In July 2021, the Supreme Court ruled in a 6–3 decision that California's requirement burdened the donors' First Amendment rights, was not narrowly tailored, and was constitutionally invalid.

[1] Two of the non-profits affected, Americans for Prosperity and the Thomas More Law Center, filed suit against attorney general Kamala Harris in 2014 in the Central District of California.

The two non-profits argued that the California regulation on disclosure violated their freedom of association under the First Amendment and would scare away donors who otherwise wished to remain anonymous.

The three-judge panel of the Ninth Circuit ruled that there was a compelling state interest to have the donor lists from the Schedule B form to police charitable fraud.

Both petitioners argued that strict scrutiny—the Supreme Court's most demanding standard of review—should apply in evaluating whether their freedom of speech and association rights could be infringed by the needs of the state.

The petitions further argued that California's request for Schedule B was far broader than necessary for its purported need to fight fraud, which would also result in the state's rule failing the strict scrutiny test.

The State argued that the request for all Schedule B's was necessarily broad so that it could review records when complaints are filed against charities, and generally to police fraud.

Those in support of California, including Democratic Senators, argued that upholding the Ninth Circuit decision was necessary to prevent the increased use of political "dark money" donated through non-profits.

Sotomayor wrote the majority decision would open up more anonymous money into political donations, and that their evaluation of California's regulation "trades precision for blunt force" and creates a "significant risk that it will topple disclosure regimes that should be constitutional.