Supreme Court Decides Agency for International Development, et al. v. Alliance for Open Society International, Inc., et al.

On June 29, 2020, the Supreme Court of the United States decided Agency for International Development, et al. v. Alliance for Open Society International, Inc., et al., No. 19-177, holding that Congress may lawfully condition American foreign aid on a foreign organization’s ideological commitments because foreign organizations operating abroad have no First Amendment rights.

During the George W. Bush administration, the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act, which is referred to simply as the Leadership Act, was passed into law. The Leadership Act launched “the largest international public health program of its kind ever created,” 22 U.S.C. § 7601(29), and under it, Congress has allocated billions of dollars to American and foreign organizations fighting the diseases. But to be eligible for the American dollars, the Leadership Act mandates that each organization has, or adopts, a “policy explicitly opposing prostitution and sex trafficking.” Id. § 7631(f ).

Plaintiffs are American organizations with foreign affiliate organizations — and resident and foreign organizations alike receive Leadership Act funding. Plaintiffs prefer not to take a public stance opposing prostitution and sex trafficking. And in 2013, the Supreme Court held in the first iteration of this issue that Plaintiffs are not subject to the Leadership Act’s policy-statement requirement because Congress cannot, consistent with the First Amendment, “deny a benefit to a person on a basis that infringes his constitutionally protected . . . freedom of speech.” Agency for Int’l Development v. Alliance for Open Society Int’l, Inc., 570 U. S. 205, 214 (2013) (AOSI I) (internal quotation marks omitted).

AOSI I exempted only American organizations. Plaintiffs sued again, this time on behalf of their foreign affiliates, again invoking the First Amendment to bar the Leadership Act’s policy requirement. The U.S. District Court for the Southern District of New York agreed with Plaintiffs’ position and prohibited the Government from requiring Plaintiffs’ foreign affiliates to have or adopt a policy against prostitution and sex trafficking. The U.S. Court of Appeals for the Second Circuit affirmed over a dissent by Judge Straub, who thought it was “startling” that the First Amendment could extend to foreign organizations operating abroad.

The Supreme Court granted certiorari and reversed based on “two bedrock principles of American law.” First, foreign citizens do not have rights under the U.S. Constitution. And second, separately incorporated organizations are distinct legal entities with their own legal rights and obligations. Thus, Plaintiffs’ foreign affiliates — who are incorporated in other countries and operate abroad — did not possess their own First Amendment rights.

The Court rejected Plaintiffs’ argument that their foreign affiliates should somehow benefit from the First Amendment rights that AOSI I held protect Plaintiffs as American citizens. Plaintiffs tried two theories. They first argued that requiring their foreign affiliates to have a policy against prostitution and sex trafficking may be incorrectly attributed to them, and their own First Amendment rights protect them against this misattribution. The Court disagreed. The Government couldn’t force Plaintiffs to affiliate with a message, or in this case a foreign organization required to carry a certain message, but the affiliation affecting Plaintiffs wasn’t compelled at all. It was wholly voluntary.

Plaintiffs alternatively argued that the question had already been resolved in AOSI I. In their view, the Court’s holding in AOSI I was broad enough to cover their foreign affiliates. Again, the Court disagreed. Its 2013 decision applied only to American organizations, and it did not purport to facially invalidate the Leadership Act’s condition on funding.

Justice Kavanaugh delivered the opinion of the Court, in which Chief Justice Roberts and Justices Thomas, Alito, and Gorsuch joined. Justice Thomas filed a concurring opinion, and Justice Breyer filed a dissenting opinion in which Justices Ginsburg and Sotomayor joined. Justice Kagan took no part in the consideration or decision of the case.