Appellants Reply Brief — First Nat. Bank of Boston v. Bellotti

FOR ARGUMENT

In the

Supreme Court of the United States

Ocroser Term, 1976

No. 76-1172

THE FIRST NATIONAL BANK OF BOSTON,

NEW ENGLAND MERCHANTS NATIONAL BANK,

THE GILLETTE COMPANY,

~ DIGITAL EQUIPMENT CORPORATION,

and

WYMAN-GORDON COMPANY,

APPELLANTS,

V.

FRANCIS X. BELLOTTI, ATTORNEY GENERAL,

APPELLEE.

On Appeal from the Supreme Judicial Court

for the Commonwealth of Massachusetts

APPELLANTS’ REPLY BRIEF

Francis H. Fox

E. Susan Gansu

Bryenam, Dana & G0

100 Federal Street

Boston, Massachusetts 02110

Attorneys for Appellants

Blanchard Press. Inc Boston. Mass — Lew Printers

TABLE OF CONTENTS

Page

I. The Action Is Not Moo t. 2

A. The Time Frame Precludes Review By This

e 2

B. Reasonable Likelihood That The *

Could Recur. 2 5

II. The Section 8 Prohibition Is Unconstitutional As

A Violation Of Freedom Of Expression. 7

III. Conclusion | 15

Taste or Avtuorities Crræp

Cases

Advisory Opinion 1975 PA 227, 396 Mich. 465, 242

N. W. ad 3 (1976) ......... 8, 15

Answer of the Justices, Mass. Adv. Sh. (1977) 1845,

—_i Pp 6

Associated Press v. National Labor Relations Board,

301 U.S. 103 (1937) | i)

Buckley v. Valeo, 424 US. 1 (1976) 14, 15

C&C Plywood Corp. v. Hanson, 420 F. Supp. 1254

(D. Mont. 1976) appeal docketed No. 76-3118 (9th

Cir. September 29, 1976) 11, 15

Citizens for Jobs and Energy, Inc. v. Fair Political

Comm n, 16 Cal. 3d 671, 547 P.2d 1386 (1976) 15

Corrigan v. Cleveland-Cliffs Iron Co., 169 Ohio St.

42, 157 N.E.2d 331 (1959) 11

International Union UAW v. National Right to Work

Legal Defense and Education Foundation, Inc., 433

F. Supp. 474 (D.D.C. 1977), appeal docketed, Nos

77-1739, 77-1766 (D.C. Cir. Aug. 16, 1977, Aug. 23,

1977) 14

Nebraska Press Ass'n v. Stuart, 427 U.S. 539 (1976) 5

Pacific Gas & Electric Co. v. Berkeley, 60 Cal. App. 3d

123, 131 Cal. Rptr. 350 (1976) 15

u Table of Contents

Page

People v. Gansley, 191 Mich. 357, 158 N. W. 195 (1916) 8

Schwartz v. Romnes, 357 F. Supp. 30 (S.D.N.Y. 1973),

rev'd, 495 F.2d 844 (2d Cir. 197427 3 13

Schwartz v. Romnes, 495 F. 2d 844 (2d Cir. 1974) 11. 12, 13

Southern Pacific Terminal Co. v. ICC, 219 U.S. 498

( non deinen p Wns ... &&

Storer v. Brown, 415 U.S. 724 (1974) | 7

United States v. Chestnut, 533 F.2d 40 (24 Cir.), cort.

denied, 429 U.S. 829 (1976) as +. 13

Weinstein v. Bradford, 423 U.S. 147 (1975) 5

Constitutional and Statutory Provisions

United States Constitution,

First Amendment | 9, 13

Massachusetts Constitution,

Amendment Article 48, IV, 65 3

Federal Corrupt Practices Act, 2 U.S.C. 6441(b)[For-

merly 18 U.S.C. 5610] 9, 14

Federal Election Campaign Act, 18 U.S.C. §608(b)

Labor-Management Reporting & Disclosure Act, 29

U.S.C. 6411(a)(4) 14

Ala. Code tit. 17, 6286 (1958) 9

Ariz. Rev. Stat. §16-471(A), (H) (1975) 9

Ark. Stat. Ann. 63-1110 (1976) 9

Del. Code Ann. tit. 15, 58004 (a) (Supp. 1976) 10

Fla. Stat. Ann. 6106.08(1) (Supp. 1977) 10

Ind. Code Ann. §3-4-3-3 (Supp. 1976) 10

Iowa Code Ann. §56.29 (Supp. 1977-78) 10

Kan. Stat. §25-1709 (1973) 10

Ky. Rev. Stat. §121-035(1) (Supp. 1976) 10

La. Rev. Stat. Ann. 418 :1488(C) (Supp. 1977) 10

Me. Rev. Stat. Ann. tit. 21, §§1395.2, 1395.3 (Supp:

. R le 10

Table of Contents iii

Page

Md. Ann. Code art. 33. §26-9(b) (1976) | ~~

Mass. Gen. Laws Ann. c 55, §8 (Supp. 1977-78) 2, 5, 6, 7,

8, 9, 10, 14

Mass. Gen. Laws Ann. c. 55, §§6, 7 (Supp. 1977-78) 6

Minn. Stat. Ann. §210A.34 (Supp. 1977) 11

Mo. Ann. Stat. §130.020.5 (Supp. 1977) 11

Mont. Rev. Codes Ann. §§23-4795(1), 4744 (Supp. 1975)

N. H. Rev. Stat. Ann. §70:2(1), (II), (IIT) (1970) 11

N. J. Stat. Ann. §19:34-45 (1964) 11

NY. Election Law 5480 (McKinney Supp. 1976-77) 11

N. C. Gen. Stat. §§163-278.15, 163-278.19 (1976) 11

N. D. Cent. Code 516-2008 (Supp. 1977) 11

Ohio Rev. Code Ann. §3599.03 (Baldwin) (1971) 11

Okla. Stat. Ann. tit 26, §15-110 (Supp. 1976) 11

Or. Rev. Stat. (260.472 (1975) 11

Pa. Stat. Ann. tit. 25, §3225(b) (Purdon) (1964) 11

S. D. Compiled Laws §12-25-2 (Supp. 1977) 12

Tenn. Code Ann. §2-1932 (Supp. 1976) 12

Tex. Elec. Code Ann. art. 14.06 (Supp. 1976-77) 12

W. Va. Code §3-8-8 (1971) 12

Wise. Stat. Ann. §11.38(a)(1) (Supp. 1977-78) 12

Wyo. Stat. §22.1-389.2 (Interim Supp. 1977) 12

Miscellaneous

Calendar of Assignments of the Justices of the Su-

preme Judicial Court of Massachusetts for the year

beginning September 1, 1975 and ending August 31,

1976 4

First Amendment Overbreadth Doctrine, 83 Harv. L.

Rev. 844 (1970) 7

Journal of the Court for the 1975 Term at 777 4

Monaghan, First Amendment Due Process , 83 Harv.

L. Rev. 517 (1970) 7

Opinion Atty. Gen. (Coleman) (Iowa), June 18, 1975 10

In the

Supreme Court of the United States

Ocroser Team, 1976

No. 76-1172

THE FIRST NATIONAL BANK OF BOSTON,

NEW ENGLAND MERCHANTS NATIONAL BANK,

THE GILLETTE COMPANY,

DIGITAL EQUIPMENT CORPORATION,

and

WYMAN-GORDON COMPANY,

APPELLANTS,

FRANCIS X. BELLOTTI, ATTORNEY GENERAL,

APPELLEE.

On Appeal from the Supreme Judicial Court

for the Commonwealth of Massachusetts

APPELLANTS’ REPLY BRIEF

Norse: This reply brief is not a comprehensive treatment

of the issues. It is a seriatim response to some of the points

raised by the Appellee. Appellants respectfully refer the

Court to their main brief for faller coverage of each of the

topics mentioned herein.

I. Tue Action Is Nor Moor

A. The Time Frame Precludes Review By This Court.

Appellee’s statements with respect to the time available

for litigation actually demonstrate the truth of Appellants’

contention that the statutory proscription against corpora-

tions operated in a time frame too short for complete

adjudication. The Attorney General points out that a suit

to challenge Mass. Gen. Laws c. 55, §8 could have been

commenced nearly eighteen months prior to the election“

(A. Br., 11):

If the suit had begun in May of 1975 and proceeded

through all stages at exactly the same pace as this

litigation, it could have been submitted to this Court

while the controversy was a current one. Thus the

limited period for review in this case is a direct conse-

quence of the Appellants’ trial strategy and is not a

result of the operation of natural or man-made laws.

No matter when commenced, this case could not have been

brought through to a Supreme Court conclusion in time

to afford Appellants relief. Cf. Southern Pacific Terminal

Co. v. ICC, 219 U.S. 498, 515 (1911) (2 year order of ICC

deemed ‘‘evading review’’). The instant action was com-

menced by seeking declaratory relief before a single justice

of the Supreme Judicial Court on April 9, 1976. The case

was argued before the full court on June 8, 1976. Although

judgment was rendered on September 28, 1976, no opinion

Appellee s brief is cited herein as A. Br.

issued until February 1, 1977, eight months after argument.

This Court denied Appellants’ motion to stay the decision

of the Supreme Judicial Court on October 6, 1976. The

ease is scheduled for oral argument before this Court

19 months after the filing of the complaint. Assuming,

arguendo, that exactly the same time would have been con-

sumed had Appellants filed their complaint on May 8, 1975,

one day after the Massachusetts legislature took the final

action necessary to place the graduated income tax amend-

ment on the November 1976 ballot,? Appellants would have

presented argument to this Court no earlier than Decem-

ber 1976. The election was held November 2, 1976. A de-

cision following this argument would have come several

weeks or months after the election.

Furthermore, any decision invalidating the statute and

allowing corporate spending would have to come well in

advance of the election date itself in order to allow Appel-

lants an opportunity to make any effective communication

to the voters. The right to communicate, if recognized two

days or two weeks before the election, would have little

value.

The Attorney General does not, and could not, argue that

the case would indeed have proceeded through the Supreme

Court in less than eighteen months had the action been

commenced in May, 1975. In fact, it is unlikely that any

such suit would have proceeded as fast as the instant action

did. The relative speed with which this case was acted

upon was due in no small measure to the courteous cooper-

? After passage by two consecutive sessions of the Massachusetts

General Court, a proposed constitutional amendment must be

certified ty the clerk of the joint arasion to the Seevetery of the

Commonwealth before it can be submitted to the voters. Mass.

Const. Amend. Art. 48, IV. §5. The amendment in question

received final approval by the General Court on May 7, 1975 and

was received by the Secretary's Office on May 29, 1975. (J.S. 9 n4,

JS. App. 43-44).

a

ation of the Attorney General and the active assistance of

the Massachusetts single justice, who perceived that the

issue at stake was both novel and important and that time

was pressing. Considerable expedition was afforded this

case so that the Massachusetts court itself could rule on

the matter before the election. Furthermore, if one uses

the instant case as a guide but looks to the court schedules

which would have been encountered had the action actually

been commenced in May, 1975, this Court would not have

heard argument until February, 1977—20 months after the

filing of the complaint and three months after the election.“

In conclusion, nothing in the record suggests that delay

was a trial strategy. It was not. The earlier the case had

been commeneed, the less likely speedy treatment would

have been afforded. Even had an action, commenced in

May of 1975, proceeded at the same pace, this Court would

not have heard oral argument before the election. It is

totally unlikely that an opinion could have issued in time

to permit meaningful expenditures or contributions.

until September, 1975, at the earliest given the summer recess.

Calendar of Assignments of the Justices of the Supreme Judicial

;

i

|

:

g

i

.

=

5

B. Reasonable Likelihood That The Issues Could Recur.

The Attorney General argues that it ‘‘cannot be conclu-

sively presumed’’ that a graduated income tax question will

again be placed on the ballot (A. Br. 9). But a ‘‘reason-

able expectation’’ and not a conclusive presumption is all

that is required. Weinstein v. Bradford, 423 U.S. 147, 149

(1975). See also Southern Pacific Terminal Co. v. ICC,

219 U.S. 498, 515 (1911). The precise form which the next

proposed tax question may take is not critical. Chapter 55,

§8, prohibits expenditures or contributions with respect to

any ballot question dealing solely with taxation of indi-

vidual income or property.

The contention that a future case will present a better

record (A. Br. 8, 10) ignores the fact that a central

issue on appeal is whether such a record must be produced,

in other words, whether Appellants’ First Amendment

rights depend upon proof by Appellants that their interests

are in fact materially affected. To argue that action by

this Court should await a case with a better record“

ignores not only the actual record in the instant action,

which includes a detailed statement of facts, but also ig-

nores Appellants’ argument that the type of trial necessary

to produce a better record’’ is itself an impermissible

burden upon, and chills the exercise of, First Amendment

rights.

This Court has been especially sensitive to the need to

avoid an unrealistic and formalistic test of mootness in the

First Amendment context. E. g., Nebraska Press Ass'n v.

Stuart, 427 U.S. 539, 546-47 (1976). The continuing nature

of the controversy and the need for clarification by this

Court is well illustrated by a recent Supreme Judicial Court

ruling, in which that court declined to answer certain ques-

tions propounded by the House of Representatives of the

Commonwealth of Massachusetts with respect to the consti-

tutionality of proposed changes to Mass. Gen. Laws c. 55,

§§6, 7 and 8 because the instant action was pending before

this Court and its resolution would affect the entire statute.‘

Answer of the Justices, Mass. Adv. Sh. (1977) 1845, —

N.E.2d —. The proposed changes would not have altered

in any way the specific language in 58 attacked by Appel-

lants. Nevertheless, the Court responded to the House of

Representatives as follows:

While the questions propounded by the House do not

directly concern our holding in First Nat’l Bank, the

entire statutory scheme on which the further limita-

tions imposed by the proposed legislation are engrafted

is dependent for its validity on the constitutional va-

lidity of the basic limitation contained in the current

G.L. c. 55, §8, and continued in §3 of the proposed bill.

While any of the limitations contained in the proposed

bill may have their validity or invalidity adjudged in

the abstract, in terms of advising the House as to the

over-all validity of the proposed legislation the two

matters cannot be separated.

*The questions propounded by the House were concerned with

the constitutionality of a pending bill which would: (1) prohibit

committees promoting or opposing ballot questions from receiving

more than $1,000 in contributions from any corporation; (2) limit

the number of committees promoting or opposing ballot questions

to one committee for the opponents and one for the proponents;

(3) limit corporations to contributions of $1,000 for each question

materially affecting such corporation; (4) prohibit corporations

from expending more than $1,000 to influence the vote on any

question which materially affects the corporation; (5) prohibit

persons or political committees promoting or opposing ballot ques-

tions from soliciting or receiving any contributions from persons,

political committees or corporations located outside the Common-

wealth and (6) prohibit utility companies from including in their

billing process information or advertising materials aiding or

defeating the nomination or election of any person, promoting or

antagonizing the interest of any political party, or from influenc-

ing the vote on « question submitted to all voters of the Common-

wealth. Answer of the Justices, Mass. Adv. Sh. (1977), 1845,

—— CEE ee ane

7

The question before the Supreme Court concerning

the validity of G.L. c. 55, 68, is an issue of first impres-

sion and one of considerable difficulty. Id. Mass. Adv.

Sh. (1977) at 1851, — N. E. 2d at

There is a critical need for clarification to eliminate the

chilling effect of the continuing statutory restrictions which

impinge directly on speech. Note, First Amendment Over-

breadth Doctrine, 83 Harv. L. Rev. 844 (1970). The heavy

criminal penalties for violation of 58 discourage challenge

by violation and criminal prosecution. See Monaghan, First

Amendment Due Process’’, 83 Harv. L. Rev. 517, 547-49

(1970).

This Court has repeatedly recognized the importance of

clarifying the constitutionality of election statutes despite

the fact that two to four years are generally available for

future litigation. Storer v. Brown, 415 U.S. 724, 738 n.8

(1974). The holdings in the two election cases relied upon

by Appellee (A. Br. 12 n.5) for the proposition that election

eases are not unique turned upon factors other than the

mere passing of the election. See Appellants’ main brief

at 24 n.10.

II. Tur Section 8 Pronisition Is UNconstrTuTIONAL as A

VIoLaTiIon or F'ReEpom or EXprRession.

The Attorney General characterizes Mass. Gen. Laws

c. 55, §8 as a law [which] simply forbids corporate mana-

gers from spending corporate money to express their per-

sonal views’’ (A. Br. 18) (emphasis added). At the same

time the Attorney General has agreed that it is the position

of the Appellants’ management that Appellants’ business

and property would be materially affected. (A. 17-21). The

personal views of Appellants’ corporate managers are not

at issue in this case and the record does not reflect what

those views may be. The Supreme Judicial Court did not

construe the law simply as forbidding expression of per-

sonal views. It specifically held that 58 prohibited expen-

ditures or contributions despite a reasonable belief by

management that the interests of the company were materi-

ally affected. (J.S. App. 15 n.15.)

People v. Gansley, 191 Mich. 357, 158 N.W. 195 (1916),

relied upon by Appellee for the proposition that restrictions

on corporate expenditures in election campaigns do not

violate the due process clause (A. Br. 24) has been effec-

tively undercut by Advisory Opinion 1975 PA 227, 396 Mich.

465, 242 N.W. 2d 3 (1976), in which the Supreme Court of

Michigan differentiated between corporate contributions or

expenditures for the purpose of influencing the nomination

or election of a candidate and those made for the purpose

of influencing the passage or defeat of a ballot question.

Contributions or expenditures by corporations to

communicate their positions or opinions concerning

ballot questions serve to enlighten the public and en-

courage an informed decision-making process. [Foot-

note omitted]! Such contributions or expenditures

create no danger of incurring obligations from an

elected official to a major contributor. The right of

the public to be informed is a paramount consideration

in seeking to preserve the free exchange of ideas in

the market place. [Footnote omitted] Id., 396 Mich.

at 494; 242 N.W.2d at 14.

Appellee seeks to justify §8’s total prohibition of expen-

ditures or contributions with respect to one type of ballot

question by referring to the undisputed proposition that

corporations may be regulated by the state. Appellee goes

on to state that ‘‘[t)his Court repeatedly has upheld over

First Amendment objections regulatory schemes which re-

strict corporate communication so long as they do not

discriminate against communications media.’’ (A. Br. 25).

However, none of the decisions cited in support of this

statement (A. Br. 25-26) focus on the ‘corporateness’’

of the petitioner, and the results presumably would have

been the same regardless of whether or not corporations

were involved.“ Appellees do not dispute that regulatory

schemes which incidentally impinge upon First Amendment

rights have been upheld. The instant case does not fall

within that category.

In support of its argument that [the Commonwealth

has substantial interests in preventing corporations from

making contributions or expenditures to influence the vote

on referendum and initiative issues’’, Appellee refers the

Court to 30 state statutes and the Federal Corrupt Prac-

tices Act, 2 U.S.C. §441(b), as examples of statutes ‘‘re-

stricting contributions either by limiting them as to amount

or restricting the source from which they are received.“

(A. Br. 32, n.19). Section 8 does not merely limit con-

tributions. It totally prohibits them. Furthermore, (8

prohibits not only all contributions but all expenditures.

Few of the statutes cited by the Attorney General are as

sweeping.* The list of statutes is misleading for other

5 Cases such as Associated Press v. NLRB, 301 U.S. 103 (1937)

(A. Br. 25), actually support Appellants’ contention that the

media has no special First Amendment protection. In that action.

the Court held that the discharge of an employee by the Associated

Press was subject to the National Labor Relations Act.

* Federal Corrupt Practices Act, 2 U.S.C. §441(b) does not

apply to ballot questions.

Ala. Code. Tit. 17, §286 (1958) prohibits corporate contributions

and expenditures to defeat ballot questions.

Ariz. Rev. Stat. §16-471(A), (H) (1975) prohibits corporate con-

tributions for the purpose of influencing an ‘‘election’’, which

term does not encompass ballot question ‘‘elections’’.

Ark. Stat. Ann. §3-1110 (1976) does not apply to ballot questions.

With respect to candidate contributions, any person, including

4 — may contribute up to 61.000 per candidate per

election.

10

reasons. It is used to support a purported interest by the

Commonwealth in prohibiting spending respecting the vote

on ballot questions, but several of the statutes do not pre-

vent corporate spending with respect to ballot questions.

Del. Code Ann. tit. 15, §8004(a) (Supp. 1976) does not a

ballot questions, and any person may contribute $1, per

candidate per statewide election.

Fla. Stat. Ann. §106.08(1) (Supp. 1977) does not single out corpo-

rations for special treatment. While the statute does apply to

ballot questions, it allows contributions up to $3,000 in support

L Cy a ey Py ae ee oa

election.

Ind. Code Ann. §3-4-3-3 (Supp. 1976) authorizes corporations to

make political contributions to (a) aid in the success or

defeat of a principle, measure or proposition submitted to a

vote in an election; (b) aid in the election or defeat of a

candidate; and (e) to aid in the success or defeat of a political

party. Only contributions to, or on behalf of, candidates and

political parties are limited.

lowa Code Ann. §56.29 (Supp. 1977-78) prohibits corporate contri-

butions for the — of influencing the vote of any election.

But see Op. Atty. Gen. (Coleman), June 18, 1975.

Kan. Stat. §25-1709 1973) prohibits limited t of corporations

from paying or contributing in order to in the vote on

any question submitted to the voters.

Ky. Rev. Stat §121-035(1) (Supp. 1976) ibits corporations

from furnishing money or any other thing of value to any

political or quasi- political organization », * be used by such

organization for any purpose whatever

La. Rev. Stat. Ann. §18-1488(C) (Supp. 1977) does not apply to

ballot questions. It prohibits corporate contributions or —

penditures to or on behalf of candidates and political

unless such contributions or e itures have been ——

authorized o> vote of the boa IN r +p

aggregate amount no greater than 6,000 in any election.

Md. Ann. Code art. 33, §26-9(b) (1976) does not to ballot

questions. Corporations, like individuals, may con e up to

$2,500 to candidates in primary or general election.

Mass. Gen. Laws Ann. e. 55, (Supp. 1976) prohibits corporate

— 1 1 I

are ‘‘materially affected

11

The chief state interest advanced in support of 8 is

one of preventing corporate funds from overwhelming the

electorate. (A. Br. 35-37) But the record does not sup-

port the proposition that corporations have overwhelmed

the electorate. Assuming, — that the Coalition for

Minn. Stat. Ann. §210A.34 — 1977) prohibits corporate con-

tributions for any political purpose whatsoever.’’ This may

or may not encompass ballot questions. See Schwartz v.

Romnes, 495 F.2d 844 (2d Cir. 1974).

Mo. Aun. Stat. §130.020.5 (Supp. 1977) does not apply to ballot

questions. It prohibits labor unions and corporations from

making contributions or expenditures in support of or in oppo-

sition to any candidate or political committee.

Mont. Rev. Codes Ann. §§23-4795(1), 4744 (Supp. 1975) prohibits

te contributions and expenditures on ballot questions.

But see C & C Plywood Corp. v. Hanson, 420 F.Supp. 1254

(D. Mont. 1976), appeal docketed, No. 76-3118 (9th Cir.

September 29, 1976).

N.H. Rev. Stat. Ann. §70:2(1), (II), (III) (1970) prohibits

contributions by corporations, partnerships and labor unions

for the purpose of promoting the success or defeat of ballot

questions.

N.J. Stat. Ann. §19:34-45 (1964) does not apply to ballot ques-

tions.

N.Y. Election Law §480 (McKinney Supp. 1976-77) prohibits

corporate contributions for any political purpose whatever

This language has been construed as not applying to ballot

questions. Schwartz v. Romnes, supra.

N.C, Gen. Stat. §§163-278.15, 163-278.19 (1976) prohibits corpo-

rations and labor unions from making any contributions and

expenditures for any political purpose whatsoever." This

may or may not encompass ballot questions. Sce Schwartz

omnes, supra.

N. D. “Cent. Code §16-20-08 (Supp. 1977) prohibits corporate con

tributions and expenditures for any political purpose or for

the influencing of legislation.

Ohio Rev. Code Ann. $3599.03 (Baldwin) (1971), which prohibits

the use of corporate funds for any *‘ partisan political pur-

pose” has been held not to apply to ‘the adoption of a consti-

tutional amendment or the passage of n bond-issue or of a

tax levy .. ."’ Corrigan * Cleveland-Cliffs Iron Co. 169 Ohio

St. 42, 45, 157 N. E. 2d 331, 334 (1959).

Okla. Stat. Ann. tit. 26, §15-110 (Supp. 1976) prohibits corporate

contributions on state ballot questions.

Or. Rev. Stat. §260.472 (1975) does not apply to ballot questions.

Pa. Stat. Ann. tit. 25 §3225(b) (Purdon) (1964) does not apply

to ballot questions.

12

Tax Reform, Inc., the only nonpolitical committee organ-

ized to promote the 1972 proposal, raised and expended

only seven thousand dollars in support of the ballot ques-

tion (A. 26),’ the record is completely silent as to the

total amount of money expended by individuals, trusts,

partnerships, or nonprofit organizations, such as the League

of Women Voters. Mass. Gen. Laws c. 55 does not require

that such direct expenditures, which are not limited, be

reported. The record is also silent as to the total amount

ef corporate expenditures relating to the 1972 graduated

income tax referendum. Thus, with respect to the expendi-

ture ban, the record lends no support to the argument that

the statute is supported by a rational, much less a compel-

ling, state interest in preventing undue influence.

The two cases relied upon as supporting bans on cor-

porate campaign contributions (A. Br. 41) are readily

distinguishable. Appellee quotes from the district court

8.D. Compiled Laws §12-25-2 (Su 1977) prohibits corporate

contributions to a committee lecting or disbursing money

for the ion or defeat of any question submitted to the

electors of whole state.

Tenn. Code Ann. §2-1932 (Supp. 1976) prohibits corporate con-

tributions and expenditures for the purpose of aiding in the

success or defeat of ballot questions.

Tex. Elee. Code Ann. art. 14.06 (Supp. 1976-77) prohibits corpo-

rations and labor unions from making contributions and ex-

penditures for the purpose of aiding or defeating the approval!

of ballot questions.

W. Va. Code §2-8-8 (1971) prohibits corporate contributions for

the payment of any primary or other election expense what-

ever This may or may not encompass ballot questions.

Cf. Schwart? v. omnes, supra.

Wise. Stat. Ann. §11.38(1)(a)(1) (Supp. 1977-78) prohibits corpo-

rate contributions and disbursements to promote or defeat

referenda.

8 Stat. §22.1-389.2 (Interim Supp. 1977) prohibits corpora-

~y¥- rtnerships, trade unions, professional associations and

civil ternal and religious groups from contributing funds

or election assistance to promote the success or defeat of any

ballot proposition.

_ "It is likely that the statements filed with the Secretary of State

understate actual deposits. (A. 34-36)

13

decision in Schwartz v. Romnes, 357 F.Supp. 30 (S. D. N. v.

1973), noting, without discussion, that it was ‘‘reversed on

other grounds,’’ 495 F.2d 844 (2d Cir. 1974) (A. Br. 41).

However, the casually referenced other grounds totally

undercut the precedential value of the district court de-

cision. The district court construed a New York statute

prohibiting corporate political contributions as prohibiting

contributions made to influence referenda, and held that the

statute did not violate the First Amendment. The Second

Cireuit reversed. It held that the statute did not prohibit

corporate contributions or expenditures with respect to

referenda. The appellate decision consciously adopted a

narrow construction specifically to avoid ‘‘transgress[ ing]

constitutional rights. . including those of corporate con-

tributors which, like individuals, are guaranteed freedom of

speech and petition.’’ 495 F.2d at 852 (citations omitted).

The Second Circuit unequivocally rejected the notion that

the interests which may justify restrictions upon contribu-

tions to candidate campaigns are transferrable to restric-

tions upon referenda contributions. Id. at 851.

United States v. Chestnut, 533 F.2d 40 (2d Cir.), cert.

denied, 429 U.S. 829 (1976) is inapposite. The Second Cir-

cuit upheld the federal ban on corporate campaign contri-

butions, 18 U.S.C. §610, relying entirely on the district

court’s discussion of the constitutional claims. Id. at 50.

The district court specifically recognized ‘‘the First Amend-

ment right of corporations and labor unions’’ but found

such rights outweighed by

the substantial governmental interests in preserving

the integrity of the electoral process, in preventing

corporate and union officials from using corporate

assets or general union dues io promote political

parties and candidates without the consent of stock-

holders or union members with different political views,

and in protecting individuals who may refuse to con-

14

tribute to campaign funds against reprisals. The need

for these safeguards is particularly acute im the labor

field where union membership can be a condition of

employment. (emphasis added) (footnotes omitted)

394 F.Supp. 581, 590 (S.D.N.Y. 1975).

Section 610 (now 2 U.S.C. §441b) does not purport to

ban contributions or expenditures relating to ballot ques-

tions. In order to rule in favor of the Appellants, this

Court need not decide whether the Constitution forbids

limitations on corporate expenditures or contributions

relative to candidates and political parties.

Moreover, §610 applies equally to labor unions as well as

to corporations and it, unlike e. 55, (8, permits the establish-

ment of segregated funds for political purposes. This factor

was noted by the Court in Buckley v. Valeo, 424 U.S. 1, 28

n.31 (1976), in upholding the $1,000 contribution limitation

in the Federal Election Campaign Act, 18 U.S.C. 5608 (b).

All recent cases which have ruled upon constitutional

challenges to statutes restricting contributions or expendi-

tures with respect to ballot questions have considered the

Buckley decision dispositive,* and all have ruled that such

The Supreme Judicial Court's decision also runs counter to

recent legal authority clearly establishing the proposition that non-

media corporations have First Amendment rights. E.., Inter-

national Union UAW vy. National Right to Work Legal Defense

and Education Foundation, Inc., 433 F.Supp. 474 (D.D.C. 1977),

appeal docketed, Nos. 77-1739, 77-1766 (D.C. Cir. Aug. 16, 1977,

Aug. 23, 1977), holding §101(a)(4) of the Labor Management Re-

porting & Disclosure Act, 29 U.S.C. §411(a)(4), which prohibits

interested employers from supporting union members’ lawsuits

against their unions, unconstitutional under the First Amendment

when applied to prohibit a right-to-work organization, funded

chiefly by contributions from interested employers, from funding

union member lawsuits against unions. The court relying in part

upon Buckley v. Valeo, 424 U.S. 1 (1976) held that Congress ma

not constitutionally restrict the First Amendments rights of suc

an organization or its contributors.

| The challenged provision] clearly, directly, and absolutely

interferes with the first amendment rights of petition, associ-

ation, and speech of the Foundation and its contributors...

the first amendment has traditionally been construed strictly

in eases involving political expression. 433 F.Supp. at 482.

restrictions are unconstitutional. C C Plywood Corp. v.

Hanson, 420 F.Supp. 1254 (D.Mont. 1976), appeal docketed,

No. 76-3118 (9th Cir. September 29, 1976); Pacific Gas d

Electric Co. v. Berkeley, 60 Cal. App. 3d 123, 131 Cal. Rptr.

350 (1976); Citizens for Jobs and Energy, Inc. v. Faw

Political Comm n, 16 Cal. 3d 671, 547 P.2d 1386 (1976);

Advisory Opinion 1975 PA 227, 396 Mich. 465, 242 N.W.2d

3 (1976). The Supreme Judicial Court found Buckley to be

irrelevant (J.S. App. 10-11) and upheld the prohibition.

Ill. Conrcivsion

Appellants urge the Court to enter one or more of the

decrees suggested at pp. 87-88 of their main brief.

Respectfully submitted,

Francis H. Fox

E. Susan Gansu

Breenam, Dana & Gouin

100 Federal Street

Boston, MA 02110

Tel. No. (617) 357-9300

Attorneys for Appellants