Removing corporate campaign finance restrictions in Citizens United v. Federal Election Commission.

• Author: Gilpatrick, Breanne

Since the Supreme Court's seminal campaign finance ruling in Buckley v. Valeo, (1) the Court continues to disagree over the best way to balance First Amendment free speech rights against the state's interest in fighting the reality or appearance of corruption caused by sizeable campaign expenditures. (2) The debate over corporate campaign expenditures has been a source of particularly sharp disagreement, generating at least six major decisions since the Court's ruling in Buckley. (3) In two recent decisions, the Court held that although corporations could use money in separate political funds for campaign spending, general treasury funds were off limits. (4) In Citizens United v. FEC, (5) however, the Supreme Court expanded corporate campaign spending power by holding that, although "It]he government can regulate corporate political speech through disclaimer and disclosure requirements," it is unconstitutional for the government to suppress corporate political speech entirely. (6) In doing so, the Court struck down parts of the two previous decisions (7) that limited the ability of corporations to spend money on electioneering communications in federal elections. Although it is too soon to know what effect the Court's decision will have on the electoral process, Citizens United likely will be most significant not for what it means for corporate campaign spending, but for what it signals for the future of campaign finance reform. Not only does the ruling mark the first time that the Roberts Court has struck down a previous campaign finance decision, but also it does so in a way that signals the Court's newfound hostility toward campaign finance regulation in all but the most limited of circumstances.

Citizens United is a nonprofit corporation that receives funds from both individuals and for-profit corporations. (8) In 2008, Citizens United created Hillary: The Movie, a ninety-minute documentary about then-Senator and presidential candidate, Hillary Clinton, and sought to expand the film's distribution by using cable video-on-demand offerings in addition to movie theater and DVD releases. (9) The Bipartisan Campaign Reform Act of 2002 (BCRA), (10) however, barred the use of corporate general treasury funds for electioneering communications. (11) The law did not, however, bar spending by segregated corporate or union funds through the use of political action committees (PACs). (12) Because Citizens United feared that its plans to make Hillary available through video-on-demand before certain 2008 presidential primaries ran afoul of the corporate expenditure prohibition contained in [section] 441b, it sought to have the federal ban as well as the disclaimer and disclosure requirements related to those corporate expenditures declared unconstitutional as applied to Hillary. (13)

The district court denied Citizens United's motion for a preliminary injunction and granted the government's motion for summary judgment, holding that the corporate expenditure ban was facially constitutional based on the Supreme Court's ruling in McConnell v. FEC, (14) which, in turn, relied on the Court's earlier holding in Austin v. Michigan State Chamber of Commerce. (15) Citizens United appealed its case to the Supreme Court. (16) Following the initial arguments in the case in October Term 2008, the Supreme Court ordered the parties to file supplemental briefs and reargue the case to address whether the Court should overrule Austin and the part of McConnell that addressed the facial validity of [section] 441b. (17)

The Supreme Court held five to four that the government could not prohibit corporate-funded independent expenditures. (18) Writing for the majority, Justice Kennedy (19) wrote that "the Government may not suppress political speech on the basis of the speaker's corporate identity" because "[n]o sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations." (20) With an even larger eight-to-one majority, the Court (21) held that disclaimer and disclosure requirements related to campaign communications were constitutional. (22)

To arrive at its conclusions, the majority first rejected arguments that the case could be resolved on narrower grounds. (23) The Court began by holding that Hillary fits within the type of corporate communication barred by [section] 441b. First, the Court dismissed Citizens United's arguments that video-on-demand distribution did not qualify as a public distribution because it would not be sent to 50,000 or more persons at once, as federal regulation requires. (24) The Court explained that. even though each transmission is sent to only one home, the number of cable subscribers in the relevant viewing areas meant that the transmission could be received by 50,000 or more persons. (25) Second, the Court held that Hillary qualified as an "electioneering communication," as defined in McConnell and Wisconsin Right to Life, because "[t]he movie, in essence, is a feature-length negative advertisement" and "there is no reasonable interpretation of Hillary other than as an appeal to vote against Senator Clinton." (26) Finally, the Court rebuffed Citizens United's argument that it qualified for the exception established in FEC v. Massachusetts Citizens for Life, Inc. for non-profit political speech funded largely by individuals. (27) The Court held Citizens United did not qualify for this exception because a portion of the funds used to make Hillary came from for-profit corporations. (28)

After rejecting these as-applied arguments, the Court then reasoned that it was proper to consider a facial challenge to [section] 441b, even though Citizens United's current argument did not include such a challenge. (29) In so doing, the Court first stated that even if a party could waive a facial challenge, a court could address the validity of an underlying statute if the argument had been considered below. (30) As a result, the Court could address this broader challenge to [section] 441b because the district court, bound by the Supreme Court's ruling in McConnell, had addressed and rejected Citizens United's facial challenge because the court was bound by the Supreme Court's ruling in McConnell. (31) Second, the Court contended that Citizens United had consistently argued that the FEC had violated its First Amendment rights. (32) Finally, the Court stated that "the distinction between facial and as-applied challenges is not so well defined that it has some automatic effect or that it must always control the pleadings and disposition in every case involving a constitutional challenge." (33)

Turning to the constitutional validity of [section] 441b, the Citizens United majority premised its holding on two propositions. The first, grounded in the Court's holding in First National Bank of Boston v. Bellotti, was that "First Amendment protection extends to corporations." (34) The second was the contribution-expenditure distinction from Buckley, in which the Court held independent expenditure ceilings were unconstitutional because, unlike campaign contribution limits, they fail to "stem[] the reality or appearance of corruption in the electoral process." (35) The Court in Citizens United ruled that the Court in Austin upheld restrictions on corporate-funded political speech by effectively "bypass[ing]" these holdings and identifying "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'"--the so-called "antidistortion interest." (36) The majority in Citizens United rejected this antidistortion interest, (37) overruling Austin, and, in part, McConnell. (38)

Like most of the Court's earlier campaign finance decisions, the ruling in Citizens United sparked an array of concurring and dissenting opinions. Chief Justice Roberts wrote a concurrence, defending the Court's opinion as one of judicial restraint. (39) Justice Thomas wrote a short partial dissent objecting to the Court's decision to uphold the federal disclaimer and disclosure requirements. (40) In a dissent roughly twenty pages longer than the majority opinion, Justice Stevens (41) questioned the Court's interpretation of campaign finance precedents and referred to the decision as "a dramatic break from our past." (42) Justice Stevens lambasted the majority, picking apart its opinion and criticizing its analysis as one that "rest[ed] on a faulty understanding of Austin and McConnell and of our campaign finance jurisprudence more generally." (43) Justice Stevens contended that the "original understandings" (44) of the First Amendment support restrictions on corporate speech because "[t]he Framers ... took it as a given that corporations could be comprehensively regulated in the service of public welfare" and, "[u]nlike our colleagues ... had little trouble distinguishing corporations from human beings." (45) Justice Scalia wrote a concurring opinion (46) addressing Justice Stevens's First Amendment analysis, and argued that "it is far from clear" that the Framers "despised" corporations or sought to deny them First Amendment protection. (47)

The Court's ruling in Citizens United removes some of the legal hurdles to corporate campaign spending, allowing corporations and unions to pay for political advertising and mailings directly out of their main treasuries in the days leading up to federal elections, rather than depending on PAC spending. Even before the conclusion of the 2010 midterm elections, the ruling already had altered the campaign landscape, but the timing of this Comment prevents a full analysis of the role corporate expenditures played in November 2010...