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Argument analysis: Justices debate constitutionality of funding condition by phone

In 2013, the Supreme Court ruled, by a vote of 6-2, that a provision in a federal law that requires organizations receiving funds to combat HIV/AIDS to “have a policy explicitly opposing prostitution and sex trafficking” violates the First Amendment when applied to nongovernmental organizations based in the United States. This morning the justices heard oral argument in a case asking them to decide whether the enforcement of the same provision against the foreign affiliates of U.S.-based NGOs also violates the First Amendment. After a little over an hour of argument by telephone, it seemed that the answer will probably still be yes, although the vote may be closer than it was seven years ago.

Arguing on behalf of the federal government, which urged the justices to allow the funding restriction to remain in place, Assistant to the U.S. Solicitor General Christopher Michel stressed that the foreign NGOs lack constitutional rights. And the domestic groups, Michel explained, are not subject to the funding condition. Any effect that the condition might have on domestic groups is merely a product of their own choice.

Lawyer David Bowker argued on behalf of the U.S.-based NGOs. He told the justices that the domestic NGOs themselves are harmed by the funding condition imposed on their foreign affiliates, with which the U.S.-based groups share names, missions and voices, because their foreign affiliates’ denunciation of prostitution and sex trafficking is attributed to them as well. And they cannot avoid such harm, Bowker emphasized, because the U.S.-based NGOs are often required to work through foreign affiliates overseas.

Some justices focused on the significance (or lack thereof) of formal legal ties between the U.S.-based NGOs and their foreign affiliates. What kind of ties, Chief Justice John Roberts asked, would the government require to attribute the speech of the foreign entity to the domestic one?

Michel responded that when two groups have opted to be separate legal entities, they will have separate legal rights. They have to take “the bitter with the sweet.”

Roberts did not seem entirely convinced. He pushed back, asking whether it is reasonable for the government to insist “on formal legal ties in this context,” particularly if an NGO needs to operate through a foreign entity to be effective overseas. Especially when the domestic and foreign NGOS have “the same logo, the same brand,” Roberts wondered “if it makes sense to think of foreign entity as another channel for domestic entity’s speech.”

Roberts pressed this point again later with Bowker, asking him whether the U.S.-based NGOs can control what their foreign affiliates say on the question of prostitution and sex trafficking.

Bowker responded that, “as a practical matter,” the U.S.-based NGOs can indeed “veto” speech by their foreign affiliates on these issues.

Justice Sonia Sotomayor (who, as she had yesterday, had some problems with her “mute” button when it was her turn to ask questions this morning) echoed Roberts’ focus on the significance of corporate structure. At least in the First Amendment context, she told Michel, the Supreme Court’s cases “seem to suggest” that the justices “are less concerned with corporate formalities” than with whether others believe that one entity shares the views of another. If these NGOs are closely affiliated, Sotomayor continued, and the public perceives them as effectively one entity, why wouldn’t the First Amendment apply to a law that barred a domestic NGO from receiving funds and partnering with its foreign affiliate in implementing a program?

Justice Neil Gorsuch was also interested in the question of the legal ties between the two sets of NGOs. He told Michel that the government seemed “to rely on legal separation. But why,” Gorsuch asked, “does the First Amendment care?”

Gorsuch followed up on this point with Bowker, asking him to explain when the Supreme Court should attribute the speech or action of foreign affiliates to domestic entities. But when Bowker pointed Gorsuch to the Supreme Court’s cases “recognizing that legally separate entities can have speech attributed from one to another” without looking for formal corporate-law distinctions, Gorsuch appeared skeptical. What empirical evidence, Gorsuch queried, do you have that there is a risk of attribution or confusion? Do people really think that the domestic entities are promoting or agreeing with the foreign affiliates’ statements about prostitution and sex trafficking?

Perhaps unlike Gorsuch, Justice Stephen Breyer appeared to believe that the answer to the question is yes. If a group takes money from the government to fight AIDS, Breyer posited, and that group goes to prostitutes and says “use safety” but also “we’re against prostitution,” the prostitutes will think they are hypocrites “or worse.” How, Breyer asked Michel, “does that change one iota” if instead of sending its own worker to India, the group gives the money to a foreign worker there who is associated with the U.S.-based group? Why don’t we accept that argument now if we accepted it before? Breyer wondered, referring to the 2013 decision.

Justice Ruth Bader Ginsburg pressed Michel to explain why the statute at issue in this case does not require other groups that receive funding to fight HIV/AIDS, such as the World Health Organization, to oppose prostitution and sex trafficking. What, Ginsburg queried, is the reason for the exemption?

When Michel responded that groups like the WHO that are exempt from the requirement are mainly international organizations, whose sovereignty Congress would have wanted to respect in a way that doesn’t come into play with the nonprofits here, Ginsburg sounded dubious. It seems to me, she countered, that these groups are doing the same thing.

When the justices considered the constitutionality of the funding condition as applied to the domestic groups in 2013, Justice Clarence Thomas, along with the late Justice Antonin Scalia, dissented from the court’s conclusion that it violated the First Amendment. Thomas did not necessarily seem to see much difference between today’s case and that one.

Justice Brett Kavanaugh expressed concern about the broader implications of a ruling for the domestic NGOs. Responding to a question from Kavanaugh about what other programs might be invalidated if the government loses, Michel warned that such a ruling could, for example, jeopardize laws banning foreign campaign contributions.

Alito similarly worried aloud that a ruling for Bowker’s clients would “force Congress to withhold foreign aid entirely or allow it to be used in ways contrary to U.S. interests.”

Bowker assured Alito and his colleagues that the government would still retain “very broad authority to control what happens with its funds.” The funding condition at the heart of this case, he explained, is “unique” in U.S. law, which would allow a “very narrow” decision for the U.S.-based NGOs.

A decision in the case is expected by summer.

This post was originally published at Howe on the Court.

Recommended Citation: Amy Howe, Argument analysis: Justices debate constitutionality of funding condition by phone, SCOTUSblog (May. 5, 2020, 1:27 PM),