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Corporate Speech and Campaign Finance Reform: Making Sense of Citizens United v. Federal Election Commission

It's the most important First Amendment decision of the 21st century

It’s the most important First Amendment decision of the 21st century, so far. It powerfully reinforced fundamental free speech principles. Unfortunately, the court invoked the principles on behalf of business interests instead of the dissidents whose messages actually need First Amendment protection.

On January 21, the court handed down its 5-4 decision, throwing out, on its face, the federal campaign finance law, part of the McCain-Feingold package of reforms, that prohibited corporations and unions from using their funds on communications – mainly television advertising – that support or oppose a candidate for office. The case pitted the value of unrestricted political speech against the competing societal value of keeping corporate money from contaminating elections. The decision came down squarely on the free speech side or the corporate side, depending on how you look at it.

The decision outraged the liberal establishment, with alarmist calls for a constitutional amendment, a nearly hysterical editorial from The New York Times and blogs fearing that corporations have been unleashed to buy whatever candidates and legislation they like and lamenting that electoral power will be shifted from the promising new grassroots social networking innovators to reactionary corporate interests. People for the American Way said the court “staged a hostile takeover of American democracy on behalf of corporations.”

I, too, have long been disgusted with the influence of money on politics. On the other hand, I teach and believe in the First Amendment as one of the most distinctive and important values of our society. I view suspiciously any restriction on political speech. Any restriction should be rigorously tested, not given the benefit of the doubt.

Critics of the Citizens United decision focused on how the court made its decision and the court’s supposed reliance on two fictions: “money is speech,” and corporations are “persons” with free speech rights. They mostly ignored the decision’s contributions to First Amendment freedoms. The decision deserves a more nuanced reading.

The Hypocrisy of “Judicial Restraint”

Justice Anthony Kennedy’s opinion for the court brushed aside all procedural obstacles to the broadest possible decision. Citizens United, a conservative nonprofit corporation, produced and wanted to put on video on demand a 90-minute documentary, “Hillary: The Movie.” The film was an attack on then-Senator Clinton, intended to sabotage her in the 2008 presidential primaries. Citizens United sued the FEC, contending that the federal law did not apply to it, to video on demand or to the documentary. It formally stipulated in the district court that it did not challenge the law on its face.

The Supreme Court, however, refused to interpret the law narrowly, rejected any “as applied” approach, overruled two of the Court’s recent precedents and declared the federal law invalid on its face. The conservative majority abandoned all the principles of judicial restraint that Chief Justice John Roberts had earnestly espoused at his confirmation hearing in 2005. Justice John Paul Stevens, almost 90 years old, observed in his 90-page dissenting opinion that the majority had improperly “manufactured” a facial attack on campaign finance laws: “Essentially, five Justices were unhappy with the limited nature of the case before us, so they changed the case to give themselves an opportunity to change the law.”

First Amendment Significance

Putting aside the unseemly route it took to get there, the court’s decision on the merits is an eloquent statement of fundamental First Amendment principles. Justice Kennedy, who in my view has been the strongest member of the court on the First Amendment, used his opinion to reaffirm and expand several bedrock tenets of the freedom of speech:

  • Kennedy proclaimed that “Speech is an essential mechanism of democracy, for it is the means to hold officials accountable to the people.” Further, the First Amendment “has its fullest and most urgent application to speech uttered during a campaign for public office.” To attack or support a candidate is core political speech.
  • Kennedy almost said political speech can’t be restricted “as a categorical matter,” but backed off to say that at least any restriction is subject to “strict scrutiny,” which requires the government to prove that the restriction “furthers a compelling interest and is narrowly tailored to achieve that interest.” This is a tough standard and is virtually the kiss of death for whatever legislation is under scrutiny, as it was in Citizens United.
  • “More speech, not less, is the governing rule,” a proposition that harks back to Justice Louis Brandeis’s classic 1927 opinion in Whitney v. California. The idea is that if government is concerned about subversive, erroneous speech that may mislead the people, “the remedy to be applied is more speech, not enforced silence.”
  • Justice Kennedy’s emphasis throughout his opinion was on the importance of protecting political speech regardless of who may be the speaker. The reasoning was that in a democracy, we, the people, are entitled to hear all points of view and that government should not be allowed to disfavor speech based on who is speaking.
  • Justice Kennedy declared, “Prolix laws chill speech for the same reason that vague laws chill speech: People of common intelligence must necessarily guess at the law’s meaning and differ as to its application.” This is new. The court has long recognized that vague speech regulations, especially those that carry criminal sanctions, improperly chill speech. But “prolix” laws? The campaign finance law thrown out by the court was a mess; it was exceedingly complex and would-be speakers had to confront not only the less than crystalline language of the statute, but 568 pages of FEC regulations, 1278 pages of explanations and 1771 FEC advisory opinions. It is good for the First Amendment and for all of us that prolixity will be treated the same as vagueness.
  • In the same vein, the court said that, as a practical matter, a speaker who does not want to risk criminal or civil liability for campaign speech is effectively forced to seek an advisory opinion from the FEC. Justice Kennedy said having to “ask a government agency for prior permission to speak” is “the equivalent of prior restraint;” it gives the FEC “power analogous to licensing laws implemented in 16th- and 17th-century England, laws and governmental practices of the sort that the First Amendment was drawn to prohibit.” This is somewhat overstated, but it was nice to see the court reaffirm the free speech principle first recognized in the classic 1931 case of Near v. Minnesota that “prior restraints” – government censorship of speech before it is uttered – is unconstitutional.
  • Finally, for those who would expand First Amendment freedoms regardless of other values, it actually was good for the court to bulldoze its way through all the procedural obstacles to declaring the law invalid on its face and to be willing to overrule precedents that restricted speech. The court previously had said that invalidating a law passed by Congress on its face is “strong medicine” to be sparingly used, even in free speech cases. Citizens United will be a strong precedent for future challenges to various kinds of speech regulation.

What is distressing about Citizens United is that this impressive catalog of fundamental First Amendment principles was put to the service of corporate interests rather than to assist the lonely individuals who invoke the First Amendment to challenge the power structure. It is they – the dispossessed, eccentrics, minorities, dissidents – who need the First Amendment’s help, not society’s established institutions.

“Money Is Speech”

Obviously money is not speech, but the court did not in fact say that it is. What it did say, quoting its earlier decision in Buckley v. Valeo, is that a “restriction on the amount of money a person or group can spend on political communication during a campaign … necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration and the size of the audience reached.” This seems self-evident. To “speak” in an election campaign requires you to spend money to print pamphlets and mail them to voters; to design and print posters and distribute them to locations where they will be seen, including billboards; to advertise on radio and television; and so on. Banning or restricting spending on these communications unquestionably limits political speech. That does not necessarily mean that spending money must be treated as the exact equivalent of standing on a soapbox for all purposes. But saying that the court believes “money is speech” is more slogan than analysis.

Should Corporations Have Free Speech Rights?

Corporations are not people, don’t think, don’t have beliefs. Should they be able to claim the First Amendment freedom to speak in elections?

Justice Kennedy pointed out how broadly the law’s prohibitions swept. It applied not just to Fortune 500 giants with billions in assets, but to all 5.8 million for-profit corporations, most of which are relatively small businesses, many with a sole shareholder, and to labor unions large and small. Equally sobering, it applied to all nonprofit corporations, including advocacy organizations, making it a crime for any of them to run an ad supporting or opposing a candidate. As Kennedy put it, “the following acts would all be felonies”:

The Sierra Club runs an ad, within the crucial phase of 60 days before the general election, that exhorts the public to disapprove of a Congressman who favors logging in national forests; the National Rifle Association publishes a book urging the public to vote for the challenger because the incumbent U.S. Senator supports a handgun ban; and the American Civil Liberties Union creates a Web site telling the public to vote for a Presidential candidate in light of that candidate’s defense of free speech. These prohibitions are classic examples of censorship.

The prevailing theme of the court’s decision was “the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.” It is the speech that is protected, regardless of who the speaker is. But the court’s finding that corporate persons are constitutionally empowered to speak is not very firmly rooted in either history or political theory.

Did the framers of the Constitution intend to include corporations along with natural persons as having the right to free speech? This question of the “original understanding” resulted in a pissing match between Justice Antonin Scalia and Justice Stevens. They debated inconclusively whether the framers meant the First Amendment to endow corporations with freedom of speech.

Stevens asserted that, based on the historical evidence he could marshal, “it was the free speech of individual Americans [the framers] had in mind.” They distrusted corporations and they “took it as a given that corporations could be comprehensively regulated in the service of the public welfare.” He said these artificial beings with perpetual life and limited liability have “no consciences, no beliefs, no thoughts, no desires … [T]hey are not themselves members of ‘We the People’ by whom and for whom our Constitution was established.”

This provoked Justice Scalia to point out that the text of the First Amendment makes no distinction between types of speakers and that Stevens had failed to find “even an isolated statement from the founding era to the effect that corporations are not covered.” Scalia acknowledged that statesmen from the founding era distrusted corporations, but said that their resentment was directed at the state-granted monopoly privileges that corporations then enjoyed.

Stevens in turn responded that Scalia had failed to come up with founding era statements that the framers meant to include corporations under the First Amendment umbrella.

This is a standoff, with neither side able to point to contemporaneous statements or specific historical evidence demonstrating the framers’ actual intent. Apparently, we will never know what they had in mind, though it seems highly unlikely that they wanted the corporations they mistrusted (which were then specially chartered by state legislatures) to have the same speech rights as individuals.

We do know that according corporations constitutional rights like those of real persons crept into the Supreme Court’s jurisprudence as a historical fluke and without any real analysis. In an 1886 railroad case, Santa Clara County v. Southern Pacific, the court simply assumed that the railroad was a person protected by the Equal Protection Clause of the then-new 14th Amendment, and refused to hear argument on the question. By 1898, the court was able casually to say, again without any analysis, that corporate “personhood” under the Equal Protection Clause was “settled.”

(This, despite the text of the Amendment: It uses “person” five times and the context clearly demonstrates that it meant natural persons. For example, persons “born or naturalized” in the United States are citizens, representatives are apportioned according to the number of persons excluding “Indians not taxed” and persons are barred from holding office if they engaged in rebellion. The court also decided long ago that the Fifth Amendment privilege against self-incrimination, which also belongs to a person, is “essentially a personal one, applying only to natural individuals.”)

The court has never squarely confronted or carefully analyzed whether corporations should have the same free speech rights as natural persons. The treatment of corporations as persons with constitutional rights has been inconsistent, unexplained and baffling and is in need of some serious attention.

Justice Kennedy said, “The Court has recognized that First Amendment protection extends to corporations.” To support this proposition, Kennedy cited 24 important First Amendment decisions going back several decades, all of which involved speech by corporations. They included such landmarks as New York Times v. Sullivan and the “Pentagon Papers” case, establishing the rights to criticize government and to be free of prior restraints on speech. The unspoken point was that it would be unthinkable now to roll back the clock and say that corporations have no First Amendment rights. No one is prepared to say that The New York Times or CBS News has no First Amendment protection and is, therefore, subject to unbridled government censorship. Many of the most important free speech rights we all enjoy were won in cases involving corporate speech.

That most of the corporate speech cases involved media corporations like newspapers has led some to argue that the decisions are explainable not on the basis that corporations have speech rights, but that media corporations are the “press,” and, thus, are protected under the Press Clause of the First Amendment (“Congress shall make no law … abridging the freedom of speech or of the press.”) Put another way, media corporations, but no others, should be allowed to speak because they are the “press” specifically recognized in the Press Clause.

Before we rush to give News Corporation (e.g., Fox News) a preferred status under the First Amendment, we have to recognize that the framers clearly included in the “press” books and pamphlets written by individuals, not just newspapers published by the institutional press. Perhaps all the framers meant to do was protect expression in both oral and written form (hence, “speech” and “press”), though the historical evidence is that at least some of the framers did think that the Press Clause had significance independent of the Speech Clause. Perhaps, they chose to mention the press specifically because, in England and the colonies, printers and publishers had more often been subjected to official restraints like licensing, censorship and prosecutions for seditious libel. Whatever their intent (again, we’ll never know), the Supreme Court has rejected claims by the press that it has special rights not enjoyed by everyone else. The court has never actually premised any decision on the Press Clause or held that it gives the institutional press freedoms beyond the speech rights we all have.

But corporations are not like soapbox orators and pamphleteers, and the court could treat them as having more restricted rights than natural persons. Unrestricted spending by corporate executives of money that is not their own is different from an individual’s speech. Justice Kennedy acknowledged that some speakers – students, prisoners, persons on military bases and government employees – do not enjoy full First Amendment protection even for core political speech. It is unclear why corporations should have rights superior to these groups. In fact, the court did not decide that corporate speech rights are identical to those of natural persons.

On mature reflection, the court could conclude that because corporations are very different and artificial beings, they are subject to differential treatment and their speech is subject to reasonable limitations. The overbroad and somewhat clumsy law thrown out in Citizens United might not have been a reasonable and carefully tailored restriction on electoral speech. But Citizens United is probably not the last word on this subject. It would be good for the court to undertake a thorough re-examination of the nature of corporations and the extent to which they can legitimately claim the benefits of the Bill of Rights.

A cynic might plausibly consider Citizens United a faux First Amendment decision, a pro-business effort dressed up in free speech clothes. Justice Kennedy himself leaked a little probusiness leaning, remarking that the federal law “muffled the voices that best represent the most significant segments of the economy,” and “on certain topics corporations may possess valuable expertise, leaving them the best equipped to point out errors” in candidates’ electoral speech. Except for Kennedy, none of the other members of the conservative majority previously exhibited great attachment to free speech values. (Eight days before the Citizens United decision, the very same five justices intervened on an emergency basis in another case with First Amendment implications. The court summarily prohibited streaming television coverage of the Proposition 8 same-sex marriage trial in San Francisco to other federal courthouses. The disingenuous ground it gave for its ruling was that the district court had allowed only five days for public comment on a change in its local rules instead of the 30 days that was usually given. The Supreme Court recognized that district courts can adopt and amend local rules governing how they do business. The majority’s rationale for reversing the district court, however, was, “If courts are to require that others follow regular procedures, courts must do so as well.” How quickly the five majority justices forgot about “regular procedures” in Citizens United and threw off the bonds of judicial restraint to rule for business interests.)

The four conservatives who joined Kennedy to decide Citizens United all came to Washington as part of the Reagan revolution and have been fully committed to its anti-government regulation ideology: getting government off the backs of business. They all subscribed to the Federalist Society agenda of free enterprise unlimited by bothersome government restrictions. Intrusive and detailed campaign finance laws and regulations must have seemed repugnant to their beliefs. The cynic might say that their real allegiance is to the Reaganesque agenda rather than to the loftier values of free speech.

* * * * * *

The Citizens United decision calls into question the legitimacy of the court’s impartial decision making because of the aggressively activist way the five-justice majority engineered the case to change the law to favor corporate interests. It is, nonetheless, a very strong statement of First Amendment principles, which should be useful in free speech disputes to come. Whether it irreparably damages our democracy depends on what happens next, events that I can’t foresee. I doubt that many major corporations, especially those who sell consumer products and services, will want to alienate half their customers by so visibly, on television, backing one candidate over another. I doubt that they will want to put their own name on attack ads beamed incessantly into consumers’ homes in election season or even on ads supporting the nominee of one party over another.

Perhaps, in practice, the decision granting them this right will only symbolically enhance corporate power. Let’s hope it is the First Amendment freedoms it recognizes that will endure.