Texas business owners lose bid for payment due to Israel boycott law

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A federal appeals court in New Orleans ruled that five Texas business owners are not entitled to $342,000 in legal fees for challenging a state law that bars government contracts.

The United States Circuit Court of Appeals for the Fifth Circuit found that the suit was successful in obtaining a summary judgment under the circumstances of the case and did not make the business owners “substantial parties” under the federal Civil Rights Act.

Writing for the appeals court, Justice Edith H. Jones said the statute’s preliminary injunction came after the Texas legislature began the process of amending it to exempt sole proprietors like the plaintiffs. Later the case was approved.

The court stated that a plaintiff who wins a preliminary injunction may be considered the prevailing party if the changes that advance the case are in direct response to the order itself or are part of an effort to avoid payments. But the exemption for sole proprietors began before the warrant was issued, Jones said.

She wrote that the amendment “certainly was not designed by a court decision” and “there is no reason to assume that it was motivated by the Texas Legislature’s desire to prohibit attorneys’ fees.”

Justices Stuart Kyle Duncan and Carolyn Dean King joined the ruling.

The state is represented by the Attorney General’s Office. The business owners are represented by the CAIR Legal Defense Fund and the John T. Floyd Law Firm.

The case is Amavi v. Paxton, 5th Circuit, No. 21-50360, 9/7/22.

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