Hastings College does not recognize or fund student groups who practice discrimination (in this case not letting anyone be a full member who won't sign a declaration of faith or is an unrepentant homosexual). The student group (the Christian Legal Society) says this is an infringement on their rights of freedom of association and freedom of religion. So they sued Hastings.
So far the lower courts have all said their case has no merit. Now it's in the Supreme Court where conservative justices like Scalia and Alito are said to be very sympathetic to the Christian group and it's anybody's guess as to how things will turn out. (more here)