People walk past the US Supreme Court on the day the court will issue orders and opinions on June 1, 2021 in Washington, USA.
Erin Scott | Reuters
The Supreme Court on Thursday overturned a California rule requiring nonprofits to disclose the names and addresses of their largest donors, winning a victory for two conservative groups that challenged the request as unconstitutional.
The 6: 3 decision, which split the nine judges on an ideological basis, overturned a 2018 appeals court decision on the side of the California attorney general.
The rule had forced nonprofits to give the state their so-called Schedule B forms, which contain the personal information of all donors across the country who had contributed more than $ 5,000 in a given tax year. The state had argued that it needed this information to detect malpractice by charities.
“We have no doubt that California has a vital interest in preventing charity misconduct,” wrote Chief Justice John Roberts in majority opinion.
But “there is a dramatic discrepancy” between “the interest the attorney general is trying to promote and the disclosure regime he has put in place to that end,” wrote Roberts.
The Conservative Chief Justice noted that about 60,000 charities renew their registrations each year and that virtually all of them are required to produce a Form B.
“This information includes the names of the donors and the total donations they have made to the charity, as well as their addresses. Given the amount and sensitivity of this state-collected information, one would expect the Schedule B collection to be an integral part of California’s fraud detection efforts It doesn’t, “wrote Roberts.
“On the contrary, the file supports the District Court’s finding that there has not been a single specific case in which the pre-investigation listing of List B did anything to advance the Attorney General’s investigative, regulatory or enforcement efforts,” he said added.
Roberts also wrote that California had failed to use other more limited tools that could achieve the state’s goals.
“The attorney general and dissent contend that alternative means of obtaining Appendix B information – such as a subpoena or examination letter – are inefficient and ineffective compared to pre-collection,” wrote Roberts. “In the process, however, it became clear that the office had not even considered alternatives to the current disclosure requirement.”
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In a dissent, Judge Sonia Sotomayor argued that the majority’s decision was a bad sign that regulated organizations should comply with the rules.
“Today’s analysis marks the reporting and disclosure requirements with a direct hit,” wrote Sotomayor. “Regulated entities wishing to evade their obligations can do so by vaguely pointing out the ‘privacy concerns’ of the first amendment.”
“Neither precedent nor common sense support such an outcome,” wrote Sotomayor.
Two nonprofits – the Americans for Prosperity Foundation, an influential advocacy group backed by billionaire Charles Koch, and the Michigan-based Thomas More Law Center, which is actively involved in hip cultural arenas – each had the disclosure rule in lawsuits against. challenged then Attorney General Kamala Harris.
These groups argued that California’s disclosure requirements violated the constitutional protection of freedom of speech and association.
US District Court judge Manuel Real agreed in 2016, ruling that the provision “chills the donor’s exercise of the freedoms of his donor’s first amendment to speak anonymously and engage in expressive association.”
But the US 9th District Court of Appeals overturned the District Court’s rulings, stating that donor information “was collected for non-public use only and the risk of inadvertent public disclosure was low”.
Xavier Becerra followed Harris in the role after she became a US Senator. The current attorney general for the state is Rob Bonta.