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Thursday, July 18, 2024 | Back issues
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Ninth Circuit upholds San Francisco initiative donor disclosure rules

The panel agreed donors to local committees are frequently committees which attempt to disguise themselves with misleading and even deceptive committee names.

SAN FRANCISCO (CN) — A Ninth Circuit panel handed San Francisco voters a win Wednesday, affirming a lower court ruling that providing the public with information about donors of ballot measures is in the public interest.

San Franciscans Supporting Prop B sued City Attorney David Chiu and others in 2022, protesting the city’s requirement that committees must run a message disclosing their campaign’s top three donors of $5,000 or more at the top of campaign ads. If one of those donors is a political action committee, that committee’s top two donors must also be disclosed.

The group, supported by Edwin M. Lee Asian Pacific Democratic Club PAC and Neighbors for a Better San Francisco Advocacy, argued San Francisco’s restrictions, punishable by fines up to $5,000 if violated, were “wholly at odds with the guarantees of the First Amendment.” 

They insisted the city’s requirement to disclose top donors on ads would be “distracting and driving away listeners before they even hear the speaker’s message.”

“Going so far swallows the committee’s communications, scares away donors and otherwise limits speakers’ and donors’ ability to speak and associate, and misleads voters as to who supports the committee’s communications," the plaintiffs said.

Nonetheless, U.S. District Judge Charles Breyer, who had upheld the ordinance before, ruled in favor of the city. The plaintiffs appealed, and on Wednesday a Ninth Circuit panel consisting of U.S. Circuit Judges Susan Graber, Ronald Gould and Paul Watford found “San Francisco’s requirement was substantially related to the governmental interest in informing voters of the source of funding for election-related communications.”

Providing voters with information about who additional donors might be beyond the named organization actually running the ad is “substantially related to the governmental interest in informing the electorate," the panel held.

Writing for the panel, Graber — a Bill Clinton appointee — said donors to local committees are frequently committees themselves which attempt to disguise themselves with misleading and even deceptive committee names.

One of the plaintiffs in this case ran into similar problems in 2022. Local news outlets revealed Neighbors for a Better San Francisco Advocacy was largely funded by San Francisco billionaire William Oberndorf, who donated more than $600,000 to the successful effort in 2022 to recall then-district attorney Chesa Boudin. Oberndorf has spent millions supporting both local and national Republican candidates and a few Democrats, including $1 million in support for former Senate Majority Leader Mitch O’Connell, and millions more for charter schools. The PAC itself was headquartered in San Rafael in neighboring Marin County and its phone number belonged to a Sacramento-based lobbying group.

The group gained even more attention when it was found that then-DA candidate Brooke Jenkins had received more than $100,000 from the PAC’s nonprofit counterpart, Neighbors for a Better San Francisco, as a spokesperson for the recall campaign against Boudin.

In both cases, the Oberndorf-funded efforts succeeded.

The Ninth Circuit panel found, too, that the plaintiffs’ argument that the secondary-contributor requirement violated their right to freedom of association was groundless and, while the plaintiffs would probably be injured by some incursions on their First Amendment rights, those would be modest. The defendants’ argument that it better serves voters to let them know who actually supports proposed ballot measures won out.

“Thus, the public interest and the balance of hardships weighed in favor of defendants,” Graber wrote.

Gould, a Clinton appointee, and Watford, a Barack Obama appointee, joined Graber's opinion.

Neither side responded to requests for comment.

Categories / Appeals, Politics, Regional

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