Welcome
The United States Law Week

‘Friends’ of Koch-Backed Group Descend on Supreme Court

Jan. 6, 2020, 9:51 AM

Friends of a charity tied to the Koch brothers are flooding the U.S. Supreme Court with briefs that they hope will help convince the justices to nix a California law targeting donors.

Twenty-two amicus briefs urge the court to take up the Americans for Prosperity Foundation’s First Amendment challenge of the requirement that non-profit charities disclose their largest donors to state officials to assist them in investigating fraud. The foundation and its supporters for high court review claim the law infringes on the right to freely associate with groups and organizations, and could put donors at risk if sensitive information ever became public.

It’s an unusually large number of friend-of-the-court filings at such an early stage in the litigation. Such a robust showing is a “strong signal about the case’s national importance,” said Paul Sherman, of the libertarian law firm Institute for Justice, which is one of the groups who filed a brief.

There’s “a much higher than average chance” of the Supreme Court agreeing to take up the challenge, Sherman said.

The justices are scheduled to consider whether to take up the case at their private conference Jan. 10. A decision not to hear the appeal would leave in place the law, which was upheld by the San Francisco-based U.S. Court of Appeals for the Ninth Circuit in 2019.

The Roberts Court has upheld disclosure laws in the campaign finance sphere, but hasn’t addressed them as they relate to charities.

The foundation and its supports say a 1958 high court ruling protecting NAACP donors should apply and not, as the Ninth Circuit held, the court’s later rulings applicable to election laws. Supporters of the California law say the privacy interests at issue here are more akin to those in the campaign finance space, not vulnerable minority groups commonly subjected to public hostility and even violence. That’s especially so given that the donor lists “are confidential and may not be disclosed to the public,” the state of California told the justices.

Koch-Linked Groups

Americans for Prosperity Foundation is a 501(c)(3) charity that “fundraises nationwide and educates the public about free-market solutions,” according to its Supreme Court petition.

Its sister organization, Americans for Prosperity, is a 501(c)(4) social welfare group focused on policy and legislative change. It was a major component in the rise of the Tea Party following the election of President Barack Obama in 2008.

Industrialists Charles Koch and his brother, David, who died last year, have been “closely associated” with both organizations, and they helped establish the foundation, the petition said.

The foundation received more than $17.6 million in contributions in 2017, according to the latest available figures from its IRS Form 990. No donors were listed.

What’s in a Number?

The more than average number of outside briefs demonstrates broad concern over California’s disclosure law, said Pacific Legal Foundation attorney Jeremy Talcott, whose right-leaning public interest law firm filed one urging the justices to take the case.

The decision threatens to chill charitable donations on a nationwide basis, Talcott said.

But the Campaign Legal Center’s Megan McAllen said the number of briefs isn’t as symbolic as it might appear at first glance.

There’s been a “coordinated strategy” of litigation and advocacy designed to chip away at disclosure laws, not only in the context of charities but also in the field of campaign finance, McAllen said.

The legal center, which supports strong campaign finance regulations, filed a brief in support of the California law while the case was pending at the Ninth Circuit.

Noting that many of the organizations that filed briefs are “closely aligned,” she said the numbers merely suggest that “someone” has prioritized the issue.

Along with the Institute for Justice and the Pacific Legal Foundation, conservative and libertarian groups like the Cato Institute, Judicial Watch, and the U.S. Chamber of Commerce filed briefs urging the justices to take the case.

Simply put, “there are more briefs than there are arguments,” McAllen said.

‘Harassment Exemption’

At issue is whether the law requiring the foundation to disclose to state officials its major donors unconstitutionally encroaches on donors’ First Amendment rights to freely associate with groups and organizations.

The Ninth Circuit rebuffed the challenge, saying the state had a significant interest in the information to help it curb charitable fraud.

Talcott said the ruling drastically reduces the privacy rights that the Supreme Court recognized in 1958 in NAACP v. Alabama. There, the high court unanimously held that Alabama’s attempt to force the civil rights organization to disclose its members violated their rights of association in part because it would likely subject them to “public hostility.”

The same concerns are at issue here, Talcott argues. Americans for Prosperity Foundation says that efforts to “identify and publicize” its donors are “manifold and unrelenting” and that they face “grave” risks if their identities became public.

But the interests of the donors in this dispute aren’t the same as the NAACP rank-and-file members in the 1950s, McAllen said.

The Supreme Court’s “harassment exemption” was “designed to protect vulnerable and pervasively abused minority groups, not politically powerful and wealthy donors to groups like AFPF,” the Campaign Legal Center said in its Ninth Circuit brief.

Moreover, McAllen notes that even in the Supreme Court’s 2010 landmark Citizens United v. FEC, which chipped away significantly at campaign finance regulations, there were eight votes to uphold the disclosure requirements.

The foundation’s members have even less of an interest to resist disclosure than in the campaign finance space, McAllen said, because the donor list isn’t made public.

But Talcott counters that that analysis improperly expands campaign finance law into the charitable sphere.

The Supreme Court “has decades of precedent protecting the right of charities to keep their donors’ names private,” Sherman said. It’s that precedent that should control—"not the Court’s unique rules for campaign finance,” he said.

California urged the justices not to disturb the lower court ruling. It noted that while “confidentiality lapses had occurred in the past,” the state has “had addressed those problems.”

The foundation is represented by Quinn Emanuel Urquhart & Sullivan, LLP. The state is represented by the California Department of Justice. Attorneys for both declined to comment on the case.

The case is Americans for Prosperity Foundation v. Becerra, U.S., No. 19-251.

To contact the reporter on this story: Kimberly Strawbridge Robinson in Washington at krobinson@bloomberglaw.com

To contact the editors responsible for this story: Jessie Kokrda Kamens at jkamens@bloomberglaw.com; John Crawley at jcrawley@bloomberglaw.com

To read the full article log in. To learn more about a subscription click here.