Citizens United et al v. Schneiderman
Filing
38
OPINION & ORDER re: 7 MOTION for Preliminary Injunction filed by Citizens United Foundation, Citizens United. Based on the evidence that the parties have presented to the Court at this stage in the litigation, the Court holds tha t plaintiffs are not entitled to a preliminary injunction prohibiting the Attorney General from obtaining their Schedules B. Most importantly, plaintiffs have not demonstrated a likelihood of success on the merits of any of their claims. Plaintiffs 039; First Amendment unconstitutional burden claim is not likely to succeed because, on this record, the Attorney General has shown that the Schedule B policy substantially relates to the important governmental interests of enforcing charitable solic itation laws and overseeing charitable organizations for the protection of the public. These interests justify the minimal burdens that the Schedule B policy places on charities' speech and association rights. Moreover, because the Attorney Gene ral does not possess unbridled discretion to impose conditions on the ability of charities to speak, plaintiffs are not likely to succeed on their First Amendment prior restraint claim. Nor are plaintiffs likely to prevail on the remainder of their c laims. Their due process and SAPA claims lack merit because the evidence in the record shows that plaintiffs had prior notice of the Attorney General's interpretation of section 91.5, which was promulgated in accordance with SAPA's notice-a nd-comment procedures. And because there is insufficient evidence that Congress intended to prevent state attorneys general from obtaining Schedule B directly from charities, plaintiffs are not likely to win their preemption challenge. Finally, plain tiffs have not shown that they will suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in their favor, or that a preliminary injunction serves the public interest. Because Citizens United and Citizens Unit ed Foundation have not made a "clear showing" that they are entitled to the "extraordinary remedy" of a preliminary injunction, Winter, 555 U.S. at 22, their motion is denied. SO ORDERED. (Signed by Judge Sidney H. Stein on 7/27/2015) (ama)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------x
CITIZENS UNITED and CITIZENS
:
UNITED FOUNDATION,
:
:
Plaintiffs,
:
-against:
:
ERIC SCHNEIDERMAN, in his official
:
capacity as New York Attorney General,
:
:
Defendant.
:
----------------------------------------------------------x
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #:
DATE FILED: 7/27/2015
14-Cv-3703 (SHS)
OPINION & ORDER
SIDNEY H. STEIN, U.S. District Judge.
Plaintiffs Citizens United and Citizens United Foundation seek to
preliminarily enjoin the New York Attorney General from enforcing his
policy of requiring registered charities to disclose the names, addresses, and
total contributions of their major donors in order to solicit funds in the state.
Plaintiffs contend principally that the policy impermissibly trenches upon
their First Amendment rights of freedom of speech and association. They
also allege that the policy was adopted in violation of the State
Administrative Procedure Act; that it is preempted by federal law; and that
the Attorney General’s enforcement of the policy violates their due process
rights. Because the Court finds that plaintiffs are not likely to succeed on the
merits of any of their claims, their motion for a preliminary injunction is
denied.
I.
BACKGROUND
Citizens United and Citizens United Foundation (collectively, “Citizens
United” or “plaintiffs”) are nonstock, nonprofit corporations that state they
advocate for “limited government, free enterprise, strong families, and
national sovereignty and security.” (Compl. ¶¶ 9–10.) Citizens United is
organized under 26 U.S.C. § 501(c)(4), while Citizens United Foundation is
a section 501(c)(3) organization. (Compl. ¶¶ 9–10.) Plaintiffs promote their
agenda through television commercials, web advertisements, and
documentary films, and raise money for these and other projects primarily
by soliciting donations from like-minded individuals. (Id. ¶¶ 17–19.)
The New York Attorney General, through his Charities Bureau, is
responsible for supervising more than 65,000 charitable organizations that
are registered in New York state. (Decl. of Karin Kunstler Goldman dated
July 23, 2014 (“Goldman Decl.”) ¶¶ 3–4.) The Charities Bureau oversees the
registration of charitable organizations, investigates donor and consumer
complaints, ensures that funds and property held for charitable purposes
are properly used, and prosecutes violations of New York’s charitable
registration and solicitation laws. (Id. ¶ 3.)
To maintain their tax-exempt and charitable organization statuses,
plaintiffs must comply with a number of registration and reporting
requirements. Pursuant to federal rules, plaintiffs annually file Form 990
and its accompanying schedules with the Internal Revenue Service (“IRS”).
(Compl. ¶ 25.) Schedule B to IRS Form 990, which is at the heart of this
litigation, directs organizations to report the name, address, and total
contribution of any donor who contributed $5,000 or more in cash or
property to the organization during the past year. (See Ex. B. to Goldman
Decl. at 1.) Pursuant to federal law, the IRS does not make Schedule B to IRS
Form 990 available to the public. See generally 26 U.S.C. § 6103; (Compl. ¶ 25).
In order to solicit donations in New York, all charitable organizations
that are not otherwise exempt—including plaintiffs—must first file a
registration form with the Attorney General’s Charities Bureau, as required
by Article 7-A of the Executive Law. N.Y. Exec. Law § 172(1); 13 NYCRR
§ 91.4. Each year thereafter, charities must file an annual report form known
as CHAR500. N.Y. Exec. Law § 172-b(1); 13 NYCRR § 91.5; (Compl. § 26). In
2006, the Attorney General promulgated a regulation, 13 NYCRR § 91.5,
which directs charities to attach “a copy of the complete IRS Form 990,
2
990-EZ or 990-PF with schedules” to their annual reports. 13 NYCRR
§ 91.5(c)(3)(i)(a); (Goldman Decl. ¶ 8). The Attorney General interprets
section 91.5 to mean that charities that file a copy of IRS Form 990 must also
submit that form’s Schedule B. (Compl. ¶ 1; see Goldman Decl. ¶¶ 8–12.) In
other words, section 91.5 serves as the Attorney General’s source of legal
authority for requiring registered charities to disclose the names, addresses,
and total contributions of their major donors, which the Court will refer to
as the Attorney General’s “Schedule B policy.”
Plaintiffs, which first registered as charities in New York in 1995, have
never filed copies of their Schedules B with the Attorney General. (Compl.
¶¶ 29, 31.) In 2012, the Charities Bureau conducted a review of its operations
and determined that certain organizations were not filing Schedule B along
with their annual reports. (Goldman Decl. ¶ 17.) The Attorney General
states that he then “implemented an across-the-board initiative to identify
and notify registered organizations of their filing deficiencies with respect
to Schedule B.” (Id. ¶ 18.) In April 2013, the Attorney General notified
plaintiffs that their annual reports for tax year 2011 were incomplete due to
the absence of Schedule B. (Id. ¶ 21.)
Plaintiffs now move for a preliminary injunction prohibiting the
Attorney General from enforcing the Schedule B policy against them. They
allege that the policy is illegal for four reasons. First, plaintiffs contend that
the policy violates their First Amendment rights of freedom of speech and
association. They identify two distinct grounds for their First Amendment
challenge: (1) that the Attorney General’s interests in enforcing the Schedule
B policy do not justify the burdens it places on charities’ rights of speech
and association (the “unconstitutional burden” argument), and (2) that
Article 7-A of the Executive Law is an unlawful prior restraint on speech
because it confers unbridled discretion on the Attorney General to impose
unlimited conditions on charities’ ability to speak (the “prior restraint”
argument).
3
Second, plaintiffs argue that the Attorney General’s enforcement of the
Schedule B policy violates due process. Plaintiffs allege that the Attorney
General initially read section 91.5 as not requiring registered charities to
submit Schedule B, but then reversed his interpretation without providing
notice of his reversal or an opportunity for public comment. Plaintiffs claim
that this “abrupt change” violates due process because they lacked fair
notice that they were required to file Schedule B in order to solicit donations
in New York. (Pls.’ Mem. of Law in Supp. of Mot. for Prelim. Inj. (“Pls.’
Mem.”) at 13; see also Pls.’ Reply Mem. of Law (“Pls.’ Reply”) at 8.)
Third, plaintiffs contend that the Attorney General adopted the
Schedule B policy in contravention of the New York State Administrative
Procedure Act (“SAPA”). Because on plaintiffs’ reading the plain text of
section 91.5 does not require charities to submit Schedule B with their
annual reports, they argue that the Attorney General was obligated to
comply with SAPA’s formal rulemaking procedures before reaching the
opposite conclusion.
Fourth, plaintiffs argue that the Schedule B policy is preempted by
federal law, which sets out a mechanism for states to request Schedules B
from the IRS and also ensures the confidentiality of donor information.
Plaintiffs assert that the Attorney General’s policy of obtaining Schedules B
directly from charities, rather than requesting them from the IRS, conflicts
with these federal statutory provisions.
II. DISCUSSION
A. Preliminary Injunction Standard
A preliminary injunction is “an extraordinary remedy that may only be
awarded upon a clear showing that the plaintiff is entitled to such relief.”
Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). To succeed on
its motion for a preliminary injunction, Citizens United must “establish that
[it] is likely to succeed on the merits, that [it] is likely to suffer irreparable
harm in the absence of preliminary relief, that the balance of equities tips in
4
[its] favor, and that an injunction is in the public interest.” N.Y. Progress &
Prot. PAC v. Walsh, 733 F.3d 483, 486 (2d Cir. 2013) (quoting Winter, 555 U.S.
at 20).1
B. Likelihood of Success on the Merits
1.
First Amendment
Citizens United has not made the requisite “clear showing,” Winter, 555
U.S. at 22, that it is likely to succeed on the merits of either of its First
Amendment claims on the record adduced to date in this litigation.
a.
Unconstitutional Burden
i.
Legal Standard
Charitable solicitation most certainly qualifies for First Amendment
protection. See, e.g., Vill. of Schaumburg v. Citizens for a Better Envt., 444 U.S.
620, 632–33 (1980). Because the Schedule B policy is a disclosure
requirement, it must satisfy exacting scrutiny. See Ctr. for Competitive Politics
v. Harris, 784 F.3d 1307, 1312 (9th Cir. 2015) (holding that exacting scrutiny
governed a First Amendment challenge to California’s requirement that
registered charities file Schedule B with the state). Exacting scrutiny
requires the government to demonstrate “a substantial relation between the
disclosure requirement and a sufficiently important governmental interest.”
1
Although plaintiffs urge that they are eligible for a preliminary injunction if they
demonstrate “sufficiently serious questions going to the merits to make them a fair
ground for litigation and a balance of hardships tipping decidedly in the movant’s
favor,” Random House, Inc. v. Rosetta Books LLC, 283 F.3d 490, 491 (2d Cir. 2002) (per
curiam), that alternative standard does not apply where, as here, a plaintiff seeks to
enjoin “government action taken in the public interest pursuant to a statutory or
regulatory scheme,” Evergreen Ass’n Inc. v. City of N.Y., 740 F.3d 233, 245 (2d Cir. 2014);
see also All. for Open Soc. Int’l, Inc. v. U.S. Agency for Int’l Dev., 651 F.3d 218, 230 (2d Cir.
2011), aff’d, 133 S.Ct. 2321 (2013).
5
Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 366–67 (2010) (internal
quotation marks and citation omitted); see also John Doe No. 1 v. Reed, 561
U.S. 186, 196 (2010); Ctr. for Competitive Politics, 784 F.3d at 1312. “Exacting
scrutiny encompasses a balancing test.” Ctr. for Competitive Politics, 784 F.3d
at 1312. To survive, “the strength of the governmental interest must reflect
the seriousness of the actual burden on First Amendment rights.” Id.
(quoting John Doe No. 1, 561 U.S. at 196).2
ii.
Scope of Challenge
Before analyzing the likelihood that plaintiffs’ unconstitutional burden
claim will succeed, the Court must define its scope, i.e., whether the claim is
“properly viewed as a facial or as-applied challenge.” John Doe No. 1, 561
U.S. at 194. The complaint seeks a declaration that the Schedule B policy “is
unconstitutional . . . as applied to charitable organizations that engage in
solicitation, advocacy, and informational campaigns.” (Compl. at 17.) This
challenge certainly has a broad reach, given that such organizations
undoubtedly comprise a large portion of the charities that the Attorney
General supervises. In addition, by arguing that the Schedule B policy does
not bear a substantial relation to any important governmental interest,
plaintiffs suggest that the policy cannot lawfully be applied to any charity.
2
Citizens United cites a line of cases that applied strict, rather than exacting,
scrutiny to regulations governing the solicitation of charitable and campaign donations
to support its argument that the Schedule B policy must be narrowly tailored to serve
a compelling governmental interest. See Williams-Yulee v. Fla. Bar, 135 S.Ct. 1656, 1664–
65 (2015); Green Party of Conn. v. Garfield, 616 F.3d 189, 208 (2d Cir. 2010); c.f. Vill. of
Schaumburg, 444 U.S. at 636–37 (explaining that restrictions on charitable solicitation
must be “narrowly drawn” to “serve[] a sufficiently strong, subordinating interest”).
But unlike the regulations in those cases, the Schedule B policy functions as a disclosure
requirement rather than a prohibition on speech: it “may burden the ability to speak,”
but it “do[es] not prevent anyone from speaking.” Citizens United, 558 U.S. at 366
(internal quotation marks and citation omitted). Plaintiffs’ strict scrutiny cases are
inapposite.
6
(See Tr. of Oct. 10, 2014 Oral Arg. (“Arg. Tr.”), at 12.) These factors indicate
that plaintiffs’ claim is best characterized as a facial attack. See Ctr. for
Competitive Politics, 784 F.3d at 1314–15. However, plaintiffs also devote
attention in the complaint and their motion papers to the particular harms
that the Schedule B policy inflicts on them alone, which certainly squints in
the direction of an as-applied challenge. See Citizens United, 558 U.S. at 370.
Ultimately, the Court does not find it necessary to place a firm label on
plaintiffs’ unconstitutional burden challenge because “[t]he label is not
what matters.” John Doe No. 1, 561 U.S. at 194. Plaintiffs claim that the
Schedule B policy is unconstitutional with respect to charities “that engage
in solicitation, advocacy, and informational campaigns.” (Compl. ¶ 39). The
relief they seek would therefore “reach beyond the particular circumstances
of these plaintiffs.” John Doe No. 1, 561 U.S. at 194. As the Ninth Circuit
recently concluded in an extremely similar First Amendment challenge to a
virtually identical California regulation requiring registered charities to file
Schedule B with the state, “the Attorney General would be hard-pressed to
continue to enforce an unconstitutional requirement against any other
member of the [charities] registry” if a preliminary injunction issued. Ctr.
for Competitive Politics, 784 F.3d at 1314. Accordingly, this Court concludes
that Citizens United must demonstrate a likelihood that the Schedule B
policy fails exacting scrutiny not only as applied to it, but also as applied to
those charities that engage in solicitation, advocacy, and informational
campaigns in general. See John Doe No. 1, 561 U.S. at 194, 200.
iii. Analysis
On the record as developed to date, Citizens United has not made a
clear showing that its unconstitutional burden claim is likely to succeed.
7
1.
The Schedule B policy bears a substantial
relation
to
sufficiently
important
governmental interests.
Through factual evidence and counsel’s representations, the Attorney
General has demonstrated on this record that the Schedule B policy bears a
substantial relation to sufficiently important governmental interests. As
noted above, the Attorney General’s duties include ensuring that charities
that solicit funds from New York residents comply with the law. See Viguerie
Co. v. Paterson, 94 A.D.2d 672, 673 (1st Dep’t 1983). The enforcement of
charitable solicitation laws and the oversight of charitable organizations for
the protection of donors are, without a doubt, sufficiently important
governmental interests. See Riley v. Nat’l Fed. of the Blind of N.C., Inc., 487 U.S.
781, 792, 795 (1988); Vill. of Schaumburg, 444 U.S. at 636–37; Ctr. for
Competitive Politics, 784 F.3d at 1317.
The Attorney General has explained that requiring registered charities
to file Schedule B furthers the government’s interests in overseeing
charitable
organizations
and
enforcing
solicitation
laws
because
information on charities’ sources of funding enables him to identify
organizations that may be operating fraudulently or without a proper
charitable purpose. (Def.’s Mem. of Law in Opp’n to Mot. for Prelim. Inj.
(“Def.’s Opp’n”) at 9; Arg. Tr. 17–18.) For example, a charity’s multi-year
filings of Schedule B may disclose that a single donor has consistently
served as its primary source of funding, causing the Attorney General to
question whether the charity is in reality a tool to evade taxes or launder
money. (Arg. Tr. 17–18.) At oral argument, counsel described a specific
instance in which an examination of Schedule B enabled the Charities
Bureau to determine that close relatives of a major donor were the recipients
of jobs with, and expenditures by, a charity, leading the Bureau to
investigate whether the entity was truly pursuing charitable purposes. (Arg.
Tr. 20–21.)
8
On this record, the Court is satisfied that the Schedule B policy bears a
substantial relation to the important governmental interests of enforcing
charitable solicitation laws and protecting New York residents from
illegitimate charities. Schedule B represents an important part of the
Attorney General’s investigative arsenal because he can compare major
donor information against other documents that charities submit, allowing
him to uncover possible violations and ultimately take action against
unlawful charities. (Arg. Tr. 17–22); cf. Buckley v. Valeo, 424 U.S. 1, 67–68
(1976) (noting that “recordkeeping, reporting, and disclosure requirements
are an essential means of gathering the data necessary to detect violations”
of campaign finance laws). In fact, the justifications that the Attorney
General has offered here are remarkably similar to those that the Ninth
Circuit found dispositive when it upheld California’s comparable Schedule
B requirement. See Ctr. for Competitive Politics, 784 F.3d at 1311, 1317.
Citizens United takes issue with the Attorney General’s rationales,
contending that uncovering tax evasion and investigating whether a charity
is abusing its tax-exempt status is the responsibility of the IRS, not the
Attorney General’s Charities Bureau. (See Arg. Tr. 34–35.) But of course, a
“charity” organized for the purpose of committing tax violations is not
pursuing charitable aims, and the Attorney General has a responsibility to
protect New York residents from falling prey to its solicitations. See Viguerie
Co., 94 A.D.2d at 673.
Citizens United also argues that the Charities Bureau may obtain major
donor information through less intrusive methods, particularly by
requesting Schedule B from the IRS. The Internal Revenue Code indeed
provides that upon written request by a state officer, the IRS may disclose
an organization’s Schedule B “for the purpose of . . . the administration of
State laws regulating the solicitation or administration of the charitable
funds or charitable assets of such organizations.” 26 U.S.C. § 6104(c)(3);
9
see also 26 U.S.C. § 6103(b)(1).3 But the Attorney General supervises more
than 65,000 registered charities with limited resources (Goldman Decl. ¶ 4;
Arg. Tr. 19), and requiring him to submit separate written requests to the
IRS for such an enormous quantity of Schedules B would be unduly
cumbersome and inefficient—both for the Attorney General and for the IRS.
See Ctr. for Competitive Politics, 784 F.3d at 1317 (crediting the Attorney
General’s argument that “having immediate access to Form 990 Schedule B
increases her investigative efficiency”). Nor could the Charities Bureau
simply limit its IRS requests to charities that it is actively investigating. The
Attorney General has explained that Schedule B itself can flag illegal activity;
therefore, requiring him to first suspect a violation in order to request a
charity’s Schedule B from the IRS would impede his oversight of charities.
See id. (rejecting the plaintiff’s argument that the Attorney General should
obtain Schedules B through subpoenas alone because “reviewing significant
donor information can flag suspicious activity”). This Court is satisfied on
this record that the Attorney General’s Schedule B policy bears a substantial
relation to the governmental interests that the Attorney General has
articulated.
3
Although the parties do not address this issue, it appears that the portion of the
Internal Revenue Code on which Citizens United relies may not authorize the IRS to
disclose the Schedules B of section 501(c)(3) organizations—such as plaintiff Citizens
United Foundation—to state officials. See 26 U.S.C. § 6104(c)(3) (permitting the IRS to
disclose “returns and return information of any organization described in section 501(c)
(other than organizations described in paragraph (1) or (3) thereof)”) (emphasis added); Ctr.
for Competitive Politics, 784 F.3d at 1318. If in fact federal law does not permit the IRS to
disclose section 501(c)(3) organizations’ Schedules B, the Attorney General’s need to
obtain major donor information directly from such charities is even stronger.
10
2.
The strength of the Attorney General’s
interests in the Schedule B policy justify its
minimal burdens on charities’ rights of
speech and association.
In light of the important governmental interests that the Schedule B
policy serves, the Court cannot find on this record that it places unjustified
burdens on charities’ rights of speech and association. Because plaintiffs
claim that the Schedule B policy is unconstitutional with respect to charities
that engage in solicitation, advocacy, and informational campaigns, the
Court must consider whether the policy “reflect[s] the seriousness of the
actual burden” on those charities, not just on plaintiffs alone. See John Doe
No. 1, 561 U.S. at 190, 194, 196, 200.
Citizens United contends that the Schedule B policy inflicts three
distinct but related harms: (1) invading the privacy of donors who wish to
remain anonymous; (2) causing donors to fear “backlash and financial
harm” should their support of controversial causes become publicly known;
and (3) chilling donations to charities, leading to a concomitant reduction in
charities’ ability to speak.4 (Compl. ¶¶ 40–41; Aff. of David N. Bossie dated
May 19, 2014 (“Bossie Aff.”) ¶¶ 6–9, 13.)
4
At oral argument, plaintiffs took the position that a First Amendment violation
would exist even in the absence of evidence that the Schedule B policy imposes actual
burdens on charities’ rights of speech and association. (See Arg. Tr. 29.) The Court does
not accept that proposition. Counsel relied on Talley v. California, 362 U.S. 60, 63–65
(1960), in which the Supreme Court invalidated an ordinance banning the distribution
of handbills that did not identify their sponsors. In that case, counsel argued, the
Supreme Court did not require a showing that disclosure of the handbill sponsors’
names would cause them harm. (Arg. Tr. 29.) As the Ninth Circuit explicated in Center
for Competitive Politics, however, Talley does not stand for the proposition that disclosure
itself constitutes an injury that relieves the Court of its duty to consider the Schedule B
policy’s actual burdens, if any, on speech and association. See Ctr. for Competitive Politics,
784 F.3d at 1316 & n.8. Rather, “[t]he basis for the [Supreme] Court’s holding was the
11
Importantly, any burden that Citizens United has identified is premised
largely on the threat of public disclosure of donors’ identities. Yet there is no
evidence that the Schedule B policy presents a cognizable risk of public
disclosure of major donor information. The Charities Bureau has
consistently followed a long-standing policy of keeping donor information
confidential, and it does not disclose Schedule B under New York’s Freedom
of Information Law (“FOIL”). (Goldman Decl. ¶¶ 13–16.) The Instructions
for Form CHAR500 expressly state that Schedule B is “exempt from FOIL
disclosure to the public.” (Ex. G to Goldman Decl. at 6.) Despite plaintiffs’
assertions to the contrary, FOIL provides firm legal authority for the
Attorney General’s practice. It states that an “agency may deny access to
records . . . that are specifically exempted from disclosure by state or federal
statute.” N.Y. Pub. Off. Law § 87(2)(a). Because the Internal Revenue Code
mandates the confidentiality of Schedule B, see generally 26 U.S.C. § 6103, the
Attorney General may also lawfully refuse to disclose it to the public—
which is in fact his established and unwavering policy, as illustrated in the
Instructions to Form CHAR500.5 See Ctr. for Competitive Politics, 784 F.3d at
1316 n.9 (declining to credit the plaintiff’s fears of public disclosure of
Schedule B because such disclosure “is likely not authorized by California
law”); (see also Goldman Decl. ¶¶ 14–16). In light of the lack of risk that the
Attorney General will publicly release major donor information, plaintiffs’
historic, important role that anonymous pamphleteering has had in furthering
democratic ideals. . . . Thus, in [Talley], the Court was certain of the First Amendment
harm that the ordinance imposed.” See id. at 1316 n.8; see also Talley, 362 U.S. at 64.
Consequently, the Court must analyze the “actual burden” at stake here. Ctr. for
Competitive Politics, 784 F.3d at 1314 (quoting John Doe No. 1, 561 U.S. at 196) (emphasis
in original).
5
Even assuming arguendo that FOIL does not authorize the Attorney General to
withhold Schedule B from the public, there is no evidence in this record that any actual
threat of public disclosure exists. Plaintiffs have neither cited to a past instance of
publication by the Attorney General nor pointed to any FOIL request for a charity’s
Schedule B.
12
fears of public backlash and financial harm are speculative and fail to
support their contention that the Schedule B policy chills donors’
association with, and contributions to, charities. See Ctr. for Competitive
Politics, 784 F.3d at 1316 & n.9.
Although plaintiffs have focused primarily on the threat of public
disclosure of Schedule B, they also suggest that compelled disclosure of
donor identities to the Attorney General itself raises First Amendment
problems. Plaintiffs argue that because their agenda includes public
criticism of the New York Attorney General and his policies (including the
Schedule B policy at issue here), their donors wish to shield their identities
from him. (Arg. Tr. 30–31.) It is true that “non-public disclosures can still
chill protected activity where a plaintiff fears the reprisals of a government
entity.” Ctr. for Competitive Politics, 784 F.3d at 1316. But the scope of this
First Amendment challenge extends beyond plaintiffs themselves, and there
is absolutely no evidence in this record that other charities that promote
their
messages
through
solicitation,
advocacy,
and
informational
campaigns share plaintiffs’ fears of retaliation by the Attorney General. See
John Doe No. 1, 561 U.S. at 200–01.
In the end, the only burden that might apply to such charities in general
is the Schedule B policy’s frustration of their donors’ generalized interest in
giving anonymously. To the extent such an interest actually exists, there has
been no evidence (or even argument) that the policy has caused donors to
curtail their participation in, or contributions to, charities that engage in
solicitation, advocacy, and informational campaigns. Whatever burden the
Schedule B policy places on donors’ “broad interest in anonymity” can
therefore only be described as modest in light of the significant
governmental interests that the policy serves. See Ctr. for Individual Freedom
v. Madigan, 697 F.3d 464, 482 (7th Cir. 2012).
In conclusion, the Court finds that on this record, the Schedule B policy
bears a substantial relation to the important governmental interests of
enforcement of charitable solicitation laws and the oversight of charitable
13
organizations for the protection of New York residents. The government’s
interests in enforcing the Schedule B policy clearly outweigh any burden
that it may impose on charities that engage in solicitation, advocacy, and
informational campaigns. Citizens United therefore has not demonstrated
that it is likely to succeed on the merits of its claim that the Attorney
General’s interests in enforcing the Schedule B policy do not justify the
burdens it places on charities’ rights of speech and association.6
6
Even if plaintiffs’ unconstitutional burden claim were properly construed as a
challenge to the Schedule B policy only as applied to Citizens United and Citizens
United Foundation, the Court would find that the strength of the government’s
interests justify the burdens that the Schedule B policy places on their speech and
association rights. David N. Bossie, president of both organizations, avers that based
on plaintiffs’ “experience from more than a quarter century of fundraising . . . if
individuals know that their names could become public record, they will often refuse
to donate.” (Bossie Aff. ¶ 7.) He explains that “donors reasonably fear public backlash
and financial harm should their support of politically contentious and controversial
causes become publicly know[n].” (Id.) Bossie believes that plaintiffs lost the financial
support of at least two major donors due to those donors’ fears of being publicly
exposed. (Id. ¶¶ 9, 11.) Because there is no evidence of a cognizable risk that the
Attorney General will publicize the identity of plaintiffs’ donors, the Court assigns very
little weight to Bossie’s concerns. See Citizens United, 558 U.S. at 370 (explaining that
Citizens United could maintain an as-applied challenge if “there were a reasonable
probability that the group’s members would face threats, harassment, or reprisals if
their names were disclosed”).
Nor could plaintiffs prevail in an as-applied challenge based on disclosure of their
major donor information solely to the Attorney General. Plaintiffs have not adequately
explained why their donors fear the Attorney General will target them; nor have they
provided a single example of past retaliation against their donors by any law
enforcement official whatsoever. Cf. Citizens United, 558 U.S. at 370 (“Citizens United
has been disclosing its donors for years and has identified no instance of harassment or
retaliation.”). On this record, plaintiffs’ fears of persecution by the Attorney General do
not rise above the level of speculation and do not defeat his strong interest in enforcing
14
b.
Prior Restraint
Citizens United also brings a separate First Amendment prior restraint
challenge to certain provisions of Article 7-A of the New York State
Executive Law, the statute that gives the Attorney General authority to
require charities to submit Schedule B. Article 7-A directs registered
charities to “file with the attorney general an annual written financial report,
on forms prescribed by the attorney general.” N.Y. Exec. Law § 172-b(1). It
also authorizes the Attorney General to “make rules and regulations
necessary for the administration of this article.” Id. § 177(1). Citizens United
alleges that these statutory provisions amount to unconstitutional prior
restraints on speech because they give the Attorney General “unbridled
discretion . . . to require virtually any information that he so desires as a
precondition to the exercise of First Amendment rights.” (Pls.’ Mem. 12.)
i.
Legal Standard
A prior restraint on speech violates the First Amendment if it places
“unbridled discretion in the hands of a government official or agency.” City
of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750, 757 (1988). To pass
constitutional muster, “‘a law subjecting the exercise of First Amendment
freedoms to the prior restraint of a license’ must contain ‘narrow, objective,
and definite standards to guide the licensing authority.’” Forsyth Cnty., Ga.
v. Nationalist Movement, 505 U.S. 123, 131 (1992) (quoting Shuttlesworth v.
City of Birmingham, Ala., 394 U.S. 147, 150–151 (1969)). Importantly, courts
considering a prior restraint claim must analyze not only the text of the
challenged law itself, but also any limits on the official’s discretion that are
“made explicit by textual incorporation, binding judicial or administrative
construction, or well-established practice.” Lakewood, 486 U.S. at 770. This
the Schedule B policy. See Ctr. for Competitive Politics, 784 F.3d at 1316–17; Ctr. for
Individual Freedom, 697 F.3d at 483.
15
rule applies “even if the face of the statute might not otherwise suggest the
limits imposed.” Id. at 770 n.11.
Prior restraint claims are properly analyzed as facial challenges. See
Children First Found., Inc. v. Fiala, --F.3d--, 2015 WL 2444501, at *9 (2d Cir.
May 22, 2015) (noting that “every prior application of the unbridled
discretion doctrine . . . [has been] construed as a facial challenge”), abrogated
on other grounds by Walker v. Texas Div., Sons of Confederate Veterans, Inc., 135
S.Ct. 2239 (2015).
ii.
Article 7-A is not an unconstitutional prior restraint
on speech.
Because Article 7-A requires charities to register with the Attorney
General and submit annual reports in order to solicit contributions in New
York, it functions as a prior restraint on speech. See Am. Target Advert., Inc.
v. Giani, 199 F.3d 1241, 1250 (10th Cir. 2000). Nonetheless, plaintiffs are not
likely to succeed on the merits of their claim because the binding regulation
that implements Article 7-A sets forth “narrow, objective, and definite
standards” that cabin the Attorney General’s exercise of discretion. Forsyth
Cnty., 505 U.S. at 131 (internal quotation marks and citation omitted).
Article 7-A confers discretion on the Attorney General by authorizing
him to prescribe the content of charities’ annual report forms. N.Y. Exec.
Law § 172-b(1). The Court cannot analyze the statutory text in a vacuum,
however, because the Attorney General’s binding regulation, 13 NYCRR
§ 91.5(c), specifies the documents that “constitute a complete annual filing
for a charitable organization.” The required documents include the
CHAR500 form and “IRS form 990, 990-EZ or 990-PF with schedules.” Id.
§ 91.5(c)(3)(i)(a). Critically, the regulation’s list of documents represents a
closed set, and it does not provide authority for the Charities Bureau to
require charities to submit additional information with their annual reports.
See 13 NYCRR § 91.5(c). Moreover, as plaintiffs concede, section 91.5(c)
applies to all registered charities. (Arg. Tr. 17.) Considered in conjunction
16
with its “binding . . . administrative construction,” Lakewood, 486 U.S. at 770,
Article 7-A does not confer unfettered discretion on the Attorney General to
impose additional conditions on charities that wish to solicit donations in
New York.
Lakewood and American Target Advertising, the cases on which plaintiffs
rely, do not require a different result. Unlike section 91.5, the
unconstitutional licensing schemes in both those cases featured catch-all
provisions authorizing government officials to demand unspecified
information or to impose supplementary conditions on a discretionary, ad
hoc basis. See Lakewood, 486 U.S. at 769 (empowering the mayor to require
“such other terms and conditions deemed necessary and reasonable”); Am.
Target Advert., 199 F.3d at 1251–52 (stating that applicants for a solicitation
permit must supply “any additional information the division may require”).
The courts in both cases held that those unrestricted grants of authority
violated the First Amendment by failing to prescribe clear standards to
guide the official’s exercise of discretion. Compare 486 U.S. at 769, 772, with
199 F.3d at 1252. By contrast, 13 NYCRR § 91.5(c) suffers from no such
deficiency.7 Accordingly, Citizens United has not shown a likelihood of
success on the merits of its prior restraint claim.
7
Plaintiffs also rely heavily on Public Citizen, Inc. v. Pinellas County, 321 F. Supp.
2d 1275 (M.D. Fla. 2004), which considered a prior restraint challenge to a county
ordinance requiring charities to obtain a permit before soliciting donations. The
ordinance authorized a county official to “promulgate the forms deemed necessary to
carry out his or her responsibilities,” including permit application forms. Id. at 1292–
93. Public Citizen, as a decision from a district court in the Eleventh Circuit, is not
binding on this Court. The Court affords it no weight because that court failed to
consider the standard permit application form issued by the county official (which did
not include a catch-all provision), despite the Supreme Court’s instructions that courts
“must consider the county’s authoritative constructions of the ordinance, including its
own implementation and interpretation of it.” Forsyth Cnty., 505 U.S. at 131.
17
2.
Due Process
Plaintiffs next contend that the Attorney General’s enforcement of the
Schedule B policy constitutes a Fourteenth Amendment due process
violation. They allege that prior to 2013, the Charities Bureau had not
indicated that it read section 91.5 to require the submission of Schedule B
and that charities therefore “had no way of knowing” that disclosing their
major donor information “was a prerequisite for political speech.” (Pls.’
Reply 9.) Plaintiffs are not likely to succeed on the merits of their due
process claim because the evidence in this record shows that the Charities
Bureau has in fact never changed its interpretation of section 91.5.
In 2003, the Attorney General promulgated a regulation identifying the
documents that must accompany CHAR500. (Goldman Decl. ¶ 7.) The 2003
regulation directed charities to submit “IRS Form 990, 990EZ or 990PF,
including schedules A and B.” (Id.) In 2006, following a public notice-andcomment period, the Attorney General published a new regulation that
replaced the 2003 version. (Id. ¶ 8); 28 N.Y. Reg. 45 (Mar. 29, 2006) (proposed
rule); 28 N.Y. Reg. 19 (Oct. 4, 2006) (final rule). As described above, the 2006
regulation requires charities to provide “a copy of the complete IRS Form
990, 990-EZ or 990-PF with schedules.” 13 NYCRR § 91.5(c)(3)(i)(a). The
Charities Bureau revised the regulatory language in order to account for the
IRS’s anticipated changes to Form 990 and its schedules. (Goldman Decl.
¶¶ 9–11.)
Citizens United stakes its due process claim on Federal Communications
Commission v. Fox Television Stations, Inc., 132 S.Ct. 2307, 2317–18 (2012),
which held that an agency may not take enforcement action unless it has
given fair notice that the conduct at issue is unlawful. In 2004, the Federal
Communications Commission (“FCC”) changed its policy regarding
broadcast indecency. See id. at 2314. It then brought enforcement actions
against broadcasters that, prior to the 2004 policy change, had aired
programs containing instances of expletives and nudity. Id. at 2314–15.
Critically, those broadcasts would not have been prohibited by the FCC’s
18
pre-2004 indecency policy. See id. at 2318. The Supreme Court concluded
that the FCC’s application of the policy it instituted in 2004 to pre-2004
conduct violated due process because the FCC had “failed to provide a
person of ordinary intelligence fair notice of what is prohibited.” Id.
(internal quotation marks, alteration, and citation omitted).
Citizens United urges the Court to apply the principle of Fox to this case,
contending that the Attorney General is attempting to enforce a policy that
he adopted without fair notice. Under Citizens United’s interpretation, the
regulatory language “IRS Form 990, 990-EZ or 990-PF with schedules”
unambiguously conveys that Schedule B need only be attached to Form
990-PF—not Forms 990 or 990-EZ. (See Pls.’ Mem. 15.) Citizens United
argues that the Schedule B policy therefore represents an entirely new
construction of section 91.5. On this theory, because the Attorney General
did not undertake notice-and-comment rulemaking or otherwise publicize
his views before adopting this “new” interpretation, registered charities
lacked fair notice as to what the law requires.
Citizens United’s due process argument fails because there is no
evidence whatsoever that the Schedule B policy represents a new
interpretation of section 91.5. CHAR500 forms that were in effect from 2006
through 2013 expressly include Schedule B in the checklist of documents
that filers must attach to Form 990. (Goldman Decl. ¶ 12; Exs. A–E to Decl.
of Katherine B. Dirks dated Oct. 14, 2014.) In addition, the Instructions for
Form CHAR500, which were revised in 2010 and remain in effect today,
state that “[t]he only parts of the annual filing exempt from FOIL disclosure
to the public are: Schedule B (Schedule of Contributors) to the IRS Form 990
or 990-EZ.” (Ex. G to Goldman Decl. at 6.) These documents demonstrate
that the Attorney General has consistently interpreted section 91.5 to require
charities to file Schedule B to IRS Form 990 with their CHAR500 forms.
Consequently, even assuming that the regulation were susceptible to
different readings, Citizens United would have had fair notice of the
Attorney General’s interpretation by reading the CHAR500 and the
19
Instructions, which unambiguously and consistently mandate the
submission of Schedule B.8
Finally, Citizens United argues that even if the Attorney General has
always interpreted section 91.5 to require the submission of Schedule B, his
relatively recent interest in enforcing the regulation violates due process.
The Charities Bureau implicitly concedes that it did not undertake
systematic efforts to enforce the Schedule B requirement until 2012. (See
Goldman Decl. ¶ 18; Arg. Tr. 19.) But as the Court has already found on this
record, Citizens United had fair notice that section 91.5 required it to file
Schedule B with its CHAR500 forms; that the Attorney General had not
previously warned Citizens United of its noncompliance does not vitiate
that notice. Nor has Citizens United alleged that the Charities Bureau has
applied the Schedule B policy in a selective or discriminatory manner or that
its decision to escalate enforcement resulted from an unconstitutional
motive. Absent such forbidden factors, the government’s renewed interest
in enforcing an old regulation does not violate the Fourteenth Amendment.
See LaTrieste Rest. & Cabaret v. Vill. of Port Chester, 40 F.3d 587, 590 (2d Cir.
8
Nor has Citizens United shown a likelihood that the Attorney General’s
interpretation of section 91.5 is unreasonable under principles of state administrative
law. Although Citizens United places great weight on the canon of construction known
as the rule of the last antecedent, that “rule” is far from unbending. See Long v.
Adirondack Park Agency, 76 N.Y.2d 416, 420 (1990) (rejecting a construction based on the
rule of the last antecedent because it ran contrary to the purpose, intent, and overall
structure of the statute); Whitebox Convertible Arbitrage Partners, L.P. v. Fairfax Fin.
Holdings, Ltd., 73 A.D.3d 448, 452 (1st Dep’t 2010). At most, the text of section 91.5 is
subject to two reasonable interpretations, and Citizens United has not demonstrated a
likelihood that the Attorney General’s construction is impermissible. See Elcor Health
Servs., Inc. v. Novello, 100 N.Y.2d 273, 280 (2003) (“That the Department's interpretation
might not be the most natural reading of the regulation, or that the regulation could be
interpreted in another way, does not make the interpretation irrational.”); Entergy
Nuclear Indian Point 2, LLC v. N.Y. State Dep’t of State, --N.Y.S.3d--, 2015 WL 4112421, at
*1 (3d Dep’t July 9, 2015).
20
1994) (addressing equal protection claim). For all of these reasons, Citizens
United has not shown a likelihood of success on the merits of its due process
claim.
3.
State Administrative Procedure Act
Plaintiffs next contend that the Schedule B policy violates the State
Administrative Procedure Act. Building off their due process argument,
plaintiffs maintain that the policy constitutes an amendment to section 91.5
and therefore should have been enacted in accordance with SAPA’s formal
rulemaking procedures.
As the Court has already found based on the record of this motion, the
Attorney General has consistently interpreted section 91.5 to require the
submission of Schedule B. In other words, the Schedule B policy is neither a
new rule nor an amendment to a prior rule, but rather a long-held
interpretation of an existing rule. New York courts have held that SAPA’s
notice-and-comment rulemaking requirements do not apply to agencies’
interpretations of their regulations. See Elcor Health Servs., 100 N.Y.2d at 279;
Bloomfield v. Cannavo, 123 A.D.3d 603, 606 (1st Dep’t 2014). Plaintiffs
therefore have not demonstrated a likelihood of success on the merits of
their SAPA claim.
4.
Preemption
Finally, plaintiffs contend that federal law preempts the Schedule B
policy. In particular, they assert that the policy frustrates the purposes and
objectives that Congress had in mind when it ensured the confidentiality of
Schedule B and established a specific process by which state officials may
request it from the IRS. Section 6104(c) of the Internal Revenue Code
provides:
Upon written request by an appropriate State officer, the Secretary
may make available for inspection or disclosure returns and return
information of any organization described in section 501(c) (other
21
than organizations described in paragraph (1) or (3) thereof) for the
purpose of, and only to the extent necessary in, the administration
of State laws regulating the solicitation or administration of the
charitable funds or charitable assets of such organizations.
26 U.S.C. § 6104(c). In addition, the Internal Revenue Code provides for civil
and criminal penalties in the event of the unauthorized disclosure of an
organization’s Schedule B. See 26 U.S.C. §§ 6103(a), 7213(a). Citizens United
argues that the Attorney General is utilizing the Schedule B policy to
circumvent the federal statutory process by which state officials may obtain
charities’ major donor information.
Under the doctrine of conflict preemption, a state law is preempted
when it “stands as an obstacle to the accomplishment and execution of the
full purposes and objectives of Congress.” Arizona v. United States, 132 S.Ct.
2492, 2501 (2012) (internal quotation marks and citation omitted). However,
“[i]n preemption analysis, courts should assume that ‘the historic police
powers of the States’ are not superseded ‘unless that was the clear and
manifest purpose of Congress.’” Id. (quoting Rice v. Santa Fe Elevator Corp.,
331 U.S. 218, 230 (1947)). Because the oversight of charitable organizations
for the protection of the public falls within the traditional police powers of
the state, see Viguerie Co., 94 A.D.2d at 673, the Court must apply a “strong
presumption against preemption.” Steel Inst. of N.Y. v. City of N.Y., 716 F.3d
31, 36 (2d Cir. 2013).
Citizens United has not demonstrated on this record a likelihood that
Congress intended to preclude states from obtaining Schedules B directly
from charitable organizations. In Center for Competitive Politics, the Ninth
Circuit rejected essentially the same argument that Citizens United makes
here. See 784 F.3d at 1318–19. That court held that section 6104 of the Internal
Revenue Code “may support an argument that Congress sought to regulate
the disclosures that the IRS may make, but [it does] not broadly prohibit
other government entities from seeking that information directly from the
organization.” Id. at 1319. The court concluded that it could not infer “that
22
Congress intended to bar state attorneys general from requesting the
information contained in Form 990 Schedule B” directly from charities they
are responsible for supervising. Id.
Citizens United relies on the same Internal Revenue Code provisions
that were at issue in Center for Competitive Politics, and this Court agrees with
the Ninth Circuit that there is no evidence that Congress intended to
prohibit states from obtaining Schedules B directly from charitable
organizations. Consequently, Citizens United has not demonstrated that it
is likely to succeed on the merits of its preemption claim.
C. Irreparable Harm
In order to secure a preliminary injunction, plaintiffs must show that
they are “likely to suffer irreparable harm in the absence of preliminary
relief.” N.Y. Progress & Prot. PAC, 733 F.3d at 486 (quoting Winter, 555 U.S.
at 20). Because plaintiffs have not shown a likelihood that the Schedule B
policy injures their First Amendment rights, conflicts with federal law, or
violates due process or SAPA, they are not likely to suffer irreparable harm
if the Court declines to preliminarily enjoin the Attorney General from
enforcing the policy. See Ctr. for Competitive Politics, 784 F.3d at 1319–20.
Even if plaintiffs had demonstrated a likelihood of success on the merits
of their claims, the Court would still find that they are not likely to suffer
irreparable harm in the absence of preliminary relief. Plaintiffs contend that
they are entitled to a presumption of irreparable harm because “[t]he loss of
First Amendment freedoms, for even minimal periods of time,
unquestionably constitutes irreparable injury.” Elrod v. Burns, 427 U.S. 347,
373 (1976). This presumption, however, only applies when the challenged
restriction “directly limits speech.” Bronx Household of Faith v. Bd. of Educ. of
the City of N.Y., 331 F.3d 342, 349 (2d Cir. 2003). The Schedule B policy
functions as a disclosure requirement, not a direct limitation on speech. See
Citizens United, 558 U.S. at 366; N.Y. Progress & Prot. PAC, 733 F.3d at 486–
87. Where, as here, “a plaintiff alleges injury from a rule or regulation that
23
may only potentially affect speech,” it must “articulate a ‘specific present
objective harm or a threat of specific future harm.’” Bronx Household of Faith,
733 F.3d at 350 (quoting Laird v. Tatum, 408 U.S. 1, 14 (1972)); see also Charette
v. Town of Oyster Bay, 159 F.3d 749, 755 (2d Cir. 1998).
Plaintiffs have not shown that the Schedule B policy poses a “specific
present objective harm or a threat of specific future harm.” Bronx Household
of Faith, 733 F.3d at 350 (internal quotation marks and citation omitted).
Plaintiffs allege two types of injury: first, that the policy curtails their ability
to speak because it deters potential donors from making financial
contributions; and second, that the Attorney General may suspend or cancel
plaintiffs’ charitable registrations if they refuse to submit Schedule B. (See
Pls.’ Mem. 20–21.) As discussed with respect to plaintiffs’ likelihood of
success on the merits of their First Amendment claim, plaintiffs’ allegations
of the Schedule B policy’s chill on donations are highly speculative and
entitled to very little weight. See supra n.6.
Although the Attorney General’s power to suspend plaintiffs’
charitable registrations could in theory create a threat of specific future
harm, Citizens United has not shown that this outcome is anything more
than hypothetical. The Executive Law states that “[t]he attorney general
shall cancel the registration of any organization which fails to comply” with
the statute’s annual reporting requirements. N.Y. Exec. Law § 172-b(5).
Cancellation of an organization’s registration requires notice and the
opportunity for a hearing. See id. §§ 172-b(5), 177(3). The record here reflects
that the Charities Bureau has never canceled a charity’s registration for its
failure to file Schedule B. (Arg. Tr. 15.) When the Court asked defense
counsel at oral argument whether the Attorney General planned to cancel
or suspend plaintiffs’ registrations, she stated that “we obviously have the
full array of enforcement options available to us, but no specific
determination has been made.” (Id. 14–15.) Because the Court cannot find a
specific future threat that the Attorney General will prohibit plaintiffs from
soliciting in New York as a result of their refusal to disclose their major
24
donor information, plaintiffs’ attempt to “articulate a specific present
objective harm or a threat of specific future harm,” Bronx Household of Faith,
733 F.3d at 350 (internal quotation marks omitted), falls decidedly short.9
D. Balance of Equities and Public Interest
Finally, Citizens United has not demonstrated that the balance of
equities tips in its favor or that a preliminary injunction serves the public
interest. On this record, the only actual, non-speculative burden that the
Schedule B policy imposes on plaintiffs’ speech and association rights
stems from its interference with their donors’ subjective desire to remain
completely anonymous. As the Court has already found, that burden is
negligible. On the other end of the scale, prohibiting the Attorney
General from obtaining Schedules B from organizations such as plaintiffs
would materially impede his oversight of charities by precluding his
access to information that exposes potential violations of the law.
Moreover, the public has a strong interest in the enforcement of laws that
protect it from unscrupulous charities, at least when such enforcement is
not likely to lead to a First Amendment violation. See Ctr. for Competitive
Politics v. Harris, No. 2:14-cv-00636, 2014 WL 2002244, at *7 (E.D. Cal. May
14, 2014). The Court concludes that the balance of equities weighs
9
The Attorney General urges the Court to consider plaintiffs’ delay in pursuing
this action as part of its irreparable harm analysis. (Def.’s Opp’n 23–24.) Although the
Attorney General sent plaintiffs a deficiency notice in April 2013 instructing them to
submit their Schedules B (Goldman Decl. ¶ 21), plaintiffs did not file the complaint in
this case until more than a year later, on May 22, 2014. Plaintiffs moved for a
preliminary injunction almost one month after that, but did not serve the Attorney
General with the summons and complaint until the Court ordered them to do so on
July 2. (Dkt. Nos. 7, 9–10.) At oral argument, plaintiffs’ counsel offered nary a
justification for plaintiffs’ sluggishness in challenging a law they claim is causing
irreparable harm. (See Arg. Tr. 47–49.) Nonetheless, the Court does not factor plaintiffs’
delay into its irreparable harm analysis.
25
heavily in favor of the Attorney General and that the public interest is
served by his continued enforcement of the Schedule B policy.
III. CONCLUSION
Based on the evidence that the parties have presented to the Court at
this stage in the litigation, the Court holds that plaintiffs are not entitled to
a preliminary injunction prohibiting the Attorney General from obtaining
their Schedules B.
Most importantly, plaintiffs have not demonstrated a likelihood of
success on the merits of any of their claims. Plaintiffs’ First Amendment
unconstitutional burden claim is not likely to succeed because, on this
record, the Attorney General has shown that the Schedule B policy
substantially relates to the important governmental interests of enforcing
charitable solicitation laws and overseeing charitable organizations for the
protection of the public. These interests justify the minimal burdens that the
Schedule B policy places on charities’ speech and association rights.
Moreover, because the Attorney General does not possess unbridled
discretion to impose conditions on the ability of charities to speak, plaintiffs
are not likely to succeed on their First Amendment prior restraint claim.
Nor are plaintiffs likely to prevail on the remainder of their claims.
Their due process and SAPA claims lack merit because the evidence in the
record shows that plaintiffs had prior notice of the Attorney General’s
interpretation of section 91.5, which was promulgated in accordance with
SAPA’s notice-and-comment procedures. And because there is insufficient
evidence that Congress intended to prevent state attorneys general from
obtaining Schedule B directly from charities, plaintiffs are not likely to win
their preemption challenge.
Finally, plaintiffs have not shown that they will suffer irreparable harm
in the absence of preliminary relief, that the balance of equities tips in their
favor, or that a preliminary injunction serves the public interest. Because
Citizens United and Citizens United Foundation have not made a “clear
26
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