On January 21, the Supreme Court held 5-4 that the First Amendment prohibits federal prohibitions on corporate independent expenditures for speech that is an "electioneering communication" or for speech that expressly advocates the election or defeat of a candidate. Citizens United v. Federal Election Commission, No. 08-205. In so doing, it overruled Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990) (holding 6-3 that political speech may be banned based on the speaker's corporate identity), along with that part of McConnell v. Federal Election Commission, 540 U.S. 93 (2003), that relied on Austin.
Citizens United, a nonprofit corporation, released a 90-minute documentary in January 2008 in theaters and on DVD. Hillary: The Movie was, in the Court's words, "in essence a feature-length negative advertisement that urges voters to vote against Senator Clinton for President." Citizens United wanted to increase distribution by making it available to cable subscribers through video-on-demand and to promote the film by advertising on broadcast and cable television.
Under 2 U.S.C. §441b, corporations and unions cannot use general treasury funds to make direct contributions to candidates or independent expenditures that expressly advocate the election or defeat of a candidate, through any form of media, in connection with certain federal elections and cannot make "electioneering communications" within 30 days of a primary election or 60 days of a general election. The statute defines "electioneering communications" as a communication that "refers to a clearly identified candidate for Federal office" and is made by "any broadcast, cable, or satellite communication" or, in the case of presidential candidates, any communication that is "publicly distributed" in a way that it could be received by 50,000 or more persons in a state where a primary election is being held within 30 days. Corporations and unions can, however, establish separate segregated funds through donations to political action committees. Other provisions of the statute exempt media corporations.
Under 2 U.S.C. §441d(d)(2), televised electioneering communications funded by anyone other than a candidate must contain a disclaimer that "_________ is responsible for the content of this advertising." Under 2 U.S.C. §434(f), any person who spends more than $10,000 within a calendar year must file a statement with the Federal Elections Commission disclosing the identity of the person making the expenditure, the amount of the expenditure, the election to which the communication was directed, and the names of certain contributors.
Citizens United sought declaratory and injunctive relief against the FEC, arguing that the expenditure, disclaimer and disclosure requirements were unconstitutional as applied to Hillary: The Movie and the related advertisements. The district court denied the injunction and granted the FEC's motion for summary judgment. The Supreme Court noted probable jurisdiction, heard argument, asked for supplemental briefing on whether Austin should be overruled as to the federal statute's facial validity, heard reargument (with Justice Sotomayor replacing Justice Souter), and issued its decision in a 5-4 ruling on the core issue that prompted a strongly worded, contentious dissent.
In an opinion by Justice Kennedy (who 20 years earlier had dissented from Austin's upholding of a Michigan statute that directly restricted independent corporate expenditures supporting or opposing any candidate for state office), the Court held that Austin had significantly departed from First Amendment principles and that therefore stare decisis did not compel its continued acceptance. Confronted "with conflicting lines of precedent: a pre-Austin line that forbids restrictions on political speech based on the speaker's corporate identity and a post-Austin line that permits them," the Court overruled Austin.
The core sentence of Justice Kennedy's opinion for the Court was that: "The government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether." Every member of the Court except Justice Thomas joined the first part of that ruling; Justice Thomas supported the second part, while Justices Stevens, Ginsburg, Breyer, and Sotomayor dissented.
The Court rejected numerous narrower grounds for protecting the particular documentary from the statute's reach. It declined "to draw, and then redraw, constitutional lines based on the particular media or technology used to disseminate political speech from a particular speaker." It refused to carve out exceptions for nonprofit corporate political speech funded overwhelmingly by individuals, and chided the Government for "suggesting" without endorsing that approach: "The Government, like any party, can make arguments in the alternative; but it ought to say if there is merit to an alternative proposal instead of merely suggesting it." The Court also held that declining to rule on the facial constitutionality of the statute "would prolong the substantial, nation-wide chilling effects caused by §441b's prohibition on corporate expenditures," and invoked the principle that "a statute which chills speech can and must be invalidated when its facial invalidity has been demonstrated."
The Court held that the statute's ban on corporate speech violated the First Amendment and was not saved by the "burdensome alternatives" of permitting speech through PACs. "[P]olitical speech must prevail against laws that would suppress it, whether by design or inadvertence," the Court explained, and "[s]peech restrictions based on the identity of the speaker are all too often simply a means to control content." The Government cannot "deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of attention." First Amendment protections extend to corporations, both in general and in the context of political speech.
Rejecting Austin's rationale of a government "antidistortion interest" in preventing "the corrosive and distorting effects" of wealthy corporations engaging in political speech, the Court held that the rationale "would produce the dangerous, and unacceptable, consequence that Congress could ban political speech of media corporations." The current statutory exemption for media corporations presented its own problems, because the institutional press does not have "any constitutional privilege beyond that of other speakers," because "the line between the media and others who wish to comment on political and social issues becomes far more blurred" with the advent of the Internet and the decline of print and broadcast media, and because it differentiates between conglomerates that own both a media business and an unrelated business would have greater rights than conglomerates with an identical business interest but no media outlet in its ownership structure. The Court held: "Factions should be checked by permitting them all to speak, and by entrusting the people to judge what is true and what is false. … The First Amendment confirms the freedom to think for ourselves."
The Court continued to accept that government interests in preventing corruption and the appearance of corruption was sufficiently important to allow limits on direct contributions, but held that the anticorruption interest was not sufficient to displace the speech made possible by independent expenditures that is not coordinated with a candidate. Congress would have to find other remedies if elected officials succumbed to improper influences from independent expenditures or put expediency before principle.
The statutory disclaimer and disclosure requirements did not on their face violate the First Amendment, the Court held in Part IV of its decision (from which only Justice Thomas dissented). Those requirements "may burden the ability to speak" but impose no ceiling on campaign-related activities and do not prevent anyone from speaking. The Government has a valid interest in providing the electorate with information about the sources of election-related spending. Although that interest might not be sufficient if there were a reasonable probability that a group's members would face threats, harassment, or reprisals if their names were disclosed, Citizens United had not presented any evidence of harassment or retaliation. "The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."
The Court's opinion was written by Justice Kennedy and joined by Chief Justice Roberts and Justices Scalia and Alito in full and by Justice Thomas as to all but Part IV (the part upholding disclaimer and disclosure restrictions).
Justice Stevens, joined by Justices Ginsburg, Breyer, and Sotomayor joined as to Part IV and dissented from the rest of the decision. In sharp language, the dissent asserted: that the "Court's ruling threatens to undermine the integrity of elected institutions across the Nation"; that the "Court operates with a sledge hammer rather than a scalpel when it strikes down one of Congress' most significant efforts to regulate the role that corporations and unions play in electoral politics" and does so "on the basis of pure speculation"; that the Court could have resolved the case on narrower grounds; that the decision "makes a hash out of" the statute's "delicate and interconnected regulatory scheme"; that existing law left open many alternative avenues for corporations' political speech; that the First Amendment permits some legislative distinctions based on content or identity of the speaker; and that legislatures are entitled to decide that the special characteristics of the corporate structure require particularly careful regulation in an electoral context. Any assumption that the identity of a speaker has no relevance to the Government's ability to regulate political speech "would have accorded the propaganda broadcasts to our troops by ‘Tokyo Rose' during World War II the same protection as speech by Allied commanders." It asserted that when the First Amendment was enacted, corporations labored under a "cloud of disfavor" and the Framers "took it as a given that corporations could be comprehensively regulated in the service of the public welfare." Although corporations should be able to speak freely on issues of general public interest, elections are a different matter, because a "referendum cannot owe a political debt to a corporation, seek to curry favor with a corporation, or fear the corporation's retaliation." It criticized the Court's "myopic focus on quid pro quo scenarios" in the decision's anti-corruption analysis and argued that even nominally independent corporate expenditures in "issue ads" had corrupted the political process in a very direct sense. "In a democratic society, the longstanding consensus on the need to limit corporate campaign spending should outweigh the wooden application of judge-made rules. … While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics."
Chief Justice Roberts, joined by Justice Alito, filed a concurring opinion, expanding upon why Austin should not be followed as stare decisis. Justice Scalia, joined by Justice Alito and in part by Justice Thomas, filed a concurring opinion regarding the Court's decision's conformity with the original meaning of the First Amendment. Justice Thomas filed a dissenting opinion, advocating his long-expressed view that restrictions on anonymous speech are unconstitutional on their face, due to likely intimidation and retaliation by persons opposed to that speech.