Nexus: Chapman's Journal of Law and Public Policy

This blog attempts to explain the context within which Citizens United v. FEC was decided, starting with broad concepts of law and quickly narrowing them to the case at hand.

The text of the First Amendment is straight forward: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” I hate to break it to you, but Congress has made laws abridging the freedom of speech. In fact, this is a good thing. Congress can regulate the advertising of illegal activities, or advertising which is false or deceptive. Moreover, the Supreme Court has declared that fighting words and obscene speech are forms of unprotected speech. In contrast, political speech is typically regarded as the highest form of speech to be protected. Thus, courts are quick to overturn prior restraints on speech or to regulate speech of a political nature; however, regulations are allowed in certain circumstances. The intersection between political speech and campaign finance reform began in the 1970s with the Federal Election Campaign Act and the establishment of the Federal Election Commission. The Court has only been involved in campaign finance reform litigation since the mid-1970s. The first important case involving the case in campaign finance reform is Buckley v. Valeo.

In Buckley v. Valeo, (1976), the Supreme Court upheld restrictions on campaign contributions, but distinguished independent expenditures and held that the interest in preventing corruption was insufficient to justify the ceiling on independent expenditures. What’s the difference between the two types of campaign financing? Campaign contributions are contributions which come directly from a contributor and go to support a particular candidate. It is pure endorsement. “I give $100,000 to John Q. Citizen for President of the United States in the 2012 election.” Independent expenditures, on the other hand, are “independent” and do not directly support candidates. Think issue ads which promote a certain viewpoint, i.e., the Chamber of Commerce ads regarding the Consumer Financial Protection Agency. In fact, independent expenditures might turn out to be counterproductive if they do not align with a particular candidate’s platform. The Court in Buckley concluded that regulation of the former was proper to prevent “corruption and the appearance of corruption spawned by the real or imagined coercive influence of large financial contributions on candidates' positions and on their actions if elected to office,” but regulation of the latter did not involve the same concerns or at least the same degree of concern.

The Court’s reasoning is this: If I spend $3 million on John Q. Citizen’s campaign, supplying half of his campaign fund, it would appear that Mr. Citizen owes me a duty to provide favorable representation because of either a feeling of obligation or the fear of losing my financial support in a subsequent campaign. If I spend $3 million on an ad which says that government is too big, regulation is evil, and anyone in favor of big government is a communist, I am not necessarily endorsing a certain candidate, but rather, I am speaking my view on a certain issue. It would be within my power to do so, even if John Q. Citizen’s opponent is in favor of expanding government, and the ad might be seen as indirect support of Mr. Citizen. Does this distinction make sense? There are arguments on both sides, and the decision in Buckley has been criticized for the distinction it draws between independent expenditures and contribution limits. However, in several cases following Buckley, the Supreme Court has continued to uphold the distinction. The question arises whether the same rules which apply to individual contributors apply to corporate contributors.

In First National Bank of Boston v. Belloti, the Court struck down a Massachusetts law that prohibited banks from making contributions or expenditures to support or oppose ballot initiatives and referenda. The Court reasoned that “[t]he inherent worth of speech … does not depend upon the identity of its source.” However, in Federal Election Commission v. Beaumont, the Court upheld contribution limits imposed on corporations. In Austin v. Michigan State Chamber of Commerce, the Court upheld a restriction on corporate expenditures and rationalized its holding based on the distortions caused by corporate wealth. From these cases, it appears that the Court recognizes that corporate speech has value regardless of the identity of the speaker, contribution limits can be applied as easily to corporations as to individuals, and corporate independent expenditures can be limited due to the ability of corporations to accumulate wealth. Are these holdings consistent? Does it make sense to say that corporations have the same freedoms and restrictions as individuals in the first two instances, but that they should be treated differently when considering campaign expenditures? The Court in Austin appears to believe that the distinction makes sense by holding corporations to a different standard with respect to independent expenditures.

Austin was decided 20 years ago, and now the paradigm has shifted. The Court in Citizens United struck down the Bipartisan Campaign Finance Reform Act’s limit on corporations for independent expenditures, and expressly overturned the holding in Austin. Citizens United brings Buckley, Belloti, and Beaumont back to the forefront of discussion. Scholars may want to look to Chief Justice Roberts’ concurrence in Citizens United to get an understanding of how the Court might treat the holdings if challenges to them do arise.

Chief Justice Roberts declares that the purpose behind writing his concurrence is “to address the important principles of judicial restraint and stare decisis implicated in [the Citizens United] case.” Roberts explains that “[f]idelity to precedent -- the policy of stare decisis -- is vital to the proper exercise of the judicial function.” However, “stare decisis is neither an ‘inexorable command,’ nor "a mechanical formula of adherence to the latest decision.’” It is a “principle of policy.” Thus, when analyzing recent cases, the Court may determine whether or not the case has before reflects “the rule of law.”

The decision in Austin is an aberration, as Roberts explains, for the following reasons: (1) it is inconsistent with Belotti which held that it was improper to distinguish between an individual and a corporation regarding prohibitions of speech in political elections; (2) its rationale has been a subject of constant dispute and remains controversial; (3) it threatens to destabilize the Court’s holding in cases like Beaumont; and (4) its rationale cannot be articulated clearly by the government and the government’s reconceptualization of Austin’s reasoning does not conform to the arguments in favor of upholding precedent. Thus, when the factors in favor of upholding recent case law are weighed against the Court’s duty to provide coherent jurisprudence, Roberts believes the latter weighs more.

In his concurrence, Chief Justice Roberts implies that the Court’s previous holdings in Belloti and Beaumont are unlikely to change. The Chief Justice’s imprimatur of the Court’s prior holdings suggest that Austin was the only aberration in the line of cases applying the First Amendment to corporate speakers, and that the Court is prepared to tread new ground with Citizens United supplying the new “constitutional ideal – the rule of law.” Campaign finance regulations on corporate campaign contributions and independent expenditures will now completely parallel regulations on individuals.