When Can a Business Refuse to Sell?

In the wake of 303 Creative LLC v. Elenis—the 2023 case in which the U.S. Supreme Court held that Colorado’s public accommodations law violated the First Amendment right of a website designer who refused to make wedding websites for same-sex couples—some scholars have worried that 303 Creative could allow business owners once again to put up a “No Blacks Served” sign or otherwise engage in discriminatory practices.

At least one scholar, however, considers these worries to be ill-founded.

In a recent article, David Cole, a professor at Georgetown University Law Center and the legal director of the American Civil Liberties Union, argues that 303 Creative’s reasoning is fundamentally flawed, and, because of its flaws, the Court’s decision should only have minimal impact on the enforcement of public accommodations laws.

Public accommodations laws refer to laws that prohibit discriminatory business practices to ensure the public’s equal access to goods and services. Such laws define public accommodations as businesses opening their services to the general public, such as restaurants, hotels, and shops.

At issue in the 303 Creative case, for example, was the Colorado Anti-Discrimination Act (CADA), a public accommodations law that prohibits businesses from refusing to sell services and goods based on customers’ protected characteristics, which include sex, race, disability, sexual orientation, and gender identity.

U.S. Supreme Court Justice Neil Gorsuch, writing for the majority in 303 Creative, held that CADA violated the First Amendment when it compelled website designers to create webpages with messages with which they disagreed, such as a website celebrating a same-sex marriage.

Depicting CADA as the government’s effort to eliminate views that it does not agree with, such as disapproval of same-sex marriage, Justice Gorsuch reasoned that CADA violated the First Amendment’s compelled speech doctrine, which prohibits the government from forcing individuals to express or support a certain idea.

Cole argues that 303 Creative’s reasoning is flawed for two reasons.

To begin with, Cole contends that CADA does not compel speech because it allows individuals to decide whether to open a business to the public in the first place and what services to provide.

Cole notes that CADA only applies to businesses that voluntarily choose to open to the public  generally. Contrary to what Justice Gorsuch claimed, CADA would not compel a Muslim filmmaker to make a Zionist film. Because most filmmakers, writers, and artists work on a freelance basis and do not offer their service to the public at large, they are not subject to CADA’s requirements, Cole explains.

Cole also explains that businesses are also free to decide what products and services to sell: CADA only requires them not to turn away customers because of protected characteristics. Accordingly, CADA would not require “an atheist muralist to accept a commission celebrating Evangelical zeal,” as Justice Gorsuch imagined. Businesses are still free to provide—or not to provide—any service so long as they do so in a non-discriminatory manner.

Furthermore, Cole argues that 303 Creative’s reasoning is flawed because it fails to consider the state’s regulatory interest. Justice Gorsuch characterizes CADA as the government seeking to eliminate disfavored ideas. This characterization, however, is misleading because the purpose of CADA is to prohibit discriminatory practices in business, contends Cole.

Cole argues that because CADA regulates conduct, not speech, the proper analysis for 303 Creative should not be the compelled speech doctrine. He notes that the Supreme Court made it clear in United States v. O’Brien that where a regulation targets conduct, as CADA does, courts should apply an intermediate scrutiny standard to examine the constitutionality of the regulation.

The intermediate scrutiny standard asks whether the means of a regulation is substantially related to the attainment of an important governmental interest. Cole contends that CADA could survive intermediate scrutiny because the state’s interest in prohibiting discrimination in the economic marketplace is important, and prohibiting discrimination based on protected characteristics is precisely tailored to that end.

Although 303 Creative rests its holding on an erroneous characterization of the nature of public accommodations laws, such a mischaracterization also limits the instances where a business owner has a legitimate First Amendment claim to refuse service, argues Cole.

To bolster his point, Cole explains that 303 Creative holds that a business has a First Amendment right to refuse service only when two conditions are met: first, a public accommodations law requires the business to provide a service conveying a message the business owner would not provide to anyone, and second, the state does so for the purpose of eliminating disfavored ideas.

Regarding the first condition, Cole underscores that 303 Creative only protects message-based refusals, not identity-based ones. Consequently, although 303 Creative would allow a t-shirt designer to decline to make a t-shirt with the message “Gay Pride” on it, 303 Creative would not permit a t-shirt designer to turn down a gay customer requesting a t-shirt with no pro-gay message on it, notes Cole.

As for the second condition, Cole emphasizes that 303 Creative teaches us that a state only violates the First Amendment if it enacts public accommodations laws for the purpose of eliminating disfavored ideas. Because states enact public accommodations laws to restrict discriminatory conduct, they can compel a business to provide services—such as requiring a photography studio to take photos of a Black family if it takes photos of White families—without offending the First Amendment, contends Cole.

Cole claims that the general rule underlying public accommodations laws remains intact, prohibiting businesses from discriminating against customers based on their identity. Consequently, he concludes that the enforcement of these laws should still remain robust in a post-303-Creative world.