The Liberty Justice Center has filed an amicus brief in the U.S. Court of Appeals for the Fifth Circuit, urging justices to reverse a lower court ruling that forces the State of Texas to invest in companies that boycott the state’s own energy industry.
The brief was filed on March 26 in the case of American Sustainable Business Council v. Hegar.
LJC is arguing that while the First Amendment protects the right of every American to express their views, it does not grant corporations a right to have their political activism subsidized by the government.
The case involves a Texas law requiring state pension funds to divest from companies that engage in environmental, social, and corporate governance (ESG) practices targeting fossil fuels.
A district court recently enjoined the law, holding that it violated the First Amendment rights of these corporations.
LJC’s brief argues that the district court’s ruling is a fundamental misinterpretation of the U.S. Constitution, stating that while companies have the right to engage in ESG practices, they have no constitutional right to do so at the taxpayers’ expense.
The brief highlights that the Supreme Court has consistently held that the government does not discriminate on the basis of viewpoint when it chooses to fund one activity over another.
“We all have a right to invest our money in causes we believe in,” said Reilly Stephens, senior counsel at LJC. “But the corollary is that no one else is required to fund that cause for you–certainly not taxpayers, who should be free to decline to invest in causes they oppose.”
LJC also warned that the lower court’s ruling imperils the First Amendment by empowering foreign censors.
The group states that many ESG mandates are driven by European Union regulations that reach across borders and influence American companies. By preventing Texas from divesting from these entities, the court is effectively preventing the state from combatting foreign influence and protecting the free flow of information.
LJC is asking the Fifth Circuit to reaffirm that the state has the authority to manage its own investments and avoid entanglement with partisan corporate activism.
It argues that the constitution demands that the government remain neutral, not that it be forced to fund speech it finds detrimental to the public interest.
Case No. 2026-50111
