Santa Fe, Soda, and Speech

May 6, 2020
By Matt Miller

This week, on behalf of New Mexico’s Rio Grande Foundation, the Goldwater Institute filed the opening Tenth Circuit appellate brief, in its ongoing dispute with the city of Santa Fe. The case has important ramifications for the privacy of people who donate to 501(c)(3)s and other nonprofits. At issue is the government’s ability to force groups to disclose the names, addresses, and employers of their donors whenever those groups support or oppose ballot measures in an election.

The case began in 2017, when the Foundation undertook a campaign to educate voters about a proposed soda tax that would be appearing on the May ballot. The “No Way Santa Fe” campaign involved simple, traditional political speech. It pointed out things like the effect of the tax on small businesses, or the fact that it would nearly double the price of a 12-pack of soda. This is the kind of speech in which nonprofits regularly engage when something appears on the ballot that may interest their supporters.

The Foundation’s “No Way Santa Fe” Facebook posts, website, and video drew the attention of the Santa Fe City Attorney. In April 2017, the Foundation received five different letters from the City Attorney which, combined with a citizen complaint, demanded that the Foundation detail its spending on the soda tax and disclose its donors to the city. These demands culminated in a late-April hearing before the Santa Fe Ethics & Campaign Review Board, where the citizen complainant presented evidence that the Foundation had spent more than the City’s$250 reporting threshold to oppose the soda tax. The presentation included an affidavit and testimony from a local videographer about the estimated cost of the “No Way Santa Fe” video. After meeting in executive session, the Review Board came back and issued a formal reprimand against the Foundation, together with a renewed demand that the Foundation disclose its spending and its donors to the government.

The extraordinary aspect of the Santa Fe ordinance—and the subject of the lawsuit—is its application to charities and nonprofits that are communicating about simple ballot initiatives, like the soda tax. In Santa Fe, whenever a charity spends more than $250 to support or oppose a municipal ballot initiative, it must file a report with the city government. That report must include the amount of each contribution, plus the name, address, and occupation of the person making the contribution. Charitable organizations are exempt only if they are conducting internal communications to their members. Any public communications—from Facebook to newspaper ads to billboards—are subject to the aggregate expenditure cap.

Unfortunately, cities and states are implementing laws designed to make it harder for nonprofits to participate in policy debates, robbing the public of these important voices. These laws, passed under the guise of “campaign finance” reform, have nothing to do with public officials or individual candidates. Instead, they target groups that are merely speaking about whether a particular ballot measure is a good or bad idea.

After a lengthy delay, the trial court ruled against the Foundation. In doing so, it committed two fundamental errors. First, the opinion contradicts two prior rulings from the Tenth Circuit in cases similar to this one: Sampson v. Buescher (2010) and Williams v. Coalition for Secular Government (2016). In these cases, the government claims that there is an “informational interest” in knowing who is giving money to groups that support or oppose ballot measures. However, in the ballot-measure context, that interest is weak. Indeed, the Tenth Circuit previously held that, at least for modest donations and modest spending, the interest is “minimal, if not non-existent.” The trial court’s ruling ignored this and found the government’s interest to be constitutionally significant.

A second fundamental error in the opinion is that it demands that a group, or its donors, must first be harassed or intimidated before they can challenge an ordinance like Santa Fe’s. But this ignores a fundamental truth about challenges like this one. These laws violate the First Amendment because they force nonprofits to choose between two unconstitutional options: either remain silent, and protect the identities of your donors; or speak, and subject those groups to potential harassment and intimidation. In the age of cyber-stalking, doxing, Twitter trolls, “swatting,” and other well-known forms of ideological harassment, it is perfectly reasonable to be concerned about one’s name, address, occupation, and employer being put on a government list.

Furthermore, the Foundation introduced testimony from similar groups about harassment those groups have already endured—everything ranging from vile, violent email threats, to vandalism, to being spat upon when they showed up to speak at an event. However, despite this uncontested testimony, the trial court ruled that the Foundation was first required to be harassed before it could reasonably be concerned that it and its supporters could be harassed as a result of the Santa Fe law.

The Tenth Circuit will now consider whether trial court was correct. The Foundation’s opening brief was filed this week. After two more rounds of briefing, the appellate court is likely to hold oral argument this summer and decide the case soon thereafter. This ruling will be important for protecting the constitutional right of every American to support causes they believe in, without fear that their name will be put on a government list. And it will support the constitutional right of nonprofit organizations to speak about things that are important to their supporters, while also protecting those supporters from harassment and intimidation.

Matt Miller is a Senior Attorney at the Goldwater Institute.