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1 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1307 Cite as 784 F.3d 1307 (9th Cir. 2015) appear simply to give courts the discretion to weigh the concerns against other issues CENTER FOR COMPETITIVE presented in individual cases. The extent POLITICS, Plaintiff of the risks associated with seating an Appellant, alternate juror will vary from case to case. When deliberations have been extended, v. jurors are more likely to have reached Kamala D. HARRIS, in her official ca- firm conclusions on certain issues, and al- ternates may be at a greater risk of intimi- pacity as Attorney General of the State dation. When deliberations have been of California, DefendantAppellee. brief, those risks are likely reduced.6 No. 1415978. Here, the jury had deliberated for over a day in a complex case involving 14 United States Court of Appeals, counts. Significantly, the jury had asked Ninth Circuit. and received answers to five substantive questions. Substituting an alternate likely Argued and Submitted Dec. 8, 2014. would have imposed substantial additional Filed May 1, 2015. work on the jury, the parties and the court. It also would have required the Background: Non-profit educational or- jurors to attempt to clear their minds of ganization brought 1983 action against any conclusions they had reached. The California attorney general, alleging Cali- court weighed these considerations and fornia regulation requiring organizations concluded that justice would best be registered with Californias registry of served by proceeding with a jury of 11 charitable trusts disclose the names of ma- individuals. Under these circumstances, jor donors on confidential forms violated the district court did not abuse its discre- the right of free association guaranteed to tion.7 organization and its supporters by the CONCLUSION First Amendment. Organization sought preliminary injunction. The United States We affirm the judgment of the district court. District Court for the Eastern District of California, Morrison C. England, Jr., Chief AFFIRMED. District Judge, 2014 WL 2002244, denied , motion. Organization appealed. Holdings: The Court of Appeals, Paez, Circuit Judge, held that: 6. In cases occupying neither extreme, a dis- 7. Brown does not argue the district court trict courts decision either to seat an alter- abused its discretion by opting to proceed nate juror or to proceed with 11 jurors may with 11 jurors rather than declaring a mistri- not be an abuse of discretion. We do not al. See Fed.R.Crim.P. 23(b) advisory commit- suggest the facts of this case required the tees notes (1983 amendment) (explaining that district court to chart a particular course, when a trial has been brief and not much merely that the decision it made was not would be lost by retrial, the court might well illogical, implausible, or without support in conclude that the unusual step of allowing a inferences that may be drawn from the rec- jury verdict by less than 12 jurors absent stipulation should not be taken, and instead ord. United States v. Hinkson, 585 F.3d declare a mistrial). We therefore do not ad- 1247, 1262 (9th Cir.2009) (en banc). dress that issue.
2 1308 784 FEDERAL REPORTER, 3d SERIES (1) organizations First Amendment chal- ment challenges to disclosure require- lenge was facial, rather than as-ap- ments. U.S.C.A. Const.Amend. 1. plied; 7. Constitutional Law O1156 (2) organization was not likely to succeed In order for a government action to on claim that regulation violated First survive exacting scrutiny, the strength of Amendment; and the governmental interest must reflect the (3) organization was not likely to succeed seriousness of the actual burden on First on claim that federal law preempted Amendment rights. U.S.C.A. Const. regulation. Amend. 1. Affirmed. 8. Constitutional Law O1440 Non-profit organizations First 1. Federal Courts O3616(2) Amendment freedom of association chal- Court of Appeals reviews a district lenge to disclosure requirements for or- courts ruling on a motion for preliminary ganizations registered with Californias injunctive relief for abuse of discretion. registry of charitable trusts was facial, rather than as-applied challenge, where re- 2. Federal Courts O3567, 3603(2) lief that would follow, were organizations Court of Appeals reviews findings of challenge successful, reached beyond or- fact for clear error and conclusions of law ganization itself. U.S.C.A. Const.Amend. de novo. 1. 3. Federal Courts O3616(2) 9. Civil Rights O1457(7) Court of Appeals review of a denial of Non-profit organization was not likely preliminary injunctive relief must be limit- to succeed on its claim that regulation ed and deferential. requiring organizations registered with 4. Injunction O1092 Californias registry of charitable trusts A plaintiff seeking a preliminary in- disclose the names of major donors on junction must establish that he is likely to confidential forms, on its face, violated succeed on the merits, that he is likely to right of free association guaranteed by the suffer irreparable harm in the absence of First Amendment, as required to support preliminary relief, that the balance of equi- preliminary injunction barring enforce- ties tips in his favor, and that an injunction ment of regulation; disclosure requirement is in the public interest. did not, in and of itself, constitute First Amendment injury, disclosures would not 5. Injunction O1075, 1572 be made public, and disclosure require- A preliminary injunction is an extraor- ment was sufficiently related to the States dinary remedy that may only be awarded interest in ensuring a charity was actually upon a clear showing that the plaintiff is engaged in a charitable purpose, rather entitled to such relief. than violating California law by engaging in self-dealing, improper loans, or other 6. Constitutional Law O1564 unfair business practices. U.S.C.A. Const. Disclaimer and disclosure require- Amend. 1; 11 CCR 301 (2014). ments may burden the ability to speak, but they do not prevent anyone from speaking, 10. States O18.3 and thus Court of Appeals applies exacting Principles of federalism dictate that scrutiny in the context of First Amend- Court of Appeals employs a strong pre-
3 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1309 Cite as 784 F.3d 1307 (9th Cir. 2015) sumption against federal preemption of Internal Revenue Service (IRS). 26 state law. U.S.C.A. 6104; 11 CCR 301 (2014). 11. States O18.3 Federal law will only preempt state law if such preemption was the clear and Allen J. Dickerson (argued), Center for manifest purpose of Congress; Congress Competitive Politics, Alexandria, VA; Alan can express that intent explicitly, or the Gura, Gura & Possessky, PLLC, Alexan- intent can be inferred when a state law dria, VA, for PlaintiffAppellant. irreconcilably conflicts with a federal law or when the federal government has estab- Kamala Harris, California Attorney lished a legislative framework so pervasive General, Alexandra Robert Gordon (ar- that Congress left no room for states to gued), Deputy Attorney General, San supplement it. Francisco, CA, for DefendantAppellee. Joseph Vanderhulst, ActRight Legal 12. States O18.5 Foundation, Plainfield, IN, for Amici Curi- A state law can be in conflict with a ae National Organization for Marriage, federal law when the state law stands as Inc., and National Organization for Mar- an obstacle to the accomplishment and ex- riage Educational Trust Fund. ecution of the full purposes and objectives Bradley Benbrook and Stephen Duver- of Congress. nay, Benbrook Law Group, PC, Sacramen- 13. Injunction O1479 to, CA, for Amicus Curiae Charles M. Watkins. Non-profit organization was not likely to succeed on its claim that Pension Pro- Appeal from the United States District tection Act provision granting limited au- Court for the Eastern District of Califor- thority for sharing non-profit organiza- nia, Morrison C. England, Jr., Chief Dis- tions tax information with state attorneys trict Judge, Presiding. D.C. No. 2:14cv general preempted California regulation 00636MCEDAD. requiring organizations registered with Californias registry of charitable trusts Before: A. WALLACE TASHIMA and disclose the names of major donors on RICHARD A. PAEZ, Circuit Judges, and confidential forms, as required to support GORDON J. QUIST, Senior District preliminary injunction barring enforce- Judge.* ment of regulation; provision did not ex- pressly prohibit state attorneys general OPINION from requiring disclosures directly from the non-profit organizations they were PAEZ, Circuit Judge: tasked with regulating, and there was no In order to solicit tax deductible con- indication that Congress sought to regu- tributions in California, a non-profit cor- late states access to federal tax informa- poration or other organization must be tion for the purposes of enforcing their registered with the states Registry of laws, or that Congress sought to regulate Charitable Trusts. Cal. Gov.Code the actions of any entity other than the 12585. To maintain its registered sta- * The Honorable Gordon J. Quist, Senior Dis- Western District of Michigan, sitting by desig- trict Judge for the U.S. District Court for the nation.
4 1310 784 FEDERAL REPORTER, 3d SERIES tus, an entity must file an annual report quirement infringes its and its supporters with the California Attorney Generals First Amendment right to freedom of as- Office, and must include IRS Form 990 sociation. CCP also argues that federal Schedule B. The Internal Revenue Ser- law preempts Californias disclosure re- vice (IRS) requires non-profit educational quirement. or charitable organizations registered un- der 26 U.S.C. 501(c)(3) to disclose the Defendant Kamala Harris, the Attorney names and contributions of their signifi- General of California, is the chief law en- cant donors (donors who have contribut- forcement officer of the State of California. ed more than $5,000 in a single year) on See Cal. Const. art. 5, 13. Furthermore, Form 990 Schedule B. The Center for under the Supervision of Trustees and Competitive Politics (CCP), a non-profit Fundraisers for Charitable Purposes Act educational organization under (the Act), Cal. Govt Code 12580 et seq., 501(c)(3), brings this lawsuit under 42 the Attorney General also has primary U.S.C. 1983, seeking to enjoin the At- responsibility to supervise charitable torney General from requiring it to file trusts and public benefit corporations in- an unredacted Form 990 Schedule B. corporated in or conducting business in CCP argues that disclosure of its major California, and to protect charitable assets donors names violates the right of free for their intended use. Cal. Govt Code association guaranteed to CCP and its 12598(a), 12581. The Act requires the supporters by the First Amendment. Attorney General to maintain a registry of CCP appeals the district courts denial charitable corporations and their trustees of CCPs motion for a preliminary injunc- and trusts, and authorizes the Attorney tion to prevent the Attorney General from General to obtain whatever information, enforcing the disclosure requirement. We copies of instruments, reports, and records have jurisdiction under 28 U.S.C. are needed for the establishment and 1292(a)(1), and we affirm. maintenance of the register. Cal. Govt Code 12584. I. An organization must maintain member- A. ship in the registry in order to solicit funds CCP is a Virginia non-profit corporation, from California residents. Cal. Govt Code recognized by the IRS as an educational 12585. The Act requires that corpora- organization under 501(c)(3). CCPs tions file periodic written reports, and re- mission is to promote and defend the quires the Attorney General to promulgate First Amendment rights of free political rules and regulations specifying both the speech, assembly, association, and petition filing procedures and the contents of the through research, education, and strategic reports. Cal. Govt Code 12586(b), Cal. litigation. CCP supports itself through Code Regs. tit. 11, 300 et seq. (2014). financial donations from contributors One of the regulations adopted by the across the United States, including Califor- Attorney General requires that the period- nia. CCP argues that the disclosure re- ic written reports include Form 990.1 Cal. 1. California is not alone in requiring charita- Rev.Stat. Ann. 367.650.670 (2014); Miss. ble organizations to file an unredacted Form Code Ann. 7911507 (2014). According to 990 Schedule B. At least Hawaii, Mississippi, Amicus Charles Watkins, Florida and New and Kentucky share the same requirement. York also require unredacted versions of Haw.Rev.Stat. Ann. 467B6.5 (2014); Ky. Form 990 Schedule B.
5 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1311 Cite as 784 F.3d 1307 (9th Cir. 2015) Code Regs. tit. 11, 301 (2014). Although Generals requirement that CCP file an many documents filed in the registry are unredacted Form 990 Schedule B amount- open to public inspection, see Cal.Code ed to a compelled disclosure of its support- Regs. tit. 11, 310, Form 990 Schedule B ers identities that infringed CCPs and its is confidential, accessible only to in-house supporters First Amendment rights to staff and handled separately from non- freedom of association. CCP also alleged confidential documents. that a section of the Internal Revenue The Attorney General argues that there Code, 26 U.S.C. 6104, which restricts is a compelling law enforcement interest in disclosure of the information contained in the disclosure of the names of significant Schedule B, preempted the Attorney Gen- donors. She argues that such information erals requirement. is necessary to determine whether a chari- As noted above, the district court denied ty is actually engaged in a charitable pur- CCPs motion for a preliminary injunction, pose, or is instead violating California law ruling that CCP was unlikely to succeed on by engaging in self-dealing, improper the merits of either of its claims, and that, loans, or other unfair business practices. therefore, CCP could not show that it See Cal. Corp.Code 5233, 5236, 5227. would suffer irreparable harm or that the At oral argument, counsel elaborated and public interest weighed in favor of grant- provided an example of how the Attorney ing the relief it requested. Ctr. for Com- General uses Form 990 Schedule B in or- petitive Politics v. Harris, No. 2:14cv der to enforce these laws: having signifi- 00636MCEDAD, 2014 WL 2002244 cant donor information allows the Attorney (E.D.Cal. May 14, 2014). General to determine when an organization has inflated its revenue by overestimating II. the value of in kind donations. Knowing the significant donors identity allows her  We review a district courts rul- to determine what the in kind donation ing on a motion for preliminary injunctive actually was, as well as its real value. relief for abuse of discretion. See FTC v. Thus, having the donors information im- Enforma Natural Prods., 362 F.3d 1204, mediately available allows her to identify 121112 (9th Cir.2004); Harris v. Bd. of suspicious behavior. She also argues that Supervisors, L.A. Cnty., 366 F.3d 754, 760 requiring unredacted versions of Form 990 (9th Cir.2004). We review findings of fact Schedule B increases her investigative effi- for clear error and conclusions of law de ciency and obviates the need for expensive novo. See Indep. Living Ctr. of S. Cal., and burdensome audits. Inc. v. Shewry, 543 F.3d 1050, 1055 (9th Cir.2008). Our review of a denial of pre- B. liminary injunctive relief must be limited and deferential. Harris, 366 F.3d at 760. CCP has been a member of the registry since 2008. Since its initial registration, [4, 5] A plaintiff seeking a preliminary CCP has filed redacted versions of Form injunction must establish that he is likely 990 Schedule B, omitting the names and to succeed on the merits, that he is likely addresses of its donors. In 2014, for the to suffer irreparable harm in the absence first time, the Attorney General required of preliminary relief, that the balance of CCP to submit an unredacted Form 990 equities tips in his favor, and that an in- Schedule B. In response to this demand, junction is in the public interest. Winter CCP filed suit, alleging that the Attorney v. NRDC, 555 U.S. 7, 20, 129 S.Ct. 365, 172
6 1312 784 FEDERAL REPORTER, 3d SERIES L.Ed.2d 249 (2008). A preliminary injunc- III. tion is an extraordinary remedy that may only be awarded upon a clear showing that A. the plaintiff is entitled to such relief. Id. at 22, 129 S.Ct. 365 (citing Mazurek v. CCP argues that the Attorney Generals Armstrong, 520 U.S. 968, 972, 117 S.Ct. disclosure requirement is, in and of itself, 1865, 138 L.Ed.2d 162 (1997)). Thus, CCP injurious to CCPs and its supporters ex- bears the heavy burden of making a clear ercise of their First Amendment rights to showing that it was entitled to a prelimi- freedom of association. CCP further ar- nary injunction. gues that the Attorney General must have [6, 7] We apply exacting scrutiny in a compelling interest in the disclosure re- the context of First Amendment chal- quirement, and that the requirement must lenges to disclosure requirements. Dis- be narrowly tailored in order to justify the claimer and disclosure requirements may First Amendment harm it causes. This is burden the ability to speak, but they TTT a novel theory, but it is not supported by do not prevent anyone from speaking. our case law or by Supreme Court prece- Citizens United v. FEC, 558 U.S. 310, 366, dent. 130 S.Ct. 876, 175 L.Ed.2d 753 (2010) (in- In arguing that the disclosure require- ternal citations and quotation marks omit- ment alone constitutes significant First ted). Therefore, courts have subjected Amendment injury, CCP relies heavily on these requirements to exacting scrutiny, dicta in Buckley v. Valeo, in which the which requires a substantial relation be- tween the disclosure requirement and a Supreme Court stated that compelled dis- sufficiently important governmental in- closure, in itself, can seriously infringe on terest. Id. at 36667, 130 S.Ct. 876 privacy of association and belief guaran- (quoting Buckley v. Valeo, 424 U.S. 1, 96 teed by the First Amendment. 424 U.S. S.Ct. 612, 46 L.Ed.2d 659 (1976)).2 Exact- at 64, 96 S.Ct. 612. Notably, the Court ing scrutiny encompasses a balancing test. said can and not always does. Fur- In order for a government action to sur- thermore, in making that statement, the vive exacting scrutiny, the strength of the Court cited a series of Civil Rights Era as- governmental interest must reflect the applied cases in which the NAACP chal- seriousness of the actual burden on First lenged compelled disclosure of its mem- Amendment rights. John Doe No. 1, 561 bers identities at a time when many U.S. at 196, 130 S.Ct. 2811 (quoting Davis NAACP members experienced violence or v. FEC, 554 U.S. 724, 744, 128 S.Ct. 2759, serious threats of violence based on their 171 L.Ed.2d 737 (2008)) (emphasis added). membership in that organization.3 Id. The 2. Although most of the cases in which we and toral context. In that case, the NAACP chal- the Supreme Court have applied exacting lenged a discovery order (arising out of a scrutiny arise in the electoral context, see contempt proceeding) that would have forced John Doe No. 1 v. Reed, 561 U.S. 186, 196, it to reveal its membership lists. 357 U.S. 130 S.Ct. 2811, 177 L.Ed.2d 493 (2010) (re- 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958). ferring to long line of such precedent), we have also applied the exacting scrutiny stan- 3. CCP also cites extensively to these cases; dard in the context of a licensing regime. See however, because all of them are as-applied Acorn Invs., Inc. v. City of Seattle, 887 F.2d challenges involving the NAACP (which had 219 (9th Cir.1989). Moreover, the founda- demonstrated that disclosure would harm its tional compelled disclosure case, NAACP v. members), these cases are all inapposite: Ala. ex rel. Patterson, arose outside the elec- Gibson v. Fla. Legislative Investigation
7 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1313 Cite as 784 F.3d 1307 (9th Cir. 2015) Court went on to explain that [t]he strict ment exclusively targeted the shareholders test established by NAACP v. Alabama is of panoram businesses, and the only justi- necessary because compelled disclosure fication that the city advanced was ac- has the potential for substantially infring- countability. Id. at 226. The plaintiff ing the exercise of First Amendment argued that the disclosure requirement rights. Id. at 66, 96 S.Ct. 612 (emphasis was intended to chill its protected expres- added). The most logical conclusion to sion, and, given the absence of any reason- draw from these statements and their con- able justification for the ordinance, we held text is that compelled disclosure, without that it violated the First Amendment. Id. any additional harmful state action, can In so holding, we found especially instruc- infringe First Amendment rights when tive and cited as indistinguishable a Sev- that disclosure leads to private discrimina- enth Circuit case, Genusa v. City of Peo- tion against those whose identities may be ria, 619 F.2d 1203 (7th Cir.1980), in which disclosed. the court concluded that there could be Of course, compelled disclosure can also no purpose other than harassment in re- infringe First Amendment rights when the quiring the individual TTT stockholders to disclosure requirement is itself a form of file separate statements or applications. harassment intended to chill protected ex- Id. (quoting Genusa, 619 F.2d at 1217). pression. Such was the case in Acorn However, here, there is no indication in Investments, Inc. v. City of Seattle, anoth- the record that the Attorney Generals dis- er opinion upon which CCP bases its theo- closure requirement was adopted or is en- ry that compelled disclosure alone consti- forced in order to harass members of the tutes First Amendment injury. In Acorn, registry in general or CCP in particular. the plaintiff brought a First Amendment Thus, the concern animating the holdings challenge to Seattles licensing fee scheme of Acorn and Genusa does not apply here. and its concomitant requirement that pa- CCP is correct that the chilling risk noram businesses disclose the names and inherent in compelled disclosure triggers addresses of their shareholders. 887 F.2d exacting scrutinythe strict test estab- at 220. Panorams, or peep shows, were lished by NAACP v. Alabama, Buckley, a form of adult entertainment business 424 U.S. at 66, 96 S.Ct. 612and that, strongly associated with criminal activity. presented with a challenge to a disclosure Id. at 22224. Seattles disclosure require- requirement, we must examine and bal- Comm., 372 U.S. 539, 83 S.Ct. 889, 9 L.Ed.2d Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 929 (1963) (holding that the NAACP was not L.Ed.2d 480 (1960) (invalidating an Arkansas required to comply with a subpoena and dis- local ordinance requiring disclosure of mem- close membership lists to a Florida state leg- bership lists on First Amendment grounds as islative committee investigating communist applied to the NAACP, given the substantial activity); NAACP v. Button, 371 U.S. 415, 83 record of the threats and harassment that S.Ct. 328, 9 L.Ed.2d 405 (1963) (upholding members of the organization would experi- NAACPs challenge to a Virginia statute bar- ence as a result of disclosure); NAACP v. ring the improper solicitation of legal busi- Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 ness, which the state had attempted to use to L.Ed.2d 1488 (1958) (holding that the NAACP prohibit the organizations operation); Shel- was not required to comply with a discovery ton v. Tucker, 364 U.S. 479, 81 S.Ct. 247, 5 order requiring disclosure of its membership L.Ed.2d 231 (1960) (striking down on First lists). In Shelton, while the NAACP was not a Amendment grounds an Arkansas statute re- quiring public school teachers to disclose all party, the primary plaintiff, Shelton, was a organizations to which they had belonged or member of the NAACP. 364 U.S. at 484, 81 contributed in the past five years); Bates v. S.Ct. 247.
8 1314 784 FEDERAL REPORTER, 3d SERIES ance the plaintiffs First Amendment inju- what matters. Id. Rather, because the ry against the governments interest. plaintiffs claim and the relief that would However, CCP is incorrect when it argues follow TTT reach[ed] beyond the particular that the compelled disclosure itself consti- circumstances of these plaintiffs, they tutes such an injury, and when it suggests were required to satisfy our standards for that we must weigh that injury when ap- a facial challenge to the extent of that plying exacting scrutiny. Instead, the Su- reach. Id. preme Court has made it clear that we must balance the seriousness of the actu-  In formulating its claim such that al burden on a plaintiffs First Amend- the disclosure requirement itself is the ment rights. John Doe No. 1, 561 U.S. at source of its alleged First Amendment in- 196, 130 S.Ct. 2811 (emphasis added); jury, CCPs claim is not limited to [its] Chula Vista Citizens for Jobs & Fair particular case, but challenges application Competition v. Norris, 782 F.3d 520, 537 of the law more broadly to all [registry 39 (9th Cir.2015) (en banc) (applying this submissions]. Id. Were we to hold that standard in evaluating a First Amendment the disclosure requirement at issue here challenge to a disclosure requirement un- itself infringes CCPs First Amendment der exacting scrutiny). Here, CCP has rights, then it would necessarily also in- not shown any actual burden on its free- fringe the rights of all organizations sub- dom of association. ject to it. Even though CCP only seeks to enjoin the Attorney General from enforc- B. ing the disclosure requirement against it- self, the Attorney General would be hard- CCPs creative formulation, however, pressed to continue to enforce an unconsti- does affect the scope of its challenge. In tutional requirement against any other John Doe No. 1, signatories of a referen- member of the registry.5 Therefore, be- dum petition challenged the Washington cause the relief that would follow TTT Public Records Act (PRA),4 which permit- reach[es] beyond the particular circum- ted public inspection of such petitions. stances of th[is] plaintif[f,] [CCPs claim] 561 U.S. at 191, 130 S.Ct. 2811. The plain- must TTT satisfy our standards for a facial tiffs sought to prevent the disclosure of the challenge to the extent of that reach. Id. names of those who had signed a referen- (citing United States v. Stevens, 559 U.S. dum petition to challenge and put to a 460, 47273, 130 S.Ct. 1577, 176 L.Ed.2d popular vote a Washington state law that 435 (2010)). had extended benefits to same-sex couples. Id. The complaint charged both that the Which standard applies in a typical [fa- PRA was unconstitutional as to the refer- cial challenge] is a matter of dispute that endum petition to overturn the same-sex we need not and do not addressTTTT Ste- benefits law and as to referendum peti- vens, 559 U.S. at 472, 130 S.Ct. 1577. The tions generally. Id. at 194, 130 S.Ct. 2811. Supreme Court has at different times re- Thus, there was some dispute as to wheth- quired plaintiffs bringing facial challenges er their challenge was best construed as to show that no set of circumstances ex- an as-applied or as a facial challenge. Id. ists under which [the challenged law] The Court explained that [t]he label is not would be valid, United States v. Salerno, 4. Wash. Rev.Code 42.56.001 et seq. 5. CCP conceded at oral argument that its challenge is best understood as a facial chal- lenge.
9 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1315 Cite as 784 F.3d 1307 (9th Cir. 2015) 481 U.S. 739, 745, 107 S.Ct. 2095, 95 blanket exemption for minor parties. The L.Ed.2d 697 (1987), or that it lacks any second ground of the Buckley plaintiffs plainly legitimate sweep, Washington v. challenge was that the thresholds trigger- Glucksberg, 521 U.S. 702, 740, n. 7, 117 ing disclosure were too low, because the S.Ct. 2258, 138 L.Ed.2d 772 (1997) (Ste- requirement attached to any donation of vens, J., concurring) (internal quotation $100 or more (with additional reporting marks omitted). Alternatively, in the requirements to a Committee, though not First Amendment context, the Court has to the public, for donations over $10). Id. sometimes employed a different standard After applying exacting scrutiny, the to evaluate facial overbreadth challenges, Buckley Court rejected the plaintiffs mi- whereby a law may be invalidated as nor party challenge because no appellant overbroad if a substantial number of its [had] tendered record evidence of the sort applications are unconstitutional, judged in proffered in NAACP v. Alabama, and so relation to the statutes plainly legitimate had failed to make the [r]equisite [f]actual sweep. Stevens, 559 U.S. at 473, 130 [s]howing. Id. at 6971, 96 S.Ct. 612. S.Ct. 1577 (quoting Wash. State Grange v. Where the record evidence constituted Wash. State Republican Party, 552 U.S. [a]t best TTT the testimony of several 442, 449, n. 6, 128 S.Ct. 1184, 170 L.Ed.2d minor-party officials that one or two per- 151 (2008)). sons refused to make contributions be- cause of the possibility of disclosure TTT The least demanding of these standards the substantial public interest in disclosure is that of the First Amendment facial over- identified by the legislative history of this breadth challenge. Because CCP cannot Act outweighs the harm generally al- show that the regulation fails exacting leged. Id. at 7172, 96 S.Ct. 612. The scrutiny in a substantial number of Court, however, left open the possibility cases, judged in relation to [the disclosure that if a minor party plaintiff could show requirements] plainly legitimate sweep, a reasonable probability that the com- we need not decide whether it could meet pelled disclosure of a partys contributors the more demanding standards of Salerno names will subject them to threats, harass- and Glucksberg. ment, or reprisals from either Government officials or private parties, then it could C. succeed on an as-applied challenge. Id. at Although not for the reasons that CCP 74, 96 S.Ct. 612. Thus, even where, unlike posits, Buckley v. Valeo is instructive for here, the plaintiffs adduced some evidence assessing CCPs facial challenge. In that their participation would be chilled, Buckley, the plaintiffs challenged the dis- the Buckley Court rejected a facial chal- closure requirements of the Federal Elec- lenge. tion Campaign Act 6 as overbroad on two Further undermining CCPs argument, grounds. 424 U.S. at 6061, 96 S.Ct. 612. the Buckley Court also rejected the plain- The first ground was that the disclosure tiffs contention, based on alleged over- requirement applied to minor party mem- breadth, TTT that the monetary thresholds bers, such as members of the Socialist in the record-keeping and reporting provi- Labor Party, who might face harassment sions lack[ed] a substantial nexus with the or threats as a result of the disclosure of claimed governmental interests, for the their names. Id. The plaintiffs sought a amounts involved [were] too low. Id. at 6. Then codified at 2 U.S.C. 431 et seq., now at 52 U.S.C. 30101 et seq.
10 1316 784 FEDERAL REPORTER, 3d SERIES 82, 96 S.Ct. 612. The Court noted that Amendment rights. As discussed supra, they were indeed low, but concluded that contrary to CCPs contentions, no case has it [could not] say, on this bare record, ever held or implied that a disclosure re- that the limits designated [were] wholly quirement in and of itself constitutes First without rationality, because they Amendment injury.8 serve[d] informational functions, and fa- Furthermore, unlike in John Doe No. 1 cilitate[d] enforcement of the contribution or in other cases requiring the disclosure limits and disclosure requirements. Id. at of the names of petition signatories, in this 83, 96 S.Ct. 612. Thus, the Buckley Court case, the disclosure would not be public. rejected the plaintiffs overbreadth chal- The Attorney General keeps Form 990 lenge both with respect to minor parties Schedule B confidential. Although it is and the donation thresholds. certainly true that non-public disclosures  Engaging in the same balancing can still chill protected activity where a that the Buckley Court undertook, we ex- plaintiff fears the reprisals of a govern- amine the claims and interests the parties ment entity, CCP has not alleged any such assert here. In contrast to the Buckley fear here. CCP instead argues that the plaintiffs, CCP does not claim and pro- Attorney Generals systems for preserving duces no evidence to suggest that their confidentiality are not secure, and that its significant donors would experience significant donors names might be inad- threats, harassment, or other potentially vertently accessed or released. Such ar- chilling conduct as a result of the Attorney guments are speculative, and do not consti- Generals disclosure requirement.7 CCP tute evidence that would support CCPs has not demonstrated any actual burden, claim that disclosing its donors to the At- John Doe No. 1, 561 U.S. at 196, 130 S.Ct. torney General for her confidential use 2811, on its or its supporters First would chill its donors participation.9 See 7. The minor parties in Buckley feared harass- freedom to distribute information and thereby ment because they advocated unpopular posi- freedom of expression TTT Anonymous pam- tions. CCP has not alleged that its supporters phlets, leaflets, brochures and even books would face a similar backlash. However, have played an important role in the progress amicus National Organization for Marriage of mankind.). Thus, in that case, the Court contends that, like the minor party donors was certain of the First Amendment harm and members in Buckley, its significant do- that the ordinance imposed. nors could face retaliatory action if their names were ever released to the public. 9. CCP also argues that only an informal poli- cy prevents the Attorney General from pub- 8. Contrary to CCPs contention, Talley v. Cali- lishing the forms and requires her to take fornia, 362 U.S. 60, 80 S.Ct. 536, 4 L.Ed.2d appropriate measures to ensure the forms 559 (1960), is not such a case. In Talley, the stay confidential. However, where a record Supreme Court struck down a law that out- is exempt from public disclosure under feder- lawed the distribution of hand-bills that did al law, as is Form 990 Schedule B, it is also not identify their authors. Id. at 64, 80 S.Ct. exempt from public inspection under the Cali- 536. In so doing, the Court did not explicitly fornia Public Records Act. Cal. Govt Code apply exacting scrutiny, though it cited 6254(k) (2015). Thus, it appears doubtful NAACP v. Alabama and Bates. Id. at 65, 80 that the Attorney General would ever be re- S.Ct. 536. The basis for the Courts holding quired to make Form 990 Schedule B publicly was the historic, important role that anony- available. Moreover, while the exemption un- mous pamphleteering has had in furthering der 6254(k) is permissive, and not mandato- democratic ideals. Id. at 64, 80 S.Ct. 536 ry, Marken v. Santa MonicaMalibu Unified (There can be no doubt that such an identifi- Sch. Dist., 202 Cal.App.4th 1250, 136 Cal. cation requirement would tend to restrict Rptr.3d 395, 405 (2012), where public disclo-
11 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1317 Cite as 784 F.3d 1307 (9th Cir. 2015) United States v. Harriss, 347 U.S. 612, tion can flag suspicious activity. The rea- 626, 74 S.Ct. 808, 98 L.Ed. 989 (1954).10 sons that the Attorney General has assert- On the other side of the scale, as CCP ed for the disclosure requirement, unlike concedes, the Attorney General has a com- those the City of Seattle put forth in pelling interest in enforcing the laws of Acorn, are not wholly without rationali- California. CCP does not contest that the ty. See Buckley, 424 U.S. at 83, 96 S.Ct. Attorney General has the power to require 612. Faced with the Attorney Generals disclosure of significant donor information unrebutted arguments that only modest as a part of her general subpoena power. burdens attend the disclosure of a typical Thus, the disclosure regulation has a [Form 990 Schedule B], we reject CCPs plainly legitimate sweep. Stevens, 559 broad challenge, John Doe No. 1, 561 U.S. at 473, 130 S.Ct. 1577. CCP argues U.S. at 201, 130 S.Ct. 2811. We conclude instead that the disclosure requirement that the disclosure requirement bears a does not bear a substantial enough rela- substantial relation to a sufficiently im- tionship to the interest that the Attorney portant government interest. See Citi- General has asserted in the disclosure, and zens United, 558 U.S. at 366, 130 S.Ct. 876 that the Attorney General should be per- (internal citations omitted). mitted only to demand the names of signif- However, as the Supreme Court did in icant donors if she issues a subpoena. Buckley and John Doe No. 1, we leave CCPs argument that the disclosure re- open the possibility that CCP could show quirement exceeds the scope of the Attor- a reasonable probability that the com- ney Generals subpoena power is similar to pelled disclosure of [its] contributors the Buckley plaintiffs argument that the names will subject them to threats, harass- low monetary thresholds exceeded the ment, or reprisals from either Government scope of Congresss legitimate regulation. officials or private parties that would war- Like the Buckley Court, we reject this rant relief on an as-applied challenge. See argument, especially in the context of a McConnell v. FEC, 540 U.S. 93, 199, 124 facial challenge. The Attorney General S.Ct. 619, 157 L.Ed.2d 491 (2003) (reject- has provided justifications for employing a ing a facial challenge, but leaving open the disclosure requirement instead of issuing possibility of a future as-applied chal- subpoenas. She argues that having imme- lenge). diate access to Form 990 Schedule B in- In sum, CCPs First Amendment facial creases her investigative efficiency, and challenge to the Attorney Generals disclo- that reviewing significant donor informa- sure requirement fails exacting scrutiny. sure is prohibited under state or federal law, the First Amendment activities of its signifi- the responsible California agency is also pro- cant donors, the potential for a future change hibited from public disclosure. See Cal. Govt in the Attorney Generals disclosure policy Code 6254(f) (This section shall not pre- does not aid CCP in making its facial chal- vent any agency from opening its records lenge. concerning the administration of the agency to public inspection, unless disclosure is oth- 10. In Harriss, the Supreme Court rejected a erwise prohibited by law.). As public disclo- First Amendment challenge to an act impos- sure (distinct from disclosure to the Attorney ing disclosure requirements on lobbyists, General) of significant donor information is where plaintiffs presented [h]ypothetical not authorized by federal law, it is likely not borderline situations where speech might be authorized by California law, either. Howev- chilled, because [t]he hazard of such re- er, because CCP has not provided any evi- straint is too remote to require striking dence that even public disclosure would chill down an otherwise valid statute.
12 1318 784 FEDERAL REPORTER, 3d SERIES IV. ney Generals disclosure requirement. CCP also contends that federal tax law That section provides: preempts the Attorney Generals disclo- Upon written request by an appropriate sure requirement. CCP argues that Con- State officer, the Secretary may make gress intended to protect the privacy of available for inspection or disclosure re- the donor information of non-profit organi- turns and return information of any or- zations from all public disclosure when it ganization described in section 501(c) added 26 U.S.C. 6104, part of the Pen- (other than organizations described in sion Protection Act of 2006, and that, paragraph (1) or (3) thereof ) for the therefore, permitting state attorneys gen- purpose of, and only to the extent neces- eral to require this information from non- sary in, the administration of State laws profit organizations registered under regulating the solicitation or administra- 501(c)(3) would conflict with that pur- tion of the charitable funds or charitable pose. CCPs argument is unavailing. assets of such organizations.  Federal law is supreme and (emphasis added). CCP reads this lan- Congress can certainly preempt a states guage to ban the Secretary from sharing authority. However, principles of federal- the tax information of 501(c)(3) organiza- ism dictate that we employ a strong pre- tions with state attorneys general. The sumption against preemption. Arizona v. language is better construed as a limited United States, U.S. , 132 S.Ct. grant of authority than as a prohibition. 2492, 2500, 183 L.Ed.2d 351 (2012). However, even if CCPs reading were ac- Therefore, federal law will only preempt curate, a statute restricting the disclosures state law if such preemption was the clear that the Commissioner of the IRS may and manifest purpose of Congress. Id. at make does not expressly preempt the au- 2501. Congress can express that intent thority of state attorneys general to re- explicitly, or the intent can be inferred quire such disclosures directly from the when a state law irreconcilably conflicts non-profit organizations they are tasked with a federal law. Id. Alternatively, the with regulating. intent to displace state law altogether can CCP further argues that the Attorney be inferred when the federal government Generals disclosure requirement conflicts has established a legislative framework so with the purpose of 6104, but neither of pervasive that Congress left no room for the two subsections of 6104 upon which states to supplement it. Id. (quoting Rice CCP relies can support its argument. v. Santa Fe Elevator Corp., 331 U.S. 218, Neither subsection indicates that Congress 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947)). sought to regulate states access to this A state law can be in conflict with a federal information for the purposes of enforcing law when the state law stands as an ob- their laws, or that Congress sought to stacle to the accomplishment and execution regulate the actions of any entity other of the full purposes and objectives of Con- than the IRS. The first subsection allows gress. Id.; see also Barnett Bank of for the public availability of the tax returns Marion Cnty. N.A. v. Nelson, 517 U.S. 25, of certain organizations and trusts, but 31, 116 S.Ct. 1103, 134 L.Ed.2d 237 (1996) goes on to qualify that [n]othing in this (holding that such an obstacle can arise subsection shall authorize the Secretary to even where the two laws are not directly in disclose the name or address of any con- conflict). tributor to any organization or trust. 26  CCP argues that 26 U.S.C. U.S.C. 6104(b) (emphasis added). The 6104(c)(3) expressly preempts the Attor- second subsection lays out disclosure re-
13 CENTER FOR COMPETITIVE POLITICS v. HARRIS 1319 Cite as 784 F.3d 1307 (9th Cir. 2015) quirements for 501(c)(3) organizations als disclosure requirement was likewise generally, and then provides an exception not preempted. to those requirements, such that they While CCP is correct that Congress shall not require the disclosure of the added 6104 thirty years after 6103, name or address of any contributor to the and that, therefore, Congresss intent may organization. Id. 6104(d)(3)(A). have differed, our opinion in Stokwitz is These subsections may support an argu- nevertheless instructive. The very legisla- ment that Congress sought to regulate the tive history to which CCP directs us de- disclosures that the IRS may make, but scribes the operation of sections 6103 and they do not broadly prohibit other govern- 6104 in tandem. See Staff of the Joint ment entities from seeking that informa- Committee on Taxation, 109th Cong., tion directly from the organization. Nor Technical Explanation of H.R. 4, the Pen- do they create a pervasive scheme of pri- sion Protection Act of 2006 at 32729 vacy protections. Rather, these subsec- (Comm. Print 2006). Nothing in the legis- tions represent exceptions to a general lative history suggests that Congress rule of disclosure. Thus, these subsections sought to extend the regulatory scheme it do not so clearly manifest the purpose of imposed on the IRS with 6103 to other Congress that we could infer from them entities when it added 6104. Moreover, that Congress intended to bar state attor- when two sections operate together, and neys general from requesting the informa- when Congress clearly sought to regulate tion contained in Form 990 Schedule B the actions of a particular entity with one from entities like CCP. section, it is not unreasonable to infer that The district court relied on our opinion Congress sought to regulate the same enti- in Stokwitz v. United States, 831 F.2d 893 ty with the other. Therefore, Stokwitz (9th Cir.1987), in holding that CCP was supports our conclusion that 6104, like unlikely to succeed on its preemption argu- 6103, is intended to regulate the IRS, ment. In that case, an attorney for the and not to ban all means of accessing U.S. Navy was charged with misconduct donor information. and his personal tax returns were seized. Section 6104 does not so clearly manifest Id. at 893. He argued that 26 U.S.C. the purpose of Congress that we could 6103, regulating public disclosure of infer from it that Congress intended to bar such documents, forbade their use in the state attorneys general from requesting proceedings against him. Id. at 894. We the information contained in Form 990 disagreed: [c]ontrary to appellants con- Schedule B. See Arizona, 132 S.Ct. at tention, there is no indication in either the 2501. CCPs preemption claim must fail. language of section 6103 or its legislative history that Congress intended to enact a V. general prohibition against public disclo- In order to prevail on a motion for a sure of tax information. Id. at 896. In- preliminary injunction, a plaintiff must stead, the legislative history of the section show a likelihood of success on the merits revealed that Congresss overriding pur- and that irreparable harm is not only pos- pose was to curtail loose disclosure prac- sible, but likely, in the absence of injunc- tices by the IRS. Id. at 894. Here, since tive relief. Winter, 555 U.S. at 20, 129 nothing in the legislative history of 6104 S.Ct. 365. CCP has not shown a likelihood suggested that its purpose was in any way of success on the merits. Because it is not different from that of 6103, the district likely that the Attorney Generals disclo- court concluded that the Attorney Gener- sure requirement injures CCPs First
14 1320 784 FEDERAL REPORTER, 3d SERIES Amendment rights, or that it is preempted failed to pay them appropriate resale roy- by federal law, it is not likely that CCP alty provided for under California Resale will suffer irreparable harm from enforce- Royalties Act (CRRA). The United States ment of the requirement. Thus, CCP can- District Court for the Central District of not meet the standard established by Win- California, Michael W. Fitzgerald, J., 860 ter. F.Supp.2d 1117, dismissed complaints, and For the foregoing reasons, the district plaintiffs appealed. After appeals were courts denial of CCPs motion for a pre- consolidated, the Court of Appeals, 769 liminary injunction is AFFIRMED. F.3d 1195, voted to hear case en banc. , Holdings: Sitting en banc, the Court of Appeals, Graber, Circuit Judge, held that: (1) CRRA violated dormant Commerce Clause, but SAM FRANCIS FOUNDATION; Estate (2) offending provision was severable from of Robert Graham; Chuck Close; Lad- remainder of statute. die John Dill, PlaintiffsAppellants, v. Remanded to three-judge panel. CHRISTIES, INC., a New York Reinhardt, Circuit Judge, concurred in corporation, Defendant part, dissented in part, and filed opinion. Appellee. Berzon, Circuit Judge, concurred in part Sam Francis Foundation; Estate of and filed opinion in which Pregerson, Cir- Robert Graham; Chuck Close; Laddie cuit Judge, joined. John Dill, PlaintiffsAppellants, v. eBay, Inc., a Delaware corporation, 1. Commerce O12 DefendantAppellee. Dormant Commerce Clause is limita- Estate of Robert Graham; Chuck Close; tion upon states power that prohibits dis- Laddie John Dill, individually and on crimination against interstate commerce behalf of all others similarly situated, and bars state regulations that unduly bur- PlaintiffsAppellants, den interstate commerce. U.S.C.A. Const. v. Art. 1, 8, cl. 3. Sothebys, Inc., a New York 2. Commerce O82.20 corporation, Defendant Appellee. Copyrights and Intellectual Property O2 Nos. 1256067, 1256068, 1256077. California Resale Royalties Act United States Court of Appeals, (CRRA), which required California sellers Ninth Circuit. of fine art and their agents to pay resale Argued and Submitted En royalties to artists, violated dormant Com- Banc Dec. 16, 2014. merce Clause; CRRA facially regulated Filed May 5, 2015. commercial transaction that took place Background: Artists and their heirs wholly outside of states borders, so long brought action alleging that auction houses as seller resided in California. U.S.C.A.Load More