American Sustainable v. Hegar

── American Sustainable v. Hegar ── Court: Court of Appeals for the Fifth Circuit Date: May 29, 2026 Category: Private Civil Federal Case: 26-50111 Document: 76-1 Page: 1 Date Filed: 05/29/2026 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit _____________ FILED May 29, 2026 No. 26-50111 _____________ Lyle W. Cayce Clerk American Sustainable Business Council, Plaintiff—Appellee, versus Glenn Hegar, in his official capacity as Texas Comptroller of Public Accounts; Ken Paxton, Attorney General, State of Texas, Defendants—Appellants. ________________________________ Appeal from the United States District Court for the Western District of Texas USDC No. 1:24-CV-1010 ________________________________ PUBLISHED ORDER Before Graves, Ho, and Douglas, Circuit Judges. Per Curiam: IT IS ORDERED that Appellants’ opposed motion to stay the injunction pending appeal is GRANTED. Case: 26-50111 Document: 76-1 Page: 2 Date Filed: 05/29/2026 No. 26-50111 James C. Ho, Circuit Judge, concurring: I heartily concur in staying the preliminary injunction pending appeal. Texas prohibits public entities from engaging with private firms that choose to discriminate in certain ways. In 2017, for example, Texas enacted a law that forbids state agencies from doing business with those that refuse to do business with Israel. And Texas is not alone—a majority of states have enacted such laws. See Matthew Impelli, Map Shows States Where Boycotting Israel is Illegal, Newsweek (Apr. 29, 2024). Similarly, in 2021, Texas banned state involvement with firms that target the firearms industry. And S.B. 13—the Texas law challenged here—prohibits certain public entities from investing in private funds that refuse to invest in energy companies. Laws like these have been challenged on First Amendment grounds. But the only circuit to have addressed the merits of such a challenge to date has rejected it. See Arkansas Times LP v. Waldrip, 37 F.4th 1386 (8th Cir. 2022) (en banc), cert. denied, 143 S. Ct. 774 (2023). And rightly so. Indeed, were it otherwise, federal nondiscrimination laws like Title VI of the Civil Rights Act of 1964 and Title IX of the Educational Amendments of 1972 would likewise be in constitutional jeopardy. So I agree with the Eighth Circuit. And for the same reason, I agree with our court’s decision today. The Supreme Court has long held that Congress may require nondiscrimination as a condition of receiving public funds—and that such laws in no way offend the First Amendment. See, e.g., Grove City College v. Bell, 465 U.S. 555, 575–76 (1984) (upholding Title IX of the Educational Amendments of 1972 against First Amendment challenge). Likewise, the Court has made clear that Congress may prohibit discriminatory hiring 2 Case: 26-50111 Document: 76-1 Page: 3 Date Filed: 05/29/2026 No. 26-50111 practices, without violating the First Amendment. See, e.g., Rumsfeld v. FAIR, 547 U.S. 47, 62 (2006) (“The fact that this will require an employer to take down a sign reading ‘White Applicants Only’ hardly means that the law should be analyzed as one regulating the employer’s speech rather than conduct.”). The same principles govern here. S.B. 13 is about spending, not sp