NJ Statute Impinging on Independent Advocacy Rights Ruled Unconstitutional

Published date01 December 2019
Date01 December 2019
December 2019 5
Bruce R. Hopkins’ Nonpr ofit Counsel DOI:10.10 02/n pc
fied government purpose of providing more information
about the funding of lobbying.” Second, “an after-the-
fact exemption procedure does nothing to ameliorate
the chilling effect on 501(c)(3) donors.” The court’s con-
clusion: “The possibility that the Attorney General might
in the future approve a disclosure exemption would
provide cold comfort to a potential donor asked to run
the risk of threats, harassment, or reprisals.”
As to § 172-f, the court began its analysis by observ-
ing that the “First Amendment rights to publicly discuss
and advocate on issues of public interest, and to do so
anonymously, have long been recognized.” This provi-
sion, the court wrote, “sweeps far more broadly than
any disclosure law that has survived judicial scrutiny,”
noting that it is “not confined to disclosure where the
entity engages in express advocacy for a candidate
or electioneering.” Instead, the court stated, the rule
“requires disclosure whenever a 501(c)(4) engages in
pure issue advocacy before the public.”
The court held that, “[g]iven that any matter of pub-
lic importance could become the subject of legislation and
given the range of positions taken by all elected officials,
§ 172-f reaches a far broader swath of communications
than did the lobbying — and election-related statutes that
the Supreme Court and Second Circuit have upheld.”
The court wrote that the “government acknowl-
edges that the government interest at stake is the inter-
est in revealing ‘the funders of issue advocacy.’” But, the
court continued, the “cases upholding donor disclosure
requirements have never recognized an informational
interest of such breadth,” adding that the case law
“strongly suggest[s] that compelled identity disclosure is
impermissible for issue-advocacy communications.”
The state’s argument that the segregated bank account
provision causes the statute to impose merely a “limited
burden” on the plaintiffs was rejected by the court,
which stated that the provision “does nothing to remedy
the central flaw of § 172-f — that it encompasses issue
advocacy.” The court concluded that “[e]ven if a 501(c)
(4) structured its activities to employ a segregated bank
account for covered communications, it would still have
to disclose donors who fund communications on nearly
any issue of public concern.” [28.11(i)]
The US District Court for the District of New Jersey,
by decision dated October 2, enjoined the governor of
the state and other defendants from enforcing a state
law that compels disclosure of the identities of donors
to “independent expenditure committees” and enforces
compliance with the law’s financial-reporting and money-
handling requirements, on the grounds that the law
unconstitutionally infringes on the plaintiff’s First Amend-
ment rights and because it is unconstitutional as applied
to the plaintiff, as it will chill its First Amendment rights
by deterring potential contributors from contributing to
the organization (Americans for Prosperity v. Grewal).
Legislation enacted in 2019 in New Jersey updated the
state’s Campaign Contributions and Expenditures Report-
ing Act to institute new reporting requirements on certain
organizations and increase the limits on the amount of
money that may be contributed to candidates and com-
mittees. The organizations involved are termed “inde-
pendent expenditure committees” (essentially entities
described in IRC §§ 501(c)(4) and 527). These committees
must quarterly file with the state’s Election Law Enforce-
ment Commission a list of contributions over $10,000.
Governor Phil Murphy conditionally vetoed the bill
on the grounds that certain provisions may infringe
rights of free speech and free association. He observed
that the bill “covers all issue advocacy conducted at any
time, regardless of whether the advocacy is connected
to an issue before the electorate.” He later signed a
nearly identical bill, with a signing statement reiterating
his concerns, based on a “commitment” from the legis-
lature that it would pass legislation “removing advocacy
in connection with legislation and regulations from its
parameters,” thereby ensuring that the law’s disclosure
requirements apply to election-related activity. To date,
the legislature has not passed a “clean-up” bill.
AFP’s state chapter publishes a “scorecard” track-
ing legislators’ voting records on key issues. The new
disclosure rules apply to the chapter. AFP, a tax-exempt
social welfare organization, sued, claiming that the law
is unconstitutional on its face because it extends “for-
midable regulations and burdens properly reserved for
electioneering” to communications focused entirely on
issue advocacy or purely factual political information.
The charge was that the enactment “obliterate[d]” the
boundaries established by the US Supreme Court in
Buckley v. Valeo (see the previous article).
General Analysis
The court first recognized the overbreadth of the
New Jersey statute in relation to the Buckley standard. It
wrote that the “plain language of the [law] makes clear
the same disclosure obligation is triggered whether a so-
called independent expenditure committee engages in
‘influencing or attempting to influence’ a direct election
of individuals, in ‘influencing or attempting to influence’
a vote to decide a ballot question, in ‘influencing or
attempting to influence’ legislators considering legislation,
and in ‘influencing or attempting to influence’ agencies

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT