Jordahl v. Brnovich
This text of 336 F. Supp. 3d 1016 (Jordahl v. Brnovich) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Honorable Diane J. Humetewa, United States District Judge *1028INTRODUCTION
In 2016, Arizona joined a growing number of states that enacted legislation "aimed at divesting state funding from companies that engage in a boycott of Israel." AZ S.F. Sheet, 2016 Reg. Sess. H.B. 2617. Arizona's House Bill 2617 was codified at Arizona Revised Statute § 35-393.01, and states in subsection (A) that:
A public entity may not enter into a contract with a company to acquire or dispose of services, supplies, information technology or construction unless the contract includes a written certification that the company is not currently engaged in, and agrees for the duration of the contract to not engage in, a boycott of Israel.
A.R.S. § 35-393.01(A) (hereafter, "Certification Requirement" or "the Act").1 The Act defines "boycott" as:
...engaging in a refusal to deal, terminating business activities or performing other actions that are intended to limit commercial relations with Israel or with persons or entitles doing business in Israel or in territories controlled by Israel, if those actions are taken either:
(a) In compliance with or adherence to calls for a boycott of Israel other than those boycotts to which 50 United States Code § 4607(c) applies.2
(b) In a matter that discriminates on the basis of nationality, national origin or religion and that is not based on a valid business reason.3
A.R.S. § 35-393(1).
Plaintiff Mikkel Jordahl ("Mr. Jordahl") is an attorney and sole owner of Plaintiff Mikkel (Mik) Jordahl, P.C. ("the Firm") (collectively, "Plaintiffs"). Mr. Jordahl personally participates in a boycott of consumer goods and services offered by businesses supporting Israel's occupation of the Palestinian territories. In doing so, Mr. Jordahl claims that he is moved by the Peace Not Walls campaign promoted by the Evangelical Lutheran Church in America ("ELCA"). The ELCA calls on "individuals to invest in Palestinian products to build their economy and to utilize selective purchasing to avoid buying products made *1029in illegal Israeli settlements built on Palestinian land."4 Mr. Jordahl is also a non-Jewish member of Jewish Voice for Peace ("JVP"), which "endorses the call from Palestinian civil society for Boycott, Divestment, and Sanctions campaigns to protest the Israeli government's occupation of Palestinian territories." (Doc. 6 at 4). Mr. Jordahl would like the Firm to participate in his boycott of "all businesses operating in Israeli settlements in the occupied Palestinian territories." (Doc. 57 at 6:6-7). He would also like his Firm "to be able to associate and provide financial resources and legal resources to Jewish Voice for Peace." (Id. at 6:8-10).
For the past twelve years, Mr. Jordahl's firm has contracted with the Coconino County Jail District ("the County") to provide legal advice to incarcerated individuals. In 2016, following the passage of A.R.S. § 35-393.01, the County asked Mr. Jordahl to execute a written certification, on the Firm's behalf, that the Firm "is not currently engaged in a boycott of Israel," that "no wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates" of the Firm are "engaged in a boycott of Israel," and that neither the Firm nor any of the above-mentioned associated entities would "engage in a boycott of Israel" for the duration of the contract agreement. (Doc. 6-1, Ex. 1). The requested certification went on to state that "Any violation of this Certification by the Independent Contractor shall constitute an event of material breach of the Agreement." (Id. ) Mr. Jordahl signed the 2016 certification under protest ("2016 Certification"), and sought confirmation with the County that the certification would not apply to his personal consumer decisions. (Doc. 6-1 at Exs. 1 & 2). The County did not respond to his inquiry but paid the Firm for its services during that year. During the contract year, Mr. Jordahl claims that he turned down opportunities for his Firm to provide administrative and pro bono services to organizations like JVP and he personally refrained from speaking out vocally about his personal boycott participation for fear that it might cast suspicion that his Firm was engaging in activity prohibited under the 2016 Certification. (Doc. 6-1 at 4-6).
The Firm's contract with the County came up for renewal in 2017, and the County again asked Mr. Jordahl to sign the required certification ("the 2017 Certification"), which by that time had been approved by the County's Jail Board of Directors. (Doc. 6 at 10; Doc. 6-1 at Ex. 5). The 2017 Certification was substantially unchanged from the 2016 Certification. This time, Mr. Jordahl refused to sign. (Doc. 6-1 at 5-6). Notwithstanding his refusal to sign, the Firm has continued to provide representative services to the County under the contract; the County, however, has not paid the Firm for those services. Mr. Jordahl fears that he will lose approximately 10% of his total income if his Firm loses its contract with the County as a result of his refusal to sign the 2017 Certification.
In their Amended Complaint, Plaintiffs allege that section 35-393.01 violates the First and Fourteenth Amendments because it requires the Firm and other government contractors to disavow their participation in political boycotts or risk forfeiting the opportunity to work for the government. (Doc. 21 ¶ 1). Plaintiffs brought suit against the Arizona Attorney General ("the Attorney General"), the Coconino County Sheriff ("the Sheriff"), and various members of the Coconino County Jail District Board of Directors ("the Board") in their official *1030capacities (collectively, "the Defendants"). (Id. ) Thereafter, the parties consented to, and the Court granted, the State of Arizona's ("the State") request to intervene for the purpose of defending the facial constitutionality of the Act. (Docs. 24 & 48).
Plaintiffs have moved for a preliminary injunction in which they seek to have the Court enjoin Defendants from enforcing the Certification Requirement in A.R.S. § 35-393.01, or alternatively to enjoin Defendants from enforcing the Certification Requirement against them. (Doc. 6 at 1). Defendants oppose Plaintiffs' motion for injunctive relief and contend that Plaintiffs are unlikely to succeed on the merits and that their alleged injuries are insufficient to justify injunctive relief. (Doc. 28 at 37). The State, joined by the Attorney General ("Defendants" or "the State"), has also moved to dismiss Plaintiffs' complaint. (Doc. 28). In doing so, Defendants challenge Plaintiffs' standing and argue that to the extent the Act applies to Plaintiffs' conduct, the Court should abstain or certify the question of the scope of the Act to the Arizona Supreme Court. (Id.
Free access — add to your briefcase to read the full text and ask questions with AI
Honorable Diane J. Humetewa, United States District Judge *1028INTRODUCTION
In 2016, Arizona joined a growing number of states that enacted legislation "aimed at divesting state funding from companies that engage in a boycott of Israel." AZ S.F. Sheet, 2016 Reg. Sess. H.B. 2617. Arizona's House Bill 2617 was codified at Arizona Revised Statute § 35-393.01, and states in subsection (A) that:
A public entity may not enter into a contract with a company to acquire or dispose of services, supplies, information technology or construction unless the contract includes a written certification that the company is not currently engaged in, and agrees for the duration of the contract to not engage in, a boycott of Israel.
A.R.S. § 35-393.01(A) (hereafter, "Certification Requirement" or "the Act").1 The Act defines "boycott" as:
...engaging in a refusal to deal, terminating business activities or performing other actions that are intended to limit commercial relations with Israel or with persons or entitles doing business in Israel or in territories controlled by Israel, if those actions are taken either:
(a) In compliance with or adherence to calls for a boycott of Israel other than those boycotts to which 50 United States Code § 4607(c) applies.2
(b) In a matter that discriminates on the basis of nationality, national origin or religion and that is not based on a valid business reason.3
A.R.S. § 35-393(1).
Plaintiff Mikkel Jordahl ("Mr. Jordahl") is an attorney and sole owner of Plaintiff Mikkel (Mik) Jordahl, P.C. ("the Firm") (collectively, "Plaintiffs"). Mr. Jordahl personally participates in a boycott of consumer goods and services offered by businesses supporting Israel's occupation of the Palestinian territories. In doing so, Mr. Jordahl claims that he is moved by the Peace Not Walls campaign promoted by the Evangelical Lutheran Church in America ("ELCA"). The ELCA calls on "individuals to invest in Palestinian products to build their economy and to utilize selective purchasing to avoid buying products made *1029in illegal Israeli settlements built on Palestinian land."4 Mr. Jordahl is also a non-Jewish member of Jewish Voice for Peace ("JVP"), which "endorses the call from Palestinian civil society for Boycott, Divestment, and Sanctions campaigns to protest the Israeli government's occupation of Palestinian territories." (Doc. 6 at 4). Mr. Jordahl would like the Firm to participate in his boycott of "all businesses operating in Israeli settlements in the occupied Palestinian territories." (Doc. 57 at 6:6-7). He would also like his Firm "to be able to associate and provide financial resources and legal resources to Jewish Voice for Peace." (Id. at 6:8-10).
For the past twelve years, Mr. Jordahl's firm has contracted with the Coconino County Jail District ("the County") to provide legal advice to incarcerated individuals. In 2016, following the passage of A.R.S. § 35-393.01, the County asked Mr. Jordahl to execute a written certification, on the Firm's behalf, that the Firm "is not currently engaged in a boycott of Israel," that "no wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates" of the Firm are "engaged in a boycott of Israel," and that neither the Firm nor any of the above-mentioned associated entities would "engage in a boycott of Israel" for the duration of the contract agreement. (Doc. 6-1, Ex. 1). The requested certification went on to state that "Any violation of this Certification by the Independent Contractor shall constitute an event of material breach of the Agreement." (Id. ) Mr. Jordahl signed the 2016 certification under protest ("2016 Certification"), and sought confirmation with the County that the certification would not apply to his personal consumer decisions. (Doc. 6-1 at Exs. 1 & 2). The County did not respond to his inquiry but paid the Firm for its services during that year. During the contract year, Mr. Jordahl claims that he turned down opportunities for his Firm to provide administrative and pro bono services to organizations like JVP and he personally refrained from speaking out vocally about his personal boycott participation for fear that it might cast suspicion that his Firm was engaging in activity prohibited under the 2016 Certification. (Doc. 6-1 at 4-6).
The Firm's contract with the County came up for renewal in 2017, and the County again asked Mr. Jordahl to sign the required certification ("the 2017 Certification"), which by that time had been approved by the County's Jail Board of Directors. (Doc. 6 at 10; Doc. 6-1 at Ex. 5). The 2017 Certification was substantially unchanged from the 2016 Certification. This time, Mr. Jordahl refused to sign. (Doc. 6-1 at 5-6). Notwithstanding his refusal to sign, the Firm has continued to provide representative services to the County under the contract; the County, however, has not paid the Firm for those services. Mr. Jordahl fears that he will lose approximately 10% of his total income if his Firm loses its contract with the County as a result of his refusal to sign the 2017 Certification.
In their Amended Complaint, Plaintiffs allege that section 35-393.01 violates the First and Fourteenth Amendments because it requires the Firm and other government contractors to disavow their participation in political boycotts or risk forfeiting the opportunity to work for the government. (Doc. 21 ¶ 1). Plaintiffs brought suit against the Arizona Attorney General ("the Attorney General"), the Coconino County Sheriff ("the Sheriff"), and various members of the Coconino County Jail District Board of Directors ("the Board") in their official *1030capacities (collectively, "the Defendants"). (Id. ) Thereafter, the parties consented to, and the Court granted, the State of Arizona's ("the State") request to intervene for the purpose of defending the facial constitutionality of the Act. (Docs. 24 & 48).
Plaintiffs have moved for a preliminary injunction in which they seek to have the Court enjoin Defendants from enforcing the Certification Requirement in A.R.S. § 35-393.01, or alternatively to enjoin Defendants from enforcing the Certification Requirement against them. (Doc. 6 at 1). Defendants oppose Plaintiffs' motion for injunctive relief and contend that Plaintiffs are unlikely to succeed on the merits and that their alleged injuries are insufficient to justify injunctive relief. (Doc. 28 at 37). The State, joined by the Attorney General ("Defendants" or "the State"), has also moved to dismiss Plaintiffs' complaint. (Doc. 28). In doing so, Defendants challenge Plaintiffs' standing and argue that to the extent the Act applies to Plaintiffs' conduct, the Court should abstain or certify the question of the scope of the Act to the Arizona Supreme Court. (Id. ) Citing state sovereign immunity, standing, and ripeness issues, Defendants specifically seek to dismiss the Attorney General from the case. (Id. at 32-33).
The Court held oral argument on these issues on May 23, 2018. (Doc. 50). The parties continued to file documents with the Court after this hearing, including Plaintiffs' Notice that the State had misstated Arizona law during oral argument regarding the Attorney General's authority to offer opinions on the meaning of Arizona law (Doc. 58); Plaintiffs' Notice that Plaintiffs' counsel had misattributed a fact to the wrong authority during their oral argument (Doc. 59); and the State's Notice of Supplemental Authority regarding updates (1) to an Arizona Agency Handbook providing interpretative guidance on A.R.S. § 35-393 and (2) on Koontz v. Watson ,
DISCUSSION
The Court will first resolve the issues and concerns related to Plaintiffs' standing and the Court's retention of this case. The Court will then turn to the merits of Plaintiffs' Motion for Preliminary Injunction and ascertain whether Plaintiffs have met their burden of showing that the Certification Requirement runs afoul of First Amendment protections afforded to Arizona companies wishing to engage in "boycott[s] of Israel", as that term is defined in the Act.
I. Standing
In moving to dismiss the Plaintiffs' First Amended Complaint, the State argues that Plaintiffs do not have standing to challenge the constitutionality of the Act because their desired conduct is not covered by its terms. Defendants also contend that Plaintiffs do not have standing to sue the Attorney General because he has not enforced the Act, and does not have the authority to do so. Because a party that lacks standing divests the court of jurisdiction to hear the case, the Court will address the standing inquiries at the threshold. See e.g. , Fleck v. Assocs., Inc. v. City of Phoenix ,
Federal Rule of Civil Procedure 12(b)(1) authorizes a court to dismiss claims over which it lacks subject-matter jurisdiction. A Rule 12(b)(1) challenge may be either facial or factual. Safe Air for Everyone v. Meyer ,
A plaintiff must prove standing "in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation." Lujan ,
A. Plaintiffs Have Standing to Challenge the Constitutionality of the Act
The State first argues that Plaintiffs have no standing to challenge the constitutionality of the Certification Requirement because the conduct that Plaintiffs say they desire to engage in "does not fall within the narrow scope of the Act" and as a result, they "will suffer no irreparable injury absent an injunction." (Doc. 28 at 8). As far as the Court can tell, the State seems to think Plaintiffs are only harmed if they actually breach the contract by engaging in the prohibited activity. Thus, because Plaintiffs have not engaged in activity that falls within the statutory definition, Defendants say Plaintiffs cannot establish they have been injured by the Certification Requirement.
The Court first notes that "[s]tanding, or the lack of it, may be intertwined with whether the complaint states a claim upon which relief can be granted, but it is not the same thing. Standing is not about who wins the lawsuit; it is about who is allowed to have their case heard in court." Catholic League for Religious and Civil Rights v. City and Cnty. of San. Fran. ,
*1032" 'At bottom, the gist of the question of standing is whether petitioners have such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination.' "
Because sweeping restrictions on speech can have chilling effects on lawfully protected speech, "the Supreme Court has dispensed with rigid standing requirements" in First Amendment cases. Cal. Pro-Life Council Inc. v. Getman,
The State's characterization of Plaintiffs' injury-in-fact presumes that Plaintiffs are only harmed if the Firm breaches its contract with the County by engaging in the conduct proscribed by the Act. The Court finds that the focus of the State's argument is misplaced, at least for purposes of standing. The Firm has been injured in at least two ways that suffice for standing to sue: one, when it was required to promise to refrain from engaging in arguably constitutionally protected activity; and two, when the County stopped paying it for services rendered.
First, the Firm was injured when it was asked to promise to refrain from engaging in a broad swath of boycotting activities, at least some of which is protected under the First Amendment, in exchange for receiving a government contract. The Supreme Court has made clear that corporations and other associations do not lose their First Amendment protections simply because they are not natural persons. Citizens United v. FEC ,
Moreover, when Mr. Jordahl refused to sign the 2017 Certification on behalf of the Firm, the County stopped paying the Firm for its services. In this regard, the Firm has not only experienced "a realistic danger of sustaining a direct injury as a result of the statute's operation or enforcement," it has actually sustained injury: it is not getting paid for services rendered due to its refusal to sign the certification. Bayless ,
Defendants also assert that Mr. Jordahl cannot establish injury for standing purposes because the Certification Requirement does not apply to Mr. Jordahl personally, and even if it did, the activities he wishes to engage in do not constitute a "boycott of Israel" as that term is defined in the Act. The Court finds, however, that Mr. Jordahl has sufficiently established his personal stake in the outcome of this controversy to challenge the constitutionality of the Certification Requirement. Although Mr. Jordahl is not a "company" under the Act, as the sole lawyer in a Firm that is required to sign the Certification to obtain the County contract, he has sufficiently established that his personal conduct, at least some of which would be prohibited by the Act, has been impermissibly chilled for fear that it may be confused with the Firm's conduct. For example, Mr. Jordahl has averred that in response to calls from JVP, the ELCA, and other "Boycott Divestment and Sanction" organizations, he has ceased purchasing products from Hewlett-Packard, Airbnb, and SodaStream, all which are companies that are "doing business...in territories controlled by Israel." § 35-393.01(A). He says he has ceased some of these political activities for fear that they may be confused with those of his Firm's. Where a plaintiff has refrained from engaging in expressive activity for fear of prosecution under the challenged statute, such self-censorship is a "constitutionally sufficient injury" as long as it is based on "an actual and well-founded fear" that the challenged statute will be enforced. Human Life of Wash., Inc. v. Brumsickle ,
*1034Plaintiffs' injuries are plainly traceable to the Certification Requirement and would be alieved if the Act was found constitutionally unenforceable. Spokeo ,
B. Plaintiffs' Standing to Sue the Attorney General
The State and the Attorney General have also moved to dismiss Plaintiffs' claim against the Attorney General on the grounds that he has not acted to enforce the Act and thus that no alleged injury can be attributed to him. They contend that the lack of sufficient connection between Plaintiffs' injuries and the Attorney General's conduct render him an improper party under principles of standing and sovereign immunity.
The Ninth Circuit has noted how issues related to a plaintiff's standing overlap with issues related to a state official's immunity from suit. Whether a state official, acting in his official capacity, is a proper defendant to an action is
really the common denominator of two separate inquiries: first, there is the requisite causal connection between their responsibilities and any injury that the plaintiffs might suffer, such that relief against the defendants would provide redress [i.e., Article III standing], and second, whether [ ] jurisdiction over the defendants is proper under the doctrine of Ex parte Young ,209 U.S. 123 , [157],28 S.Ct. 441 ,52 L.Ed. 714 (1908), which requires "some connection" between a named state officer and enforcement of a challenged state law.
Planned Parenthood of Idaho, Inc. v. Wasden ,
Causation for Article III standing requires that "the injury [ ] be fairly...traceable to the challenged action of the defendant, and not...the result of the independent action of some third party not before the court." Lujan ,
As stated in Wasden , courts determining whether an exception to the Eleventh Amendment applies in a given case assess causality - "the common denominator" - in a very similar manner. Typically, the Eleventh Amendment bars federal court lawsuits against a state "by Citizens of another State, or by Citizens or Subjects of any Foreign State," without the state's consent. U.S. Const. amend. XI. State agencies such as the Attorney General's Office fall within the protection of the Eleventh Amendment because a suit against that office is considered a suit against the State itself. Will v. Michigan Dept. of State Police ,
*1035But the Ex parte Young exception does not apply to all state officers. To enjoin the enforcement of an allegedly unconstitutional statute, the officer named in the suit "must have some connection with the enforcement of the act."
Plaintiffs have sued Mark Brnovich in his official capacity as the Arizona Attorney General. They allege that Mr. Brnovich is the chief law enforcement officer of Arizona under A.R.S. § 41-192(A). They further allege that under A.R.S. § 41-194.01, he has the authority to investigate, at the request of a state legislator, whether county actions violate state law; to initiate legal proceedings if he concludes that a county's actions do or may violate state law; and to notify the Arizona State Treasurer of his conclusions so that the Treasurer will withhold and redistribute state shared monies. They also allege that under A.R.S. § 41-193(A)(2), Mr. Brnovich has the authority to prosecute public officials and others for misappropriation of public monies.
The Arizona Attorney General is not directly responsible for enforcement of the Act, a fact that Plaintiffs acknowledge. But the lack of direct enforcement authority does not necessarily mean that the Attorney General's authority is unconnected to Plaintiffs' failure to be paid for their services, or the self-censorship Plaintiffs impose on their conduct. Courts have found a requisite connection for purposes of both standing and application of Ex parte Young not only where the law has specifically granted the defendant enforcement authority, see, e.g. , Ass'n des Eleveurs de Canards et d'Oies du Quebec v. Harris ,
Sufficient causality exists here for both Article III standing purposes and Ex Parte Young. Specifically, a sufficient connection exists between the Attorney General's authority to prosecute persons illegally paying public contractors and Plaintiffs' injuries. See A.R.S. § 41-193(A)(2). Pursuant to A.R.S. § 35-301(1), the Attorney General is authorized to prosecute custodians of public funds who pay public funds to another person "[w]ithout authority of law." At the same *1036time, the Act makes it unlawful for any public entity to enter into a contract for services unless the contracting company certifies that it is not and will not engage in a boycott of Israel. A.R.S. § 35-393.01. The County's decision to pay or not pay its government contractors is necessarily guided and determined in large part on whether that payment is authorized; if the payment is not authorized, but is nonetheless made, the Attorney General can prosecute the custodian of those funds. This authority to prosecute custodians of public funds for payment made in violation of the law imposes "a powerful coercive effect" on the County and entities charged with directly enforcing the Certification Requirement. Bennett ,
The Attorney General's authority, together with the actions of the County, form a clear and plausible causal chain resulting in Plaintiffs' alleged constitutional injuries. The Attorney General is therefore a proper party to this suit and will not be dismissed for want of standing. Likewise, principles of sovereign immunity do not bar Plaintiffs' claim for injunctive relief against the Attorney General. The State's Motion to Dismiss the Attorney General from this action is therefore denied.
II. Abstention and Certification
Defendants next argue that given the lack of interpretative law on this recent state legislation, the Court should abstain from hearing this case or alternatively, "certify the legal question of the scope of the Act to the Arizona Supreme Court." (Doc. 28 at 14).
In order to avoid conflict with a state's legislature and the laws it enacts, federal cases raising constitutional issues sometimes warrant federal court abstention under the Pullman doctrine. See R.R. Comm'n of Tex. v. Pullman Co. ,
(1) the case touches on a sensitive area of social policy upon which the federal courts ought not enter unless no alternative to its adjudication is open, (2) constitutional adjudication plainly can be avoided if a definite ruling on the state issue would terminate the controversy, and (3) the proper resolution of the possible determinative issue of state law is uncertain.
Porter v. Jones ,
*1037Unlike abstention, which entails a full round of litigation in the state court system before a plaintiff can resume proceedings in federal court, the certification process authorized by Arizona's statute enables a federal court to pose a question directly to the state's highest court. Lehman Bros. v. Schein ,
With regard to abstention, the Court finds that at least two of the requisite Pullman factors are not present, making abstention under that doctrine improper. This case squarely raises important questions surrounding First Amendment guarantees - "an area of particular federal concern" - that are not overridden by any sensitive area of social policy inappropriate for this Court.
Defendants' proposed limiting construction of "boycott of Israel" does not, however, resolve the constitutionality of the Certification Requirement. As an initial matter, the proposed construction is contrary to the plain language of the Act. Courts should not apply limiting constructions when the proposed construction is "contrary to the plain language of the statute." Valle Del Sol v. Whiting ,
*1038Moreover, while interpretive guidance on the scope of "boycott of Israel" may help courts (and companies wishing to contract with a public entity in Arizona) determine whether certain activities constitute a breach of an avowal to refrain from the conduct prohibited by the Act, such an interpretation would not resolve the question of whether the Act's Certification Requirement unconstitutionally imposes a condition on receipt of a government contract. Indeed, this position presupposes that Arizona can constitutionally condition a company's right to engage in "a general boycott of Israel" that is taken in response to a larger call for such action on receipt of any public contract. But as the Court discusses infra , to justify such a broad restriction, regulation of activity that infringes on expressive boycotting activities must be "necessary" to the "actual operation of the government." U.S. v. Nat'l Treasury Employees Union ,
In sum, this case fails at least two of Pullman's requirements. This Court therefore lacks the discretion to abstain and the State's request for the same is denied. For similar reasons, Defendants' request to certify a question to the Arizona Supreme Court pursuant to A.R.S. § 12-8161 regarding the scope of "boycott of Israel" is also denied.
Having satisfied itself that this case is justiciable and abstention or certification to the Arizona Supreme Court would be improper, the Court will now turn to the merits of Plaintiffs' motion for injunctive relief.
III. Plaintiffs' Motion for Preliminary Injunction
A preliminary injunction "is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Mazurek v. Armstrong ,
A. Likelihood of Success on the Merits
Plaintiffs assert that they are likely to succeed in showing that the Certification Requirement unconstitutionally infringes on their First Amendment rights. In doing so, Plaintiffs contend that the Certification Requirement is an unconstitutional condition, is viewpoint and content discriminatory, and impermissibly compels protected speech. They further contend that the Certification Requirement is not justified by sufficiently legitimate government interests. Defendants argue that the activity that Plaintiffs wish to engage in is unexpressive commercial conduct that is not protected by the First Amendment, and that to the extent such conduct is protected, it is more than justified by the State's interest in regulating its "commercial activity to align commerce in the State with the State's policy objectives and values" as well as its interest in preventing discrimination on the basis of national origin. (Doc. 28 at 22-24). Accordingly, Defendants contend that "Plaintiffs are not likely to prevail on the merits and their Complaint should be dismissed." (Doc. 28 at 15).
The First Amendment, made applicable to the States by the Fourteenth Amendment, provides that "Congress shall make no law...abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble." U.S. Const. amend. I. "The First Amendment protects political association as well as political expression." Buckley v. Valeo ,
As the Supreme Court has observed, "[i]t is fundamental that the First Amendment was fashioned to assure an unfettered interchange of ideas for the bringing about of political and social changes desired by the people." Legal Services Corp. v. Velazquez ,
*1040Turner Broadcasting System, Inc. v. FCC ,
Plaintiffs advance various theories as to why the Certification Requirement is unconstitutional under the First Amendment.7 The Court finds, however, that Plaintiffs would at least be able to meet their burden of showing that the Certification Requirement is an unconstitutional condition on government contractors. In reaching this conclusion, the Court will first discuss why the conduct implicated by the terms of the Act encompasses expressive activity that is protected under the First Amendment. The Court will then provide some background on the unconditional conditions doctrine in the context of government employment. Finally, the Court will explain why the State's proffered interests do not justify the infringement the Certification Requirement imposes on such expressive conduct.
1. The Act Burdens Expressive Conduct Protected by the First Amendment
Defendants argue that the Supreme Court's decision in Int'l Longshoremen's Association, AFL-CIO v. Allied International, Inc. , and the Seventh Circuit's decision in Briggs & Stratton Corp. v. Baldrige foreclose Plaintiffs' claims because they establish that economic boycotts are not protected under the First Amendment.
a. Int'l Longshoremen's Association, AFL-CIO v. Allied International, Inc. ,
Defendants first contend that Plaintiffs cannot prevail on the merits of their claim because any alleged First Amendment right to engage in an economic boycott is foreclosed by the Supreme Court's decision in Int'l Longshoremen. In Int'l Longshoremen , the Supreme Court found that a labor organization's politically-motivated boycott of goods from the Soviet Union was an illegal secondary boycott under section 8(b)(4)(B) of the National Labor Relations Act ("NLRA").
Defendants overstate the meaning of Int'l Longshoreman , which was decided in the context of federal labor laws. Int'l Longshoreman does not purport to state that there is no constitutional right to engage in boycotting activities. It does, however, highlight the context in which this type of governmental infringement on the First Amendment rights of labor unions and their members is justified. See NAACP v. Claiborne Hardware Co. ,
In Claiborne , civil rights activists called for a boycott of all white merchants in Claiborne County, Mississippi.
The boycott was launched at a meeting of a local branch of the NAACP attended by several hundred persons. Its acknowledged purpose was to secure compliance by both civil and business leaders with a lengthy list of demands for equality and racial justice. The boycott was supported by speeches and nonviolent picketing. Participants repeatedly encouraged others to join its cause.
Claiborne stands for the proposition that collective boycotting activities undertaken to achieve social, political or economic ends is conduct that is protected by the First Amendment. See also NAACP v. Alabama ,
The Arizona legislature has defined "boycott" to mean "engaging in a refusal to deal, terminating business activities or performing other actions that are *1042intended to limited commercial relations with Israel or with persons or entities doing business in Israel or in territories controlled by Israel, if those actions are taken...in compliance with or adherence to calls for a boycott of Israel ..." A.R.S. § 35-393(1)(a) (emphasis added). In accordance with Claiborne , these types of boycotting activities, which clearly include "the practice of persons sharing common views banding together to achieve a common end," are entitled constitutional protections.
Indeed, the collective element of the actions that are prohibited, together with the potential reach of what activities constitute "other actions," is what distinguishes this Act from those statutes that lawfully prohibit conduct that is not inherently expressive. See e.g., Rumsfeld v. Forum for Academic & Institutional Rights, Inc. ,
"Effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association, as this Court has more than once recognized by remarking *1043upon the close nexus between the freedoms of speech and assembly." NAACP ,
b. Briggs & Stratton Corp. v. Baldrige ,
Defendants also argue that Plaintiffs' First Amendment claim is precluded by the Seventh Circuit Court of Appeals' decision in Briggs & Stratton Corp. v. Baldrige . In Briggs , United States companies doing business with Arab League nations challenged the constitutionality of a section in the Federal Export Administration Act ("EAA") that prohibits United States companies from participating in a foreign government's request for a boycott against countries friendly to the United States. See
Briggs , as a result, is wholly distinguishable. First, unlike the activities Plaintiffs wish to engage in, and the politically-motivated actions that are contemplated by the *1044plain language of the Act, the Court in Briggs found that the plaintiffs' desires to answer questions from their trade partners were not politically-motivated and thus not deserving of First Amendment protection. Second, the substantial state interests advanced by the government in Briggs - foreign policy and international trade relations - are simply not present here. Thus, even if Briggs were binding precedent on this Court, which it is not, the case does not stand for the proposition that the conduct prohibited under the Act falls outside the protections of the First Amendment.
c. Restriction of Purely Commercial Conduct
Finally, Defendants argue that the Certification Requirement does not implicate the First Amendment because it "only regulates commercial conduct." (Doc. 28 at 18). Defendants first maintain that "Plaintiffs may say absolutely anything they desire about Israel. Or they may maintain complete and absolute silence regarding their beliefs about the policies of Israel." (Id. (emphasis in original) ). The Court again finds that Defendants interpret the protections of the First Amendment too narrowly. The fact that the Act does not expressly limit or restrain what Plaintiffs can say does not mean that protected conduct is not affected by its terms. The Supreme Court has held that even a facially speech-neutral statute or regulation may implicate expressive activity protected under the First Amendment. See Nat'l Treasury ,
The Act thus encompasses and contemplates elements of expressive political conduct protected under the Constitution. As such, the Court finds it highly likely that Plaintiffs will be able to establish that "boycott," as defined in the Arizona legislature, burdens expressive political activity protected under the First Amendment. The question then becomes whether the State has an adequate interest in restricting companies' rights to engage in boycotts of Israel by conditioning their government contracts on a promise to refrain from such activity.
2. Unconstitutional Conditions on Government Employment
"[C]itizens do not surrender their First Amendment rights by accepting public employment." Lane v. Franks ,
Recognizing that "constitutional violations may arise from the deterrent, or 'chilling,' effect of governmental [efforts] that fall short of a direct prohibition against the exercise of First Amendment rights," [...] our modern "unconstitutional conditions" doctrine holds that the government "may not deny a benefit to a person on a basis that infringes his constitutionally protected...freedom of speech" even if he has no entitlement to that benefit [...]
*1045Umbehr ,
The State's burden in justifying a restriction of speech or expressive conduct is greater, however, when the restriction is not related to an isolated employee disciplinary action but instead has widespread prophylactic impact. Moonin v. Tice ,
*1046Where a 'wholesale deterrent to a broad category of expression' rather than 'a post hoc analysis of one employee's speech and its impact on that employee's public responsibilities' is at issue...the court weighs the impact of the ban as a whole-both on the employees whose speech may be curtailed and on the public interested in what they might say-against the restricted speech's 'necessary impact on the actual operation' of the Government.
Moonin ,
*10473. The Act Broadly Restricts Government Contractor's Expressive Conduct As Citizens Speaking on Matters of Public Concern
"The first prong of the employee speech analysis involves two inquiries: whether the restriction reaches only speech within the scope of a public employee's official duties, and whether it impacts speech on matters of public concern." Pickering , 391 U.S. at 571,
The Court has little difficulty in finding that actions prohibited by the Act have no relation to Plaintiffs' official duties. The Ninth Circuit has found that communication "with individuals or entities outside of [an employee's] chain of command...[is] unlikely" to be pursuant to the employee's official duties." See Dahlia v. Rodriguez ,
The prohibited acts also have no relation to official contractors' duties in general. The Certification Requirement applies to any company that provides "services, supplies, information technology or construction" to a public entity in Arizona. A.R.S. § 35-393.01(A). The scope of "official duties" that are encompassed by the number and diversity of companies contracting with the State vary dramatically and the plain language of the Certification Requirement does not limit its scope to prohibit actions taken in furtherance of those duties. See Moonin , 868 F.3d at n.5 (noting that the "focus in the prospective restraint context is on the chilling effect of the employer's policy on employee speech" which is "determined by the language of the policy - what an employee reading the policy would think the policy requires - not what [the employer] subjectively intended the [policy] to say"). The Court thus finds that the Act reaches beyond the scope of contractors' official duties.
The Act also unquestionably touches on matters of public concern. "Speech involves matters of public concern when it can be fairly considered as relating to any matter of political, social, or other concern to the community, or when it is a subject of legitimate news interest; that is, a subject of general interest and of value and concern to the public." Lane ,
As is evidenced by the parties' briefings, actions taken by Israel in relation to Palestine are matters of much political and public debate. Plaintiffs want to participate in collective economic boycotts of goods and products from companies doing business in Israeli-occupied settlements in order to show their political discontent with Israel's policies toward Palestine. Through their actions, Plaintiffs seek to promote "equal human dignity and rights for all people in the Holy Land" and "an end to Israeli settlement building and the occupation of Palestinian land." (Doc. 6-1 at 3). See also Nat'l Treasury ,
Plaintiffs have thus met their burden of showing not only that they and others are engaged in protected activities, but that the terms of the Act encompass such activities.
4. The State Cannot Meet its Burden of Showing that the Certification Requirement Has a Necessary Impact on the Actual Operation of the State
Of course, properly justified, the fact that the Act infringes on protected activity does not render the Act unconstitutional. Where a restriction prospectively limits government contractors' expressive conduct, the State can justify such interference by showing the restriction has a "necessary impact on the actual operation" of the State. Nat'l Treasury ,
The legislative history of the Act calls these stated interests into doubt. The Act's history instead suggests that the goal of the Act is to penalize the efforts of those engaged in political boycotts of Israel and those doing business in Israeli-occupied territories because such boycotts are not aligned with the State's values. See e.g. , *1049Ariz. House Republican Caucus News Release, Feb. 4, 2016 (representing that the purpose of the Act is to penalize "companies engaging in actions that are politically motivated and intended to penalize, inflict economic harm on, or otherwise limit commercial relations with Israel, its products, or partners"). If so, such an interest is constitutionally impermissible. See Koontz v. Watson ,
Assuming the legitimacy of the interests advanced by the State, the Court still finds that neither of the proffered interests justify the restriction because the Certification Requirement is not necessary to advance either of them. To meet its burden, the State "must demonstrate that the recited harms are real, not merely conjectural, and that the regulation will in fact alleviate these harms in a direct and material way." Nat'l Treasury ,
Beyond the conjecture noted above, the State has demonstrated no harms to Arizona, or its economic relationship with Israel, that would be alleviated by conditioning all public entity contracts on the *1050contractors' promise to refrain from engaging in actions taken in response to larger calls to boycott of Israel. Defendants have failed to meet their burden of showing that restricting government contractors' right to boycott Israel is "necessary" to the State's operation.
B. Likelihood of Irreparable Harm
Having established Plaintiffs' likelihood of success on the merits, the next issue is whether Plaintiffs are likely to suffer irreparable harm absent the protection of a preliminary injunction. Generally, courts of equity should not act when the moving party "will not suffer irreparable injury if denied equitable relief." Younger v. Harris ,
The Court finds that Plaintiffs have met their burden here. Plaintiffs' objections to the Act implicate core protections of the First Amendment. "The loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury." Elrod v. Burns ,
C. Balance of the Equities and the Public Interest
The Court also finds that the balance of equities tips in favor of Plaintiffs. Defendants will experience little to no hardship by enjoining the enforcement of a law that does nothing to further any economic state interest and infringes on First Amendment protections. Although generally barring discrimination on the basis of national origin is a legitimate state interest, the State clearly has less intrusive and more viewpoint-neutral means to combat such discrimination. Plaintiffs, on the other hand, have shown a likelihood of irreparable harm if the Certification Requirement is not enjoined. Moreover, public interest favors an injunction as the public has little interest in enforcement of unconstitutional laws.
D. Security
A court may issue a preliminary injunction "only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained." Fed. R. Civ. P. 65(c). Although the plain language of the rule suggests that a bond is mandatory, the Ninth Circuit has held that it "invests the district court with discretion as to the amount of security required, if any." Johnson v. Couturier ,
CONCLUSION
Defendants' motion to dismiss Plaintiffs' Amended Complaint is denied, including their request to dismiss the Attorney General from this action. Moreover, Plaintiffs have shown that they are likely to succeed *1051on the merits of their claim, that they are likely to suffer irreparable harm in the absence of a preliminary injunction, and that the balance of equities and public interest favor an injunction. The Court therefore will grant Plaintiffs' request for a preliminary injunction and enjoin Defendants from enforcing the Certification Requirement in A.R.S. § 35-393.01(A).
IT IS ORDERED that Plaintiffs' Motion for a Preliminary Injunction (Doc. 6) is granted . Until further order of the Court, Defendants are enjoined from enforcing A.R.S. § 35-393.01(A).
IT IS FURTHER ORDERED that Defendants' Motion to Dismiss Plaintiffs' Complaint (Doc. 28) is denied.
Related
Cite This Page — Counsel Stack
336 F. Supp. 3d 1016, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jordahl-v-brnovich-azd-2018.