Ninth Circuit Deals Blow to Koch Brothers' Nonprofit
A conservative nonprofit organization must hand over the names of its top contributors to the California attorney general, a federal appeals court ruled Tuesday in a legal blow for the group's founders, brothers Charles and David Koch.
September 11, 2018 at 04:56 PM
3 minute read
A conservative nonprofit organization must hand over the names of its top contributors to the California attorney general, a federal appeals court ruled Tuesday in a legal blow for the group's founders, brothers Charles and David Koch.
A three-judge panel for the U.S. Court of Appeals for the Ninth Circuit unanimously sided against the Americans for Prosperity Foundation in its challenge to the California attorney general's disclosure requirement, collecting the names and addresses of the largest donors to the group. The nonprofit—which was founded in 2004 and has tea party ties—along with a number of other groups, had claimed the requirement burdened their First Amendment right to free association by deterring possible contributors.
U.S. District Judge Manuel Real of the Central District of California issued a permanent injunction in 2016, blocking the state from demanding that information.
The panel vacated the trial court's injunction Tuesday, finding the attorney general had a state interest in collecting the information to prevent charitable fraud, and would not make the information public, with few exceptions.
“We hold that the California attorney general's Schedule B requirement, which obligates charities to submit the very information they already file each year with the IRS, survives exacting scrutiny as applied to the plaintiffs because it is substantially related to an important state interest in policing charitable fraud,” said the 41-page opinion, written by Judge Raymond Fisher.
Fisher was joined by Judges Richard Paez and Jacqueline Nguyen.
In their ruling, the judges said the state only collected donor information for nonpublic use.
“The risk of inadvertent disclosure of any Schedule B information in the future is small, and the risk of inadvertent disclosure of the plaintiffs' Schedule B information in particular is smaller still. To the extent the district court found otherwise, that finding was clearly erroneous,” the panel said.
In a statement, a spokesman for the Americans for Prosperity Foundation said they would seek further review.
“We are disappointed by the Ninth Circuit's latest decision and believe it imperils people's First Amendment right to freedom of speech and of association,” the statement said. “Consistent with the protected, sensitive nature of our donors' identities, the threat and chill they face from disclosure that was established during the trial of this case, and a demonstrated pattern of misuse of Schedule B information by California officials, the foundation intends to continue doing all it can to champion and protect the important constitutional rights at stake.”
“We remain gratified by the outpouring of amicus support from groups across the spectrum and hope these and other groups will continue to express their views in court as we seek further review,” it added.
Xavier Becerra, California's attorney general, weighed in Tuesday: “By law, California requires the collection of major donor information. The reason is simple: our mission is to protect Californians who donate their hard-earned dollars to charity. Charities operating in California must not engage in fraud or unfair business practices,” Becerra said in a statement.
The Thomas More Law Center, a Michigan-based group that says on its website it “defends and promotes America's Judeo-Christian heritage and moral values,” also lost its challenge to California's donor disclosure rule Tuesday.
Quinn Emanuel Urquhart & Sullivan represented the Americans For Prosperity Foundation before the Ninth Circuit, with Washington D.C.-based partner Derek Shaffer arguing on behalf of the plaintiffs.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllNew Class Action Points to Fears Over Privacy, Abortions and Fertility
Deception or Coercion? California Supreme Court Grants Review in Jailhouse Confession Case
5 minute readCourt rejects request to sideline San Jose State volleyball player on grounds she’s transgender
4 minute readTrending Stories
- 1Judicial Ethics Opinion 24-68
- 2Friday Newspaper
- 3Judge Denies Sean Combs Third Bail Bid, Citing Community Safety
- 4Republican FTC Commissioner: 'The Time for Rulemaking by the Biden-Harris FTC Is Over'
- 5NY Appellate Panel Cites Student's Disciplinary History While Sending Negligence Claim Against School District to Trial
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250