Judge dismisses Citizens United challenge to New York donor rules

By Jonathan Stempel

NEW YORK (Reuters) – A federal judge on Monday dismissed a lawsuit in which Citizens United sought to block New York Attorney General Eric Schneiderman from enforcing rules requiring the conservative group to disclose more information about its donors.

U.S. District Judge Sidney Stein in Manhattan said the attorney general did not violate Citizens United’s First Amendment rights by requiring registered charitable organizations to disclose names, addresses and contributions of big donors before soliciting funds in the state.

Citizens United is perhaps best known as the plaintiff in the landmark 2010 U.S. Supreme Court case that allowed unlimited independent spending by corporations and labor unions in election campaigns.

The nonprofit group, which advocates for limited government, free enterprise and strong families, had argued that its donors would “reasonably fear public backlash, financial harm, and worse” should their support be disclosed.

But the judge found no evidence that this would occur, and that the policy advanced New York’s “unquestionably important” interest that charitable groups not engage in crime or fraud.

He also said Citizens United did not show that the policy substantially burdened the rights of charities to free speech and association, or that Schneiderman exceeded his authority, or that federal law pre-empted him from acting.

“The complaint states not a single plausible claim upon which relief can be granted,” Stein wrote.

Michael Boos, Citizens United’s general counsel, in a statement said the group is “quite disappointed” and is reviewing its options, including a possible appeal.

Stein had in July 2015 refused Citizens United’s request for a preliminary injunction against enforcing New York’s policy, which reflected Schneiderman’s interpretation of a 2006 regulation on donor disclosures.

The judge on Monday said Citizens United may bring its First Amendment claim again, but not its claims regarding federal pre-emption and Schneiderman’s authority.

“Today’s decision is a victory for common sense oversight of New York’s vast nonprofit sector,” Schneiderman said in a statement. “New Yorkers deserve to know their donations are protected against fraud and abuse.”

The case is Citizens United et al v. Schneiderman, U.S. District Court, Southern District of New York, No. 14-03703.

(Reporting by Jonathan Stempel in New York; Editing by Dan Grebler)