Free Association Lawsuit Settlement Filed This Morning

Salt Lake City, UT (July 13, 2016) — A lawsuit filed last November by the Utah Taxpayers Association and Libertas Institute, represented by attorneys from the Center for Competitive Politics, has now reached a mutually agreeable settlement.

The lawsuit alleged that House Bill 43, passed by the Utah Legislature in 2013, was unconstitutional under the First and Fourteenth Amendments to the U.S. Constitution by seeking to compel non-profit organizations, for whom political activity is not a primary purpose, to disclose detailed information about their private donors.

In the settlement, the defendants recognize and agree that the law is “unconstitutional” as applied to our organizations, since political advocacy is not our major purpose. The state also agrees that House Bill 43 will not be enforced against organizations such as ours who engage “in constitutionally protected political advocacy and political issues advocacy.”

“House Bill 43, while well meaning, was reactionary legislation that resulted in our organization being unable to engage in the public square on an important ballot proposition,” said Connor Boyack, president of Libertas Institute. “This chilling effect was palpable and threatened to undermine our ability to educate Utahns in the future. We are pleased with the outcome that not only protects the free association and speech of our organizations as plaintiffs, but organizations throughout Utah as well.”

The settlement makes clear the following:

• The state will not enforce HB43 against non-profit organizations who engage “in constitutionally protected political advocacy and political issues advocacy,” recognizing that doing so would be “unconstitutional unless those organizations are political action committees or political issues committees for which such advocacy is their major purpose.” In other words, 501(c)3 nonprofits that engage in political advocacy on a limited, infrequent basis (as in our case) are exempt from prosecution.
• Exempted organizations in Utah—not just our organizations as plaintiffs—will not be fined or criminally charged for failing to comply with the provisions of HB43.
• By the end of 2016, the state’s publications, websites, and other information about disclosure requirements will be changed to not indicate in any way that exempted organizations are required to disclose the information required by HB43.
• Past, current, or future violations of HB43 by our organizations will not be prosecuted.
• The consent decree (settlement) is an enforceable contract that can be used by us or another organization in the future as may be necessary, should the state violate its agreement not to enforce the law.

Given the state’s decision to no longer enforce key provisions of the law, we expect the Utah Legislature to amend the law in the 2017 General Session to align statute with the terms of today’s settlement.