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

United States Court of Appeals, Second Circuit

December 20, 2018

ALLIANCE FOR OPEN SOCIETY INTERNATIONAL, INC., OPEN SOCIETY INSTITUTE, PATHFINDER INTERNATIONAL INC., GLOBAL HEALTH COUNCIL, and INTERACTION, Plaintiffs-Appellees,
v.
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT, MARK GREEN, in his official capacity as Administrator of the United States Agency for International Development, ROBERT R. REDFIELD, in his official capacity as Director of the United States Centers for Disease Control and Prevention, and his successors, ALEX M. AZAR II, in his official capacity as Secretary of the United States Department of Health and Human Services, and his successors, UNITED STATES CENTERS FOR DISEASE CONTROL AND PREVENTION, and UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendants-Appellants. [*]

          Argued: May 17, 2018

          Appeal from the United States District Court for the Southern District of New York No. 05 Civ. 8209 (VM), Victor Marrero, District Judge, Presiding.

         Plaintiffs are several domestic organizations that receive government funds to assist their efforts to fight HIV/AIDS abroad, often through legally distinct affiliates. The funds come with the condition that "[n]o funds . . . be used to provide assistance to any group or organization that does not have a policy explicitly opposing prostitution and sex trafficking." 22 U.S.C. § 7631(f). The Supreme Court concluded that this requirement compels speech in violation of the First Amendment. Agency for Int'l Dev. v. Alliance for Open Soc. Int'l, Inc., 570 U.S. 205 (2013). After the Supreme Court's decision, when the Government continued to apply this requirement to plaintiffs' foreign affiliates, plaintiffs sought permanent injunctive relief. The United States District Court for the Southern District of New York (Marrero, J.) granted a permanent injunction. We affirm.

          Benjamin H. Torrance, David S. Jones, for Geoffrey S. Berman, U.S. Attorney's Office, S.D.N.Y., New York, N.Y., for appellants United States Agency for International Development, Mark Green (Administrator of USAID, in his official capacity), United States Centers for Disease Control and Prevention, Robert R. Redfield (Director, U.S.C.D.C., in his official capacity), United States Department of Health and Human Services, Alex M. Azar II, (Acting Secretary, U.S.H.H.S., in his official capacity).

          David W. Bowker, Catherine M.A. Carroll, Ari J. Savitsky, David A. Stoopler, Kevin M. Lamb, Jason D. Hirsch, Jonathan E. Barbee, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, D.C. and New York, N.Y., for appellees Alliance for Open Society International, Inc., Open Society Institute, Pathfinder International, Global Health Council, InterAction.

          Before: STRAUB, POOLER, and PARKER, Circuit Judges.

          BARRINGTON D. PARKER, CIRCUIT JUDGE.

         In Agency for International Development v. Alliance for Open Society International, Inc., 570 U.S. 205 (2013) ("AOSI"), the Supreme Court held that a provision of the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 (the "Leadership Act"), 22 U.S.C. § 7601 et seq., which required that recipients of funds appropriated under the Act affirmatively adopt a policy explicitly opposing prostitution and sex trafficking violated the First Amendment. The Court determined that this condition, known as the Policy Requirement, could not be applied to plaintiffs because, as Chief Justice Roberts stated, it "compels as a condition of federal funding the affirmation of a belief that by its nature cannot be confined within the scope of the Government program." AOSI, 570 U.S. at 221.

         The Government subsequently interpreted the Supreme Court's opinion as allowing the Policy Requirement to continue to be applied to foreign affiliates. Plaintiffs disagreed and sought and obtained a permanent injunction in the District Court, which concluded that AOSI did not allow the Policy Requirement to be applied to plaintiffs' foreign affiliates. The Government appeals and we are required to determine the narrow issue of whether the Government's reading of the Supreme Court's decision is correct. We agree with the District Court that the Government's reading is foreclosed by that opinion and, consequently, we affirm the order below.

         BACKGROUND

         The background of this litigation is well known and fully described in the various judicial decisions that have been issued: the Honorable Victor Marrero's thorough and well reasoned decision in 2006, our 2011 opinion affirming him, and the Supreme Court's 2013 opinion affirming us. See Alliance for Open Soc'y Int'l v. U.S. Agency for Int'l Dev., 430 F.Supp.2d 222 (S.D.N.Y. 2006); Alliance for Open Soc. Int'l, Inc. v. U.S. Agency for Int'l Dev., 651 F.3d 218 (2d Cir. 2011); AOSI, 570 U.S. 205 (2013). We recount here only the background necessary for understanding this appeal.

         In 2003, Congress passed the Leadership Act, which authorized the appropriation of billions of dollars to nongovernmental organizations to assist the worldwide fight against HIV/AIDS and other diseases. The Leadership Act contains the Policy Requirement, which states that "[n]o funds . . . may be used to provide assistance to any group or organization that does not have a policy explicitly opposing prostitution and sex trafficking." 22 U.S.C. § 7631(f).

         Plaintiffs are several domestic organizations that fight HIV/AIDS abroad. Many plaintiffs carry out their aid work through legally distinct affiliates that together constitute global families of closely aligned entities. For example, plaintiff InterAction is a network of U.S.-based humanitarian organizations and contains, as a member, the domestic entity Save the Children Federation, Inc., which is a part of the global set of entities operating as Save the Children, an international aid organization that focuses on children's health. Save the Children Federation, Inc., in turn, is part of the Save the Children Association, a non-profit Swiss association that owns the Save the Children logo and maintains criteria for Save the Children members. There are over 30 distinct Save the Children entities incorporated around the world in addition to in the United States, such as in Australia, Brazil, Canada, India, Japan, Norway, South Africa, Spain, and Swaziland. These entities comprise Save the Children, and share the same name, logo, brand, and mission, even though they are distinct legal entities incorporated in various jurisdictions worldwide.

         As plaintiffs explain and the record reflects, maintaining a unified global identity, branding, and approach enhances the ability of an organization like Save the Children to perform its aid mission. Moreover, various legal and administrative considerations encourage (and sometimes require) such international aid organizations to operate as formally legally distinct entities, despite otherwise being unified. As an example, the president and chief executive officer of plaintiff Pathfinder International attested that defendant United States Agency for International Development ("USAID") gives preference for Leadership Act contracts to NGOs that are incorporated outside the United States and sought to increase direct partnerships with local organizations in order to enhance the long-term effectiveness of aid delivery. USAID also limits a significant number of potential grants to organizations incorporated outside of the United States. Moreover, some foreign governments require NGOs to be incorporated in their countries in order to be permitted to undertake public health work there. Overall, factors such as these have caused international aid organizations to be organized as formally legally distinct entities while operating with a unified and consistent identity, mission, and work. As a consequence, these organizations appear to the public as unified entities. Throughout this litigation, plaintiffs have emphasized that, while they do not support prostitution, they would not include in their mission statements a policy officially expressing an opposition to prostitution because, among other things, effectively fighting diseases like HIV/AIDS often requires direct involvement with sex-worker communities.

         In 2005, plaintiffs sued to enjoin the Government's implementation of the Policy Requirement. As noted, the District Court issued a preliminary injunction, which we affirmed on appeal.[1] The Supreme Court granted certiorari and also affirmed, holding that "[t]he Policy Requirement compels as a condition of federal funding the affirmation of a belief that by its nature cannot be confined within the scope of the Government program. In so doing, it violates the First Amendment and cannot be sustained." AOSI, 570 U.S. at 221.

         After the Supreme Court's decision, the Government nevertheless continued to apply the Policy Requirement to plaintiffs' foreign affiliates. In January 2015, after receiving letter briefing, the District Court converted its preliminary injunction to a permanent injunction barring the Government from imposing the Policy Requirement on plaintiffs or their affiliates. The Government appealed, and we stayed the permanent injunction pending this appeal.

         STANDARD OF REVIEW

         A district court's decision to issue a permanent injunction is reviewed for abuse of discretion, as "[t]he decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court." eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006); see also, e.g., Knox v. Salinas, 193 F.3d 123, 128-29 (2d Cir. 1999) (per curiam). A district court commits an abuse of discretion when it "(1) bases its decision on an error of law or uses the wrong legal standard; (2) bases its decision on a clearly erroneous factual finding; or (3) reaches a conclusion that, though not necessarily the product of a legal error or a clearly erroneous factual finding, cannot be located within the range of permissible decisions." Klipsch Grp., Inc. v. ePRO E-Commerce Ltd., 880 F.3d 620, 627 (2d Cir. 2018) (internal quotation marks omitted). We review questions of law de novo. See ACORN v. United States, 618 F.3d 125, 133 (2d Cir. 2010).

         DISCUSSION

         I.

         The narrow issue before this Court is whether applying the Policy Requirement to plaintiffs' closely aligned foreign affiliates violates plaintiffs' own First Amendment rights. The Supreme Court's decision considered this question and resolved it in plaintiffs' favor. Consequently, we conclude that the District Court did not abuse its discretion in issuing its permanent injunction.[2]

         In AOSI, the Supreme Court explained that requiring the recipient of government funds to adopt the Government's view on the issue of prostitution and sex trafficking was a violation of plaintiffs' First Amendment rights. 570 U.S. at 219. The Court's opinion focused on the distinction "between conditions that define the federal program and those that reach outside it," id. at 217, and the Court explicitly considered the role that affiliates of a funded organization can play in that dichotomy, id. at 219. It noted that where a funded organization's speech was limited by a federal program, the funded organization could employ affiliates outside the federal program to exercise its First Amendment rights. Id. In so reasoning, the Court explicitly recognized that organizations exercise their First Amendment rights through their affiliates. Id.

         The Court therefore made clear that forcing an entity's affiliate to speak the Government's message unconstitutionally impairs that entity's own ability to speak. As Chief Justice Roberts noted, where, as here, an affiliate is "clearly identified" with the recipient of government funds, the recipient can express beliefs that contradict the speech of its affiliate "only at the price of evident hypocrisy." Id.[3] Applying the Court's holding in AOSI to the present iteration of this case as we must, we hold that the speech of a recipient who rejects the Government's message is unconstitutionally restricted when it has an affiliate who is forced to speak the Government's contrasting message.[4]

         These principles decide this appeal. Here, the affiliates are clearly identified with plaintiffs, and to require the affiliates to abide by the Policy Requirement would require the closely related-and often indistinguishable-plaintiffs to be seen as simultaneously asserting two conflicting messages. This is the "evident hypocrisy" to which the Chief Justice referred: when the Government requires contrasting, hypocritical messages between domestic and foreign affiliates by making one speak the Government's message, this requirement infringes the speech of the domestic affiliate and, in so doing, violates the First Amendment. Id. Indeed, the Government itself acknowledges that forced hypocrisy can impair an entity's ability to speak: "It may be true that when two organizations are closely linked, in some circumstances the speech of one can be seen as the speech of both." See Gov't Reply at 9.

         The Government's arguments in this appeal are unpersuasive. It mainly contends that foreign organizations like plaintiffs' affiliates do not possess First Amendment rights. But the Government as well as our dissenting colleague misunderstands the Supreme Court's decision in AOSI. It is the First Amendment rights of the domestic plaintiffs that are violated when the Policy Requirement compels them to "choose between forced speech and paying 'the price of evident hypocrisy.'" All. for Open Soc'y Int'l, Inc. v. U.S. Agency for Int'l Dev., 106 F.Supp.3d 355, 361 (S.D.N.Y. 2015) (quoting AOSI, 570 U.S. at 219).

         The Government also contends that the contrasting speech between domestic and foreign affiliates is irrelevant because, following the Supreme Court's decision, the Policy Requirement may no longer be applied to domestic organizations, and so domestic organizations may now say what they want and still receive government funds. But this argument also misses the point. It is the domestic organization's speech, not its funding, that is at stake when its affiliate is forced to speak the Government's message. If the Government is right, then Chief Justice Roberts was wrong. We part ways with our dissenting colleague because we believe that it is the Supreme Court's decision and not the Government's brief that controls this appeal.

         The Government finally argues that our decisions in Planned Parenthood Federation of America, Inc. v. Agency for International Development, 915 F.2d 59 (2d Cir. 1990) and Center for Reproductive Law & Policy v. Bush, 304 F.3d 183 (2d Cir. 2002), which upheld a funding condition requiring foreign organizations to agree not to promote abortion, require us to vacate the injunction. These cases, however, are of little help to the Government. In Center for Reproductive Law & Policy, we identified the "thrust of the claim" as that because of the government's funding conditions, "foreign NGOs are chilled from interacting and communicating with domestic abortion rights groups such as plaintiff CRLP, thus depriving plaintiffs of the rights to freedom of speech and association in carrying out the mission of the organization." Center for Reprod. Law & Policy, 304 F.3d at 188. The foreign NGOs at issue were mere potential partners of the plaintiffs; they were not affiliated. In contrast, here the foreign NGOs and plaintiffs are not just affiliates-they are homogenous. Plaintiffs share their names, logos, and brands with their foreign affiliates, and together they present a unified front. This sameness creates the risk of evident hypocrisy that motivated the Supreme Court to find a First Amendment violation. AOSI, 570 U.S. at 219. With the Supreme Court's articulation of "evident hypocrisy" as our lodestar, Center for Reproductive Law & Policy did not address the role of closely affiliated foreign NGOs and cannot decide today's result.

         Nor can Planned Parenthood. In that case, the government refused to fund foreign NGOs who offered abortion as a family-planning technique. We weighed allegations "that it is impractical for United States citizens or organizations to engage in abortion-related activities abroad without the cooperation of foreign organizations and that the Standard Clause deters many of the most logical and effective foreign partners." Id. at 64 (internal quotation marks omitted). But critically, the government did not request that foreign NGOs explicitly adopt a policy of not advocating for abortion. As such, the domestic NGOs and partner foreign NGOs were not compelled to make contradictory statements regarding their core objectives as plaintiffs and their foreign affiliates are in this case.

         The policies in these cases did not compel speech, did not involve closely identified organizations, and, unlike this case, did not burden the free speech rights of domestic organizations. Planned Parenthood, 915 F.2d at 64. We therefore hold that the District Court did not abuse its discretion in enjoining the Government from imposing the Policy Requirement on plaintiffs' closely aligned foreign affiliates.

         II.

         The Government also argues that the District Court violated Federal Rule of Civil Procedure 65 by imposing the permanent injunction on the basis of letter briefing and in the absence of a formal motion and a full hearing. The Government also argues that the injunction is unclear because its reference to plaintiffs "or their domestic and foreign affiliates" is imprecise. We see no abuse of discretion.

         There is no requirement that a District Court must wait for a formal motion and hold a hearing to issue a permanent injunction. This conclusion is, in our view, particularly sound in a case such as this, involving nearly a decade of litigation, multiple appeals and resolution by the Supreme Court. In any event, Rule 65 requires hearings for only preliminary injunctions, not permanent injunctions. Beck v. Levering, 947 F.2d 639, 641-42 (2d Cir. 1991) (per curiam) ("Appellants contend that [Rule 65] requires that an evidentiary hearing be held in order to issue a permanent injunction. However, Rule 65 requires hearings for preliminary injunctions, not permanent injunctions.").

         Nor does the injunction violate Rule 65(d)'s requirement that an injunction "describe in reasonable detail . . . the act or acts restrained or required." Fed.R.Civ.P. 65(d)(1)(C). We are confident that the term "affiliate" is sufficiently clear so that the Government will be able "to ascertain from the four corners of the order precisely what acts are forbidden." In re Baldwin-United Corp., 770 F.2d 328, 339 (2d Cir. 1985) (internal quotation marks omitted). As the District Court correctly noted, the word "affiliate" has a sufficiently clear meaning. It is defined, according to that Court, as "[a] corporation that is related to another corporation by shareholdings or other means of control; a subsidiary, parent, or sibling corporation." 258 F.Supp.3d 391, 396 (S.D.N.Y. 2017) (quoting Black's Law Dictionary (10th ed. 2014)). As previously noted, there is an unusually full record in this case. We do not think that the Government, in applying a definition such as this, lacks adequate guidance in determining the entities to which the injunction applies or that the District Court otherwise abused its discretion in fashioning the permanent injunction as it did.

         CONCLUSION

         For the foregoing reasons, the order of the District ...


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