Case Summary and Outcome

U.S. Supreme Court held that the First Amendment prohibits the government from creating restrictions on independent political expenditures by corporations.  The ruling reversed prior law that had imposed financial restrictions on the amount of money that a corporation could spend in advocating for, or against a candidate in an election.

Facts

The 2002 Bipartisan Campaign Reform Act (also known as the McCain-Feingold Act or “BCRA”), prohibited corporations and unions from using its general treasury funds for “electioneering communications” within 30 days before a primary election, or 60 days before a general election. Under the BCRA, “electioneering communication” was defined as a broadcast, cable, or satellite communication that mentioned a candidate within 60 days of a general election or 30 days of a primary, and prohibited such expenditures by corporations and unions.

A conservative lobbying group, Citizens United (a nonprofit corporation) wanted to air a film about Hilary Clinton, and advertise the film on television. Citizens United filed a lawsuit with the U.S. District Court for the District of Columbia because it wanted to make the film available within 30 days of the 2008 primary elections. However, it was concerned that the film, and any related advertisements, would be impermissible due to the BCRA’s prohibitions on corporate-funded expenditures. The Plaintiff-Appellants requested a declaratory judgment and injunctive relief against the Federal Elections Committee (FEC), claiming that the prohibitions were unconstitutional as applied to the airing of the Hillary Clinton film. The U.S. District Court for the District of Columbia denied the Plaintiff-Appellant’s motion for a preliminary injunction, and granted summary judgement for the FEC.

The U.S. Supreme Court affirmed the district court’s judgment regarding the disclaimers in advertisements, but reversed the decision regarding the whether the corporate expenditures were constitutional. The case was remanded to the district court.

Decision Overview

The 5-4 decision was approximately 180 pages, 90 of which consisted of a dissent. In affirming the BCRA’s requirement for corporations to disclose their spending in advertisements, the Court supported its holding in opining that, “[t]he 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 also found that the disclaimers aid voters by ensuring that voters are fully aware and dissolves confusion about who is speaking the political message.

In analyzing the contents of the film that the Plaintiff-Appellants sought to air, the Court relied on the functional-equivalent test, stating that, “a court should find that [a communication] is the functional equivalent of express advocacy only if [it] is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate.” Applying this test to the case at hand, the Court found that the Hillary Clinton film was equivalent to express advocacy.

In reversing the District Court’s judgment that the BCRA’s restrictions on corporate independent expenditures were unconstitutional, the Supreme Court found that there was no way to resolve the case on a narrower ground without chilling the First Amendment. The Majority recognized the importance of preventing the government from censoring speech based on the speaker’s identity, regardless if the speaker is an individual or a corporation. The Court emphasized that if the government censors political speech, it must do so only if it can establish that the restriction “furthers a compelling interest and is narrowly tailored to achieve that interest.” In applying this strict scrutiny standard to corporate expenditures, the Court rejected the justification that independent expenditures result in political corruption or the appearance of corruption. The Court also stressed that political speech is “indispensable to decision-making in a democracy, and this is no less true because the speech comes from a corporation.” The Court found that the prohibition on corporate expenditures, was, in fact, a ban on protected speech. Such a ban would prohibit voters from freely obtaining information from diverse sources, and would interfere with the integrity of the political process, because, “[c]orporations and other associations, like individuals, contribute to the discussion, debate, and the dissemination of information and ideas that the First Amendment seeks to foster.”

The dissent is notable because of its vehement position that money does not equate to speech. The dissent also refused to accept the notion that corporations should be afforded rights under the First Amendment, and, rather, the right to free speech is a right that should only be retained by an individual. The dissent also expressed its concern about the large role that corporate interests can now have in elections as a result of the Majority Opinion.