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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appellants Reply Brief
- **Published:** January 1, 1978
- **Citation:** 435 U.S. 765

## Text

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

;
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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_1717%3A08. Public record. Not legal advice.