Citizens United loses in the Second Circuit

Citizens United -- yes, that Citizens United -- sued the State of New York over its requirement that registered charities must disclose the names of their donors. CU brought this case under the First Amendment, arguing that this rule will chill the speech of donors who want to associate with the organization. The Court of Appeals rejects the challenge and says the regulation is constitutional.

The case is Citizens United v. Schneiderman, decided on February 15. CU raised an interesting argument: that the regulation is like the one struck down by the Supreme Court in NAACP v. Patterson, 357 U.S. 449 (1958), which held the State of Alabama could not force the civil rights organization to disclose its membership list. The NAACP won that case on freedom of association grounds since it espouses dissent beliefs and its members feared violent retaliation from white supremacists. CU uses that case in arguing that it, too, is a controversial organization and its donors fear any public association with it. For this reason, CU argues, the New York regulations must be reviewed under "strict scrutiny," which is the kiss of death in the world of constitutional law.

The Court of Appeals (Pooler, Leval and Newman) sides with New York. Strict scrutiny only applies when the regulations are content-based, that is, they single out organizations because of their speech or inherently discriminate among speakers. The Circuit cites the famous Citizens United campaign finance case from the Supreme Court in making that point. Instead, since this is a content-neutral regulation, the court will review it under "intermediate scrutiny," which requires only that the government show a substantial relationship between the disclosure requirement and a sufficiently important governmental interest.

The New York regulation satisfies intermediate judicial scrutiny. The government has an interest in ensuring that organizations that receive special tax treatment do not abuse that privilege and to ensure that these groups do not use their donations "for purposes other than those they represent to their donors and the public." While law enforcement officials have been known to abuse their power, the Court says, "and there is always a risk that an office charged with care of confidential information will spring a leak . . . , totalitarian tendencies do not lurk behind every instance of a state's collection of information about those within its jurisdiction. Any form of disclosure-based regulation -- indeed, any regulation at all -- comes with some risk of abuse."