Discovery in Donor Disclosure Case Splits Appeals Panel (1)

A Sixth Circuit panel during oral arguments Wednesday was divided on the need for further discovery as it grappled with the appropriate standard of review to use when analyzing a challenge to a statute requiring nonprofits to disclose major donors to the IRS.

If the challenge is successful, it could usher in a wave of lawsuits challenging other types of compelled disclosures, according to legal observers.

Judges Chad A. Readler and Richard A. Griffin took turns pressing attorneys representing the IRS and Ohio-based nonprofit Buckeye Institute.

Readler was skeptical of the government’s argument that a looser standard of review should ...