Eighth Circuit Strikes Down Arkansas’s Anti-BDS Law

The U.S. Court of Appeals for the Eighth Circuit on Feb. 12 ruled that an Arkansas law requiring state contractors to pledge not to boycott Israel violates the First Amendment. In a 2-1 panel decision, the majority ruled that the Arkansas law was written so broadly that it would also apply to vendors that support or promote a boycott of Israel—even if they did not engage in a boycott themselves. And the court explained that supporting or promoting boycotts of Israel is constitutionally protected expressive activity. The ruling reversed a January 2019 district court decision, which had dismissed the case, and remanded the case for further proceedings.

The case arose out of a dispute between the Arkansas Times and University of Arkansas Pulaski Technical College (Pulaski Tech). The Times, a monthly alternative newspaper based in Little Rock, filed suit in December 2018 on First and Fourteenth Amendment grounds to prevent Pulaski Tech from requiring the paper to sign a pledge agreeing not to boycott Israel as part of an advertising contract. The Times refused to sign, and as a result the parties did not renew their contract. The newspaper takes no position on boycotts of Israel but argued that it should not be compelled to speak against such boycotts as a condition for receiving a government contract. The state argued that the Arkansas act prohibiting public entities from contracting with companies that boycott Israel prohibited only commercial activities that are not protected by the First Amendment.

Arkansas’s law is similar to restrictions on contracting with entities that boycott Israel enacted in 30 states since 2014, many of which have also been challenged in court. The laws are intended to stymie the pro-Palestinian boycott, divestment and sanctions (BDS) movement against Israel, which aims to force Israel to change its treatment of Palestinians by applying external pressure. The Eighth Circuit’s ruling comes on the heels of legal challenges to similar laws in other states, including Arizona, Georgia, Kansas, Maryland and Texas. In Arizona, Kansas and Texas, federal courts ruled that the anti-BDS laws at issue were unconstitutional under the First Amendment. But each of these states’ anti-BDS laws were later amended to exclude individual contractors and apply only to larger contracts worth more than $100,000.

Arkansas’s Act 710 of 2017

Arkansas’s Act 710, entitled “An Act to Prohibit Public Entities from Contracting with and Investing in Companies That Boycott Israel,” took effect on July 31, 2017. One of the bill’s drafters, Rep. Jim Dotson, said the legislation was a reaction to the BDS movement.

The act prohibits public entities from entering into contracts “to acquire or dispose of services, supplies, information technology, or construction” with a company unless the company certifies that “the person or 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 “boycotts of Israel” in three ways: as (a) “engaging in refusals to deal”; (b) “terminating business activities”; or (c) “other actions that are intended to limit commercial relations with Israel, or persons or entities doing business in Israel or in Israeli-controlled territories.”

Precedent and Lower Court Ruling

A collection of federal courts have considered First Amendment challenges to anti-BDS laws, and the central precedential question at issue in these cases is which of two prior Supreme Court rulings should apply to boycotts of Israel. In NAACP v. Claiborne Hardware Co. (1982), which concerned a boycott of white-owned businesses in Mississippi, the Supreme Court held that a state’s right to regulate economic activity “could not justify a complete prohibition against a nonviolent, politically motivated boycott.” In Rumsfeld v. Forum for Academic and Institutional Rights, Inc. (FAIR) (2006), the court ruled that several law schools’ refusal to allow military recruiters on campus in protest of the military’s then-existing “don’t ask, don’t tell” policy was not protected by the First Amendment. The FAIR court held that the refusal alone was not “expressive conduct.” The expressive component of the action was created “not by the conduct but by the speech that accompanies it.”

In its challenge to the act, the Arkansas Times relied heavily on Claiborne and argued that a boycott of Israel is “necessarily politically motivated” and thus that any effort to restrict their ability to participate in such a boycott would thus be unconstitutional. Relying on FAIR, Arkansas responded that a decision not to purchase Israeli goods could not be understood by others as expressive conduct if it was not combined with speech that explained it.

An Arkansas district court in January 2019 dismissed the Times’s motion for a preliminary injunction and granted the state’s motion to dismiss. The district court ruled that boycotts against Israel, as defined by the statute, are not protected by the First Amendment. The court agreed that boycotts are “neither speech nor inherently expressive conduct” because, under FAIR, refusals to deal or purchase “do not communicate ideas through words or other expressive media” unless accompanied by explanatory speech. The district court ruled that Claiborne did not apply in the current dispute because it did not address “purchasing decisions or other non-expressive conduct” and instead reached only “meetings, speeches, and non-violent picketing.” Under Claiborne, the Times could “call upon others to boycott Israel” or “write in support of such boycotts,” but the district court held that the act was confined only to commercial restrictions and did not prohibit state contractors from engaging in such expressive activities.

Does Arkansas’s Anti-BDS Law Violate the First Amendment?

Overturning the district court, the Eighth Circuit ruled that Act 710 does not solely prohibit commercial activity that lacks expressive or political value but also prohibits “those elements of a boycott, such as speech and association, that we know enjoy First Amendment protection[.]” The court writes:

Considering the Act as a whole, we conclude that the term “other actions” in the definition of “boycott Israel” and “boycott of Israel” encompasses more than “commercial conduct” similar to refusing to deal or terminating business activities. Instead, the Act requires government contractors, as a condition of contracting with Arkansas, not to engage in economic refusals to deal with Israel and to limit their support and promotion of boycotts of Israel. As such, the Act restricts government contractors’ ability to participate in speech and other protected, boycott-associated activities recognized by the Supreme Court in Claiborne.

The court provides three arguments in support of its claim that the phrase “other actions” includes support and promotion of boycotts of Israel. First, the court argues that, in order to determine whether a company is participating in a boycott of Israel, the act permits the state to consider as evidence the company’s “speech and association with others.” Therefore, the act “limit[s] what a company may say or do in support of such a boycott,” a restriction that implicates First Amendment rights. Second, the court argues that the act’s “codified legislative findings” demonstrate that Arkansas intends to avoid contracting with “anyone who supports or promotes” a boycott of Israel. Third, the court argues that, because the pledge presented to the Arkansas Times did not define “boycott of Israel,” a contractor could reasonably conclude that they were also prohibited from supporting or promoting a boycott of Israeli goods. As a result, “[a] contractor that does not want to risk violating the terms of its contract would likely refrain even from activity that is constitutionally protected.”

The panel concludes that the conditions imposed on contractors by the act unconstitutionally burden contractors’ First Amendment rights. Per the court, the conditions are not intended to specify which activities the state wants to subsidize and are, instead, attempts to leverage funding in order to regulate speech. The act thus prohibits contractors from engaging in boycott-related activity “outside the scope of the contractual relationship ‘on its own time and dime,’” the court writes. “Such a restriction violates the First Amendment.”

In a dissenting opinion, Judge Jonathan Kobes denies that the phrase “other actions” includes constitutionally protected activities. He argues that “other actions” should be interpreted as similar to the preceding phrases in the definition of “boycott of Israel” and construed to relate only to commercial activities. Kobes claims that the speech and associations permitted to be used as evidence of boycotting are intended only to establish “the element of intent.” Furthermore, he argues that, because “anyone interested in finding out what conduct is barred can read the definition in Section 502” of Act 710, the state’s certification provides sufficient notice to the contractor of what conduct is prohibited.

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The decision in Arkansas Times v. Waldrip is the fourth time a federal court has blocked an anti-BDS law on First Amendment grounds. The Eighth Circuit’s ruling follows similar rulings in Arizona, Kansas and Texas where federal district courts held that boycotts against Israel involved protected expressive conduct. As a result, these courts enjoined the states from enforcing the anti-BDS laws.

In the aftermath of decisions in Arizona, Kansas and Texas, the legislatures in each state passed bills aimed at adjusting the anti-BDS laws to skirt the district court ruling. Each state enacted changes to the laws that narrowed their scope so that they no longer applied to the plaintiffs, rendering the district courts’ injunctions moot. In Kansas, the amended law removes individuals, sole proprietors, and contracts worth less than $100,000 from the purview of the state’s anti-boycott law. Companies required to sign a pledge must now state only that they are “not currently engaged in a boycott of goods or services from Israel that constitute an integral part of business conducted or sought to be conducted within the state.” In Texas and Arizona, the amendments limit the anti-boycott certification to companies with more than 10 employers and contracts worth more than $100,000.

The ACLU, which represented plaintiffs in each of the four cases, has argued that the scaled-back laws still run afoul of the First Amendment. The ACLU’s Brian Hauss wrote that “[t]hese amendments do nothing to cure the laws’ fundamental defects. The government is still forcing contractors to disavow participation in constitutionally protected boycotts, and it is still using its economic leverage to suppress one side of a public debate.”

Will the Arkansas legislature amend Bill 710 in order to exclude the Arkansas Times from the certification requirement? Who knows. If Arkansas follows other states in imposing a $100,000 floor for contracts subject to the anti-BDS law, the Arkansas Times would likely be exempt from pledging not to boycott Israel. The American Jewish Committee, which has supported anti-BDS legislation and rallied state governors to condemn BDS, wrote on Feb. 12 that it has “already put into motion efforts to facilitate such changes” by limiting the Arkansas statute.

In the meantime, legislators will be watching how Arkansas Times v. Waldrip continues to unfold in the courts. The State of Arkansas plans to file a petition for an en banc review of the panel’s decision and on Feb. 23 was granted a 30-day extension of time to file the petition for rehearing. If the petition is denied, the district court judge will face the task of determining how to enact the Eighth Circuit panel’s decision. Eugene Volokh—who filed an amicus brief on appeal arguing that the anti-BDS law is constitutional—writes that under Arkansas law the phrase “other actions” is severable from the other two prongs of the definition of “boycotts of Israel.” One thing the district court judge might do is grant a preliminary injunction against the “other actions” provision without invalidating either the “engaging in refusals to deal” or “terminating business activities” parts of the law, which could remain in force. But this wouldn’t necessarily resolve the case. If the Arkansas Times appeals a decision not to enjoin the other provisions of Act 710, the Eighth Circuit may have to consider the question it side-stepped in its recent decision: whether the act would violate the First Amendment if it were limited to purely economic activity.