Amicus Curiae Brief — Americans for Prosperity Foundation, Petitioner v. Rob Bonta, Attorney General of California
Supreme Court briefMar 1, 2021
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Nos. 19-251 and 19-255
In the Supreme Court of the United States
AMERICANS FOR PROSPERITY FOUNDATION, PETITIONER
v.
XAVIER BECERRA, ATTORNEY GENERAL OF CALIFORNIA
THOMAS MORE LAW CENTER, PETITIONER
v.
XAVIER BECERRA, ATTORNEY GENERAL OF CALIFORNIA
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING VACATUR AND REMAND
ELIZABETH B. PRELOGAR
Acting Solicitor General
Counsel of Record
SARAH E. HARRINGTON
Deputy Assistant Attorney
General
FREDERICK LIU
SOPAN JOSHI
Assistants to the Solicitor
General
MICHAEL S. RAAB
DANIEL WINIK
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Whether California’s requirement that charitable organizations that fundraise in the State disclose to the
state Attorney General’s office the identities of their
substantial contributors violates the constitutional freedom of association.
(I)
TABLE OF CONTENTS
Page
Interest of the United States....................................................... 1
Statement ...................................................................................... 2
Summary of argument ................................................................. 9
Argument:
A. Compelled-disclosure requirements are subject
to exacting scrutiny ......................................................... 13
B. Disclosure requirements imposed as conditions on
the receipt of governmental subsidies are not
subject to exacting scrutiny ........................................... 24
C. The cases should be remanded for the court of
appeals to reassess the as-applied burden on
associational rights .......................................................... 27
Conclusion ................................................................................... 35
TABLE OF AUTHORITIES
Cases:
Agency for Int’l Dev. v. Alliance for Open Soc’y Int’l,
Inc., 570 U.S. 205 (2013) ..................................................... 26
Bates v. City of Little Rock, 361 U.S. 516 (1960) .... 20, 22, 27
Board of Trs. of the State Univ. of N.Y. v. Fox,
492 U.S. 469 (1989).............................................................. 21
Boy Scouts of Am. v. Dale, 530 U.S. 640 (2000) ........... 14, 19
Buckley v. Valeo, 424 U.S. 1 (1976)............................. passim
Cammarano v. United States, 358 U.S. 498 (1959) ........... 26
Center for Competitive Politics v. Harris,
784 F.3d 1307 (9th Cir.), cert. denied,
577 U.S. 975 (2015) .......................................................... 28
Citizens United v. FEC, 558 U.S. 310 (2010) ................ 17, 20
Citizens United v. Schneiderman, 882 F.3d 374
(2d Cir. 2018) ....................................................................... 29
(III)
IV
Cases—Continued:
Page
Doe v. Reed, 561 U.S. 186 (2010) ................................. passim
Elrod v. Burns, 427 U.S. 347 (1976) .............................. 14, 17
Grove City Coll. v. Bell, 465 U.S. 555 (1984) ....................... 26
Healy v. James, 408 U.S. 169 (1972).............................. 15, 16
Lewis Publ’g Co. v. Morgan, 229 U.S. 288 (1913) .............. 27
Louisiana ex rel. Gremillion v. NAACP,
366 U.S. 293 (1961).............................................................. 20
McCutcheon v. FEC, 572 U.S. 185 (2014) ..................... 16, 21
NAACP v. Alabama ex rel. Patterson,
357 U.S. 449 (1958)................................. 10, 15, 20, 22, 23, 31
Regan v. Taxation With Representation,
461 U.S. 540 (1983)............................................ 11, 24, 25, 26
Roberts v. United States Jaycees,
468 U.S. 609 (1984).................................................. 14, 15, 17
Rust v. Sullivan, 500 U.S. 173 (1991) .................................. 26
Rutan v. Republican Party of Ill. , 497 U.S. 62 (1990) ...... 14
Shelton v. Tucker, 364 U.S. 479 (1960) .......................... 20, 22
United States v. O’Brien, 391 U.S. 367 (1968) .................... 21
United States v. Stevens, 559 U.S. 460 (2010) ................ 7, 28
United States Postal Serv. v. Gregory,
534 U.S. 1 (2001) ................................................................. 32
Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353 (2009) ....... 26
Constitution, statutes, and regulations:
U.S. Const. Amend. I ................................................... passim
Tax Reform Act of 1969, Pub. L. No. 91-172,
83 Stat. 487 .......................................................................... 26
Internal Revenue Code (26 U.S.C.):
§ 170 ............................................................................ 24, 25
§ 501(a) ....................................................................... 24, 25
§ 501(c)(3) ....................................................... 1, 2, 3, 25, 26
§ 507(d)(2)(A) ..................................................................... 3
V
Statutes and regulations—Continued:
Page
§ 6033(b)(5) ................................................................... 3, 25
§ 6103 .................................................................................. 3
§ 6104(b) ............................................................................. 3
§ 6104(d)(3)(A) ................................................................... 3
§ 7213 .................................................................................. 3
§ 7213A ............................................................................... 3
§ 7431 .................................................................................. 3
Cal. Gov’t Code (West 2018):
§ 12581 ................................................................................ 2
§ 12584 ................................................................................ 2
§ 12586(a)............................................................................ 2
§ 12586(b) ........................................................................... 2
§ 12590 ................................................................................ 3
26 C.F.R.:
Section 1.6033-2(a)(2)(ii)( f ) .............................................. 3
Section 1.6033-2(a)(2)(iii)(a) ............................................. 3
Cal. Code Regs. tit. 11:
§ 301 (2005)......................................................................... 2
§ 310(a) (2016) .................................................................... 3
§ 310(b) (2016) .............................................................. 3, 32
Miscellaneous:
H.R. Rep. No. 413, 91st Cong., 1st Sess. (1969) ................. 26
Ely R. Levy & Norman I. Silber, Nonprofit
Fundraising and Consumer Protection:
A Donor’s Right to Privacy, 15 Stan. L. & Pol’y
Rev. 519 (2004) .................................................................... 30
In the Supreme Court of the United States
No. 19-251
AMERICANS FOR PROSPERITY FOUNDATION, PETITIONER
v.
XAVIER BECERRA, ATTORNEY GENERAL OF CALIFORNIA
No. 19-255
THOMAS MORE LAW CENTER, PETITIONER
v.
XAVIER BECERRA, ATTORNEY GENERAL OF CALIFORNIA
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING VACATUR AND REMAND
INTEREST OF THE UNITED STATES
These cases concern a constitutional challenge to
California’s requirement that certain charitable organizations that fundraise in the State disclose to the state
Attorney General’s office the identities of their substantial contributors. Federal law generally requires disclosure of the same information to the Internal Revenue
Service by organizations exempt from federal taxation as
described in Section 501(c)(3) of the Internal Revenue
(1)
2
Code, 26 U.S.C. 501(c)(3). Although that federal reporting provision has not been challenged here, the United
States has a substantial interest in the proper interpretation of the constitutional standards that apply to the
disclosure of that same information to state officials. At
the Court’s invitation, the United States filed an amicus
brief at the petition stage of these cases.
STATEMENT
Petitioners, two charitable organizations that fundraise in California, filed suits alleging that a state law
requiring them to disclose a list of their substantial contributors to respondent, the state Attorney General, impermissibly burdens their constitutional freedom of association. Following bench trials, the district court enjoined respondent from requiring petitioners to disclose
their substantial contributors to him. 19-251 Pet. App.
41a-56a; 19-255 Pet. App. 51a-67a. The court of appeals
reversed. 19-251 Pet. App. 1a-40a.
1. California law requires respondent to “establish
and maintain a register” of charitable organizations
that operate or solicit contributions within the State,
and authorizes him to obtain “whatever information,
copies of instruments, reports, and records are needed
for the establishment and maintenance of the register.”
Cal. Gov’t Code § 12584 (West 2018); see id. § 12581.
After an initial registration, such organizations generally must continue to “file with the Attorney General periodic written reports * * * in accordance with rules
and regulations of the Attorney General.” Id. § 12586(a);
see id. §§ 12584, 12586(b).
California regulations require those charitable organizations to submit copies of their Internal Revenue
Service (IRS) Form 990 as part of their annual periodic
reports to respondent. See Cal. Code Regs. tit. 11, § 301
3
(2005). IRS Form 990 is a return that Section 501(c)(3)
charitable organizations exempt from federal taxation
generally must file with the IRS each year. On Schedule B of the form, such organizations must disclose “the
names and addresses of all substantial contributors.”
26 U.S.C. 6033(b)(5). A substantial contributor is one who
gives $5000 or more to the organization during the year,
though in some cases only if the amount also exceeds 2%
of the total donations the organization received that
year. See 26 C.F.R. 1.6033-2(a)(2)(ii)( f ) and (iii)(a); cf.
26 U.S.C. 507(d)(2)(A). Although the IRS must allow public inspection of a public charity’s Form 990, the names
and addresses of any contributors identified on Schedule B generally must be kept confidential, under pain of
civil and criminal penalties. See 26 U.S.C. 6103, 6104(b)
and (d)(3)(A), 7213, 7213A, 7431.
Under California law, charitable organizations’ annual periodic reports, including IRS Form 990, generally must be made available for public inspection. See
Cal. Gov’t Code § 12590 (West 2018); Cal. Code Regs.
tit. 11, § 310(a) (2016). For decades, however, the State
has had a policy of “maintain[ing] Schedule B for public
charities as a confidential document.” 16-55727 C.A.
Supp. E.R. 202. In 2016, after this litigation commenced, the State adopted a regulation codifying that
policy. See Cal. Code Regs. tit. 11, § 310(b) (2016).
2. a. Petitioners are tax-exempt charitable organizations under Section 501(c)(3) that solicit contributions
in California and are subject to the State’s registration
requirement. See 19-251 Pet. App. 6a, 10a-11a. Since
2001, each petitioner has “annually filed a complete
Schedule B with the IRS,” but has “either filed redacted
versions of the Schedule B or not filed it with the Attorney General at all.” Id. at 10a-11a.
4
In 2012 and 2013, respondent sent deficiency letters
asserting that petitioners’ periodic reports had improperly omitted unredacted copies of Schedule B containing the names and addresses of petitioners’ significant
contributors. 19-251 Pet. App. 11a. Respondent informed
petitioners that if they did not submit complete Schedule B forms, they would face various consequences under state law, including disallowance of their state tax
exemption, late fees for “each month or partial month
for which the report(s) are delinquent,” and suspension
of their registration as charitable organizations that
may operate or solicit contributions in California. 19-251
J.A. 55-57; 19-255 Pet. App. 181a-183a.
After receiving the deficiency letters, petitioners
filed separate suits alleging that the requirement to disclose the names and addresses of their significant contributors impermissibly burdens the constitutional
freedom of association. See 14-cv-9448 Compl. ¶¶ 1-6;
15-cv-3048 Am. Compl. ¶¶ 1-10. Petitioners alleged that
their contributors had in the past suffered harassment,
reprisals, and similar harms because of their association
with petitioners. See, e.g., 14-cv-9448 Compl. ¶¶ 16-17.
Petitioners also alleged that respondent would make
their Schedule B forms publicly available. See, e.g., id.
¶ 25. And petitioners alleged that the possibility of public disclosure and harassment would deter current donors and others from making future contributions. See,
e.g., id. ¶¶ 13-19, 47; 15-cv-3048 Am. Compl. ¶ 36.
b. The district court preliminarily enjoined respondent from requiring petitioners to submit their Schedule
B forms. 19-251 Pet. App. 70a-73a; 19-255 Pet. App. 90a96a. The court of appeals vacated those injunctions and
directed the district court “to enter new orders preliminarily enjoining the Attorney General from publicly
5
disclosing, but not from collecting, [petitioners’] Schedule B forms.” 19-251 Pet. App. 58a. The court of appeals found that petitioners had not shown “that confidential disclosure to the Attorney General will chill participation or result in harassment of [their] donors by
the state or the public.” Id. at 62a. The court thus concluded that petitioners had “failed to demonstrate any
actual burden on First Amendment rights,” so long as
respondent kept their contributors’ information “nonpublic.” Id. at 65a. And while the court acknowledged
petitioners’ concerns about “the risk of public disclosure,” it determined that a “properly tailored” preliminary injunction would address that risk by “enjoining
the Attorney General only from making Schedule B information public.” Id. at 68a.
c. Following bench trials, the district court entered
permanent injunctions prohibiting respondent from requiring petitioners to include Schedule B forms in their
periodic reports. 19-251 Pet. App. 41a-56a; 19-255 Pet.
App. 51a-67a.
The district court concluded that the State’s disclosure requirement is unconstitutional as applied to petitioners. 19-251 Pet. App. 41a; 19-255 Pet. App. 51a.
That conclusion rested on what the court viewed as two
“independent[]” grounds. 19-251 Pet. App. 48a; 19-255
Pet. App. 58a. First, the court held that the State had
not “convincingly show[n] that its demands are substantially related to a compelling interest, including by being narrowly tailored to achieve that interest.” 19-251
Pet. App. 47a; see 19-255 Pet. App. 53a-58a. In the court’s
view, the evidence showed that the State’s “auditors and
attorneys seldom use Schedule B when auditing or investigating charities,” and that “even in instances where
a Schedule B was relied on, the relevant information
6
it contained could have been obtained from other
sources.” 19-251 Pet. App. 45a; see 19-255 Pet. App. 55a.
Second, the district court held that petitioners had
established that “disclosing [their] Schedule B to the
Attorney General would create a burden on [their] First
Amendment rights.” 19-251 Pet. App. 48a; 19-255 Pet.
App. 58a. In the court’s view, evidence that individuals
publicly associated with petitioners had in the past suffered harassment, reprisals, and similar harms sufficed
to establish a “reasonable probability” that the contributors listed on their Schedule B forms would face such
harms in the future if their identities were made public.
19-255 Pet. App. 61a; see 19-251 Pet. App. 48a-50a. The
court acknowledged that respondent “is only seeking
disclosure of [petitioners’] Schedule B for nonpublic
use,” 19-251 Pet. App. 51a, and further recognized that
the State had recently “codified” its “confidentiality policy” in a “formal regulation” and “implemented a system of automated and personal reviews to identify documents that were incorrectly classified as not confidential,” 19-255 Pet. App. 62a. But the court concluded that
such measures were insufficient in light of what it viewed
as respondent’s “substantial history” of “inadvertent[ly]
disclos[ing]” Schedule B forms to the public, ibid.—
which included the publication of “1,778 confidential
Schedule Bs” online and constituted what the court
characterized as a “pervasive, recurring pattern of uncontained Schedule B disclosures [that] persisted even
during [one of ] th[e] trial[s],” 19-251 Pet. App. 52a.
While the district court found the Schedule B disclosure requirement invalid as applied to petitioners, it rejected their facial challenges. 19-251 Pet. App. 42a-43a;
19-255 Pet. App. 52a-53a. The court observed that “the
‘strong medicine’ of facial invalidation need not and
7
generally should not be administered when the statute
under attack is unconstitutional as-applied to the challenger before the court.” 19-251 Pet. App. 43a (quoting
United States v. Stevens, 559 U.S. 460, 482-483 (2010)
(Alito, J., dissenting)).
3. The court of appeals reversed the district court’s
conclusion that the disclosure requirement violates the
Constitution as applied to petitioners. 19-251 Pet. App.
1a-40a.
a. Relying on this Court’s decision in Doe v. Reed,
561 U.S. 186 (2010), the court of appeals subjected the
disclosure requirement to “exacting scrutiny” under the
First Amendment. 19-251 Pet. App. 15a (citation omitted). The court explained that, under that standard,
there must be “a substantial relation between the disclosure requirement and a sufficiently important governmental interest,” and “the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.” Ibid. (citations omitted). The court declined “to apply the kind of
‘narrow tailoring’ traditionally required in the context
of strict scrutiny,” finding such a requirement inconsistent with “the ‘substantial relation’ standard [this]
Court applied in [Reed].” Id. at 16a.
The court of appeals then held that the State’s
Schedule B requirement survives exacting scrutiny as
applied to petitioners. 19-251 Pet. App. 7a. With respect
to the strength of the governmental interest, the court
determined that the disclosure requirement “is substantially related to an important state interest in policing charitable fraud,” ibid., because “quick access to
Schedule B filings ‘increases the Attorney General’s investigative efficiency’ and allows him to ‘flag suspicious
activity’ ” without “ ‘the need for expensive and burden-
8
some audits,’ ” id. at 19a (brackets and citations omitted). The court concluded that the district court had erroneously applied a “least-restrictive-means” test to
discount the governmental interest in disclosure. Id. at
22a. The court of appeals explained that “nothing in the
substantial relation test requires [respondent] to forgo
the most efficient and effective means of ” pursuing “important regulatory efforts” to prevent fraud and selfdealing by charities—“at least not absent a showing of
a significant burden on First Amendment rights.” Id.
at 23a.
Turning to an assessment of the burden on petitioners, the court of appeals concluded that they had not
“established a reasonable probability of retaliation from
compliance with” the Section B disclosure requirement.
19-251 Pet. App. 34a. The court observed that “the Schedule B requirement is a far cry from the broad and indiscriminate disclosure laws passed in the 1950s to harass
and intimidate members of unpopular organizations.”
Id. at 29a. The court declined to resolve whether petitioners had shown a “constitutionally significant level of
threats, harassment or reprisals if their Schedule B information were to become public,” id. at 34a, because
“the information is collected solely for nonpublic use”
and the court believed “the risk of inadvertent public
disclosure is slight,” id. at 7a. While acknowledging “that,
in the past, the Attorney General’s office ha[d] not
maintained Schedule B information as securely as it
should have,” id. at 35a, the court stated that respondent was not “likely to inadvertently disclose [petitioners’] Schedule B [information] in the future,” given “the
promulgation of ” the regulation codifying the State’s
policy of treating Schedule B forms as confidential and
the “adoption of additional security measures,” id. at
9
38a. The court therefore concluded that, “[b]ecause the
burden on the First Amendment right to association is
modest, and the Attorney General’s interest in enforcing its laws is important, ‘the strength of the governmental interest . . . reflects the seriousness of the actual burden on First Amendment rights.’ ” Id. at 39a
(brackets and citations omitted).
The court of appeals also rejected petitioners’ facial
challenges. 19-251 Pet. App. 39a-40a. The court observed
that “the evidence adduced at these trials does not
prove the Schedule B requirement fails exacting scrutiny in a substantial number of cases, judged in relation
to its plainly legitimate sweep.” Id. at 40a (brackets, citations, and internal quotation marks omitted).
b. The court of appeals denied rehearing en banc.
19-251 Pet. App. 77a. Judge Ikuta, joined by four other
judges, dissented. Id. at 77a-97a. In her view, the
State’s “established history of disclosing confidential information inadvertently” supported the conclusion that
Schedule B information could be publicly released, and
she concluded that petitioners had “established that
[their] members might be exposed to harassment and
abuse if their identities were made public.” Id. at 91a.
She further faulted the panel for not applying “a narrow
tailoring requirement.” Ibid. In response, the three
judges on the panel expressed their view that these
cases involve “the nonpublic disclosure of Schedule B
information,” and thus do not “expos[e] contributors to
the threats, harassment or reprisals that might follow
public disclosure.” Id. at 98a; see id. at 98a-109a.
SUMMARY OF ARGUMENT
A. Compelled-disclosure requirements are subject
to exacting scrutiny, a standard this Court has specifi-
10
cally recognized is less stringent than strict scrutiny.
Doe v. Reed, 561 U.S. 186, 196, 199 n.2 (2010).
1. Laws that implicate the freedom of association
take various forms. A requirement that organizations
disclose their members’ or donors’ identities involves
“no direct action” restricting association. NAACP v.
Alabama ex rel. Patterson, 357 U.S. 449, 461 (1958).
But such laws may “have the practical effect ‘of discouraging’ the exercise” of that freedom and thus affect associational rights indirectly. Ibid. (citation omitted).
This Court has made clear that such disclosure requirements are subject to “exacting scrutiny.” Reed,
561 U.S. at 196. “That standard requires a substantial
relation between the disclosure requirement and a sufficiently important governmental interest.” Ibid. (citations and internal quotation marks omitted). And while
the disclosure requirement need not be the least restrictive means to achieve that interest, “the strength
of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.”
Ibid. (citation omitted).
The Court’s application of exacting, rather than
strict, scrutiny to disclosure requirements reflects the
different constitutional interests presented by laws that
only indirectly affect associational rights. Such laws—
unlike those that directly affect associational rights—
do not bar anyone from associating or pose the same
threat of governmental suppression of dissident views.
Yet those challenging a disclosure requirement may be
able to demonstrate an impermissible burden on association if they can establish “a reasonable probability that
the compelled disclosure of [their] contributors’ [or
members’] names will subject them to threats, harassment, or reprisals from either Government officials or
11
private parties.” Buckley v. Valeo, 424 U.S. 1, 74 (1976)
(per curiam). Such challengers “must be allowed sufficient flexibility in the proof of injury to assure a fair
consideration of their claim.” Ibid.
2. Petitioners are wrong to contend that disclosure
requirements should instead be subject to strict scrutiny or at least its narrow-tailoring requirement. That
argument ignores this Court’s clear articulation of the
less stringent exacting-scrutiny standard, which appropriately reflects the First Amendment interests implicated by disclosure provisions. Petitioners isolate phrases
in various decisions considering disclosure requirements, but the Court’s analysis in each case was consistent with the application of exacting scrutiny. Nor
can petitioners successfully distinguish cases applying
exacting scrutiny on the ground that they arose in the
electoral context. This Court has subjected all disclosure requirements to the same standard of constitutional scrutiny—and that makes sense. Both inside and
outside the electoral context, the relevant principle is
the same: because disclosure requirements affect associational rights only indirectly, strict scrutiny and its
least-restrictive-means test are unwarranted.
B. The constitutionality of the IRS’s collection of
Schedule B information does not resolve these cases.
The federal reporting provision does not compel disclosure, but rather constitutes a condition for receiving a
governmental subsidy in the form of tax exemptions and
deductibility. Such subsidies are not subject to exacting
scrutiny. See Regan v. Taxation With Representation,
461 U.S. 540, 545-551 (1983). Thus, the fact that the IRS
permissibly collects Schedule B information as a condition of providing a governmental subsidy is not dispositive of the constitutionality of respondent’s requirement
12
that charities disclose Schedule B information to operate or fundraise in the State.
C. The court of appeals correctly identified exacting
scrutiny as the constitutional standard for evaluating
the State’s Schedule B disclosure requirement, and it
correctly rejected petitioners’ facial challenges. The disclosure requirement clearly furthers important governmental interests in policing fraud and abuse; other means
of obtaining the same information would be less effective and less efficient; and petitioners have not shown
that donors who contribute to charitable organizations
in general will be exposed to a reasonable probability of
threats and harassment as would be necessary to establish that the disclosure provision is facially invalid.
The court of appeals’ analysis of petitioners’ as-applied
challenges, however, was incomplete based on the facts
of these cases. In reversing the district court’s finding
that petitioners had demonstrated a substantial First
Amendment burden, the court of appeals declined to
consider how significant the harm would be to petitioners’ contributors if their identities became publicly
known. But the magnitude of such harm is relevant to
properly assessing the possible deterrent effect of the
law based on the particular history of respondent’s
prior public disclosure of Section B information. In addition, some language in the court’s analysis erroneously suggested that petitioners must specifically establish that their contributors’ information, as distinct
from other organizations’ contributors’ information,
would be inadvertently disclosed. To give the court the
opportunity to account for those issues in the first
instance, the cases should be remanded for the court to
reassess the as-applied burden on the associational
rights that petitioners assert.
13
ARGUMENT
California requires charitable organizations that
fundraise in the State to disclose to respondent the
identities of their substantial contributors. This Court
has subjected such disclosure requirements to exacting
scrutiny, requiring that they be substantially related to
important governmental interests and that the strength
of those interests reflect the seriousness of the actual
burden on First Amendment rights. That standard—
rather than strict scrutiny—should apply here.
In a brief filed in response to the Court’s invitation
at the petition stage, the United States took the position
that California’s disclosure requirement is not narrowly
tailored to a compelling governmental interest. After
this Court’s grant of review and the change in Administration, the government reconsidered the issues presented in these cases and has concluded that its prior
position misstated the exacting-scrutiny standard and
gave insufficient weight to the nonpublic nature of the
disclosure that California requires. The flaw in the decision below lies not in its articulation of the governing
legal standard, but in its application of established legal
principles to the facts of these cases. Thus, without unsettling those principles, this Court should vacate the
decision below and remand for further proceedings.
A. Compelled-Disclosure Requirements Are Subject To
Exacting Scrutiny
1. The First Amendment protects “the free exercise” of religion; “the freedom of speech” and “of the
press”; and “the right of the people peaceably to assemble, and to petition the Government for a redress of
grievances.” U.S. Const. Amend. I. This Court has recognized that “[a]n individual’s freedom to speak, to worship, and to petition the government for the redress of
14
grievances could not be vigorously protected from interference by the State [if ] a correlative freedom to engage in group effort toward those ends were not also
guaranteed.” Roberts v. United States Jaycees, 468 U.S.
609, 622 (1984). Accordingly, the Court has “long understood as implicit in the right to engage in activities protected by the First Amendment a corresponding right
to associate with others in pursuit of a wide variety of
political, social, economic, educational, religious, and
cultural ends.” Ibid.
As this Court has recognized, laws that implicate the
freedom of association “can take a number of forms.”
Roberts, 468 U.S. at 622. Some laws “directly and immediately affect[] associational rights.” Boy Scouts of
Am. v. Dale, 530 U.S. 640, 659 (2000). For example, a
law might impose penalties on individuals because of
their “affiliation or nonaffiliation” with a particular
group. Elrod v. Burns, 427 U.S. 347, 349 (1976) (plurality opinion). Or a law might “force[] the group to accept
members it does not desire.” Roberts, 468 U.S. at 623.
When a law directly and immediately affects associational rights, this Court typically has applied a form of
strict scrutiny. See Dale, 530 U.S. at 659 (rejecting application of an “intermediate standard of review” to a
law that “directly and immediately affects associational
rights”); Rutan v. Republican Party of Ill., 497 U.S. 62,
74 (1990) (requiring that political patronage practices
be “narrowly tailored to further vital government interests”); Roberts, 468 U.S. at 623, 626 (upholding “a reglation that force[d] [a] group to accept members” as
“the least restrictive means of achieving” a “compelling
interest”).
Other laws, in contrast, have “only an incidental effect on” associational rights. Dale, 530 U.S. at 659. For
15
example, a law might “require disclosure of the fact of
membership” in a particular group. Roberts, 468 U.S.
at 622-623. Or a law might require disclosure of the
group’s donors or contributors. See Buckley v. Valeo,
424 U.S. 1, 65 (1976) (per curiam). Although disclosure
requirements involve “no direct action” restricting the
freedom of association, they may nevertheless “have the
practical effect ‘of discouraging’ the exercise” of that
freedom. NAACP v. Alabama ex rel. Patterson, 357 U.S.
449, 461 (1958) (citation omitted).
The Court confronted a membership disclosure requirement in NAACP v. Alabama. See 357 U.S. at 460.
There, Alabama sought to compel the NAACP to disclose “the names and addresses of all its Alabama members and agents, without regard to their positions or
functions in the Association” for the purpose of “determining whether [the NAACP] was conducting intrastate business in violation of the Alabama foreign corporation registration statute.” Id. at 451, 464. Evaluating the effect on associational rights, the Court was “unable to perceive that the disclosure of the names of [the
NAACP’s] rank-and-file members ha[d] a substantial
bearing” on determining whether the NAACP was subject to the foreign corporation registration statute. Id.
at 464. The Court further emphasized that the NAACP
had made an “uncontroverted showing” that the disclosure of its membership lists would “expose[] its members to economic reprisal, loss of employment, threat of
physical coercion, and other manifestations of public
hostility.” Id. at 462. The Court “conclude[d] that Alabama ha[d] fallen short of showing a controlling justification for the deterrent effect on the free enjoyment of
the right to associate which disclosure of membership
lists is likely to have.” Id. at 466; see Healy v. James,
16
408 U.S. 169, 183 (1972) (observing that “[t]he requirement * * * that the NAACP disclose its membership
lists was found to be an impermissible, though indirect,
infringement of the members’ associational rights”).
2. Although NAACP v. Alabama did not label the
level of constitutional scrutiny it applied, the Court has
since made clear that disclosure requirements are subject to “exacting scrutiny.” Buckley, 424 U.S. at 64.
“That standard requires a substantial relation between
the disclosure requirement and a sufficiently important
governmental interest.” Doe v. Reed, 561 U.S. 186, 196
(2010) (citations and internal quotation marks omitted).
“To withstand this scrutiny, ‘the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.’ ” Ibid. (citation
omitted). Thus, under exacting scrutiny, “fit matters.”
McCutcheon v. FEC, 572 U.S. 185, 218 (2014) (plurality
opinion). But unlike strict scrutiny, exacting scrutiny
does not demand that a disclosure requirement be the
least restrictive means to achieve the pertinent governmental interests. Instead, a court must “look to the extent of the burden that [the disclosure requirement]
place[s] on individual rights,” and then “determin[e]
whether [the governmental] interests are sufficient to
justify the requirement[].” Buckley, 424 U.S. at 68.
This Court’s application of exacting scrutiny rather
than strict scrutiny to disclosure requirements reflects
the different constitutional interests presented by laws
that have only an indirect effect on associational freedoms. As the Court explained in Reed, it is “pertinent
to [the] analysis” that a law is “a disclosure requirement” rather than “a prohibition” on the exercise of
First Amendment rights because “[d]isclosure require-
17
ments may burden the ability to speak” but “do not prevent anyone from speaking.” 561 U.S. at 196 (citation,
emphasis, and internal quotation marks omitted); see
Buckley, 424 U.S. at 66 (observing that “compelled disclosure has the potential for substantially infringing
the exercise of First Amendment rights”) (emphasis
added); Citizens United v. FEC, 558 U.S. 310, 366, 369
(2010) (characterizing disclosure requirements as “less
restrictive” than “more comprehensive regulations of
speech”). In addition to presenting a lesser burden on
First Amendment rights, disclosure requirements do
not present the same threat of governmental “suppression” of “dissident expression,” Roberts, 468 U.S. at 622,
as do laws that seek to control “association and belief
per se,” Elrod, 427 U.S. at 363 n.17 (plurality opinion).
Thus, the rationale for strict scrutiny does not apply
when the “deterrent effect on the exercise of First
Amendment rights arises, not through direct government action, but indirectly as an unintended but inevitable result of the government’s conduct in requiring
disclosure.” Buckley, 424 U.S. at 65.
In applying exacting scrutiny and assessing the indirect burden on First Amendment rights that may arise
from a disclosure requirement, this Court has further
made clear that those challenging the law must establish a causal chain between disclosure and the asserted
infringement of associational rights. See, e.g., Buckley,
424 U.S. at 69-74. The Court has recognized that the
causal requirement is satisfied and challengers may be
able to demonstrate an impermissible burden on association when they establish “a reasonable probability that
the compelled disclosure of a party’s contributors’ [or
members’] names will subject them to threats, harassment, or reprisals from either Government officials or
18
private parties.” Id. at 74. But absent the “[r]equisite
[f ]actual [s]howing,” the Court has found that “any serious infringement on First Amendment rights brought
about by the compelled disclosure of contributors is
highly speculative,” rendering NAACP v. Alabama “inapposite.” Id. at 69-70.
The Court’s decision in Buckley illustrates the application of the foregoing principles to a disclosure law.
The Court in that case upheld a law requiring minor political parties and independent candidates to disclose
their contributors, explaining that none of the challengers had “tendered record evidence of the sort proffered
in NAACP v. Alabama,” “where the threat to the exercise of First Amendment rights [wa]s so serious and the
state interest furthered by disclosure so insubstantial
that the [disclosure] requirement[] [could not] be constitutionally applied.” Buckley, 424 U.S. at 71. “At best,”
the Court observed, the challengers had “offer[ed] the
testimony of several minor-party officials that one or
two persons refused to make contributions because of
the possibility of disclosure.” Id. at 71-72. And “on th[at]
record,” the Court held, “the substantial public interest
in disclosure * * * outweigh[ed] the harm generally alleged.” Id. at 72.
The Court in Buckley further emphasized, however,
that challengers who seek to establish a reasonable
probability that disclosure will result in threats, harassments, or reprisals “must be allowed sufficient flexibility in the proof of injury to assure a fair consideration
of their claim.” 424 U.S. at 74. That proof may take a
variety of forms, including “specific evidence of past or
present harassment of members due to their associational ties,” “harassment directed against the organiza-
19
tion itself,” or a “pattern of threats or specific manifestations of public hostility.” Ibid. The Court recognized
that “[a] strict requirement that chill and harassment
be directly attributable to the specific disclosure from
which the exemption is sought” could constitute an “unduly strict requirement[] of proof.” Ibid. Nevertheless,
the Court did not find it necessary to recognize “a blanket exemption” from disclosure for minor parties, emphasizing that it would not “assume that courts will be
insensitive to” the requisite showing of harm when it is
established on an individual basis. Ibid.; see Reed, 561
U.S. at 203 (Alito, J., concurring) (observing that the
recognition of an as-applied exemption in compelleddisclosure cases “plays a critical role in safeguarding
First Amendment rights”). “Where it exists,” the Court
observed, “the type of chill and harassment identified in
NAACP v. Alabama can be shown.” Buckley, 424 U.S.
at 74.
3. Petitioners contend that strict scrutiny—or at
least narrow tailoring, by which they appear to mean a
least-restrictive-means test—should apply to the disclosure requirement at issue here. AFPF Br. 24-27; TMLC
Br. 19-32. But as explained above, the rationale for strict
scrutiny does not apply where, as here, a law does not
“directly and immediately affect[] associational rights.”
Dale, 530 U.S. at 659. Petitioners identify no sound basis for this Court to depart from precedent recognizing
that disclosure requirements are instead subject to exacting scrutiny, which appropriately balances the First
Amendment interests implicated in this context.
a. To support their request that the Court apply
strict scrutiny or a least-restrictive-means test to respondent’s Schedule B disclosure requirement, peti-
20
tioners focus on isolated phrases from this Court’s precedents. AFPF Br. 20-27; TMLC Br. 26-29. For example, they highlight NAACP v. Alabama, in which the
Court found that the State had not shown a “compelling”
interest in a disclosure requirement that was “sufficient
to justify the deterrent effect” on associational freedom.
AFPF Br. 22 (quoting NAACP v. Alabama, 357 U.S. at
463); TMLC Br. 27 (same). They observe that Bates v.
City of Little Rock, 361 U.S. 516 (1960), likewise described the State’s need to show a “compelling” interest.
AFPF Br. 22 (quoting Bates, 361 U.S. at 524); TMLC
Br. 27 (same). And they cite language from Shelton v.
Tucker, 364 U.S. 479 (1960), stating that “even though
the governmental purpose be legitimate and substantial, that purpose cannot be pursued by means that
broadly stifle fundamental personal liberties when the
end can be more narrowly achieved.” AFPF Br. 24 (quoting Shelton, 364 U.S. at 488); TMLC Br. 28 (same); see
also AFPF Br. 25 (quoting language from Louisiana
ex rel. Gremillion v. NAACP, 366 U.S. 293, 297 (1961),
stating that time, place, and manner regulations “need
to be ‘narrowly drawn to prevent the supposed evil’ ”)
(citation omitted).
But those isolated phrases do not override this
Court’s clear articulation of the “exacting scrutiny”
standard: “[t]o withstand this scrutiny,” there must be
“a substantial relation between the disclosure requirement and a sufficiently important governmental interest,” such that “the strength of the governmental interest * * * reflect[s] the seriousness of the actual burden
on First Amendment rights.” Reed, 561 U.S. at 196 (citations and internal quotation marks omitted); see also,
e.g., Citizens United, 558 U.S. at 366-367 (“The Court
has subjected [disclosure] requirements to ‘exacting
21
scrutiny,’ which requires a ‘substantial relation’ between the disclosure requirement and a ‘sufficiently important’ governmental interest.”) (citation omitted).
Indeed, the Court in Reed explained that exacting scrutiny is a lower “standard of review” than “strict scrutiny.” 561 U.S. at 199 n.2. And the Court upheld the
disclosure requirement in that case without subjecting
it to the least-restrictive-means test that the Court has
adopted to implement strict scrutiny’s narrow-tailoring
element. Id. at 197-202.
Against the backdrop of this Court’s clear distillation
of the exacting-scrutiny standard, the disclosure cases
that petitioners cite cannot be read as requiring strict
scrutiny or its stringent form of narrow tailoring. The
Court has previously recognized that phrases like
“ ‘narrowly drawn’ ” can describe a standard of review
that is “more flexible” than a “ ‘least-restrictive-means’
approach.” Board of Trs. of the State Univ. of N.Y. v.
Fox, 492 U.S. 469, 476-477 (1989) (citation omitted); see
also, e.g., McCutcheon, 572 U.S. at 218 (plurality opinion) (describing the requirement of “a fit that is not necessarily perfect, but reasonable,” because it “employs
not necessarily the least restrictive means but . . . a
means narrowly tailored to achieve the desired objective”) (citations omitted). That language reinforces that
“fit matters” under exacting scrutiny, McCutcheon,
572 U.S. at 218 (plurality opinion)—but provides no basis to avoid exacting scrutiny altogether in favor of a
more stringent standard of review. Instead, the phrases
petitioners quote merely reflect the “imprecision” that
the Court has previously acknowledged in the “variety
of descriptive terms” it historically used when describing standards of constitutional scrutiny. United States
v. O’Brien, 391 U.S. 367, 376-377 (1968).
22
Moreover, the disclosure cases petitioners cite are
consistent with this Court’s articulation of exacting
scrutiny in both reasoning and result. In NAACP v.
Alabama, the Court considered the “substantiality of
Alabama’s interest in obtaining the membership lists”
and the “substantial restraint” on associational freedom
arising from disclosure, ultimately finding that the
State had “fallen short of showing a controlling justification” for the burden imposed. 357 U.S. at 462, 464,
466. Similarly, in Bates, the Court evaluated whether
the law had “a reasonable relationship to the achievement of the governmental purpose asserted as its justification,” emphasized that the disclosure requirement
constituted a “substantial abridgement of associational
freedom,” and ultimately found “no relevant correlation” between the claimed state interest and the compelled disclosure. 361 U.S. at 524-525. And in Shelton,
the Court determined that a disclosure law’s “comprehensive interference with associational freedom [went]
far beyond what might be justified in the exercise of the
State’s legitimate inquiry into the fitness and competency of its teachers.” 364 U.S. at 490. In each case, the
Court weighed the strength of the State’s interest in
disclosure against the extent of the burden on First
Amendment rights—just as exacting scrutiny demands.
See Reed, 561 U.S. at 196 (“To withstand this scrutiny,
‘the strength of the governmental interest must reflect
the seriousness of the actual burden on First Amendment rights.’ ”) (citation omitted).
b. Petitioners contend that reliance on Reed or any
other election-related decision is misplaced because the
electoral context is unique. AFPF Br. 27-30; TMLC Br.
29-31. But the relevant principle is that because disclo-
23
sure requirements affect associational rights only indirectly, strict scrutiny and the least-restrictive-means
test are unwarranted. That principle is the same, both
inside and outside the electoral context.
It is therefore not surprising that in evaluating disclosure requirements in election-related cases, this
Court has observed that the exacting-scrutiny standard
is drawn from NAACP v. Alabama and the other nonelection cases that followed it, with no suggestion that
the standard of review differs based on context. See,
e.g., Buckley, 424 U.S. at 64-65 & n.73 (describing “exacting scrutiny” as a standard derived from, inter alia,
NAACP v. Alabama, Shelton, and Bates); Reed, 561
U.S. at 196 (“Since NAACP v. Alabama * * * we have
required that the subordinating interests of the State
[offered to justify compelled disclosure] survive exacting scrutiny.”) (quoting Buckley, 424 U.S. at 64) (brackets in original). That the standard of review does not
differ follows from NAACP v. Alabama itself, which
pronounced it “immaterial whether the beliefs sought to
be advanced by association pertain to political, economic, religious or cultural matters.” 357 U.S. at 460.
Petitioners are further wrong to assert that this
Court’s decisions in the electoral context “did not conduct a narrow-tailoring analysis because this Court already held in Buckley * * * that such laws categorically satisfy narrow tailoring solely for reasons unique
to elections.” AFPF Br. 18; see TMLC Br. 30. Petitioners do not point to any post-Buckley decision of this
Court that has recognized that “categorical[]” holding
of Buckley. AFPF Br. 18 (emphasis omitted). And if
that holding existed, much of the analysis in Reed would
have been unnecessary. See 561 U.S. at 197-199. Petitioners accordingly provide no sound basis to modify or
24
depart from the exacting-scrutiny standard that this
Court has long applied to disclosure requirements, both
inside and outside the election context.
B. Disclosure Requirements Imposed As Conditions On The
Receipt Of Governmental Subsidies Are Not Subject To
Exacting Scrutiny
In seeking to defend California’s Schedule B disclosure requirement, respondent has emphasized that
charitable organizations exempt from federal taxation
are required by federal law to submit the same information about their major donors to the IRS. Resp. Supp.
Br. 1, 5-6. But petitioners have not challenged that federal law, see AFPF Br. 45-47; TMLC Br. 53-55—and for
good reason. The federal reporting provision is not a
compelled-disclosure requirement. Rather, it is a condition on receiving a governmental subsidy in the form
of tax exemptions and deductibility. See 26 U.S.C. 170,
501(a). Such conditions on governmental subsidies are
not subject to exacting scrutiny. See, e.g., Regan v.
Taxation With Representation, 461 U.S. 540, 545-551
(1983). Respondent has not sought to characterize California’s Schedule B requirement as such a condition,
however—presumably because charitable organizations
that fail to comply are not merely denied a subsidy but
also barred from operating and fundraising in the State.
Thus, the constitutionality of the IRS’s collection of
Schedule B information does not resolve these cases.
1. When a disclosure requirement is imposed as a
condition on a governmental subsidy, exacting scrutiny
does not apply. An organization seeking a subsidy is not
compelled to disclose its contributors because it can
simply forgo the governmental benefit, to which it has
no entitlement. Accordingly, a disclosure requirement
imposed as a condition on a governmental subsidy does
25
not raise the same First Amendment concerns as a requirement that compels disclosure as a regulatory measure. See Regan, 461 U.S. at 550 (contrasting “governmental provision of subsidies” with a situation in which
“the State attempts to impose its will by force of law,”
where “constitutional concerns are greatest”) (brackets, citation, and internal quotation marks omitted).
This Court’s decision in Regan is instructive. There,
the Court upheld a requirement that Section 501(c)(3)
organizations that enjoy tax-exempt status refrain from
lobbying activities. See 461 U.S. at 545. The Court determined that, although lobbying is protected by the
First Amendment, the government does “not infringe[]
any First Amendment rights or regulate[] any First
Amendment activity” when it denies tax-exempt status
to organizations engaged in lobbying because “Congress is not required by the First Amendment to subsidize lobbying.” Id. at 546. The Court explained that
“[b]oth tax exemptions and tax deductibility are a form
of subsidy that is administered through the tax system,”
id. at 544, and that Congress’s “decision not to subsidize
the exercise of a fundamental right does not infringe the
right,” id. at 549. Accordingly, Congress’s decision to
impose a viewpoint-neutral condition on the receipt of a
governmental subsidy “is not subject to strict scrutiny,”
ibid., even if, by choosing to accept the subsidy, the recipient “cannot exercise its freedom of speech as much
as it would like,” id. at 550.
2. Here, the requirement that charitable organizations file Schedule B with the IRS each year is a condition on the receipt of a subsidy under the Internal Revenue Code. See 26 U.S.C. 6033(b)(5). As in Regan, that
subsidy takes the form of tax exemptions and deductibility, see 26 U.S.C. 170, 501(a), and any organization can
26
avoid the disclosure condition by choosing to forgo the
subsidy. Heightened scrutiny therefore does not apply.
See Regan, 461 U.S. at 545-551. Rather, such a condition may be upheld so long as it is reasonable, see
Ysursa v. Pocatello Educ. Ass’n, 555 U.S. 353, 359-360
(2009); Rust v. Sullivan, 500 U.S. 173, 197 (1991); Grove
City Coll. v. Bell, 465 U.S. 555, 575 (1984); Regan, 461
U.S. at 550-551, and does not “reach outside” the federal
tax-subsidy program, Agency for Int’l Dev. v. Alliance
for Open Soc’y Int’l, Inc., 570 U.S. 205, 217 (2013).
The federal disclosure requirement satisfies those
requirements. Disclosure of a charitable organization’s
significant contributors is reasonably related to the
IRS’s administration of tax-subsidy laws that apply to
Section 501(c)(3) charities. Indeed, Congress specifically added the disclosure requirement in the Tax Reform Act of 1969, Pub. L. No. 91-172, 83 Stat. 487, in
order to “facilitate meaningful enforcement” of “new
self-dealing rules and other provisions” regulating organizations that choose to claim tax-exempt status under Section 501(c)(3). H.R. Rep. No. 413, 91st Cong.,
1st Sess. 36 (1969). The IRS thus properly collects
Schedule B information as part of its administration of
the federal tax-subsidy program, and the federal reporting provision is constitutional. See Grove City
Coll., 465 U.S. at 575 (rejecting a First Amendment
challenge to a condition on financial assistance because
the petitioner could “terminate its participation in the
[federal] program and thus avoid [its] requirements”);
Cammarano v. United States, 358 U.S. 498, 513 (1959)
(rejecting a First Amendment challenge to a regulation
denying a tax deduction for lobbying expenses because
“[p]etitioners are not being denied a tax deduction be-
27
cause they engage in constitutionally protected activities, but are simply being required to pay for those activities entirely out of their own pockets”); Lewis Publ’g
Co. v. Morgan, 229 U.S. 288, 306-307 & n.3, 314-315
(1913) (rejecting a First Amendment challenge to a discounted postal rate conditioned on the recipient’s making certain disclosures).
3. In contrast, respondent has not sought to defend
California’s Schedule B disclosure requirement as a
condition on governmental subsidies. When petitioners
did not comply with the requirement, respondent informed them not only that they might lose their state
tax exemptions but also that they could be barred from
operating or soliciting contributions in California. See
19-251 J.A. 55-57; 19-255 Pet. App. 181a-183a; Bates,
361 U.S. at 517, 524 (applying exacting scrutiny to a disclosure requirement imposed as a condition on “operating within [a] municipality”). Respondent therefore has
acknowledged that exacting scrutiny applies here, Br.
in Opp. 12-16, and the constitutionality of the IRS reporting provision does not resolve these cases.
C. The Cases Should Be Remanded For The Court Of Appeals
To Reassess The As-Applied Burden On Associational
Rights
For the most part, the court of appeals correctly applied the foregoing principles. The court was right to
assess California’s Schedule B disclosure requirement
under exacting scrutiny and correctly rejected petitioners’ facial challenges. But in addressing petitioners’ asapplied challenges, the court’s analysis was incomplete
on the facts presented here. A remand is therefore warranted.
1. The court of appeals correctly identified exacting
scrutiny as the applicable constitutional standard for
28
assessing California’s disclosure requirement. 19-251
Pet. App. 15a. The court further correctly articulated
the elements of exacting scrutiny, stating that it “requires a substantial relation between the disclosure requirement and a sufficiently important governmental
interest,” such that “the strength of the governmental
interest * * * reflect[s] the seriousness of the actual
burden on First Amendment rights.” Ibid. (quoting
Reed, 561 U.S. at 196). And the court rightly rejected
petitioners’ suggestion that it should instead “apply the
kind of ‘narrow tailoring’ traditionally required in the
context of strict scrutiny” or “require the state to choose
the least restrictive means of accomplishing its purposes.” Id. at 16a.
2. Applying exacting scrutiny, the court of appeals
correctly rejected petitioners’ facial challenges to the
Section B disclosure requirement. 19-251 Pet. App. 3940a. Petitioners cannot demonstrate error in the court’s
conclusion that “the evidence adduced at these trials
d[id] not prove the Schedule B requirement ‘fails exacting scrutiny in a “substantial” number of cases, “judged
in relation to its plainly legitimate sweep.” ’ ” Id. at 40a
(quoting Center for Competitive Politics v. Harris,
784 F.3d 1307, 1315 (9th Cir.), cert. denied, 577 U.S. 975
(2015), in turn quoting United States v. Stevens, 559 U.S.
460, 473 (2010)).
In seeking to invalidate the requirement on its face,
petitioners principally challenge the strength of the
State’s interest in requiring disclosure. AFPF Br. 3034; TMLC Br. 33-43. But as the court of appeals explained, the disclosure requirement “ ‘clearly furthers’ ”
“ ‘important government interests’ in ‘preventing fraud
and self-dealing in charities by making it easier to police
29
for such fraud.’ ” 19-251 Pet. App. 22a (brackets, citation, and ellipsis omitted). Schedule B information can
help state investigators “determine whether a charity is
actually engaged in a charitable purpose, or is instead
violating [state] law by engaging in self-dealing, improper loans, or other unfair business practices.” Id. at
17a (citation omitted). For example, Schedule B information can allow state investigators “to determine when
an organization has inflated its revenue by overestimating the value of ‘in kind’ donations.” Id. at 19a (citation
omitted); see Citizens United v. Schneiderman, 882 F.3d
374, 382 (2d Cir. 2018) (explaining that Schedule B information “permits detection of schemes such as the ‘intentional overstatement of the value of noncash donations in order to justify excessive salaries’ ”) (brackets
and citation omitted). Schedule B information can also
help state investigators “trace money used for improper
purposes,” determine whether a charity is being used
“as an improper vessel for gain,” and identify other suspicious activity. 19-251 Pet. App. 21a.
Petitioners assert that respondent’s effort to police
fraud should be confined to issuing targeted audit
letters and subpoenas. AFPF Br. 34-39; TMLC Br. 38,
42-43. But attempts to obtain Schedule B information
through those alternatives would be less effective and
less efficient. 19-251 Pet. App. 19a-21a. As the evidence
showed, issuing a subpoena or audit letter would alert a
charity to the State’s investigation, which could allow it
to hide assets, destroy documents, and fabricate records. Id. at 20a. Issuing a subpoena or audit letter
would also be more expensive and burdensome, substantially delaying the State’s ability to take action. See
id. at 19a-21a. The Schedule B disclosure requirement
30
thus “increases the Attorney General’s investigative efficiency” while avoiding the risk of revealing ongoing investigations. Id. at 19a (brackets and citation omitted).
Because the disclosure requirement “clearly furthers” “ ‘important government interests,’ ” 19-251 Pet.
App. 22a (brackets and citation omitted), a facial challenge cannot succeed unless “the strength” of those interests, in general, fails to “reflect the seriousness of
the actual burden on First Amendment rights,” Reed,
561 U.S. at 199 (citation omitted). As in Reed, however,
petitioners’ evidence of such a burden focuses “almost
entirely on the specific harm they say would attend disclosure of [their own] information,” id. at 200, with no
evidence that similar harms would “attend the disclosure of a typical” charitable organization’s donors, id. at
201.
Petitioners have not shown that donors who contribute to charitable organizations in general will face a reasonable probability of threats or harassment if their
identities become known. While petitioners point to evidence that some of their contributors have previously
been harassed on account of their association with petitioners, see AFPF Br. 50-51; TMLC Br. 44-50, many
charitable organizations could not plausibly advance
similar claims. Indeed, although some philanthropy is
anonymous, it is common for charitable organizations to
publicly acknowledge donations by publishing contributors’ names. And many charitable organizations sell the
names and contact information of their donors with no
apparent concern that this conduct will subject their
contributors to threats or harassment. See Ely R. Levy
& Norman I. Silber, Nonprofit Fundraising and Consumer Protection: A Donor’s Right to Privacy, 15 Stan.
L. & Pol’y Rev. 519, 529-530 (2004). Because “there is
31
no reason to assume that any burdens imposed by disclosure of typical” charitable donations “would be remotely like the burdens [petitioners] fear in this case,”
their facial challenge to the Section B disclosure provision cannot succeed. Reed, 561 U.S. at 201.
3. The proper resolution of petitioners’ as-applied
challenges to the disclosure requirement presents a
closer question. To determine the “actual burden on
[petitioners’] First Amendment rights,” the court of appeals recognized that it must consider the extent to
which the disclosure requirement would have a “ ‘deterrent effect’ ” on contributors’ willingness to associate
with petitioners. 19-251 Pet. App. 23a (citation omitted).
That issue, in turn, required an assessment of whether
petitioners could show “a reasonable probability that
the compelled disclosure [of their Schedule B information] will subject [their significant contributors] to
threats, harassment, or reprisals from either Government officials or private parties.” Id. at 24a (citations
omitted).
In evaluating the probability of such harm, all judges
who have considered the evidence in these cases—from
the district court judge to the court of appeals panel to
the circuit judges who dissented from the denial of rehearing en banc—correctly emphasized the important
distinction between public and nonpublic disclosure of
Schedule B information. See 19-251 Pet. App. 25a-39a,
51a-53a, 91a-93a, 106a-109a. Many of this Court’s cases
involve the risk of threats, harassment, or reprisals by
private parties following the disclosure of information
to the public. See, e.g., NAACP v. Alabama, 357 U.S. at
462-463. But when, as here, a law involves only nonpublic
disclosure—that is, disclosure of information to govern-
32
mental officials, who are required to keep the information confidential—such harms will presumably not
occur, absent a showing that the officials themselves will
misuse the information or will publicly release the information notwithstanding confidentiality requirements.
Here, petitioners did not show a reasonable probability that nonpublic disclosure of their Schedule B information to respondent will lead to threats, harassment, or reprisals from governmental officials themselves. See 19-251 Pet. App. 27a-28a, 48a-50a; 19-255
Pet. App. 58a-61a. Nor did petitioners establish that
governmental officials would deliberately violate the
State’s current prohibition on the disclosure of Schedule B information to the public. See Cal. Code Regs.
tit. 11, § 310(b) (2016); see also United States Postal
Serv. v. Gregory, 534 U.S. 1, 10 (2001) (“[A] presumption
of regularity attaches to the actions of Government
agencies.”). Thus, an assessment of the actual burden
on the First Amendment rights that petitioners assert
turns on (1) the risk that governmental officials will
inadvertently disclose Schedule B information to the
public, and (2) the risk that private parties will subject
petitioners’ contributors to threats, harassment, and reprisals if the information is publicly disclosed. See 19-251
Pet. App. 30a-39a.
In holding that petitioners had shown only a “modest” burden on their First Amendment rights, 19-251
Pet. App. 39a, the court of appeals reached a conclusion
on only the first of those two issues and focused on the
likelihood that petitioners’ contributors’ information, in
particular, would be inadvertently disclosed. In light of
measures respondent had taken to address previous
breaches of confidentiality, the court determined that
“[t]he risk of inadvertent disclosure of any Schedule B
33
information in the future is small, and the risk of inadvertent disclosure of the plaintiffs’ Schedule B information in particular is smaller still.” Id. at 38a. Having
found no “reasonable probability that [petitioners’]
Schedule B information will become public as a result of
disclosure to [respondent],” the court declined to “decide whether [petitioners] have demonstrated a reasonable probability that the compelled disclosure of Schedule B information would subject their contributors to a
constitutionally significant level of threats, harassment
or reprisals if their Schedule B information were to become public.” Id. at 34a.
Given the competing evidence in these cases and the
district court’s contrary finding that “there is a high
risk of public disclosure,” 19-251 Pet. App. 38a, the
court of appeals erred in stopping its analysis without
assessing how significant the harm would be to petitioners’ contributors if their identities became publicly
known. In deciding whether to make a donation, potential contributors will naturally consider not just the likelihood of inadvertent public disclosure, but also the
probability and magnitude of the harms they could suffer if public disclosure occurred. The greater the probability and magnitude of those harms, the greater the
chilling effect of the disclosure requirement, even if the
threshold risk of inadvertent disclosure remains relatively small. On these unique facts, where respondent’s
“history” of not “maintain[ing] Schedule B information
as securely as it should have * * * raises a serious concern,” id. at 35a, the overall deterrent effect on the exercise of First Amendment rights should be assessed as
a function of both variables: the probability of public disclosure and the severity of the harms such disclosure
could produce.
34
Nor should petitioners be required to specifically establish that their contributors’ information, as distinct
from other organizations’ contributors’ information,
would be inadvertently disclosed. In response to the
dissent from the denial of rehearing en banc, the panel
stated that it found the risk of public disclosure to be
“exceedingly small” because “[t]he key question * * *
was not whether there was a ‘risk of inadvertent disclosure of any Schedule B information in the future,’ but
rather whether there was a significant ‘risk of inadvertent disclosure of the plaintiffs’ Schedule B information
in particular.’ ” 19-251 Pet. App. 108a-109a. Of course,
the bare claim that “[n]othing is perfectly secure on the
internet” cannot “establish a significant risk of public
disclosure.” Id. at 37a. But to the extent the court of
appeals required petitioners to offer proof of how
respondent handles their specific information, that
approach contradicts this Court’s recognition that
organizations seeking an as-applied exemption from a
compelled-disclosure requirement should not be subject
to “unduly strict requirements” and instead “must be
allowed sufficient flexibility in the proof of injury to assure a fair consideration of their claim.” Buckley, 424
U.S. at 74.
Because the court of appeals’ analysis was incomplete, a remand is appropriate to allow the court to reassess the burden that California’s disclosure requirement places on the associational rights petitioners assert. The court could then determine whether the disclosure requirement satisfies exacting scrutiny as applied to petitioners, in light of the principles set forth
above.
35
If the court of appeals determines that the disclosure
requirement does not withstand such scrutiny as applied to either petitioner, it should further consider
whether a remedy that addresses the actual burden on
First Amendment rights by further reducing the risk of
inadvertent public disclosure—rather than by prohibiting the collection of petitioners’ Schedule B information
altogether—would be appropriate. See 19-251 Pet. App.
68a-69a (granting such a remedy at the preliminary injunction stage to “address the risk of public disclosure”
without “preclud[ing] [respondent] from obtaining and
using Schedule B forms for enforcement purposes”).
CONCLUSION
The judgment of the court of appeals should be
vacated, and the cases should be remanded for further
proceedings.
Respectfully submitted.
ELIZABETH B. PRELOGAR
Acting Solicitor General
SARAH E. HARRINGTON
Deputy Assistant Attorney
General
FREDERICK LIU
SOPAN JOSHI
Assistants to the Solicitor
General
MICHAEL S. RAAB
DANIEL WINIK
Attorneys
MARCH 2021
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.