Americans for Responsible Leadership (“ARL”), a Phoenix-based nonprofit organization, disclosed its donors today in response to a ruling late yesterday from California’s highest court. The suit to enforce a new California disclosure regulation was filed by the state’s Fair Political Practices Commission (“FPPC”). According to the FPPC, the contribution was funneled to ARL from two other nonprofit organizations, Americans for Job Security and the Center to Protect Patient Rights.

The dramatic court order and subsequent disclosure is the latest development in an ongoing legal battle between the FPPC and ARL, stemming from ARL’s $11 million contribution to a California political action committee that is opposing one ballot measure and supporting another. The contribution prompted an activist organization to file a complaint with the FPPC arguing that the contribution violated a new California regulation requiring contributors to be identified if they donate to nonprofits with the intention of spending money on state political campaigns. Following the complaint, the FPPC commenced an audit of ARL to determine whether reporting of the contribution complied with the new rule, but the group had refused to turn over its records.

At the heart of the controversy is a new FPPC regulation that went into effect in May 2012. The regulation applies to tax-exempt organizations and federal or out-of-state political organizations that make contributions or independent expenditures to support or oppose candidates or ballot measures in California. Under the rule, if a donor to such an organization “requests or knows that the payment will be used by the organization to make a contribution or an independent expenditure to support or oppose a candidate or ballot measure in California,” the organization must disclose the individual donation.

ARL argued that it has not solicited earmarked contributions for any particular project or campaign, and thus no donor had reason to know that ARL would make a contribution to the California PAC. As a result, according to ARL, it is not required to identify individual donations to the group. The group asserted that because the underlying donor information is not subject to public disclosure under the law, forcing disclosure would be unjustified and would have a chilling effect on the exercise of fundamental rights.

In response to the Citizens United decision many states have pushed through tough disclosure requirements. The California regulation at issue here is particularly controversial because it requires the disclosure of individual donors to a 501(c)(4) nonprofit group. Under federal law, such organizations do not have to disclose their donors. Moreover, the FPPC’s decision to seek a court order forcing a group to release its donor records in order to determine whether a violation even occurred signals that states are more aggressively pursuing politically-active organizations.