Citizens United v. Federal Election Commission

2010-01-21

Headline: Court strikes down bans on corporate and union independent political spending while upholding disclosure and disclaimer rules, allowing corporate treasuries to fund independent election ads during campaigns.

Holding: The Court held that the First Amendment protects independent political expenditures by corporations and unions, invalidating §441b’s ban on such expenditures while upholding disclosure and disclaimer requirements as applied to the film and ads.

Real World Impact:

Allows corporations and unions to use general treasury funds for independent political ads.
Keeps disclosure and disclaimer rules for election ads in effect.
Overrules part of McConnell and removes a legal basis for criminal penalties under §441b.

Topics: campaign finance, corporate political spending, disclosure rules, election advertising, First Amendment

Summary

Background

Citizens United, a nonprofit corporation, produced a film critical of then-Senator Hillary Clinton and planned to distribute it by video-on-demand and run television ads shortly before primary elections. The group feared federal law (BCRA §203 and 2 U.S.C. §441b) barred corporations and unions from using general treasury funds for independent political spending and asked a court to block enforcement after the District Court ruled for the Federal Election Commission.

Reasoning

The Court rejected narrower statutory and delivery-system arguments and concluded it was necessary to address whether the ban on corporate independent expenditures could stand. It overruled Austin and held that the First Amendment protects independent political expenditures by corporations and unions, finding that speech cannot be suppressed because of the speaker’s corporate identity. The opinion explained that Austin’s “antidistortion” rationale could not justify a broad ban, and that anticorruption and shareholder-protection reasons were insufficient to sustain the restriction under First Amendment scrutiny. The Court treated political speech as requiring strict protection but upheld BCRA’s disclosure and disclaimer provisions as applied to the movie and ads.

Real world impact

The ruling clears the way for corporations and unions to fund independent political ads from general treasuries while leaving in place public notice requirements about who pays for those ads. The Court overruled the part of McConnell that upheld broader corporate expenditure limits and remanded the case for further proceedings consistent with these holdings.

Dissents or concurrances

Several Justices filed separate concurring and dissenting opinions; some agreed with parts of the outcome while dissenting from overruling prior precedents or the breadth of the new rule.