Court Opinion

ID: 3208359
Source: CourtListenerOpinion
Date Created: 2016-06-01 17:00:54.618246+00
Date Added: 2024-06-11T14:29:12.739029
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ARIZONA STUDENTS’                        No. 13-16639
ASSOCIATION,
             Plaintiff-Appellant,         D.C. No.
                                     2:13-cv-00306-JWS
               v.

ARIZONA BOARD OF REGENTS,                 OPINION
          Defendant-Appellee.

      Appeal from the United States District Court
               for the District of Arizona
      John W. Sedwick, District Judge, Presiding

       Argued and Submitted November 17, 2015
               San Francisco, California

                    Filed June 1, 2016

    Before: John T. Noonan, Kim McLane Wardlaw,
         and Richard A. Paez, Circuit Judges.

                 Opinion by Judge Paez
2    ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

                           SUMMARY*

                            Civil Rights

    The panel affirmed in part and reversed in part the
dismissal of a complaint brought pursuant to 42 U.S.C.
§ 1983 by the Arizona Students’ Association against the
Arizona Board of Regents alleging First Amendment
retaliation in connection with the Regents’ decision to
suspend its collection and remittance of the Arizona Students’
Association fees and then to modify its fee collection
policies.

     The panel agreed with the district court that the Eleventh
Amendment barred any claim by the Students’ Association
for retrospective relief, including money damages, against the
Board of Regents. The panel held, however, that the
Students’ Association’s claim for prospective injunctive relief
and related declaratory relief was not barred by sovereign
immunity, provided such relief was sought against individual
members of the Board. The panel held that the district court
abused its discretion when it failed to grant the Students’
Association leave to amend its complaint to conform with the
requirements of Ex Parte Young, 209 U.S. 123 (1908). The
panel directed the district court, on remand, to afford the
Students’ Association a reasonable opportunity to file an
amended complaint.

    The panel held that the Students’ Association adequately
alleged that it had engaged in the kinds of core political

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS            3

speech that trigger the First Amendment’s highest levels of
protection. The panel stated that the Board of Regents had no
affirmative obligation to collect or remit the Students’
Association fees, but having done so for fifteen years at no
cost, the Board of Regents could not deprive the Students’
Association of the benefit of its fee collection and remittance
services in retaliation for the Students’ Association’s exercise
of its First Amendment rights. The panel held that the
collection and remittance of funds is a valuable government
benefit, and a change in policy undertaken for retaliatory
purposes that results in the deprivation of those funds
implicates the First Amendment.

                         COUNSEL

Stephen Montoya (argued), Montoya Jiminez, P.A., Phoenix,
Arizona, for Plaintiff-Appellant.

Joseph Andrew Kanefield (argued) and Craig Carson
Hoffman, Ballard Spahr LLP, Phoenix, Arizona, for
Defendant-Appellee.
4    ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

                         OPINION

PAEZ, Circuit Judge:

    The Arizona Students’ Association (“ASA”) brought this
First Amendment retaliation case against the Arizona Board
of Regents (“ABOR” or “the Board”). The district court
dismissed the ASA’s complaint without leave to amend,
concluding that the ASA’s claims were barred by sovereign
immunity, and in the alternative failed to state a claim upon
which relief could be granted. Reviewing de novo, we
conclude that the complaint states a plausible claim for First
Amendment retaliation. See Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009); O’Brien v. Welty, No. 13-16279, 2016 WL
1382240, at *11 (9th Cir. Apr. 7, 2016). We further conclude
that the district court erred when it declined to grant the ASA
leave to amend its complaint to comply with the requirements
set forth in Ex Parte Young, 209 U.S. 123 (1908). We
therefore reverse and remand for further proceedings
consistent with this opinion.

                              I.

    The ASA is an Arizona non-profit corporation that
represents students enrolled at the state’s three public
universities. Its primary purpose is to advocate for the
affordability, accessibility, and quality of public higher
education in Arizona, and the ASA frequently engages in
political activity related to financial aid, public funding of
higher education, and tuition policy.

    From 1974 through 1998, ABOR, a state board whose
members are appointed by the Governor and confirmed by
the Arizona State Senate, directly funded the ASA. In 1998,
       ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS                 5

students at Arizona’s three public universities voted to
impose a semesterly one-dollar fee per student to fund the
ASA. In 2008, students voted to increase the fee to two
dollars per semester.1 From 1998 through 2013, ABOR
collected the student fee on the ASA’s behalf and remitted
proceeds to the ASA at no cost.

     Throughout 2012, the ASA advocated for the passage of
Proposition 204, a state ballot initiative that would increase
funding for public education. In preparation for the
November 2012 election, the ASA co-drafted the text of the
initiative; collected over 20,000 petition signatures to qualify
the initiative for the election; co-drafted the ballot argument
that appeared in the state’s official Publicity Pamphlet
(voter’s guide); participated in media events in support of the
initiative; hosted information sessions and distributed
literature explaining the initiative; engaged in social media
campaigning; phone-banked and canvassed neighborhoods to
encourage voter turnout in support of the initiative; and
contributed $120,000 of its student-fee income to the Yes on
Proposition 204 campaign. All of the ASA’s activities
complied with campaign disclosure and reporting laws and
regulations.

   Janice Brewer, the former Governor of Arizona and an
ex-officio member of ABOR, opposed Proposition 204.
Additionally, during the campaign and after the election,
several Regents criticized the ASA for supporting Proposition
204. Within weeks of the November election, ABOR called

   1
     Although ABOR collected the ASA fee in conjunction with the
collection of tuition payments, the ASA fee was not mandatory, and
students could request a fee refund consistent with the ASA’s published
procedures.
6       ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

a special meeting to discuss the ASA fee. At the special
meeting, ABOR voted to suspend collection of the ASA fee,
and it withheld the fee income it already had collected for the
Spring 2013 semester. Several Regents commented that the
suspension was “political” in nature and was undertaken in
response to the ASA’s Proposition 204 advocacy. ABOR
held a second special meeting in January 2013, in which it
proposed changing the Board’s policies to collect the ASA
fee only from students who “opted-in” and to require that the
ASA reimburse the universities for the administrative costs of
collecting the ASA fee. On February 7, 2013, ABOR adopted
the policy revisions proposed at the January 2013 meeting.
The ASA alleged that it lost “its only source of income” when
ABOR suspended fee collection and then modified its
policies to an opt-in model, and it argued to this court that
since November 26, 2012, the Board has not remitted to the
ASA the fees ABOR collected for Spring 2013.

    The ASA filed suit pursuant to 42 U.S.C. § 1983, alleging
that ABOR had modified its policies to retaliate against the
ASA’s exercise of its First Amendment free speech rights.2
The ASA alleged that ABOR’s retaliatory policy change
caused it harm by chilling students’ political speech and
depriving the ASA of its income. ABOR moved to dismiss
the complaint on sovereign immunity grounds and, in the
alternative, for failure to state a claim upon which relief could
be granted. Fed. R. Civ. P. 12(b)(1), 12(b)(6). In opposing

    2
     After the ASA filed its lawsuit, the Arizona Legislature enacted
Arizona Revised Statutes section 15-1626.01, which proscribes the
transfer of student fees or the use of “any university student billing
process to collect monies on behalf of an organization not under the
jurisdiction of the Arizona board of regents and not recognized as a
university student organization.” Because that statute does not affect our
analysis, we do not address it.
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS             7

the motion, the ASA emphasized that it had pleaded a claim
of First Amendment retaliation, and it argued that in addition
to chilling the ASA’s ability to exercise its free speech rights,
ABOR had harmed the ASA by depriving it of a valuable
government benefit. The district court granted ABOR’s
motion with prejudice, concluding that sovereign immunity
barred all of the ASA’s claims and, in the alternative, that the
ASA had failed to allege a plausible claim for relief.
Additionally, the district court denied the ASA’s request for
leave to amend to name individual regents, concluding that
such amendment would be futile.

                               II.

    We review de novo a dismissal on the basis of sovereign
immunity or for failure to state a claim upon which relief can
be granted. O’Brien, 2016 WL 1382240, at *7; Kahle v.
Gonzales, 487 F.3d 697, 699 (9th Cir. 2007). We limit our
review to the complaint, accept the complaint’s well-pleaded
factual allegations as true, and construe all inferences in the
plaintiff’s favor for the purposes of evaluating a motion to
dismiss under Federal Rule of Civil Procedure 12(b)(6).
Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006);
Zimmerman v. City of Oakland, 255 F.3d 734, 737 (9th Cir.
2001).

                              III.

    The district court concluded that sovereign immunity
barred the ASA from suing ABOR, and accordingly, the court
determined that it lacked subject matter jurisdiction over the
ASA’s complaint. U.S. Const., amend XI; Fed. R. Civ. P.
12(b)(1). Alternatively, the district court concluded that if
sovereign immunity did not bar the ASA’s lawsuit, then the
8    ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

ASA’s complaint failed to state a claim upon which relief
could be granted under Rule 12(b)(6). We first analyze the
district court’s sovereign immunity determination, and we
conclude that although the district court did not err in
determining that ABOR is an arm, division, or instrumentality
of the State of Arizona entitled to sovereign immunity, it
erred when it failed to apply the Young doctrine to the ASA’s
claims.

                               A.

    Sovereign immunity provides that an individual may not
sue a state, a division of a state, or an instrumentality/arm of
a state without the state’s consent. Frew v. Hawkins,
540 U.S. 431, 437 (2004); Seminole Tribe of Fla. v. Florida,
517 U.S. 44, 54 (1996); Edelman v. Jordan, 415 U.S. 651,
662–63 (1974). As a result, the Eleventh Amendment bars
individuals from bringing lawsuits against a state for money
damages or other retrospective relief, Frew, 540 U.S. at 437,
so long as the “state is the real, substantial party in interest,”
Regents of the University of California v. Doe, 519 U.S. 425,
429 (1997) (citation omitted).

    We have previously held that ABOR is an arm of the
State of Arizona for Eleventh Amendment purposes. See
Rutledge v. Ariz. Bd. of Regents, 660 F.2d 1345, 1349 (9th
Cir. 1981), abrogated on other grounds by Haygood v.
Younger, 769 F.2d 1350, 1356 (9th Cir. 1985) (en banc);
Ronwin v. Shapiro, 657 F.2d 1071, 1073 (9th Cir. 1981)
(“[W]e conclude that the [Arizona] Board of Regents is
protected by the eleventh amendment.”). In our prior
analyses, we have also held that the State of Arizona treats
ABOR as a division of the State under Arizona law. See
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS            9

Rutledge, 660 F.2d at 1349 (citing Ariz. Bd. of Regents v.
Ariz. York Refrigeration Co., 115 Ariz. 338 (1977)).

    We are bound by the holdings of prior three-judge panels
so long as those holdings and their reasoning have not been
superseded by later or intervening authority. See Rodriguez
v. Robbins, 804 F.3d 1060, 1080 (9th Cir. 2015); Lair v.
Bullock, 798 F.3d 736, 745 (9th Cir. 2015); Miller v.
Gammie, 335 F.3d 889, 892–93 (9th Cir. 2003) (en banc).
We have not revisited or abrogated our determination that
ABOR is a division of the State of Arizona entitled to
sovereign immunity. Accordingly, the Eleventh Amendment
bars any claim by the ASA for retrospective relief, including
money damages, against ABOR. As discussed below,
however, the ASA’s claim for prospective injunctive relief
and related declaratory relief is not barred by sovereign
immunity, provided such relief is sought against individual
members of the Board.

                              B.

    Although sovereign immunity bars money damages and
other retrospective relief against a state or instrumentality of
a state, it does not bar claims seeking prospective injunctive
relief against state officials to remedy a state’s ongoing
violation of federal law. Ex Parte Young, 209 U.S. 123,
149–56 (1908); see also Quern v. Jordan, 440 U.S. 332, 337
(1979); Agua Caliente Band of Cahuilla Indians v. Hardin,
223 F.3d 1041, 1045 (9th Cir. 2000). The Young doctrine
allows individuals to pursue claims against a state for
prospective equitable relief, including any measures ancillary
to that relief. Green v. Mansour, 474 U.S. 64, 68–71 (1985);
Hutto v. Finney, 437 U.S. 678, 689–92 (1978) (allowing the
recovery of attorney’s fees and costs). To bring such a claim,
10 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

the plaintiff must identify a practice, policy, or procedure that
animates the constitutional violation at issue. Hafer v. Melo,
502 U.S. 21, 25 (1991); Monnell v. N.Y.C. Dep’t of Soc.
Servs., 436 U.S. 658, 690 & n.55 (1978).

     The district court erred when it failed to apply Young to
the ASA’s claim of ongoing First Amendment retaliation, and
its request for prospective injunctive and declaratory relief.
As explained below, the ASA properly alleged a First
Amendment retaliation claim, and it identified ABOR’s
changes to its fee-collection policies as the sources of
ongoing violations of federal law within the meaning of
Young and its progeny. The ASA’s error was in naming
ABOR as the defendant instead of naming either the
President, Chair, or other members of ABOR in their official
capacities.3

    The district court failed to distinguish between the ASA’s
request for prospective equitable relief and its request for
money damages. As noted above, although the Eleventh
Amendment bars the ASA’s requests for money damages and
other retrospective relief, it does not preclude the ASA’s
requests for prospective injunctive and declaratory relief.
Edelman, 415 U.S. at 662–63. Thus, the district court erred
in dismissing the ASA’s entire complaint instead of
dismissing only those portions of the complaint that sought
relief barred by Eleventh Amendment sovereign
immunity—i.e. money damages and other retrospective relief.
Had the district court allowed the ASA to amend its

  3
   We previously have noted that, “[t]he Young doctrine is premised on
the fiction that such a suit [against an official-capacity defendant] is not
an action against a ‘State’ and is therefore not subject to the sovereign
immunity bar.” Agua Caliente, 223 F.3d at 1045.
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS 11

complaint to conform to the Young doctrine, as it requested,
sovereign immunity would not have barred the ASA’s suit.
Because the Young doctrine provides that the ASA’s claims,
when properly crafted, would not violate the Eleventh
Amendment, the district court had subject matter jurisdiction.

                              IV.

    The district court held in the alternative that amendment
would be futile because the ASA’s complaint failed to state
a claim upon which relief could be granted pursuant to
Federal Rule of Civil Procedure 12(b)(6). As we discuss
further, the district court erred when it dismissed the suit with
prejudice on futility grounds.

                               A.

    In evaluating whether the ASA’s complaint stated a claim
upon which relief could be granted, the district court focused
on the fee-collection agreement between the parties, as well
as ABOR’s policies regarding collection of the ASA fee. The
district court analogized collection of the ASA fee to cases
involving payroll deductions of public-employee union dues.
Viewing ASA’s complaint in this manner, the court rejected
the ASA’s argument that its cause of action sounded in First
Amendment retaliation. The district court instead construed
the ASA’s claim as challenging ABOR’s decision to refrain
from facilitating the ASA’s exercise of its free speech rights.

    The district court relied on two cases to support its
interpretation of the ASA’s complaint. First, it turned to
Davenport v. Washington Education Association, 551 U.S.
177 (2007), noting that there the Supreme Court upheld a
state statute that required public-sector unions to obtain
12 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

affirmative consent from nonmembers before expending
nonmembers’ agency-shop fees on election-related activities.
Id. at 184. Davenport held that the statute did not restrict
speech, but rather, allowed the state to decline to facilitate a
union’s political speech. Id. at 187–90. That is, a union
could theoretically still engage in political speech activities
and receive dues, but the state had no obligation to allow the
union to piggyback on the state’s payroll deduction system to
obtain those dues.

    Next, the court pointed to Ysura v. Pocatello Education
Association, 555 U.S. 353 (2009), where the Supreme Court
upheld a statute prohibiting payroll deductions for public-
employee union dues used for political activities (“political
fees”). Applying the more lenient standard of review for
claims related to a state’s facilitation of speech, the Ysura
Court held that public-employee unions had no affirmative
right to receive money for expressive activities through
government payroll mechanisms. Id. at 355.

    The district court reasoned that the ASA was similar to a
public-employee union that sought to collect dues through a
payroll deduction system. The district court considered
ABOR’s modification of its fee-collection policies similar to
a statutory change in union dues collection; therefore, ABOR
“ha[d] no obligation to continue to subsidize [ASA’s]
speech.” Although the district court briefly acknowledged
that the ASA had attempted to allege a First Amendment
retaliation claim in which ABOR’s motive would be a
necessary element of the claim, the district court held that the
policy change, like the passage of a statute, was a non-
content-based, neutral, procedural modification. It reasoned
that in cases involving neutral changes to policy, an inquiry
into ABOR’s motive would be irrelevant because, when the
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS 13

allegation of improper motive was excluded, the policy
modifications would have been constitutional.

    The district court also rejected the ASA’s argument that
ABOR had retaliated against the ASA for its political speech
by terminating a valuable government benefit. Drawing on
Perry v. Sindermann, 408 U.S. 593, 597 (1972), the district
court explained that a “valuable government benefit”
included the termination of public employment, denial or
revocation of tax exemption, and deprivation of
unemployment or welfare benefits. The court explained that
ABOR’s original “opt-out” policy for collecting the ASA fee
was “not an equivalent benefit” to the kinds of benefits set
forth in Sindermann. The district court also reasoned that a
benefit only qualified as a valuable government benefit if it
were a “benefit available to the general public based on
objective criteria.” Because ABOR did not collect fees for
other student organizations or members of the public, the
court reasoned that the ASA-fee collection was a voluntary
benefit, which it could revoke at any time. Viewed in this
context, the court concluded that changing a policy from an
opt-out to an opt-in model was “not the type of benefit
deprivation that could support a First Amendment retaliation
case.”

   The ASA argues that the district court misconstrued its
complaint, as the only claim it seeks to pursue is one for First
Amendment retaliation and not to compel the facilitation of
speech. We thus turn to whether the ASA’s complaint states
a plausible claim for retaliation in violation of the First
Amendment. We conclude below that it does.
14 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

                               B.

    A plaintiff may bring a Section 1983 claim alleging that
public officials, acting in their official capacity, took action
with the intent to retaliate against, obstruct, or chill the
plaintiff’s First Amendment rights. Gibson v. United States,
781 F.2d 1334, 1338 (9th Cir. 1986). To bring a First
Amendment retaliation claim, the plaintiff must allege that
(1) it engaged in constitutionally protected activity; (2) the
defendant’s actions would “chill a person of ordinary
firmness” from continuing to engage in the protected activity;
and (3) the protected activity was a substantial motivating
factor in the defendant’s conduct—i.e., that there was a nexus
between the defendant’s actions and an intent to chill speech.
O’Brien, 2016 WL 1382240, at *11 (citing Pinard v.
Clatskanie Sch. Dist. 6J, 467 F.3d 755, 770 (9th Cir. 2006);
Mendocino Envt’l Ctr. v. Mendocino County, 192 F.3d 1283,
1300 (9th Cir. 1999)); see also Blair v. Bethel Sch. Dist.,
608 F.3d 540, 543 (9th Cir. 2010). Further, to prevail on such
a claim, a plaintiff need only show that the defendant
“intended to interfere” with the plaintiff’s First Amendment
rights and that it suffered some injury as a result; the plaintiff
is not required to demonstrate that its speech was actually
suppressed or inhibited. Mendocino Envt’l Ctr., 192 F.3d at
1300.

                               1.

    “The First Amendment affords the broadest protection to
. . . political expression in order ‘to assure unfettered
interchange of ideas for the bringing about of political and
social changes desired by the people.’” Buckley v. Valeo,
424 U.S. 1, 14 (1976) (per curiam) (quoting Roth v. United
States, 354 U.S. 476, 484 (1957)). A person’s First
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS 15

Amendment free speech right is at its highest when that
person engages in “core political speech,” which includes
issue-based advocacy related to ballot initiatives. McIntyre
v. Ohio Elections Comm’n, 514 U.S. 334, 347, 351 (1995).

    In the context of ballot-initiative advocacy, the Supreme
Court has recognized a wide array of protected speech
activities. Those activities include, and are not limited to,
donating money to an initiative campaign, First Nat’l Bank of
Boston v. Bellotti, 435 U.S. 765, 775 (1978); circulating a
petition and gathering signatures to qualify an initiative for
the ballot, Meyer v. Grant, 486 U.S. 414, 421–22 (1988);
Buckley v. Am. Con. Law Found., Inc., 525 U.S. 182, 186–87
(1999); and electioneering and distributing elections material,
Int’l Soc’y for Krishna Consciousness, Inc. v. Lee, 505 U.S.
672, 677 (1992). Both natural persons and corporations enjoy
those free-speech rights. Citizens United v. Fed. Election
Comm’n, 558 U.S. 310, 355 (2010); Fed. Election Comm’n v.
Wisc. Right to Life, Inc., 551 U.S. 449, 480 (2007); Bellotti,
435 U.S. at 777.

    According to the complaint’s factual allegations, the ASA
engaged in multiple forms of constitutionally protected, core
political speech. Those activities included co-drafting
Proposition 204’s text and statement of support in the State’s
official voter’s guide, gathering petition signatures to qualify
Proposition 204 for the ballot, donating to the proposition’s
campaign, producing and circulating electioneering
communications and materials, and engaging in face-to-face
advocacy with prospective voters. Thus, the ASA adequately
alleged that it had engaged in the kinds of core political
speech that trigger the First Amendment’s highest levels of
protection.
16 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

                              2.

    The ASA additionally alleged that ABOR’s retaliatory
policy modification chilled its exercise of its free speech
rights by terminating a valuable government benefit.
Specifically, the ASA alleged that ABOR engaged in conduct
that would chill a person of ordinary firmness from engaging
in protected First Amendment speech when it suspended
collection and remittance of the ASA fee and modified its
fee-collection policies. The ASA also alleged that it suffered
and continues to suffer direct harm that has limited its ability
to participate in the kind of core political speech activities
that it undertook prior to ABOR’s alleged retaliation.

    Both the Supreme Court and we have recognized a wide
variety of conduct that impermissibly interferes with speech.
For example, the government may chill speech by threatening
or causing pecuniary harm, Bd. of Cty. Comm’rs v. Umbehr,
518 U.S. 668, 674 (1996); withholding a license, right, or
benefit, Baird v. State Bar of Ariz., 401 U.S. 1, 7 (1971);
prohibiting the solicitation of charitable donations, Vill. of
Schaumburg v. Citizens for a Better Env’t, 444 U.S. 620, 633
(1980); detaining or intercepting mail, Blount v. Rizzi,
400 U.S. 410, 417–18 (1971); or conducting covert
surveillance of church services, The Presbyterian Church v.
United States, 870 F.2d 518, 522–23 (9th Cir. 1989).
Importantly, the test for determining whether the alleged
retaliatory conduct chills free speech is objective; it asks
whether the retaliatory acts “‘would lead ordinary student[s]
. . . in the plaintiffs’ position’ to refrain from protected
speech.” O’Brien, 2016 WL 1382240, at *11 (quoting
Pinard, 467 F.3d at 770).
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS 17

    The ASA also alleged that ABOR’s retaliatory acts
directly undermined the ASA’s ability to pursue its core
purpose—to advocate for policies that improve the
affordability, accessibility, and quality of public higher
education. The ASA’s complaint asserts that ABOR’s
conduct is more than a threat to encumber speech; the
Board’s actions have actually limited the ASA’s speech by
eliminating the ASA’s primary source of income.

    Although the district court viewed the ASA’s claim as
seeking to compel ABOR to facilitate speech, it briefly
addressed the ASA’s allegations of retaliation and concluded
that the collection and remittance of the ASA fee did not
constitute a valuable government benefit for the purposes of
a First Amendment retaliation claim. The district court cast
ABOR’s fee collection as a “simply voluntary” activity that
it could terminate at any time, and consequently, the court
held that the ASA had not demonstrated that ABOR had an
affirmative obligation to collect the ASA fee. As discussed
below, the district court erred when it restricted the category
of activities that constitute a valuable government benefit. It
additionally erred when it failed to evaluate ABOR’s
suspension of those activities as a deprivation of a valuable
government benefit.

    Significantly, the ASA and ABOR’s dispute is more than
a disagreement between similarly situated political rivals.
ABOR represents the State’s most powerful authority in
determining the policies, delivery, governance, management,
and accessibility of Arizona’s public higher education. The
ASA is composed entirely of public university students, and
it represents the collective voice of those students. The
disparity in power between ABOR and Arizona’s public
university students is vast. According to the ASA, ABOR
18 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

leveraged that power to punish the ASA for participating in
core political speech and, further, to attempt to bankrupt the
ASA to prevent it from exercising its free-speech rights in the
future. Given the inherent power asymmetry between the
Board and students, as well as the severe impact of ABOR’s
actions on the ASA, it is highly likely that the Board’s alleged
retaliation would chill and discourage a student or student
organization of similar fortitude and conviction from
exercising its free-speech rights.

    As we have noted, “Otherwise lawful government action
may nonetheless be unlawful if motivated by retaliation for
having engaged in activity protected under the First
Amendment.” O’Brien, 2016 WL 1382240, at *10. A state,
division of the state, or state official may not retaliate against
a person by depriving him of a valuable government benefit
that that person previously enjoyed, conditioning receipt of a
government benefit on a promise to limit speech, or refusing
to grant a benefit on the basis of speech. Those limitations
apply even if the aggrieved party has no independent or
affirmative right to that government benefit:

        [E]ven though a person has no “right” to a
        valuable governmental benefit and even
        though the government may deny him the
        benefit for any number 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. . . . Such interference with
        constitutional rights is impermissible.
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS 19

Outdoor Media Grp., Inc. v. City of Beaumont, 506 F.3d 895,
903 (9th Cir. 2007) (quoting Rutan v. Republican Party of Ill.,
497 U.S. 62, 72 (1990)); see also Vignolo v. Miller, 120 F.3d
1075, 1077 (9th Cir. 1997).

    In considering whether a benefit constitutes a valuable
government benefit, we ask whether the opportunity to access
the benefit or privilege at issue is the type of benefit that can
trigger First Amendment scrutiny, not whether the benefit is
available to the public. See Hyland v. Wonder, 972 F.2d
1129, 1135 (9th Cir. 1992). Importantly, the deprivation of
a valuable government benefit for the purpose of
discouraging the exercise of First Amendment rights “need
not be particularly great in order to find that rights have been
violated.” Id. (quoting Elrod v. Burns, 427 U.S. 347, 359
n.13 (1976)). Although the “prototypical” First Amendment
retaliation case arises from the termination of public
employment, see Blair, 608 F.3d at 544, we have recognized
claims for First Amendment retaliation in several non-
employment contexts.

    “The injury to position or privilege necessary to activate
the First Amendment . . . need not rise to the level of lost
employment. Retaliatory actions with less momentous
consequences . . . are equally egregious in the eyes of the
Constitution.” Hyland, 972 F.2d at 11135. Indeed, we have
held that a plaintiff was deprived of a valuable government
benefit when a state rejected an application to exhibit
commercial and noncommercial speech, Outdoor Media
Group, 506 F.3d at 906; terminated a prisoner from his prison
job, Vignolo, 120 F.3d at 1078; suspended a previously
authorized environmental use permits, Soranno’s Gasco, Inc.
v. Morgan, 874 F.2d 1310, 1314 (9th Cir. 1989); revoked a
business license, CarePartners LLC v. Lashway, 545 F.3d
20 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

867, 871, 877–78 (9th Cir. 2008); or removed a volunteer
from his unpaid position, Hyland, 972 F.2d at 1135.

    ABOR had no affirmative obligation to collect or remit
the ASA fee, but having done so for fifteen years at no cost,
ABOR could not deprive the ASA of the benefit of its fee
collection and remittance services in retaliation for the ASA’s
exercise of its First Amendment rights. ABOR’s fee
collection falls within the range of government benefits we
have previously recognized as sufficiently valuable to give
rise to a retaliation claim. Indeed, the ASA alleged that its
student fees were allocated to its efforts to exercise core
political speech. As we have previously held in other First
Amendment retaliation cases, and as we now hold in this
case, the collection and remittance of funds is a valuable
government benefit, and a change in policy undertaken for
retaliatory purposes that results in the deprivation of those
funds implicates the First Amendment.

                              3.

    A plaintiff may establish motive using direct or
circumstantial evidence. Ulrich v. City & County of San
Francisco, 308 F.3d 968, 979 (9th Cir. 2002) (citing Allen v.
Iranon, 283 F.3d 1070, 1074 (9th Cir. 2002)). In cases
involving First Amendment retaliation in the employment
context, we have held that a plaintiff may rely on evidence of
temporal proximity between the protected activity and alleged
retaliatory conduct to demonstrate that the defendant’s
purported reasons for its conduct are pretextual or false. Id.
at 980. At the pleading stage, a plaintiff adequately asserts
First Amendment retaliation if the complaint alleges plausible
circumstances connecting the defendant’s retaliatory intent to
     ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS 21

the suppressive conduct. O’Brien, 2016 WL 1382240, at *11,
*13.

    The ASA offers several plausible factual allegations to
support its contention that ABOR changed its policies to
retaliate against the ASA for its support of Proposition 204.
As direct evidence of ABOR’s retaliatory intent, the ASA
alleges that several Regents publicly acknowledged that the
Board’s decision to suspend collection of the ASA student fee
was “political in nature and resulted from ASA’s advocacy in
support of Proposition 204.” As circumstantial evidence of
ABOR’s retaliatory intent, the ASA notes that “[s]everal
members of [ABOR] criticized ASA for supporting
Proposition 204,” and that the Board’s allegedly retaliatory
conduct was temporally proximate to ASA’s exercise of its
free-speech rights. Taken together, those allegations
sufficiently identify ABOR’s retaliatory intent and the nexus
between the Board’s intent and its later suspension and
amendment of its policies.

    The ASA adequately and plainly pleaded a plausible
claim for First Amendment retaliation on the basis that
ABOR deprived it of a valuable government benefit. We
therefore reverse the district court’s dismissal of the ASA’s
retaliation claim and remand for further proceedings
consistent with this opinion.

                              V.

    When justice requires, a district court should “freely give
leave” to amend a complaint. Fed. R. Civ. P. 15(a)(2). A
district court’s decision to deny a party leave to amend its
complaint is reviewed for an abuse of discretion. Cervantes
v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1041 (9th
22 ARIZ. STUDENTS’ ASS’N V. ARIZ. BD. OF REGENTS

Cir. 2011). Dismissal of a complaint without leave to amend
is only proper when, upon de novo review, it is clear that the
complaint could not be saved by any amendment. Thinket Ink
Info. Res., Inc. v. Sun Microsys., Inc., 368 F.3d 1053, 1061
(9th Cir. 2004). As discussed above, the amendment of the
ASA’s complaint would not have been futile.

    The district court abused its discretion when it failed to
grant the ASA leave to amend its complaint to conform with
the requirements of Young. On remand, the district court
shall afford the ASA a reasonable opportunity to file an
amended complaint.

                   *       *          *

    For the reasons set forth above, we affirm in part and
reverse in part the dismissal of the ASA’s complaint, and we
remand for further proceedings consistent with this opinion.

   The ASA shall recover its costs on appeal.

  AFFIRMED in part, REVERSED in part, and
REMANDED.