A Free Speech Chill? Donor Disclosure Rules Debated at 10th Circuit

A conservative think tank has been fighting a donor disclosure rule in Santa Fe, New Mexico, after a soda tax ballot measure brought millions of dollars into city politics.

(CN) — A conservative think tank on Thursday asked a 10th Circuit panel to revive its claim against a city’s requirement that donors contributing over $250 to ballot measure campaigns must be disclosed.

As a super-sized debate bubbled up around a proposed soda tax in 2017, Albuquerque-based Rio Grande Foundation sued the city of Santa Fe over an ordinance requiring donor disclosure by groups spending more than $250 to advocate for ballot measures.

With proponents of the proposed 2-cent-per ounce tax on sugary beverages backed by billionaire Mike Bloomberg, groups on both sides spent nearly $2 million. Ultimately voters rejected the measure by more than 15 points.

In voicing opposition of the proposal, the Rio Grande Foundation launched a website and videos under the campaign slogan “No Way Santa Fe.” Estimating the nonprofit spent more than $7,000 on the issue — well over the threshold — the Santa Fe Ethics and Campaign Review Board asked for the donors to be disclosed.

After the nonprofit filed a lawsuit to block the ordinance, a federal judge sided with the city in January 2020 and dismissed the case. The Rio Grande Foundation appealed, citing potential “ideological harassment” if forced to comply with the rule.

Before the 10th Circuit, attorney Timothy Sandefur argued the Rio Grande Foundation only needed to show minimal burden and harm it would face if forced to disclose its donors.

“The reason why you can’t require a plaintiff to show they are personally harmed or retaliated against is because it’s impossible to prove today that you won’t suffer retaliation tomorrow or next month or years from now,” added Sandefur, who practices with the Goldwater Institute in Phoenix.

“The government could place the donors on a publicly accessible list today and that list could become controversial in a way no one had thought about five years before,” Sandefur said.

U.S. Circuit Judge Carolyn McHugh, a Barack Obama appointee, said the organization had to show some evidence of harm to make its case.

“Even if the interest is a feather, you have to have something to put on the other side of the scale, and if the district court is correct and you cannot rely on information based on what’s happened to other organizations, then there’s nothing to put on the other side of the scale,” McHugh said.

Her fellow Obama appointee U.S. District Judge Scott Matheson Jr. posed a similar question to the city of Santa Fe, represented by Campaign Legal Center attorney Tara Malloy.

“Do you agree that courts need to be more lenient on the issue of First Amendment chill?” Matheson asked.

Malloy noted this has often been the case.

“I think it’s fair to say that courts are fairly lenient, in terms of the standard for standing in First Amendment cases,” Malloy said, adding the Rio Grande Foundation presented little evidence that the city’s ordinance produced a chilling effect that would prevent the foundation from participating in future campaigns.

“The only bit of evidence Rio Grande submitted is the affidavit of its president, Paul Gessing, and in that affidavit the president states that Rio Grande Foundation fully intends to participate in the future and does not appear dissuaded from participating in ballot measurements in the future,” Malloy said.

Matheson seconded Malloy’s observation.

“I’m looking at that affidavit and that seems to be all that it says: they will speak in the future,” Matheson said.

U.S. Circuit Judge Carlos Lucero, a Bill Clinton appointee, presided over the hearing broadcast via YouTube. The panel did not indicate when or how they will decide the case.

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