Alliance for Open Society International, Inc. v. United States Agency for International Development
Docket: No. 05 Civ. 8209
Court: District Court, S.D. New York; January 29, 2015; Federal District Court
Plaintiffs, including Alliance for Open Society International and others, filed a lawsuit against the United States Government agencies, challenging the enforcement of a "Policy Requirement" under 22 U.S.C. Section 7631(f), which mandates organizations to oppose prostitution and sex trafficking to qualify for government grants related to HIV/AIDS and other health initiatives. The court granted a preliminary injunction against this enforcement, citing potential irreparable harm and infringement on the Plaintiffs' First Amendment rights, a decision later upheld by both the Second Circuit and the United States Supreme Court.
On September 23, 2014, Plaintiffs requested a pre-motion conference to convert the preliminary injunction into a permanent one, alleging that the Government had not complied with the Supreme Court's ruling. A conference was held on October 16, 2014, where the court instructed both parties to provide supporting documentation. Six key issues were identified for resolution:
1. Whether the Government has properly exempted Plaintiffs from the Policy Requirement per the preliminary injunction.
2. Whether the language in USAID’s requests for proposals (RFPs) and applications (RFAs) is confusing enough to inhibit free speech.
3. Whether the Supreme Court's ruling regarding the injunction applies solely to domestic affiliates of the Plaintiffs or also includes foreign affiliates.
4. Whether the preliminary injunction necessitates that the Government explicitly exempt Plaintiffs from the Policy Requirement in all official communications beyond RFPs and RFAs.
5. Whether the Supreme Court deemed the Policy Requirement unconstitutional on its face, thereby barring enforcement against all domestic non-government organizations, or if it was unconstitutional only as applied to the Plaintiffs.
6. Whether the Plaintiffs have satisfied the criteria for a permanent injunction.
The Government claims compliance with the Court's preliminary injunction by refraining from enforcing the Policy Requirement against the Plaintiffs and including language in grant contracts that exempts them from this requirement. All parties acknowledge that the Policy Requirement has not been enforced against the Plaintiffs, and there is a consensus that Requests for Proposals (RFPs) and Requests for Applications (RFAs) should clearly indicate this exemption. However, there is contention over whether all RFPs and RFAs currently include the necessary exemption language and whether updates have been made promptly. Plaintiffs have provided examples of RFPs and RFAs issued post-Supreme Court ruling that lack the exemption.
Furthermore, the language used by USAID to communicate the Plaintiffs' exemption is contested. Plaintiffs argue that USAID's wording is confusing and could unconstitutionally deter affiliates from applying for Leadership Act grants, suggesting an expectation of rejection due to the Policy Requirement. Conversely, USAID contends that its language is clear and does not inhibit potential applicants. The language in question outlines prohibitions related to prostitution and sex trafficking while specifying exemptions for certain organizations. The Government is instructed to ensure that all RFPs and RFAs referencing the Policy Requirement explicitly include the exemption for Plaintiffs.
Plaintiffs argue that the language used by HHS to exempt them from the Policy Requirement is sufficiently clear. HHS states that a standard term will be included in the final award notice, prohibiting the use of awarded funds to promote prostitution or sex trafficking. Non-U.S. NGOs face an additional requirement to oppose these practices. The Court finds that while HHS’s language is clearer than USAID's, USAID’s language does not rise to a level that would confuse applicants into believing the Policy Requirement applies to them, nor does it violate the First Amendment. The Court asserts that the Constitution does not demand perfect clarity in government contracts.
Regarding the scope of the Supreme Court's ruling on affiliates, Plaintiffs contend that the Supreme Court determined a domestic NGO cannot be compelled to express a policy contrary to that of its affiliates, which they argue applies to both domestic and foreign affiliates. The Government counters that the Supreme Court's discussion solely pertains to domestic affiliates, suggesting NGOs could mitigate the Policy Requirement's impact by establishing domestic affiliates to express opposing views or by declining funding while allowing affiliates to receive Leadership Act funds. The Court concludes that neither approach effectively addresses the constitutional concerns raised.
Affiliates play a crucial role for organizations subject to funding conditions, enabling them to exercise First Amendment rights independently of federal programs. However, if a funding recipient is required to adopt a specific belief, affiliates cannot facilitate this expression. Distinct affiliates do not allow for authentic belief expression, while closely associated affiliates force the recipient into a position of hypocrisy. The Supreme Court has ruled that a domestic NGO's free speech rights are violated when it must choose between complying with a policy that mandates specific speech or risking hypocrisy by opposing an affiliate's stance. This violation occurs regardless of whether the affiliate is foreign or domestic, as it is the NGO’s constitutional rights that are protected. Thus, the government cannot compel compliance with the Policy Requirement from the Plaintiffs or their affiliates.
Additionally, a 2006 preliminary injunction prohibits the government from terminating or denying funding based on the Policy Requirement and mandates that any relevant agreements include an exemption stating that enforcement of the Policy Requirement during the injunction period is subject to the order. While all parties agree that exemptions must be included in Requests for Proposals (RFPs) and Requests for Applications (RFAs), they disagree on whether this applies to Other Communications. Plaintiffs argue for the necessity of including exemptions in Other Communications, citing the same rationale as for RFPs and RFAs. Conversely, the Government contends that the injunction does not explicitly mention Other Communications and that they are not legally binding funding documents, thus not violating the injunction by including the Policy Requirement without an exemption.
The preliminary injunction aims to prevent the Government from infringing upon protected speech by imposing a Policy Requirement that discourages domestic NGOs from applying for grants under the Leadership Act. This chilling effect arises when organizations refrain from applying for funding due to the belief that they will be denied grants for non-compliance with the Policy Requirement, a perception influenced by the Government's communications. The record indicates that many NGOs were deterred from responding to funding solicitations, fearing the Policy Requirement would prevent their eligibility. Letters from Plaintiffs to the Government highlighted instances where solicitations still required compliance with the Policy Requirement, contradicting the injunction. This situation led many organizations to opt-out of applying for funding altogether.
The Court notes that including the Policy Requirement in solicitations without acknowledging the exemption for the Plaintiffs could deter applications, while the burden on the Government to include exemption language is minimal. Therefore, the Court concludes that the Government must incorporate the exemption in future communications.
Additionally, the Plaintiffs argue that the Supreme Court deemed the Policy Requirement unconstitutional on its face, as it compels NGOs to affirm beliefs incompatible with the Government program's intent, thus violating the First Amendment. The Court anticipates that enforcing the Policy Requirement against any domestic NGOs would similarly infringe upon their constitutional rights. If the Government seeks to apply the Policy Requirement to any organizations, it must justify how such enforcement would not conflict with the Supreme Court's ruling or this Court's decisions.
A permanent injunction requires proof of irreparable harm and actual success on the merits. The Court has established that irreparable harm exists in this case and has now determined there is actual success on the merits, as enforcing the Policy Requirement against a domestic NGO or its affiliates infringes upon their First Amendment rights. Consequently, the Court orders that the Government is permanently enjoined from issuing any official communications that enforce the Policy Requirement without a clear exemption for the Plaintiffs and their affiliates. The Government is further prohibited from applying the Policy Requirement to the Plaintiffs or their affiliates. Requests from the Plaintiffs for alternative language in grant contracts, for the payment of fees and costs, and for fines for future violations are all denied. Additionally, the Government is required to show cause as to why it should not be barred from enforcing the Policy Requirement against any organization and why its continued application would not contravene the Supreme Court's decision. The Court advises USAID to consider adopting the clearer language used by HHS to prevent confusion and controversy.
