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Ali v. Hogan

United States District Court, D. Maryland

October 1, 2019

SAQIB ALI,
v.
LAWRENCE HOGAN, et al.

          MEMORANDUM

          Catherine C. Blake United States District Judge.

         Saqib Ali brings this facial First Amendment challenge to Governor Lawrence Hogan's Executive Order 01.01.2017.25, entitled "Prohibiting Discriminatory Boycotts of Israel in State Procurement.", ECF No. 9-1 at 43. Mr. Ali has sued Governor Lawrence Hogan and Attorney General Brian Frosh (the "defendants"), in their official capacities, requesting declaratory and injunctive relief. Specifically, Mr. Ali asks this court to declare Executive Order 01.01.2017.25 invalid and to enjoin its enforcement because, he contends, the "No Boycott of Israel" clause violates the First Amendment. The plain text of the Order appears to proscribe executive agencies from executing procurement contracts with business entities that boycott Israel. E.O. 01.01.2017.25(B). The defendants filed motions to dismiss, and oral argument was heard on August 1, 2019.

         Unexpectedly, the Governor, interpreting his own executive order, asserted in his Reply and at oral argument, through counsel, that the Order prohibits only national-origin discrimination against Israelis in the formation of a bid for a state contract, leaving Mr. Ali and other potential state contractors free to boycott Israel and Israeli companies outside the bid formation process without compromising their eligibility to receive and maintain procurement contracts with the state. On this basis, the defendants argue that Mr. Ali lacks standing to bring this lawsuit, because the boycott activities he describes in the complaint do not involve the bid formation process, because his proffered activities are carved out of the Order's definition of a boycott, and because he has not submitted a bid to test the contours of the Order's prohibition. Mr. Ali rightly notes that a potential contractor reading Section B of the Order would be led to believe that the Order's prohibitions were more expansive, and he asserts that the Governor's position is somewhat of a bait-and-switch used to duck this facial challenge. And yet, given the opaque language and structure of the Order, the parties' various interpretations of its meaning, and the Governor's express disavowal of its applicability to Mr. Ali's boycott of Israel as it is described in the complaint, the court is hesitant to reach the Order's constitutionality before there precipitates a more distilled dispute.

         By way of background, and as Mr. Ali tells it, the Boycott, Divestment, Sanctions ("BDS") movement is an international effort "to impose economic pressure on Israel to substantially alter the country's practices and policies regarding Palestinians. . .. [and] seeks the peaceful end of Israeli discrimination against and maltreatment of Palestinians. The BDS movement specifically encourages economic divestment from institutions that are not in compliance with established international law related to the Israeli occupation of Palestine." ECF 1, Compl. ¶ 15. At least twenty-five states have implemented so-called "anti-BDS" requirements, some through legislation, and some, like Maryland, through executive order. While they range in specificity and the precise actions prohibited, these laws and regulations similarly purport to refuse state contracts to individuals and/or entities that boycott Israel. See, e.g., Amawi v. Pflugerville Indep. Sch. Dist., 373 F.Supp.3d 717 (W.D. Tex. 2019) (Texas); Arkansas Times LP v. Waldrip, 362 F.Supp.3d 617 (E.D. Ark. 2019) (Arkansas); Jordahl v. Bmovich, 336 F.Supp.3d 1016 (D. Ariz. 2018) (Arizona); Koontz v. Watson, 283 F.Supp.3d 1007 (D. Kan. 2018) (Kansas). All but one (Arkansas's) have been held to constitute an unconstitutional restriction on the protected First Amendment right to engage in a political boycott under N.A.A.C.P. v. Claibome Hardware Co., 458 U.S. 886 (1982). Id. As explicated below, however, the Maryland Order's definition of a boycott appears to be more narrow than those promulgated in Kansas, Arkansas, Arizona, and Texas, chiefly because it comes with five carve-outs, the third of which appears to be a catch-all provision that allows a potential contractor to boycott an Israeli person or entity "because of the specific conduct of the person or entity." Id.; E.O. 01.01.2017.25(A)(1).

         Several anti-BDS bills were introduced in the Maryland legislature between 2014 and 2017, but they failed to pass. Compl. ¶ 21. On October 23, 2017, Governor Hogan issued Executive Order 01.01.2017.25. He proclaimed: "The shameful BDS movement seeks to undercut those rights and freedoms, using economic discrimination and fear, by boycotting Israeli companies and prohibiting them from doing business in the United States.... The executive order further strengthens Maryland's opposition to the Boycott, Divestment, Sanctions (BDS) movement, a discriminatory campaign designed to undermine global trade with Israel." Id. ¶ 22.

         Mr. Ali is an experienced computer software engineer, a former Maryland state legislator, a resident of North Potomac, Maryland, and a United States citizen. Id. ¶¶ 29-32. Mr. Ali also is a political activist. He "has dedicated himself to education and advocacy regarding the plight of the Palestinian people . . . [and] works to enlist as many members of the public as possible in joining him in non-violent opposition to Israel's maltreatment of Palestinians." Id. ¶ 34. Mr. Ali also supports BDS. "Personally, Saqib Ali refuses to purchase Sabra hummus or SodaStream products, which have ties to Israel and its occupation of Palestine. He also advocates for others to join the BDS movement, and monitors current events in order to identify and promote specific BDS actions." Id. ¶ 35. He has led public demonstrations and testified against proposed anti-BDS legislative efforts in Maryland. Id. ¶ 36. In 2014, he organized "Freedom2Boycott in Maryland," a grassroots effort to oppose the same proposed legislation. Id. ¶ 37.

         As a professional software engineer, Mr. Ali seeks to submit bids for state contracts. Id. ¶ 39. He pleads that there are two specific projects for which Maryland has put out a call for bids and for which he generally has the requisite qualifications. Id. ¶ 40. The Maryland Office of the Chief Actuary has solicited bids for the creation of life insurance evaluation software (Bid Solicitation #MDD8031042042) and the Maryland Department of Aging has called for software support related to Medicaid (Bid Solicitation #MDD2631042358). Id. Under Mr. Ali's interpretation of Executive Order 01.01.201.7.25, he is barred from submitting a bid for either state contract because he boycotts certain Israeli companies and he "cannot certify in good faith that he has not 'refused to transact or terminated business activities, or taken other actions intended to limit commercial relations, with a person or entity on the basis of Israeli national origin, or residence or incorporation in Israel and its territories.'" Id. ¶ 42 (quoting E.O. 01.01.2017.25(C)). Accordingly, he filed the present complaint.

         The starting point here is the text. Executive Order 01.01.2017.25 dictates that:

"Executive agencies may not execute a procurement contract with a business entity unless it certifies, in writing when the bid is submitted or the contract is renewed that:
1. it is not engaging in a boycott of Israel; and
2. it will, for the duration of its contractual obligation, refrain from a boycott of Israel."

E.O. 01.01.2017.25(B). "Boycott of Israel" has the following meaning within the Order: "the termination of or refusal to transact business activities, or other actions intended to limit commercial relations, with a person or entity because of its Israeli national origin, or residence or incorporation in Israel and its territories." E.O. 01.01.2017.25(A)(1). But there are five carve-outs. '"Boycott of Israel' does not include actions taken: (i) that are not commercial in nature; (ii) for business or economic reasons; (iii) because of the specific conduct of the person or entity; (iv) against a public or governmental entity; or (v) that are forbidden by the United States pursuant to 50 U.S.C. § 4607." Id.[1]

         Critically however, while it can be read as a separate required certification, any mandate contained within Section B is not contained within the Maryland Bid/Proposal Affidavit, which potential contractors are required to submit with their bids. Instead, potential contractors are required to sign a different, and seemingly narrower, certification-that contained within the Order's Section C.[2] While Section B appears to forbid potential contractors from boycotting Israel at the time of bidding for, or during, a state procurement contract, Section C says no such thing. Instead, it is written in the present perfect tense, requiring a bidder to certify that in the bid formation process she "has considered" all bids from subcontractors, suppliers and vendors, and "has not" discriminated on the basis of Israeli national origin, residence or incorporation. E.O. 01.01.2017.25(C). The certification, moreover, omits the phrase "Boycott of Israel," despite the Order's protracted definition of the term in Section (A)(1) and its use in Section B. In full, the Section C certification reads:

In preparing its bid on this project, the bidder has considered all proposals submitted from qualified, potential subcontractors and suppliers, and has not, in the solicitation, selection, or commercialtreatment of any subcontractor, vendor, or supplier, refused to transact or terminated business activities, or taken other actions intended to limit commercial relations, with a person or entity on the basis of Israeli national origin, or residence or incorporation in Israel and its territories. The bidder also has not retaliated against any person or other entity for reporting such refusal, termination, or commercially limiting actions. Without limiting any other provision of the solicitation for bids for this project, it is understood and agreed that, if this certification is false, ...

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