Legal Docket - Americans for Prosperity v Bonta : S2.E8

MARY REICHARD, HOST: In the 1988 movie, Enemy of the State, actor Will Smith plays a labor lawyer named Bobby Dean. He’s got incriminating evidence against the government. But he isn’t aware that he is in possession of it. Determined to either get the evidence or get Dean, an official with the National Security Agency goes after him. One day Dean comes home from work to find his wife watching a congressman being interviewed on TV. The congressman is advocating for greater surveillance power for intelligence agencies. Dean’s wife can hardly believe her ears!

MOVIE DIALOG: Baby, listen to this fascist gasbag! / Freedoms have always existed in a very precarious balance and when buildings start blowing up people's priorities tend to change. / He’s got a point there, sweetie. / Bobby! / He is talking about ending personal privacy. Do you want your phone tapped? / I'm not planning on blowing up the country. / Well, how do we know until we've heard all your dirty little secrets? / You're just gonna have to trust me. / Oh, I know. We'll just tap the criminals. We won't suspend the civil rights of the good people. / Right. / Then who decides which is which?

MR: Who decides, indeed? Soon enough, surveillance... and more... rains down on Bobby Dean. Enough to ruin his life.

MOVIE DIALOG: Put taps on his 20 most frequently called numbers and let's get into his life. The union situation has mob written all over it and he's definitely vulnerable on Rachel Banks. I want to know about his wife. I want to know about his parents. I want to know about his gambling problems. His urine samples. His porno rentals. I want to use every means possible to get what we need.

The bigger the state, the smaller the citizen. Today, a case of state overreach into the private information of donors.

THEME

I Clarence Thomas...I Sonya Sotomayor...I Neil M. Gorsuch...I John G Roberts...I Elena Kagan...I Samuel Alito, Jr….I Steven Breyer...I Ruth Bader Ginsburg...I Brett M. Kavanaugh do solemnly swear, do solemnly swear, do solemnly swear, that I will administer justice, without respect to persons, that I will support and defend the constitution of the United States, so help me God…[APPLAUSE]

MR: Welcome to Legal Docket, I’m Mary Reichard.

JR: And I’m Jenny Rough. This podcast is from the team that brings you The World and Everything in It.

The honorable Chief Justice and the associate justices of the Supreme Court of the United States. Oyez! Oyez! Oyez!

MR: Come with us inside the world of the Supreme Court as we look more deeply into current disputes and how they make a difference to your life.

All persons having business before the honorable Supreme Court...

JR: When a state seizes too much power, the US Constitution provides a check on it.

God save the United States and this honorable court.

UNDERWRITER: Support for the Legal Docket podcast comes from listeners like you. Additional support comes from Samaritan Ministries, a Biblical solution to health care, connecting Christians across the nation who care for one another spiritually and financially when a medical need arises. More at SamaritanMinistries.org/podcast.

MR: Kamala Harris became vice president of the United States in 2020. But from 2011 to 2016, she was California’s attorney general. Listen to hear speak in July 2016 at the New York Delegation Breakfast, during her run for senator: 

HARRIS: Because in our system of democracy and in our system of justice, we have rightly said a harm against against any one of us is a harm against all of us.

MR: Harris fought for changes in the way charities and nonprofits could do business in California. She reinterpreted an existing rule to put a new condition on these entities: before soliciting money in California, they had to hand over their list of donors, those who gave more than $5,000. California before hadn’t required this level of detail that Harris demanded. She wanted IRS Schedule B Form 990. That document contains not only donor names, but their addresses, total contributions, and more. Identifying information.

JR: The attorney general of a state is chief overseer of charities. Harris pointed out that her job as attorney general included rooting out fraud. To uncover self-dealing and to stop improper loans. But her approach to the rule set off alarm bells among many charities. And for good reason: donors had already been harmed when their names got leaked into the public sphere.

MR: You needn’t go back far in history for examples of that. Just take the run-up to Proposition 8, the campaign to retain the historical and biblical meaning of marriage as between a man and a woman. Anonymous activists in 2008 sorted through disclosure records and doxxed donors. That means publishing identifying information about an individual with malicious intent. Even getting them fired.

PROP 8 MONTAGE

MR: It’s important to understand that Prop 8 was a political campaign, and disclosure rules for that are quite stringent. Political campaigns are different from charity or education groups. Those campaigns are permitted to shield donor information from public view. Still, these stories of harassment and violence against people who supported causes they believed in are instructive.

JR: Let’s take a moment here and review some relevant history about disclosure laws. Let’s go back to the presidency of Richard Nixon. May 13th, 1971. Nixon made clear to his aides what he was looking for in the next IRS Commissioner. This is an old tape, so you’ll need to listen carefully:

NIXON: I want to be sure he will do what he’s told, that every income tax return I want to see, I see. That he will go after our enemies and not go after our friends. Now, it’s as simple as that. If he isn’t, he doesn’t get the job.

MR: Revelations that the president of the United States used the IRS to go after his enemies prompted Congress to act. Lawmakers amended the tax code to restrict access to federal tax return information by federal and state officials. They attached penalties for violating the law.

JR: Let’s go further back in time to the Jim Crow era. In the 1950s, an Alabama state judge ordered the NAACP to submit membership lists to the state or incur a $100,000 fine. The NAACP is the National Association for the Advancement of Colored People. But the US Supreme Court shut that down in the landmark case NAACP v Alabama, decided in June 1958.

MR: Listen to a snippet of that oral argument from NAACP lawyer and civil rights leader Robert Carter. President Nixon later nominated Carter for federal district court judge.

ROBERT CARTER: We contend that the order requiring us to disclose the list of our members is a denial of our right, the right of the corporation and the right of its members to free speech and freedom of association and is protected by the First Amendment...We contend that if we had disclosed the list of our members, they would have been subjected to possible harm, threats, and fears. We further contend that the punishment for contempt and the fines issued was so vindictive that they in and of themselves constituted a denial of due process...There is no necessity, no need that has been shown as to why this Attorney General desires to know who our members are.

MR: And of course in more recent memory, during the Obama administration. The IRS targeted conservative groups for more than two years before the 2012 presidential election and even destroyed evidence arguably subject to subpoena. The House Oversight committee investigated the targeting. Listen to this exchange in May 2013 between Republican Congressman Darrell Issa and acting director at the IRS, Lois Lerner:

DARRELL ISA: Ms. Lerner, the topic of today’s hearing is the IRS’ improper targeting of certain groups for additional scrutiny regarding their application for tax-exempt status.
LERNER: I will not answer any questions or testify about the subject matter of this committee’s meeting.

JR: No charges were brought against anyone at the IRS. Still, those are three examples of private information being used by both political parties against people. Once private information is “out there,” few people have the means to protect themselves from fanatics. The natural reaction is to withdraw or to silence themselves out of fear.

MR: So that’s some history. And now let’s return to our case today, and the request by California’s attorney general that charities hand over their confidential information. Rather than capitulate to the request, two charities sued the state for violating their right to freedom of association. One was Americans for Prosperity. That’s an advocacy group funded by the Koch brothers that promotes limited government and leans libertarian.

JR: The other nonprofit that sued over the disclosure requirements: Thomas More Law Center, a conservative public-interest law firm. The Supreme Court consolidated the two cases after each spent years in litigation in lower courts. By the time oral argument rolled around, the attorney general job had changed hands; from Harris to Xavier Becerra to Rob Bonta.

MR: In April 2021, lawyers jousted by phone with the justices before the Supreme Court. Lawyer for the charities Derek Shaffer shot an arrow straight into the problem of the state demand for private donor information:

DEREK SHAFFER: This demand casts a profound nationwide chill and it does so for no good reason, Your Honors. Forty-six states today police charities without any such blanket demand. California itself likewise did so for years, Your Honors, without any problems. These 
Schedule Bs never find any legitimate use unless and until a complaint comes in, as happens for only a fraction of 1 percent of all charities. Even when reviewed, Schedule Bs, for all of their extreme sensitivity, have only trifling utility.

JR: In other words, the minuscule need stated by the attorney general requires no dragnet operation. Shaffer argued that’s just massive overreach. Not only that. These facts demand strict scrutiny, the highest level of judicial review. That applies when the government burdens individual freedoms. Shaffer asserted that’s why the government must show it has a compelling reason to request this confidential information. And then, the government must show it uses the most narrowly tailored means to achieve that compelling reason. Shaffer says the government fails that test. Big time.

MR: On the other side, defending California’s disclosure rule, lawyer Aimee Feinberg. She argued that these charities hadn’t shown a significant burden on First Amendment rights. And the state’s interest in policing charities is obvious. 

FEINBERG: The Petitioners' evidence centered only on their own organizations. They did not show that California's confidential collection of the same information that charities already provide to the IRS chills associational interests in general or for a substantial number of charities in the state. At the same time, the state's upfront collection of Schedule Bs is substantially related to important oversight and law enforcement interests.

MR: Just like Kamala Harris said, it’s the state’s job to root out fraud. Feinberg asked, why not allow it to do the job, assuming adequate security measures are taken? That fostered a barrage of skeptical questions from several justices. First, Justice Samuel Alito. When he says “petitioners,” he means the charities fighting the disclosure requirement.

JUSTICE SAMUEL ALITO: You know what the record here shows. The district court conducted a trial and it 
found ample evidence that the contributors to Petitioners would be harassed. And the brief filed by the American Civil Liberties Union and the NAACP Legal Defense Fund and other groups says, "Petitioners have shown that people 
publicly affiliated with their organizations have been subjected to threats, harassment, or economic reprisals in the past and are likely to be chilled." What more do you think these Petitioners would have to show? 


JR: The answer came well then, send this case back to lower court. Let those judges figure out the extent of any threat or harassment, and whether that actually chilled people from donating. On a case by case basis. Friend of the court briefs filed in support of the state underscored how unaccountable charities can be, even though independent organizations try to hold them to account. So state oversight is absolutely required.

MR: Assuming necessity of oversight, what about the confidentiality piece? That’s what Chief Justice John Roberts wanted to know.

CHIEF JUSTICE JOHN ROBERTS: Assume you have a charity that supports a cause that is controversial, and a number of organizations, people have said they will make life miserable for anybody who supports that charity. They'll picket outside their house. They will boycott anybody doing business with them. If that person came to you and said I want to give a donation, but I want to be sure that California will not disclose this and it will not get out, can you give me 100 percent assurance that that will not happen? What would you tell that person? I want to be sure that California will not disclose this, that it will not get out, can you give me 100 percent assurance that that will not happen? What -- what would you tell that person? 


FEINBERG: I don’t think any organization can guarantee perfection.

MR: Nobody reasonably expects perfection in any human endeavor. But Justice Alito pointed out the state fell far short of that. In fact, briefs filed by the ACLU and the NAACP said we should regard California’s system as de facto public disclosure, due to repetitive confidentiality breaches in that state.

ALITO: And from the perspective of a donor, that may make sense. A donor may say: “This is a state that has been grossly negligent in the past. No sanctions against anybody who's leaked this information. I have to assume that this may happen again.” Why isn't that a reasonable way to look at this? 


FEINBERG: I don't think even the district court regarded it that way, Justice Alito... The district court said that the Attorney General's Office efforts to rectify past lapses and to prevent them in the future were commendable. 


ALITO: It said your past record was shocking, did it not?

JR: So far, the state's argument wasn't holding up very well. But the charities didn’t have it all that easy, either. Justice Sonia Sotomayor liked the idea of government efficiency while at the same time reducing fraud. Listen to this exchange with lawyer Shaffer, for the charities:

JUSTICE SONIA SOTOMAYOR: The interest that California has in this schedule is, in part -- there was testimony by the head of the charitable organizations and by the auditing team that if you give out a subpoena or an audit letter, that it tips off, and there has been history of these letters tipping off fraudsters and then hiding their illegality. 
So this disclosure saves some time because audit and subpoena letters take them a long time to get the information. B, it helps them identify when a report comes in of problems, whether it supports further investigation. And..it helps avoid the tipping that they're concerned about. Given that state interest, if the State had properly kept this nonpublic, why 
would it be not narrowly tailored? 


JR: Well, the state hadn’t kept it nonpublic. And Shaffer pointed out that any attorney general truly worried about tipping off fraudsters wouldn’t start out with an audit letter anyway. The reality about those Schedule Bs? Shaffer argued it’s about bureaucratic laziness.

SHAFFER: The interest is not in reviewing Schedule Bs. 
It’s in having them on hand prophylactically on a suspicion less basis from all charities to then review a tiny handful when an external complaint comes in.

MR: The two sides also disagreed whether the whole disclosure rule should be struck down, or whether only in specific cases. The charities wanted the court to say the rule was unconstitutional on its face. Across the board, for all charities. California wanted the court to keep the rule and have the courts evaluate any harm done on a case by case basis. In legal parlance, an “as applied” analysis.

JR: During oral argument, the justices grappled with how to do that “as applied,” or, case by case analysis. For example, is it the potential for abuse that matters when a name is made public? Or is it the subject matter of the charity that’s key? Or is it something else? That’s what Justice Clarence Thomas had in mind with this hypothetical for Shaffer, lawyer for the charities:

JUSTICE CLARENCE THOMAS: How would it affect your analysis if the organization involved, just did something that was not controversial, such as provide free dog beds, or taking care of stray puppies or something like that? Would your analysis change in any way?

SHAFFER: It wouldn't, Justice Thomas. And I do note that among the amici supporting us is PETA, joining the brief by the nonprofit alliance. And so their work too can be controversial and, depending upon one's views of how puppies should be handled, there can be controversy around that. 


MR: Shaffer pounded on this: any requirement to disclose is unconstitutional, plain and simple. No matter the charity, no matter the number of people made fearful. And that exchange illuminates the strange bedfellows created in this case. These conservative charities found support from the likes of PETA, People for the Ethical Treatment of Animals; the ACLU; and the NAACP! Nearly 300 organizations signed in support of the charities in this case, from the left and the right.

JR: None of those groups want to turn over their donor lists, either. Yet, something lurked in the background. It bothered Justice Stephen Breyer.

JUSTICE STEPHEN BREYER: If you win in this case, I think the court will have in some form held that the interest of the donors in maintaining privacy of their giving to a charity, interest of the charity in receiving those money here at least outweighs the interest of the state in having a law on the books that even if it never is actually enforced, frightens people into behaving properly. OK? Something like that. Well, if we hold that, can we distinguish campaign finance laws where the interest is even stronger in people being able to give anonymously?

JR: Justice Breyer worried that this case was really a stalking horse to undermine campaign finance rules. And some politicians amplified that worry the day the decision came down. We’ll get to some of those criticisms in a moment.

MR: And Jenny, before we go further, I asked for interviews with people on the other side, those who supported donor disclosure. Nobody I asked agreed: the attorney for California, Charity Watch, Legal Historians, and others all declined to be interviewed for this podcast. But we did our best to understand their briefs and let those inform our coverage.

JR: Okay, let’s move on now to the decision. A victory for the charities in a 6-3 ruling. Chief Justice Roberts authored the opinion. He wrote that the risks of “bomb threats, protests, stalking, and physical violence…. seem to grow with each passing year,” giving “anyone with access to a computer” the power to gather information to destroy other people. John Bursch is an attorney for one of the charities. He helps explain the reasoning. 

MR: I had to get something out of the way with him right off the bat: If the IRS has this confidential donor information, what protection do donors have there that they don’t have with a state attorney general? Bursch explains:

BURSCH: The IRS does not put any confidential donor information on the internet, it only keeps it in paper form. And it has very strict rules in place to make sure that that information is not disclosed to anyone.

MR: It’s a felony to disclose. And if someone did leak info from the IRS, that person would be fired. (Note: Lois Lerner retired before that happened to her.) But California? It didn’t have the same IRS rules. 

BURSCH: Not only were there no consequences whatsoever if information was released, they didn't even notify charities that their information had been released. 

So Bursch’s clients were justified in their worries. They’d been doxxed, vilified on social media, threatened, harassed. In the opinion, the majority six justices agreed with the charities that the disclosure rule was indeed unconstitutional. On its face, across the board.

BURSCH: Because if they didn't do that, that would mean that 60,000 organizations would all have to file their own lawsuits. And we all know that litigation is expensive and time consuming and difficult for everybody….And so as a result, they were able to strike it down on its face. And that made it a much bigger win for freedom than it otherwise would have been. If they had simply struck it down with respect to these two parties, it would not have been as nearly an important constitutional victory.

MR: The majority six were not in agreement as to the level of judicial scrutiny this case deserved. It makes no practical difference as to the result, but interesting nonetheless. Three of the majority would apply strict scrutiny here, three others exacting scrutiny. Remember, strict scrutiny is the highest standard of judicial review. It requires the state to show a compelling interest to get the information AND that mass, forced disclosure is the least restrictive way to get it.

JR: But three other justices in the majority applied something less than that, exacting scrutiny. A substantial relationship between the donor list and a sufficiently important government interest. California failed even that lesser test.

BURSCH: So this question of whether government mandatory disclosure laws or policies should be subjected to the highest scrutiny or merely exacting scrutiny with teeth is still kind of an open question.

JR: One that lawyers will have to figure out going forward. Still, the six majority justices agreed in all other respects that California violated the Constitution. That leaves three justices in dissent. Justice Sotomayor wrote the dissent, joined by Justices Breyer and Elena Kagan. Bursch explains:

BURSCH: The main bone that they had to pick was the fact that the court was letting 60,000 charities off the hook and not requiring each one of them to prove harm. And so that's where they really parted ways with the majority.

MR: So that’s the breakdown of the opinion. I wanted to get some historical context of first amendment rights. For that, I called up Trevor Burrus. He’s a lawyer at the Cato Institute who co-authored an amicus brief in support of the charities. Burrus reminded us of what was going on pre-Bill of Rights. Back to the founding era. Burrus brings up the authors of The Federalist Papers to illustrate.

TREVOR BURRUS: Those were written under the pseudonym Publius, by Alexander Hamilton, John Jay And James Madison. You think about Common Sense by Thomas Paine. That was originally anonymous for about the first six months, before he had to kind of tell who he was. If the British would have come in and said, “ You know, we want to know who funded Common Sense. So we could, you know, put them in jail for treason or something like that.” Well, I mean, they would have said, “Well, this is a problem, too.”

JR: So, acquainted as the founders were with life under monarchy, anonymous speech became tradition in their time. And that skepticism wasn’t just on one side of the political spectrum, either. It included the anti-federalists, too. People who opposed ratifying the Constitution without a bill of rights to protect individuals from government overreach.

BURRUS: It was actually considered to be more of a credible, if not honorable thing to do, to write anonymously, because you weren't backing up your arguments with your name or your reputation, you were backing him up with just what your arguments were.

MR: Burrus said that tradition continued through the whole first 200 years of American history.

BURRUS: The real aberration has come since the 70s, when you've had campaign finance laws, which are relatively new, and this increased fear of things like quote, unquote, “dark money,” and now this attack on money in order to attack the speech, which I think is actually where this case came from. Like, a lot of people who are against political speech they don't agree with have decided that they can go after the money and not go after the speech.

MR: Remember when Justice Breyer brought up campaign finance during oral argument? Well, House Speaker Nancy Pelosi and Senate Majority leader Chuck Schumer gave press releases condemning the ruling. Here’s Democrat Senator Sheldon Whitehouse with a similar reaction:

SENATOR SHELDON WHITEHOUSE: What we are dealing with here is judges implementing a dark money enterprises ideal. And we see it right in that Americans for Prosperity Foundation case because even at the certiorari proceeding stage, 50 right wing, dark money groups came to tell the court what they wanted.

JR: Well, plenty of left wing groups also weighed in. But what about those dire warnings about dark money? John Bursch, again lawyer for one of the charities, put it bluntly:

BURSCH: That was really silly because the dark money that they're talking about is dark money that influences politics. And here we're talking about charitable organizations under 501(c)(3) of the U-S tax code. If they engage in political activity, they lose their 501(c)(3) designation. By definition, they are not allowed to advocate for candidates and participate in political campaigns. And so all of that was just a line of malarkey.

MR: I brought up the dissent saying that there was no real harm done to these particular donors or these particular charities. Trevor Burrus:

BURRUS: And there's a lot of weird lines in Sotomayor's dissent where she kind of says that a lot of people disclose their charitable giving, therefore, what's the harm? But that's like never been the reasoning of a First Amendment case. A lot of people disclose a lot of things about themselves or speak out about a lot of things. The fact that other people disclose their charitable giving does not matter for the purposes of the First Amendment.

MR: Burrus said the First Amendment puts the thumb on the scale for anonymity. Had the other side got its way?

BURRUS: And that would not give you a very good protection of the First Amendment, if that’s what you needed to do in order to receive the protections of anonymity that the First Amendment presumptively gives. ...That would mean that the only way you could get it was to do exactly what they did: get a lawyer, go to court, demonstrate on the record that you had threats against your organization and threats against your donors, and therefore you receive the protections of the First Amendment. That is not how the First Amendment works.

JR: Burrus pointed out how the majority was incredulous about California’s argument.

BURRUS: They said, "We need this to protect against charitable fraud," essentially. And then you actually ask them, “Well, do you ever use this to protect against charitable fraud? How many times did you actually use it?” Roberts used the term mismatch. It was an extreme mismatch between how necessary they said this was to them, and how much they actually used it...

MR: At the heart of these cases? It’s the list of donors.  I got why donors might not want their names publicized. I also wanted to understand why the charities want to protect their donor lists. Karen Donnelly is a lawyer who filed a friend of the court brief on behalf of 126 different charities.

KAREN DONNELLY: The donor file being nonprofit organizations’ most valuable asset. It absolutely is. That donor file is really the lifeline of the organization. It's a trade secret. It's confidential, it's nonpublic. Nonprofit organizations spend decades developing that asset. They use it in all aspects of their work. Relationships with major donors require development and cultivation. Those relationships are built on trust and integrity. Without their donors, they can't complete or achieve their missions.

JR: Donnelly states the dilemma this way:

DONNELLY: And it really puts them in a Hobson's choice to protect the anonymity of their donors, their donor intent, or to disregard it and comply with an unconstitutional rule of law here.

MR: Donnelly mentioned the risks of disclosure unique to our digital age. But also? Plain old incompetence.

DONNELLY: The breaches of confidentiality by the Attorney General didn't happen in a vacuum...(later)...this particular governmental office didn't have the privacy, either the competence level, or the privacy measures in place to protect that information , demonstrated by a long track record of disclosures in averting public disclosures...

MR: One other amicus brief caught my eye, from the Goldwater Institute. Timothy Sandefur is its vice president of litigation. He pointed out something lawyers already know: that using fuzzy language makes holding to a standard very difficult.

JR: For example, phrases like “we may” or “you might.” Words California officials used to defend why they wanted to collect donor information. They “may” use it, or “might” need it.

TIMOTHY SANDEFUR: Lawyers call it, call them weasel words. And of course, lawyers, you know, lawyers make their living with words that that's our tool and trade. So we are very well aware of the ways in which you can deploy weasel words in order to get away with what you want to.

MR: Okay, then. Consider yourself warned! Sandefur said to fend off tyranny, we need a clear eyed understanding of human nature.

SANDEFUR: And that's why we have these privacy restrictions in place to try and protect people against the tyranny of, well, I was going to say the tyranny of the majority, but even the tyranny of the minority. It's, there's a, there's just people out there who cannot keep politics in its place and want to go out and harass and intimidate donors. And that's what these donor disclosure requirements foster.

JR: Sandefur pointed out the invisible people in all this: those who aren’t harassed, but the countless people who simply don’t donate, out of fear. That silence is impossible to measure. As to the 6-3 win for the charities? Sandefur wasn’t quite as enthusiastic as some of the others.

SANDEFUR: Now, the downside is this is kind of an unusual case, and I'm not sure how broad a precedent it really sets, because it's very rare that you're going to hear the government admit that all it's trying to do is, is some relatively insignificant thing. Usually politicians claim that what they're doing is really, really important. And here? They didn't do that. Here, they said, well, this just makes our lives easier.

JR: Legal Docket is produced by the creative team at WORLD Radio. I’m Jenny Rough.

MR: And I’m Mary Reichard. We’re the hosts each week and we research and write the scripts. Our script editor is Nick Eicher. Technical engineer is Rich Roszel, and our producer is Paul Butler with production assistance from Josh Schumacher.

JR: Our thanks to those who took time to help explain the court’s ruling: John Bursch, Trevor Burrus, Karen Donnelly, and Timothy Sandefur. Audio credit goes to supremecourt.gov, oyez.com, the Richard Nixon Presidential Library and Museum, C-Span, CNN, and music from Hamilton.

MR: This second season, thanks to your ratings and reviews, we’ve pretty much stayed in the top 20 on iTunes’ government category. It’s been such an encouragement to us, because we’re a tiny team in competition with some big players. If you haven’t yet left a review, please know it really makes a difference. And thank you for listening!

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