The Limited Reach of the Olympia Food Co-op Case

Earlier this month, the Washington State Court of Appeals affirmed the dismissal of a lawsuit, Davis v. Cox, filed by five members of the Olympia Food Co-op against current and former members of the Co-op’s Board of Directors for instituting a boycott of Israeli products. Moreover, the court upheld the prior decision that the suit was a Strategic Lawsuit Against Public Participation (SLAPP) that targeted protected First Amendment conduct, namely participation in a boycott.

The Co-op’s boycott is part of the Boycott, Divestment, and Sanctions (BDS) movement, a discriminatory campaign that targets Israeli civilians and entities in attempt to influence policies of the Israeli government. Though proponents claim the movement is aimed at protecting Palestinian rights, numerous critics have opined that anti-Israel and anti-Semitic sentiments are the true motivators. Even Noam Chomsky, an outspoken supporter of BDS, has reflected that the movement’s tactic of singling out Israel “could be attacked . . . as pure anti-Semitism.”

Not surprisingly, advocates of the boycott have incorrectly extrapolated the Davis holding and its implications, mischaracterizing it as standing for the general proposition that lawsuits filed in response to boycott activity are invalid and doomed to dismissal. Such an interpretation, however, ignores the specific key facts on which the appellate court decided the case.

Ultimately, the court’s decision in Davis turned on whether or not the board violated mandatory Co-op rules, specifically its Boycott Policy (Policy), in deciding to boycott. The court held that, although the board’s adoption of the boycott at issue failed to comply with the Policy (requiring staff consensus to boycott, which was not reached), such compliance was not required by the Co-op’s articles of incorporation or bylaws in light of the board’s “general authority to manage the Co-op.”

The holding is indeed troubling, as it effectively means that board members are free to violate the very rules they themselves set, unless organizing corporate documents concretely stipulate otherwise. However, even if other courts follow this seemingly counter-intuitive rationale (according to which established corporate policies are treated merely as suggestions that can be disregarded at will), the takeaway is not that any and all actions in furtherance of the Israel boycott movement’s discriminatory goals are above the law. Had the Co-op’s founding documents stated that board policies were mandatory, Davis would seemingly have been decided in the opposite direction. And, as The Lawfare Project has previously discussed, boycotts based on Israeli national origin likely violate the anti-discrimination statutes of states such as New York and California. For instance, in 2012, The Lawfare Project was asked to brief the Brooklyn-based Park Slope Food Co-op on a prospective boycott of Israeli goods and advised that such a boycott might run afoul of New York State anti-discrimination law. The co-op subsequently voted against boycotting.

Indeed, there exist legitimate situations where the judicial system should and must be used to prevent unlawful discriminatory business conduct, and the federal government should also expand protections against discrimination based on national origin. Still, even in states that lack potent anti-discrimination legislation, jumping from the Davis outcome to the conclusion that any and all cases filed to counter discriminatory boycott activity are frivolous, intended to harass, or likely to lose indicates a lack of understanding of the Washington appellate court’s ruling.

The Lawfare Project