Monday, April 25, 2022

Don't Say Mickey: Crony Capitalism and the First Amendment

 by Michael C. Dorf

In a recent blog post, Professor Eugene Volokh considers the question whether Florida's imminent withdrawal of the very substantial legal benefits it had bestowed on the Disney Corporation--in obvious retaliation for Disney's opposition to Florida's "Don't Say Gay" legislation--violates the First Amendment. Although Professor Volokh's views overall could be fairly called center-right (with a strong libertarian streak) while mine could be called center-left, we often agree and sometimes work together (e.g., here) on free speech issues.

I find Professor Volokh's post characteristically thoughtful and balanced. He first sets out the precedents and principles that might lead one to conclude that Florida will violate Disney's free speech rights if, as seems likely, it revokes Disney's various privileges and breaks. Employee speech cases are most apt here. As a Justice of the Massachusetts Supreme Judicial Court, Oliver Wendell Holmes, Jr. famously wrote that a man "may have a constitutional right to talk politics, but he has no constitutional right to be a policeman." That view--that the greater power to deny someone a government job includes the lesser power to condition employment on the relinquishment of free speech rights--is not the current state of the law. Rather, modern case law recognizes that government employees have a right to speak on matters of public concern, except that if the speech is in the course of official duties, the government may limit that speech where it has an interest that goes beyond the (illegitimate) interest it has in limiting the speech of citizens who are not government employees.

After acknowledging the force of the government employee speech precedents, Professor Volokh suggests two grounds for concluding that Florida's impending actions relating to Disney might be different. First, he observes that, as opposed to the run-of-the-mill government employee, "officials exercising political power are generally not protected from retaliation by other political figures, at least when the retaliation consists of benefits conferred by the other political figures in the first place." The extraordinary powers that Florida has invested in Disney include those ordinarily reserved for government entities.

Second, Professor Volokh notes that Florida would be withdrawing special benefits from Disney that go well beyond "the sorts of contracts (there, for trash disposal) that pretty much any company could bid for," so that "withdrawing th[e company's "extraordinary"] status would simply put Disney in the same position as other companies in that geographical area, and the bulk of other companies in Florida."

Although Professor Volokh does not offer a bottom-line conclusion one way or the other about whether withdrawal of Disney's special status would be constitutional, I read him as tentatively leaning towards a conclusion that the withdrawal would be valid. Accordingly, I want to push back a little on the two lines of argument mentioned above to explain why I lean tentatively in the other direction--towards concluding that what Florida proposes to do is unconstitutional.

Glossing over any distinctions one might draw between the free speech rights of individuals and corporations (as Professor Volokh does), it strikes me that the kinds of political power that Disney exercises are not relevant to its speech on the Don't-Say-Gay law. Here's a description from the NY Times:

Disney’s special zone is called the Reedy Creek Improvement District and gives the company considerable control over the planning and permitting process for construction on its 25,000-acre property, including road building. Reedy Creek also levies taxes on Disney to pay for the resort’s own fire and medical response battalions, among other services.

Put differently, in some respects Disney is a local government. So let's try to construct an analogy that's a bit different from the ones Professor Volokh gives--in which government officials lose their special privileges (like a member of Congress losing the chairmanship of a committee) in response to political statements or actions out of step with leadership.

Consider Bridgegate. The Democratic mayor of a municipality did not support the state's Republican governor's re-election bid; in response, people working for the governor retaliated against the municipality. Let's assume that the mayor speaks for the municipality. After all, he was elected. And he clearly exercises political power over the municipality--probably more local government authority than Disney has. Even so, when the governor's staff punished the municipality, it seems that they were punishing it for speech unrelated to the political power that the mayor and municipality exercise.

But wait. What about Professor Volokh's second observation? In the actual Bridgegate, the retaliation took the form of needlessly creating a traffic jam and endangering public safety; in that sense the governor's staff punished Fort Lee by making the municipality worse off than other New Jersey municipalities. Might the case look different if instead the governor's staff had retaliated by withdrawing some special benefit that Fort Lee had previously enjoyed?

Maybe, but I'm not so sure. That view sounds a bit too much like Holmes's no-right-to-be-a-policeman. We can think of a government job--even a low-ranking one--as a "special" benefit in the sense that most people aren't employed by the government. The relevant question for determining whether the loss of a benefit for political speech implicates the First Amendment strikes me as the one that the Court asks in the employee speech cases: does the government have an interest in controlling employees' speech that goes beyond its interest in controlling the general public's speech?

Where the speech relates to the official duties, the answer will generally be yes. And with respect to political appointees, the job is inherently political, so patronage of some sort is inevitable. But where the speech of an individual, local government, or corporation with some special governmental authority is on a matter wholly unrelated to the exercise of the governmental authority that individual, locality, or corporation possesses, the interest in retaliating in response is no different from the (nonexistent) interest in retaliating against ordinary citizens for speaking out on matters of public concern.

Accordingly, I find the garden-variety government employee speech cases more like the Disney case than Professor Volokh does. Nonetheless, I too hold my position tentatively because of the difficulty of proving illicit motive in most cases.

Governor DeSantis is trying to burnish his image as an anti-woke ideologue. Thus, he has gone out of his way to make plain that he wants the Florida legislature to revoke Disney's current status specifically in retaliation for Disney's opposition to Don't-Say-Gay. However, in the typical case in which government revokes some special status (or takes any action that disadvantages a company, local government, or individual), legislative motive will be more difficult to prove. And even when motive is clear, illicit legislative motive can be a problematic basis for invalidating legislation--as Professor Richard Fallon and I discussed in the Harvard Law Review (his article here; my response here).

Thus, at the end of the day, both Professor Volokh and I think it unresolved whether what Florida aims to do to Disney is constitutional, and neither of us is sure what the right answer is.

However, if the constitutional issues are difficult, the policy issues are not. What DeSantis and the GOP-controlled Florida legislature aim to do here is fundamentally corrupt--in much the same way that the repeal of state and local tax (SALT) deductibility by the then-Republican-controlled Congress and President Trump was. Their pretty obvious goal was to punish blue states for their political positions by shifting more of the tax burden onto them from red states. In analyzing that legislation in a Verdict column in late 2017, I noted First Amendment and other objections that parallel the ones I've noted here, as well as the same reservation about the difficulty of proving motive in cases less obvious than the attack on Disney. My bottom line with respect to SALT deductibility was this:

[N]o one should be fooled by the limits of what can be proven in court. In shifting some of the nation’s tax burden from over-represented red states to under-represented blue ones, congressional Republicans and President Trump acted in a crassly partisan manner and betrayed core [American] ideals . . . .

Likewise here, whether or not Disney can prevail in court, in wielding government authority in a crassly partisan manner, DeSantis and the Florida legislature act as corrupt bullies.


Postscript: After I drafted but before I posted the foregoing, I came across Ian Millhiser's analysis of the same topic on Vox. He concludes, largely on the strength of the SCOTUS opinion in Hartman v. Moore, that Florida's revocation of Disney's privileges obviously violates the First Amendment. Although I am often in agreement with Millhiser's usually astute analysis, I respectfully disagree that this is an easy case as to which the existing precedents provide a determinate answer.

It's true that the Hartman case includes the language Millhiser quotes: "official reprisal for protected speech offends the Constitution . . . ." But that language is surely less sweeping in practice than on its face. Hartman was a criminal prosecution, not the withdrawal of benefits, and the case could hardly have been meant to overrule the decisions allowing the withdrawal of all special statuses--such as chairing a committee, as in Professor Volokh's example--in response to speech. It's also notable that the Court in Hartman rejected the free speech damages claim that the appeals court had accepted (prompting a dissent by Justices Ginsburg and Breyer).

To be clear, my normative bottom line is close to Millhiser's. I just don't share his certainty about where the law currently stands.