SCOTUS Holds Condition for AIDS Funding Is Constitutional As Applied to Foreign Affiliates of Domestic NGOs

In Agency for International Development v. Alliance for Open Society International, Inc., 591 U. S. ____ (2020), the U.S. Supreme Court held that because the foreign affiliates of American nongovernmental organizations (NGOs) possess no First Amendment rights, the requirement for funding under the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act that organizations have “a policy explicitly opposing prostitution and sex trafficking” does not run afoul of the Constitution when applied to foreign NGOs.

Facts of the Case

In 2003, Congress passed and President George W. Bush signed the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act, known as the Leadership Act. To advance the global relief effort, Congress has allocated billions of dollars to American and foreign nongovernmental organizations that combat HIV/AIDS abroad. As rele- vant here, Congress sought to fund only those organizations that have, or agree to have, a “policy explicitly opposing prostitution and sex trafficking.” §7631(f); see also §7631(e); 45 CFR §89.1 (2019). Congress imposed that condition on funding, known as the Policy Requirement, be- cause Congress found that prostitution and sex trafficking “are additional causes of and factors in the spread of the HIV/AIDS epidemic” and that prostitution and sex trafficking “are degrading to women and children.”

In 2013, the Supreme Court held that the Policy Requirement was an unconstitutional restraint on free speech when applied to American organizations. Under Agency for Int’l Development v. Alliance for Open Society Int’l, Inc., 570 U. S. 205, 214 (2013), the Policy Requirement no longer applies to American organizations that receive Leadership Act funds, meaning that American organizations can obtain Leadership Act funds even if they do not have a policy explicitly opposing prostitution and sex trafficking.

The American organizations filed suit again seeking to bar the Government from enforcing the Policy Requirement against plaintiffs’ legally distinct foreign affiliates. The U. S. District Court for the Southern District of New York agreed with plaintiffs and prohibited the Government from enforcing the Policy Requirement against plaintiffs’ foreign affiliates.

Supreme Court’s Decision

The Supreme Court reversed by a vote of 5-3. “In short, plaintiffs’ foreign affiliates are foreign organizations, and foreign organizations operating abroad have no First Amendment rights,” Justice Brett Kavanaugh wrote on behalf of the majority.

According to the majority, “Plaintiffs’ position runs headlong into two bedrock principles of American law.” The Court first noted that it is long settled as a matter of American constitutional law that foreign citizens outside U. S. territory do not possess rights under the U.S. Constitution.

While the Court acknowledged that foreign citizens in the United States may enjoy certain constitutional rights, it further noted that the Court has not allowed foreign citizens outside the United States or such U. S. territory to assert rights under the U. S. Constitution. “If the rule were otherwise, actions by American military, intelligence, and law enforcement personnel against foreign organizations or foreign citizens in foreign countries would be constrained by the foreign citizens’ purported rights under the U. S. Constitution,” Justice Kavanaugh wrote. “That has never been the law.”

The Court next cited that “it is long settled as a matter of American corporate law that separately incorporated organizations are separate legal units with distinct legal rights and obligations.” As Justice Kavanaugh explained, “Plaintiffs’ foreign affiliates were incorporated in other countries and are legally separate from plaintiffs’ American organizations. Even though the foreign organizations have affiliated with the American organizations, the foreign organizations remain legally distinct from the American organizations.”

Taken together, the Court determined that the legal principles “lead to a simple conclusion: As foreign organizations operating abroad,” the foreign NGOs do not have First Amendment rights. “That conclusion corresponds to historical practice regarding American foreign aid. The United States supplies more foreign aid than any other nation in the world. Acting with the President in the legislative process, Congress sometimes imposes conditions on foreign aid,” Justice Kavanaugh wrote. “Congress may condition funding on a foreign organization’s ideological commitments—for example, pro-democracy, pro-women’s rights, anti-terrorism, pro-religious freedom, anti-sex trafficking, or the like. Doing so helps ensure that U. S. foreign aid serves U. S. interests.”

“By contrast, plaintiffs’ approach would throw a constitutional wrench into American foreign policy. In particular, plaintiffs’ approach would put Congress in the untenable position of either cutting off certain funding programs altogether, or instead funding foreign organizations that may not align with U.S. values,” Justice Kavanagh further wrote. “We see no constitutional justification for the Federal Judiciary to interfere in that fashion with American foreign policy and American aid to foreign organizations.”