Citizens United loses New York ruling over donors

By Jonathan Stempel
New York State attorney general Eric Schneiderman speaks at a rally to celebrate the passage of the minimum wage for fast-food workers by the New York State Fast Food Wage Board in New York July 22, 2015. REUTERS/Brendan McDermid

By Jonathan Stempel

NEW YORK (Reuters) - A federal judge on Monday rejected Citizens United's effort to block New York Attorney General Eric Schneiderman from demanding that the conservative group disclose more information about its major donors.

U.S. District Judge Sidney Stein in Manhattan refused to impose a preliminary injunction to stop Schneiderman from requiring registered charitable organizations such as Citizens United from disclosing names, addresses and total contributions of big donors before soliciting funds in the state.

Citizens United is a nonprofit that advocates for limited government, free enterprise and strong families. It was also 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 group argued that Schneiderman's interpretation of a 2006 state regulation on donor disclosures violated its First Amendment free speech and association rights, invaded the privacy of donors who wished to remain anonymous, and risked a backlash against donors who supported controversial causes.

Stein, however, said Schneiderman's policy was substantially related to the important government interests of enforcing charitable solicitation laws, and protecting residents from illegitimate charities.

He also said Citizens United did not make the required "clear showing" that it would ultimately prevail, and fell "decidedly short" in attempting to show it would suffer irreparable harm absent an injunction.

"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 donor information," Stein wrote.

Donald McGahn, a partner at Jones Day representing Citizens United, said the group plans to pursue the rest of its lawsuit against Schneiderman, and show that the attorney general is "acting unconstitutionally and beyond his authority."

Schneiderman, in a statement, said "today's victory over Citizens United reaffirms some of our most basic responsibilities in overseeing the nonprofit sector," including to ensure that charitable funds are properly used.

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 Richard Chang and Tom Brown)