Argument Preview: USAID v. Alliance for Open Society Int'l

Steven D. Schwinn, UIC John Marshall Law School

The Supreme Court will hear oral arguments tomorrow in USAID v. Alliance for Open Society International, the case testing whether the First Amendment bars Congress from restricting federal funds to fight HIV and AIDS abroad to foreign affiliates of U.S. nongovernmental organizations that have a policy opposing prostitution and sex trafficking. Here's my preview, from the ABA Preview of United States Supreme Court Cases, with permission:

FACTS

In 2003, in order to fight the global HIV and AIDS pandemic, Congress enacted the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act. Under the Act, Congress has provided billions of dollars to fight HIV and AIDS abroad through increased treatment, efforts to prevent new infections and initiatives to “support the care for those affected by the disease.”

As part of its detailed factual findings in support of the Act, Congress determined that women were particularly vulnerable to HIV and AIDS. As relevant here, Congress identified “[p]rostitution and other sexual victimization,” including sex trafficking, as significant harms to women and children. The Act accordingly states that it “should be the policy of the United States to eradicate” the practices of “[p]rostitution and other sexual victimization.”

As part of its findings, Congress also determined that “[n]ongovernmental organizations . . . have proven effective in combating the HIV/AIDS pandemic” and are “critical to the success of . . . efforts to combat HIV/AIDS.” The Act accordingly “enlist[s] the assistance of nongovernmental organizations to help achieve the many goals of the program.”

But the Act establishes two conditions on its funds. First, the Act prohibits funds to “be used to promote or advocate the legalization or practice or prostitution or sex trafficking.” Second, at issue here, the Act specifies that no funds “may be used to provide assistance to any group or organization that does not have a policy explicitly opposing prostitution and sex trafficking,” with certain exceptions not relevant here. The parties refer to this second condition as the “Policy Requirement.” In order to enforce the “Policy Requirement,” the U.S. Department of Health and Human Service and the U.S. Agency for International Development directed that the recipient of any funding under the Act certify in the funding contract that it is opposed to “prostitution and sex trafficking because of the psychological and physical risks they pose for women, men, and children.”

In 2005, the Alliance for Open Society International and Pathfinder International, domestic NGOs that work to combat HIV and AIDS overseas, sued the government, arguing that the Policy Requirement violated their First Amendment rights. (The plaintiffs did not, and do not, support prostitution or sex trafficking, but they worried that complying with the Policy Requirement “may alienate certain host governments, and may diminish the effectiveness of some of their programs by making it more difficult to work with prostitutes in the fight against HIV/AIDS.”) As the case worked its way through the courts, the government adopted “Affiliate Guidelines” to try to accommodate the plaintiffs’ concerns. These Guidelines allowed domestic NGOs (like the plaintiffs) to “maintain an affiliation with separate organizations that do not have such a policy,” so long as those organizations met certain conditions. The Guidelines thus allowed domestic NGOs to abide by the Policy Requirement while working with foreign affiliates that could express their own views on prostitution. The plaintiffs argued that the Policy Requirement still violated their First Amendment rights, even with the Guidelines, in large part because the Guidelines required such a degree of separation between the plaintiffs and their affiliates that the affiliates’ speech could not stand-in for the plaintiffs’ own message.

The Supreme Court agreed. The Court first noted that as a general matter the government may place conditions on the receipt of federal funds, even when a condition may affect a recipient’s exercise of First Amendment rights. The Court said that these conditions merely “define the limits of the government spending program” by “specify[ing] the activities that Congress wants to subsidize.” But here, the Court held that the Policy Requirement sought “to leverage funding to regulate speech outside the contours of the program itself.” In other words, the Policy Requirement regulated more speech than necessary to define the program. As to the Affiliate Guidelines, the Court wrote,

When we have noted the importance of affiliates in this context, it has been because they allow an organization bound by a funding condition to exercise its First Amendment rights outside the scope of the federal program. Affiliates cannot serve that purpose when the condition is that a funding recipient espouse a specific belief as its own. If the affiliate is distinct from the recipient, the arrangement does not afford a means for the recipient to express its beliefs. If the affiliate is more clearly identified with the recipient, the recipient can express those beliefs only at the price of evident hypocrisy. The guidelines themselves make that clear.

As a result, the Court ruled that the Policy Requirement violated the plaintiffs’ First Amendment rights and affirmed a preliminary injunction halting its enforcement against them. Alliance I, 570 U.S. 205 (2013).

After the Court ruled in Alliance I, in September 2014, HHS and USAID issued funding notices that explicitly exempted all domestic NGOs from the Policy Requirement but continued to apply the Requirement to foreign NGOs, including the plaintiffs’ affiliates. The plaintiffs sued again, arguing (for the first time) that the Policy Requirement’s application to their foreign affiliates violated their own First Amendment rights. In short, the plaintiffs said that their close affiliation with foreign NGOs meant that those NGOs’ certification under the Requirement could be imputed to them.

The district court agreed. The court applied the Court’s ruling in Alliance I and issued a permanent injunction, halting the government’s application of the Policy Requirement to the plaintiffs’ foreign NGO affiliates. (During the district court proceedings, the parties attempted to agree upon a definition of “affiliate” that would resolve the plaintiffs’ complaint. They apparently failed.) The United States Court of Appeals for the Second Circuit affirmed. This appeal followed.

CASE ANALYSIS

The government argues that it can apply the Policy Requirement to foreign entities operating abroad under basic constitutional principles. It first points out that as a general matter the government can set limits on the use and distribution of federal funds, and that recipients who object to those limits can simply decline the funds. It next notes that this general principle sometimes gives the government the ability to put unconstitutional conditions, including violations of the First Amendment, on the receipt of federal funds. But the government argues that the unconstitutional conditions doctrine only applies to recipients that actually have constitutional rights. It contends that foreign entities operating abroad have no such rights. Therefore, it contends that its denial of funds based on a foreign entity’s failure to comply with the Policy Requirement cannot violate that foreign entity’s First Amendment rights.

The government argues that the Third Circuit got it wrong when it held that the First Amendment bars enforcement of the Policy Requirement against the plaintiffs’ foreign affiliates, because such enforcement violates the plaintiffs’ own free speech rights. The government contends that “[n]o legal principle supports that proposition.” It claims that the plaintiffs themselves acknowledged that they are legally distinct from their foreign affiliates, and that basic tenets of corporate law reinforce that conclusion. The government says that the Court cannot treat the plaintiffs and their affiliates as a single entity, because, again, corporate law does not permit legally distinct entities to be treated as one, even if, as here, they share similar names, logos, and brands. The government asserts that the Court “has repeatedly enforced corporate separation even when presented with closer affiliations.”

The government argues that nothing in Alliance I suggests the contrary. The government claims that the Court in that case said nothing about whether the government could require foreign affiliates to adopt the Policy Requirement, and that it only considered affiliated organizations (in the passage quoted above) in order to show that their own speech could not alleviate any First Amendment problem with applying the Policy Requirement to the plaintiffs. The government says that this analysis has no bearing on this case, because the government now does not apply the Policy Requirement to domestic NGOs (and so there is no need to analyze whether their foreign affiliates might speak for them).

Finally, the government argues that there is no other basis to invalidate the application of the Policy Requirement to domestic NGOs. It says that such an application does not undermine the goals of the Leadership Act (as the plaintiffs contend), because, after all, Congress itself wrote the Policy Requirement into the Act. In any event, the government claims that efforts to eradicate prostitution and sex trafficking are perfectly consistent with a fight against HIV and AIDS, and that it has applied the Policy Requirement to foreign entities since the Leadership Act was enacted, without hindering that fight.

The plaintiffs counter that the government’s application of the Policy Requirement to their foreign affiliates infects their own speech in violation of the First Amendment. The plaintiffs say that the Policy Requirement, unlike a restriction on speech, necessarily taints all “clearly identified” affiliates, no matter where they operate, including the domestic plaintiffs themselves. They contend that the Court recognized this in Alliance I (again, in the passage quoted above), and that the government’s enforcement of the Policy Requirement to their foreign affiliates overseas therefore necessarily infringes on their own First Amendment rights.

The plaintiffs argue that this analysis is consistent with the more general constitutional prohibition on government forcing citizens to express views that they find objectionable. The plaintiffs contend that compelled speech (in contrast to restricted speech) “imprint[s] the speaker itself with the government’s view and depriv[es] the speaker and those to whom its speech is attributed of control over their message.” They say that the courts can’t remedy compelled speech by simply opening alternative channels for speech (as they can with restricted speech). Instead, the plaintiffs claim that the courts “must ensure that the government’s viewpoint is no longer forcibly imputed to the speaker.”

The plaintiffs argue that the record supports their points. They contend that they and their foreign affiliates are “unified organizations,” with “the same name, brand, and logo,” and that they “speak as one.” The plaintiffs say that the government’s own affiliate regulations make this clear: under those regulations, affiliates “must maintain objective independence from any entity that does not adhere to the recipient’s anti-prostitution pledge.” The plaintiffs claim that without an injunction against the enforcement of the Policy Requirement to their foreign affiliates, they have to “conform [their] own speech and conduct to [their] affiliate’s pledge to keep from jeopardizing not only their shared identity and reputation as a global public-health organization but also their federal funding.” The plaintiffs contend that formal legal separation with their affiliates does not change any of this: “[a]n organization-wide affirmation of belief will necessarily be attributed to any clearly identified components of the organization, regardless of their corporate structure.”

Finally, the plaintiffs assert that the government’s other arguments have no merit. They say that nothing in the record supports the government’s claim that upholding the injunction would undermine the Leadership Act or foreign aid more generally. They also say that nothing in the record supports the government’s “specter of sham affiliations,” especially given that the plaintiffs  are “well-known, steadfast partners that for nearly two decades have worked with the government to save millions of lives.”

SIGNIFICANCE

For the plaintiffs, the Policy Requirement, however the government enforces it, has always been a significant impediment to their hard-won relationships and credibility, and therefore to their tireless and sustained efforts, in their fight again HIV and AIDS around the world. That’s no small thing: the plaintiffs are major players in this global fight and, as they say, have been working with the government “for nearly two decades . . . to save millions of lives.” Moreover, for the plaintiffs and the communities they serve, the plaintiffs are one with their foreign affiliates. They not only share the same name, brand, and logo; they also share the same approach and messaging. For the plaintiffs, their legal distinction from their foreign affiliates is a mere formality, driven by the international, or multi-national, nature of their work, and the government’s enforcement of the Policy Requirement against their foreign affiliates is simply an attempt to sidestep the principles in Alliance I.

On the other side, for the government this case is about enforcing the Policy Requirement—and thus cracking down on prostitution and sex trafficking in the fight against HIV and AIDS—in whatever ways remain available after Alliance I. For the government, this objective is an essential part of the fight against HIV and AIDS under the Leadership Act, and enforcing the Policy Requirement against foreign entities is simply its way of fully enforcing the Act.

In short, this case is much more than a mere postscript to Alliance I. Indeed, for both sides, this case amounts to an entirely new challenge to, or defense of, the Policy Requirement. And the Court’s ruling will be every bit as important as its earlier ruling in Alliance I.