MANHATTAN (CN) – Upholding a law that requires charities to identify their donors to New York state, the Second Circuit shut the door Thursday on a challenge by the group Citizens United.
Forever linked with the landmark Supreme Court decision that struck down campaign-spending limits by corporations in 2010, the conservative-aligned Citizens United brought its challenge to New York’s scheme in 2014.
A year earlier, Thursday’s ruling notes, New York Attorney General Eric Schneiderman sent Citizens United the first of what were to become annual deficiency notices, warning the charity that it had failed to comply with yearly disclosure requirements.
The nonprofit has filed annual disclosures with the state every year since it first registered in 1995, but it has never included a donor list in any of these disclosures.
The ruling notes that Schneiderman has never escalated beyond stern reminders, but that he could at any time levy fines or revoke the nonprofit’s privileges to solicit donations in New York state.
Citizens United cast the disclosure requirements as a violation of its First Amendment rights, but U.S. District Judge Sidney Stein dismissed the case in 2016, and the Second Circuit affirmed Thursday.
Writing for a three-person panel in Manhattan, U.S. Circuit Judge Rosemary Pooler disagreed that New York could chill speech by merely requiring disclosure of donor lists from tax-exempt charities.
“A list of names in the hands of those with access to a state’s coercive resources conjures up an uneasy number of troubling precedents,” the 37-page opinion states. “But totalitarian tendencies do not lurk behind every instance of a state’s collection of information about those within its jurisdiction. Any form of disclosure‐based regulation — indeed, any regulation at all — comes with some risk of abuse. This background risk does not alone present constitutional problems. And requiring disclosure is not itself an evil: anonymity can protect both those whose unpopular beliefs might subject them to retaliation and those who seek to avoid detection (and consequences) for deceptive or harmful activities that governments have legitimate interests in preventing. It follows that only where a plaintiff organization presents well pleaded facts of a ‘likelihood of a substantial restraint upon the exercise by [its] members of their right to freedom of association’ or expression should we raise the First Amendment’s shield of privacy.”
Though the NAACP managed to subvert an order to disclose its members’ names and addresses in 1958, Pooler quickly distinguished Citizens United’s challenge from this precedent.
Finding no evidence that Schneiderman has a “vendetta” against the group, Pooler said the group’s arguments are “a far cry from the clear and present danger that white supremacist vigilantes and their abettors in the Alabama state government presented to members of the NAACP in the 1950s.”
Pooler also noted that most of the charities affected by New York’s regulations already disclose the same information to the IRS.
Schneiderman hailed Thursday’s ruling as a “victory for all those who believe in fairness across this vital sector of New York’s economy.”
“Citizens United can no longer shroud its biggest donors in secrecy,” the AG said in a statement.
A representative for Citizens United has not returned a call seeking comment.
In August 2016, the same week that Judge Stein ruled against Citizens United in 2016, New York Governor Andrew Cuomo signed into law a bill that he said would serve as the “nation’s strongest protections to combat Citizens United.”
The new law mandates the public disclosure of all donors and donations to a 501(c)(3) charity in excess of $2,500 whenever that organization makes an “in-kind donation” of over $2,500 to certain 501(c)(4)s engaged in lobbying activity.
For 501(c)4 disclosure, the law lowers the threshold from $50,000 to $15,000 in annual lobbying spending. Donors that give $2,500 or more meanwhile must disclose details of the transaction, dropping the minimum down from $5,000.
That December, both the American Civil Liberties Union and the watchdog group Citizens Union brought federal complaints to challenge the law.
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