CA’s Presidential Tax Return Law Deemed Unenforceable, Pending Appeal
By: William K. Bliss
A California federal district court ordered an injunction earlier this month on a new California law that requires presidential candidates to publicly disclose their tax returns.
Shortly after the Presidential Tax Transparency and Accountability Act (SB 27) was signed into law, the Trump campaign, the Republican National Committee, and three individual voters filed suit in federal court. They alleged violations of the First and Fourteenth Amendments, the Qualifications Clause, and that the law is preempted by the Ethics in Government Act (EIGA).
U.S. District Judge Morrison C. England Jr. of the Eastern District of California wrote in his 24-page opinion that the plaintiffs are likely to succeed on the merits of their case because the law likely violates the Constitution and the laws of the United States. Judge England wrote, “At base, the Act seeks to punish a class of candidates who elect not to comply with disclosing their tax returns by handicapping their access to the electoral process. This is plainly impermissible.”
Jay Sekulow, an attorney for President Trump, praised the ruling. He argued that the law adds an additional qualification to run for President in California. “This is the ongoing pattern and practice of trying to basically shred the Constitution,” Sekulow said in an interview with Sean Hannity.
Two years ago, Gov. Jerry Brown vetoed a nearly identical bill over fears that it was unconstitutional and that it would set a “slippery slope” precedent for States that may wish to regulate the presidential election in other ways.
“[W]hat would be next? Five years of health records? A certified birth certificate? High school report cards? I hesitate to start down a road that might lead to an ever escalating set of differing state requirements for presidential candidates,” he wrote in his veto of SB 149.
When Gov. Gavin Newsom signed SB 27 into law this July, he wrote the state has a strong interest in ensuring that its voters make informed and educated choices at the voting booth. Voter education is cited in the opinion as one of California’s interests in passing this law.
The court, however, views the state’s interest in voter education as “somewhat specious” because it does not extend to all candidates in all elections. The law only applies to party-affiliated candidates in the primaries, rather than the general election.
The law would require all candidates for the presidency or governorship submit their tax returns to the Secretary of State, who then publishes a redacted version on the official Secretary of State’s website until the official canvass for the presidential primary election is completed.
Bradley Joondeph, Professor of constitutional law at Santa Clara University School of Law, says that the Supreme Court has been clear that there are limits of the government’s ability to dictate rules on how a party selects its own nominee.
In 2000, he explained, both the Republican and Democrat parties in California brought suit against a law requiring them to hold open primaries. The U.S. Supreme Court declared the law unconstitutional because it interfered with their First Amendment right to choose who their members and nominees.
“More neutral rules like getting signatures and filing fees would be fine, but something like this is a bit different because there is some ideological bent to this requirement. Had this been brought up fifteen years ago, it might be thought of in different terms. We can sort the world into facts and law or opinion, but ultimately different facts have different meanings when they arise in different political contexts.” Joondeph said.
Although the law only regulates the primaries, Joondeph explains that regulation of the general election would be similarly impermissible because it would be a state imposing requirements on a federal office and the federal government.
“What we’re worried about from a structural perspective is a state, without the blessing of the federal government, doing things to dictate what the national rule is. Within a federal system, as long as the federal government is acting within its sphere, it should dictate what national policy is, and states should dictate policy within their borders,” Joondeph said.
Assemblymember Marc Berman (D-Palo Alto) says he and a number of constitutional law scholars think it is constitutional. Mr. Berman disavows the notion that the law is a partisan measure. “The law applies to both Democrats and Republicans. Historically, candidates from both parties released this information. There is nothing partisan about it at all,” said Berman.
The returns have been a major focus of political controversy for the President since his refusal to disclose them in the 2016 campaign. Two separate subpoenas for the President’s tax returns have survived challenge in federal courts—one from House Democrats on the Oversight and Reform Committee and another from Manhattan prosecutors to Mazars USA LLP.
Assembly member Berman expressed solidarity with those who are disappointed with the news of the injunction. “I, too, am disappointed, and it’s a shame that all candidates running for President don’t voluntarily release their tax returns. As we have seen numerous times with President Trump, there is a real fear that any President could abuse the office for personal financial gain. Californians have a right to know what a presidential candidate’s financial interests are, and how that might influence the way they govern,” Berman said.
California Secretary of State Alex Padilla said in a news conference that he is going to appeal the order. The law will remain unenforceable pending appeal.
(Editor's Note: This article was originally published in the October 2019 [Volume 50, Issue 1] version of The Advocate.)