For the second time in nearly eight years, Colorado’s second-highest court has agreed Masterpiece Cakeshop, Inc. violated the state’s antidiscrimination law by refusing to sell a cake to an LGBTQ customer.

A three-judge panel for the Court of Appeals concluded the store’s owner, Jack Phillips, ran afoul of the Colorado Anti-Discrimination Act (CADA) when he turned down a transgender woman’s request for a cake because of her gender identity. Although Phillips attempted to justify his actions by referencing his religious beliefs, the panel noted that Colorado has a compelling interest in preventing discrimination in places of public accommodation, like businesses.

“CADA is rationally related to a legitimate governmental interest. Accordingly, CADA may be enforced against Masterpiece and Phillips without violating their right to the free exercise of religion,” wrote Judge Timothy J. Schutz in the Jan. 26 opinion.

However, the conservative-majority U.S. Supreme Court is poised to hand down the opposite conclusion in a separate, but similar, free speech case pending before the justices, 303 Creative v. Elenis. The case also arose from Colorado and, like Phillips, involves a Christian business owner whose religious beliefs are inimical to LGBTQ rights.

Colorado's anti-discrimination law v. the First Amendment: Explainer on the 303 Creative case

Phillips and his Lakewood cake-making business attracted national attention in 2017 when the Supreme Court agreed to decide whether CADA violated Phillips’ First Amendment rights by compelling him to “create expression” in the form of baking a wedding cake for a gay couple.

Phillips initially refused to serve the couple, telling them, “I’ll make your birthday cakes, shower cakes, sell you cookies and brownies, I just don’t make cakes for same-sex weddings.” The Colorado Civil Rights Commission later determined Phillips’ actions violated CADA, a decision the Court of Appeals upheld in August 2015.

“CADA prohibits places of public accommodations from basing their refusal to serve customers on their sexual orientation, and Masterpiece violated Colorado’s public accommodations law by refusing to create a wedding cake,” wrote Judge Daniel M. Taubman in the appellate opinion. The court also found CADA did not infringe on Phillips’ free speech and religious exercise.

On appeal to the federal Supreme Court, a majority of justices reversed the state court decision, but did not resolve the larger issue of whether CADA violated Phillips’ rights. Instead, they decided the Colorado Civil Rights Commission was not a neutral decision-maker in Phillips’ case.

The same day the Supreme Court agreed to hear the original Masterpiece Cakeshop appeal, a transgender attorney, Autumn Scardina, called the store to see if Phillips really would provide non-wedding cake services to LGBTQ customers as he had claimed. Scardina spoke to Phillips’ wife, Debra, over the phone, asking for a blue and pink birthday cake. Debra Phillips confirmed they would make the cake, until Scardina disclosed the cake would celebrate her transition from male to female.

Phillips then said she did not believe her husband could provide such a product.

The Colorado Civil Rights Commission eventually dismissed the case as part of a settlement with Jack Phillips, but Scardina filed suit to allege Phillips violated CADA.

After a 2021 trial, Denver District Court Judge A. Bruce Jones found in Scardina’s favor. Although Phillips claimed he was willing to serve anyone, and simply objected to the “message” of Scardina’s proposed cake, Jones believed Phillips’ own self-expression was not implicated by Scardina’s request to bake a blue and pink cake. 

“Here, the refusal to provide the bakery item is inextricably intertwined with the refusal to recognize Ms. Scardina as a woman,” Jones wrote in June 2021. “The concept that a business can decide whether to make the requested item depending on what information the customer provides would establish the equivalent of a ‘Don’t Ask, Don’t Tell’ rule — LGBT individuals would be entitled to equal service only to the extent they do not request goods that reflect their identity as LGBT individuals.”

Phillips then appealed, and the appellate panel held oral arguments in the case last fall.

“Compelling Phillips to express that message invades his individual freedom of mind,” argued Jake Warner, a lawyer with the Alliance Defending Freedom, which litigates cases that challenge LGBTQ legal protections.

“Imagine a store that sells black and white cookies and it sells them to the public. And a mixed-race couple comes in and says, ‘These are fantastic. We want them for our anniversary’,” said John M. McHugh, Scardina’s lawyer. “And the baker says, ‘I’m sorry, I’m a member of the First Church of Aryan Nations. I won’t sell that to you because I have a religious objection to interactional marriage.’

“Under their theory,” McHugh continued, referring to Phillips, “no CADA violation. Under our theory, it’s an obvious CADA violation.”

Schutz, in the panel’s opinion, wrote that business owners cannot refuse to sell a “nonexpressive product” based on a customer’s protected characteristics. Phillips had effectively done just that when Scardina learned she could order a blue and pink cake, only to have the product withdrawn after disclosing her gender identity.

“We conclude that creating a pink cake with blue frosting is not inherently expressive and any message or symbolism it provides to an observer would not be attributed to the baker,” Schutz wrote. Therefore, the First Amendment did not protect Phillips’ refusal.

Phillips attempted to have the Court of Appeals hold off on issuing a decision until the Supreme Court decides 303 Creative, whose ruling will come before the end of June. Although the appellate panel declined to wait, the Supreme Court’s decision will likely answer whether artists can use the First Amendment to avoid serving customers based on LGBTQ status or other traits. That is the outcome Phillips advocated for to the Court of Appeals.

A similar argument came from 16 Republican attorneys general, who filed a brief in the Court of Appeals that was supportive of Phillips. A ruling that CADA cannot compel Phillips to “speak” — in the form of creating a cake for LGBTQ customers — would not have a broad effect, they argued, because the “vast majority of transactions” in the marketplace do not involve custom speech.

However, the legal associations in Colorado representing LGBTQ, women and Hispanic attorneys also filed a brief, pointing to a study that suggested wedding businesses became less likely to serve LGBTQ couples following the Supreme Court’s ruling in Masterpiece Cakeshop.

The appellate panel also rejected Phillips’ arguments that Scardina should have been barred from bringing suit and that the case should have been moot. Even though Phillips had attempted to pay the $500 fine for a CADA violation, the trial judge found — and the panel agreed — the money alone would not resolve the case unless Phillips admitted to violating the law.

Phillips, on a website soliciting donations, alleged Scardina’s lawsuit was a “setup” and that Colorado has “been on a crusade to crush Jack because of his Christian faith.” Jones, the trial judge, explicitly found Scardina intended to purchase a cake, not as a ruse to set up her lawsuit.

The Alliance Defending Freedom said on Thursday that it would appeal the panel’s decision. The group is also litigating the 303 Creative appeal before the Supreme Court.

The case is Scardina v. Masterpiece Cakeshop, Inc. et al.