HOUSTON (CN) — Texas asked the Fifth Circuit Court of Appeals on Monday to toss a judgment ordering its attorney general to pay $336,000 in attorney’s fees to business owners who successfully challenged a law blocking state agencies from hiring contractors that boycott Israel.
Texas joined 25 other states with similar legislation when its passed House Bill 89 in 2017. Dubbed “No Boycott of Israel,” it barred state agencies or local governments from entering into contracts unless the agreement contained written verification the contractor does not boycott Israel.
Bahia Amawi, a Palestinian U.S. citizen, had worked for the Pflugerville Independent School District for nearly a decade as a speech therapist for kindergarteners when the school district offered to renew her contract for the 2018-2019 school year.
She refused due to a new anti-boycott of Israel clause in the contract. She then sued Texas Attorney General Ken Paxton and Pflugerville ISD in Austin federal court in December 2018, claiming HB 89 violated her First Amendment rights.
Amawi testified she is part of the boycott, divestment and sanctions movement against Israel, based on South Africa’s anti-apartheid movement, in support of her family living in Palestine, who she claims is subject to curfews imposed by the Israeli government that last for weeks, preventing Palestinians from buying groceries and going to doctor’s appointments and blocking their children from attending school.
U.S. District Judge Robert Pitman, an Obama appointee, consolidated Amawi’s case in January 2019 with a parallel challenge brought by four men, two of whom are of Middle Eastern descent and claimed two Texas school districts denied them work as debate coaches because they refused to agree not to boycott Israel.
Pitman issued an injunction on April 25, 2019, blocking enforcement of the law. He found the plaintiffs were likely to succeed on their claims that HB 89 was an unconstitutional viewpoint-based restriction on free speech.
Less than two weeks later, Texas Governor Greg Abbott signed House Bill 793.
A Fifth Circuit panel then stayed Pitman's order and another panel of the New Orleans-based appellate court eventually determined HB 793 mooted the claims of the plaintiffs, all of whom contract with Texas school districts or universities through their sole proprietorships, enterprises owned and run only by one person.
House Bill 793 amended the law so it no longer applies to sole proprietorships, only to businesses worth more than $100,000 with 10 or more employees.
The contractors then asked Pitman to award them attorney’s fees, but only against AG Paxton. Pitman obliged last April, ordering Paxton to pay counsel from the American Civil Liberties Union of Texas and Council on American-Islamic Relations more than $336,300 in fees.
Paxton appealed to the Fifth Circuit and a new three-judge panel heard arguments Monday at the Houston federal courthouse.
Texas Assistant Solicitor General Michael Abrams argued the attorney’s fees award should be reversed because the contractors have not met their burden of showing they are prevailing parties. Under Fifth Circuit and Supreme Court precedent, Abrams said, they must show a “direct causal link” between Pitman’s preliminary injunction and the Texas Legislature’s passage of HB 793, watering down the “No Boycott of Israel” legislation so it no longer applies to sole proprietorships.
But HB 793 was in the works for months prior to its passage, Abrams emphasized.
The Legislature’s 2019 regular session started in January of that year and State Representative Phil King, a Republican from Weatherford, proposed HB 793 early in the session. The Texas House of Representatives then passed it by a veto-proof majority of 105-0.
The full Texas Senate approved it by a large majority just days after Pitman blocked it with a preliminary injunction on April 25, 2019, and Governor Abbott quickly signed it into law, effective immediately, on May 7.
“It’s hard to think of stronger evidence that the injunction itself did not cause the legislature to moot the case,” Abrams surmised.
U.S. Circuit Judges Edith Jones and Kyle Duncan appeared in Monday’s hearing to be leaning towards tossing out the attorney’s fees award against AG Paxton or substantially reducing it.
Jones, a Reagan appointee, asked Amawi’s attorney, Justin Sadowsky of the Council on American-Islamic Relations, why Amawi did not also seek attorney’s fees from Pflugerville ISD.
Sadowsky replied, “Because in the case the school district was passive. … They were taking no position and weren’t active, and I think it was just a matter of—"
“It doesn’t matter? She sued them, she prevailed,” Jones cut in.
“I think it was a matter of courtesy. Whether that courtesy was deserved or not,” Sadowsky replied.
Jones also noted the challengers had sought permanent injunctive and declaratory relief the law was unconstitutional but had only secured a preliminary injunction before the Texas Legislature passed the amendment that mooted their case.
“Your clients barely prevailed. They ended up prevailing for their own benefit but not overturning the law as a whole,” Jones told ACLU of Texas attorney Thomas Buser-Clancy, who represented the cohort of contractors whose case was consolidated with Amawi’s.
Buser-Clancy countered that the only requisite to be considered a prevailing party entitled to attorney’s fees is if “you succeed on a significant claim that affords some relief,” not all the relief you wanted.
“But you don’t get all your fees when you only prevail on a narrow part of your claim,” Jones added.
Duncan, a Trump appointee, focused on the timeline of the case. He said that under Fifth Circuit precedent, there must be a direct and causal relationship between the preliminary injunction and mooting of the case.
“Whereas here as I understand the timeline … the change in the legislation was on the two-yard line by the time the preliminary injunction issued. So how could it have directly caused it?” he asked Sadowsky.
Sadowsky said because the Legislature passed the amendment so quickly after Pitman entered his preliminary injunction, one should presume state lawmakers passed it in response to the injunction.
Also, both Sadowsky and Buser-Clancy cautioned the panel not to assume it was inevitable Abbott would have signed the bill absent the injunction.
U.S. Circuit Judge Carolyn Dineen King, a Carter appointee, rounded out the panel but did not speak during the 40-minute hearing. The judges did not say when they would rule on the appeal.
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