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"The worst in collegiate journalism since 1982!" The Koala, a student publication at the University of California, San Diego, boasts on its home page.

But a student publication is a student publication, whether it traffics in satire or offensive material (as many at UCSD believe The Koala does) or, more traditionally, in nonfake news. And if a public university allows student publications to compete with other student groups for funds, barring the publication in retaliation for content it published violates its free press and free speech rights, a federal appeals court ruled Wednesday.

The decision by the U.S. Court of Appeals for the Ninth Circuit overturned a lower court's 2017 ruling dismissing The Koala's lawsuit against UCSD. The appeals court found that the student publication had offered sufficient evidence to suggest the university (and its student government) had changed their policies for funding student groups to single out and retaliate against The Koala.

The Koala describes itself formally as "a student-run humor publication" and less formally as a "safe and clean atmosphere for normal UCSD students to get drunk (on life) and write funny stuff. We also are not as dumb as we look, so don’t fuck with us." Its history of alienating students earned it a 2014 profile in The New York Times with the headline "Free to Be Mean: Does This Student Satire Cross the Line?"

The university's student government tried multiple times to end funding for The Koala, the Foundation for Individual Rights in Education says, but had been told repeatedly that it could not strip funding for any one publication without violating the First Amendment.

The article that got the publication into legal hot water in 2015 was entitled "UCSD Unveils New Dangerous Space on Campus," and its takedown of "safe spaces" -- which the University of Chicago and others had turned into a hot topic at the time -- offended many on the campus with its use of the N-word and other ethnic slurs.

A few days after the article was published, UCSD's senior administrators, led by Chancellor Pradeep K. Khosla, published a statement condemning it.

"We, the UC San Diego administration, strongly denounce the Koala publication and the offensive and hurtful language it chooses to publish. The Koala is profoundly repugnant, repulsive, attacking and cruel. The UC San Diego administration does not provide any financial support for The Koala, and we call on all students, faculty, staff and community members to join us in condemning this publication and other hurtful acts."

The day of the chancellor's statement, the university's student government, the Associated Students, held a meeting at which a vice president read Khosla's statement. The student government also considered and approved legislation that eliminated "media" as one of seven categories of student organizations that could receive funding from student-paid campus activity fees. That approach was seemingly designed to avoid going after The Koala alone.

According to the court's ruling, that change stripped The Koala of $452.80 in funds, enough to stop it from printing any additional issues during the rest of the 2015-16 academic year. While it has continued to publish occasional issues online, the publication says that doing so "hinders its ability to reach and engage with its intended audience." (Inside Higher Ed takes vehement exception to that view.)

The publication sued, represented by the American Civil Liberties Union, and a federal judge in 2017 dismissed the suit, saying that the 11th Amendment shielded the state university and that the university and the student government had the right to eliminate the "media" category. The Koala appealed, backed this time by FIRE and by media organizations such as the Student Press Law Center.

The three-judge appeals panel of the Ninth Circuit disputed all of the lower court judge's findings.

It rejected the conclusion about the 11th Amendment because the student publication sought only the opportunity to compete for compulsory activity-fee money, rather than asking the court to force the state to fund the publication. The appeals court also noted that since students paid the fees as part of their tuition bills, "the suit's outcome would not increase or decrease the overall financial burden on the state," but would merely change how the fees are distributed.

More substantively, the appeals panel also rejected the lower court's conclusion about The Koala's free press claims, ruling that withholding a subsidy to a publication can be just as much an attack on the free press as imposing a fee or a fine, if evidence suggests that the action was taken to punish the publication for its viewpoint.

"We see no reason why the rule … that the government may not withhold benefits for a censorious purpose … should not apply when the state singles out and burdens the press by revoking a subsidy, particularly where, as here, the record includes unusually compelling allegations that the government acted with discriminatory intent," the Ninth Circuit decision said.

The Ninth Circuit panel also asserted that by closing the "media" portion of its student activity fund in a way that more or less singled out The Koala, the university had created -- and then closed -- a "limited public forum" in a way that could be seen as violating the publication's free speech rights.

"If the government could define the contours of a limited public forum one way at its inception, then redefine its scope in response to speech it disfavors, the government would be free to zero in and selectively silence any voice or perspective," the decision reads.

Advocates for free press and free speech cheered the appeals court's decision -- and how bad an outcome the other way would have been.

"Had it gone the other way, it would have been really disastrous for anybody that relies on government funding for their speech," said Frank D. LoMonte, professor and director of the University of Florida's Brechner Center for Freedom of Information, who wrote an amicus brief in 2017 when he directed the Student Press Law Center. "We feared the judges could get waylaid by the distasteful content of this particular publication, but they saw past that to the much larger legal principle."

That principle, LoMonte said, is that "once you create funding system, you can’t just yank it out because you don’t like someone's speech."

Or, as David Loy of the ACLU of San Diego & Imperial Counties, put it: "You cannot manipulate the scope of a program as subterfuge to justify and get away with censoring speech because of viewpoint. They tried to do an end run around the First Amendment."

A spokeswoman for UC San Diego said university officials could not comment because the litigation is still active.

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