOLI found a violation of the law based on a complaint by the Commissioner of the agency, and assessed damages of $50,000 for each complainant and $5,000 in penalties against the bar and Penner.

On appeal, Penner’s counsel argued that actually the law had not been violated, as none of the complainants had come to the bar after those messages were received, and so nobody had actually been turned away or denied services. They argued that if the entire case turned on the phone messages, then it was an unconstitutional penalty for speech.

The Court of Appeals ultimately found these arguments totally lacking in merit, agreeing with BOLI that the phone messages constituted “an actual denial of service.” Wrote Judge Douglas L. Tookey for the court, “As we understand it, that statement including 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 P Club on Friday nights. That finding is supported by substantial evidence.” Thus, the club and its owner were not being held liable for their speech, itself, but for the “forbidden effect” of the speech, a denial of services by a public accommodation. “When Penner left the voicemails for Lynn,” wrote Tookey, “he was verbally barring her and the T-Girls from the P Club on Friday nights.” Thus, he concluded, the fact that none of the T-Girls returned to the club was “immaterial” to the case.

The court did not pay any attention to Penner’s asserted justification in his voicemails that the Club’s attendance on Friday nights had fallen off after the T-Girls began meeting there. Such a defense has long since been rejected in public accommodations cases dating back to the 1960s when the federal civil rights laws prohibited places of public accommodation from discrimination because of race. If an owner could justify denying service to a class of people on the ground that other people would stop patronizing the business, laws banning discrimination by places of public accommodation would be toothless at best.

After the publicity surrounding this case, Penner changed the name of the bar to Twilight Room Annex. In a 2012 interview, he said that he is neither homophobic nor anti-transgender, but that other customers had complained about the T-Girls and business had declined after they started coming to the bar on Friday nights. After OBLI’s judgment became final, according to a September 23 report in the Oregonian, Penner’s bank accounts were seized to satisfy the judgment, Penner laid off five employees, and the Twilight Room Annex closed.

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