CITIZENS UNITED V. FEDERAL ELECTION COMMISSION

United States Supreme Court (2010)

Justice Kennedy delivered the opinion of the Court.

            Federal law prohibits corporations and unions from using their general treasury funds to make independent expenditures for speech defined as an “electioneering communication” or for speech expressly advocating the election or defeat of a candidate. 2 U.S.C. § 441b.  Limits on electioneering communications were upheld in McConnell v. Federal Election Comm’n (2003). The holding of McConnell rested to a large extent on an earlier case, Austin v. Michigan Chamber of Commerce (1990). Austin had held that political speech may be banned based on the speaker’s corporate identity.

            In this case we are asked to reconsider Austin and, in effect, McConnell. It has been noted that “Austin was a significant departure from ancient First Amendment principles,” We agree with that conclusion and hold that stare decisis does not compel the continued acceptance of Austin. The Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether. …

I

A

            Citizens United is a nonprofit corporation. …

            Citizens United has an annual budget of about $12 million. Most of its funds are from donations by individuals; but, in addition, it accepts a small portion of its funds from for-profit corporations.

            In January 2008, Citizens United released a film entitled Hillary: The Movie. We refer to the film as Hillary. It is a 90-minute documentary about then-Senator Hillary Clinton, who was a candidate in the Democratic Party’s 2008 Presidential primary elections. Hillary mentions Senator Clinton by name and depicts interviews with political commentators and other persons, most of them quite critical of Senator Clinton. Hillary was released in theaters and on DVD, but Citizens United wanted to increase distribution by making it available through video-on-demand. …

B

            Before the Bipartisan Campaign Reform Act of 2002 (BCRA), federal law prohibited—and still does prohibit—corporations and unions from using general treasury funds to make direct contributions to candidates or independent expenditures that expressly advocate the election or defeat of a candidate, through any form of media, in connection with certain qualified federal elections. 2 U.S.C. §441b (2000 ed.). BCRA §203 amended §441b to prohibit any “electioneering communication” as well. An electioneering communication is defined as “any broadcast, cable, or satellite communication” that “refers to a clearly identified candidate for Federal office” and is made within 30 days of a primary or 60 days of a general election. §434(f)(3)(A). The Federal Election Commission’s (FEC) regulations further define an electioneering communication as a communication that is “publicly distributed.” “In the case of a candidate for nomination for President … publicly distributed means” that the communication “[c]an be received by 50,000 or more persons in a State where a primary election . . . is being held within 30 days.” Corporations and unions are barred from using their general treasury funds for express advocacy or electioneering communications. They may establish, however, a “separate segregated fund” (known as a political action committee, or PAC) for these purposes. The moneys received by the segregated fund are limited to donations from stockholders and employees of the corporation or, in the case of unions, members of the union.
C

            Citizens United wanted to make Hillary available through video-on-demand within 30 days of the 2008 primary elections. It feared, however, that both the film and the ads would be covered by §441b’s ban on corporate-funded independent expenditures, thus subjecting the corporation to civil and criminal penalties under §437g. In December 2007, Citizens United sought declaratory and injunctive relief against the FEC. It argued that (1) §441b is unconstitutional as applied to Hillary; and (2) BCRA’s disclaimer and disclosure requirements, BCRA §§201 and 311, are unconstitutional as applied to Hillary and to the three ads for the movie. …

III

            The First Amendment provides that “Congress shall make no law … abridging the freedom of speech.” Laws enacted to control or suppress speech may operate at different points in the speech process. …

            The law before us is an outright ban, backed by criminal sanctions. Section 441b makes it a felony for all corporations—including nonprofit advocacy corporations—either to expressly advocate the election or defeat of candidates or to broadcast electioneering communications within 30 days of a primary election and 60 days of a general election. Thus, the following acts would all be felonies under §441b: 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. …

            Section 441b’s prohibition on corporate independent expenditures is thus a ban on speech. As a “restriction on the amount of money a person or group can spend on political communication during a campaign,” that statute “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.” Buckley v. Valeo (1976) (per curiam). Were the Court to uphold these restrictions, the Government could repress speech by silencing certain voices at any of the various points in the speech process. …  If §441b applied to individuals, no one would believe that it is merely a time, place, or manner restriction on speech. Its purpose and effect are to silence entities whose voices the Government deems to be suspect.

            Speech is an essential mechanism of democracy, for it is the means to hold officials accountable to the people. …  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 necessary means to protect it. The First Amendment “ ‘has its fullest and most urgent application’ to speech uttered during a campaign for political office.” …

            For these reasons, political speech must prevail against laws that would suppress it, whether by design or inadvertence. Laws that burden political speech are “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.” [Federal Election Commission v. Wisconsin Right to Life, Inc.] [WRTL] While it might be maintained that political speech simply cannot be banned or restricted as a categorical matter, the quoted language from WRTL provides a sufficient framework for protecting the relevant First Amendment interests in this case. We shall employ it here.

            Premised on mistrust of governmental power, the First Amendment stands against attempts to disfavor certain subjects or viewpoints. …  Prohibited, too, are restrictions distinguishing among different speakers, allowing speech by some but not others. … As instruments to censor, these categories are interrelated: Speech restrictions based on the identity of the speaker are all too often simply a means to control content.

            Quite apart from the purpose or effect of regulating content, moreover, the Government may commit a constitutional wrong when by law it identifies certain preferred speakers. By taking the right to speak from some and giving it to others, the Government deprives the disadvantaged person or class of the right to use speech to strive to establish worth, standing, and respect for the speaker’s voice. The Government may not by these means deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration. The First Amendment protects speech and speaker, and the ideas that flow from each. …

                We find no basis for the proposition that, in the context of political speech, the Government may impose restrictions on certain disfavored speakers. …

A

1

            The Court has recognized that First Amendment protection extends to corporations. …

            This protection has been extended by explicit holdings to the context of political speech. … Under the rationale of these precedents, political speech does not lose First Amendment protection “simply because its source is a corporation.” …  The Court has thus rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not “natural persons.” …

2

            In Buckley, the Court addressed various challenges to the Federal Election Campaign Act of 1971 (FECA) as amended in 1974. …

            Before addressing the constitutionality of §608(e)’s independent expenditure ban, Buckley first upheld §608(b), FECA’s limits on direct contributions to candidates. The Buckley Court recognized a “sufficiently important” governmental interest in “the prevention of corruption and the appearance of corruption.” … This followed from the Court’s concern that large contributions could be given “to secure a political quid pro quo .” …

The Buckley Court explained that the potential for quid pro quo corruption distinguished direct contributions to candidates from independent expenditures. The Court emphasized that “the independent expenditure ceiling … fails to serve any substantial governmental interest in stemming the reality or appearance of corruption in the electoral process,”, because “[t]he absence of prearrangement and coordination . . . alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate,”. Buckley invalidated §608(e)’s restrictions on independent expenditures, with only one Justice dissenting. …

            Less than two years after Buckley, … Bellotti … reaffirmed the First Amendment principle that the Government cannot restrict political speech based on the speaker’s corporate identity. Bellotti could not have been clearer when it struck down a state-law prohibition on corporate independent expenditures related to referenda issues:

            “We thus find no support in the First . . . Amendment, or in the decisions of this Court, for the proposition that speech that otherwise would be within the protection of the First Amendment loses that protection simply because its source is a corporation that cannot prove, to the satisfaction of a court, a material effect on its business or property. . . . [That proposition] amounts to an impermissible legislative prohibition of speech based on the identity of the interests that spokesmen may represent in public debate over controversial issues and a requirement that the speaker have a sufficiently great interest in the subject to justify communication.
.     .     .     .     .

            “In the realm of protected speech, the legislature is constitutionally disqualified from dictating the subjects about which persons may speak and the speakers who may address a public issue.” …

3

            Thus the law stood until Austin. … Austin “uph[eld] a direct restriction on the independent expenditure of funds for political speech for the first time in [this Court’s] history.” There, the Michigan Chamber of Commerce sought to use general treasury funds to run a newspaper ad supporting a specific candidate. Michigan law, however, prohibited corporate independent expenditures that supported or opposed any candidate for state office. A violation of the law was punishable as a felony. The Court sustained the speech prohibition.

            To bypass Buckley and Bellotti, the Austin Court identified a new governmental interest in limiting political speech: an antidistortion interest. Austin found 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 and that have little or no correlation to the public’s support for the corporation’s political ideas.” …

B

            In its defense of the corporate-speech restrictions in §441b, the Government notes the antidistortion rationale on which Austin and its progeny rest in part, yet it all but abandons reliance upon it. It argues instead that two other compelling interests support Austin ’s holding that corporate expenditure restrictions are constitutional: an anticorruption interest, … and a shareholder-protection interest. …We consider the three points in turn.

1

            As for Austin ’s antidistortion rationale, the Government does little to defend it. … And with good reason, for the rationale cannot support §441b.

            If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech. If the antidistortion rationale were to be accepted, however, it would permit Government to ban political speech simply because the speaker is an association that has taken on the corporate form. The Government contends that Austin permits it to ban corporate expenditures for almost all forms of communication stemming from a corporation. … If Austin were correct, the Government could prohibit a corporation from expressing political views in media beyond those presented here, such as by printing books. The Government responds “that the FEC has never applied this statute to a book,” and if it did, “there would be quite [a] good as-applied challenge.” … This troubling assertion of brooding governmental power cannot be reconciled with the confidence and stability in civic discourse that the First Amendment must secure. …

            Austin interferes with the “open marketplace” of ideas protected by the First Amendment. … It permits the Government to ban the political speech of millions of associations of citizens. … Most of these are small corporations without large amounts of wealth. … This fact belies the Government’s argument that the statute is justified on the ground that it prevents the “distorting effects of immense aggregations of wealth.” … It is not even aimed at amassed wealth. …

2

            What we have said also shows the invalidity of other arguments made by the Government. For the most part relinquishing the antidistortion rationale, the Government falls back on the argument that corporate political speech can be banned in order to prevent corruption or its appearance. In Buckley , the Court found this interest “sufficiently important” to allow limits on contributions but did not extend that reasoning to expenditure limits. … When Buckley examined an expenditure ban, it found “that the governmental interest in preventing corruption and the appearance of corruption [was] inadequate to justify [the ban] on independent expenditures.” …

3

            The Government contends further that corporate independent expenditures can be limited because of its interest in protecting dissenting shareholders from being compelled to fund corporate political speech. This asserted interest, like Austin ’s antidistortion rationale, would allow the Government to ban the political speech even of media corporations. … Assume, for example, that a shareholder of a corporation that owns a newspaper disagrees with the political views the newspaper expresses. … Under the Government’s view, that potential disagreement could give the Government the authority to restrict the media corporation’s political speech. The First Amendment does not allow that power. There is, furthermore, little evidence of abuse that cannot be corrected by shareholders “through the procedures of corporate democracy.” …
4

            We need not reach the question whether the Government has a compelling interest in preventing foreign individuals or associations from influencing our Nation’s political process. … Section 441b is not limited to corporations or associations that were created in foreign countries or funded predominately by foreign shareholders. Section 441b therefore would be overbroad even if we assumed, arguendo, that the Government has a compelling interest in limiting foreign influence over our political process. …

C

            Due consideration leads to this conclusion: Austin, should be and now is overruled. We return to the principle established in Buckley and Bellotti that the Government may not suppress political speech on the basis of the speaker’s corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.

D

    As the Government appears to concede, overruling Austin “effectively invalidate[s] not only BCRA Section 203, but also 2 U. S. C. 441b’s prohibition on the use of corporate treasury funds for express advocacy.” … Section 441b’s restrictions on corporate independent expenditures are therefore invalid and cannot be applied to Hillary .

            Given our conclusion we are further required to overrule the part of McConnell that upheld BCRA §203’s extension of §441b’s restrictions on corporate independent expenditures. … The McConnell Court relied on the antidistortion interest recognized in Austin to uphold a greater restriction on speech than the restriction upheld in Austin, and we have found this interest unconvincing and insufficient. This part of McConnell is now overruled.

            Some members of the public might consider Hillary to be insightful and instructive; some might find it to be neither high art nor a fair discussion on how to set the Nation’s course; still others simply might suspend judgment on these points but decide to think more about issues and candidates. Those choices and assessments, however, are not for the Government to make. “The First Amendment underwrites the freedom to experiment and to create in the realm of thought and speech. Citizens must be free to use new forms, and new forums, for the expression of ideas. The civic discourse belongs to the people, and the Government may not prescribe the means used to conduct it.” …

 

Chief Justice Roberts, with whom Justice Alito joins, concurring.

… The dissent advocates an approach to addressing Citizens United’s claims that I find quite perplexing. It presumably agrees with the majority that Citizens United’s narrower statutory and constitutional arguments lack merit—otherwise its conclusion that the group should lose this case would make no sense. Despite agreeing that these narrower arguments fail, however, the dissent argues that the majority should nonetheless latch on to one of them in order to avoid reaching the broader constitutional question of whether Austin remains good law. It even suggests that the Court’s failure to adopt one of these concededly meritless arguments is a sign that the majority is not “serious about judicial restraint.” …

            This approach is based on a false premise: that our practice of avoiding unnecessary (and unnecessarily broad) constitutional holdings somehow trumps our obligation faithfully to interpret the law. It should go without saying, however, that we cannot embrace a narrow ground of decision simply because it is narrow; it must also be right. Thus while it is true that “[i]f it is not necessary to decide more, it is necessary not to decide more,” … sometimes it is necessary to decide more. There is a difference between judicial restraint and judicial abdication. When constitutional questions are “indispensably necessary” to resolving the case at hand, “the court must meet and decide them.” …

 

Justice Scalia, with whom Justice Alito joins, and with whom Justice Thomas joins in part, concurring. …

 

Justice Stevens, with whom Justice Ginsburg , Justice Breyer, and Justice Sotomayor join, concurring in part and dissenting in part.

            The real issue in this case concerns how, not if, the appellant may finance its electioneering. Citizens United is a wealthy nonprofit corporation that runs a political action committee (PAC) with millions of dollars in assets. Under the Bipartisan Campaign Reform Act of 2002 (BCRA), it could have used those assets to televise and promote Hillary: The Movie wherever and whenever it wanted to. It also could have spent unrestricted sums to broadcast Hillary at any time other than the 30 days before the last primary election. Neither Citizens United’s nor any other corporation’s speech has been “banned,” … All that the parties dispute is whether Citizens United had a right to use the funds in its general treasury to pay for broadcasts during the 30-day period. The notion that the First Amendment dictates an affirmative answer to that question is, in my judgment, profoundly misguided. Even more misguided is the notion that the Court must rewrite the law relating to campaign expenditures by for-profit corporations and unions to decide this case.

            The basic premise underlying the Court’s ruling is its iteration, and constant reiteration, of the proposition that the First Amendment bars regulatory distinctions based on a speaker’s identity, including its “identity” as a corporation. While that glittering generality has rhetorical appeal, it is not a correct statement of the law. Nor does it tell us when a corporation may engage in electioneering that some of its shareholders oppose. It does not even resolve the specific question whether Citizens United may be required to finance some of its messages with the money in its PAC. The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court’s disposition of this case.

            In the context of election to public office, the distinction between corporate and human speakers is significant. Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by nonresidents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races.

III

            The novelty of the Court’s procedural dereliction and its approach to stare decisis is matched by the novelty of its ruling on the merits. The ruling rests on several premises. First, the Court claims that Austin and McConnell have “banned” corporate speech. Second, it claims that the First Amendment precludes regulatory distinctions based on speaker identity, including the speaker’s identity as a corporation. Third, it claims that Austin and McConnell were radical outliers in our First Amendment tradition and our campaign finance jurisprudence. Each of these claims is wrong.
The So-Called “Ban”

            Pervading the Court’s analysis is the ominous image of a “categorical ba[n]” on corporate speech. … Indeed, the majority invokes the specter of a “ban” on nearly every page of its opinion. … This characterization is highly misleading, and needs to be corrected. …

            … Consider the statutory provision we are ostensibly evaluating in this case, BCRA §203. It has no application to genuine issue advertising—a category of corporate speech Congress found to be far more substantial than election-related advertising … —or to Internet, telephone, and print advocacy. Like numerous statutes, it exempts media companies’ news stories, commentaries, and editorials from its electioneering restrictions, in recognition of the unique role played by the institutional press in sustaining public debate. … It also allows corporations to spend unlimited sums on political communications with their executives and shareholders, … to fund additional PAC activity through trade associations, … to distribute voting guides and voting records, … to underwrite voter registration and voter turnout activities, … to host fundraising events for candidates within certain limits, … and to publicly endorse candidates through a press release and press conference. …

            … Neither Austin nor McConnell held or implied that corporations may be silenced; the FEC is not a “censor”; and in the years since these cases were decided, corporations have continued to play a major role in the national dialogue. Laws such as §203 target a class of communications that is especially likely to corrupt the political process, that is at least one degree removed from the views of individual citizens, and that may not even reflect the views of those who pay for it. Such laws burden political speech, and that is always a serious matter, demanding careful scrutiny. But the majority’s incessant talk of a “ban” aims at a straw man.
Identity-Based Distinctions

            The second pillar of the Court’s opinion is its assertion that “the Government cannot restrict political speech based on the speaker’s … identity.” … The case on which it relies for this proposition is First Nat. Bank of Boston v. Bellotti (1978). … [T]he holding in that case was far narrower than the Court implies. Like its paeans to unfettered discourse, the Court’s denunciation of identity-based distinctions may have rhetorical appeal but it obscures reality.

    … [I]n a variety of contexts, we have held that speech can be regulated differentially on account of the speaker’s identity, when identity is understood in categorical or institutional terms. The Government routinely places special restrictions on the speech rights of students, prisoners, members of the Armed Forces, foreigners, and its own employees.  When such restrictions are justified by a legitimate governmental interest, they do not necessarily raise constitutional problems. …

            The free speech guarantee thus does not render every other public interest an illegitimate basis for qualifying a speaker’s autonomy; society could scarcely function if it did. It is fair to say that our First Amendment doctrine has “frowned on” certain identity-based distinctions, … particularly those that may reflect invidious discrimination or preferential treatment of a politically powerful group. But it is simply incorrect to suggest that we have prohibited all legislative distinctions based on identity or content. Not even close. …

            … As we have unanimously observed, legislatures are entitled to decide “that the special characteristics of the corporate structure require particularly careful regulation” in an electoral context. … Not only has the distinctive potential of corporations to corrupt the electoral process long been recognized, but within the area of campaign finance, corporate spending is also “furthest from the core of political expression, since corporations’ First Amendment speech and association interests are derived largely from those of their members and of the public in receiving information”. … Campaign finance distinctions based on corporate identity tend to be less worrisome, in other words, because the “speakers” are not natural persons, much less members of our political community, and the governmental interests are of the highest order. Furthermore, when corporations, as a class, are distinguished from noncorporations, as a class, there is a lesser risk that regulatory distinctions will reflect invidious discrimination or political favoritism. …

            A third fulcrum of the Court’s opinion is the idea that Austin and McConnell are radical outliers, “aberration[s],” in our First Amendment tradition. … The Court has it exactly backwards. It is today’s holding that is the radical departure from what had been settled First Amendment law. …

            … [R]egulations such as §203 and the statute upheld in Austin impose only a limited burden on First Amendment freedoms not only because they target a narrow subset of expenditures and leave untouched the broader “public dialogue,” … but also because they leave untouched the speech of natural persons.

            … Corporate “domination” of electioneering, … can generate the impression that corporations dominate our democracy. When citizens turn on their televisions and radios before an election and hear only corporate electioneering, they may lose faith in their capacity, as citizens, to influence public policy. A Government captured by corporate interests, they may come to believe, will be neither responsive to their needs nor willing to give their views a fair hearing. The predictable result is cynicism and disenchantment: an increased perception that large spenders “‘call the tune’” and a reduced “‘willingness of voters to take part in democratic governance.’” … To the extent that corporations are allowed to exert undue influence in electoral races, the speech of the eventual winners of those races may also be chilled. Politicians who fear that a certain corporation can make or break their reelection chances may be cowed into silence about that corporation. On a variety of levels, unregulated corporate electioneering might diminish the ability of citizens to “hold officials accountable to the people,” … and disserve the goal of a public debate that is “uninhibited, robust, and wide-open.” … At the least, I stress again, a legislature is entitled to credit these concerns and to take tailored measures in response. …

            In a democratic society, the longstanding consensus on the need to limit corporate campaign spending should outweigh the wooden application of judge-made rules. The majority’s rejection of this principle “elevate[s] corporations to a level of deference which has not been seen at least since the days when substantive due process was regularly used to invalidate regulatory legislation thought to unfairly impinge upon established economic interests.” … At bottom, the Court’s opinion is thus a rejection of the common sense of the American people, who have recognized a need to prevent corporations from undermining self-government since the founding, and who have fought against the distinctive corrupting potential of corporate electioneering since the days of Theodore Roosevelt. It is a strange time to repudiate that common sense. While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics.