Home » News » Supreme Court voids Calif. donor-disclosure requirement

By The Associated Press, published on July 1, 2021

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WASHINGTON (AP) — The Supreme Court on July 1 ordered California to stop collecting the names and addresses of top donors to charities, calling the state’s requirement a “dragnet for sensitive donor information.”


The justices voted 6-3 along ideological lines to side with two nonprofit groups, including one with links to billionaire Charles Koch. The groups argued that California’s policy of collecting the information violates the First Amendment.


The nonprofits had drawn strong support from groups across the political spectrum, including the Becket Fund for Religious Liberty, American Civil Liberties Union and NAACP Legal Defense and Educational Fund.


California had defended its policy by saying that the information’s collection was necessary to prevent fraud. But Chief Justice John Roberts wrote in a majority opinion joined by the Court’s other conservatives that there is a “dramatic mismatch” between California’s interest in preventing wrongdoing by charities and its donor-information requirement.


“The upshot is that California casts a dragnet for sensitive donor information from tens of thousands of charities each year, even though that information will become relevant in only a small number of cases involving filed complaints,” Roberts wrote.


He later added: “We have no trouble concluding here that the Attorney General’s disclosure requirement is overbroad.”


In a dissent for the Court’s three liberals, Justice Sonia Sotomayor warned of the decision’s consequences.


“Today’s analysis marks reporting and disclosure requirements with a bull’s-eye. Regulated entities who wish to avoid their obligations can do so by vaguely waving toward First Amendment ‘privacy concerns,’” she said.


California had required all charities that collect money from state residents to give the state an IRS form identifying their largest contributors. The information is not supposed to be disclosed publicly. Just three other states, Hawaii, New Jersey and New York, require charities to provide the IRS form.


A federal appeals court had upheld California’s practice, ruling that the information serves the important state goal of preventing charities from committing fraud. The information was unlikely to be released publicly, the 9th U.S. Circuit Court of Appeals said.


The two groups that had challenged California’s requirements are the Michigan-based Thomas More Law Center and the Virginia-based Americans for Prosperity Foundation, a charitable organization connected to the primary political organization supported by Koch and his brother, David, who died in 2019. Koch’s organizations have spent hundreds of millions of dollars supporting Republican candidates and conservative policies, making them frequent targets of attacks by Democrats.


Both groups argued that their contributors had in the past suffered harassment and threats and that California had in the past let the donor information become public.


In a statement, an attorney for the Thomas More Law Center called July 1 a “great day.”


“This opinion safeguards our client’s donors from the threats of governmental misuse and public disclosure of their identities and addresses — whether intentional, mistaken, or by electronic theft,” Louie Castoria said.


Americans for Prosperity Foundation CEO Emily Seidel said in a statement that the decision “protects Americans from being forced to choose between staying safe or speaking up.”


California Attorney General Rob Bonta said he was disappointed by the decision.


“As the People’s Attorney, my office has the responsibility to protect charitable assets for their intended use and ensure that donations go towards their intended purpose. Stripping our office of confidential access to donor information — the same information about major donors that charities already provide to the federal government — will make it harder for the State to fight fraud and prevent the misuse of charitable contributions,” he said in a statement.


The Biden administration had argued that California’s requirement should stand but that the justices should send the case back to the appeals court for a fuller analysis of whether the two charities themselves should have to comply.


The presence of the Koch organization in the case prompted three Democratic lawmakers to ask Justice Amy Coney Barrett to sit out the high-court dispute or explain her decision to take part. That’s because Americans for Prosperity, Koch’s main political arm, said it would spend more than $1 million last year in support of Barrett’s Supreme Court confirmation, said Democratic Sens. Sheldon Whitehouse of Rhode Island and Richard Blumenthal of Connecticut, and Rep. Hank Johnson of Georgia in a letter to the justice. Barrett was among the six conservative votes for the nonprofits.


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