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Citizens United v. FEC – American Jurisprudence at its best or partisanship?

The Supreme Court’s decision in the Citizens United v. Federal Election Commission (FEC) case is being hailed as one of the most troubling and controversial decisions by the nation’s highest court.  Some say that the Court’s decision advances the agenda of conservative Justices who went out of their way to invalidate precedent resulting in a win for big money corporations and the Republican candidates they frequently endorse.  Let’s face it – this was a 5-4 decision which, for the most part, appears to be split along party lines.

The 5 Justices who ruled to invalidate 441b’s ban on the use of corporate funds for political speech (Justices Roberts, Scalia, Alito, Thomas and Kennedy) are all known for their conservative views, and were nominated to the Supreme Court by Republican Presidents.  On the other hand, the 4 Justices who dissented are known for their liberal views.  Three of them (Justices Breyer, Bader-Ginsburg, Sotomayor) were nominated by Democratic Presidents.  But, Justice John Paul Stevens was nominated by Republican President, Gerald Ford.

In a nutshell, here are the highlights of the decision.  Prior to the 2008 primary elections, Citizens United (“Citizens”), a nonprofit corporation, produced a politically conservative ninety-minute documentary entitled Hillary: The Movie (“Hillary“). This documentary, which is critical of Clinton, covers her record while in the Senate and the White House and during her bid to become the Democratic presidential nominee. The movie was released in theaters and on DVD.  But Citizens United decided to increase distribution by making it available through cable television video-on-demand services.

To promote the film, Citizens United produced two 10-second and one 30-second ad for Hillary.  The ads included a short and pejorative statement about Senator Clinton, followed by the name of the movie and the movie’s website address.

Citizens United became concerned that its ads and movie would violate Section 441b.  So in December, 2007, Citizens United went to court to seek declaratory judgment asking the Court to declare the law unconstitutional.  Citizens also asked for injunctions to prevent the FEC from enforcing Section 441b.  The District Court denied Citizens’ motions, and Citizens appealed.

Federal law (2 U.S.C. Section 441b) makes it a felony for all corporations (including nonprofit advocacy corporations) and unions to use their general treasury funds to make independent expenditures for speech that is an electioneering communication or for speech which expressly advocate the election or defeat of federal candidates. A corporation may establish a separate segregated fund (known as a political action committee or PAC) for these purposes.  However, PACs are burdensome.  They are expensive to administer and subject to extensive regulations.

An electioneering communication is defined as “any broadcast, cable or satellite communication” that “refers to a clearly identified candidate for federal office and is made within 30 days of a primary election and 60 days of a general election.

On January 21, 2010, the Supreme Court reached its decision.  The Court threw out decades of precedent and held that Section 441b’s prohibition on corporate and union independent expenditures is a ban on speech which violates the Fist Amendment.  Hence, 441b’s restrictions on such expenditures are invalid and cannot be applied to Hillary.  The Court reasoned that the First Amendment has its fullest most urgent application to speech uttered during a campaign for political office.  Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution.  For these reasons political speech must prevail against laws that would suppress it, whether by design or inadvertence.

The Court first recognized that First Amendment protections extend to corporations (whether for-profit or not for profit).  Political speech does not lose First Amendment protection simply because its source is a corporation.  The Court rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not natural persons.  The Court found that political speech is indispensible to decision making in a democracy, and this is no less true because the speech comes from a corporation rather than an individual.

It is noted, however, that although the Court invalidated the expenditures ban, it upheld the limits on direct contributions to candidates.

In defense of the restrictions on corporate-speech found in section 441b, the Government (FEC) raised several arguments.  The government first raised the antidistortion rationale which is the theory that big corporations will distort the public discussion of campaign issues because of their wealth which is accumulated from the public although the public may or may not support the corporation’s political ideas.

The Court rejected this argument by pointing out that if the antidistortion rationale is applied, it would produce the dangerous and unacceptable consequence that Congress could ban political speech of media corporations because most media organizations are corporations.  (Media corporations are exempt from section 441b’s ban on corporate expenditures).  As a result of the exemption the law would allow a news organization the right to speak, but deny that right to other organizations. Therefore a conglomerate that owns both a media business and an unrelated business would be allowed to speak to advance its own overall business interest, but at the same time, other organizations with an identical business interest, but no media outlet in its ownership structure, would be forbidden to speak or inform the public about the same issue.  This differential treatment cannot be squared with the First Amendment, the Court noted.  Therefore, exempting media corporations from 441b’s is an admission of the invalidity of the antidistortion rationale.

Next, the Government raised the argument that corporate political speech can be banned in order to prevent corruption or its appearance.  The Court noted that the hallmark of corruption is the financial quid pro quo:  dollars for political favors.  The Court found, however, that the anti-corruption interest was sufficiently important to allow limits on contributions to candidates, but not on expenditures for speech.  The Court explained that limiting independent expenditures, as section 441b does, will have a chilling effect which extends well beyond the Government’s interest in preventing quid pro quo corruption.  Therefore, the anticorruption interest is not sufficient to displace speech during the critical pre-election period.

The Government finally contended that corporate independent expenditures can be limited because of the Government’s interest in protecting dissenting shareholders from being compelled to fund corporate political speech.  The Court rejected this argument by applying it to media corporations.  The Court reasoned that if a shareholder of a corporation that owns a newspaper disagreed with the political views of the newspaper, under the Government’s view, the potential disagreement could give the Government the authority to restrict the media corporation’s political speech.  The Court concluded that the First Amendment does not allow that power.  The Court also noted that there is little evidence of abuse that cannot be corrected by shareholders through the procedures found in their by-laws.  The Court summarized by saying that the law is under-inclusive because if Congress had been seeking to protect dissenting shareholders, it would have banned corporate speech in any media at any time (not only within 30 or 60 days before an election.)

The Court’s reasoning falls short on a number of points.  It appears that the Court knew what it wanted to achieve, then it crafted the decision to fit that goal.  However, what else can you expect from the Roberts Court?  The decision is not surprising at all.

President Obama has vowed to have his administration work with Congress to develop a forceful bipartisan response to this decision.  In the mean time, Americans need to develop a healthy suspicion of the origins of the numerous ads which will no doubt flood the media prior to the midterm elections this year.  We all need to inquire about the source of all ads and political speech.  Read the disclaimers, and request disclosure forms for all ads to ascertain who the message is from and who is funding it.

If you enjoyed the read or would like to hear more of my perspectives on legal issues and current events, please go to my homepage, subscribe to my blog, and never have to check to see when a new story comes out.  If not, please visit my blog at least twice weekly.

Related posts:

Citizens United v. FEC – The Good, the Bad and the Ugly


4 Responses

  1. Wendy!! You are a great writer!! I know it’s time consuming but please write whenever you can!


  2. Thanks, Long. Please subscribe and send the link to my blog to your friends.

  3. let’s just hope that comments supporting the cu v fec decision (wherever they may appear) aren’t plants, when 80% of americans polled oppose the clear and present danger of the scotus 1/21/10 decision.

    but what’s next: if corporations have now been given human ”unalienable” rights which are protected by the constitution (which btw does NOT mention corporations ~ for the simple reason that it’s about We the People) then of course they can vote? (do they need to? they already count the votes…hmmmm…)

    corporations are not We the People. period end of discussion.

    thank you for your highlights and analysis, and the opportunity to comment here.

  4. Just read your blog and it is generally well stated. However; in the end you write “The Court’s reasoning falls short on a number of points.” yet you fail to enumerate these points. From what I read in your blog the court reasoned properly and was correct in their points in regards to the unfair limits placed by 441b especially in regards to the exceptions allowed to media companies and PAC’s. Where exactly is their reasoning faulty?

    Also as far as “Justices who went out of their way to invalidate precedent resulting in a win for big money corporations and the Republican candidates they frequently endorse.” it should be noted that the majority of corporate political donations, especially those made by large corporations went not the Republican Party but to the Democrat Party. It is only the much smaller corporations which give a preponderance of their donations to the Republican Party. BP would be great example to look at right now. ENRON, Madoff’s company and Bear Sterns would be others.

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