They didn't actually win. It had the some procedural non-decision that the Colorado bakery case had (i.e. the regulator failed to be sufficiently neutral). They got fined again and that is being appealed. https://en.m.wikipedia.org/wiki/Klein_v._Oregon_Bureau_of_Labor_and_Industries
The blacklisting is interesting, but a 1% default rate doesn't seem particularly high. E.g. the US default rate has possiblity never been that low (graph only goes back to 1991): https://fred.stlouisfed.org/series/DRSFRMACBS