Supreme Court Campaign Finance Decision Favors First Amendment for Small Business

by Gaius Octavian on January 25, 2010

Gaius Octavian

This past week the United States Supreme Court (“Supreme Court”) struck a blow in favor of the First Amendment’s protection of the right to free speech for everyone, including small businesses, when it issued its long-awaited opinion for Citizens United v. Federal Election Commission.  Not surprisingly, liberals are condemning the Supreme Court’s decision with typical hysterical rants that only underscores their collective ignorance of the U.S. Constitution.

Unfortunately, President Obama, who should know better as a former constitutional law professor, is also condemning the decision, which means that President Obama supports limitations on the First Amendment’s protection of free speech.  Regrettably, President Obama has forgotten that he swore an oath to “preserve, protect, and defend the Constitution of the United States.”

The First Amendment and Conflicting Federal Statute

The First Amendment plainly states that “Congress shall make no law…abridging the freedom of speech.”  The First Amendment provides no exceptions by which Congress can interfere with the right to free speech.

Notwithstanding the First Amendment’s clear prohibition of any congressional legislation to limit the right to free speech, Congress passed the Bipartisan Campaign Reform Act of 2002 (“BCRA”), which amended federal law prohibiting corporations and unions from using their general treasury funds to make independent expenditures for any electioneering communication that advocates the election or defeat of a candidate.  Federal law provided civil and criminal sanctions for any violation of the foregoing law.

Factual Background of the Lawsuit

In Citizens United, a non-profit corporation funded primarily by small donors, created a documentary in December 2007 entitled Hillary: The Movie for public broadcast that was critical of then presidential candidate Hillary Clinton for the upcoming presidential primaries.  An opportunity arose for Hillary to be aired on a pay-per-view cable network so long as the corporation made a large payment of $1.2 Million to the network.

Fearful of incurring civil or criminal sanctions, Citizens United filed suit against the Federal Election Commission (“FEC”) in federal court challenging the facial constitutionality of the federal law in question.  The federal court dismissed Citizens United’s lawsuit on the basis that the Supreme Court had previously held in a 20-year old decision, Austin v. Michigan Chamber of Commerce, that Congress may prohibit political speech based on a speaker’s corporate identity.

The Supreme Court Decision

In reversing the lower federal court’s decision and overruling Austin as bad precedent, the Supreme Court reasoned that the First Amendment, history, and logic, prohibits a government from imposing restrictions on political speech by certain disfavored speakers.  In fact, the Supreme Court noted that numerous Supreme Court decisions prior to Austin had extended the First Amendment protections to political speech by corporations.

The Supreme Court’s liberal dissenters’ primary argument against extending the right to free speech by corporations was that corporations are not persons entitled to First Amendment rights since they can neither vote nor hold office.  (Ironically, the liberal judges on the Supreme Court are the first to argue that terrorists deserve every protection under the Bill of Rights even though they cannot vote or hold office.)  However, the majority opinion dismissed the liberal dissenters’ argument by correctly pointing out that corporations are associations of persons who do not collectively surrender their right to free speech, or any other rights recognized by the Bill of Rights such as the right to due process, or right against unlawful search and seizure, etc., merely because they associate under the corporate form.

Small Business Corporations Permitted to Participate in Political Process

In addition, the Supreme Court noted that out of 5.8 million for-profit corporations who filed tax returns in 2006, only 2000 corporations, primarily the largest, have the resources to establish and manage separate political action committees (“PACs”), which are subject to extensive regulations.  The Supreme Court further noted that these large corporations have the resources to employ armies of lobbyists; resources small corporations simply do not possess.

In fact, the Supreme Court’s reasoning indicates that the prohibition against free speech by corporations primarily burdened small businesses since more than 75% of corporations taxed under federal law have less than $1 million in receipts per year and 96% of the 3 million businesses that belong to the U.S. Chamber of Commerce have fewer than 100 employees.  Therefore, the Supreme Court’s decision permits small business corporations to once again participate in the political process; a process that has been dominated by Big Business and Big Labor.

First Amendment Strengthened for the People

Thus, the Supreme Court opined that Congress had “muffled the voices that best represent the most significant segments of the economy,” which are small businesses.  In re-affirming the First Amendment for all speakers, including disliked speakers such as corporations and small businesses, the Supreme Court held that:

“When government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought. This is unlawful. The First Amendment confirms the freedom to think for ourselves.”

Notwithstanding President Obama’s attempts to characterize corporations as akin to the devil completely undeserving of the First Amendment’s right to free speech, the Supreme Court’s decision in Citizens United ensures the First Amendment’s right to free speech for the rest of us.

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