A Federal Court Will Soon Decide the “Soda Tax” Donor Privacy Case

by Matt Miller
June 12, 2018

A little more than a year ago, the Rio Grande Foundation, a 501(c)(3) nonprofit based in New Mexico, was ordered to turn its donor list over to the government after the Foundation ran an educational campaign about a proposed soda tax on the ballot in the city of Santa Fe. The Foundation’s speech—which mainly consisted of a website and YouTube video—triggered a new Santa Fe law that requires any group spending more than $250 to communicate with voters to disclose the identities and occupations of the group’s supporters to the city. The soda tax was defeated at the ballot box, but the Foundation’s saga has continued.

The forced disclosure of nonprofit donors is unconstitutional under the First Amendment to the U.S. Constitution and the free speech clause of the New Mexico Constitution. Every American has the right to support causes they believe in. And they should be able to do so without their names and, in some cases, occupations and employers ending up on a government list that allows their ideological opponents to harass and intimidate them. That is why the Foundation, which is represented by Goldwater Institute attorneys, filed a motion yesterday asking a federal judge to declare that the law violates the constitutional rights of the Foundation and its donors. The city filed a cross-motion asking the court to uphold the law.

As the Foundation argued in its motion:

This case is about a government obsessed with knowing the origins of garden variety speech about municipal ballot measures, and the strength (or lack thereof) of the government’s interest in such information. In an attempt to learn the source of a website and YouTube video—which featured cartoon characters talking about why a soda tax is a bad idea—the City attorney sent no fewer than four letters to the Foundation, demanded that it explain the source of the website and video under oath, and eventually conducted a mini-trial before the Board, after which the Foundation was declared guilty and issued a public reprimand. All of this happened because of a YouTube video—and associated website—about a proposed soda tax. This lawsuit seeks to prevent that kind of ordeal from happening to the Foundation ever again.

The Foundation’s motion can be found here, and you can read more about the case here. There will be two more rounds of briefing over the summer, followed by oral argument and a decision on the merits soon thereafter.

Matt Miller is a senior attorney at the Goldwater Institute.