"Anti-BDS" Statute Imposing No-Boycott-Israel Term in Arkansas Government Contracts Is Constitutional

So holds the Eighth Circuit, sitting en banc.

From today's Eighth Circuit en banc opinion in Arkansas Times LP v. Waldrip, written by Judge Jonathan Kobes (I think it's basically correct, for reasons given by Profs. Michael Dorf and Andrew Koppelman and me in our amicus brief in the case, and see Prof. Dorf's follow-up post):

Arkansas Act 710 prohibits state entities from contracting with private companies unless the contract includes a certification that the company "is not currently engaged in, and agrees for the duration of the contract not to engage in, a boycott of Israel." The statute defines "boycott of Israel" as "engaging in refusals to deal, terminating business activities, or other actions that are intended to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories, in a discriminatory manner." The Act exempts contracts if a company provides goods or services for at least 20% less than the lowest certifying business, or if the contract has a total potential value of less than $1,000.

The court held that boycotts, in the sense of refusals to engage in commercial dealings, generally aren't protected by the First Amendment, and therefore imposing a no-boycott requirement as a contractual provision isn't unconstitutional, either:

The government imposes an unconstitutional condition when it requires someone to give up a constitutional right in exchange for a government benefit. This includes making government benefits contingent on endorsing a particular message or agreeing not to engage in protected speech.

The basic dispute in this case is whether "boycotting Israel" only covers unexpressive commercial conduct, or whether it also prohibits protected expressive conduct. Arkansas Times points us to N.A.A.C.P. v. Claiborne Hardware Co. (1982), which held that expressive conduct accompanying a boycott is protected by the First Amendment.  The State, on the other hand, argues that Rumsfeld v. Forum for Academic & Institutional Rights, Inc. (FAIR) (2006) controls. There, the Supreme Court held that First Amendment protection does not extend to non-expressive conduct intended to convey a political message.

Claiborne involved a boycott of white business owners organized by the N.A.A.C.P. The participants refused to purchase anything from white-owned businesses and encouraged support for the boycott with speeches, marches, and picketing.  But some participants took it further, committing acts of violence against those who opposed the boycott.  White business owners sued to recover physical and economic losses caused by the boycott and enjoin future boycotts.  So the question before the Court was whether the activities in support of the boycott, both peaceful and violent, were protected.

The Court first noted that the boycott "took many forms," including speeches, picketing, marches, and pamphleteering.  It then held that the boycott "clearly involved constitutionally protected activity" and that "[e]ach of these elements of the boycott is a form of speech or conduct that is ordinarily entitled to protection under the First and Fourteenth Amendments."  The Court held that the violence and threats that accompanied the boycott were "beyond the pale of constitutional protection."  So Claiborne instructs us to examine the elements of a boycott to determine which activities are constitutionally protected.

FAIR, on the other hand, dealt with a different issue—whether the First Amendment protects non-expressive conduct. In FAIR, several law schools banned military recruiters on campus in protest of the military's "don't ask, don't tell" policy.  Congress then passed the Solomon Amendment, which conditioned some federal funding on allowing military recruiters on campus.  The law schools sued, arguing that this limited their speech by prohibiting expressive conduct—i.e., banning military recruitment on campus.  The Court disagreed, holding that the law schools' refusal to allow military recruiters did not implicate the First Amendment because such a refusal was "not inherently expressive." The Court made clear that the question wasn't whether someone intended to express an idea, but whether a neutral observer would understand that they're expressing an idea. In that case, an observer would have no way of knowing the law school was expressing disapproval of the military without accompanying explanatory speech. An observer could assume that the law school's interview rooms were full, or that the recruiters preferred to interview off-campus. But the Court made clear that only the schools' non-expressive conduct was unprotected.  The law schools were still free to express their disapproval of "don't ask, don't tell" in other ways, such as posting signs and organizing student protests.

Arkansas Times argues that Act 710 runs afoul of Claiborne, which it suggests held that boycotts are protected under the First Amendment. But the Court stopped short of declaring that a "boycott" itself—that is, the refusal to purchase from a business¾is protected by the First Amendment. Instead, it acknowledged that "States have broad power to regulate economic activity," but held that this power does not allow for a prohibition on "peaceful political activity such as that found in the boycott in this case." Contrary to Arkansas Times's argument, Claiborne only discussed protecting expressive activities accompanying a boycott, rather than the purchasing decisions at the heart of a boycott….

So this case turns on what Act 710 bans: protected boycott-related activity, or non-expressive commercial decisions? … Act 710 prohibits public entities from contracting with companies unless they certify that they won't boycott Israel. It defines "boycott of Israel" as (1) "engaging in refusals to deal"; (2) "terminating business activities"; or (3) taking "other actions that are intended to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories," "in a discriminatory manner."

The third category is in dispute. Arkansas Times argues that the catch-all "other actions" language includes constitutionally protected activity that is intended to limit commercial relations with Israel. This interpretation implicates protected speech, such as picketing outside a business that has commercial relations with Israel. The State, on the other hand, argues that the statute only prohibits non-expressive commercial decisions, which are not protected under the First Amendment.

Under Arkansas's canons of statutory interpretation [constitutional avoidance, following legislative intent, and ejusdem generis], we think the Arkansas Supreme Court would read Act 710 as prohibiting purely commercial, non-expressive conduct. It does not ban Arkansas Times from publicly criticizing Israel, or even protesting the statute itself. It only prohibits economic decisions that discriminate against Israel. Because those commercial decisions are invisible to observers unless explained, they are not inherently expressive and do not implicate the First Amendment….

And the court rejected the argument that the mere requirement that contractors certify compliance with the law is unconstitutional "compelled speech":

[T]he certification requirement here is markedly different from other compelled speech cases. Although it requires contractors to agree to a contract provision they would otherwise not include, it does not require them to publicly endorse or disseminate a message. Instead, the certification targets the noncommunicative aspect of the contractors' conduct—unexpressive commercial choices. The "speech" aspect— signing the certification—is incidental to the regulation of conduct. See FAIR ("There is nothing in this case approaching a Government-mandated pledge or motto that the school must endorse. The compelled speech to which the law schools point is plainly incidental to the Solomon Amendment's regulation of conduct.").

We are not aware of any cases where a court has held that a certification requirement concerning unprotected, nondiscriminatory conduct is unconstitutionally compelled speech. A factual disclosure of this kind, aimed at verifying compliance with unexpressive conduct-based regulations, is not the kind of compelled speech prohibited by the First Amendment.

Judge Jane Kelly filed a solo dissent; she would have interpreted the "other actions" provision to include constitutionally protected speech, and concluded that this makes the statute unconstitutional. (She didn't opine on whether the statute was constitutional under the majority's narrower interpretation.) For more on the statutory construction dispute, see here.