[no audio] honorable, the chief justice and associate justices of the suit in court of the united states. oh yea, oh yea, all people having business with the honorable supreme court of the united states are admonished to give their attention, the court is now sitting. god save the united states and this honorable court. hearis morning we will argument in case 19 177, united states agency for international development v. alliance for open society international inc. i note, at the outset, that

justice kagan is recused in this case. mr. michelle? mr. chief justice and may it please the court. 20 years ago the hiv-aids pandemic was devastating the world. in response, president bush proposed and congress adopted the leadership act, since reauthorized three times the act has committed nearly $80 million to global aids relief and it has worked, saving more than 17 million lives in the most successful foreign aid effort from america since the marshall plan. the issue at here requires recipients to have a policy of opposing prostitution and sex trafficking, which congress found our coercive practices that spread hiv-aids and degrade women and girls. this court held that applying that condition to respondents violates the constitutional conditions doctrine, but respondents sought more. the question is whether the condition can still be applied

to foreign grant recipients operating abroad. it can for two straightforward reasons. they cannot bring in unconstitutional conditions claim, and neither can respondents, because they are not subject to the funding condition. thanks to their victory in this court, respondents can accept and use funds without any compelled speech. respondents can choose to affiliate with foreign entities that must comply with the policy condition, but any affect on respondents message is now a product of their own choice, not government compulsion. respondent contrary view is startling. nonprofitsallow u.s. to export constitutional rights to legally separate foreign entities abroad, simply because they share similar brands. that novel theory has no basis andhis court prior decision could undermine long-standing regulations of foreign speech

and it has no practical justification. years foreign recipients have adhered to the policy position without harming program or respondent speech. this afforded respondents all the relief they deserve and the decision below should be reversed. >> council, one thing that is not clear from the record is the precise relationship between the domestic entity and its foreign affiliates. we know that there are no formal corporate ties, but do these entities share the same name, logo, brand? what would you require beyond that before attributing the speech of the foreign entity to the domestic one? are correct that the record is not particularly thorough on that issue despite 15 years of litigation on this matter the district court entered the injunction at issue here based on letter briefing. the formaln is that

distinction between the entities , the u.s. entity and foreign entity is all that is required to attach separate legal rights. it is important to note that respondents and the foreign entity they claim is affiliated made the choice to be separate legal entities. that choice had certain benefits such as shielding them from liability. ittice roberts: is reasonable to insist on formal corporate ties in this context? i gather that it is undisputed that to be effective in many of the foreign countries involved here, you have to operate through a foreign entity. the effort would not be as entityve if the american were the one on the ground in the foreign country.

i think that is not true as a uniform matter. that arehe respondents u.s. entities do operate in forest -- foreign countries through branch offices. prioresult of the court's decision they have the choice to operate in that way without compromising their speech. they are completely in charge of their own message, while also accepting leadership act funds. theyur second point, if make the choice to operate through a foreign entity, because they decide that is more convenient or effective, they have to accept the bitter with the sweet to be sure that operating through a distinct legal entity -- they are not without legal recourse. they can explain that a policy statement being issued by the foreign entity does not reflect their own views. their free speech allows them to do that. justice roberts: presumably it does reflect their own views.

they have the same name, same logo, same brand. i wonder if it makes more sense to think of the foreign entity as simply another channel for the domestic entity speech. with respect, i don't think it does. the only option available as it was in the court pasta decision last time i can understand why the court decided the way it did. now that respondents have a second choice, the choice they were fighting for last time, any consequences of the choice to operate as separate entities is the result of their own decisions. justice roberts: thank you, counsel. justice thomas? justice thomas: the respondent seems to argue that your guidelines -- your affiliate guidelines support their argument. what do you think of that? mr. michel: justice thomas, i don't think that they do as a

judicial matter. even if they did i think that would be at most a basis for challenging the guidelines, not the constitutionality of the statutes. the guidelines which are reproduced on pages one a through iiia of the reply brief supply that an entity can affiliate with a separate entity that has a different policy on prostitution and sex trafficking if it certain requirements. there are five nonexhaustive requirements spelled out there. four of those would generally be satisfied by an entity that has legal separation. it would be a rare circumstance that these regulations would ever result in the denial of funding to a foreign affiliate. the respondents themselves are no longer subject to the policy of requirement as a result of their prior decision in this case. if they run afoul of these regulations, which simply interpret what it means to have

a policy opposing prostitution and sex trafficking, these record -- these resolutions cannot be a mechanism for depriving the respondents of funds. justice thomas: when this issue was here last i seem to remember it was about the domestic organization. what has changed since it was here? there was very little talk. the only time the affiliates actually came out was as an alternative to enforcement procedures that were being used for the domestic organizations. what has changed since this case was here last? you are right, that was all that was at issue last time and the only thing that has changed is respondents have asked for broader relief. priorepted the court's decision and submit that respondents are not entitled to any further relief. as you suggest, there is nothing in the decision that

antemplates or suggests prohibition on requiring the policy requirement to foreign entities overseas. i think the court ought to simply analyze the claim under first principles. i think two simple principles resolve the case. respondents are not subject to a funding condition so they cannot have a constitutional conditions claim. the foreign entities that are subject to it have no constitutional rights so they cannot have an unconstitutional condition claim. we think that what respondents are asking for is unjustifiably bootstrapping this court's prior decision into global relief and we don't think there is any basis for that. justice thomas: thank you. justice roberts: justice ginsburg? justice ginsburg: the statute exempts certain nondomestic toities from the requirement adopt an anti-prostitution policy, those are the global

fund to fight aids, the world health organization, international aids vaccine initiative, and any u.n. agency. what is the reason for the exemption? why are these organizations exempt and not the organizations at issue here? mr. michel: there are a few reasons. the main in international organizations that are composed of their own separate sovereigns. i think it makes sense that congress would have wanted to respect the sovereignty of the members of those organizations in a way that doesn't apply to nonprofit organizations receiving funds at issue here. the vaccine organization that you mention seems to be particularly unlikely to bring into play the considerations tot motivated congress

require the anti-prostitution and sex trafficking pledge because they are not operating in the yield, they are simply doing research on vaccines. seems to meburg: it that these organizations are doing the same thing. is, may aquestion --dge taker may they nonetheless work with prostitutes to encourage the prostitutes to take preventative advance that will control of aids? mr. michel: the answer to that question -- justice ginsburg: can they do that? can they say, all right take the pledge -- we will take the pledge and work with prostitutes to make sure they use preventative devices. mr. michel: absolutely they can.

we encourage that. back to a point i was going to make earlier, the pledge that is required by the statute only requires one affirmative speech act. withis submitting to usaid the grant agreement a policy opposing prostitution and sex trafficking. there is no requirement that foreign entities that make that pledge and shout it from the mountain tops or get it to anybody's face about it. work withncouraged to prostitutes and victims of sex trafficking to prevent hiv-aids and one of the reasons for including this requirement in the statute and many other provisions dealing with prostitution and sex trafficking is that congress recognized that women who are often coerced into those practices are at heightened risk of contracting the disease, spreading the othere and of losing opportunities in their lives.

we certainly encourage groups to do that kind of work and it is not in all intentioned with the policy requirement. the amicus brief filed by the coalition against trafficking and women, which made the point that many prostitutes and victims of sex trafficking are themselves opposed to prostitution and sex trafficking so would not take offense at the statement the groups have to make. justice roberts: thank you, counsel. justice breyer? justice breyer: following up on that question. some would take offense. case, this court said this organization, which takes money from the government and uses it to fight aids, goes to prostitutes as part of their effort and says, use safety. that is one way of helping to

fight aids. if at the same time they have to are against prostitution, we don't like it, we are against it, it's terrible. the prostitutes will think they are hypocrites or maybe worse and will be suspicious. that was their reasoning last time. iota in that change one terms of their rights, which we said they have, the major organizations in the u.s. have the right to do. if does that change one iota they are scared of sending their own workers there, they give their money to a foreign worker in india who is associated with them? and that foreign worker goes and says the same thing to the rusted toots. -- prostitutes. since the foreign workers are identified by name, mission, ,ogo with the domestic workers how does it interfere one whit

argumente accept your they will be seen domestic as well as foreign ones as hypocrites, or worse, interfering with their mission. if we accepted that argument before why don't we accept it now? mr. michel: a couple of quick responses. i don't think that the court did bake it -- based its prior decision on that particular concern. they based it on the first amendment rights of the u.s. entities receiving the funds. the principal difference between the case last time and this time is not that the entities are interacting with prostitutes in any different manner. it's that the entities subject to the funding condition lacked constitutional rights under deeply established principles that foreign entities abroad don't exercise constitutional rights and can be subject to greater speech protection --

restrictions then u.s. entities at home. i want to reiterate that i think that concerns you have raised, while legitimate, are not born out of practice. whether this applied in the past two domestic groups and now to foreign groups, does not require them to tell prostitutes they oppose prostitution or to do anything affirmative beyond agreeing to oppose prostitution and sex trafficking. we are fortunate to have a 17 year track record to look at here. foreign entities have from the very beginning and recently under the stays of the district court injunction in the phase of this litigation, been subject to policy requirements throughout that period. as the judge noted in his dissent they have not identified perceiving of anyone hypocrisy in their message or setting back their work to fight hiv-aids. >> thank you, counsel. justice alito?

justice alito: as i understand the government's position it on whether the entity that ultimately gets the leadership act funds is a separate legal entity or legally distinct from the u.s. entity, is that correct? at is whetherk the recipient of the funds, the entity subject to the conditions has first amendment rights or not. we think it -- you understand to be the meaning of legally separate or legally distinct and how would that apply where the u.s. entity is a nonprofit anporation, a trust, or unincorporated association if there are any of those in the situation where the foreign entity is organized in one of

those ways? mr. michel: the difficult questions about how -- i think respondents in the foreign entities at issue are clearly legally separate in the way that matters for the funding program, which is to say they have applied separately for different grants. the easiest way to answer the question is that when a u.s. entity applies for a grant it is not subject to the policy requirement. when a foreign entity applies for a separate grant, separate of any affiliation it might have with a u.s. entity, -- justice alito: the u.s. entity gets the money and wants to make a subgrant to a foreign entity. if i understood your position, whether or not the foreign entity can be required to endorse the policy depends on whether it is legally distinct from the u.s. entity, is that correct? mr. michel: that is correct.

in the subgrant relationship that condition would attach to the foreign entity as the subgrantee of the u.s. entity. justice alito: if the u.s. entity is a trust, how would we determine what is legally separate -- what foreign entity is legally separate from a trust -- a u.s. trust? mr. michel: i have to confess, justice, we have not confronted the trust question. i don't have a ready answer for that. i think that in the 17 year history of the program there has not been any difficulty in telling apart foreign organizations from domestic organizations. we are happy to take a further look at the trust hypothetical. is that because, until recently the government's test was not whether it was a legally separate entity, but a multi-fact or test under the

regulation to which justice thomas referred? mr. michel: no, with respect, that is not and has not been our position. from the outset the government has applied the policy requirement to foreign entities abroad. it turns out as the result of injunctions for almost that entire period the government has not applied the policy requirement two domestic entities. justice roberts: justice sotomayor. [no audio] justice sotomayor? justice sotomayor: i am sorry jesus, did it again. the long -- i am sorry, chief, dated again. a domestic agency would not want to adopt a policy of being opposed to abortion, but who is willing to not supported in a program, they cannot receive

with unless they affiliate someone who will make the statement for them, correct? mr. michel: i don't think so, justice. a u.s. entity that opposes prostitution and sex trafficking, which is the only requirement as -- at issue, can receive funds and use those funds abroad without contracting or working through affiliates. justice sotomayor: the domestic corporation who does not want to speak a government's message but does want to do the program, cannot, unless it finds an affiliate who will speak a government's messages? mr. michel: with respect i think that was the issue in the case last time. justice sotomayor: exactly. you cametime, when it wasus you said

tantamount for mounting to a facial challenge. if we read our prior decision as addressingacially the restrictions -- i think if you read it as truly facially invalidating the statute we could not win. justice sotomayor: i will move on to another question. in hobby lobby, we recognize that a closely held corporation at least could be viewed as expressing the religious beliefs of its owner. a person independent legally. in hurley we said that parade organizers could be identified by the people who marched in their parade. saidarly, in reagan, we that an entity could speak through an affiliate who would be recognized as itself because it could then do lobbying that

reagan could not do under the government program. these cases seem to suggest to me, that at least in the first amendment context, let's put aside any other context, in the first amendment context we are less concerned with corporate formalities then we are with toutation or perception, and the extent that these corporations are closely affiliated -- i know you said before you don't think there is enough in the record and we can deal with that separately -- presuming the public does ,erceive these entities as one why wouldn't the first amendment applied to the inability of the domestic corporations to receive funds and partner with a closely iniliated foreign entity

implementing the program? mr. michel: a couple of points. i think hurley and the other cases you cited depend on the predicate of a forced affiliation between the two groups. in hurley it was the parade organizers and the group that wanted to join the parade. ofesponse to the last part your question, nobody is forcing the domestic entity to affiliate with the foreign entity. the domestic entity has a choice to take the money and use it itself. to hypocrisy or disturbance the message is a result of its own choice to affiliate with the group must make the statement. toy are not being forced affiliate with anyone in the way that was at issue in the cases you cited. justice roberts: thank you, counsel. justice gorsuch? you seem touch:

rely heavily on legal separation, but the first -- it is not clear why that cares. as opposed to the imputation -- can you speak to that further please? mr. michel: the reason to follow corporate separation here is that is how the grant program is organized. earlier there was a forced association that attribution matters. and every one of their funding condition cases, the court has looked to the effect on the recipient of the funds itself and respondents and the foreign entities are making the conscious choice to apply for separate grants and entities and subject -- >> i think the argument goes beyond the forced nature of the

association to the concern about chilling of speech. can you speak to that? the first amendment does not care just about protecting speech, it is concerned about avoiding chilling speech. mr. michel: i think you are right about that. i simply don't see any chilling of speech here, given that as a result of this court's prior decision domestic entities are free to take the money and use it themselves in charge of their own message and free to make a different choice which is to work to a foreigner -- through a foreign affiliate that will have to make the policy statement opposing prostitution and sex trafficking. respondentsance are free to use their own speech rights to explain that they don't share the views of the foreign affiliate on prostitution and sex trafficking. respondentsmately are asking for a right to

optimal message management, which is simply not what the first amendment protects. if you look at cases like rumsfeld, the law schools in that case -- they were concerned about misattribution of their position on letting military recruiters onto campus. that concern alone was not a reason to find it unconstitutional conditions violation. in the other funding cases like rust and reagan the entities were ultimately not allowed to operate in their preferred manner, but the abortion providers in rust certainly did not want to have to separate their speech in the way they did. the court found that it was constitutionally permissible for congress and the executive branch to require them to separate that speech because they still had an open channel to express their first amendment views. , the the prior decision respondents clearly have an open channel to express their views without chilling and having to give up the money. justice roberts: thank you,

counsel. >> thank you, chief justice. i am interested in the implications of our decision in this case, in particular if the government were to lose this case, would any other programs or statutes be invalidated or called into question by such a decision? would be realre concerns about that. i am not here to give up any other statutes, but i think the gravity -- the foreign entities have chosen to keep separate should somehow be treated as some kind of single global unified entity and if that is the theory that they are operating under i think it would call into question a number of different statutory and administrative regulations of foreign speech that likely could not be applied domestically.

congress has long banned campaign contributions in u.s. elections by foreign entities, but congress could not ban such contributions by u.s. entities. if a u.s. entity were able to say that it shares or confers on a or an affiliate it's first amendment rights it might well claim a basis for challenging a ban on foreign speech. there are many other examples that we cite in our brief. it is commonplace for congress and the executive branch to condition foreign aid to entities abroad on certain policy objectives such as opposing terrorism or supporting women's rights or opposing case of ther in the mexico city policy taking certain cases -- stances on abortion. -- domestic entities who are able to confer or unite with their

foreign bodies, foreign entities to challenge those -- we are leaving briefly. we will return as soon as the house session is done. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]

the speaker: the house will be in order. the prayer will be offered by our chaplain, father conroy. pray.in conroy: let us compassionate god, thank you for day.g us another in an earlier national crisis, gerald ford bound the nation with these words, my americans, our long national nightmare is over. works.stitution our great republic is a of rnment of laws and not men. here, the people rule. brotherly love purge our hearts of suspicion and