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newsBoycott, Divestment & Sanctions (BDS)

BDS proponents suffer third consecutive loss in court

With the dismissal of a challenge to Texas’ anti-BDS law, the BDS movement doesn’t appear to have any judicial cards left to play.

The John Minor Wisdom U.S. Courthouse, home of the U.S. Court of Appeals for the Fifth Circuit, New Orleans. Photo by Bobak Ha'Eri/Wikipedia.
The John Minor Wisdom U.S. Courthouse, home of the U.S. Court of Appeals for the Fifth Circuit, New Orleans. Photo by Bobak Ha'Eri/Wikipedia.

The movement to boycott, divest from and sanction Israel took another legal system loss this week. On July 10, the U.S. Court of Appeals for the Fifth Circuit in New Orleans dismissed a lawsuit that challenged a Texas state law that withholds state contracts from businesses that boycott Israel.

The case of A&R Engineering v. Scott, which was filed in 2021, concerns a provision in a Houston renewal contract offered to A&R Engineering and Testing that prohibits boycotting the Jewish state. Rasmy Hassouna, a Palestinian-American executive at A&R, who is from the Gaza Strip, brought the suit.

A&R requested that the city eliminate the provision, but Houston officials refused. That set the lawsuit in motion, with a subsequent district court injunction favoring the plaintiff. While Texas appealed the injunction, Houston agreed to move forward with a contract sans boycott provision.

The Fifth Circuit sided with Texas on the appeal, concluding both that A&R lacked standing to sue and that the lower court lacked jurisdiction to issue the injunction. The court decided the latter since the boycott law has “textually unenforceable language,” and “the attorney general hasn’t taken any action to suggest he might enforce the provision even if he has such power.”

Joseph Sabag, executive director of the Israeli-American Coalition for Action and an attorney, told JNS that the lifted injunction is a win for the anti-BDS movement even though the appeals court avoided analyzing the case on constitutional grounds.

“It was not a merit-based ruling,” Sabag, who helped draft the Texas anti-BDS law, told JNS. “Ultimately, the Fifth Circuit declared that the plaintiff had a lack of standing in order to bring the suit. He ended up obtaining the contract, and therefore he didn’t have the ability to claim harm.”

Following the issuance of an anti-BDS executive order in New Hampshire last week, anti-BDS laws remain in effect in all 37 states that passed them, noted Sabag. A few states have tailored their anti-boycott laws more narrowly following legal actions, but courts haven’t struck any of them down.

“I think we’re seeing that these thresholds that have been implemented have made it a lot harder for the other side to cultivate plaintiffs,” he said.

The recent decision in the Lone Star State is Texas-sized in importance, according to Sabag. State law regulated some $270 billion worth of Texas’s economy at the time that the state’s anti-BDS law was drafted, according to Sabag.

The Council on American-Islamic Relations, which has an anti-Israel history, brought A&R Engineering’s case. A JNS query to CAIR’s general counsel and national litigation director went unanswered.

Brian Hauss, senior staff attorney at the American Civil Liberties Union, supports those who challenge anti-BDS laws. Earlier this year, Hauss told JNS that the A&R Engineering case and Abby Martin v. Regents of the University System of Georgia would give the BDS movement new life in the courts. At the time, the U.S. Supreme Court had chosen not to hear an appeal to an Arkansas anti-BDS law.

Months later, neither case appears to have turned out as Hauss predicted. Last month, the 11th U.S. Circuit Court of Appeals ruled against Martin, a journalist and BDS proponent, who refused to sign an anti-BDS pledge as part of her contract to speak at Georgia Southern University. (CAIR brought that case as well. Hauss did not respond to JNS queries.)

A lower court judge declared Georgia’s anti-BDS law unconstitutional in 2021, but the state altered it the next year, raising the threshold for the anti-boycott pledge to state contracts worth more than $100,000. It also applied only to companies with five or more employees.

Last month, the appeals court ruled that Martin failed to prove a constitutional violation, though it made no ruling on the law’s constitutionality.

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