Jordahl v. Brnovich

United States District Court, D. Arizona

In 2016, Arizona joined a growing number of states that enacted legislation "aimed at divesting state funding from companies that engage in a boycott of Israel." AZ S.F. Sheet, 2016 Reg. Sess. H.B. 2617. Arizona's House Bill 2617 was codified at Arizona Revised Statute § 35-393.01, and states in subsection (A) that:

A public entity may not enter into a contract with a company to acquire or dispose of services, supplies, information technology or construction unless the contract includes a written certification that the company is not currently engaged in, and agrees for the duration of the contract to not engage in, a boycott of Israel.
A.R.S. § 35-393.01(A) (hereafter, "Certification Requirement" or "the Act"). The Act defines "boycott" as:

Subsection (B) separately prohibits public entities from "adopt[ing] a procurement, investment or other policy that has the effect of inducing or requiring a person or company to boycott Israel." A.R.S. § 35-393.01(B). Although Plaintiffs seek to enjoin A.R.S. § 35-393.01, the facts presented by Plaintiffs, as well as the arguments they have advanced, show that A.R.S. § 35-393.01(B) has no applicability here. (See also Doc. 20, First Amended Complaint ("FAC") (omitting any reference to A.R.S. § 35-393.01(B) ) ). Accordingly, this Order will not address the constitutionality or enforceability of that subsection.

...engaging in a refusal to deal, terminating business activities or performing other actions that are intended to limit commercial relations with Israel or with persons or entitles doing business in Israel or in territories controlled by Israel, if those actions are taken either:

(a) In compliance with or adherence to calls for a boycott of Israel other than those boycotts to which 50 United States Code § 4607(c) applies.

(b) In a matter that discriminates on the basis of nationality, national origin or religion and that is not based on a valid business reason.
50 U.S.C. § 4607(a)(1) is part of the Export Administration Act ("EAA"), which prohibits "any United States person, with respect to his activities in the interstate or foreign commerce of the United States, from taking or knowingly agreeing to take [certain enumerated actions] with intent to comply with, further, or support any boycott fostered or imposed by a foreign country against a country which is friendly to the United States and which is not itself the object of any form of boycott pursuant to United States law or regulation." Subsection 4607(c) states that this prohibition shall preempt any state law that "pertains to participation in, compliance with, implementation of, or the furnishing of information regarding restrictive trade practices or boycotts fostered or imposed by foreign countries against other countries." Id.

The parties seem to agree that this subsection does not apply to Plaintiffs' desired boycotting activities. (See Doc. 28 at 13 and Doc. 39 at 22).

A.R.S. § 35-393(1).

Plaintiff Mikkel Jordahl ("Mr. Jordahl") is an attorney and sole owner of Plaintiff Mikkel (Mik) Jordahl, P.C. ("the Firm") (collectively, "Plaintiffs"). Mr. Jordahl personally participates in a boycott of consumer goods and services offered by businesses supporting Israel's occupation of the Palestinian territories. In doing so, Mr. Jordahl claims that he is moved by the Peace Not Walls campaign promoted by the Evangelical Lutheran Church in America ("ELCA"). The ELCA calls on "individuals to invest in Palestinian products to build their economy and to utilize selective purchasing to avoid buying products made in illegal Israeli settlements built on Palestinian land." Mr. Jordahl is also a non-Jewish member of Jewish Voice for Peace ("JVP"), which "endorses the call from Palestinian civil society for Boycott, Divestment, and Sanctions campaigns to protest the Israeli government's occupation of Palestinian territories." (Doc. 6 at 4). Mr. Jordahl would like the Firm to participate in his boycott of "all businesses operating in Israeli settlements in the occupied Palestinian territories." (Doc. 57 at 6:6-7). He would also like his Firm "to be able to associate and provide financial resources and legal resources to Jewish Voice for Peace." (Id. at 6:8-10).

Evangelical Lutheran Church in America, Peace Not Walls , https://www.elca.org/Our-Work/Publicly-Engaged-Church/Peace-Not-Walls (last visited Sept. 27, 2018).

For the past twelve years, Mr. Jordahl's firm has contracted with the Coconino County Jail District ("the County") to provide legal advice to incarcerated individuals. In 2016, following the passage of A.R.S. § 35-393.01, the County asked Mr. Jordahl to execute a written certification, on the Firm's behalf, that the Firm "is not currently engaged in a boycott of Israel," that "no wholly owned subsidiaries, majority-owned subsidiaries, parent companies, or affiliates" of the Firm are "engaged in a boycott of Israel," and that neither the Firm nor any of the above-mentioned associated entities would "engage in a boycott of Israel" for the duration of the contract agreement. (Doc. 6-1, Ex. 1). The requested certification went on to state that "Any violation of this Certification by the Independent Contractor shall constitute an event of material breach of the Agreement." (Id. ) Mr. Jordahl signed the 2016 certification under protest ("2016 Certification"), and sought confirmation with the County that the certification would not apply to his personal consumer decisions. (Doc. 6-1 at Exs. 1 & 2). The County did not respond to his inquiry but paid the Firm for its services during that year. During the contract year, Mr. Jordahl claims that he turned down opportunities for his Firm to provide administrative and pro bono services to organizations like JVP and he personally refrained from speaking out vocally about his personal boycott participation for fear that it might cast suspicion that his Firm was engaging in activity prohibited under the 2016 Certification. (Doc. 6-1 at 4-6).

The Firm's contract with the County came up for renewal in 2017, and the County again asked Mr. Jordahl to sign the required certification ("the 2017 Certification"), which by that time had been approved by the County's Jail Board of Directors. (Doc. 6 at 10; Doc. 6-1 at Ex. 5). The 2017 Certification was substantially unchanged from the 2016 Certification. This time, Mr. Jordahl refused to sign. (Doc. 6-1 at 5-6). Notwithstanding his refusal to sign, the Firm has continued to provide representative services to the County under the contract; the County, however, has not paid the Firm for those services. Mr. Jordahl fears that he will lose approximately 10% of his total income if his Firm loses its contract with the County as a result of his refusal to sign the 2017 Certification.

In their Amended Complaint, Plaintiffs allege that section 35-393.01 violates the First and Fourteenth Amendments because it requires the Firm and other government contractors to disavow their participation in political boycotts or risk forfeiting the opportunity to work for the government. (Doc. 21 ¶ 1). Plaintiffs brought suit against the Arizona Attorney General ("the Attorney General"), the Coconino County Sheriff ("the Sheriff"), and various members of the Coconino County Jail District Board of Directors ("the Board") in their official capacities (collectively, "the Defendants"). (Id. ) Thereafter, the parties consented to, and the Court granted, the State of Arizona's ("the State") request to intervene for the purpose of defending the facial constitutionality of the Act. (Docs. 24 & 48).

Plaintiffs have moved for a preliminary injunction in which they seek to have the Court enjoin Defendants from enforcing the Certification Requirement in A.R.S. § 35-393.01, or alternatively to enjoin Defendants from enforcing the Certification Requirement against them. (Doc. 6 at 1). Defendants oppose Plaintiffs' motion for injunctive relief and contend that Plaintiffs are unlikely to succeed on the merits and that their alleged injuries are insufficient to justify injunctive relief. (Doc. 28 at 37). The State, joined by the Attorney General ("Defendants" or "the State"), has also moved to dismiss Plaintiffs' complaint. (Doc. 28). In doing so, Defendants challenge Plaintiffs' standing and argue that to the extent the Act applies to Plaintiffs' conduct, the Court should abstain or certify the question of the scope of the Act to the Arizona Supreme Court. (Id. ) Citing state sovereign immunity, standing, and ripeness issues, Defendants specifically seek to dismiss the Attorney General from the case. (Id. at 32-33).

The Court held oral argument on these issues on May 23, 2018. (Doc. 50). The parties continued to file documents with the Court after this hearing, including Plaintiffs' Notice that the State had misstated Arizona law during oral argument regarding the Attorney General's authority to offer opinions on the meaning of Arizona law (Doc. 58); Plaintiffs' Notice that Plaintiffs' counsel had misattributed a fact to the wrong authority during their oral argument (Doc. 59); and the State's Notice of Supplemental Authority regarding updates (1) to an Arizona Agency Handbook providing interpretative guidance on A.R.S. § 35-393 and (2) on Koontz v. Watson , 283 F.Supp.3d 1007 (D. Kan. 2018), a case relied upon by Plaintiffs, which since oral argument has been voluntary dismissed as a result of a settlement (Doc. 61). Defendants responded to Plaintiff's notice of misstatement (Doc. 60) and Plaintiffs have responded to the State's supplemental authority (Doc. 62). The Court has considered these filings in its decision, and where necessary, has addressed them below.