Court decision on Texas 'boycotters' has implications for Florida, Louisiana: attorneys

A decision by a federal court judge in Texas that blocks a state law prohibiting business with firms that "boycott" the fossil fuel industry, will have some impact on municipal underwriters and other municipal firms operating in Florida and Louisiana, attorneys said.

The decision of U.S. District Court Judge Alan Albright has more precendential value for Louisiana than for Florida, according to Neal Pandozzi, counsel at Troutman Pepper Locke LLP, and Lance Dial, partner at K&L Gates LLP.

Louisiana barred Bank of America from managing a state bond deal in 2018 because of its positions on guns and fossil fuels. However, since August 2024 Louisiana has allowed it as well as JP Morgan Chase, Wells Fargo, and other national firms that were members of the Net-Zero Banking Alliance to join deals.

The alliance dissolved in October 2025 due to political pressure, antitrust concerns and member departures. 

"For companies outside Texas that are harmed by anti‑boycott or anti‑ESG laws and are considering similar constitutional challenges, the federal district court's decision in American Sustainable Business Council v. Hegar is an important, but not controlling, precedent," said Pandozzi. "Because it is a decision from a federal district court in Texas, it does not automatically bind federal courts in other states, including those in Louisiana or Florida, though it can be cited as persuasive authority."

However, if the case is appealed and the U.S. Court of Appeals for the Fifth Circuit rules, Pandozzi continued, it "would be binding on all federal district courts within that circuit, including those in Texas, Louisiana, and Mississippi (but not Florida, which is located in the Eleventh Circuit), and would therefore have a much more significant precedent‑setting impact on similar anti‑boycott laws in those states."

Dial also believes the ruling is more significant for Louisiana than Florida for different reasons. "The Texas district court's decision vacating Senate Bill 13 turned on features specific to that statute, including the open-ended 'boycott' definition and a state-maintained blacklist, that implicated free speech concerns," he said. 

Those arguments could be valid in the Louisiana firearm discrimination statute, Dial said, "because it contains similar features (i.e., a requirement that contracts with state entities include specific language), but the arguments are not directly on point because the Louisiana statute is not as broad."

Florida's ESG law, Dial said, "is even further removed, as that statute focuses on the consideration of ESG factors in connection with procurement, rather than the vendor's status as 'boycotting' or 'discriminating,' activities which could be protected speech (as seen in the Texas case)."

Florida adopted House Bill 3 in spring 2023, banning the issuance of municipal bonds using ESG (Environmental, Social and Governance) labeling or using an ESG verifier.

The law's intention is not to prevent rating agencies from considering environmental factors in their credit analysis, but rather to prevent any future attempt to map a separate ESG score into the overall creditworthiness of an issuer, supporters of the bill said.