Breaking Down the Combating BDS Act of 2019 and First Amendment Challenges to State Anti-BDS Laws

On Feb. 5, the Senate passed a package of Middle East policy bills, including the Combating BDS Act of 2019. The act, which would affect laws on the books in 26 states that prevent state and local governments from doing business with entities that boycott Israel, has reignited debate over whether lawmakers’ efforts to stymie the boycott, divestment and sanctions (BDS) movement against Israel violate the First Amendment. This post examines the bill passed by the Senate and tracks ongoing litigation against state anti-BDS laws in federal courts.

The Strengthening America’s Security in the Middle East Act of 2019

On the first day of the 116th Congress, Sens. Marco Rubio, R-Fla., James Risch, R-Idaho, Cory Gardner, R-Colo., and Mitch McConnell, R-Ky., introduced S.1, the Strengthening America’s Security in the Middle East Act, a package of four Middle East policy bills that died in the last Congress. Three of the act’s four sections were relatively uncontroversial: One codified a 2016 agreement guaranteeing Israel $38 billion in security assistance over 10 years, another reauthorized defense cooperation with Jordan through 2020, and the third added sanctions on the Syrian regime and those that do business with it.

The fourth section, entitled the Combating BDS Act, was more controversial. According to a press release from Sen. Rubio, it would “empower state and local governments in the United States to counter the anti-Israel boycott, divestment and sanctions movement’s discriminatory economic warfare against the Jewish state.” Senate foreign relations committee Chairman Risch added that the bill “is vital to ... end discrimination against Israel.”

After the package was introduced, critics voiced strong concern. The ACLU and Sens. Bernie Sanders, I-Vt., and Rand Paul, R-Ky., criticized the bill on the grounds that economic boycotts are protected by the First Amendment. Sen. Rubio and newly elected Rep. Rashida Tlaib, D-Mich., also traded barbs on Twitter over the constitutionality of laws restricting boycotts of Israel.

The Combating BDS Act is a top legislative priority of the American Israel Public Affairs Committee (AIPAC), which published a memo asserting that “[t]he legislation in no way impedes the right of any American to boycott or criticize Israel.” Others have disagreed with this reading of the legislation. Lara Friedman of the Foundation for Middle East Peace, who tracks Israel-related legislation in Congress, offered a “fact-check” of the AIPAC memo, writing: “The purpose of the [Combating BDS Act] is to give political and legal cover to, and encouragement for, state laws that violate the First Amendment of the Constitution.”

In early January, a week after the bill was introduced, Senate Democrats blocked a Republican effort to move the package forward, arguing that the then-ongoing government shutdown should be resolved first. Commenting on the politics of the Senate debate during the shutdown, the Washington Post’s Josh Rogin observed: “McConnell is attempting to show that, on Israel, Republicans are actually largely in agreement, whereas Democrats have a growing problem. The political battle over foreign policy leading up to 2020 has begun, and McConnell just fired the opening salvo.”

On Feb. 5, the Senate passed S.1, with an amendment rebuking the Trump administration’s proposed withdrawal of troops from Syria and Afghanistan, by a vote of 77 to 23. Of the 22 Democrats (including several 2020 hopefuls) who voted no alongside Sen. Paul, many cited First Amendment concerns. Attempting to preempt those arguments before the vote, Sen. Rubio made the case on the New York Times op-ed page that:

The Combating B.D.S. Act does not infringe on Americans’ First Amendment rights or prohibit their right to engage in boycotts .... Rather, the bill merely clarifies that entities—such as corporations, companies, business associations, partnerships or trusts—have no fundamental right to government contracts and government investment.

The Combating BDS Act of 2019

The operative provisions of the Combating BDS Act would establish that state and local anti-BDS laws that meet certain conditions are not preempted by federal law. The act itself mirrors provisions in the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 that similarly provide a safe harbor against federal preemption claims for state and local laws that authorize divestment from companies doing business in Iran.

The text of the act establishes that state and local measures designed to “divest the assets ..., prohibit investment ..., or restrict contracting” with an entity that “knowingly engages” in “commerce that is intended to penalize, inflict economic harm on, or otherwise limit commercial relations with Israel or persons doing business in Israel or Israeli-controlled territories for purposes of coercing political action by, or imposing policy positions on, the Government of Israel” are not preempted by federal law if they comply with the requirements in Section 402(c). While not addressed explicitly in the act, this provision may in turn increase the odds that relevant state and local laws that do not meet the act’s requirements are federally preempted, making the act something of a double-edged sword.

Notably, the act would hold boycotts against Israel and Israeli-controlled territories as equivalent, mirroring language from the Trade Facilitation and Trade Enforcement Act of 2015, which included provisions designed to oppose boycotts against Israel. In a signing statement, President Obama voiced opposition to such language. “[C]onflating Israel and ‘Israeli-controlled territories,’ [is] contrary to longstanding bipartisan United States policy, including with regard to the treatment of settlements,” the statement read.

To fall under the act’s Section 402(e), which establishes that a “measure of State or local government ... is not preempted by any Federal law,” not-yet-enacted state and local laws must incorporate a number of procedural steps that may be intended to insulate them against due process-related claims. Specifically, Sections 402(c)(1) and (2) require that states give written notice and then wait 90 days before divesting or declining to enter into a contract. Section 402(c)(3) provides private entities an opportunity to comment in writing in response to the government’s actions. If the entity can show that it has not “knowingly engaged” in a boycott, then the state cannot apply the sanction. (Section 402(h)(4) defines the term “knowingly” as meaning that “a person has actual knowledge, or should have known ....”) And Section 402(c)(4) makes clear that a state can require a prospective contractor to disclose any involvement in a boycott of Israel before agreeing to do business.

For already-enacted state and local laws, Section 402(f) establishes that they must comply with the above requirements within two years of the bill’s enactment to fall under the Section 402(e) protection.

The act also contains several other provisions worth noting. Section 403(d) would require states to report a description of their laws to the Department of Justice. Section 403(h) slightly narrows the scope of the act by explicitly defining the words “assets,” “investments” and “knowingly,” in addition to offering an exemption. Finally, Section 403(g)(2) affirms that the act does not disrupt the long-standing U.S. policy that the Arab-Israeli conflict can “only be resolved through direct negotiations between the parties.”

Legal Challenges to State Anti-BDS Laws

While the Combating BDS Act appears primarily intended to address preemption and perhaps due process challenges to state and local anti-BDS laws, plaintiffs’ legal challenges have thus far centered on the First Amendment. The ACLU has filed lawsuits in federal courts in Arizona, Arkansas, Kansas and Texas, while the Council on American-Islamic Relations (CAIR) has done the same in Maryland and Texas.

The courts in Kansas and Arizona struck down anti-BDS laws at issue as unconstitutional, while the federal court in Arkansas dismissed the plaintiffs’ challenge in January. In Texas, the district court consolidated the ACLU and CAIR lawsuits and has set a motions hearing for March 29. In the Maryland case, which involves a challenge to an executive order, the state recently filed a motion to dismiss.

The key issue that has divided the district courts that have considered the issue so far is whether NAACP v. Claiborne Hardware Co. or Rumsfeld v. Forum for Academic and Institutional Rights, Inc. (FAIR) should control. Legal commentators have also weighed in on this question.

In the Arkansas case, Arkansas Times v. Waldrip, the district court ruled that boycotts against Israel, as defined by the statute, are not protected by the First Amendment. Relying on FAIR, the court found that boycotts are not protected “inherently expressive conduct” because “a refusal to deal, or particular commercial purchasing decisions, do not communicate ideas through words or other expressive media.” The court similarly concluded that Claiborne was not on point as it “did not ‘address purchasing decisions or other non-expressive conduct’” and instead reached only “meetings, speeches, and non-violent picketing.”

By contrast, the district courts in Arizona and Kansas found that boycotts against Israel, as defined by their states’ respective statutes, are protected by the First Amendment. The Arizona court explained:

The Court agrees that the commercial actions (or non-actions) of one person, e.g., the decision not to buy a particular brand of printer to show support for a political position, may not be deserving of First Amendment protections on the grounds that such action is typically only expressive when explanatory speech accompanies it. However, when a statute requires a company, in exchange for a government contract, to promise to refrain from engaging in certain actions that are taken in response to larger calls to action that the state opposes, the state is infringing on the very kind of expressive conduct at issue in Claiborne. Such a regulation squarely raises First Amendment concerns.

Along this line of reasoning, finding that economic boycotts against Israel are protected by the First Amendment, the two courts determined that FAIR’s holding did not reach the issue at bar.
Both Arkansas Times v. Waldrip and the Arizona case, Jordahl v. Brnovich, are currently on appeal, before the Eighth and Ninth Circuits, respectively. Oral argument in Jordahl will likely be scheduled for this summer, according to the court’s docket. (The Arizona Senate recently passed a bill aimed at circumventing the district court’s decision, but it probably will not significantly affect the constitutional analysis.) The Arkansas Times court recently set a briefing schedule, with the appellant’s opening brief due April 8.

***

Though the Senate passed the Strengthening America’s Security in the Middle East Act in February, the House seems unlikely to take up the bill. A top House Democrat told reporters in January that leadership would not “allow the Senate Republicans to move legislation forward that really is a political stunt.”

In the absence of further movement in Congress, the next action on state anti-BDS laws will be in the circuit courts. Since January, more than 10 amicus briefs have been filed in Jordahl v. Brnovich alone, including one from a group of leading First Amendment scholars who argue that boycotting Israel qualifies as protected speech. “This is an easy First Amendment case,” they told the court. Time will tell if they’re right.