The case is Alliance for Open Society v. United States Agency for International Development, issued on December 20. The first time this case reached the Second Circuit a few years ago, the Court held that the policy requirement violates the First Amendment rights of domestic organizations that receive this governmental funding. From what I recall, there was a good reason for this holding, though it is counter-intuitive (who would be in favor of sex trafficking?). The Supreme Court agreed with the Second Circuit's reasoning in this case.
The case returns to the Court of Appeals on a related issue: does the policy requirement violate the First Amendment when the domestic organization is closely affiliated with a foreign entity that follows a contrary policy? Over a dissent from Judge Straub, the Second Circuit (Parker and Pooler) says that it does. In that circumstance, the policy cannot apply to the foreign affiliates. Judge Parker explains why: the domestic organizations are affiliated with foreign entities who work on the HIV/AIDS programs. These entities try to maintain a unified global identity, with consistent branding. When this case reached the Supreme Court five years ago, the Court said that where an entity is clearly identified with another recipient of government funds and it rejects the government's message, its ability to speak is compromised when its affiliate is forced to speak to government's contrasting message. Consistency of message is key under this First Amendment doctrine. The Supreme Court's reasoning applies in this case. As Judge Parker writes:
These principles decide this appeal. Here, the affiliates are clearly identified with plaintiffs, and to require the affiliates to abide by the Policy Requirement would require the closely related—and often indistinguishable—plaintiffs to be seen as simultaneously asserting two conflicting messages. This is the “evident hypocrisy” to which the Chief Justice referred: when the Government requires contrasting, hypocritical messages between domestic and foreign affiliates by making one speak the Government’s message, this requirement infringes the speech of the domestic affiliate and, in so doing, violates the First Amendment. Indeed, the Government itself acknowledges that forced hypocrisy can impair an entity’s ability to speak: “It may be true that when two organizations are closely linked, in some circumstances the speech of one can be seen as the speech of both.”