Elon’s Demands For Media Matters’ Donor Details Hits A Surprising Hurdle: Fifth Circuit Says ‘Not So Fast’

Elon Musk’s SLAPP suit against Media Matters has hit a roadblock, as the Fifth Circuit Court of Appeals—not exactly known for its progressive rulings—has granted a stay on Judge Reed O’Connor’s order compelling the nonprofit to reveal its donor information.

These days, the Fifth Circuit is where good law goes to die, but apparently even they have some limits. We’ve been following the story of Elon Musk’s SLAPP suit against Media Matters over the advocacy group’s article detailing (accurately) how it found ads from big companies next to neo-Nazi content on the platform.

Judge Reed O’Connor (owner of a bunch of Tesla stock, which he doesn’t think conflicts him out of this case) has been consistently siding with Musk despite the absurdity of the case. The case should have been thrown out for any number of reasons, starting with jurisdiction and venue questions. The lawsuit was brought by a (then) Nevada company headquartered in California, against a DC-based group and a Maryland-based writer. Note the lack of Texas.

The case is so obviously a bogus attack on Media Matters’ free speech and an attempt to punish the company for that speech. Also, in a related matter, another federal judge has already called out Musk’s attack on Media Matters as obviously trying to suppress critical speech (free speech absolutist, my ass).

However, as Judge O’Connor seems willing to bend over backwards to help out Musk, that has included saying that Media Matters has to turn over its donor rolls and related documents as part of the discovery process. The judge (falsely) claimed that Media Matters waived any claim of privilege in those documents by failing to provide a privilege log.

Media Matters asked Judge O’Connor to stay the order while it could appeal, pointing out how damaging it is to the First Amendment to have a non-profit be forced to hand over all its donor info. Judge O’Connor, once again siding with Musk, denied the motion but said that Media Matters wouldn’t have to comply until the Fifth Circuit responded to the organization’s request for an emergency stay.

Over the weekend, the Fifth Circuit granted the stay, meaning that it doesn’t yet need to hand over the donor info. It’s a short per curiam ruling that is not entirely supportive of Media Matters but shows that, unlike Judge O’Connor, the panel of judges recognized there are larger issues beyond “who do we like, Elon Musk or Media Matters?”

In particular, they realized that the Supreme Court had already rejected a law in California that required non-profits to reveal their largest donors. In that case, it was about Democratic government officials trying to force conservative non-profits to reveal donors. O’Connor doesn’t seem to care about how his own rulings might be used against non-profits he supports. He seems to only care that he’s supporting Elon Musk’s censorial campaign.

But the Fifth Circuit, at least, is willing to take a broader view of things. However, it admits that Media Matters’ refusal to even search for or create a privilege log of the materials was kind of stupid for the organization to do. But, also forcing non-profits to reveal donors could have serious First Amendment impacts. Weighing those two things against each other means that Media Matters can’t yet be compelled to give up the info, because of that case regarding California’s law.

Media Matters primarily claims that the order violates its donors’ First Amendment rights. It contends that, under Bonta, the district court could not order disclosure unless it satisfied “exacting scrutiny” because “compelled disclosure of donor identity imposes a widespread burden on donors’ associational rights under the First Amendment.”

In Bonta, the Supreme Court held unconstitutional a California regulation requiring charities to “disclose to the state . . . the identities of their major donors.” 594 U.S. at 600–01. “[C]ompelled disclosure of affiliation,” the Court explained, “may constitute as effective a restraint on freedom of association as other forms of governmental action.” Id. at 606 (quoting NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 462 (1958)) (cleaned up). The Court thus applied “exacting scrutiny” to California’s regulation. Id. at 611. The regulation failed exacting scrutiny because (1) there was no “substantial relation between the disclosure [regulation] and a sufficiently important government interest,” and (2) California had not “narrowly tailored” the regulation to its claimed interest. Id. at 611, 612.

“[E]xacting scrutiny is triggered by state action which may curtail the freedom to associate.” Bonta, 594 U.S. at 616 (emphasis added) (cleaned up). Conversely, the discovery order here compels a private party to disclose information to another private party.

But, the court says Media Matters didn’t do itself any favors by simply refusing to even look for the documents or creating a log:

In the intervening four months, however, Media Matters refused to search for these documents or to log its claims to privilege over them. It says that it had several more months to comply under the district court’s updated discovery timeline. But that’s not how it explained its refusal; instead, it told X Corp. that it was “not separately searching for donor-related documents” under Requests 17 and 18 and that X Corp. would find out about those documents only if they fell within other discovery requests. It similarly maintains here that those requests “substantially overlap” with other requests.

The district court granted X Corp.’s second motion to compel. It reasonably concluded that Media Matters never intended to log responsive documents. It thus found that by defying the order, Media Matters had waived any applicable First Amendment privilege. In addition, it found that Media Matters had abandoned its First Amendment privilege by not properly raising it in its updated discovery responses.

It is puzzling why Media Matters defied the district court. As that court explained, Media Matters “could have complied with the Order by, at a minimum, independently searching for the documents and creating a privilege log.” In other words, it didn’t yet have to turn over the purportedly privileged documents. Does Media Matters think that the First Amendment excuses it from explaining why withheld discovery is privileged?…

“A trial judge’s control of discovery is granted great deference.” HC Gun, 201 F.3d at 549. If litigants refuse to comply with the trial court’s reasonable discovery orders, they do so at their own risk. Even when we reversed a discovery order mid-litigation in Whole Woman’s Health, the adversely affected party had diligently searched for and turned over a substantial number of responsive documents….

But, weighing those two things against each other, the court feels that forcing Media Matters to hand over such info at this time might do undue damage to the First Amendment. It also notes that (1) Elon Musk has promised to go after Media Matters’ funders and, (2) the demands for information on donors appears to be way too broad:

We doubt that X Corp. needs the identity of Media Matters’s every donor, big or small, to advance its theories. Nor does it need the full residential addresses for any of those stated purposes. Conversely, Media Matters and its donors would bear a heavy burden if Media Matters had to release this information. It could enable others to harass or intimidate Media Matters or its donors. Indeed, X Corp.’s owner, Elon Musk, has said that X Corp. would “pursue not just [Media Matters] but anyone funding that organization. I want to be clear about that anyone funding that organization, will be, we will pursue them.”…

[…]

The other requestsfor production are not as broad but still encompass irrelevant information. Request 18 asks for communications “reflecting . . . attempts to solicit donations or financial support, including . . . discussions with donors” or potential donors. Request 21 asks for “sources of funding for research, investigation, reporting, publication, or any other work related to X, the Platform, Elon Musk, or Linda Yaccarino.” Request 35 asks for communications with donors or potential donors regarding “this Matter, Elon Musk, Linda Yaccarino, X, Twitter, or the Platform, including misinformation, brand safety, or ad pairing on the Platform.” There is no apparent reason why these documents need to identify all donors or potential donors, but we agree with the district court that the communications could otherwise be relevant to X Corp.’s theories. Indeed, Media Matters seems to agree that Requests 21 and 35 are appropriate.

Because X Corp.’s discovery requests are disproportional to the needs of the case, Media Matters is likely to succeed on the merits of its appeal.

Of course, they also appear to suggest ways that O’Connor can still compel some discovery by issuing a protective order on the information:

The district court might have alleviated some of these burdens by issuing the protective order to which the parties had stipulated. It declined to do so, reasoning that parties could always “agree to any confidentiality or discovery-related contract” without using judicial resources. Unlike a private agreement, however, court orders are backed by courts’ coercive power. True, the district court required X Corp. to “ask the Court before using an information beyond the Attorney’s Eyes Only designation.” But that was far from a blanket ban on sharing confidential information. We conclude that Media Matters was reasonably concerned, not because we doubt the “character of [X Corp.’s] lawyers” or the judgment of the district court, but because of the sensitive nature of the requested data.

Still, this is a small but important win for Media Matters. Even the Fifth Circuit thinks that O’Connor is going a bit overboard in his direct support of Elon over the basics of the First Amendment.