Supreme Court wipes out California nonprofit donor disclosure law

Lawmakers had watched case for potential effects on campaign finance

The Supreme Court is seen on Jan. 7.  (Bill Clark/CQ Roll Call file photo)
The Supreme Court is seen on Jan. 7. (Bill Clark/CQ Roll Call file photo)
Posted July 1, 2021 at 12:27pm

The Supreme Court struck down a California state requirement Thursday that nonprofits disclose a list of major donors to state regulators, in a decision some members of Congress closely watched for how it will affect other campaign finance disclosure rules.

In a 6-3 decision along familiar ideological lines, the court sided with two charities with histories of backing conservative causes who challenged the law as an unconstitutional burden on their freedom of association under the First Amendment.

The groups argued that sharing the information with state regulators could expose donors to “potential intimidation, retaliation, and harassment,” and dry up the charities' sources of support. California argued it seeks to police charitable fraud.

Chief Justice John G. Roberts Jr., writing for the majority, pointed out that the collection of the information does not form an integral part of California’s fraud detection efforts and the groups presented evidence that they and their supporters have faced bomb threats, protests and stalking.

“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.

And Roberts wrote that the privacy concerns from the groups in the case, Americans for Prosperity Foundation and Thomas More Law Center, are shared across the ideological spectrum. He highlighted briefs filed by hundreds of groups including the American Civil Liberties Union, Council on American-Islamic Relations and Feeding America Eastern Wisconsin.

“The deterrent effect feared by these organizations is real and pervasive, even if their concerns are not shared by every single charity operating or raising funds in California,” Roberts wrote.

Justice Sonia Sotomayor, in a dissent, wrote that the majority opinion is not narrow or modest, and discarded previous rulings and departed from a more nuanced approach to laws that might burden the First Amendment.

That could lead to other disclosure laws toppling, Sotomayor wrote.

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

The case drew briefs from members of Congress from sides of the aisle. Senate Minority Leader Mitch McConnell of Kentucky, who has played a leading role in legal challenges to campaign finance laws, filed a brief in the cases arguing that donor disclosure requirements threaten great practical harm to those with unpopular views.

Rhode Island Democratic Sen. Sheldon Whitehouse, who led a brief from his colleagues on the case, said Thursday that the ruling extends protections to fossil fuel billionaires and massive corporations who want to keep their political spending private.

“We are now on a clear path to enshrining a constitutional right to anonymous spending in our democracy, and securing an upper hand for dark-money influence in perpetuity,” Whitehouse said in a news release.