U.S. Supreme Court to hear from Ann Arbor law center challenging nonprofit disclosures

A case pitting Ann Arbor’s Thomas More Law Center against California’s attorney general over whether nonprofits should be forced to disclose their donors will be heard by the U.S. Supreme Court in April. 

The lawsuit filed by the Thomas More Law Center challenges a disclosure rule in California that requires all nonprofits soliciting donors in the state to report their contributors to the state, similar to what's required of nonprofits at the federal level. 

The law center's case was consolidated for April arguments with a similar suit filed by Americans for Prosperity. 

“Because (the Thomas More Law Center) solicits donors in California, all of their major donors no matter where they’re located throughout the country have to be disclosed,” said John Bursch, a former Michigan solicitor general representing the Thomas More Law Center on behalf of Alliance Defending Freedom.

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California's disclosure requirement violates not only the constitutional rights to freedom of association but also free speech rights, he said. Additionally, while donor information is supposed to be kept secret by the Attorney Gneral’s office, the office “leaks” the data “like a sieve,” Bursch said in a Monday filing.

Democratic Attorney General Xavier Becerra's office argued the disclosures are necessary to properly regulate charities. 

"California’s interests in policing fraud and self-dealing, moreover, outweigh any minimal burden on petitioners’ associational interests," Becerra's office wrote in a December filing with the Supreme Court. 

The case could have ramifications for both liberal and conservative groups seeking to shield their donors, Bursch said Monday.

The conservative Thomas More Law Center was founded by Domino’s Pizza founder Tom Monaghan and former Oakland County Prosecutor Richard Thompson in 1999. The group, which relies mainly on donations, represents clients pro bono.

The law center largely deals with divisive social issues that might open donors to harassment, including religious freedom, free speech, opposition to same-sex marriage and anti-abortion causes, Bursch said. 

The California disclosures also open donors to requests from different organizations looking for similar monetary support, Bursch said. Clients of the law center have been threatened for their beliefs in the past, he said. 

“Every American should be free to support causes they believe in without fear of intimidation or harassment,” Bursch said.

California is joined by Hawaii and New York in requiring nonprofits to disclose their donors, but California has been more aggressive about enforcement, Bursch said. 

California’s lists of donor names have never been used as a “triggering document” that would lead to an investigation and have been relevant in less than 1% of cases, the filing said. The information, if needed, also could be obtained through an investigatory subpoena. 

The law center has refused to disclose its donors to California since 2012, when Vice President Kamala Harris was still California’s attorney general. The law center argued that Harris focused the office’s “regulatory resources” on nonprofits like the law center because the law center “took positions adverse to her.” 

Harris threatened the law center with revocation of its charitable license and personal fines if the law center refused to comply, the Supreme Court filing said. 

California federal district court granted the Thomas More Law Center a permanent injunction after a 4-day bench trial in 2016. But the Ninth Circuit Court reversed in 2018, pushing the law center to take its case to the U.S. Supreme Court. 

In the brief submitted to the Supreme Court, Bursch argued the case was similar to NAACP vs. Alabama, in which the NAACP fought an order compelling the group to disclose its members in the 1950s at a time when civil rights activists were being targeted for their work. The U.S. Supreme Court eventually ruled the order to disclose its members would violate the group’s freedom of association. 

eleblanc@detroitnews.com