A bit of legal background: Generally speaking, the government may not cancel contracts with private organizations based on the organizations' First Amendment activities (see, e.g., Bd. of Comm'rs v. Umbehr (1997)). The same is true of cancellation or denial of grants (see, e.g., Agency for Int'l Dev. v. Alliance for Open Soc'y Int'l (2013)). And filing lawsuits is generally seen as protected by the First Amendment right to "petition the Government for a redress of grievances."
Now, from today's opinion by Judge Christopher Cooper (D.D.C.) in American Bar Ass'n v. U.S. Dep't of Justice (what follows is just a short excerpt from a longer analysis):
Last month, Deputy Attorney General Todd Blanche issued a memorandum prohibiting all Department of Justice ("DOJ") lawyers from participating in events sponsored by the American Bar Association ("ABA") on official time. The reason, Blanche candidly explained, was that the ABA had recently joined a lawsuit against the Trump Administration {challenging the Administration's freeze on international development grants to the U.S. Agency for International Development and the Department of State}. The next day, DOJ cancelled a series of grants with the ABA that funded services to victims of domestic and sexual violence. The only explanation offered for the cancellation was a terse statement indicating that the grants "no longer effectuate[ ] … [DOJ] priorities." …
"[T]he First Amendment bars [government] retaliation for protected speech." … The ABA has made a strong showing that Defendants terminated its grants to retaliate against it for engaging in protected speech…. First, the Blanche Memo "openly acknowledges that plaintiff engaged in speech and other activities protected by the First Amendment." It identifies the catalyst for the memo and DOJ's change in policy as to the ABA: "[T]he ABA filed a lawsuit against the United States." And it describes the ABA's history of "tak[ing] positions on contentious legal, policy, and social issues" that "frequently have not aligned with the positions advanced by [DOJ]" and its "litigat[ion] in support of activist causes." This activity is protected under the First Amendment.
