Americans for Prosperity Found. v. Bonta
| Decision Date | 01 July 2021 |
| Docket Number | No. 19-251, No. 19-255,19-251 |
| Citation | 141 S.Ct. 2373,210 L.Ed.2d 716 |
| Parties | AMERICANS FOR PROSPERITY FOUNDATION, Petitioner v. Rob BONTA, Attorney General of California; Thomas More Law Center, Petitioner v. Rob Bonta, Attorney General of California |
| Court | U.S. Supreme Court |
Kathleen M. Sullivan, Quinn Emanuel Urquhart & Sullivan, LLP, Los Angeles, CA, Derek L. Shaffer, Counsel of Record, William A. Burck, John F. Bash, Jonathan G. Cooper, Quinn Emanuel Urquhart & Sullivan, Washington, DC, for Petitioner Americans for Prosperity Foundation.
Matthew Rodriquez, Acting Attorney General of California, Michael J. Mongan, Solicitor General, Tamar Pachter, Senior Assistant, Attorney General, Aimee Feinberg, Counsel of Record, Deputy Solicitor General, Jose A. Zelidon-Zepeda, Deputy Attorney General, Kimberly M. Castle, Associate Deputy, Solicitor General, State of California, Department of Justice, Sacramento, CA, for Respondent.
Louis H. Castoria, Kaufman Dolowich & Voluck, LLP, San Francisco, CA, Kristen K. Waggoner, John J. Bursch, Counsel of Record, David A. Cortman, Rory T. Gray, Christopher P. Schandevel, Mathew W. Hoffmann, Alliance Defending Freedom, Washington, DC, for Petitioner Thomas More Law Center.
To solicit contributions in California, charitable organizations must disclose to the state Attorney General's Office the identities of their major donors. The State contends that having this information on hand makes it easier to police misconduct by charities. We must decide whether California's disclosure requirement violates the First Amendment right to free association.
The California Attorney General's Office is responsible for statewide law enforcement, including the supervision and regulation of charitable fundraising. Under state law, the Attorney General is authorized to "establish and maintain a register" of charitable organizations and to obtain "whatever information, copies of instruments, reports, and records are needed for the establishment and maintenance of the register." Cal. Govt. Code Ann. § 12584 (West 2018). In order to operate and raise funds in California, charities generally must register with the Attorney General and renew their registrations annually. §§ 12585(a), 12586(a). Over 100,000 charities are currently registered in the State, and roughly 60,000 renew their registrations each year.
California law empowers the Attorney General to make rules and regulations regarding the registration and renewal process. §§ 12585(b), 12586(b). Pursuant to this regulatory authority, the Attorney General requires charities renewing their registrations to file copies of their Internal Revenue Service Form 990, along with any attachments and schedules. See Cal. Code Regs., tit. 11, § 301 (2020). Form 990 contains information regarding tax-exempt organizations’ mission, leadership, and finances. Schedule B to Form 990—the document that gives rise to the present dispute—requires organizations to disclose the names and addresses of donors who have contributed more than $5,000 in a particular tax year (or, in some cases, who have given more than 2 percent of an organization's total contributions). See 26 C.F.R. §§ 1.6033–2(a)(2)(ii)(f), (iii) (2020).
The petitioners are tax-exempt charities that solicit contributions in California and are subject to the Attorney General's registration and renewal requirements. Americans for Prosperity Foundation is a public charity that is "devoted to education and training about the principles of a free and open society, including free markets, civil liberties, immigration reform, and constitutionally limited government." Brief for Petitioner Foundation 10. Thomas More Law Center is a public interest law firm whose "mission is to protect religious freedom, free speech, family values, and the sanctity of human life." Brief for Petitioner Law Center 4. Since 2001, each petitioner has renewed its registration and has filed a copy of its Form 990 with the Attorney General, as required by Cal. Code Regs., tit. 11, § 301. Out of concern for their donors’ anonymity, however, the petitioners have declined to file their Schedule Bs (or have filed only redacted versions) with the State.
For many years, the petitioners’ reluctance to turn over donor information presented no problem because the Attorney General was not particularly zealous about collecting Schedule Bs. That changed in 2010, when the California Department of Justice "ramped up its efforts to enforce charities’ Schedule B obligations, sending thousands of deficiency letters to charities that had not complied with the Schedule B requirement." Americans for Prosperity Foundation v. Becerra , 903 F.3d 1000, 1006 (C.A.9 2018). The Law Center and the Foundation received deficiency letters in 2012 and 2013, respectively. When they continued to resist disclosing their contributors’ identities, the Attorney General threatened to suspend their registrations and fine their directors and officers.
The petitioners each responded by filing suit in the Central District of California. In their complaints, they alleged that the Attorney General had violated their First Amendment rights and the rights of their donors. The petitioners alleged that disclosure of their Schedule Bs would make their donors less likely to contribute and would subject them to the risk of reprisals. Both organizations challenged the disclosure requirement on its face and as applied to them.
In each case, the District Court granted preliminary injunctive relief prohibiting the Attorney General from collecting their Schedule B information. Americans for Prosperity Foundation v. Harris , 2015 WL 769778 (C.D. Cal., Feb. 23, 2015) ; App. to Pet. for Cert. in No. 19–255, pp. 90a–96a. The Ninth Circuit vacated and remanded. Americans for Prosperity Foundation v. Harris , 809 F.3d 536 (9th Cir. 2015) (per curiam ). The court held that it was bound by Circuit precedent to reject the petitioners’ facial challenge. Id ., at 538 (citing Center for Competitive Politics v. Harris , 784 F.3d 1307, 1317 (2015) ). And reviewing the petitioners’ as-applied claims under an "exacting scrutiny" standard, the panel narrowed the injunction, allowing the Attorney General to collect the petitioners’ Schedule Bs so long as he did not publicly disclose them. 809 F.3d at 538, 543.
On remand, the District Court held bench trials in both cases, after which it entered judgment for the petitioners and permanently enjoined the Attorney General from collecting their Schedule Bs. Americans for Prosperity Foundation v. Harris , 182 F.Supp.3d 1049 (C.D. Cal. 2016) ; Thomas More Law Center v. Harris , 2016 WL 6781090 (C.D. Cal., Nov. 16, 2016). Applying exacting scrutiny, the District Court held that disclosure of Schedule Bs was not narrowly tailored to the State's interest in investigating charitable misconduct. The court credited testimony from California officials that Schedule Bs were rarely used to audit or investigate charities. And it found that even where Schedule B information was used, that information could be obtained from other sources.
The court also determined that the disclosure regime burdened the associational rights of donors. In both cases, the court found that the petitioners had suffered from threats and harassment in the past, and that donors were likely to face similar retaliation in the future if their affiliations became publicly known. For example, the CEO of the Foundation testified that a technology contractor working at the Foundation's headquarters had posted online that he was "inside the belly of the beast" and "could easily walk into [the CEO's] office and slit his throat." 182 F.Supp.3d at 1056. And the Law Center introduced evidence that it had received "threats, harassing calls, intimidating and obscene emails, and even pornographic letters." 2016 WL 6781090, *4.
The District Court also found that California was unable to ensure the confidentiality of donors’ information. During the course of litigation, the Foundation identified nearly 2,000 confidential Schedule Bs that had been inadvertently posted to the Attorney General's website, including dozens that were found the day before trial. One of the Foundation's expert witnesses also discovered that he was able to access hundreds of thousands of confidential documents on the website simply by changing a digit in the URL. The court found after trial that "the amount of careless mistakes made by the Attorney General's Registry is shocking." 182 F.Supp.3d at 1057. And although California subsequently codified a policy prohibiting disclosure, Cal. Code Regs., tit. 11, § 310(b) —an effort the District Court described as "commendable"—the court determined that "[d]onors and potential donors would be reasonably justified in a fear of disclosure given such a context" of past breaches. 2016 WL 6781090, *5.
The Ninth Circuit again vacated the District Court's injunctions, and this time reversed the judgments and remanded for entry of judgment in favor of the Attorney General. 903 F.3d 1000. The court held that the District Court had erred by imposing a narrow tailoring requirement. Id ., at 1008–1009. And it reasoned that the disclosure regime satisfied exacting scrutiny because the up-front collection of charities’ Schedule Bs promoted investigative efficiency and effectiveness. Id ., at 1009–1012. The panel also found that the disclosure of Schedule Bs would not meaningfully burden donors’ associational rights, in part because the Attorney General had taken remedial security measures to fix the confidentiality breaches identified at trial. Id ., at 1013–1019.
The Ninth Circuit denied rehearing en banc. Americans for Prosperity Foundation v. Becerra , 919 F.3d 1177 (9th Cir. 2019). Judge Ikuta dissented, joined by four other judges. In her view, the panel had impermissibly overridden the District Court's factual...
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