Citizens United v. Federal Election Commission (2010)
Arguably the most controversial decision of the past twenty years, Citizens United stands as a testament to the willingness of Supreme Court justices to disregard statutes and even their own precedent when partisan interests are at stake.1 Under the Federal Election Campaign Act of 1971 (FECA), Congress banned corporations and unions from using general treasury funds to make independent expenditures expressly advocating for the election or defeat of a candidate.2 FECA, 2 U.S.C. § 441b prohibited contributions or expenditures by corporations or labor organizations in connection with federal elections.3 Subsequently, Congress passed § 203 of the Bipartisan Campaign Reform Act of 2002 (BCRA), that amended FECA to include a ban on corporations and unions using general treasury funds for electioneering communications (Section 203 was codified as part of 2 U.S.C. § 441b).4 These statutes were part of a long-standing tradition dating back to the Tillman Act of 1907,5 which banned corporations from making monetary contributions in connection with any election for political office, and the Federal Corrupt Practices Act of 1925, which expanded the ban on corporations beyond money contributions to include “anything of value.”6 Congress enacted these statutes in recognition of the corrupting influence corporations have over elected officials.
The Supreme Court respected Congress’ prerogatives in this area for over a century. In Austin v. Michigan Chamber of Commerce (1990), the court held that Congress may ban political speech based on the speaker’s corporate identity.7 Subsequently, in McConnell v. Federal Election Commission (2003), the court upheld limits on electioneering communications.8 The Citizens United decision marked an abrupt shift in the court’s First Amendment jurisprudence when it came to campaign finance law and essentially overturned the key parts of Austin and McConnell.
The corporation at the center of this case, Citizens United, posed as a nonprofit advocacy group. In reality, it was an extension of the Republican Party. Citizens United’s president, David Bossie, was a regular Fox News contributor and an eventual Deputy Campaign Manager for President Trump’s 2016 campaign. He worked as a Republican political operative for decades. The justices must have been aware of this at the time, and yet, Justice Kennedy’s opinion didn’t mention the corporation’s partisan leanings a single time.
Citizens United produced a film called Hillary: The Movie, a ninety-minute “documentary” highly critical of Hillary Clinton, who was the favorite at the time to win the 2008 presidential nomination of the Democratic Party. The film was basically a ninety-minute political commercial advocating against Hillary Clinton. The release of the film in January 2008, was obviously timed to coincide with the start of primary season. It was released in theaters and on DVD, but Citizens United also wanted to release it on video-on-demand free of charge. Citizens United was concerned that its film would violate federal elections laws, since it would be an electioneering communication released for free within thirty days of a primary. Thus, it sought declaratory and injunctive relief against the FEC in federal district court. Citizens United wanted to preempt possible civil and criminal penalties it would incur, since releasing the film on video-on-demand would violate FECA and BCRA restrictions on corporate electioneering. The District Court followed the Supreme Court precedent set in McConnell and granted the FEC’s motion for summary judgment. In McConnell, the court established that § 441b was facially constitutional.
Citizens United focused its appeal on three narrow as-applied arguments regarding the showing of Hillary: The Movie through video-on-demand. First, the film did not qualify as an electioneering communication because a video-on-demand download went to one household’s cable box and not 50,000 households. Under 11 CFR 100.29(b)(3), an electioneering communication is one that could be received by 50,000 or more persons in a state. The court rejected this argument on the grounds that the 50,000 person threshold was determined by the total number of cable subscribers in the area, which would run in the millions. Second, Citizens United contended the film did not qualify as express advocacy because it was a historical documentary. The court also rejected this point because the film was essentially a feature-length negative advertisement urging voters not to vote for Hillary Clinton. Finally, Citizens United urged the court to exclude video-on-demand from the requirements of § 441b by differentiating this method of delivery from television ads. Since viewers had to affirmatively subscribe to cable, traverse several menus, and then select the film, Citizens United maintained that the likelihood of influencing a large segment of the public in a way that would affect the outcome of an election was low. The court rejected this argument because it was not prepared to move in the direction of differentiating between means of communication.
After disposing of Citizens United’s narrow as-applied challenges, the majority decided to take up a broader First Amendment argument regarding protected political speech. The majority considered a facial validity challenge to the constitutionality of § 441b in regards to corporate expenditures. In the District Court, Citizens United initially raised a facial validity challenge to § 441b in its third argument, but dismissed this part of its complaint by stipulation with the government. Thus, neither the District Court nor the Circuit Court ruled on the facial validity argument. After oral arguments before the Supreme Court, the justices asked the parties to submit supplemental briefs to specifically address whether § 441b violated the First Amendment. The majority reasoned that it had the power to review the facial challenge because Citizens United raised the issue in the lower court and the District Court “did pass upon the issue” in its decision.9 Therefore, even though Citizens United dismissed this part of its complaint, the majority took the extraordinary step of expanding its review beyond the actual arguments of the parties in the case, or the rulings of the lower courts.
In defending this decision, Justice Kennedy utilized plenty of First Amendment rhetorical flourishes. He wrote, “The right of citizens to inquire, to hear, to speak, and to use information to reach consensus is a precondition to enlightened self-government and a means to protect it.”10 Although corporations could express their views through PACs, Justice Kennedy found them too burdensome. Administering a PAC was time-consuming and expensive. They had to appoint a treasurer, keep detailed records of donors, and file reports with the FEC. Why should corporations be restricted to PACs? The majority seemed determined to open the flood gates to corporate spending and grant them the same rights as individual citizens.
Of course, corporations are composed of hundreds or even thousands of individual employees and shareholders who hold differing viewpoints and ideologies, and some may even be foreign nationals. Yet, the majority adopted the fiction that a corporate entity was a citizen for purposes of political speech, and ruled that the government could not limit political speech based on the identity of the speaker. That is to say, the First Amendment does not distinguish between types of speakers. Justice Kennedy reiterated this point twenty-five times in his opinion. But, who is the speaker when it comes to corporate political speech? Whose political opinion is the corporation expressing through expenditures?
Justice Kennedy cited precedent for the proposition that First Amendment protections extend to corporations. However, the cases he cited did not involve political contributions or expenditures. For instance, he cited Linmark Associates v. Willingboro (1977)11 which focused on commercial speech, Time, Inc. v. Firestone (1976)12 was a defamation case, and Miami Herald Pub. Co. Div. of Knight Newspapers, Inc. v. Tornillo (1974)13 was about protecting freedom of the press. These cases highlighted the importance of differentiating between instances where the corporation serves as a conduit for free speech, and ones where the corporation expresses a political viewpoint. For example, in a freedom of the press case, the corporation provides the medium through which individuals report the news or express their personal viewpoints (e.g., when the Washington Post publishes an op-ed in its newspaper, the op-ed does not represent the opinions of the Washington Post).
In order to extend its reasoning to political speech, the majority relied heavily on Buckley v. Valeo (1976).14Table 8.1 confirms that Justice Kennedy devoted 6 percent of his opinion to Buckley and it was cited more than any other case. The Buckley decision involved federal contribution and expenditure limits. While the opinion did not address corporate and union independent expenditures, the majority cited Buckley frequently for the proposition that political expenditures are free speech. The impact of this ruling was immediate. As Justice Kennedy noted, four months after the Buckley decision, Congress codified the corporate and union expenditure ban in 2 U.S.C. § 441b, that became the subject of this case.
Table 8.1 Justice Kennedy’s Majority Opinion, Citizens United v. Federal Election Commission (2010)
|
Content |
Number of lines |
Percentage of opinion |
|
Buckley v. Valeo (1976) |
28 |
5.67 |
|
First Amendment does not distinguish between types of speakers (w/o citation) |
25 |
5.06 |
|
McConnell v. FEC (2003) |
22 |
4.45 |
|
First Amendment extends to corporations, including political speech (First National Bank of Boston v. Belotti (1978)) |
18 |
3.64 |
|
Austin v. Michigan Chamber of Commerce (1990) |
17 |
3.44 |
|
Review of § 441b requires expediency (w/o citation) |
17 |
3.44 |
|
Precedent does not support corporate or union bans on political expenditures (with citation) |
17 |
3.44 |
|
§ 441b chills First Amendment political speech (w/o citation) |
16 |
3.24 |
|
Citizens United did not waive its facial validity argument by dismissing it |
16 |
3.24 |
|
Majority rejected Austin opinion’s anti-distortion rationale (w/o citation) |
16 |
3.24 |
|
Facts of the case |
15 |
3.04 |
|
FEC’s arguments |
15 |
3.04 |
|
Majority rejected FEC’s anti-corruption argument (w/o citation) |
13 |
2.63 |
|
2 U.S.C. § 441b prohibits corporations and unions from making independent contributions for electioneering |
12 |
2.43 |
|
Hillary: The Movie is express advocacy under the WRTL test (w/o citation) |
11 |
2.23 |
|
First Amendment does not distinguish between types of speakers (with citation) |
11 |
2.23 |
|
Government censorship is vast in its reach and deprives the public of knowledge (w/o citation) |
11 |
2.23 |
Notes: N = 494. This table presents data for content that appeared at least eleven times in the opinion. These results do not include Part IV of the opinion.
Source: Table created by author based on data from Citizens United v. FEC, 558 U.S. 310 (2010).
The majority also relied heavily on First National Bank of Boston v. Belotti (1978) for the proposition that First Amendment protections apply to corporations. Under Belotti, “the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.”15 Justice Kennedy used Belotti eighteen times to make this point. Importantly, the Belotti case dealt with a referendum vote on a public issue and not support for an individual candidate. Business corporations wanted to spend money to publicly oppose an amendment to the Massachusetts Constitution authorizing the legislature to enact a graduated personal income tax.
Rather than helping Justice Kennedy’s argument, the Belotti opinion actually contradicted it. The court declared, “Referenda are held on issues, not candidates for public office. The risk of corruption perceived in cases involving candidate elections . . . simply is not present in a popular vote on a public issue.”16 This statement clearly drew a line between corporate speech on a referendum vote versus supporting a candidate for office. It was also indicative of the court’s view that the risks of corruption from corporate speech when it came to electing a candidate were higher than when a corporation weighed in on a referendum issue of public concern.
Despite this distinction, the majority in Citizens United was not deterred. Justice Kennedy asserted, “Belotti did not address the constitutionality of the State’s ban on corporate independent expenditures to support candidates. In our view, however, that restriction would have been unconstitutional under Belotti’s central principle: that the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.”17 It is hard to understand how the majority reached this conclusion when it is inconsistent with the actual wording in Belotti.
While Buckley and Belotti were tangentially related to the matter in Citizens United, there were two case precedents directly on point—Austin v. Michigan Chamber of Commerce (1990) and McConnell v. FEC (2003). In Austin, the court upheld a Michigan law prohibiting corporate independent expenditures supporting or opposing a candidate for office. This was the precedent most directly related to Citizens United, but was cited only seventeen times by Justice Kennedy. The Austin decision posed a problem for the majority, so it created the illusion of two conflicting lines of precedent—pre-Austin (Buckley and Belotti) and post-Austin (McConnell). As already noted, Buckley and Belotti did not address restrictions on corporate independent expenditures supporting a political candidate. Thus, there was actually only one line of precedent. The rationale in Austin was upheld in McConnell, a case decided only seven years prior to Citizens United.
The decision in Citizens United effectively overturned Austin and McConnell, as well as, decades of Congressional statutes. What was the court’s aim if not to grant corporations enormous influence over political candidates? Citizens United opened the flood gates to corporate spending in both state and federal elections. Did this influx of money improve the discourse in political campaigns or simply drown out the voices of regular voters?
The dissent considered a central question to be the method by which corporations financed their electioneering efforts. Citizens United maintained a PAC with millions of dollars in assets it could have used to promote Hillary: The Movie. The question was whether it could use money from its general treasury funds for a broadcast that appeared thirty days before an election. Clearly, Congress preferred the use of strictly regulated PACs to unlimited expenditures. Justice Stevens lamented the majority’s decision to “rewrite the law relating to campaign expenditures by for-profit corporations and unions to decide this case.”18
The dissent challenged the majority’s position that corporations should be treated the same as individuals when it comes to campaign finance. Justice Stevens laid out several reasons for the distinction. First, while corporations contribute to society, they are not actually members of it. For example, they cannot vote or run for office. Second, corporations are often managed by nonresidents, and therefore, their interests may conflict with those of the voters. Third, corporations can amass enormous amounts of wealth and resources beyond that of individuals. Fourth, corporate profits reflect the motivations of investors and customers, not the corporation’s political ideals. Fifth, corporations can be foreign-controlled. Finally, “corporations have no consciences, no beliefs, no feelings, no thoughts, no desires . . . they are not themselves members of ‘We the People’ by whom and for whom our Constitution was established.”19
Congress and the Supreme Court recognized this distinction for over a century. Congress started placing limitations on campaign spending by corporations beginning with the Tillman Act of 1907, and in case after case, the court upheld Congress’ power to do so. In reaching its decision, the majority had to overturn a century of statutes and precedent. Justice Stevens stated, “Relying largely on individual dissenting opinions, the majority blazes through our precedents, overruling or disavowing a body of case law.”20
One of the peculiar aspects of this case was the majority’s decision to settle it on an issue not pressed by either party in the courts below. The majority raised the First Amendment issue on its own. In fact, Citizens United “never sought a declaration that § 203 was facially unconstitutional as to all corporations and unions; instead it argued only that the statute could not be applied to it because it was ‘funded overwhelmingly by individuals.’”21 Citizens United’s as-applied challenge was that § 203 did not lawfully apply to a video-on-demand film or to a nonprofit corporation funded overwhelmingly by individuals. The majority took the unusual step of reviewing a question that was not pressed by the parties below. As Justice Stevens put it, “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.”22
The dissent took the majority to task for using a “sledge hammer rather than a scalpel” in this case.23 That is, the majority turned to a facial challenge of the law, rather than an as-applied challenge. This was contrary to the principle of judicial restraint. Since Citizens United did not maintain a facial challenge, neither party developed the record for the court on this issue. Consequently, the court negated a Congressional statute based on a nonexistent record of how § 203 affected entities beyond Citizens United. Alternatively, the court could have decided this case on narrower grounds. First, it could have ruled that a video-on-demand film did not qualify as an electioneering communication, and second, it could have extended an exemption to nonprofit corporations funded almost entirely by individuals. The majority believed that limiting its decision to an as-applied challenge would lead to an endless number of cases down the line based on new media and technology. Justice Stevens countered, “The fact that a Court can hypothesize situations in which a statute might, at some point down the line, pose some unforeseen as-applied problems, does not come close to meeting the standard for a facial challenge.”24
The principle of stare decisis enables legislators to craft legislation in an effective and consistent manner. McConnell was seven years old, and the Austin decision had been around for decades. The majority could not point to any intervening changes that warranted revisiting these two decisions. As Justice Stevens put it, “no one has argued to us that Austin’s rule has proved impracticable, and not a single for-profit corporation, union, or State has asked us to overrule it . . . As for McConnell . . . all three branches of Government have worked to make § 203 as user-friendly as possible.”25
The last part of Justice Stevens’ dissent addressed the government’s interest in preventing corruption and the appearance of corruption. He asserted that the government cannot properly function if voters believe their representatives are bought and sold by wealthy corporations. The court had consistently upheld this rationale for limited corporate electioneering. “Buckley expressly contemplated that an anticorruption rationale might justify restrictions on independent expenditures at a later date.”26 Likewise, “The Austin Court did not rest its holding on quid pro quo corruption, as it found the broader corruption implicated by the antidistortion and shareholder protection rationales a sufficient basis for Michigan’s restriction on corporate electioneering.”27 Legislators have long recognized that corporate expenditures are no different than direct contributions in generating quid pro quo agreements. Corporations spend money on candidates in order to gain access to and influence over elected representatives. The majority pointed to a lack of evidence in the Congressional record regarding specific quid pro quo arrangements, but it should not be surprising that Members of Congress were reluctant to develop a record of their own corruption.
NOTES
1. Citizens United v. FEC, 558 U.S. 310 (2010).
2. Federal Election Campaign Act of 1971, 2 U.S.C. §§ 431–457.
3. Id. at § 441.
4. Bipartisan Campaign Reform Act of 2002 § 203, 116 Stat. 81.
5. Tillman Act of 1907, 34 Stat. 864.
6. Federal Corrupt Practices Act of 1925, 36 Stat. 822.
7. Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990).
8. McConnell v. FEC, 540 U.S. 93 (2003).
9. Citizens United, 558 U.S. at 330.
10. Id. at 339.
11. Linmark Associates, Inc. v. Willingboro, 431 U.S. 85 (1977).
12. Time, Inc. v. Firestone, 424 U.S. 448 (1976).
13. Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974).
14. Buckley v. Valeo, 424 U.S. 1 (1976).
15. Citizens United, 558 U.S. at 347.
16. First National Bank of Boston v. Bellotti, 435 U.S. 765, 790 (1978).
17. Citizens United, 558 U.S. at 347.
18. Id. at 394.
19. Id. at 466.
20. Id. at 394.
21. Id. at 397.
22. Id. at 398.
23. Id. at 399.
24. Id. at 401.
25. Id. at 413.
26. Id. at 453.
27. Id. at 454.