The Illegality of BDS in New York State: Response to Frivolous Arguments of Palestine Legal and the Center for Constitutional Rights

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February 2016

Proponents of Boycott, Divestment and Sanctions (BDS) related conduct—which is aimed at economically harming the State of Israel and Israeli persons (which necessarily includes some Palestinians)—routinely rely on arguments put forth by Palestine Legal and the Center for Constitutional Rights (CCR). They do so in attempt to assert the legality of these discriminatory commercial practices. In particular, BDS advocates claim that any boycott of Israel, Israeli goods, or Israeli persons is protected by the First Amendment, and that the application of state anti-discrimination laws to prohibit or penalize BDS activities is consequently unconstitutional. Analysis of these arguments, however, readily reveals their fatal deficiencies, as discussed herein. It is imperative that businesses and other entities contemplating the implementation of BDS practices understand these flaws, lest they find themselves subject to potentially crushing legal liability. The following analysis focuses on the legally defective and professionally irresponsible arguments presented by Palestine Legal and CCR regarding New York State anti-discrimination law and its implications for BDS conduct.

The BDS movement and actions taken in furtherance thereof are widely viewed as thinly veiled manifestations of anti-Semitism. That is, BDS is understood to be based more on animus toward Jews, Israel, and the Jewish state rather than on any legitimate interest in rectifying the plight of an Arab people. This is apparent from the BDS movement’s singular focus on Israel, the only democratic country in a sea of dictatorial Islamist regimes. These regimes consistently perpetrate the most heinous of civil and human rights violations against their own civilian populations, which the BDS movement entirely ignores. By obsessively crusading for Palestinian people living under Israeli authority, while ignoring rights violations committed against Palestinians by Hamas, Jordan, Lebanon, Syria, et al, BDS betrays its inherent bias. Indeed, BDS is only pro-Palestinian to the extent that it is anti-Israel.

It must be understood that the theories of liability discussed below arise in the context of persons and entities engaging in discriminatory commercial conduct (as distinct from consumer conduct), such as when one business boycotts or refuses to deal with another business or individual because the latter is Israeli or has a connection with Israel. Individual consumers, acting in their own individual capacities, cannot be punished for refusing to purchase Israeli products, regardless of motivation. Supporters of BDS are also free to stage protests, circulate petitions, and otherwise exercise their First Amendment rights to advocate for boycotts of Israel, Israeli goods, and Israeli persons. However, BDS proponents and their supporters—including Palestine Legal and CCR—neglect to differentiate between these scenarios in their arguments, instead jumbling all BDS conduct together, be it advocacy, individual consumer decisions, or corporate action. The result is a confused analysis where legal protections applicable in certain contexts are improperly extended to others, and the very real distinctions between lawful and unlawful conduct are blurred.

Fallacy #1: Political, social, and economic boycotts of Israel, Israeli goods, and Israeli persons are protected by the First Amendment of the U.S. Constitution.

The most common argument advanced to defend the boycott of Israeli persons, entities, and goods is that non-violent boycott activity seeking to bring about political, social, or economic change is constitutionally protected speech. As such, the argument goes, state or federal laws that prohibit such boycotts violate the First Amendment. This reasoning relies almost exclusively on NAACP v. Claiborne Hardware Co., a landmark civil rights case decided by the U.S. Supreme Court in 1982.[1]

In Claiborne, black citizens voted at a meeting of the local NAACP branch to boycott white merchants with the goal of inducing elected officials and business leaders to adopt racial justice measures. Participants refused to patronize identified white-owned businesses, and individuals gave speeches and engaged in picketing and other nonviolent conduct to support the boycott. Some participants committed or threatened acts of violence. The targeted white merchants who suffered economic damages as a result of the boycott retaliated by filing suits against the NAACP and others, both to recover for lost earnings and to enjoin future boycott activity. The Mississippi Supreme Court found the NAACP and other named defendants liable for the tort of malicious interference with the plaintiffs’ businesses and, based thereon, concluded that the entire boycott was unlawful.[2]

The case reached the U.S. Supreme Court, which ruled against the merchants and held that the nonviolent elements of the boycott—speeches, picketing, and other associated communications—were protected under the First Amendment. There are several important points of distinction between the facts of Claiborne and those of the typical BDS scenario where an individual or entity engages in discriminatory business conduct aimed at harming Israeli persons or entities.

First, the Mississippi Supreme Court did not find that the boycotters had violated a state law. Rather, the finding of liability was based on common-law tort theory, which the Supreme Court specifically acknowledged in its reversal of the prior decision.[3] That is, in holding that the boycotters in Claiborne were not liable, it was relevant to the Court’s determination that the boycotters had been found to have committed a tort, rather than a violation of state law. Dissimilarly, in the context of BDS activity (discriminatory business conduct) perpetrated in New York State, existing state law expressly prohibits boycott activity targeting persons and entities because of their national origin. If a boycotted entity files suit claiming violation of the New York State law—rather than commission of a tort—and a New York State court imposes liability, there is no indication that, if appealed, Claiborne would guide the Supreme Court to reverse the state court’s decision.

Second, the conduct challenged (and later found to be legal and protected) in Claiborne was largely speech, not business conduct. Indeed, the issue in Claiborne was whether the state could justify a “complete prohibition” on the boycott, including speech and other expressive conduct.[4] The Supreme Court found that such a sweeping prohibition could not be justified. This is easily distinguishable from a BDS situation where state law prohibits—and provides for the recovery of damages against businesses that engage in—discriminatory commercial conduct aimed at disadvantaging others because of their national origin. The statutory prohibition is limited to business activity and, notably, does not forbid advocacy, picketing, or other forms of speech in furtherance of boycotting. Hence, imposition of liability against boycotting businesses under such anti-discrimination statutes[5] cannot be characterized as a “complete prohibition” on boycotting, and there is no basis for concluding that the Claiborne court would similarly have found these laws problematic.

Contrary to the position advanced by CCR and Palestine Legal, Claiborne cannot reasonably be read to stand for the proposition that any statutory regulation of boycott activity is tantamount to a complete prohibition or, put another way, that any regulation of boycott activity is constitutionally impermissible. Again, reliance on Claiborne in the context of BDS is wholly inappropriate.

Fallacy #2: Political, social, and economic boycotts of Israel, Israeli goods, and companies that profit from or are complicit in the so-called “occupation” of Arab land are not prohibited under New York State’s Human Rights Law.

Section 296(13) of New York State’s Human Rights Law provides:

It shall be an unlawful discriminatory practice (i) for any person to boycott or blacklist, or to refuse to buy from, sell to or trade with, or otherwise discriminate against any person, because of the race, creed, color, national origin, sexual orientation, military status, sex, disability, or familial status, of such person, or of such person’s partners, members, stockholders, directors, officers, managers, superintendents, agents, employees, business associates, suppliers or customers, or (ii) for any person wilfully to do any act or refrain from doing any act which enables any such person to take such action. This subdivision shall not apply to:

(a) Boycotts connected with labor disputes; or

(b) Boycotts to protest unlawful discriminatory practices.[6]

Commonly referred to as the “Arab Boycott Law,” the statute was enacted to curtail Arab OPEC nations’ use of their “new-found economic strength to discriminate against and boycott certain religious and ethnic groups,” namely Jewish-owned businesses.[7] Palestine Legal and CCR proffer the groundless position that boycotts targeting companies because of their relationship with Israel fall beyond the scope of section 296(13). Such boycotts, they claim, are outside the ambit of the law because they protest “the Israeli government’s failure to comply with international rights and its failure to respect the rights of Palestinians.” Regardless of their claim, the veracity of which is debatable, their reasoning ignores both the statutory language and case law.

Courts have steadfastly affirmed that section 296(13) must be read broadly to include and prohibit discrimination in all forms of commercial activity and business practices, and that a finding of liability is justified when it can be shown that the “defendant engaged in a pattern of conduct that commercially disadvantaged only members of a protected class . . . .”[8] The decision to boycott only Israeli companies, irrespective of claimed motivation, undeniably satisfies this criterion. Whether the impetus is bigotry or supposed disagreement with the actions of the Israeli government, is irrelevant.

Further, the statutory exemption from liability for “[b]oycotts to protest unlawful discriminatory practices” is inapplicable in the context of commercial BDS activity. Section 296 expressly identifies the various forms of “unlawful discriminatory practices” governed by the statute.[9] These include discrimination in employment, housing, and public accommodation based on the protected status (e.g., national origin) of the targeted party. BDS proponents advance generalized theories of “illegal occupation” and target companies such as SodaStream that offer equal employment opportunities for Palestinians.[10] However, one would be hard-pressed to argue that such allegations regarding the daily life of Palestinians under Israeli government authority fall within any of the statutory provisions. The irony is striking: BDS claims to be protesting discrimination when, in reality, the entities carrying out commercial BDS are the only parties in the equation actually engaging in statutorily barred discriminatory conduct.

Fallacy #3: Lawsuits brought under the New York Human Rights Law for boycotts of Israel, Israeli goods or persons are unlikely to succeed in court.

As a last-ditch effort to encourage discriminatory business conduct prohibited under section 296(13), Palestine Legal and CCR attempt to convince their audience that such actions are unlikely to succeed by intimating that they lack merit:

Meritless lawsuits are always a possibility. Legal bullying is one of many tactics that Israel advocates use against Palestinian human rights activists. There are individuals, organizations, and law firms that will threaten to sue—and may actually sue—purely as a bullying tactic, even if their underlying claims are unfounded and fly in the face of basic democratic principles and established First Amendment law.

However, using the New York State Human Rights Law to challenge First Amendment-protected activity is unlikely to succeed in court. In fact, no court has ruled that boycotts of Israel or Israeli goods violate the NYSHRL or any other law.

. . . .

More importantly, as the Center for Constitutional Rights stated in a recent blog post [concerning boycotts of Israeli products], “Legal bullying will sometimes serve its purpose of intimidating people of conscience into silence, but it ultimately cannot stop the growing BDS movement in support of Palestinian rights.”

This argument is aspirational at best. A cursory read reveals it to be no more than a collection of statements that, while individually accurate, have no bearing whatsoever on the likelihood of success of a suit brought under section 296(13). Meritless lawsuits and legal bullying are of course possible, to the detriment of our legal system. The Lawfare Project has been exposing and combatting the filing of frivolous lawsuits for more than half a decade. However, the fact that some lawsuits within the realm of the universe may be meritless and filed as a “bullying tactic” does not logically support the proposition that any lawsuit filed to rectify harm caused by discriminatory BDS conduct is also frivolous.

Moreover, that no court has ruled that boycotts of Israel or Israeli goods violate the Human Rights Law adds nothing to Palestine Legal and CCR’s argument because the converse is also true: no court has ruled that such boycotts do not violate the law. That is, no case has been decided on this topic. This is likely due to the fact that, despite the clamoring of BDS advocates, New York businesses have consistently opted to comply with the law instead of boycotting. Without concrete discriminatory business conduct, there are no grounds for suit under the Human Rights Law. At minimum, the absence of a judicial decision means that a case applying the Human Rights Law to a boycott of Israeli goods could theoretically go either way. Indeed, The Lawfare Project would welcome a test case, but would pity the company that engages in discriminatory BDS conduct despite the staggering risk. Essentially, such a company would be hedging its bet on the prospect of a judicial determination that New York’s “Arab League Boycott” law does not prohibit the Palestinian (Arab)-inspired boycott of Israeli (Jewish) businesses.

At maximum, both the statutory language and the relevant case law strongly indicate that such a boycott would violate the Human Rights Law. What has been decided, in the Second Circuit’s opinion in Jews for Jesus, Inc., is that a suit brought under section 296(13) will withstand a First Amendment challenge. Specifically, the court held that “the statutes at issue in this case that bar ‘direct’ discrimination on the basis of, among other things, race or religion [including the New York Human Rights Law] . . . easily satisfy [the] criteria” necessary for states to “constitutionally regulate conduct even if such regulation entails an incidental limitation on speech” and, further, “[t]hese statutes are plainly aimed at conduct, i.e., discrimination, not speech.”[11]

Conclusion

Perhaps the erroneous arguments of Palestine Legal and CCR are the product of poor lawyering. More likely, they are part of a lawfare strategy to incorrectly apply case law in furtherance of the BDS goal of economically harming Israelis and Jews, precisely what the New York State law was conceived of to prevent. If the latter, the purposefully misleading analysis put forth by Palestine Legal and CCR lawyers arguably amounts to a violation of professional ethics.

[1] 458 U.S. 886 (1982).

[2] Id. at 894.

[3] Id. at 915.

[4] Id. at 914.

[5] California’s Unruh Civil Rights Act, for example, similarly prohibits boycotts and other discriminatory business conduct based on national origin. Cal. Civ. Code §§ 51, 51.5 (West 2016).

[6] N.Y. Exec. Law § 296(13) (McKinney 2016).

[7] Scott v. Massachusetts Mut. Life Ins. Co., 86 N.Y.2d 429, 435-6 (1995), citing Bill Jacket, L.1975, ch. 662, Cosponsor Anderson’s Mem in Support.

[8] Id. at 436.

[9] “The term ‘unlawful discriminatory practice’ includes only those practices specified in sections two hundred ninety-six, two hundred ninety-six-a and two-hundred ninety-six c of this article.” N.Y. Exec. Law § 292(4) (McKinney 2015) (emphasis added).

[10] Note that after SodaStream closed its West Bank factory, which the BDS movement claimed as a victory, hundreds of Palestinians were left unemployed. As one critic wrote, “[N]ot a single Palestinian is better off today without SodaStream in the West Bank . . . .” David Rosenberg, SodaStream Bows to BDS, and the Only Losers are the Palestinians, Haaretz (Nov. 5, 2014), http://www.haaretz.com/blogs/david-s-harp/1.624764.

[11] Jews for Jesus, Inc. v. Jewish Cmty. Relations Council of N.Y., Inc., 968 F.2d 286, 295 (2d Cir. 1992).