Thursday, September 6, 2012

Eighth Circuit Strikes Corporate Campaign Spending Law, Tees Up Corporate Contribution Ban

A sharply divided Eighth Circuit ruled in Minnesota Citizens Concerned for Life, Inc. v. Swanson that Minnesota's requirement that corporations and associations establish a "political fund" for independent campaign expenditures violated the First Amendment.

The court also upheld the state's ban on corporate contributions to political parties and candidates for the purpose of promoting a candidate, based on the Supreme Court's long-standing distinction between how it treats restrictions on contributions (more deferentially, with a lower level of scrutiny, more likely to be upheld by the courts) and how it treats restrictions on expenditures (far less deferentially, with strict scrutiny, and thus overturned by the courts).

But the court also suggested that this distinction hangs by a thread, and that the Supreme Court may be ready to revisit it--likely subjecting all restrictions on contributions and expenditures to strict scrutiny.  If so, this case could take down restrictions on corporate contributions to parties and candidates.  After Citizens United struck restrictions on independent corporate spending, this would remove the last meaningful restriction in state and federal law on corporate participation in electioneering.

Keep an eye on this one.  If, as the Eighth Circuit seemed to suggest, the Supreme Court is ready to reconsider this mainstay of First Amendment campaign finance jurisprudence--the distinction between contributions and expenditures--this may be the case.

The case involved two Minnesota laws.  The first required corporations and associations--even just two people getting together--to create a "political fund" for independent electioneering expenditures.  State law also required political funds to file all manner of reports on contributions and expenditures with the state--even when the corporation stopped spending.  The requirements thus looked like contributor-disclosure requirement (in the spirit of the DISCLOSE Act).  If so, as the state and dissent said, the requirements would be subject to the lower level of scrutiny for disclosure laws--the easier-to-meet exacting scrutiny (and not strict scrutiny).

The majority said that the political fund requirement looked more like the PAC requirement struck down in Citizens United.  But even if the lower level of scrutiny applied, it said, the state didn't articulate a sufficiently weighty interest to justify the burdensome reporting requirements.  (The dissent disagreed; it said there were four: informing the public of corporate contributors; informing the corporate shareholders how the corporation spends money; preventing "improper and suspect relationships" between elected officials and those who support them; and gathering data to detect violations of campaign finance laws.)  The majority thus struck the political fund requirement.

The second law bans corporate contributions to political parties and candidates for advocacy for or against a candidate.  The court upheld the law under the long-standing distinction between the treatment of restrictions on contributions and restrictions on expenditures.  (As above, the courts apply strict scrutiny to restrictions on corporate expenditures and overturn them (as in Citizens United).  In contrast, courts apply lower scrutiny to restrictions on contributions, giving those restrictions more breathing room.)

But the court also suggested that this distinction is on shaky ground, and that the Supreme Court might be ready to revisit it.  In footnote 14, it quoted Justice Thomas's dissent in Beaumont: "explaining his belief that all campaign finance laws are subject to strict scrutiny and the federal ban on corporate contributions was 'not narrowly tailored to meet any relevant compelling interest.'"

More importantly (if we're counting heads on the Court), the Eighth Circuit also quoted Justice Kennedy's concurrence in that same case:

Were we presented with a case in which the distinction between contributions and expenditures under the whole scheme of campaign finance regulation were under review, I might join Justice Thomas' dissent.

Op. at 24, fn 12.

If so, and if the two could get three more votes, this case could mark the end of the last meaningful restriction on corporate campaign spending--the long-standing state and federal bans on corporate contributions to political parties and candidates.

SDS

http://lawprofessors.typepad.com/conlaw/2012/09/eighth-circuit-strikes-corporate-campaign-spending-law-tees-up-corporate-contribution-ban.html

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Comments

Spending money on electioneering and supporting political candidates is and should be a fundamental right. Only the nature of American voters and the Supreme Court's unwillingness to differentiate between corporations as business entities and corporations as citizens entitled to exercise fundamental rights make this principle seem dangerous to self-government. The false equivalence of corporate "personhood" and living persons demonstrates beyond any possible doubt the hypocrisy of the ultra-conservative justices' "originalism."

Posted by: Jeffrey G. Purvis | Sep 8, 2012 1:26:44 PM

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