On July 1, the U.S. Supreme Court decided the consolidated case Americans for Prosperity Foundation v. Bonta in favor of the nonprofit organizations that brought the suits, holding California’s donor disclosure law to be unconstitutional because it violates the First Amendment protection of freedom of association. The immediate effect of the Court’s ruling is that the Court invalidated California’s rule requiring charities registered to fundraise in the state to file with the state Attorney General an unredacted copy of IRS Form 990 Schedule B, which discloses the names and addresses of their major donors.

As we previously wrote when the Court decided to hear the case and later heard oral arguments, the case focused on two main issues: (1) the standard of review that must be applied to laws involving compelled disclosure that are challenged on First Amendment grounds, and (2) whether the law should be held unconstitutional only as applied to the two nonprofits that brought the cases, or if the law should be struck down on its face.

The appropriate standard of review was not definitively resolved, as Chief Justice Roberts, joined only by Justices Kavanaugh and Barrett, held that compelled disclosure cases, including California’s law, should be reviewed under a standard of “exacting scrutiny.” Others in the majority either stated a higher “strict scrutiny” standard should be applied or declined to decide whether strict scrutiny or exacting scrutiny should be used. Chief Justice Roberts stated in his opinion that exacting scrutiny was not limited to disclosure in the electoral context and laid out how the standard should be applied when reviewing compelled disclosure laws. He explained that “[w]hile exacting scrutiny does not require that disclosure regimes be the least restrictive means of achieving their ends, it does require that they be narrowly tailored to the government’s asserted interest.”

When analyzing the law, Chief Justice Roberts wrote that there is “a dramatic mismatch . . . between the interest that the Attorney General seeks to promote and the disclosure regime he has implemented of service to that end.” When considering the burden on tens of thousands of charities required to submit their donor information to fundraise in California each year and the risk of reprisal against donors, the state could not demonstrate it had used the information collected as part of the registration process in any investigative, regulatory, or enforcement efforts. Accordingly, the burden imposed by California’s law could not be justified “in light of less intrusive alternatives,” which the state had failed to consider.

From this vantage point, the Court said a facial challenge was appropriate—a finding not limited to the unconstitutionality of the law as applied to the two specific nonprofits that initiated the suits. In First Amendment cases, the Court wrote that a “law may be invalidated as overbroad if a substantial number of its applications are unconstitutional, judged in relation to the statute’s plainly legitimate sweep.” The majority found that California’s up-front collection of donor information failed to satisfy the exacting scrutiny standard, and the “lack of tailoring to the State’s investigative goals is categorical.” They saw no occasion where the risk of a chilling effect on the right to association—not just actual restrictions on this right—was outweighed by the state’s need for such information, which according to Chief Justice Roberts appeared to be more for ease of administration and less for investigating fraud.

For their part, Justices Sotomayor, Breyer, and Kagan, in dissent, argued that the majority opinion was too sweeping. Failing to require a showing of actual, objective harm or burden on the First Amendment right of association, the dissent argued, is a departure from the more nuanced approach of reviewing First Amendment challenges, was overbroad, and could open the door to future superficial challenges to compelled disclosure rules. Justice Sotomayor also suggested that the ruling could have a potential effect on other disclosure regimes by “mark[ing] reporting and disclosure requirements with a bull’s eye.”

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The Court’s decision opens the door to challenges against other reporting and disclosure requirements. Although the immediate effect of the Court’s decision affects only the validity of California’s law, this decision likely jeopardizes the validity of similar laws in New York and New Jersey. This decision’s impact on other disclosure laws, like government-imposed campaign finance disclosure requirements, remains to be seen.