Americans for Prosperity Foundation v. Bonta (2021)

Americans for Prosperity Foundation v. Bonta (2021)

594 U.S. 595

Charitable organizations soliciting funds in California must disclose the identities of their major donors to the state Attorney General’s Office. Charities generally must register with the Attorney General and renew their registrations annually. The Attorney General requires charities renewing their registrations to file copies of their Internal Revenue Service Form 990, a form on which tax-exempt organizations provide information about their mission, leadership, and finances. Schedule B to Form 990—the document that gives rise to the present dispute—requires organizations to disclose the names and addresses of their donors who have contributed more than $5,000 in a particular tax year (or, in some cases, who have given more than 2 percent of an organization’s total contributions). California contends that having this information readily available furthers its interest in policing misconduct by charities.

Since 2001, American for Prosperity Foundation, a tax-exempt charity that solicit contributions in California, had renewed its registration and filed a copy of its Form 990 with the Attorney General. To preserve donors’ anonymity, however, the foundation declined to file unredacted Schedule Bs. Disclosure of their Schedule Bs, the foundation believed, would make their donors less likely to contribute and would subject donors to the risk of reprisals. The foundation tends to advocate for conservative and libertarian causes and is associated with Charles Koch. The foundation had faced no consequences for noncompliance, until 2010, when California increased its enforcement of charities’ Schedule B disclosure obligations. California’s Attorney General ultimately threatened the foundation with suspension of its registrations and fines for noncompliance. American for Prosperity Foundation filed suit, alleging that the compelled disclosure requirement violated its First Amendment rights and the rights of its donors.

Opinion of the Court except as to Part II–B–1: Roberts, Kavanaugh, Barrett, Alito, Gorsuch, Thomas.

Dissenting opinion: Sotomayor, Breyer, Kagan.

Chief Justice ROBERTS delivered the opinion of the Court, except as to Part II–B–1.

II

A

. . . The First Amendment prohibits government from “abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” This 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.” Protected association furthers “a wide variety of political, social, economic, educational, religious, and cultural ends,” and “is especially important in preserving political and cultural diversity and in shielding dissident expression from suppression by the majority.” Government infringement of this freedom “can take a number of forms.” We have held, for example, that the freedom of association may be violated where a group is required to take in members it does not want, where individuals are punished for their political affiliation, or where members of an organization are denied benefits based on the organization’s message.

We have also noted that “[i]t is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as [other] forms of governmental action.” NAACP v. Alabama [1958] involved this chilling effect in its starkest form. The NAACP opened an Alabama office that supported racial integration in higher education and public transportation. In response, NAACP members were threatened with economic reprisals and violence. As part of an effort to oust the organization from the State, the Alabama Attorney General sought the group’s membership lists. We held that the First Amendment prohibited such compelled disclosure. We explained that “[e]ffective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association,” and we noted “the vital relationship between freedom to associate and privacy in one’s associations.” Because NAACP members faced a risk of reprisals if their affiliation with the organization became known—and because Alabama had demonstrated no offsetting interest “sufficient to justify the deterrent effect” of disclosure—we concluded that the State’s demand violated the First Amendment.

B

1

NAACP v. Alabama did not phrase in precise terms the standard of review that applies to First Amendment challenges to compelled disclosure. We have since settled on a standard referred to as “exacting scrutiny.” Under that standard, there must be “a substantial relation between the disclosure requirement and a sufficiently important governmental interest. To withstand this scrutiny, the strength of the governmental interest must reflect the seriousness of the actual burden on First Amendment rights.” Such scrutiny, we have held, is appropriate given the “deterrent effect on the exercise of First Amendment rights” that arises as an “inevitable result of the government’s conduct in requiring disclosure.” . . .

III

As explained, exacting scrutiny requires that there be “a substantial relation between the disclosure requirement and a sufficiently important governmental interest.” . . .

We do not doubt that California has an important interest in preventing wrongdoing by charitable organizations. . . .

There is a dramatic mismatch, however, between the interest that the Attorney General seeks to promote and the disclosure regime that he has implemented in service of that end. Recall that 60,000 charities renew their registrations each year, and nearly all are required to file a Schedule B. Each Schedule B, in turn, contains information about a charity’s top donors—a small handful of individuals in some cases, but hundreds in others. This information includes donors’ names and the total contributions they have made to the charity, as well as their addresses.

Given the amount and sensitivity of this information harvested by the State, one would expect Schedule B collection to form an integral part of California’s fraud detection efforts. It does not. To the contrary, the record [indicates] that there was not “a single, concrete instance in which pre-investigation collection of a Schedule B did anything to advance the Attorney General’s investigative, regulatory or enforcement efforts.” . . .

[E]ven if the State relied on up-front collection [to prevent and police fraud] in some cases, its showing falls far short of satisfying the means-end fit that exacting scrutiny requires. California is not free to enforce any disclosure regime that furthers its interests. It must instead demonstrate its need for universal production in light of any less intrusive alternatives.

The Attorney General and the dissent contend that alternative means of obtaining Schedule B information—such as a subpoena or audit letter—are inefficient and ineffective compared to up-front collection. It became clear at trial, however, that the Office had not even considered alternatives to the current disclosure requirement. The Attorney General and the dissent also argue that a targeted request for Schedule B information could tip a charity off, causing it to “hide or tamper with evidence.” But again, the States’ witnesses failed to substantiate that concern. Nor do the actions of investigators suggest a risk of tipping off charities under suspicion, as the standard practice is to send audit letters asking for a wide range of information early in the investigative process. Furthermore, even if tipoff were a concern in some cases, the State’s indiscriminate collection of Schedule Bs in all cases would not be justified.

The upshot is that California casts a dragnet for sensitive donor information from tens of thousands of charities each year, even though that information will become relevant in only a small number of cases involving filed complaints. California does not rely on Schedule Bs to initiate investigations, and in all events, there are multiple alternative mechanisms through which the Attorney General can obtain Schedule B information after initiating an investigation. The need for up-front collection is particularly dubious given that California—one of only three States to impose such a requirement—did not rigorously enforce the disclosure obligation until 2010. Certainly, this is not a regime “whose scope is in proportion to the interest served.” 

In reality, then, California’s interest is less in investigating fraud and more in ease of administration. This interest, however, cannot justify the disclosure requirement. The Attorney General may well prefer to have every charity’s information close at hand, just in case. But “the prime objective of the First Amendment is not efficiency.” Mere administrative convenience does not remotely “reflect the seriousness of the actual burden” that the demand for Schedule Bs imposes on donors’ association rights. . . .