Alliance for Open Soc'y Int'l, Inc. v. U.S. Agency for Int'l Dev.

• Decision Date: 20 December 2018
• Docket Number: 17-2126 (Con),August Term 2017,Nos. 15-974 (L),s. 15-974 (L)
• Citation: 911 F.3d 104
• Parties: 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.
• Court: U.S. Court of Appeals — Second Circuit

911 F.3d 104

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.^*

Nos. 15-974 (L)

17-2126 (Con)

August Term 2017

United States Court of Appeals, Second Circuit.

Argued: May 17, 2018;

Decided: December 20, 2018

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.

Judge Straub dissents in a separate opinion.

BARRINGTON D. PARKER, Circuit Judge:

In Agency for International Development v. Alliance for Open Society International, Inc. , 570 U.S. 205, 133 S.Ct. 2321, 186 L.Ed.2d 398 (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, 133 S.Ct. 2321.

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, 133 S.Ct. 2321 (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, 133 S.Ct. 2321.

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, 126 S.Ct. 1837, 164 L.Ed.2d 641 (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...