The Supreme Court of the United States considered the constitutionality of a ban on corporations making independent expenditures in federal candidate elections. To review a summary of the decision’s impact, click here. To download the Supreme Court’s decision, click here.

Citizens United (“Corporation”) is a nonprofit corporation supported by donations. In 2008, the Corporation released a film entitled Hillary: The Movie (“Movie”), a 90-minute film critical of then-Senator Hillary Clinton. The Corporation released the film during the Democratic primary in which Clinton was a candidate.

The Corporation released the Movie directly onto DVD and in theaters, but the Corporation also wanted to offer the Movie through video-on-demand. A cable company offered to show the movie through video-on-demand for free in exchange for an upfront payment. The Corporation accepted the offer and prepared three advertisements to promote the video-on-demand release. However, the Corporation believed that the advertisement and film could violate existing federal campaign finance restrictions on corporations.

The Bipartisan Campaign Reform Act of 2002 (“BCRA”) continued the long-standing prohibition on the use of corporate treasury funds in federal candidate elections. The law also created standards for “electioneering communications”, which are communications made within certain timeframes close to an election that referred to a candidate for federal office and were transmitted in way that they could be received by 50,000 or more persons. Because both the Movie and its ads could be received by more than 50,000 persons and both were paid for with corporate treasury funds, the Corporation believed that it would violate BCRA if either were communicated.

In order to avoid prosecution by the Federal Election Commission (“FEC”), the Corporation filed a lawsuit seeking a declaratory judgment that the federal restrictions on a corporation’s ability to participate in the federal election process were unconstitutional. The lower court rejected the Corporation’s arguments, and the Corporation appealed to the Supreme Court.

The Court found that the federal prohibition on corporate speech in support of federal candidates violated the First Amendment and so declared those restrictions unconstitutional. The Court first looked at whether BCRA applied to the Movie. The Court found that because the Movie was an independent expenditure (i.e., not coordinated with any candidate’s political committee) capable of being received by more than 50,000 and constituted an express piece of advocacy opposed to Senator Clinton (as opposed to a documentary), the Movie was the type of communication that BCRA intended to regulate. Further, the Court declined to create an exception for video-on-demand releases.

Next, the Court considered whether BCRA’s electioneering communications rules violated the First Amendment of the Constitution. The government argued that corporations could establish political action committees to freely engage in these types of communications and so their speech was not curtailed by BCRA, but the Court determined that this did not remove the fact that the BCRA prohibited direct political speech by corporations. The Court also rejected the government’s argument that the ban on corporate independent expenditures was necessary to avoid corporations corrupting the political process, finding that there was no evidence that independent expenditures promoted corruption and that there were other ways to protect against possible corruption, such as direct contribution limits and the reporting of expenditures.

The Court ruled that the ban on corporate independent expenditures for federal candidates is unconstitutional because it bans certain types of speech by corporations. The First Amendment prohibits any law that restricts freedom of speech, and corporations have First Amendment rights and so BCRA impermissibly limited a corporation’s speech rights. BCRA also impermissibly favors certain speakers over others, not only individuals over corporations but also media corporations over other corporations.

Based on the determination that the ban on independent expenditures is unconstitutional, the Court overruled earlier decisions that had allowed a ban on corporate-sponsored independent expenditures in federal elections. The Court upheld the disclaimer and disclosure provisions found in federal law, but ruled that the ban on corporate-supported independent expenditures is unconstitutional.

In addition to the main opinion written by Justice Kennedy, three separate opinions were also filed. Justice Thomas authored an opinion concurring the main opinion but dissented on the upholding of the disclaimer and disclosure rules. Chief Justice Roberts, joined by Justice Alito, filed a concurring opinion. Justice Stevens, joined by Justices Breyer, Ginsburg, and Sotomayor, dissented from the main opinion’s finding that portion of BCRA was unconstitutional but concurred in the upholding of the disclosure and disclaimer provisions.

Citizens United v. Fed. Election Com'n, No. 08-205, 2010 WL 183856 (U.S. Jan. 21, 2010). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].