Every time a prominent person suffers any kind of business-related consequences from saying something absurdly insensitive, a great howl arises. This great howl usually consists of appeals to the First Amendment to the U.S. Constitution, which says, succinctly:

Congress shall make no law...abridging the freedom of speech...

Note the use of the word "Congress." Congress shall make no law. Congress is the federal legislature based in Washington, D.C. which makes federal law. Also note that the Fourteenth Amendment extends this restriction to state governments, as well, so state legislatures are also prohibited from making laws abridging the freedom of speech.

The consistent factor here is that our freedom of speech is protected from the government ("state actors" as they're known in the law). State actors like the federal Congress and state legislatures can't pass laws keeping us from saying things we want to say, with only a few very narrow exceptions.

Whenever someone suffers negative repercussions because of something they said or the beliefs they hold, the very first question you ask should always be, "is the government involved?" If the answer is no, then it's not a First Amendment issue. It's that simple. If the state is not acting, then the First Amendment is not implicated.

Recently, Los Angeles Clippers owner Don Sterling said some really dumb, racist things. Now, the NBA has punished him for it. He is banned from the league for life (which means he'll be forced to sell his team) and he has to pay a $2.5 million fine.

This punishment triggered a typical Twitter rant totally misrepresenting the First Amendment. Twitter user Matthew F. Benjamin, apparently paraphrasing Fox News host Shepard Smith, had this to say:

It is bigger than the NBA. If people can use the law to seize another person's property because he spoke in unpopular terms, if Mr. Sterling loses his property here, then the First Amendment doesn't exist. The 1st Amendment always applies. A private citizen in the US can practice what ethos he or she desires. It is not a crime for a citizen to be a bigot or practice bigotry. It may be unpopular or unwise. But the law and policies have to apply equally to non-bigots and bigots. You cannot seize another citizens property simply because he was a bigot in his house. If you do, then any person uttering any offensive comment can have their property seized by law.

This statement represents a profound misunderstanding of what and to whom the First Amendment applies. It's difficult to decide where to start when addressing statements like these.

First of all, let's understand the situation. Don Sterling is (was) an NBA team owner. As an owner, he signed a contract with the NBA to own a team in that league. He agreed to operate under the terms of that agreement. This is a private contract, and all the actors are private. Don Sterling is a private businessman and the NBA is a private sports league. There is no government power or "state actor" involved here.

Don Sterling said terrible things. As such, the NBA found he had violated its policies and was therefore subject to discipline (and apparently complete divestment) under the contract between the two parties. He will now have to give up his team and leave the NBA. Though he has to pay a fine, he will still be entitled to whatever price he can get for the Clippers (and he's still going to be a billionaire).

Now, back to that statement from Mr. Benjamin (or Mr. Smith). We'll go sentence by sentence.

It is bigger than the NBA. If people can use the law to seize another person's property because he spoke in unpopular terms, if Mr. Sterling loses his property here, then the First Amendment doesn't exist.

Who are "people" here? Apparently the NBA is "people," and we'll assume for argument's sake that they're "seizing" Mr. Sterling's property. Are they "using the law" to do so? Not really. Though private contracts are subject to legal standards which prohibit fraud and other unfair dealings, private contracts are presumed to be enforceable. The NBA kicking an owner out of their league under the terms of a private contract is not really "using the law," and is nothing like a state actor such as the U.S. Congress passing a law that says "bigots can't own NBA teams."

The 1st Amendment always applies.

Well, not really. The First Amendment always applies when individuals interact with government (unless those individuals formally waive their right), but it doesn't apply when individuals act with private companies or other individuals. The First Amendment applies in certain situations only.

A private citizen in the US can practice what ethos he or she desires.

Generally speaking, this is true. Nobody is telling Mr. Sterling that he can't be a racist. The NBA is telling him that he can't say racist things and simultaneously own an NBA team.

It is not a crime for a citizen to be a bigot or practice bigotry.

Mr. Sterling is not being accused of breaking any laws. He does not face any criminal punishment. And it can't be a crime to be a bigot or practice bigotry because that would be a First Amendment violation.

It may be unpopular or unwise.

Certainly.

But the law and policies have to apply equally to non-bigots and bigots.

This is also true. The Fourteenth Amendment demands equal protection under the law. But this deals with laws, which are state actions. It does not demand equal protection under private contracts or business policies. While anti-discrimination laws (like the Civil Rights Act of 1964) can prohibit certain types of bigotry in private commerce, the Constitution itself does not compel equality of private actions or policies. The NBA can make up its own rules. If the NBA said "racists can't own NBA teams, but homophobes can," that would be OK under the Constitution.

You cannot seize another citizens property simply because he was a bigot in his house.

This statement turns on the meaning of "you." A private individual cannot seize another person's property unless he or she sells it or gives it as a gift. Otherwise it's stealing. However, if I enter a contract with somebody that says I get their stuff if they break the contract (and the contract is not otherwise unfair), then I can take their stuff when they break the contract. In Don Sterling's case, the NBA says he has to sell his team because he violated their rules - they're not exactly "seizing" it in the eminent domain/Fifth Amendment sense of the word - but he does have to give it up. The government can't do that (without a better justification), but a private organization like the NBA certainly can. And Sterling can sue them if he thinks they don't have that power under the contract. He can't sue the NBA for violating the Constitution. They're not a state actor.

If you do, then any person uttering any offensive comment can have their property seized by law.

This is an extrapolation based on a profound misunderstanding of how the First Amendment works. The NBA forcing Don Sterling to sell his NBA team is not a slippery slope to mass government seizure of private racist property. The NBA isn't the government, and they're not really "seizing" anything. They're expelling a team owner from their organization for breaking their rules. It's not a "seizure," it's not state action, and it's not a violation of the First Amendment.