[EL] Americans For Prosperity Foundation Wins Injunction Against Donor Disclosure

[BZall at aol.com]

Judge Manuel Real, for the second time, enjoined the  California Attorney 
General from collecting donor lists from Americans  For Prosperity 
Foundation, finding after an extensive trial, that the Secretary  not only didn't need 
the donor lists, but couldn't protect them against illegal  disclosure. 
Copy of the opinion, ordering a permanent injunction against the  Attorney 
General, is attached. 
 
The lists are filed with the federal Internal Revenue Service as Schedule B 
 to tax-exempt organizations' annual Form 990 Federal tax returns, but are  
released to others only in redacted form. Recently, the California Attorney 
 General began requesting unredacted Schedule Bs. In an earlier proceeding, 
Judge  Real enjoined the collection of Schedule Bs, finding that AFPF had 
demonstrated  hardship if the donor list were provided. The Ninth Circuit, 
however, reversed  the injunction because a similar case had held that the 
requirement could  not be attacked facially, and ordered the District Court to 
hold a trial on  whether the collection was unconstitutional as applied 
against  AFPF. Americans for Prosperity Found. v. Harris, 809 F.3d 536 (9th Cir. 
 2015).  
 
The District Court then held the required trial and found "this Court,  
unlike the Ninth Circuit, had the benefit of holding a bench trial in the 
matter  and was left unconvinced that the Attorney General actually needs 
Schedule B  forms to effectively conduct its investigations." Judge Real then found 
"It is  clear that the Attorney General’s purported Schedule B submission 
requirement  demonstrably played no role in advancing the Attorney General’s 
law enforcement  goals for the past ten years. The record before the Court 
lacks even 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. If heightened scrutiny means 
anything, it at least requires  the Government to convincingly show that its 
demands are substantially related  to a compelling interest, including by being 
narrowly tailored to achieve that  interest." Slip Op. 6.
 
As to the burden on AFPF's First Amendment rights of speech and  
association, the District Court listed a variety of death threats and other  
harassment, then said: "The Court can keep listing all the examples of threats  and 
harassment presented at trial; however, in light of these threats, protests,  
boycotts, reprisals, and harassment directed at those individuals publicly  
associated with AFP, the Court finds that AFP supporters have been 
subjected to  abuses that warrant relief on an as-applied challenge. And although 
the Attorney  General correctly points out that such abuses are not as violent 
or pervasive as  those encountered in NAACP v. Alabama or other cases from 
that era, this Court  is not prepared to wait until an AFP opponent carries 
out one of the numerous  death threats made against its members." Slip Op. 
8. 
 
Finally, in the face of evidence showing that 1,400 confidential Schedule  
B's have been publicly disclosed by the Attorney General's Office, the Court 
 noted: "The current Registrar effectively acknowledges that the Registry’s 
 approach to maintaining the supposed confidentiality of Schedule Bs have 
been  indefensible. Not only did he admit that information has been 
improperly  classified, which would make it available to the public, but he also 
conceded  that the Registry has more work to do before it can get a handle on 
maintaining  confidentiality. (Eller Test. 3/3/16 Vol. II, p. 95:7–11). While 
the Attorney  General will have this Court believe that proper procedures 
are now in place to  prevent negligent disclosures of Schedule Bs, the Court 
is unconvinced." Slip  Op. 9. 
 
Now that a trial has shown the confidentiality failings of the California  
Attorney General's office, the unresolved question after this decision  is 
how much evidence of burden future court reviews will require to allow  other 
California charities to avoid submitting their Schedule Bs to the Attorney  
General. Is economic harm enough, or death threats? Or will some court 
require  actual murder to demonstrate harm?
 
And how will this decision affect similar policies in New York and Hawai'i? 
 
Barnaby  Zall
Of Counsel
Weinberg, Jacobs & Tolani, LLP
10411 Motor City  Drive, Suite 500
Bethesda, MD 20817
301-231-6943 (direct  dial)
bzall at aol.com 
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