Supreme Court strikes down California donor disclosure rule

The Supreme Court on Thursday ruled that a California regulation requiring nonprofits to disclose their donors to state officials is unconstitutional.

The court sided with a pair of conservative groups challenging the disclosure requirement in a 6-3 split along ideological lines.

Chief Justice John Roberts wrote the majority opinion, ruling that the disclosure regulations have a chilling effect on donors' First Amendment rights.

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We are left to conclude that the Attorney General’s disclosure requirement imposes a widespread burden on donors’ associational rights," Roberts wrote. "And this burden cannot be justified on the ground that the regime is narrowly tailored to investigating charitable wrongdoing, or that the State’s interest in administrative convenience is sufficiently important."

The rule requires tax-exempt charities to disclose donors to the California attorney general’s office, but forbids their public disclosure.

The three justices in the court’s liberal wing dissented, arguing the majority was mistaken in finding that the regulation was an invasion of donors’ privacy.

“Today’s analysis marks reporting and disclosure requirements with a bull’s-eye," Justice Sonia SotomayorSonia SotomayorThe Hill's Morning Report - Presented by Altria - Jan. 6 panel flexes its muscle Sotomayor says recent changes were made because male justices interrupted female colleagues Why Latinos need Supreme Court reform MORE wrote in the dissent. “Regulated entities who wish to avoid their obligations can do so by vaguely waving toward First Amendment ‘privacy concerns.’ It does not matter if not a single individual risks experiencing a single reprisal from disclosure, or if the vast majority of  those affected would happily comply.”

“Neither precedent nor common sense supports such a result,” she added.

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The decision on Thursday came out of a pair of legal challenges brought by the conservative nonprofits Americans for Prosperity Foundation (AFPF) and the Thomas More Law Center.

“Today’s decision protects Americans from being forced to choose between staying safe or speaking up,” Emily Seidel, chief executive of AFPF, said in a statement. “The ability to maintain one’s privacy makes it possible for people to join together in causes and movements.”

Because the regulation did not require public disclosure, it's not immediately clear what the decision's implications will be for campaign finance transparency efforts.

The conservative majority was split over what level of scrutiny courts should apply to donor disclosure requirements. In a concurring opinion, Justice Clarence ThomasClarence ThomasLocked and Loaded: Supreme Court is ready for a showdown on the Second Amendment Two conservatives resign from Biden's Supreme Court commission Sotomayor says recent changes were made because male justices interrupted female colleagues MORE argued that such regulations warrant strict scrutiny from judges, suggesting that he is skeptical that any disclosure regulations are constitutional.

“Laws directly burdening the right to associate anonymously, including compelled disclosure laws, should be subject to the same scrutiny as laws directly burdening other First Amendment rights.”

Justice Samuel AlitoSamuel AlitoLocked and Loaded: Supreme Court is ready for a showdown on the Second Amendment The Hill's Morning Report - Presented by Altria - Jan. 6 panel flexes its muscle Sen. Whitehouse blasts Alito speech: 'You have fouled your nest, not us' MORE wrote another concurring opinion, saying he doesn’t believe that every disclosure requirement should be subject to a single level of scrutiny.

The Campaign Legal Center, a nonprofit watchdog group that advocates for greater transparency around money in politics, said it was disappointed in the decision but said it “does not call into question the longstanding laws and regulations requiring public disclosure of campaign spending.”

“This case addresses non-public tax reporting by charities, not public disclosure by those spending money to influence elections,” the group said in a statement. “Still, this ruling needlessly brushes aside precedent in favor of wealthy special interests — expanding an exemption originally reserved for marginalized groups to seven-figure donors hoping to insulate themselves from public criticism.”

Democratic lawmakers have warned that “dark money” groups that influence elections while keeping their donors secret could use the court’s precedent to dodge disclosure laws.

Democrats’ sweeping election overhaul bill, which passed the House but was blocked by Republicans in the 50-50 Senate, would require any group that spends $10,000 or more to influence elections to disclose its donors. Those include politically active 501(c)(4) nonprofits, which are currently permitted to keep their sources of funding hidden.

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A group of 15 Democratic senators filed an amicus brief in the case, telling justices to reject a broad ruling in favor of AFPF that would “tighten dark money’s hold over our politics, policy, and public discourse.”

Proponents of stricter campaign finance rules argue that dark money prevents the public from identifying the wealthy donors lawmakers may be beholden to and judging the legitimacy of political ads. Secret money also makes it difficult for authorities to enforce the existing ban on foreign money in U.S. elections, advocates say.

Dark money groups spent more than $1 billion on political ads and other messages to influence the 2020 election for both Democrats and Republicans, according to an estimate from OpenSecrets.org.

Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellFixing Congress requires fixing how it legislates McConnell: GOP should focus on future, not 'rehash' 2020 Hoyer: Democrats 'committed' to Oct. 31 timeline for Biden's agenda MORE (R-Ky.), who filed a brief in support of AFPF, has led GOP opposition to donor disclosure proposals. Republicans say the measures would discourage individuals from making donations to issue groups for fear of harassment, effectively chilling their free speech rights.

Republicans have noted that conservative groups aren’t the only ones backing the lawsuit. The American Civil Liberties Union also filed a brief in support of the plaintiffs.

In April, Sen. Sheldon WhitehouseSheldon WhitehouseOn The Money — It all comes down to Bernie and Joe Manchin, Tester voice opposition to carbon tax Democrats scramble for climate alternatives MORE (D-R.I.), Sen. Richard Blumenthal (D-Conn.) and Rep. Hank JohnsonHenry (Hank) C. JohnsonDraft Georgia congressional lines target McBath, shore up Bourdeaux Overnight Defense & National Security — Iron Dome funding clears House Overnight Defense & National Security — Presented by AM General — Defense bill takes center stage MORE (D-Ga.) sent a letter to Justice Amy Coney BarrettAmy Coney BarrettLocked and Loaded: Supreme Court is ready for a showdown on the Second Amendment Biden's Supreme Court commission ends not with a bang but a whimper Biden's Supreme Court reform study panel notes 'considerable' risks to court expansion MORE unsuccessfully urging her to recuse herself from the case. The lawmakers pointed to dark money groups, including the political arm of AFPF, that launched ad campaigns urging senators to support her confirmation.

Updated at 11:22 a.m.