21 Comments

I made it to the end and found the whole thing illuminating and, dare I say, enjoyable.

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Thank you for the detailed explanation. Much appreciated.

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Fascinating! I’m gonna send this to my lawyer grandson who’ll enjoy it even more than I did. DeSantis’s vindictiveness is incredible. Can’t wait until he loses these cases.

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May 15, 2023·edited May 15, 2023

I look forward to your articles every week. The topics are always interesting, the viewpoints are always unique, and the legal analysis is always pellucid. This article is no exception -- it's extremely thoughtful from start to finish.

That said, I disagree with it. I am neither an experienced lawyer like you, nor even an American, but I have a working knowledge of the Constitution, and have read a lot of Supreme Court decisions. So you can take what I say with a pinch of salt. But my main criticism of this analysis is that recognising cognisable First Amendment retaliations in this context is unsupported by precedent, unjustified in principle, and -- most importantly -- completely unworkable in practice.

Let's start with the most important question: would your analysis be different if Disney advocated for fascism or communism? For sure, this is legally protected speech. Florida assuredly could not legally penalise -- as in, impose a civil or criminal penalty on -- Disney for it. But I can say with almost as much confidence that this speech would not be irrelevant to any consideration of whether tax breaks or regulatory perks are justified. Even re-evaluating any previously granted benefits of that sort would not be -- as it would be according to your theory -- a sinister form of punishment designed to shut them up. It would instead be a sensible realisation that the values a business promotes is an essential part of any economic or practical assessment of its worth to the society. In other words, there is no principled basis -- none whatsoever -- to say that Disney's 'speech' is automatically, per se less integral to a reasonable assessment of the company's economic value to Florida than its "sewage collection, surface water control, emergency medical services, drainage, bridge maintenance". With respect, have you seen the recent boycott against Budweiser? I think that strongly supports my argument. The central flaw with your argument is therefore your extremely narrow and reductive view of what brings economic value.

In this case, DeSantis thinks -- not unreasonably -- that his constituents and the people he is trying to attract to Florida will find Disney's values perverse and for that reason be less likely to use its products, services and facilities. This will make the company less profitable. And all of that makes all the tax breaks and regulatory perks less justifiable. Once the complaint in seen in that light, it is clear that what Disney is seeking is not a licence to be left alone to say what they like, but special treatment due to its political speech that no other comparable business would get. And the answer should be: no, Disney has no right to have its political speech actively facilitated or subsidised by the government, to the detriment of other companies and other interests.

You might be thinking 'but what if this economic argument is a mere pretext for retaliation?' I do not think Disney have sufficiently demonstrated that Florida's actions fail to advance any state interest other than chilling speech. Constitutional arguments based on motivations alone have to cross a high threshold. And rightly so. Especially here, where in my view the 'retaliation' and economic interests are essentially inseparable.

I want to make a couple of final points. I assume for the sake of argument that corporations are as protected by the First Amendment as people. I know there is a long line of case law confirming this, but I still think it rests on dubious premises. Chief Justice Marshall once said that "a corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being a mere creature of law, it possesses only those properties which the charter confers upon it, either expressly, or as incidental to its very existence". You cannot imagine any judge saying the same about a human being. Corporations do not have minds of their own. They rather have perverse incentives to take whatever stances suit their interests. Here, it is highly likely that Disney -- along with many other corporations -- would not have taken the same public positions if it was not terrified of what some of its activist employees might do otherwise. I find the idea that its public pronouncements represented a unique, authentic, human viewpoint, or added anything to the marketplace of ideas, highly dubious. And yes, I would say the same for all other corporations. I have nothing against them at all. My view is simply this: because the Bill of Rights was informed by natural law precepts, the suggestion that it applies to corporations -- artificial beings which are the mere creature of law -- as much as people is nothing short of absurd.

You would not be surprised to hear that I believe Twitter's First Amendments lawsuits against DeSantis and other governors should be laughed out of court. I would be interested in your perspective on this.

Another point: your argument is at its strongest when it lists what the US Supreme Court has protected under the First Amendment in the past. I have followed these precedents for the sake of argument. For these reasons given above, I do not consider any of them directly applicable. Moreover, I consider that almost all -- if not all -- of them took the First Amendment well beyond its proper limits, whether the decisions favoured liberal policies or conservative ones. Almost any law hinders 'expression' -- and even speech indirectly -- in some way. Whether that hindrance is justified should be down to the democratic process, unless it the impugned law imposes a legal penalty for historically protected speech. The words 'abridge' and 'speech' are being used far too loosely. And this does not necessarily even advance free speech. It instead trivialises the First Amendment. It only advances the sorts of expression favoured by a majority of the Justices sitting on the Court. In addition, it constrains any government which wants to advance free speech by passing laws to protect people who might be bullied for their views by private actors colluding with each other -- namely the media and big corporations. This complaint might sound reactionary today, but it is crucial to remember that the great liberal John Stuart Mill thought that in Victorian England social pressure and conformity was a far greater threat to free speech than government censorship. In my view, conservatives cannot complain about liberals using the Constitution to advance progressive social policies while they often give similarly unprincipled, result-orientated rulings on the First Amendment clauses on speech and religion, and the Equal Protection Clause.

However, as I have said, this case can be distinguished from all the precedents you have listed. "Complete definitional boundaries around or between different legal concepts... are generally hard to achieve, and usually get wrecked upon the unanticipated facts of a later case which appears to straddle them" Lord Briggs, para 148 Bott & Co. Solicitors Ltd v Ryanair DAC [2022] UKSC 8. I have no idea how the US Supreme Court might hypothetically rule in this case. On the one hand, the majority of the Justices are conservative. On the other hand, they seem incredibly protective of the First Amendment's wide ambit. All I am saying is that if Disney win we will get another ruling which essentially says 'the government's actions interfere with First Amendment interests to an unjustifiable degree' instead of something less partisan, more principled, and with less of a slippery slope. It simply cannot be the case that government is categorically forbidden from considering the implications of protected speech when making political and economic decisions. That would prevent them from governing.

I have little to say about the Contracts Clause because that dispute seems extremely complex to me.

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And Disney strikes back where it hurts the most. Money jobs and taxes

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Too bad Republicans don't apply this to the NRA. “When corporations try to use their economic power to advance a woke agenda, they become political and not merely economic actors. … Leaders must stand up and fight back when big corporations make the mistake, as Disney did, of using their economic might to advance a political agenda.”

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You have a gift for making things seem simple. But I'm not sure if this situation is as straightforward as you make it out.

1. I don't know much about Hungary, but I understand that Orban has made a practice of working with corporations controlled by allies. Let's imagine that DeSantis adopts a similar practice, and then eventually loses reelection - in the lame duck period, he contracts with corporations to manage the state's educational system and hire back whichever teachers the corporation wishes.

1a. Do you agree that granting corporations "free speech" rights that are too strong could have the potential to undermine democracy, at least in some contexts? It would an outgoing administration to exercise dead hand control, no?

1a. The use of contract law to hobble an incoming administration isn't so far-fetched... Trump/Miller did this to some extent when DHS took on contractual obligations to advise some states before it would change certain practices.

2. Take two scenarios: (A) the new governor expresses publicly how he feels about said corporation and then ends the contract; (b) the new governor says nothing publicly but goes about firing them as soon as she can. Can it be correct that a Governor cannot take away the corporation's uninhibited control over the schools if the Governor has spoken publicly about it, but the Governor can do so if she just stays silent. That seems to reward Nixonian craftiness.

2a. Put another way, the limitations on evidence of 1st Am violations in this context creates odd and undesireable incentives. When politicians punish corporations, we should want them to say why, so that they can be punished or rewarded appropriately.

3. The Disney situation might seem clear, but I'm not sure these principles are nearly as obvious as you make them out. What about private prison corporations advocating for more immigration detention, or lifting up voices advocating same? What about Blackwater etc. urging continuation of Afghanistan military involvement, etc.? Your principle would seem to limit the Biden Administration from considering that in deciding to award contracts to other jailors, etc. Our govt is already weak in comparison to some corporate actors.

3a. Does it matter whether the corporate acting is core governmental in nature? What if Trump contracted with Fox or OANN to staff the spokesperson offices of every cabinet-level or sub-cabinet-level agency?

3b. It does feel pre-Reform Act British for the Reedy Creek district to be governed by the propertied classes... if I understand correctly, only someone with 1 acre of land is qualified to serve and landowners vote based on acreage. It's effectively a pocket borough.

I take your point about corporations fearing retaliation, and the clarity of the statements here. I'm not just sure that's the only relevant issue.

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Thanks for the delightful read, all the way to the bottom, Adam

I did note a few typos—quite understandable for a piece of writing that likely poured out—that you may want to review. From memory:

Two (redundant) instances of “should” in one sentence; one inside and one outside a quote

“Anyway” where you mean “anyone”

“Is” where you mean “in” in discussion of Daniel Webster and legal lore

One more I forgot

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He says "also" twice in a sentence when he meant "only" the first time.

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I think Adam is wrong that this is unprecedented. The closest precedent is a Fourth Circuit case, Kensington Volunteer Fire Department v. Montgomery County, which holds that you can't bring a First Amendment retaliation claim based on legislation, because courts aren't allowed to strike down laws under the First Amendment based on the motives of the politicians who passed it. (This is different from bringing a First Amendment retaliation claim based on a executive official's discretionary action, which is perfectly permissible and is in fact where the retaliation doctrine comes from.) Kensington is in turn based on a very famous SCOTUS case, United States v. O'Brien, which upheld a statute prohibiting the burning of draft cards despite the fact that it was enacted to suppress protests of the draft; SCOTUS held the legislative motive was irrelevant to the First Amendment inquiry and could not be considered.

I also think the contracts clause analysis is incorrect. The importance of Section 163.3241 is that because it preexisted Disney's development agreement with RCID, it is considered PART FO THE CONTRACT. ALL contracts incorporate ALL existing applicable law. So if you enter into a contract with a government agency that is subject to revocation by the state legislature, you agreed to that term contained in that statute as part of your contract, the same as if the language were actually recited as a term. You can see this rule referred to in footnotes 14 and 17 of US Trust Co. v. New Jersey, a SCOTUS contracts clause case from the 1970's.

Because Disney agreed to the applicability of Section 163.3241 when it signed its contract, the legislative revocation does not impair the obligation of its contract in anyway; Disney never obtained the contractual right to be free of a Section 163.3241 revocation in the first place.

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I see your point on the first amendment argument: any time federal courts try to piece out "motivations," that's just asking for trouble.

Still, I'm going to argue that O'Brien is distinguishable (despite the broad holding). On the one hand, there is No. Question. the sole purpose of criminalization of burning draft cards was an attempt to suppress speech. However, if you squint right, you can find (at the time) some legitimate interest in keeping America combat ready, by having all men carrying a little card. I mean, there's at least something there: there was a reason for all those little cards, before the card burning protests.....

Conversely, DeSantis et al shot their mouths off about how the SOLE REASON for these changes, was to suppress Disney's criticism of the gov't: there was literally no other reason.

Had DeSantis just kept his fat yap shut, then yeah--I'd say that Disney was in for some uphill sledding. But then, he wouldn't be DeSantis... he'd be a competent governor.

Two cases I'll point to are National Institute of Family and Life Advocates v. Becerra, 585 U.S. ___ (2018) and Masterpiece Cakeshop v. Colorado Civil Rights Commission, 584 U.S. ___ (2018).

In Becerra, Justice Thomas, writing for the Court, protected pro-life groups free speech right to lie to their clients, which shows how far some members of the Court will go to protect corporate speech.

In Masterpiece, the Court reversed a sanction on a baker who refused to bake a cake for a same sex couple, contrary to state law. The Court sent the case back, with directions to look into any "anti-religious bias," motivating enacting of the law--based on A statement from AN official. My point is, the Court has looked at possible improper "motivations" in enacting laws....

But on Masterpiece, the Court ALSO affirmed Trump's "Muslim Ban" in Trump v. Hawaii, 585 U.S. ___ (2018), holding the Court couldn't look at any of the bazillion statements Trump made, touting the fact the ban was motivated by Trump's religious discrimination....... So, that would lend support to your assertion that the SCt won't look at "motivations."

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Kensington's facts are materially different and I'm not sure I agree the 4th Circuit's opinion should be read to support Florida in the Disney suites. In Kensington, a volunteer firefighter organization's budget was cut; the organization sued the County government alleging the cuts were retaliation for lobbying in a previous round of budgeting. However, the law passed by the local government here cut the firefighter organization's budget only incidentally. The cuts at issue in the lawsuit were less than 2% of the total budget reductions in the challenged law. Furthermore, the Circuit court agreed with the District court and concluded there was insufficient evidence to support the plaintiff's allegation the cuts were retaliatory, calling the budget cuts "thoroughly ordinary." Here's the conclusion of the relevant section of the 4th Circuit opinion (cleaned up):

In trying economic times, and in response to the loss of $14.1 million in projected revenue following the defeat of the ambulance fee legislation, the County passed a budget that called for difficult cuts felt by many. As the district court concluded "there is no doubt that Defendants had the authority to pass the budget savings plan, and it appears to be a thoroughly ordinary cost savings measure." Confronted with such a facially constitutional budgetary enactment, O'Brien instructs that we not strike it down "on the basis of an alleged illicit legislative motive."

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Obviously every case's facts are different but that's not how distinguishing cases works, especially given O'Brien has a big broad holding that we are supposed to ignore pretexts in First Amendment cases.

The HOLDING of Kensington is that retaliatory or speech suppressive motive is irrelevant when evaluating a legislative act. The language you quote is stray language dressing up the argument, but the holding is retaliatory motive is irrelevant.

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What is your perspective on the Contracts Clause aspect of the case?

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I think Disney contracted knowing that there was a statute that permitted legislative revocation, and that statute became a term in its contract, which makes it an easy case. (Disney's best argument is under the Due Process Clause, for what it is worth.)

I would also say that while the equities favor Disney and NOT DeSantis on the First Amendment issue (DeSantis is every bit the bully Adam portrays him as), on the contracts clause issue, this cuts the other way. After all, why was Disney signing this contract? Obviously to lock in sweetheart benefits to try to prevent the Florida Legislature from taking them away. They even got very cute with the Rule Against Perpetuities Clause and the reference to King Charles. It looks very much like they were scheming. And while I can see a court distinguishing the First Amendment caselaw and holding DeSantis was so blatant that O'Brien and its progeny shouldn't apply, I can't imagine a court saying that you have the right to rush in and sign a sweetheart contract before the Legislature can change the rules, and if you get that contract signed, the state can't do anything to get out of it under the Contracts Clause.

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Don’t we see that kind of phenomenon happen regularly though with businesses taking certain actions before certain legislation takes affect in order to be grandfathered in?

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We do, but my point is I think courts will be reluctant to say you have a constitutional right to get yourself grandfathered in to binding favorable terms that cannot be modified, especially when the statute that authorizes your contract says that it is revokable by the legislature.

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May 15, 2023·edited May 15, 2023

Kensington found that when a govt act is facially neutral, in this case a general budget cut, then motives should not be examined. DeSantis singling out a single contract fails that test and isn't applicable.

The Florida statute means that laws generally applied can render parts or all of a contract unenforceable. It was not intended, and does not, allow the legislature to single out contracts and revoke them. If the Democrats come back, can they cite this statute to revoke all of the contracts of DeSantis' contributors? Of course not. The contracts are constitutionally protected. Adam is right about this.

I think you mischaracterize O'Brien as well. To quote from the digest, "Warren showed deference to the legislature in the sphere of military service. He observed that the law covered conduct rather than speech, which meant that the Court should review it more leniently. Expressive conduct that has a symbolic meaning still may be protected by the First Amendment, but the standard of review requires only an important governmental interest that is content-neutral, is not independently unconstitutional, and does not infringe on more speech than is needed to pursue the government's interest." That is, the court can examine DeSantis' laws for their effect on free speech and require the govt to articulate their "important govt interest," which is another way of saying they can examine motives in free speech cases.

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1. DeSantis' bill is facially neutral. It reorganizes the Reedy Creek Improvement District.

2. The Florida statute means that the Legislature can revoke development agreements. This is 100% its plain meaning and it's very weird that people are trying to avoid what the statute plainly says.

3. Yes, O'Brien is a symbolic expression case. But that cuts the exact opposite way as you are saying-- the key point is that because it on its face targeted conduct and not speech the Court would not "look behind" the statute at the motivation to target speech. Same thing here. DeSantis' law reorganizes the Reedy Creek Improvement District. That targets conduct and not speech on its face. And you can't look behind that at the motivations.

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I would disagree that a bill that singles out one entity is facially neutral per se. This is more like a bill of attainder for a corporation (I know that's pushing it). The statute requires contracts to be modified or revoked if a new law "preclude[s] the parties’ compliance with the terms of a development agreement." The new law didn't preclude compliance, it revoked the contract outright. Not the same thing. Also, it has to be read consistently with the Constitution, which means that you could use it for a legitimate govt purpose, which the govt has to articulate, that somehow outweighs the contract, but not to punish speech. I don't think revoking one statute and replacing it with another has anything to do with conduct within the meaning of O'Brien. I have to go back to work, but want to say that I'm enjoying this with you and appreciate your arguments and civility.

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It has a legitimate government purpose. The Legislature wanted to overturn collusive deals made by Disney and the RCID in anticipation of the reorganization.

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