Dkt Intern. v. U.S. Agency for Intern. Development

• Citation: 435 F.Supp.2d 5
• Decision Date: 18 May 2006
• Docket Number: Civ. No. 05-1604 (EGS).
• Parties: DKT INTERNATIONAL, INC., Plaintiff, v. UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT, et al., Defendants.
• Court: U.S. District Court — District of Columbia

435 F.Supp.2d 5

DKT INTERNATIONAL, INC., Plaintiff, v. UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT, et al., Defendants.

Civ. No. 05-1604 (EGS).

United States District Court, District of Columbia.

May 18, 2006.

Julie M. Carpenter, Martina E. Vandenberg, Jenner & Block, LLP, Washington, DC, for Plaintiff.

Rupa Bhattacharyya, U.S. Department of Justice, Civil Division, Washington, DC, for Defendants.

MEMORANDUM OPINION

SULLIVAN, District Judge.

Plaintiff DKT International, Inc. ("DKT") commenced this action seeking declaratory and injunctive relief against the United States Agency for International Development and its Administrator, Andrew S. Natsios (collectively "USAID") to protect its First Amendment right to freedom of speech. DKT challenges the constitutionality of the USAID's enforcement of the organizational eligibility restriction, see 22 U.S.C. § 7631(f), under the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ("Leadership Act"), see Pub.L. No. 108-25, 117 Stat. 711, codified at 22 U.S.C. § 7601-7682. The organizational eligibility restriction prohibits USAID funds from being disbursed to any organization that does not have a policy explicitly opposing prostitution and sex trafficking. 22 U.S.C. § 7631(f).

USAID issued the Acquisition and Assistance Policy Directive 05-04 ("AAPD 05-04") to implement 22 U.S.C. §§ 7631(e) and (f). AAPD 05-04 requires recipients of Leadership Act funds to certify that they have a policy opposing prostitution and sex trafficking. DKT does not have an institutional policy opposing prostitution or sex trafficking. Thus, DKT argues that 22 U.S.C. § 7631(f) and AAPD 05-04 are unconstitutional as applied for they require DKT to adopt a policy and to certify that it has a policy explicitly opposing prostitution in contravention of DKT's First Amendment rights.

Pending before the Court are the plaintiffs Motion for Preliminary Injunction and the defendants' Motion to Dismiss. With the consent of the parties, their respective motions are consolidated with the proceedings on the merits pursuant to Rule 65(a) of the Federal Rules of Civil Procedure. See Scheduling Order, Oct. 12, 2005, DKT v. USAID, et al. (CA 05-1604)(EGS). Hence, the parties' respective motions are construed as cross motions for summary judgment. A hearing on these motions was held on December 20, 2005. Upon careful consideration of the parties' cross motions, the responses and replies thereto, the briefs of the amici curiae, the oral arguments of counsel, and the entire record herein, as well as the governing statutory and case law, the Court concludes that 22 U.S.C. § 7631(f) is unconstitutional as applied to DKT to the extent that it requires DKT to have a policy explicitly opposing prostitution and sex trafficking. Further, AAPD 05-04 is unconstitutional as applied to DKT to the extent that it requires DKT to certify that it has a policy explicitly opposing prostitution and sex trafficking. Accordingly, plaintiff's Motion for Summary Judgment is GRANTED and defendants' Motion for Summary Judgment is DENIED.

I. BACKGROUND

A. 22 U.S.C. § 7631(f) and AAPD 05-04

Finding that "[d]uring the last 20 years, HIV/AIDS has assumed pandemic proportions, spreading from the most severely affected regions, sub-Saharan Africa and the Caribbean, to all corners of the world," 22 U.S.C. § 7601(1), Congress enacted the United States Leadership Against HIV/ AIDS, Tuberculosis, and Malaria Act of 2003 ("Leadership Act") in May of 2003. The Leadership Act created a $15 billion program dedicated to fighting the worldwide spread of HIV/AIDS. See 22 U.S.C. § 7601(1). The introduction to the Leadership Act states that over 65 million people have been infected with HIV/AIDS since the epidemic began, and that "[w]omen are four times more vulnerable to infection than are men, and are becoming infected at increasingly high rates, in part because many societies do not provide poor women and young girls with the social, legal, and cultural protections against high risk activities that expose them to HIV/AIDS." Id. at § 7601(3)(B). Recognizing that "prostitution and other sexual victimization are degrading to women and children," the Leadership Act provides that it is "the policy of the United States to eradicate such practices." Id. at § 7601(23).

Organizations, otherwise eligible to receive funding under the Leadership Act for their work in preventing, treating, and monitoring the spread of HIV/AIDS, must abide by two limitations. First, the Leadership Act provides that its funds may not "be used to promote or advocate the legalization or practice of prostitution or sex trafficking." Id. at § 7631(e) (hereinafter the "funding restriction"). Second, the Leadership Act prohibits its funds from being "used to provide assistance to any group or organization that does not have a policy explicitly opposing prostitution and sex trafficking." Id. at § 7631(f) (hereinafter the "organizational eligibility restriction"). The principle legal issue in this case arises from the second restriction on funding — the organizational eligibility restriction of § 7631(f).

USAID is authorized to award grants, cooperative agreements and contracts pursuant to the Leadership Act. See 22 U.S.C. § 2151 et seq. On June 9, 2005, USAID issued AAPD 05-04 to implement the Leadership Act. AAPD 05-04 requires, among other things, that HIV/AIDS grants and cooperative agreements with U.S. and non-U.S. non-governmental organizations include a specific provision entitled "Prohibition on the Promotion or Advocacy of the Legalization or Practice of Prostitution or Sex Trafficking" ("Standard Provision"). The Standard Provision requires recipients of HIV/AIDS treatment and prevention funds under the Leadership Act to have or to adopt a policy explicitly opposing prostitution and sex trafficking. Specifically, AAPD 05-04 requires the following language to be included in all grants or cooperative agreements/sub-agreements funded with FY04-FY08 Leadership Act funds:

The U.S. Government is opposed to prostitution and related activities, which are inherently harmful and dehumanizing, and contribute to the phenomenon of trafficking in persons. None of the funds made available under this agreement may be used to promote or advocate the legalization or practice of prostitution or sex trafficking....

Except as noted in the second sentence of this paragraph, as a condition of entering into this agreement or any sub-agreements, a non-governmental organization or public international organization recipient/subrecipient must have a policy explicitly opposing prostitution and sex trafficking. The following organizations are exempt from this paragraph: the Global Fund to Fight AIDS, Tuberculosis and Malaria; the World Health Organization; the International AIDS Vaccine Initiative; and any United Nations Agency.

AAPD 05-04 at 5.

Further, AAPD 05-04 requires all recipients of FY04-FY08 Leadership Act funds to provide to the USAID Agreement Officer a certification substantially as follows:

[Recipient's name] certifies compliance as applicable with the standard provision entitled ... "Prohibition on the Promotion or Advocacy of the Legalization or Practice of Prostitution or Sex Trafficking" included in the referenced agreement.

AAPD 05-04 at 6 (hereinafter the "certification requirement").

B. Plaintiff DKT

Plaintiff DKT is a not-for-profit organization that provides family planning and HIV/AIDS prevention programming in eleven different countries around the world, including Vietnam. Joint Statement of Undisputed Facts ("Joint Statement") ¶¶ 7, 8. DKT has received USAID funding in the past for its HIV/AIDS prevention work, often as a subgrantee of other direct grantees of USAID. Id. at ¶ 9. DKT also receives funding for its HIV/ AIDS work from other donors from around the world, including private donors, foundations, international organizations, and other governments. Id. at ¶ 10. USAID funding to DKT represents about 16 percent of DKT's total organizational budget. Compl. ¶ 26.

Since 1998, DKT has been implementing a condom distribution project in Vietnam with USAID funding called "100% Condom Access." Holzman Declaration ¶ 7. Another non-governmental agency, Family Health International ("FHI"), was the direct grantee from USAID and, with USAID's permission, Fill executed a subgrant to DKT. Id. The most recent grant under this program was awarded in, July 2003, and it expired on June 30, 2005. Id. When some funds remained unspent at the end of the grant period, DKT requested from FHI a "no-cost extension" to permit it to use the unspent grant funds on the condom distribution program for two additional months. Id. at ¶ 8.

On June 27, 2005, FM sent to the DKT representative in Vietnam the relevant amendment to the sub-agreement for the no-cost extension, which had been approved by USAID. Id. The DKT representative signed the no-cost extension amendment; however, he voided his signature when he saw that FHI and USAID required him to certify that DKT "has a policy explicitly opposing prostitution and sex trafficking." Id. at ¶ 9. The no-cost extension amendment provided that the certification requirement "is an express term and condition of the agreement and any violation of it shall be grounds for unilateral termination of the agreement by FM or USAID prior to the end of its term." Compl. ¶ 16. The DKT representative refused to sign the no-cost extension amendment and sought a waiver of the certification requirement. Joint Statement ¶ 17. The DKT representative was informed that the certification requirement could not be waived. Holzman Decl. ¶ 11. On July 13, 2005, however, FM informed DKT that the no-cost extension amendment could go forward without DKT's adherence to the certification requirement because "the funds for DKT's sub-agreement with FHI originated prior to the application of USAID guidance on antiprostitution." Joint...