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Conservative Justices Strike Down California Donor Disclosure Law; More ‘Dark Money’ in Politics Will Likely Follow


An image shows the front of the Supreme Court building.

The Supreme Court of the United States struck down a California statute requiring charities to disclose names and addresses of their major donors to the IRS. The Court’s sweeping 6-3 ruling in Americans for Prosperity v. Bonta (formerly Americans for Prosperity v. Becerra) declared the statute unconstitutional on its face — a harsh ruling against a law that will impact campaign finance laws and regulations against so-called “dark money.”

Conservative watchdog groups raised First Amendment challenges to a California law requiring charities to submit to the state a list of the names and addresses of their major donors to the IRS. The Court sided with those groups, ruling that California’s statute failed to comport with First Amendment guarantees.

Writing for the 6 member majority, Chief Justice John Roberts ruled that “exacting scrutiny” must apply to the law in question, a legal standard he said requires “a substantial relation between the disclosure requirement and a sufficiently important governmental interest.”  Applying that level of scrutiny, Roberts began by acknowledging that California clearly had an important motive for the disclosure law.  Roberts wrote,”We do not doubt that California has an important interest in preventing wrongdoing by charitable organizations. It goes without saying that there is a “substantial governmental interest[] in protecting the public from fraud.”

Problematically, though, there is what Roberts called a “dramatic mismatch” between California’s interest in preventing fraud and the amount of disclosure it requires. The Court ruled that “California is not free to enforce any disclosure regime that furthers its interests.” Rather, it continued, “It must instead demonstrate its need for universal production in light of any less intrusive alternatives.”

Furthermore, Roberts, wrote, the “dragnet” created by California law is “particularly dubious” because California did not even enforce the disclosure obligation rigorously until 2010 — years after it had been on the books.

Roberts called out what he believed to be the state’s true motivation for the disclosure statute.

“In reality,” the chief justice ruled, “California’s interest is less in investigating fraud and more in ease of administration.”  California’s Attorney General “may well prefer to have every charity’s information close at hand, just in case,” Roberts wrote, “[b]ut ‘the prime objective of the First Amendment is not efficiency.'”

The Court also specifically rejected California’s argument that the disclosure requirement posed little or no burden on donors. Rather, the Court held, “disclosure requirements can chill association.” To illustrate the gravity of the potential consequences, Roberts pointed out that the law’s challengers introduced evidence that donors “have been subjected to bomb threats, protests, stalking, and physical violence,” and that these risks “are heightened in the 21st century and seem to grow with each passing year” as technology continues to advance.

At oral arguments in the case, Justice Clarence Thomas had been concerned about the potential ramifications for donors contributing to controversial charities. He asked opponents of California’s law whether their analysis would change if the disclosure showed information that a donor was a member of a white supremacist, racist, or homophobic organization.  In a concurrence to the chief justice’s opinion, Thomas revisited his take on the matter by reminding the Court’s majority that the First Amendment includes not only the right to assemble, but also the right associate anonymously.

Thomas also took the opportunity to raise his concerns with the Court’s use of the “overbreadth doctrine.”

Although the majority found California’s disclosure law to be too broad (and thus, not appropriately tailored to the state’s interest in preventing fraud), Thomas “continue[s] to have doubts” on the Court’s analysis. While the Supreme Court has ruled that federal courts can strike down a law “if a substantial number of its applications are unconstitutional,” the courts have “no power to enjoin the lawful application of a statute just because that statute might be unlawful as-applied in other circumstances.”

Justices Samuel Alito and Neil Gorsuch also teamed up in a concurrence authored by Alito. Referring to the disclosure requirement as “California’s blunderbuss approach to charitable disclosures,” Alito opined that the question of constitutionality “is not even close,” as the challenged statute clearly fails strict scrutiny.  However, Alito qualified his concurrence, saying that while Justice Thomas would apply strict scrutiny to every such case, he “is not prepared at this time to hold that a single standard applies to all disclosure requirements.”

Pointing out that the majority had chosen to apply “exacting scrutiny” in its analysis, Alito concluded with the following:

Because the choice between exacting and strict scrutiny has no effect on the decision in these cases, I see no need to decide which standard should be applied here or whether the same level of scrutiny should apply in all cases in which the compelled disclosure of associations is challenged under the First Amendment.

Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan dissented. Writing for the trio, Justice Sotomayor slammed the majority for holding that a disclosure statute “must be narrowly tailored even if a plaintiff
demonstrates no burden at all.” Pointing out extreme disparity between disclosure requirements in different contexts, Sotomayor criticized the unfair results caused by the Court’s decision:

The same scrutiny the Court applied when NAACP members in the Jim Crow South did not want to disclose their membership for fear of reprisals and violence now applies equally in the case of donors only too happy to publicize their names across the websites and walls of the organizations they support.

Neither was the dissent buying the argument that disclosure requirements would unduly burden donors’ freedoms of association. Anonymous association isn’t always necessary, the justice explained. Rather, “[i]t depends on whether publicity will lead to reprisal.” “For groups that promote mainstream goals and ideas,” she continued, “privacy may not be all that important.” In fact, “[n]ot only might their supporters feel agnostic about disclosing their association, they might actively seek to do so.” Given those realities, the Court should have adopted a rule that analyzed the existence and significance of any burden on donors to disclose.

Similarly, the dissent continued, the Court abandoned the requirement that a plaintiff demonstrate any actual chilling effect. Sotomayor continued by warning that the Court’s ruling could similarly strike down all disclosure requirements for donors:

Of course, all disclosure requires some loss of anonymity, and courts can always imagine that someone might, for some reason, prefer to keep their donations undisclosed. If such speculation is enough (and apparently it is), then all disclosure requirements ipso facto impose cognizable First Amendment burdens.

Per the dissent, the majority’s ruling “now departs from this nuanced approach in favor of a ‘one size fits all’ test.” Whether or not burdens “are slight, heavy, or nonexistent, disclosure regimes must always be narrowly tailored.”

Sotomayor concluded by calling the Court’s choice to facially invalidate California’s statute “a final coup de grâce.”

After the ruling, Court watchers were quick to raise the point that several justices were helped onto the high bench by funding from Americans for Prosperity. Had those justices recused themselves, the outcome might have been quite different:

Other legal experts have looked toward the long-term political fallout from the ruling. As election law expert Rick Hasen explained, the Court’s ruing will mean trouble for laws aimed at limiting so-called “dark money” in politics.

[image via Samuel Corum/Getty Images]

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Elura is a columnist and trial analyst for Law & Crime. Elura is also a former civil prosecutor for NYC's Administration for Children's Services, the CEO of Lawyer Up, and the author of How To Talk To Your Lawyer and the Legalese-to-English series. Follow Elura on Twitter @elurananos