Koch Brothers' Nonprofit Asks US Supreme Court to Keep Donor Names Secret
A circuit split and the "exceptionally important" First Amendment issues raised help make this case "an ideal vehicle" for the high court to clarify its position on the disclosure of group affiliations, argue the petitioners, who are represented by Quinn Emanuel Urquhart & Sullivan.
August 26, 2019 at 05:15 PM
3 minute read
A conservative charity with ties to the Koch brothers has asked the U.S. Supreme Court to block California's attempts to identify its donors.
Attorneys with Quinn Emanuel Urquhart & Sullivan, representing the Americans for Prosperity Foundation, filed a cert petition Monday seeking to overturn a 2018 ruling from the U.S. Court of Appeals for the Ninth Circuit that upheld California Attorney General Xavier Becerra's demands to see the names and addresses of the 501(c)(3) nonprofit's largest contributors.
"Unless this Court intercedes, the Ninth Circuit has opened the door for the major donors of thousands of charities to be exposed and chilled through California's dragnet," Quinn Emanuel's Derek Shaffer, counsel of record for the petitioners, wrote. "If this Court declines review, the resulting chill will be profound and lasting."
The case, which drew amicus briefs from privacy advocates, think tanks and the NAACP, stems from the attorney general's practice of collecting tax information from charities that operate in California. For years, the office allowed organizations to file only their Form 990s, the broad disclosure documents submitted annually to the U.S. Internal Revenue Service, and not the Schedule B forms that detail donor information. In 2010, however, under then-Attorney General Kamala Harris, the state charity registry began sending "deficiency letter" to charities demanding to see their Schedule Bs.
Harris, and later Becerra, argued that the donor information is kept confidential but that the attorney general's office has an interest in collecting it to ensure the charity is not engaging in fraud or other unfair business practices. The Americans for Prosperity Foundation, established by libertarian businessmen and brothers Charles Koch and the late David Koch, balked at the attorney general's demand for their donors' names, calling it a violation of its First Amendment right to free association.
The foundation sued and in 2016, the late U.S. District Judge Manuel Real of California's Southern District issued a permanent injunction barring the attorney general from collecting the donors' information. In September 2018, a three-judge panel for the U.S. Court of Appeals for the Ninth Circuit sided with Becerra and vacated the injunction.
"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," Judge Raymond Fisher wrote for the panel.
In its petition to the high court, the Americans for Prosperity Foundation argues that the Ninth Circuit's decision "cannot be squared" with "well-settled" constitutional protections for private association.
"The court sought to justify this holding by citing cases upholding disclosure requirements governing elections," Shaffer wrote. "But there is a categorical distinction between the election context, where compelled public disclosure can be an affirmative good, and the non-election context, where compelled disclosure (even to government itself) is at best a necessary evil."
A circuit split and the "exceptionally important" First Amendment issues raised help make this case "an ideal vehicle" for the high court to clarify its position on the disclosure of group affiliations, the petitioners argue.
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