Federal Appeals Court Upholds Anti-BDS Texas Law, Agreeing With ACLJ Arguments in Defense of Israel’s Interests

On Monday, the Fifth Circuit Court of Appeals in A& R Engineering v. Scott ruled that the state of Texas can continue to enforce its anti-BDS (Boycott, Divestment, and Sanctions) law, which is aimed at curbing discriminatory practices against Israel and safeguarding U.S. companies. The Court dismissed the case on jurisdictional grounds and removed an injunction that had been wrongfully imposed by the lower court.

The ACLJ had filed an amicus brief in this case (as we have done in several other BDS-related cases across the country), defending the constitutionality of the statute. The Fifth Circuit’s latest decision makes it the third circuit court of appeals this year alone to uphold anti-BDS statutes (following opinions by the Eighth and the Eleventh Circuits), and the practical outcome of these combined rulings is that every single one of the anti-BDS regulations that now exist in some 37 states that have been challenged have been successfully defended and remain in full effect.

In our brief, we argued that the BDS movement operates as a coordinated, sophisticated effort to disrupt the economy of the State of Israel, with the ultimate goal of destroying the sovereign nation altogether. It uses the threat of withdrawing financial support in an effort to coerce companies or other entities to cease or refuse to engage in business relations with Israel, its nationals, and its residents. Moreover, it often intentionally targets for discrimination people who are Jewish or who do business with persons who are Jewish.

In its objectives, activities, and effects, the BDS movement is by definition antisemitic.

The Texas law, which passed unanimously in the Texas House and with overwhelming support in the Senate, prohibits the state from contracting with companies that discriminatorily boycott Israel. The language in the statute makes clear that it only regulates non-expressive commercial activity. The law was amended in 2019 to exclude individual contractors and narrowed to apply only to state contracts with companies that have more than 10 full-time employees and when the contract is worth more than $100,000.

The state of Texas does a tremendous amount of business with Israel. Simply put, it makes bad business sense for the state to contract with suppliers and others who are actively engaged in an economic boycott of one of Texas’ largest business partners. The law is a clear example of constitutional government speech occurring in the context of a governmental spending program (i.e., commercial contracting for goods and services) within which the state of Texas has determined which agendas and viewpoints it will and will not support as a commercial operator. The government is not required to remain viewpoint-neutral in such circumstances. Instead, it is permitted to take or not take a position of its own. In this case, the state of Texas has merely chosen not to fund, through commercial contracts, companies that participate in an activity at odds with the state’s own commercial policies and interests – the boycott of Israel, its businesses, and its people.

To the extent that private speech is even implicated here, the statute has no unconstitutional chilling effect, nor does it unconstitutionally compel private speech, as no one is compelled to contract with the state in the first instance. Further, any private individual, acting in a personal capacity and according to a personal choice, may boycott the State of Israel and may engage in related speech of their choosing. They just cannot do so and expect their customer – the state of Texas, a trade ally of the State of Israel – to continue to contract with them or their business.

No one is being asked to relinquish any speech rights; rather, the terms of the statute merely confirm that the state’s commercial contracting funds are authorized to be spent only in furtherance of the commercial policies and interests of the state. Contracting with companies that wish to undermine those interests – unremarkably – is therefore not authorized.

The relationship between Israel and Texas has led to quantifiable financial gains, advances in technology, environmental developments, and any of a number of successful partnership enterprises that make it in the best interest of Texas for the parties to maintain a healthy relationship. It would be absurd to think that the state of Texas cannot refrain from doing official commercial business with companies that boycott one of the state’s key trade partners. Forcing the state to strain this relationship would be asking the government to act against its own interests. No constitutional provision or law requires such an absurd result.

Because the purpose of the law challenged here is a legitimate expression of state and national policy in foreign relations and commerce, i.e., government speech, there is no First Amendment violation. The same is true for all 37 states that have similar provisions in their own funding requirements and agreements. For those reasons and more, we argued that the court should uphold the Texas statute.

To date, the Supreme Court has not decided to take the issue up on certiorari and given the consensus amongst the circuit courts, it is possible that they never will. But if and when they ever do, we will be there to continue fighting to protect the interests of American citizens and our closest ally, Israel.