Attorney General Mark Brnovich is asking a federal appellate court to overturn an injunction issued by a trial judge blocking the state from using its economic power to keep firms from boycotting Israel and companies that operate there.
In new legal filings Thursday, Assistant Attorney General Drew Ensign told the 9th Circuit Court of Appeals that the anti-boycott law that Judge Diane Humetewa found legally flawed is being replaced. That, he said, makes the whole case moot.
The new legal papers acknowledge that replacement language actually contains similar anti-boycott provisions, denying government contracts to firms that refuse to do business with Israel or boycott companies that do business with that country.
But Ensign said it does not apply to as many individuals and companies as the original law that Humetewa said appears constitutionally flawed. And that narrowing, he argued on behalf of Brnovich, makes the new version a different – and he contends legal – measure.
Anyway, Ensign told Capitol Media Services that when the state is paying at least $100,000 to some firm for work it has a “legitimate interest” in ensuring that some of those dollars aren’t used for activities the state considers to be contrary to its public policy, meaning in this case deterring boycotts of Israel.
The fight surrounds efforts by Arizona lawmakers to combat locally the national BDS movement which seeks to urge firms to boycott, divest and sanction Israel over its policies in dealing with Palestinians and what they see as illegal occupation of Palestinian territories and establishing Jewish settlements there.
As originally approved in 2016, the law requires companies to sign agreements that they will not engage in any boycotts of Israel as a condition of getting government contracts.
Flagstaff attorney Mik Jordahl, who has contracted to provide legal services to the Coconino County jail district, would not sign. He said it would interfere with his right to refuse to buy office equipment from Hewlett Packard, a company that helps the Israeli government with security.
He then sued.
Last year Humetewa barred the state from enforcing the law, saying it interferes with First Amendment rights.
She specifically rejected Brnovich’s arguments that lawmakers have a legal, and even moral, right to prevent public dollars from going to companies that endorse the BDS movement. Humetewa said the state cannot use its economic power to deny people their right to speak out and act on their personal beliefs.
Brnovich appealed. But in the interim, lawmakers last month approved a new version of the law; it will take effect later this year.
The big difference is that it applies only to companies of 10 or more employees with a contract of at least $100,000.
Based on that, Ensign is arguing that it will no longer apply to Jordahl whose law firm has an $18,000 contract. That leaves him free to decide whether or not to boycott Israel without fear of losing public business.
That, the attorney general told the appellate judges, means he no longer has standing to sue, making the case legally moot, requiring it be dismissed.
There was no immediate comment from the American Civil Liberties Union which is representing Jordahl on whether it will argue that the new law is no more legal than the one that Humetewa found wanting. But Ensign already is waiting with arguments that the new version is constitutional.
First, he said, it clarifies that the conduct that will deny a public contract is not based on someone’s support for a boycott but an actual refusal to do business with Israel and other firms that do.
“That change makes even clearer that the focus of the statute is on conduct, and not on messaging or affiliation,” Ensign claims.
And then there’s that new $100,000 threshold.
“As the state has explained, Arizona is not attempting to ban boycotts through the act, but merely to avoid subsidizing them with public funds,” he said, saying that is borne out with the minimum financial requirement.
“As money is fungible, a contract over $100,000 in value would invariably result in some marginal dollars that a contractor could spend on other activities (such as boycotting), which would not otherwise be available,” Ensign argues. And he said that gives the state the right to keep any of its funds from going to that company.
So firms with smaller contracts could not use some of their funds for a boycott?
“We certainly believe that even a single dollar is too much,” Ensign told Capitol Media Services, acknowledging that Humetewa was not buying that argument.
“We think that reasoning was erroneous,” he said. “But even if you accept the district court’s reasoning, now that the statute will have a six-digit threshold it can little be doubted that that sort of public money will inevitably result in some sort of subsidization of the activities.”
Brnovich does not explain, however, why someone with a smaller contract could not also use some of those funds for a boycott.
The appellate court is set to hear the case next month.