Opinion ID: 2795022
Heading Depth: 3
Heading Rank: 2

Heading: The “Unconstitutional Conditions” Doctrine

Text: The Supreme Court has repeatedly held that the government cannot deny access to a benefit because of the recipient’s exercise of constitutionally protected speech. Under the “unconstitutional conditions” doctrine, [E]ven though a person has no ‘right’ to a valuable governmental benefit and even though the gov- ernment may deny him the benefit for any num- ber of reasons, there are some reasons upon which the government may not rely. It may not deny a benefit to a person on a basis that infringes his constitutionally protected interests—especially, his interest in freedom of speech. For if the gov- ernment could deny a benefit to a person because of his constitutionally protected speech or associations, his exercise of those freedoms would in ef- fect be penalized and inhibited. Perry v. Sindermann, 408 U.S. 593, 597 (1972). Under this doctrine, the Supreme Court held that a state college could not refuse to retain a professor because of his public criticism of that college’s policy, even though the professor had no right to reemployment and even though the government had not directly prohibited the professor from speaking. Id. at 597–98. This is because “[t]o deny [a benefit] to claimants who engage in certain forms of speech is in effect to penalize them for such speech.” Speiser v. Randall, 357 U.S. 513, 518 (1958). Since Perry, the Supreme Court has wrestled with the inherent tension between applying the “unconstitutional conditions” doctrine and protecting Congress’ ability to direct government spending. As the Supreme Court has noted, the Spending Clause of the U.S. Constitution, which grants Congress the power “[t]o lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” U.S. Const. Art. I, § 8, cl. 1, “provides 10 IN RE TAM Congress broad discretion to tax and spend for the ‘general Welfare,’ including by funding particular state or private programs or activities.” Agency for Int’l Dev. v. Alliance for Open Soc’y Int’l, Inc., 133 S. Ct. 2321, 2327– 28 (2013). This includes “the authority to impose limits on the use of such funds to ensure they are used in the manner Congress intends,” even when these limits are conditioned on the recipients’ constitutional rights. Id. at 2328 (citing Rust v. Sullivan, 500 U.S. 173, 195 n.4 (1991)). The Court reasoned that “if a party objects to a condition on the receipt of federal funding,” it can always decline the funds. Id. Thus, “when the Government appropriates public funds to establish a program it is entitled to define the limits of that program.” United States v. Am. Library Ass’n, Inc., 539 U.S. 194, 211 (2003) (quoting Rust, 500 U.S. at 194). Under this reasoning, the Supreme Court upheld regulations prohibiting the use of federal family planning funds for abortion counseling and referral services. Rust, 500 U.S. at 192. Similarly, the Court held that conditioning public libraries’ receipt of federal subsidies on their use of Internet filtering software was a valid exercise of Congress’ spending power, because Congress was entitled to insist that “public funds be spent for the purposes for which they were authorized.” Am. Library Ass’n, 539 U.S. at 211–12 (quotation marks omitted). This spending limitation applies to indirect forms of public funding such as tax exemptions as well as direct subsidies. Regan v. Taxation with Representation of Wash., 461 U.S. 540, 544 (1983) (“Both tax exemptions and tax-deductibility are a form of subsidy that is administered through the tax system.”). The government’s discretion under the Spending Clause, while broad, is not unbounded. If a program arises from the Spending Clause, Congress is free to attach “conditions that define the limits of the governIN RE TAM 11 ment spending program—those that specify the activities Congress wants to subsidize.” Agency for Int’l Dev., 133 S. Ct. at 2328. However, Congress does not have the authority to attach “conditions that seek to leverage funding to regulate speech outside the contours of the program itself.” Id. For example, the Court held that Congress could not restrict appropriations aimed at combating the spread of AIDS to only organizations having policies explicitly opposing prostitution and sex trafficking. Id. at 2230–31. Thus, the analysis of whether Congress has imposed an unconstitutional condition on a federal benefit is affected by the nature of the Congressional benefit— namely, was the benefit authorized pursuant to Congress’ Spending power. Courts have examined whether the conditioned benefit was pursuant to the Spending Clause. For example, the Ninth Circuit considered whether the “unconstitutional conditions” doctrine prevented the government from implementing a treaty under which certain “educational, scientific, and cultural” audio-visual materials were subject to benefits, including exemption from import duties. Bullfrog Films, Inc. v. Wick, 847 F.2d 502, 503 (9th Cir. 1988). Film makers, producers, and distributors argued that the treaty violated the First Amendment. Id. at 504. The government responded by arguing, as it does here, that the regulations stemming from the treaty did not “punish or directly obstruct plaintiffs’ ability to produce or disseminate their films,” and that any benefits flowing from the regulations were “a case of the government simply declining to pay a subsidy.” Id. at 509. The Ninth Circuit disagreed with the government’s “benign characterization” of the effect of the regulations and reasoned that the trade benefits were not a subsidy because “no Treasury Department funds [were] involved,” and therefore the spending exception did not apply. Id. at 509. The Ninth Circuit held that “by condi12 IN RE TAM tioning a valuable governmental benefit on the basis of speech content, the [government] forces film makers to choose between exercising their right to free speech and foregoing benefits under the [treaty], or curtailing their speech and obtaining the benefits.” Id. at 511. It reasoned that “this sort of dilemma patently transgresses the well-established principle that government may not condition the conferral of a benefit on the relinquishment of a constitutional right.” Id. The Fifth Circuit recently considered, en banc, the constitutionality of a Texas law allowing charitable organizations to hold bingo games so long as the resulting funds were not used for lobbying. Dep’t of Tex., Veterans of Foreign Wars v. Tex. Lottery Comm’n, 760 F.3d 427, 430 (5th Cir. 2014) (en banc). The Texas Lottery Commission argued that the law’s restrictions were not unconstitutional because they fell within the state government’s spending power, which is analogous to the federal government’s spending power. Id. at 434. The Fifth Circuit agreed that “the government may attach certain speech restrictions to funds linked to the public treasury—when either granting cash subsidies directly from the public coffers . . . or approving the withholding of funds that otherwise would go to the public treasury.” Id. at 435. However, the Fifth Circuit found the Texas bingo program “wholly distinguishable . . . because no public monies or ‘spending’ by the state are involved.” Id. at 436. The Fifth Circuit reasoned that the bingo program’s primary function is regulatory, further “underscor[ing] the incongruity of [applying] the ‘subsidy’ paradigm to the bingo program.” Id. at 437. The Fifth Circuit therefore applied the “unconstitutional conditions” doctrine to the bingo program, and found its lobbying provision unconstitutional. Id. at 437–41. The D.C. Circuit similarly held that a presidential directive barring lobbyists from serving on international IN RE TAM 13 trade advisory committees implicated the First Amendment. Autor v. Pritzker, 740 F.3d 176, 177 (D.C. Cir. 2014). The government argued that “when [it] appropriates public funds to establish a program, its decision not to use program funds to subsidize the exercise of a fundamental right does not infringe.” Id. at 182 (quotations and alterations omitted). The D.C. Circuit rejected the government’s argument because membership in the advisory committees was a non-financial—albeit valuable—benefit. Id. at 182–83. It noted that advisory committee members are not paid for their service, “absorbing even their out of pocket expenses.” Id. at 183. Because “[t]he Supreme Court has never extended the [spending exception] to situations not involving financial benefits,” the D.C. Circuit found the directive could be an unconstitutional condition, and remanded so the district court could consider the lobbyists’ claims further. Id. at 183– 84. In another case, satellite carriers objected to the “must carry” provision in a federal law that granted satellite carriers a copyright license to retransmit local television stations in a given market so long as they also retransmitted all local television stations in that market upon request. Satellite Broad. & Commc’ns Ass’n v. FCC, 146 F. Supp. 2d 803, 808–09 (E.D. Va. 2001), aff’d, 275 F.3d 337 (4th Cir. 2001). The district court reasoned that Congress’ grant of a copyright license to satellite carriers did not arise from the Spending Clause (and therefore qualify as a “subsidy”) because “it [did] not entail the grant of government funds, or other benefits obtained through the use of government funds (i.e., property, government-created jobs, etc.), to confer a benefit.” Id. at 829. The court then considered the constitutionality of the “must carry” condition attached to the copyright license, and held the law constitutional both because it satisfied intermediate scrutiny and because, if a carrier 14 IN RE TAM opted not to accept the copyright license granted by the statute, it could still negotiate for the right to transmit the local stations. Id. at 830–31.