CITIZENS UNITED VS FEDERAL ELECTION COMMISSION : CASE SUMMARY

The Supreme Court in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) held that the First Amendment prohibits the Government from suppressing independent political expenditures by corporations and labor unions. The Court held that corporations and unions cannot be prohibited from using their general treasury funds to finance independent communications advocating the election or defeat of candidates.

The Court reasoned that political speech lies at the core of the First Amendment and that the Government generally cannot suppress political speech on the basis of the identity of the speaker. The Court therefore invalidated the federal prohibition on corporate and union independent expenditures contained in §203 of the Bipartisan Campaign Reform Act of 2002 (BCRA). At the same time, the Court upheld the Act’s disclaimer and disclosure requirements as applied to the communications at issue.

The judgment became one of the most consequential First Amendment decisions concerning campaign finance in American constitutional law. It significantly changed the legal framework governing political spending by corporations, unions and other organizations.

FACTS OF THE CASE

The case concerned the Bipartisan Campaign Reform Act of 2002 (BCRA), commonly known as the McCain-Feingold Act. Among other provisions, BCRA amended federal campaign-finance law to prohibit corporations and labor unions from using their general treasury funds to finance certain “electioneering communications” close to federal elections.

Under the statutory framework, an electioneering communication included a broadcast, cable or satellite communication referring to a clearly identified federal candidate and made within 30 days of a primary election or 60 days of a general election. Corporations and unions could establish separate political action committees (PACs) to engage in certain political activity, but they could not use their general treasury funds for communications prohibited by §203 of BCRA.

Citizens United, a nonprofit corporation, produced a documentary film entitled Hillary: The Movie. The film was highly critical of then-Senator Hillary Clinton, who was a candidate for the Democratic Party’s nomination for President in the 2008 election.

Citizens United wanted to make the film available through video-on-demand and also wanted to broadcast television advertisements promoting the film. However, because the film referred to a candidate for federal office and was intended to be distributed during the period covered by BCRA, Citizens United feared that its proposed activities would violate the federal campaign-finance restrictions and expose it to civil and criminal penalties.

Citizens United therefore brought an action against the Federal Election Commission (FEC), challenging the application of BCRA. It argued, among other things, that the prohibition on corporate-funded electioneering communications violated the First Amendment’s protection of freedom of speech.

The Federal District Court rejected Citizens United’s challenge and granted summary judgment to the FEC. The matter ultimately reached the Supreme Court. Because the case raised important questions concerning the continuing validity of earlier precedents, the Supreme Court ordered reargument on whether Austin v. Michigan Chamber of Commerce and the relevant portion of McConnell v. Federal Election Commission should be overruled.

ISSUE BEFORE THE SUPREME COURT

The principal question before the Supreme Court was whether the First Amendment permits the Federal Government to prohibit corporations and labor unions from using their general treasury funds to make independent expenditures for political communications that advocate the election or defeat of candidates.

The Court also had to consider whether BCRA’s disclaimer and disclosure requirements applicable to such communications violated the First Amendment.

OPINION OF THE COURT

Justice Anthony Kennedy delivered the opinion of the Court. He was joined by Chief Justice Roberts and Justices Scalia and Alito, with Justice Thomas joining most, but not all, of the opinion. The judgment substantially changed the constitutional law governing corporate political speech.

Political Speech and the First Amendment

The Court began with the fundamental principle that political speech occupies a central position in the protection afforded by the First Amendment.

The First Amendment provides that:

“Congress shall make no law … abridging the freedom of speech.”

The Court regarded political speech as particularly important because it enables citizens to obtain information about candidates, public officials and government policies and to make informed decisions during elections.

The Court emphasized that the First Amendment does not permit the Government to determine which persons or organizations are sufficiently important or sufficiently trustworthy to participate in political debate. Political discourse is strengthened, in the Court’s view, when citizens can receive information from diverse sources.

Corporate Identity Cannot Be Used to Suppress Political Speech

A central question was whether the Government could restrict political speech simply because the speaker was a corporation rather than a natural person.

The Court answered this question in the negative. It held that the First Amendment protects political speech regardless of whether the speaker is an individual, corporation, labor union or other association.

The Court rejected the proposition that corporations could be excluded from the political marketplace merely because of their corporate form. It emphasized that corporations are associations through which individuals join together to communicate ideas and participate in public debate.

According to the Court, permitting the Government to prohibit speech because of the identity of the speaker would give the Government excessive power to determine which voices could participate in the electoral process. Such a system would be inconsistent with the fundamental purpose of the First Amendment.

Independent Expenditures Are Different from Contributions

An important distinction in the judgment was between independent expenditures and contributions made directly to candidates.

An independent expenditure is made without coordination with a candidate or political campaign. The Court considered this distinction constitutionally significant because an independent expenditure does not ordinarily create the same risk of a direct exchange between a candidate and the person or organization financing the speech.

The Court therefore rejected the argument that independent corporate expenditures could be prohibited merely because they might create political influence.

The Court relied heavily upon the absence of quid pro quo corruption. In its view, the Government’s interest in preventing corruption could justify restrictions aimed at direct exchanges between political candidates and donors, but that justification was insufficient to support a complete prohibition on independent political speech.

Rejection of the Anti distortion Rationale

The Government also argued that corporations possess substantial economic resources and that unrestricted corporate spending could distort the political process.

The Court rejected this so-called “antidistortion” rationale. It held that the Government could not suppress political speech merely because the speaker had accumulated wealth through the corporate form.

The Court considered such an approach particularly dangerous because it could permit the Government to suppress speech on the ground that some speakers had greater financial resources than others.

The First Amendment, according to the Court, protects the freedom of the political marketplace rather than guaranteeing equality of financial resources among speakers.

Overruling of Austin and Part of McConnel

One of the most important aspects of Citizens United was the Court’s decision to overrule Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990).

In Austin, the Supreme Court had upheld restrictions on independent corporate expenditures based substantially on the concern that corporate wealth could distort the political process.

The Citizens United Court rejected that reasoning. It concluded that the Government could not suppress political speech because the speaker happened to be a corporation.

The Court also overruled the portion of McConnell v. Federal Election Commission, 540 U.S. 93 (2003) that had upheld BCRA’s restrictions on corporate electioneering communications. Thus, Citizens United expressly displaced important portions of both Austin and McConnell.

Disclosure and Disclaimer Requirement

Importantly, the Supreme Court did not invalidate all campaign-finance regulations contained in BCRA.

The Court upheld the Act’s disclosure and disclaimer requirements as applied to Hillary: The Movie and its advertisements.

BCRA required certain political communications to disclose who had financed them and required appropriate disclaimers identifying the organization responsible for the communication. The Court recognized that disclosure requirements could impose some burden on political speech, but concluded that they did not prevent the speaker from communicating its political message.

The Court therefore distinguished between a law that suppresses political speech altogether and a law that requires the public to receive information concerning the source of that speech.

The Court found the disclosure provisions sufficiently related to legitimate governmental interests, including providing information to voters and promoting transparency in the electoral process.

DISSENTING OPINION OF JUSTICE STEVENS

Justice John Paul Stevens delivered a lengthy opinion concurring in part and dissenting in part, joined by Justices Ginsburg, Breyer and Sotomayor.

Justice Stevens strongly disagreed with the majority’s treatment of corporations and individuals as equivalent participants in the political process.

In his view, a corporation is a legal entity created under state law and possesses substantial economic resources that are fundamentally different from those of individual citizens. He rejected the proposition that corporations possess constitutional rights identical in every respect to those of natural persons.

Justice Stevens also argued that corporate political expenditures could distort democratic decision-making. Corporations can accumulate substantial wealth through activities unrelated to political participation, and allowing them to use that wealth for unrestricted political expenditures could give corporate entities disproportionate influence over elections.

He therefore defended Congress’s authority to regulate corporate campaign spending and argued that the majority had improperly displaced longstanding campaign-finance precedent.

Justice Stevens was particularly concerned that unlimited corporate spending could drown out the voices of individual citizens and undermine public confidence in the electoral process.

SIGNIFICANCE OF THE JUDGMENT

Citizens United is significant for several reasons.

First, it firmly established that independent political expenditures by corporations and labor unions constitute protected political speech under the First Amendment.

Second, the Court rejected the argument that corporate political speech could be suppressed simply because corporations possessed greater financial resources than individual speakers.

Third, the judgment drew an important constitutional distinction between independent expenditures and direct contributions to candidates. The Court’s reasoning concerning the absence of quid pro quo corruption became particularly important in subsequent campaign-finance litigation.

Fourth, the judgment demonstrated the Supreme Court’s willingness to reconsider and overrule constitutional precedents when it concluded that those precedents were inconsistent with fundamental First Amendment principles.

IMPACT OF THE JUDGMENT

The practical consequences of Citizens United were substantial. By invalidating restrictions on independent expenditures by corporations and unions, the decision created greater freedom for organizations to finance independent political communications.

The judgment contributed to the development and expansion of organizations commonly known as Super PACs. Super PACs are political committees that may accept unlimited contributions for independent political expenditures, although they cannot lawfully coordinate their expenditures with candidates or their campaigns.

The decision therefore contributed to a significant increase in the amount of money that can be spent independently in American elections. Political organizations, corporations, labor unions, wealthy individuals and other groups have subsequently played a much larger role in financing independent political communications.

Supporters of the judgment argue that it strengthens the First Amendment by preventing the Government from censoring political speech based on the identity of the speaker. They contend that voters benefit when they receive political arguments from a wide variety of sources.

Critics, however, argue that the decision has increased the influence of wealthy corporations, unions, associations and individuals in the electoral process. They contend that the availability of enormous financial resources can result in political voices being amplified according to wealth rather than according to the number of citizens holding a particular view.

The controversy therefore reflects a fundamental constitutional tension between freedom of political expression and the democratic concern that excessive concentrations of financial power may influence elections.

SUBSEQUENT DEVELOPMENT

The constitutional framework established by Citizens United did not mean that all campaign-finance restrictions became unconstitutional. Restrictions on direct contributions to candidates, disclosure requirements and other forms of campaign regulation have continued to be litigated.

The Supreme Court subsequently decided McCutcheon v. Federal Election Commission, 572 U.S. 185 (2014), which invalidated aggregate limits on the total amount an individual could contribute to federal candidates and political committees during a two-year election cycle. The Court again emphasized the distinction between preventing quid pro quo corruption and attempting to equalize political influence.

Thus, Citizens United formed part of a broader transformation of the Supreme Court’s campaign-finance jurisprudence, under which the prevention of direct corruption and quid pro quo arrangements has remained an important constitutional justification for campaign-finance regulation, while broader attempts to equalize political influence have received considerably less constitutional acceptance.

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