American Sustainable Business Council v. Hegar

An organization that encourages sustainable investing and business practices filed a lawsuit in the federal district court for the Western District of Texas challenging Texas Senate Bill 13 (SB 13), a 2021 law that prohibits State entities from investing in or contracting with companies that “boycott fossil fuels.” SB 13 requires that certain State entities divest from financial companies that “boycott energy companies” and also generally prohibits governmental entities from contracting with companies for good or services unless companies confirm in writing that they do not “boycott energy companies.” The complaint alleged that implementation of SB 13 included preparation of a “blacklist” of financial companies that boycott fossil fuels and that the State Comptroller indicated that companies could be removed from the blacklist if they discontinued membership in organizations such as the Net Zero Asset Managers Initiative that advocate for addressing climate change and other sustainable practices. The organization asserted that SB 13’s divestment and procurement provisions infringe on freedom of speech and association in violation of the First Amendment and also are unconstitutionally vague in violation of the Fourteenth Amendment. In addition, the complaint asserted that the law’s provisions prohibiting lawsuits challenging the law and requiring parties that challenge the law to pay the opposing party’s attorneys’ fees and costs regardless of outcome infringed on the plaintiff’s right of access to the courts in violation of the First Amendment.