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The Americans for Prosperity Foundation had argued that the state's rules requiring filing of the donor list violate the First Amendment by discouraging individuals from giving and by exposing them to threats and harassment. | Brendan Smialowski/Getty Images Koch group loses donor secrecy fight at appeals court

A nonprofit group founded by conservative political megadonors Charles and David Koch must disclose its largest givers to law enforcement authorities in California, a federal appeals court ruled Tuesday.

The Americans for Prosperity Foundation had argued that the state's rules requiring filing of the donor list violate the First Amendment by discouraging individuals from giving and by exposing them to threats and harassment.

In 2016, the group persuaded a federal judge in Los Angeles to issue a permanent injunction against the requirement. U.S. District Court Judge Manuel Real said the state rarely used the information, but often disclosed it accidentally with charities' public tax filings.

However, a three-judge panel of the 9th Circuit Court of Appeals unanimously reversed that ruling Tuesday, holding that the state had a legitimate need for the data and that the Koch-founded group had not shown a significant burden on donors.

"To the extent the district court found actual chilling or a reasonable probability of harassment from confidential disclosure to the Attorney General, those findings are clearly erroneous," Judge Raymond Fisher wrote In a 41-page opinion, joined by Judges Richard Paez and Jacqueline Nguyen.

"The mere possibility that some contributors may choose to withhold their support does not establish a substantial burden on First Amendment rights," Fisher added.

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The foundation's head, Tim Phillips, testified in the case that the group believes it is being targeted for political reasons by California officials. Sen. Kamala Harris, a Democrat, was the attorney general at the time the litigation began. California Attorney General Xavier Becerra, a Democrat and former House member, is now overseeing the case.

Fisher called it "undeniably" true that that some people connected to the Americans for Prosperity Foundation had been subjected to threats or harassment, but it was unclear whether that resulted from their ties to the foundation or from other activities. He also said that the court did not need to consider the dangers associated with public disclosure of the donor list, because the state has implemented a regulation that exempts the information from public release.

"The evidence presented by the plaintiffs here does not show that disclosure to the Attorney General will 'actually and meaningfully deter contributors,'" the opinion said, "or that disclosure would entail 'the likelihood of a substantial restraint upon the exercise by [their contributors] of their right to freedom of association.'"

The appeals court said it had "serious concern" about lapses that led to disclosure of the donor lists in the past, but said steps the state has taken to prevent those in the future were reasonable. Fisher also noted that the IRS already collects the same information and he described as "slight" the chances of the state accidentally releasing the group's data in the future.

"Nothing is perfectly secure on the internet in 2018, and the Attorney General’s data are no exception, but this factor alone does not establish a significant risk of public disclosure," he wrote.

Another conservative group, the Michigan-based Thomas More Law Center, pursued a parallel case against the California AG's office over the donor filing requirement. That challenge was also rejected by the 9th Circuit Tuesday.

Americans for Prosperity Foundation spokesman Bill Riggs said the group plans to pursue the case further, but he did not indicate if that will involve a request for a larger, 11-judge 9th Circuit panel to rehear the case or for the Supreme Court to take it up.

“We are disappointed by the Ninth Circuit’s latest decision and believe it imperils people’s First Amendment right to freedom of speech and of association," Riggs said in a statement. "Consistent with the protected, sensitive nature of our donors’ identities, the threat and chill they face from disclosure that was established during the trial of this case."

Becerra welcomed the court's ruling.

"By law, California requires the collection of major donor information. The reason is simple: our mission is to protect Californians who donate their hard-earned dollars to charity," Becerra said in a statement. "Charities operating in California must not engage in fraud or unfair business practices.”

The Thomas More Law Center did not immediately respond to a request for comment on the decision.

Fisher and Paez were appointed by President Bill Clinton, Nguyen by President Barack Obama and Real by President Lyndon Johnson.