Case Summary and Outcome

The New York Attorney General requested Citizens United and Citizens United Foundation to file Schedule B, a form that discloses the names, addresses, and total contributions of their major donors (donors of more than $5,000), as per New York law. Citizens United responded by requesting a court preliminary injunction to enjoin the Attorney General from requesting such information, alleging a violation of First Amendment rights to freedom of speech and association, among other arguments. The U.S. District Court denied Citizens United’s request.

Facts

Citizens United and Citizens United Foundation are non-profit and non-stock corporations that have been active in New York since 1995. Article 7 of the New York Executive Law requires charities to register with the New York Attorney General to be able to solicit donations in state. In 2006, the Attorney General introduced a regulation that required charities to submit copies of IRS forms and schedules. Schedule B, one of the required submissions under the 2006 regulation, requires entities to disclose the name, address, and the total contribution of any donor who gave more than $5,000. Citizens United has never filed Schedule B in New York.

In 2012, the Charities Bureau reviewed its activities and identified certain organizations that did not file Schedule B with their annual reports. In response, the New York Attorney General introduced a policy to identify and notify registered charities that did not file Schedule B. In April 2013, Citizens United was notified that their 2011 annual tax reports were incomplete because of a missing Schedule B.

Citizens United requested the U.S. District Court to issue a preliminary injunction to prohibit the Attorney General from enforcing the Schedule B policy against them, alleging that the requirement violated Citizens United’s First Amendment rights to freedom of speech and association.

Decision Overview

Citizens United’s First Amendment argument was based on two grounds: (1) unconstitutional burden – the Attorney General’s interest in enforcing Schedule B placed an unconstitutional burden on it; and (2) prior restraint argument – Article 7 of the New York Executive Law was unlawful because it conferred unchecked power to the Attorney General to impose unlimited conditions on charities’ ability to speak.

Charitable solicitation falls under the protection of the First Amendment and as such the disclosure requirement of the New York Attorney General must satisfy exacting scrutiny. This type of scrutiny requires the government to demonstrate that there is a substantial relation between the disclosure requirement and a sufficiently important government interest. In turn, Citizens United had to show that the Schedule B policy fails exacting scrutiny not only towards itself, but also other charities that engage in solicitation, advocacy, and informational campaigns.

The court reasoned that the government has a sufficiently important government interest in the enforcement of charitable solicitation laws and the oversight of charitable organizations for the protection of donors. In relation to Schedule B specifically, the court agreed with the Attorney General that the disclosure of information of large donors protects against possible fraud and criminal activity. In order to meet this interest, Citizens United argued that the Attorney General could request Schedule B directly from the IRS. The court, taking into account that the Attorney General supervises 65,000 charities, concluded that such requests would be too burdensome for the New York State. Thus, the court determined that there is a substantial relation between the Schedule B policy and a sufficiently important government interest.

Citizens United’s claim to the Schedule B policy burden relied heavily on the risk of public disclosure of donor information. However, the court held such fears to be unfounded after analyzing the Attorney General’s legal and administrative mechanisms to protect Schedule B information. Moreover, the court found the plaintiff’s argument that the disclosure would discourage donations from some donors due to fears of retaliation to be speculative. The court rejected this argument because Citizens United did not provide evidence that demonstrated this fear of retaliation among donors from their organization or other charities. This highlights the court’s reasoning that a broad interest in anonymity is outweighed by the substantial government interests served by Schedule B.

In judging the prior restraint argument, the court reviewed whether the Schedule B policy contained “narrow, objective, and definite standards to guide the licensing authority.” [1] The court agreed that “because Article 7-A requires charities to register with the Attorney General and submit annual reports in order to solicit contributions in New York, it functions as a prior restraint on speech.” [2] However, the court found that the law requires an exhaustive list of documents for a specific purpose and thus follows narrow, objective, and definite standards. Thus, the court ruled that Citizens United failed in making its prior restraints argument.

[1] Court’s decision, http://www.ag.ny.gov/pdfs/072715-SDNY-Citizens_United-Schneiderman_decision.pdf. See also, Forsyth Cnty., Ga. v. Nationalist Movement, 505 U.S. 123, 131 (1992)

[2] Id.