The Supreme Court, Crypto, and the First Amendment (Collecting Cases): Americans For Prosperity Foundation v. Bonta

The development and extension of our rights under the Constitution have been defined largely by analogy. Whether a particular judge is a self-proclaimed “textualist” or not a form of at least light-textualism has made its way into nearly all modern Constitutional decision-making. A court, tasked with deciding if a particular restriction is Constitutional surveys past cases and determines whether there are similar principles or characteristics in previous cases that can be applied to whatever particular issue is before the court. In other words, when a case interpreting the Constitution is decided by the Supreme or an Appellate Court it impacts not only the litigants before it but the principles upon which the Constitution was birthed. It is the reason the Supreme Court has come to recognize that your right to associate through social media is as powerful and protected as it would be in a town square and why we can be confident that nebulous concepts like freedom of speech or association can be applied in a world in which the methods for communicating and associating change rapidly.

On July 1, 2021, the Supreme Court decided Americans For Prosperity Foundation v. Bonta, a case in which the Court held that a California rule requiring charitable organizations to disclose to the state the identities of their donors is unconstitutionally burdensome. The decision, which was supported by the Court’s conservative majority, is significant in a number of ways. For one, it demonstrates that the liberal wing of the Court no longer prioritizes broad associational freedoms that once formed the backbone of a pre-Citizens United liberal judicial philosophy. Indeed, it was a liberal majority that first recognized in NAACP v. Alabama ex rel. Patterson, 357 U.S. 449 (1958) that “compelled disclosure of affiliation with groups engaged in advocacy may constitute as effective a restraint on freedom of association as [other] forms of governmental action.” The practical impact of the Court’s campaign finance decisions has become the focus of its detractors at the expense of the appreciation of expressive individualistic activity that formed the foundation of the Citizens United v. F.E.C., 558 U.S. 310 (2010) decision.

In the more than a decade since the Court published Citizens United, the case has had a realigning effect on the judiciary along partisan lines to such an extent that the First Amendment has become refashioned as a tool of the philosophical right. In the last decade, Court watchers have witnessed the conservative majority adopt a greater emphasis on the establishment clause of the First Amendment and corporate speech rights to a greater degree than had been a part of the Court’s constitutional framework during its glorified First Amendment heyday in which the Warren Court extended personal expressive and newsgathering rights.

The legacy of Citizens United and its popularized, albeit anachronistic, “Money is Speech” holding is a recognition, for better or worse practical effect on electioneering activity, that at its core money is a conduit for expressive activities. Notably, however, the Court’s view that restrictions on the use of money for political purposes can constitute a violation of the First Amendment is not a creation of the 2010 case. Indeed, earlier recognition of the expressive uses of money was announced by the Court in its 1976 bipartisan per curiam decision in Buckley v. Valeo, 424 U.S. 1 (1976).

The Buckley Court understood that limitations of election spending constitute a restriction on speech because restricting spending necessarily means a reduction in the quantity of expression (commercials and flyers cost money). The Citizens United decision and its broad recognition that money is a tool for speech activity, as well as the chipping away of the commercial speech doctrine in its aftermath, is the natural consequence of recognizing that money is, at its core, a tool for expression analogous to a bull horn or printing press. With today’s decision recognizing that the right to speak is often chilled through mandatory disclosure requirements on charities, the Court further reinforces an expressive interpretation of money and its use as a political associational tool.

Since 1976, the Court has consistently upheld the idea that because one speaks through the deployment of capital one has at least some protected right to spend money to promote expression and that the government cannot indiscriminately take that right away. But since 1976, the uses and potential of “money” have changed. Since 2009, money is no longer tethered to a printing press or a federal reserve. More interestingly, however, money is no longer just a tool for contributing to an association, as was the case in Bonta, but the association itself. In other words, following the implementation of the Bitcoin network, which is a collective worldwide association of individuals coming together to support a philosophical and political network that advocates against centralized monetary policy, and the advent of decentralized autonomous organizations that require specific currencies to act collectively, we need to reevaluate how the principles of anonymity in association can and should be applied to those participating in these and other decentralized political experiments.

Of course, at some point, a decision has to be made by the Court as to how anonymity and the expressive and associational protections it affords must be balanced against the Federal government’s predominately surveillance-focused policy that all transactions must be monitored. As the distinction between money as a method of commercial and expressive activity continues to breakdown as the technology of money becomes more utile and a conduit for more complex expressive and associational activities the instinct to surveil all transactions, and indeed, all monetary activity, becomes a greater threat to our individual liberties. Luckily, and most likely without the Supreme Court even knowing it, today’s seemingly unrelated-to-crypto decision provides an analogy that may be helpful in the fight against the government’s creep toward perpetual financial surveillance.

Justin Wales is a Partner at K&L Gates law firm.

For more information on the First Amendment implications of Bitcoin and decentralized networks see “Bitcoin is Speech: Notes Toward Developing the Conceptual Contours of Its Protection Under the First Amendment”.