United States Agency for International Development v. Alliance for Open Society International, Inc.

FIRST AMENDMENT RIGHTS AND AFFILIATED ENTITIES

USAID argues that foreign entities operating abroad do not have First Amendment rights, and therefore, the Policy Requirement applies to AOSI’s foreign affiliates. Brief for Petitioner, United States Agency for International Development at 20. Furthermore, USAID explains that Congress is constitutionally authorized to implement conditions in order for organizations to receive federal funds, which includes requiring organizations to comply with certain requirements like the Policy Requirement. Id. at 21. USAID also differentiates the Supreme Court’s holding in Agency for International Development v. Alliance for Open Society International, Inc. by contending that the freedom of speech concerns in the prior case do not apply to foreign recipients of federal funding. Id. In deciding the prior case, the Supreme Court relied on the unconstitutional-conditions doctrine, which states that the government cannot deny benefits to an individual or entity if the basis for that denial infringes on constitutionally guaranteed freedom of speech. Id. at 22. According to USAID, the unconstitutional-conditions doctrine does not apply to foreign affiliates of AOSI because the doctrine can only be used by an entity with constitutional rights. Id. at 23.

AOSI counters that private entities have a right to control their speech. Brief for Respondents, Alliance for Open Society International, Inc. at 30. AOSI explains that the Government cannot force private entities to support ideas against their will by compelling certain speech. Id. at 31. For example, AOSI distinguishes speech restrictions from compelled speech. Id. at 32. It explains that speech restrictions can prevent an organization from explicitly affirming certain views but can only limit this speech within the scope of federal funding, thus remedying the First Amendment violation by permitting the organization to espouse their ideals outside of the federal funding requirements. Id. AOSI contends that compelled speech cannot be remedied in the same manner because the private entity is forced to affirmatively support a view, such as the Policy Requirement, which cannot be cabined into one part of the organization “because the government’s view is inscribed on the organization as a whole.” Id. at 32. In particular, AOSI notes that the organization cannot support one belief due to the Policy Requirement when utilizing Leadership Act funds and then claim a different belief when utilizing the organization’s private funds because compelled speech cannot be limited “to the recipient’s federally funded activities.” Id. at 28. Thus, AOSI argues that their organization is harmed by the Policy Requirement because if foreign affiliates have to espouse a particular belief for Leadership Act funds, that belief will inevitably be cast upon AOSI. Id.

LEGAL DISTINCTION AND ATTRIBUTION

USAID argues that applying the Policy Requirement to AOSI’s foreign affiliates does not violate AOSI’s First Amendment rights because the foreign entities are legally distinct. Brief for Petitioner at 27. USAID further supports this claim by explaining that the domestic and foreign entities cannot be viewed as one unified entity simply because the organizations “share their names, logos, and brands,” especially since the organizations themselves decided to organize as legally distinct entities. Id. at 28. This claim is supported by corporate law principles, according to USAID, because by forming legally distinct entities, these entities are able to have distinct rights and responsibilities such as a lack of liability. Id. USAID also notes that Supreme Court precedent has applied legal distinction in funding-condition cases; and therefore, since these entities are set up as legally distinct, instituting the congressional policy requiring foreign entity recipients of Leadership Act funds to have a policy expressly opposing prostitution and sex trafficking does not infringe on AOSI’s First Amendment rights. Id. at 29. Overall, USAID argues that AOSI and its affiliates decided to maintain legal distinction, and these entities are able to utilize the benefits of that separation, but the entities are not able to disregard this legal distinction in order to avoid the burdens that accompany corporate separation. Id. at 32–33.

Additionally, USAID contends that AOSI’s concern that the organization and its affiliates will appear hypocritical by having differing views regarding prostitution and sex trafficking is unwarranted because there are several ways to mitigate those concerns. Id. at 37. First, USAID explains that AOSI can clarify that their affiliated entities do not speak for them by utilizing “their own speech rights to make clear that no other entity speaks for them on these issues.” Id. at 38. Also, USAID states AOSI could stop utilizing foreign affiliates and instead operate directly in other countries. Id. Finally, USAID posits that AOSI could decide not to have affiliates receive Leadership Act funds, which would mean these entities would not be subject to the Policy Requirement. Id. USAID adds that AOSI has several options in order to ensure statements by foreign affiliates that do not align with AOSI’s policies are not attributed to AOSI; however, USAID argues that AOSI “cannot bootstrap” their First Amendment rights not requiring compliance with the Policy Requirement in order to apply federal funds to its foreign entities operating abroad. Id.

AOSI counters that the legal distinction does not remedy the burden on AOSI posed by compelled speech. Brief for Respondent at 37. AOSI contends that despite all the corporate formalities, a legal burden on one entity can always implicate the First Amendment rights of another independent but “closely related” entity. Id. AOSI notes that there are several compelling reasons that AOSI and its foreign affiliates would be established as legally distinct entities, including, requirements of local incorporation in certain foreign countries and funding eligibility requirements. Id. Furthermore, AOSI explains that the importance of legal distinction is context-dependent because in this case the separation between entities does not remedy the freedom of speech concerns because the belief necessary under the Policy Requirement “easily crosses invisible corporate lines” and thus, is easily attributed to AOSI. Id. at 39.

AOSI further contends that the hypocrisy of views that the Policy Requirement could cause cannot be remedied without infringing on AOSI’s First Amendment rights. Id. AOSI notes that legal distinction does not remedy the First Amendment harm because speech by one legally distinct entity is likely to be attributed to an affiliate, and therefore, legal distinction is “insignificant” in this context. Id. In addition, AOSI posits that the likelihood of attributing speech by one entity to its affiliates is the determinative factor in this case, not whether the entities are legally distinct. Id. at 41. AOSI explains that Supreme Court precedents on government-speech issues have been dependent, in part, on the likelihood that the speech will be attributed to affiliates. Id. at 42. Here, AOSI argues that the scope of the injunction restricts USAID from imposing the Policy Requirement on foreign affiliates that utilize the “same name, logo, and trademark” because attribution is likely to occur. Id. at 42–43. Overall, AOSI contends that legal separation between entities does not remedy USAID’s freedom of speech infringement because speech by foreign affiliates is likely to be attributed to AOSI, and AOSI should be able to organize their entity and affiliates as they see fit without being harmed by the Policy Requirement. Id. at 45.