Third Circuit Halts Delaware Donor Transparency Law

• A Koch-backed lobbying firm, Americans for Prosperity, has asked the Third Circuit to halt a Delaware law requiring donor transparency.
• The groups challenged the law in April, arguing it violates the First Amendment and lacks a substantial relation to government interests.
• A preliminary injunction was denied by U.S. District Judge Jennifer L. Hall, but the groups appealed.
• The Supreme Court's 2021 ruling in Americans for Prosperity Foundation v. Bonta has implications for similar donor disclosure laws across the country.

However, if the law is allowed to stand, it would set an important precedent for transparency in elections.

A Koch-backed lobbying firm, Americans for Prosperity, has asked the Third Circuit to halt a Delaware law requiring donor transparency. The law, known as the Delaware Elections Disclosure Act, mandates that organizations disclose the names and addresses of donors who give more than $100. This move comes just weeks ahead of state elections in Delaware.

The groups challenged the law in April, arguing it violates the First Amendment. They claimed the law lacks a substantial relation to government interests such as informing voters and deterring corruption. The groups also argued that requiring donor disclosure would irreparably harm their ability to engage in advocacy communications.

A preliminary injunction was denied by U.S. District Judge Jennifer L. Hall, but the groups appealed. In oral arguments before the Third Circuit, the panel of judges appeared skeptical of the groups' claims, questioning whether they had waited too long to challenge the law and whether the harm they claimed was sufficient to warrant an injunction.

The Delaware Elections Disclosure Act is not the first donor disclosure law to be challenged in court. In 2021, the Supreme Court ruled in Americans for Prosperity Foundation v. Bonta that certain donor disclosure laws violate the First Amendment. The ruling has implications for similar laws across the country.

The Third Circuit's consideration of the groups' appeal is significant because it could set a precedent for other jurisdictions with similar donor disclosure laws. If the court were to grant an injunction, it would effectively block the law from being enforced until the case is resolved.

However, the panel of judges appeared hesitant to intervene, citing concerns about the timing and the lack of evidence presented by the groups.

The outcome of this case has significant implications for advocacy groups and their ability to engage in targeted advertising campaigns. If the court were to block the donor disclosure law, it could embolden other organizations to challenge similar laws in other jurisdictions.

However, if the law is allowed to stand, it would set an important precedent for transparency in elections. Donor disclosure laws are designed to inform voters about who is influencing their elected officials and to deter corruption.

The case highlights the ongoing tension between free speech rights and government interests in regulating campaign finance. The Third Circuit's decision will have far-reaching implications for the balance of power between these competing interests.

Lawyers representing advocacy groups should be aware of the potential for courts to block donor disclosure laws, which may impact their clients' ability to run targeted advertising campaigns in certain jurisdictions.

Source: Original reporting via Courthouse News