On April 26, the U.S. Supreme Court heard oral arguments in Americans for Prosperity Foundation v. Bonta, a case involving a California law that requires nonprofits to disclose their donors' identities to the state's attorney general.
What's at issue, and how lower courts have ruled
California law requires nonprofits to file copies of their IRS 990 forms with the state. This includes Schedule B, which contains the names and addresses of all individuals who donated more than $5,000 to the nonprofit in a given tax year. Although the law does not allow the public access to Schedule B information, court documents show that inadvertent disclosures have occurred.
In 2014, Americans for Prosperity challenged the law in U.S. district court, triggering a series of legal developments spanning several years. Here’s a brief timeline of how we got here:
-
2014: Americans for Prosperity Foundation (AFPF), a 501(c)(3) nonprofit, filed suit in U.S. district court, alleging the California law violated its First Amendment rights.
-
2015: The Thomas More Law Center (TMLC), also a 501(c)(3) nonprofit, filed a similar suit in the same U.S. district court.
-
2016: Judge Manuel Real of the U.S. District Court for the Central District of California found in favor of AFPF and barred the state from collecting the group's Schedule B information. In a separate 2016 ruling, Real also found in favor of TMLC and prevented the state from collecting the group's Schedule B information. Real was appointed to the court by Lyndon Johnson (D).
-
2018: The two suits were combined on appeal. A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit unanimously overturned Real's rulings in 2018. Judges Raymond Fisher, Richard Paez, and Jacqueline Nguyen issued the ruling. Fisher and Paez are Bill Clinton (D) appointees. Barack Obama (D) appointed Nguyen. Writing for the court, Fisher said:
-
It is clear that the disclosure requirement serves an important governmental interest. In Center for Competitive Politics, we recognized the [California] Attorney General's argument that 'there is a compelling law enforcement interest in the disclosure of the names of significant donors.' The Attorney General observed that 'such information is necessary to determine whether a charity is actually engaged in a charitable purpose, or is instead violating California law by engaging in self-dealing, improper loans, or other unfair business practices,' and we agreed[.]
-
2019: The plaintiffs petitioned the Ninth Circuit for en banc review. That petition was rejected March 29, 2019. On Aug. 26, 2019, the plaintiffs appealed to the Supreme Court.
Highlights from oral arguments on April 26
According to the Supreme Court, oral arguments "are an opportunity for the Justices to ask questions directly of the attorneys representing the parties to the case, and for the attorneys to highlight arguments they view as particularly important." Oral arguments generally last one hour per case. Below are some excerpts from arguments on April 26:
In his opening statement, AFPF attorney Derek L. Shaffer said:
At bottom, California's justification [for the policy under dispute] reduces to a claimed law enforcement interest in having all Schedule Bs prophylactically warehoused before it re-requests Schedule B pursuant to any actual investigation. That does not begin to justify the First Amendment intrusions here posed, as 40 amicus briefs from hundreds of concerned parties spanning the spectrum agree. Because California's upfront suspicionless demand for donor information is not narrowly tailored as it must be under this Court's precedents, it is unconstitutional in all its applications and certainly in a substantial number of them.
During questioning, Associate Justice Clarence Thomas, a George H.W. Bush (R) appointee, asked Shaffer, "How would it affect your analysis if the organization involved just did something that was not controversial, such as provide free dog beds or taking care of stray puppies or something like that?"
Shaffer said, "Think about religious charities. Think about medical organizations that may take views about masking, about vaccinations. In – in our very divisive times, it's tough to identify with certainty a charity that is non-controversial in those – in those respects."
Associate Justice Stephen Breyer, a Bill Clinton (D) appointee, said:
If you win in this case, I think the Court will have in some form held that the interest of the donors in maintaining privacy of their giving to a charity, interests of the charity in receiving [the] money, here at least outweighs the interest of the State in having a law on the books that, even if it is never actually enforced, frightens people into behaving properly. … Well, if we hold that, can we distinguish campaign finance laws, where the interest is even stronger in people being able to give anonymously?
Shaffer responded:
[Let] me emphasize there is no law on the books in California requiring Schedule B. What you have is bureaucratic whim, and we submit that's different from a considered legislative judgment. Number two, the interest is not in reviewing Schedule Bs. It's in having them on hand prophylactically on a suspicionless basis from all charities to then review a tiny handful when an external complaint comes up. We're not here challenging the individualized request for a Schedule B from a particular charity which the [attorney general] is always doing if they actually have reason to read a Schedule B.
In her opening statement, California Deputy Attorney General Aimee Feinberg said:
To prevail on their facial claim, Petitioners must demonstrate that California's Schedule B requirement is unconstitutional in all or at least many of its applications. The Petitioner's evidence centered only on their own organization. They did not show that California's confidential collection of the same information that charities already provide to the IRS chills associational interest in general or for a substantial number of charities in the state. At the same time, the state's upfront collection of Schedule B is substantially related to important oversight and law enforcement interests.
During questioning, Chief Justice John Roberts, a George W. Bush (R) appointee, asked Feinberg:
[Assume] you have a charity that supports a cause that is controversial, and a number of organizations, people have said they will make life miserable for anybody who supports that charity. … If that person came to you and said I want to give a donation, but I want to be sure that California will not disclose this, that it will not get out, can you give me 100 percent assurance that that will not happen?
Feinberg responded:
I don't think any organization can guarantee perfection. But here the State has promulgated a regulation codifying the … confidential status of Schedule Bs, and it … has enhanced its protocols in response to past lapses. … And so we don't think there's any probability that those harms would come to pass in light of the non-public nature of the requirement.
Associate Justice Amy Coney Barrett, a Donald Trump (R) appointee, asked Feinberg, "So we're at 250 organizations who filed briefs in support of the Petitioners here, arguing that the disclosure mandate would harm their rights. Is that enough for a facial challenge?"
Feinberg said," This Court's precedents require different standards for facial invalidation, but even the most liberal is that a facial challenge has to show a substantial number of unconstitutional application. There is no such evidence here."
To read the complete transcript of oral arguments, click here. An audio recording is available here.
What comes next
The Supreme Court is expected to make a decision in the case by the end of its current term in June. |
