Very Important First Amendment and Campaign Law Case

CITIZENS UNITED v. FEDERAL ELECTION
COMMISSION

appeal from the united states district court for the district of columbia

No. 08-205. Argued March 24, 2009--Reargued September 9, 2009--Decided January 21, 2010

As amended by §203 of the Bipartisan Campaign Reform Act of 2002 (BCRA), federal law prohibits corporations and unions from using their general treasury funds to make independent expenditures for speech that is an "electioneering communication" or for speech that expressly advocates the election or defeat of a candidate. 2 U. S. C. §441b. An electioneering communication is "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 election, §434(f)(3)(A), and that is "publicly distributed," 11 CFR §100.29(a)(2), which in "the case of a candidate for nomination for President ... 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," §100.29(b)(3)(ii). Corporations and unions may establish a political action committee (PAC) for express advocacy or electioneering communications purposes. 2 U. S. C. §441b(b)(2). In McConnell v. Federal Election Comm'n, 540 U. S. 93, 203-209, this Court upheld limits on electioneering communications in a facial challenge, relying on the holding in Austin v. Michigan Chamber of Commerce, 494 U. S. 652, that political speech may be banned based on the speaker's corporate identity.

In January 2008, appellant Citizens United, a nonprofit corporation, released a documentary (hereinafter Hillary) critical of then-Senator Hillary Clinton, a candidate for her party's Presidential nomination. Anticipating that it would make Hillary available on cable television through video-on-demand within 30 days of primary elections, Citizens United produced television ads to run on broadcast and cable television. Concerned about possible civil and criminal penalties for violating §441b, it sought declaratory and injunctive relief, arguing that (1) §441b is unconstitutional as applied to Hillary; and (2) BCRA's disclaimer, disclosure, and reporting requirements, BCRA §§201 and 311, were unconstitutional as applied to Hillary and the ads. The District Court denied Citizens United a preliminary injunction and granted appellee Federal Election Commission (FEC) summary judgment.

Held:

1. Because the question whether §441b applies to Hillary cannot be resolved on other, narrower grounds without chilling political speech, this Court must consider the continuing effect of the speech suppression upheld in Austin. Pp. 5-20.

(a) Citizen United's narrower arguments--that Hillary is not an "electioneering communication" covered by §441b because it is not "publicly distributed" under 11 CFR §100.29(a)(2); that §441b may not be applied to Hillary under Federal Election Comm'n v. Wisconsin Right to Life, Inc., 551 U. S. 449 (WRTL), which found §441b unconstitutional as applied to speech that was not "express advocacy or its functional equivalent," id., at 481 (opinion of Roberts, C. J.), determining that a communication "is the functional equivalent of express advocacy only if [it] is susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate," id., at 469-470; that §441b should be invalidated as applied to movies shown through video-on-demand because this delivery system has a lower risk of distorting the political process than do television ads; and that there should be an exception to §441b's ban for nonprofit corporate political speech funded overwhelming by individuals--are not sustainable under a fair reading of the statute. Pp. 5-12.

(b) Thus, this case cannot be resolved on a narrower ground without chilling political speech, speech that is central to the First Amendment's meaning and purpose. Citizens United did not waive this challenge to Austin when it stipulated to dismissing the facial challenge below, since (1) even if such a challenge could be waived, this Court may reconsider Austin and §441b's facial validity here because the District Court "passed upon" the issue, Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 379; (2) throughout the litigation, Citizens United has asserted a claim that the FEC has violated its right to free speech; and (3) the parties cannot enter into a stipulation that prevents the Court from considering remedies necessary to resolve a claim that has been preserved. Because Citizen United's narrower arguments are not sustainable, this Court must, in an exercise of its judicial responsibility, consider §441b's facial validity. Any other course would prolong the substantial, nationwide chilling effect caused by §441b's corporate expenditure ban. This conclusion is further supported by the following: (1) the uncertainty caused by the Government's litigating position; (2) substantial time would be required to clarify §441b's application on the points raised by the Government's position in order to avoid any chilling effect caused by an improper interpretation; and (3) because speech itself is of primary importance to the integrity of the election process, any speech arguably within the reach of rules created for regulating political speech is chilled. The regulatory scheme at issue may not be a prior restraint in the strict sense. However, given its complexity and the deference courts show to administrative determinations, a speaker wishing to avoid criminal liability threats and the heavy costs of defending against FEC enforcement must ask a governmental agency for prior permission to speak. The restrictions thus function as the equivalent of a prior restraint, giving the FEC power analogous to the type of government practices that the First Amendment was drawn to prohibit. The ongoing chill on speech makes it necessary to invoke the earlier precedents that a statute that chills speech can and must be invalidated where its facial invalidity has been demonstrated. Pp. 12-20.

2. Austin is overruled, and thus provides no basis for allowing the Government to limit corporate independent expenditures. Hence, §441b's restrictions on such expenditures are invalid and cannot be applied to Hillary. Given this conclusion, the part of McConnell that upheld BCRA §203's extension of §441b's restrictions on independent corporate expenditures is also overruled. Pp. 20-51.

(a) Although the First Amendment provides that "Congress shall make no law ... abridging the freedom of speech," §441b's prohibition on corporate independent expenditures is an outright ban on speech, backed by criminal sanctions. It is a ban notwithstanding the fact that a PAC created by a corporation can still speak, for a PAC is a separate association from the corporation. Because speech is an essential mechanism of democracy--it is the means to hold officials accountable to the people--political speech must prevail against laws that would suppress it by design or inadvertence. Laws burdening such 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." WRTL, 551 U. S., at 464. This language provides a sufficient framework for protecting the interests in this case. Premised on mistrust of governmental power, the First Amendment stands against attempts to disfavor certain subjects or viewpoints or to distinguish among different speakers, which may be a means to control content. The Government may also commit a constitutional wrong when by law it identifies certain preferred speakers. There is no basis for the proposition that, in the political speech context, the Government may impose restrictions on certain disfavored speakers. Both history and logic lead to this conclusion. Pp. 20-25.

(b) The Court has recognized that the First Amendment applies to corporations, e.g., First Nat. Bank of Boston v. Bellotti, 435 U. S. 765, 778, n. 14, and extended this protection to the context of political speech, see, e.g., NAACP v. Button, 371 U. S. 415, 428-429. Addressing challenges to the Federal Election Campaign Act of 1971, the Buckley Court upheld limits on direct contributions to candidates, 18 U. S. C. §608(b), recognizing a governmental interest in preventing quid pro quo corruption. 424 U. S., at 25-26. However, the Court invalidated §608(e)'s expenditure ban, which applied to individuals, corporations, and unions, because it "fail[ed] to serve any substantial governmental interest in stemming the reality or appearance of corruption in the electoral process," id., at 47-48. While Buckley did not consider a separate ban on corporate and union independent expenditures found in §610, had that provision been challenged in Buckley's wake, it could not have been squared with the precedent's reasoning and analysis. The Buckley Court did not invoke the overbreadth doctrine to suggest that §608(e)'s expenditure ban would have been constitutional had it applied to corporations and unions but not individuals. Notwithstanding this precedent, Congress soon recodified §610's corporate and union expenditure ban at 2 U. S. C. §441b, the provision at issue. Less than two years after Buckley, Bellotti reaffirmed the First Amendment principle that the Government lacks the power to restrict political speech based on the speaker's corporate identity. 435 U.S., at 784-785. Thus the law stood until Austin upheld a corporate independent expenditure restriction, bypassing Buckley and Bellotti by recognizing a new governmental interest in preventing "the corrosive and distorting effects of immense aggregations of [corporate] wealth ... that have little or no correlation to the public's support for the corporation's political ideas." 494 U. S., at 660. Pp. 25-32.

(c) This Court is confronted with conflicting lines of precedent: a pre-Austin line forbidding speech restrictions based on the speaker's corporate identity and a post-Austin line permitting them. Neither Austin's antidistortion rationale nor the Government's other justifications support §441b's restrictions. Pp. 32-47.

(1) The First Amendment prohibits Congress from fining or jailing citizens, or associations of citizens, for engaging in political speech, but Austin's antidistortion rationale would permit the Government to ban political speech because the speaker is an association with a corporate form. Political speech is "indispensable to decisionmaking in a democracy, and this is no less true because the speech comes from a corporation." Bellotti, supra, at 777 (footnote omitted). This protection is inconsistent with Austin's rationale, which is meant to prevent corporations from obtaining " 'an unfair advantage in the political marketplace' " by using " 'resources amassed in the economic marketplace.' " 494 U. S., at 659. First Amendment protections do not depend on the speaker's "financial ability to engage in public discussion." Buckley, supra, at 49. These conclusions were reaffirmed when the Court invalidated a BCRA provision that increased the cap on contributions to one candidate if the opponent made certain expenditures from personal funds. Davis v. Federal Election Comm'n, 554 U. S. ___, ___. Distinguishing wealthy individuals from corporations based on the latter's special advantages of, e.g., limited liability, does not suffice to allow laws prohibiting speech. It is irrelevant for First Amendment purposes that corporate funds may "have little or no correlation to the public's support for the corporation's political ideas." Austin, supra, at 660. All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech, and the First Amendment protects the resulting speech. Under the antidistortion rationale, Congress could also ban political speech of media corporations. Although currently exempt from §441b, they accumulate wealth with the help of their corporate form, may have aggregations of wealth, and may express views "hav[ing] little or no correlation to the public's support" for those views. Differential treatment of media corporations and other corporations cannot be squared with the First Amendment, and there is no support for the view that the Amendment's original meaning would permit suppressing media corporations' political speech. Austin interferes with the "open marketplace" of ideas protected by the First Amendment. New York State Bd. of Elections v. Lopez Torres, 552 U. S. 196, 208. Its censorship is vast in its reach, suppressing the speech of both for-profit and nonprofit, both small and large, corporations. Pp. 32-40.

(2) This reasoning also shows the invalidity of the Government's other arguments. It reasons that corporate political speech can be banned to prevent corruption or its appearance. The Buckley Court found this rationale "sufficiently important" to allow contribution limits but refused to extend that reasoning to expenditure limits, 424 U.S., at 25, and the Court does not do so here. While a single Bellotti footnote purported to leave the question open, 435 U. S., at 788, n. 26, this Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption. That speakers may have influence over or access to elected officials does not mean that those officials are corrupt. And the appearance of influence or access will not cause the electorate to lose faith in this democracy. Caperton v. A. T. Massey Coal Co., 556 U. S. ___, distinguished. Pp. 40-45.

(3) The Government's asserted interest in protecting shareholders from being compelled to fund corporate speech, like the antidistortion rationale, would allow the Government to ban political speech even of media corporations. The statute is underinclusive; it only protects a dissenting shareholder's interests in certain media for 30 or 60 days before an election when such interests would be implicated in any media at any time. It is also overinclusive because it covers all corporations, including those with one shareholder. P. 46.

(4) Because §441b is not limited to corporations or associations created in foreign countries or funded predominately by foreign shareholders, it would be overbroad even if the Court were to recognize a compelling governmental interest in limiting foreign influence over the Nation's political process. Pp. 46-47.

(d) The relevant factors in deciding whether to adhere to stare decisis, beyond workability--the precedent's antiquity, the reliance interests at stake, and whether the decision was well reasoned--counsel in favor of abandoning Austin, which itself contravened the precedents of Buckley and Bellotti. As already explained, Austin was not well reasoned. It is also undermined by experience since its announcement. Political speech is so ingrained in this country's culture that speakers find ways around campaign finance laws. Rapid changes in technology--and the creative dynamic inherent in the concept of free expression--counsel against upholding a law that restricts political speech in certain media or by certain speakers. In addition, no serious reliance issues are at stake. Thus, due consideration leads to the conclusion that Austin should be overruled. The Court returns to the principle established in Buckley and Bellotti that the Government may not suppress political speech based on the speaker's corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations. Pp. 47-50.

3. BCRA §§201 and 311 are valid as applied to the ads for Hillary and to the movie itself. Pp. 50-57.

(a) Disclaimer and disclosure requirements may burden the ability to speak, but they "impose no ceiling on campaign-related activities," Buckley, 424 U. S., at 64, or " ' "prevent anyone from speaking," ' " McConnell, supra, at 201. The Buckley Court explained that disclosure can be justified by a governmental interest in providing "the electorate with information" about election-related spending sources. The McConnell Court applied this interest in rejecting facial challenges to §§201 and 311. 540 U. S., at 196. However, the Court acknowledged that as-applied challenges would be available if a group could show a " 'reasonable probability' " that disclosing its contributors' names would " 'subject them to threats, harassment, or reprisals from either Government officials or private parties.' " Id., at 198. Pp. 50-52.

(b) The disclaimer and disclosure requirements are valid as applied to Citizens United's ads. They fall within BCRA's "electioneering communication" definition: They referred to then-Senator Clinton by name shortly before a primary and contained pejorative references to her candidacy. Section 311 disclaimers provide information to the electorate, McConnell, supra, at 196, and "insure that the voters are fully informed" about who is speaking, Buckley, supra, at 76. At the very least, they avoid confusion by making clear that the ads are not funded by a candidate or political party. Citizens United's arguments that §311 is underinclusive because it requires disclaimers for broadcast advertisements but not for print or Internet advertising and that §311 decreases the quantity and effectiveness of the group's speech were rejected in McConnell. This Court also rejects their contention that §201's disclosure requirements must be confined to speech that is the functional equivalent of express advocacy under WRTL's test for restrictions on independent expenditures, 551 U. S., at 469-476 (opinion of Roberts, C.J.). Disclosure is the less-restrictive alternative to more comprehensive speech regulations. Such requirements have been upheld in Buckley and McConnell. Citizens United's argument that no informational interest justifies applying §201 to its ads is similar to the argument this Court rejected with regard to disclaimers. Citizens United finally claims that disclosure requirements can chill donations by exposing donors to retaliation, but offers no evidence that its members face the type of threats, harassment, or reprisals that might make §201 unconstitutional as applied. Pp. 52-55.

(c) For these same reasons, this Court affirms the application of the §§201 and 311 disclaimer and disclosure requirements to Hillary. Pp. 55-56.

Reversed in part, affirmed in part, and remanded.

Kennedy, J., delivered the opinion of the Court, in which Roberts, C. J., and Scalia and Alito, JJ., joined, in which Thomas, J., joined as to all but Part IV, and in which Stevens, Ginsburg, Breyer, and Sotomayor, JJ., joined as to Part IV. Roberts, C. J., filed a concurring opinion, in which Alito, J., joined. Scalia, J., filed a concurring opinion, in which Alito, J., joined, and in which Thomas, J., joined in part. Stevens, J., filed an opinion concurring in part and dissenting in part, in which Ginsburg, Breyer, and Sotomayor, JJ., joined. Thomas, J., filed an opinion concurring in part and dissenting in part.

Link to Interesting Article re: Toyota Crisis Management

http://www.detnews.com/article/20100128/AUTO01/1280364/1148/rss25

Charities in Africa

Paul Theroux in his book Dark Star Safari is quoted:

"Charities and aid programs seemed to turn African problems into permanent conditions that were bigger and messier."

He continues:

"They have turned much of Africa into a land of beggars and helpless whiners who approach life with a sense of frustrated entitlement.The result after four decades [of extensive charitable efforts] was a lower standard of living, a higher rate of illiteracy, overpopulation, and much more disease."

He believes that the key to Africa's prosperity is in the hands of Africans,

"In my view, aid is a failure if in forty years of charity the only people still dishing up the food and doling out the money are foreigners. No Africans are involved - there is not even a concept of African volunteerism or labor-intensive project. If all you have done is spend money and have not inspired anyone, you can teach the sharpest lesson by turning your back and going home."

What is the difference between morals and ethics?

Here's something I found online that supplements our previous discussion in class about the difference between morals and ethics.

“The difference between ethics and morals can seem somewhat arbitrary to many, but there is a basic, albeit subtle, difference. Morals define personal character, while ethics stress a social system in which those morals are applied. In other words, ethics point to standards or codes of behavior expected by the group to which the individual belongs. This could be national ethics, social ethics, company ethics, professional ethics, or even family ethics. So while a person’s moral code is usually unchanging, the ethics he or she practices can be other-dependent.

When considering the difference between ethics and morals, it may be helpful to consider a criminal defense lawyer. Though the lawyer’s personal moral code likely finds murder immoral and reprehensible, ethics demand the accused client be defended as vigorously as possible, even when the lawyer knows the party is guilty and that a freed defendant would potentially lead to more crime. Legal ethics must override personal morals for the greater good of upholding a justice system in which the accused are given a fair trial and the prosecution must prove guilt beyond a reasonable doubt…”

Things made a little more sense after I read this, so hopefully some of you find it helpful!

Source: http://www.wisegeek.com/what-is-the-difference-between-ethics-and-morals.htm

Morals and Ethics.... and some Ayn Rand

Here is a link to a site that I found that briefly described a few examples of morals and ethics in society, also pointing out the main difference. Enjoy...!

http://www.buzzle.com/articles/difference-between-ethics-and-morality.html


Also, here is a famonus invterview of Ayn Rand with Mike Wallace about her view on objectivism in which she includes her thoughts on morals and faith.

http://www.youtube.com/watch?v=7ukJiBZ8_4k

Lincoln quote- Captalism, Labor, Wealth

"Property is the fruit of labor...property is desirable...is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise. Let not him who is houseless pull down the house of another; but let him labor diligently and build one for himself, thus by example assuring that his own shall be safe from violence when built." The Collected Works of Abraham Lincoln edited by Roy P. Basler, Volume VII, "Reply to New York Workingmen's Democratic Republican Association" (March 21, 1864), pp. 259-260.

Ayn Rand on Charity

My views on charity are very simple. I do not consider it a major virtue and, above all, I do not consider it a moral duty. There is nothing wrong in helping other people, if and when they are worthy of the help and you can afford to help them. I regard charity as a marginal issue. What I am fighting is the idea that charity is a moral duty and a primary virtue.

“Playboy’s Interview with Ayn Rand,” March 1964.

Reading Assignment - Cheap - The High Cost of Discount Culture

Important Reminder: Please complete your reading of: Cheap - The High Cost of Discount Culture by 2-8-2010. We will have an in-class assignment Monday Feb. 8.

Welcome to USD Business & Society - Course Description

University of San Diego
School of Business Administration

ETLW 302
Business & Society
Section # 8
Spring 2010




Richard E. Custin, J.D., LL.M. email: rcustin@sandiego.edu
Olin Hall Office 205 Office Hours- MWF 7-8 A.M. & 10-11 A.M.
619 260-4854



Course Description:


This course examines principles of social responsibility, ethics, law, and stakeholder theory as they apply to organizations domestically and abroad. Coverage includes business ethics; individual versus societal interests; labor and employment issues; consumer protection; discrimination and diversity; the natural environment; politics, public policy, and government regulation of business. Particular attention is given to developing moral reasoning skills. Meets the requirements for the Environmental Studies minor. Prerequisite: MGMT 300.

Course Objectives:


Students who complete this course will be able to:

Recognize the stakeholders in various types of international and domestic organizations

Evaluate competing interests in business, government, and society

Apply ethical reasoning to problem solving in business

Demonstrate an appreciation for diversity

Assess the relationship of ethics and law




Key topics to be covered this semester are:

The Relationship between Business & Society

Corporate Responsibility

The Stakeholder Approach

Corporate Governance

Crisis Management

Business Ethics

Legal issues concerning business including Products Liability, & Consumer Product Safety

Employment Law

Labor Law

Employment Discrimination & Affirmative Action

Workplace Legal Issues including Privacy & Health & Safety





Requited Course Materials:
Business & Society, Stakeholders, Ethics & Public Policy, 12, Lawrence & Weber, McGraw-Hill Irwin

Cheap: The High Cost of Discount Culture, Ellen Ruppel Shell,
Penguin Press (2009) ISBN-13: 978-1594202155


Course Requirements and Student Evaluation:

Attendance:

We fully expect that students will attend all scheduled classes. All students will be provided two absences during the spring semester. Your final cumulative point total may be reduced five points for each absence in excess of two days. Please do not enter the classroom late. Tardiness may count as a class absence. Please note: Students in prior semesters have occasionally ignored the attendance and tardiness rule and have earned poor grades.


Caveat:

Average work in this course will result in a “C’ grade. You must be prepared to discuss the material assigned and the cases contained within. In the event you are unprepared for any class question or case discussion your overall cumulative grade points may be reduced five points for each instance you are unprepared. We need your active participation! Please do not text, email or use your phone during class. You may use your computer for taking notes or to view the electronic version of the text.

Please provide me with a valid e-mail address. I may contact you via e-mail with information concerning class cancellations, assignments, due dates and supplemental reading. An e-mail message created and sent to you creates a presumption that the e-mail was received and read by you. Therefore, check your e-mail regularly! You may need access to the Internet to complete some assignments.

No make-up examinations will be given absent extraordinary reasons. (Ie: major earthquakes-8.0+, tornados, floods- like the “Ark”, impending end of world, and disasters of monstrous proportion) No assignments will be accepted after the announced due date.

Grading:

Scale: A+ 100-97, A 96-92, A-91-90, B+89, B 88-82, B-80-81, C+ 79, C 78-72, C-71-70, D+ 69, D 68-62, D- 61-60, less than 60=F

2 tests = 40%
multiple choice

Final Examination= 30%
Essay and/or multiple choice
Comprehensive

Written Assignments= 15%

Class Participation= 15%



Statement on Academic Integrity:

“All members of the University community share the responsibility for maintaining an environment of academic integrity since academic dishonesty is a threat to the University. Acts of academic dishonesty include: a) unauthorized assistance on an examination; b) falsification or invention of data; c) unauthorized collaboration on an academic exercise; d) plagiarism; e) misappropriation of resource materials; f) any unauthorized access of an instructor's files or computer account; or g) any other serious violation of academic integrity as established by the instructor.”

School of Business Administration Mission Statement:

To develop socially responsible business leaders with a global outlook through academically rigorous, relevant, and values-based education and research.