Citizens United v. Federal Election Commission (FEC): Supreme Court Ruling Is a Major Victory for New Media First Amendment Rights
Digital media law update: In a victory for new media rights, the U.S. Supreme Court held today that the Government may not prohibit corporations from making independent expenditures on media in support of political causes. This opinion invalidated a federal statute, 2 U.S.C. §441b, that prohibited corporations -- except those involved in traditional broadcast media -- from making independent expenditures to publicly advocate the election or defeat of a Federal candidate 30 days before a primary or 60 days before a general election. Citizens United v. FEC, 558 U.S.____ (2010). This ruling is important for the multitudes of businesses (like my own) who make direct expenditures on political advocacy through blogs and other forms of interactive media.
The Court's decision arose out of a controversy over the film Hillary: The Movie, a film criticizing Sen. Hillary Clinton, that nonprofit organization Citizens United wished to broadcast during the 2008 election season. Citizens United was concerned that the film and ads that supported it would be covered by §441b's ban on corporate-funded expenditures, so it filed a suit for declaratory and injunctive relief against the Federal Election Commission (FEC). A District of Columbia District Court three-judge panel denied Citizens United's petition for a preliminary injunction, holding that §441b was facially constitutional under Supreme Court precedent.
The Supreme Court has now overruled that District Court ruling. The opinion was written by the "centrist" Justice Kennedy, with concurrences by Justices Roberts, Alito, Scalia, and Thomas.
Justice Kennedy's opinion characterized §441b's prohibition on independent corporate expenditures as a "ban on speech." He noted that laws that burden political speech are subject to strict scrutiny, which requires the Government to prove that the restriction "furthers a compelling interest and is narrowly tailored to that interest." Few restrictions on speech have ever satisfied this test.
According to Kennedy, "the First Amendment stands against attempts to disfavor certain subjects or viewpoints," Indeed, "[s]peech restrictions based on the identity of the speaker are all too often simply a means of content control." This means that the Government cannot impose restrictions on certain disfavored speakers. That includes corporations, because "First Amendment protections extend to corporations." Political speech does not lose First Amendment protection "simply because its source is a corporation."
Kennedy admitted that since the latter part of the 19th Century, state and federal laws have imposed a ban on direct corporate contributions to candidates. However, laws prohibiting corporate expenditures for independent corporate advocacy were not enacted until 1947. Corporate expenditures that are made to candidates are different from independent expenditures, because donations made directly to candidates raise the possibility of corruption -- as held in Buckley v. Valeo, 424 U.S. 1, 47-48 (1976). As such, until 1990, the Supreme Court upheld laws restricting corporate donations to candidates, but struck down laws restrictions on corporate independent expenditures. See, e.g., First Nat. Bank of Boston v. Belotti, 435 U.S. 765, 784 (1978).
This changed with the Supreme Court's decision in Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990) in which the Court held that speech may be banned based on the speaker's corporate identity. In the Austin decision, to which Kennedy dissented, the Court held that there was a compelling governmental interest in preventing the "corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas."
Justice Kennedy now argued that the Austin decision should be abandoned because it was contrary to the political structure set up by the Constitution and because of its damage to free press rights. Leveling electoral opportunities means that the Congress is imposing its own judgments on what candidate capabilities should contribute to the outcome of an election. But "the Constitution confers on voters, not Congress, the power to choose the Members of the House of Representatives." Citing Davis v. FEC, 554 U.S.___ (2008).
Moreover, accepting Austin's anti-distortion rationale "would produce the danger and unacceptable consequence that Congress could ban political speech of media corporations." While media corporations are current exempt from §441b, they also accumulate wealth with help of the corporate form. So there is no reason that the Government couldn't use as anti-distortion rationale to also squelch their speech as well -- a result that would certainly be at odds with all First Amendment precedent. Moreover, why give a special exemption for media corporations? Kennedy noted that "[w]ith the advent of the Internet and the decline of print and broadcast media . . . the line between the media and others who wish to comment on political issues becomes far more blurred."
Justice Kennedy argued that Austin interferes with the "open marketplace" of ideas protected by the First Amendment. "It permits the Government to ban political speech by millions of associations of citizens . . . most of [which] are small corporations without large amounts of wealth." Indeed, while the §441b is ostensibly designed to prevent the 'distorting effects of immense aggregations of wealth', "[i]t is not even aimed at amassed wealth," since the vast majority of corporations are quite small in size. As a result, "[t]censorship we now confront is vast in its reach," muffling the voices that best represent the most segments of the economy." While large corporations are able to afford other means to reach Government officials, such as employing lobbyists. The effect of §441b is that "smaller or nonprofit corporations cannot raise a voice to object when other corporations, including those with vast wealth, as cooperating with the Government."
Kennedy rejected the notion at §441b is needed to control bribery or undue influence on public officials. Because independent corporate expenditures are not pre-arranged or coordinated with individual candidates, this "undermines the value of the expenditure to the candidate." Independent expenditures also do not lead to quid pro quo corruption. He further rejected the argument that corporate independent expenditures should be limited to protect dissenting shareholders from being forced to fund political speech. After all, this argument would prevent even media corporations from engaging in political speech.
In a direct nod to those involved in Internet media (including me), Kennedy added:
"Rapid changes in technology -- and the creative dynamic inherent in the concept of free expression-- counsel against upholding a law that restricts political speech in certain media or by certain speakers. . . Today, 30-second television ads may be the best way to convey a political message. . . . Soon, however, it may be that Internet sources, such as blogs and social networking Web sites, will provide citizens with significant information about political candidates and issues. Yet, §441d would seem to ban a blog post if that blog were created with corporate funds. . . . The First Amendment does not permit Congress to make these categorical distinctions based on the corporate identity of the speaker and the content of the political speech."
The conclusion of Kennedy and the majority of the Court was that Austin was overruled and the provisions in § 441b on corporate independent expenditures were invalidated.
On the other hand, the Court did uphold provisions requiring televised electioneering communications to disclose the identity of the organization responsible for the ad. This could include requiring ads funded by persons other than the candidate to contain a disclaimer that "____ is responsible for the content of this advertising," and that the communication "is not authorized by any candidate or candidate's committee." This part of the Court's ruling is consistent with a long history of Supreme Court precedent and was joined by all members of the Court, except for Justice Thomas.
This ruling is great news for those involved in all forms of media, who no longer need to fear the restraining hand of Government when speaking their mind about those who would rule them.
David Johnson's practice focuses on complex litigation and science, technology and health law. David can be contacted at (415) 399-6032 or DJohnson@ebglaw.com.
