# Amicus Curiae Brief — Austin v. Michigan Chamber of Commerce > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0465%3A14 ## Record - **Collection:** Supreme Court brief - **Document type:** Amicus Curiae Brief - **Published:** January 1, 1990 - **Citation:** 494 U.S. 652 ## Text : ' | Bupreme Court, U.S" (») | FILED No. 88-1569 JUL 26 109 IN THE cette Supreme Court of the United States ‘ OCTOBER TERM, 1989 RICHARD H. AUSTIN, eta, Appellants, Vv. MICHIGAN STATE CHAMBER OF COMMERCE, Appellee. On Appeal from the United States Court of Appeals for the Sixth Circuit BRIEF OF THE AMERICAN CIVIL LIBERTIES UNION, AMICUS CURIAE, IN SUPPORT OF APPELLEE ARTHUR B. S PITZER AMERICAN CIVIL LIBERTIES UNION OF THE NATIONAL CAPITAL AREA 1400 20th Street, N.W. Washington, D.C. 20036 (202) 457-0800 Of Counsel: Counsel of Record _ for Amicus Curiae JOHN A. POWELL JOEL M. GORA AMERICAN CIVIL LIBERTIES UNION FOUNDATION 132 West 43rd Street New York, N.Y. 10036 (212) 944-9800 July 28, 1989 SE2Q. TABLE OF CONTENTS Page INTEREST OF AMICUS CURIAE .000.......ccccccccseesssseseee sete: l SUMMARY OF ARGUMENT .u.......ccccccceceeccetecee ceeeeeeee 3 ARGUMENT: I. SECTION 54(1) DIRECTLY RESTRICTS SPEECH AT THE CORE OF THE FIRST AMENDMENT’S RIFE ARIE SP ne gg ene Oe 4 Il. SECTION 54(1) SERVES NO COMPELLING GOVERNMENTAL INTFREST... ....0........0.0.0000005 ~ 7 A. Eliminating Corruption or the Appearance of SUIT Colicieicidsilininibedionieaiah décitbatdesaienieeeeneses 7 1. Independent Expenditures by Non-Profit Corporations Do Not Pose a Threat of EERSTE REAR roe eae 8" 2. A Complete Ban on Independent Spending by Non-Profit Corporations that Receive Corpo- rate Contributions is Not Necessary to Prevent Spending by Business Corporations. ......... 3. A Complete Ban on Independent Spending by Non-Profit Corporations Gives Government Too Potent a Weapon to Harass Public Issue III. icsinninctesaraninisbisiiiiediin damnibbmesincnises B. Protecting the Rights of Dissenting Members ...... C. Avoiding the “Unfair Deployment of Wealth” and Protecting the “Integrity of the Political a alah es namebennees ELE ERT ESERIES AEN DEEE EA ao ae 11 if TABLE OF AUTHORITIES Page CASES: Abood v. Detroit Board of Education, 431 U.S. 209 SETUP vcinisisinteiaccencnseentsesn sncmtuninnisdtnenmesinnins snetntanitete 20 American Civil Liberties Union v. Jennings, 366 F. Supp. 1041 (D.D.C. 1973) (three-judge court), vacated as moot sub nom. Staats v. American Civil Liberties Union, 422 Tt |. . Seen 2 Board of Airport Commissioners of Los Angeles v. Jews for Jesus, Inc., 482 U.S. S69 (1987) ..........cscccccsscecceseeees sonees 4 Board of Education v. Allen, 392 U.S. 236 (1968) ............. 13 Boos v. Barry, 108 S. Ct. 1157 (1988) ........ccceeeeneeeenens 11 Brown v. Socialist Workers '74 Campaign Committee, 459 Te BI vniccsacencccvindsceneticcntionn ‘santipeiavestintvanasevionssiiniit te 2 Buckley v. Valeo, 424 U.S. 1 (1976) ......ccccccceseeeeseseees passim Buckley v. Valeo, 519 F.2d 821, 871 (D.C. Cir. 1975) CEI YD ecececcccccoscrevenscssessessses The fact that the Chamber of Commerce also engages in non-po- litical activities hardly makes its political activities suspect. See intra note |4, 10 11 2. A Complete Ban on Independent Spending by Non-Profit Corporations that Receive Corpo- rate Contributions is Not Necessary to Prevent profit membership corporation, much like appellee except in size, is corrupt, a presumption rejected in MCFL. © To be sure, the State Chamber’s treasury may be larger than that of Massachusetts Citizens for Life, but NCPAC’s pocket was apparently even deeper. See Brief for Appellant Common Cause at 33 n.53, Common Cause v. Schmitt, No. 88-847 (O.T. 1980) (reporting that NCPAC collected more than $7.6 million in 1979-1980 for use in the 1980 cam- paigns). The size of these figures, however, is irrelevant. Wealth is not synonymous with corruption. Even a small bribe is corrupt; even a large independent expenditure is not.’ In short, appellants assert an interest in preventing corruption or its appearance only because that is the judicially- approved route to upholding statutes that restrict political funding. But the facts of this case do not entitle appellants to proceed down that route. 6 Buckley and NCPAC make it clear that even large independent expenditures do not raise the specter of corruption, and cannot be prohib- ited on that ground. Yet the Michigan law challenged here bans inde- pendent expenditures of even small sums of money. 7 Indeed, the size of an independent expenditure is not even a particularly good proxy for the size of a political favor. A single personal appearance by a political or entertainment celebrity may capture more votes for a candidate than a million dollars’ worth of television commercials, and leave the candidate feeling more grateful for the favor. If the government has a compelling interest in eliminating grateful feelings on the part of politicians, then a ban on political endorsements by popular public figures will be the next logical step in election campaign “reform.” Spending by Busi C . Appellants and their amici also argue that, because the State Chamber has members who are business corporations, it must be prohibited from making independent expenditures in order to prevent it from acting as a “conduit” for money from such entities. See Brief for Appellants at 39-40, 46; FEC brief at 15; Common Cause brief at 20-24. Even assuming that such activity constitutes “corruption” and can constitutionally be prohibited,® it is simply not necessary to ban independent expenditures by groups such as the State Chamber in order to achieve that goal. Non-profit corporations can be required to fund their independent expenditures out of income from other sources, and to keep such records or file such reports as the government requires to demonstrate compliance with such limitations. See MCFL, 479 U.S. at 262 (reporting require- ments of federal law “provide precisely the information neces- sary to monitor MCFL’s independent spending activity and its receipt of coniributions”).? 8 But see intra Part U-C-1. 9 The Court of Appeals in this case stated that the reporting re- quirements of Section 5! of the Michigan law would serve this purpose. See J.S. App. 25a-26a. The State responds that Section 5! does not apply to corporations. Bnet for Appellants at 24. Assuming the State to be correct, the constitutional solution is for Michigan to enact an appro- priate reporting requirement. A State cannot impose a direct, content- based restriction on core First Amendment nghts when a iess restrictive alternative is available, simply because it doesn't feel like using the altemative. See Boos v. Barry, 108 S. Ct. 1157, 1165-68 (1988) (Distnet of Columbia law banning demonstrations near embassies struck down im light of more narrowly drawn federal statute that adequately 12 Common Cause argues that because “[mJoney is fungible,” such segregation of funds is meaningless. Common Cause brief at 21. However, neither Congress nor this Court shares that view, as federal legislation and judicial decisions demonstrate. In the Internal Revenue Code, Congress has provided that non-profit, tax-exempt organizations qualified under 26 U.S.C. § 501(c)(3) (contributions to which are tax-deductible to the donor) may not engage in a substantial amount of lob- bying activity, while organizations qualified under § 501(c)(4) (contributions to which are not deductible) may lobby freely. The congressional purpose is to avoid subsidizing lobbying with tax-deductible funds. See Regan v. Taxation With Rep- resentation of Washington, 461 U.S. 540, 544 (1983). A great many non-profit organizations (including the ACLU) consist of affiliated (c)(3) and (c)(4) corporations. All that is required is “that the two groups be separately incorporated and keep records adequate to show that tax-deductible contribu- tions are not used to pay for lobbying.” /d, 461 U.S. at 544- 45 n.6. But the (c)(3) organizations can exercise “control .. . over the lobbying of their § 501(c)(4) affiliates,” and the (c)(4) organizations can engage in “lobbying explicitly on behalf of their § 501(c)(3) affiliates.” /d at 553 (Blackmun, J., concur- ring). Under Common Cause’s reasoning, this careful statu- tory scheme is “economic nonsense,” Common Cause brief at 20, because “money from one source that is used for one activity frees up money from other sources to be used for served same interests, even though legislation would be necessary to make federal statute applicable in the District of Columbia). 13 other activities.” /d at 21. Obviously, Congress does not agree with that assessment. !© Nor does this Court share the view that Common Cause urges here. In a series of constitutional cases arising under the Establishment Clause of the First Amendment, the rule has been established that government financial assistance to private, religious schools for discrete, secular activities will not be considered as a subsidy for the schools’ religious activities merely because “money from [the government] source that is used for one activity frees up money from other sources to be used for [religious] activities.” See Everson v. Board of Education, 330 U.S. 1 (1947); Board of Education v. Allen, 392 U.S. 236 (1968): Tilton v. Richardson, 403 U.S. 672 (1971); Roemer v. Board of Public Works, 426 U.S. 736 (1976).'' Accordingly, there is no reason to assume that any concern about the use of non-profit corporations as “conduits” for the funds of business corporations cannot be adequately addressed through bookkeeping and reporting requirements. Moreover, to the extent that such requirements are not a foolproof guarantee against some small leakage of business funds into non-profit expenditures, the Court has already explained that direct and substantial restraints on political speech “cannot be sustained simply by invoking the interest in 10 The ACLU, as amicus curiae in Taxation With Representation. argued that the statutory restrictions on lobbying by § 501(c)(3) organizations were unconstitutional. The Court concluded, however, that the requirements of separate mcorporation and bookkeeping were “not unduly burdensome.” 461 U.S. at 544-45 0.6. By contrast, the Court emphasized the extensiveness and complexity of the “separate segregated! fund” restrictions involved in MCFL, and concluded that they were unduly burdensome. 1! Whether the line has been correctly drawn under the Establish- ment Clause is a separate issue. But as long as it exists, the rule of seg- regated funds can and should be applied in this context as well. 14 maximizing the effectiveness” of other regulations. Buckley, 424 U.S. at 44. This is so because the First Amendment is not a disfavored “loophole” in an edifice of governmental regula- tion of speech; under our Constitution, it is the other way around: “debate on public issues should be uninhibited, ro- bust, and wide-open,” New York Times v. Sullivan, 376 U.S. 254, 270 (1964). It is not government censorship that must be augmented for -optimal effectiveness, but “First Amendment freedoms [that] need breathing space to survive.” NAACP v. Button, 371 U.S. 415, 433 (1963). 3. A Complete Ban on Independent Spending by Non-Profit Corporations Gives Government Too Potent a Weapon to Harass Public Issue Advocacy. Appellants argue that the criteria identified by this Court in MCFL for constitutionally exempting certain non-profit .cor- porations from statutory prohibitions on political campaign expenditures are not met in this case. Amici FEC and Com- mon Cause, however, would essentially have this Court limit that decision to its special facts, thereby denying First Amendment protection to non-profit corporations that accept any contributions from business corporations. These suggestions must be analyzed in the context of the total statutory ban on any corporate political expenditures and the frequently malleable nature of the “express advocacy" concept that defines such expenditures. In Buckley, this Court recognized the danger that a broad definition of “expenditure” could ensnare a wide range of vital discussion of public issues in the net of campaign finance restrictions. Accordingly, the Court ruled that regulation of independent expenditures could only attach to “communications that include explicit words of advocacy of election or defeat of a candidate.” 424 U.S. at 43. 15 But as important as this limitation has been, it is subject to the vagaries of context and interpretation. !2 The Federal Election Commission has persistently pressed for a broad and expansive interpretation of the “express advo- cacy” concept, to the point where one court chastized it for pursuing a “totally meritless” complaint over a $135 expendi- ture, see Federal Election Commission v. Central Long Island Tax Reform Immediately Committee, 616 F.2d 45, 53 (2d Cir. 1980) en banc ), with a concurring opinion charging that the Commission had “failed abysmally” to show sensitivity to First Amendment rights. /d. at 5S (Kaufman, C.J.). The combination of an aggressive agency view of what constitutes “express advocacy” and broad statutory prc! »!- tions on corporate expenditures that could be so characterized puts at considerable risk the political speech of many issue- oriented organizations that take corporate form. If their public advocacy can in any way be construed by the Commission as “express advocacy”—for example, if it criticizes an incumbent President during an election year—then they risk a charge of having made an illegal expenditure under 2 U.S.C. § 441b. Indeed, in recent years such charges have been filed with the Commission against such groups as Planned Parenthood, the National Organization for Women, the Wilderness Society. the Sierra Club and the Committee for Sane Nuclear Policy. The Commission even entertained charges against the ACLU, and it took a ten-page General Counsel's Report for the Commis- 12 Compare MCFL, 479 U.S. at 248-50 (finding express advocacy) atid Federal Election Commission v. Furgatch, 807 F.2d 857 (9th Cur. 1987) (same) with Federal Election Commission v. Central Long Island Tax Reform Immediately Committee, 616 F.2d 45 (2d Cir. 1980) (en bane) (finding no express advocacy) and Federal Election Commission v. National Organization for Women, C.A. No. 87-2269 (D.D.C. 1989) (same). 16 sion to conclude that there was “no reason to believe” that ACLU fund-raising mailings, attacking President Reagan's record on civil liberties during a Presidential election year, constituted an illegal corporate expenditure. For these reasons, any narrowing of MCFL will place issue organizations in even greater danger of being the target of enforcement proceedings on claims, however marginal, Lat their political speech constitutes “express advocacy.” Simi- larly, a rule that automatically prevents non-profit corporations from qualifying for the MCFL exemption if they receive any contributions from business corporations would disable many advocacy organizations from invoking the MCFL protections, since many do receive a small portion of their contributions from business organizations. See FEC v. N.O.W., supra. Thus, non-partisan issue-oriented organizations require careful protection against government harrasment of their speech: both a strict definition of the "express advocacy" concept, and a broad First Amendment-based rule that non- profit organizations cannot be punished for such advocacy under statutory prohibitions of corporate expenditures that were intended to apply to profit-making business corporations, not issue-oriented organizations that take the corporate form. B. Protecting the Rights of Dissenting Members. The second interest advanced by the State as a justifica- tion for Section 54(1) is the interest in “protect{ing] shareholders who have paid money into a corporation ‘for purposes other than the support of candidates from having that money used to support candidates to whom they may be op- posed.’” Brief for Appellants at 35, quoting Federal Election Commission v. National Right to Work Committee, 459 U.S. 197, 208 (1982). This purported interest is not truly present in this case, nor would it be compelling if it were. 17 1. This Court has already disapproved this alleged state interest as one that can justify governmental prohibition of corporate speech in circumstances such as those presented here. In Bellotti, supra, Massachusetts law prohibited busi- ness corporations from spending money to urge the passage or defeat of ballot questions. In defense of the law, the State asserted the same interest in “preventing the use of corporate resources in furtherance of views with which some shareholders may disagree” that appellants proffer here. See 435 U.S. at 792-93. Assuming, arguendo, that such an interest could be compelling, the Court rejected the State’s submission, noting that :he State's asserted purpose was “belied . . . by the provi- sions of the statute,” id. at 793. which were both underinclu- sive and overinclusive: underinclusive in that thay permitted corporations to engage in other political advocacy (such as lobbying) without regard to the displeasure of dissenting shareholders, and permitted unincorporated organizations to urge the passage or defeat of ballot questions without regard to the views of dissenting members; overinclusive in that they prohibited a corporation from engaging in such speech even if the shareholders had unanimously authorized it. /d at 793-95. The circumstances here are preciseiy the same. The State’s purported purpose is belied by its own law, which permits corporations to engage in other forms of political speech, including lobbying on controversial proposed leg- islation and public advocacy for or against ballot questions, “though the displeasure of disapproving shareholders is un- likely to be any less.” Bellotti, 435 U.S. at 793. Similarly, the restriction does not apply to unincorporated “entities or orga- nized groups in which numbers of persons may hold an inter- est or membership,” even though “[mlinorities in such groups or entities may have interests with respect to institutional 12 speech quite comparable to those of minority shareholders in a corporation.” /d. Finally, Michigan law is identically overin- clusive, prohibiting the specified communications “even if its shareholders [or members] unanimously authorized the . . . expenditure.” /d. at 794. Moreover, appellants have produced no evidence indicating that the protection of shareholders’ rights was, in fact, a purpose of the Michigan Campaign Fi- nance Act. See Mississippi University for Women v. Hogan, 458 U.S. 718, 730 (1982) (State’s asserted justification for constitutionally-suspect legislation rejected in part because it “failed to establish that the alleged objective is the actual pur- pose” of the law). Thus, whatever force this asserted interest might have in a proper case, it is clear that it is not in fact an interest that Michigan views as compelling in the context of election finance regulation. 2. Nor is there any reason to believe that the members of the State Chamber joined that organization or pay their dues in ignorance of, or in disagreement with, its activities or its political orientation: as an advocaie for the interests of the business community. '> While there may be other benefits of 13 Both Common Cause and the FEC insist that the State Chamber is wholly unlike MCFL because MCFL is an ideological organization, while “the Chamber was established by business corporations to promote their economic interests.” Common Cause brief at 12; see also FEC brief at 16. But a great déal of political debate involves the economic interests of various groups. When the Grange lobbies for crop supports, the AFL-CIO campaigns for an imcrease in the minimum wage, the AARP works for catastrophic health inrurance for the elderly, the VFW pushes for an extension of the GI Bill, cr the CCNV demonstrates for low-income housing, they are engaging in political activity to advance the economic, as well as the ideological, interests of their members. This does not render their advocacy an: less than fully protected by the First Amendment. See, e.g., Meyer v. Grant, supr., 108 S. Ct. at 1894 19 membership, such as the ability to purchase group insurance or to receive Chamber publications at discount rates, see Common Cause brief at 13-14; FEC brief at 13-14,'4 this is hardly a situation where Michigan businesswomen and men have little choice but to belong to the Chamber of Commerce regardless of their sympathy with its politics.'5 Thus, like the (political activity by Coloradans for Free Enterprise, Inc., to repeal state regulation of the trucking industry is at the “zenith” of First Amendment freedoms); Eastern RR Presidents Conference v. Nverr Motor Freight, Inc., 365 U.S. 127, 139 (1961) (“A construction of the Sherman Act that would disqualify people from taking a public position on matters in which they are financially interested would . . . deprive the people of their nght to petition m the very mstances in which that right may be of the most importance to them”); Thomas v. Collins, 323 U.S. 516, 540 (1945) (the First Amendment protects “he who seeks to rally support for any social, business, religious or political cause”). This is a free speech case, not an economic substantive due process case. Business interests are not seeking to avoid government regulation of their business; they are resisting government censorship of their speech. 14 There are probably few major membership organizations that engage im political advocacy and do not also provide some valuable benefits to members, including the ACLU. For example, the Sierra Club organizes wildemess excursions for its members, offers a variety of camping and outdoor equipment and publications for sale at a discount to members, and publishes a monthly membership magazine. The Ameri- can Automobile Association provides its members with emergency road service, maps and vacation planning services, and group insurance, and also engages in political speech on behalf of the interests of motorists, as the AAA views those interests. i 15 Appellee has approximately 8,000 members, of which more than 6,000 are corporations. J.S. App. 4la. There are over 3,277,000 active corporations in the United States. See U.S. Bureau of the Census, STATISTICAL ABSTRACT OF THE UNITED STATES: 1989, at 516 (Table 846) (1985 data). If only 2% of them operate in Michigan (presumably a very low estimate), then fewer than 10% of Michigan businesses are members of the State Chamber of Commerce. 20 resources available to MCFL, the resources available to the State Chamber “are not a function of its success in the economic mavketplace, but its popularity in the political marketplace.” MCFL, 479 U.S. at 259. In reality, “[iJt is unduly stretching language to say that the members or stockholders are unwilling participants in such normal organizational activities, including the advocacy . . . of governmental policies affecting their interests, and the support thereby of candidates thought to be favorable to their inter- ests.” United States v. Congress of Industrial Organizations, 335 U.S. 106, 123 (1948). Members who disagree frequently enough, or strongly enough, with the views expressed by an organization to which they voluntarily belong, or by a corpo- ration in which they own stock, can always quit or sell their stock, and frequently do. '® 3. Even if a State legislated unambiguously in further- ance of this interest, however, and even if there were a signifi- cant number of dissenting members or shareholders, it would seriously threaten basic constitutional values to allow the gov- ernment to override a private, voluntary organization’s right of free expression. It is, for example, no secret that with respect to virtually every issue on which the ACLU expresses a public position, some of its members disagree, often strongly. 17 By 16 Of course, different principles apply when membership in, or payments to, an organization are legally or practically compulsory. Compare, e.g., Abood v. Detroit Board of Education, 431 U.S. 209 (1977), with Bellotti, 435 U.S. at 794 n.34 (noting this “critical distinction”). 17 “Most of our decisions are made by a board of directors by a vote of 42 to 36, with 12 abstentions, and three motions to :econsider. [| would be surprised if there was a single member of the ACLU that di.in't disagree with 10 or 12 things that we do—and that includes me.” Ira Glasser (Executive Director, ACLU), Presidential Politics and the 21 the same token, some members of Common Cause no doubt disagree with some of the views that it has expended their dues to express.'8 Some shareholders of the Mobi! Corpora- tion surely disagree with the views it has expressed in its series of newspaper commentaries, and some shareholders of Texaco Inc. probably can’t stomach the Metropolitan Opera. Endorsements of candidates occupy no special position with respect to engendering shareholder or membership dissent. If the government could, by asserting a “compelling interest in protecting minority rights,” silence the voices of private, vol- untary organizations. whenever a minority of the organization’s members disagreed with the majority’s decision, the First Amendment would be seriously ailuted. C. Avoiding the “Unfair Deployment of Wealth” and Protecting the “Integrity of the Political Process.” 1. Appellants and their amici play their basic theme in close harmony: that it is “unfair,” Brief for Appellants a: 41: Common Cause brief at 2, and “corrosive,” FEC brief at 12, for “concentrated corporate wealth,” id., “amassed through the corporate form,” Common Cause brief at 2, in “the economic marketplace,” Brief for Appellants at 41, to be allowed into election campaigns. Of course these arguments, however valid they may be with respect to business corporations, have nothing to do with the activities of non-profit membership corporations such as the State Chamber. And when they are subjected to the “close ACLU, speech at the National Press Club, Washington, D.C. (Oct. 6. 1988). 18 Many people are members of both the ACLU and Common Cause, and cannot possibly agree with their divergent positions on the controversial political issue of election campaign finance — ulation. REST AVANT ABI Fenp 22 examination of [their] underlying rationale” that the First Amendment requires, MCFL, 479 U.S. at 257, it is not at all clear why independent expenditures even by business cor- porations are constitutionally different from expenditures by so-called “ideological” corporations, unincorporated associa- tions and individuals, all of which have been protected. The argument appears to rest on two _ interrelated grounds: that corporate funds are different because they are ““amassed by the special advantages which go with the corpo- rate form of organization,” Brief for Appellants at 42, quoting MCFL, 479 U.S. at 257, and that corporate funds are different because corporations earn their money through the sale of goods and services, rather than receiving voluntary political contributions, see FEC brief at 13; Common Cause brief at 6. Upon examination, however, neither ground persuasively distinguishes the funds earned by a corporation from those earned by others. With respect to the first ground, it is exceedingly difficult to identify the special advantages of corporate form that are thought to be relevant, or to learn why or how they are thought to be relevant, to the asserted distinction. In MCFL, the Court noted this theory, 479 U:S. at 257, without specifying the relevant advantages or explaining their significance, but citing to National Right to Work Committee, supra, 459 U.S. at 207. That case, in turn, noted the concern about the “special advan- tages which go with the corporate form of organization,” jd, citing United States v. Automobile Workers, 352 U.S. 567, 579 (1957), but again did not specify what these advantages were or indicate why money earned by corporations was dif- ferent from money earned by partnerships, proprietorships or individuals. The NRWC Court did, however, identify the underlying governmental interest in regulating the political use of corporate money: it was the interest in preventing 23 “corruption threatened by large financial contributions.” Id. at 208 (emphasis added). The Automobile Workers case con- tains no discussion of any special advantages of corporate form at the cited page; indeed the case, and the discussion at that page, involved congressional concern with large contribu- tions made by powerful labor unions. The trail ends there. It is, of course, true that corporations have some advan- tages compared to other forms of organization, for example. they are subject to “special rules relating to such matters as limited liability, perpetual life, and the accumulation, distribu- tion, and taxation of assets.” Be//otti,435 U.S. at 809 (White, J., dissenting). But the majority in Be//otti viewed these dif- ferences as irrelevant to a corporation’s right to engage in free speech with respect to ballot issues, and no reason has been suggested here why they are any more relevant with respect to speech about candidates. !9 The second prong of appellants’ argument is that it is “unfair” for “resources amassed in the economic marketplace” to be used “in the political marketplace” because these resources reflect “the economically motivated decisions of investors and customers” rather than “popular support for the corporation’s political ideas.” MCFL at 258. But except for funds raised by explicitly political organizations such as MCFL and NCPAC, virtually a// money “amassed” in the 19 It is worth noting that other forms of organization have special advantages of their own: tax exemption, for example. And some part- nerships or unincorporated associations have existed far longer than most corporations and have accumulated far greater assets than most corpora- tions—Lloyd’s of London, for example, has been wm unimecorporated existence since the early 18th Century, see Webster's Deluxe Unabndged Dictionary 1059 (2d ed., 1979), and some law partnerships have contin- ued for several generations. Likewise, the National Collegiate Athletic Association, a large and well-financed organizai.on, 1s an unincorporates. association. See NCAA v. Tarkaman, 109 S. Ct. 454, 455 (1988). 24 United States is earned in the “economic marketplace” and reflects something other than popular support for the “amasser’s” political views. An individual who is wealthy because he made a better mousetrap cannot constitutionally be prohibited from spending it on political speech, even if he is a Socialist and most rodent-hunters are Republicans. Why, then, should the owners of Better Mousetrap, Inc., be prohib- ited from doing so? Indeed, the Court has acknowledged that there is nothing special about corporations in this regard, except that they are “the most prominent example” of wealthy entities. MCFL, 479 U.S. at 258 n.11. In other words, legislatures have cho- sen to restrict the political speech of corporations “because that’s where the money is,” or so they think.2° But that is surely not the kind of narrow tailoring required of laws that directly restrict core political speech, for “the desire for a bright-line rule . . . hardly constitutes the compelling state 20 In actuality, singling out corporations for regulation on this basis is not even particularly accurate. Some corporations have lots of money, but most have very little. See U.S. Bureau of the Census, STATISTICAL ABSTRACT OF THE UNITED STATES: 1989 at 516 (Table 847) (over 700,000 corporations with gross receipts of less than $25,000) (1985 data). At the same time, some unincorporated associations are quite wealthy, see, e.g., Brief for Appellant Common Cause at 33 2.53, Common Cause v. Schmitt, No. 88-847 (O.T. 1980) (reporting that NCPAC collected more than $7.6 million in 1979-1980 for use in the’ 1980 campaigns), as are some partnerships, some sole proprietorships, and some individuals, see STATISTICAL ABSTRACT OF THE UNITED STATES: 1989 at 516 (Table 847) (nearly 480,000 partnerships and 1,200,000 non-farm proprietorships with receipts greater than $100,000 in 1985); see also The Am Law 100, The American Lawyer, July/August 1989, special insert at 10 (reporting 100 law firms—most of which are unincorporated— with gross revenues of more than $52 mil- lion per year; the first-ranked firm had over $440 million in revenues in 1988). 25 interest necessary to justify any infringement on First Amend- ment freedom." /d. at 263 (emphasis in original). Nor, under Buckley and NCPAC, can there be a compelling governmental interest in the prohibition of independent expenditures by any person whose speech is protected vy the First Amendment. The Court has already held that affluent candidates, political action committees, and individuals cannot be pre- cluded from using their wealth to attempt to influence the out- come of elections through public speech, because there is simply “nothing invidious, improper, or unhealthy in permit- ting such funds to be spent” in political debate. Buckley, 424 U.S. at 56. To the contrary, “the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment.” /d. at 48-49. And as shown above, there is nothing about the sources of corporate money that makes its expenditure any less “healthy.” 2. Even on its own terms, the prohibition of corporate expenditures is unworkable and senseless. The clearest exam- ple of why this is so is the universally-recognized necessity of exempting the press from such restrictions. For example, Section 6(3)(d) of the Michigan Campaign Finance Act exempts from the prohibition against corporate expenditures any “expenditure by a broadcasting station, newspaper, maga- zine, or other periodical or publication for any news story, commentary, or editorial in support of or in opposition to a candidate... .” MCL 169.206(3)(d), J.S. App. 92a-93a. Newspapers, magazines and other media are generally owned by corporations, yet the First Amendment plainly will not tolerate a law prohibiting the expenditure of corporate funds by the Washington Post Company or the New York Times Company to endorse or oppose a candidate for public office. As the Court observed in Mills v. Alabama, 384 U.S. 26 214, 219 (1966), “[i]t is difficult to conceive of a more obvi- ous and flagrant abridgment of the constitutionally guaranteed freedom of the press.” But if it is impermissible to prohibit Booth Newspapers, Inc. (the corporate publisher of the Grand Rapids Press) from spending its money to publish an editorial endorsing Dan Quayle on page 16, how can it properly be made a crime for the Michigan State Chamber of Commerce— or the Grand Rapids Furniture Company—to spend its money to buy space on page 17 endorsing Jesse Jackson? The answer cannot be that one company is in the busi- ness of communicating and the other is not. Nearly all corpo- rations ccramunicate with the public. The Mobil Corporation, for example, has been running a series of paid editorial columns in newspapers for years. Nor are the media always owned by corporations whose major business is communica- tive: NBC, for example, is owned by the General Electric Co. And is a newspaper that operates at a substantial deficit, sub- sidized by a sister corporation that manufactures widgets, to be prohibited from publishing campaign editorials because the “real” expenditure is by the widget company? For that matter, even a profisable newspaper derives much of its income from the sale of advertising in the “economic marketplace,” not from contributions from ideological supporters. It was in part, perhaps, unanswerable questions like these that led a majority of the Court to conclude, in Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U.S. 749 (1985), that “the rights of the institutional media are no greater and no less than those enjoyed by other individuals or organi- zations engaged in the same activities.” /d. at 784 (dissenting opinion of Brennan, J., joined by Marshall, Blackmun and Stevens, JJ.); 773 (White, J., concurring in judgment) (“the First Amendment gives no more protection to the press . . than it does to others exercising their freedom of speech”). 27 In the District Court, appellee challenged the Michigan statute’s exemption for media corporations as a denial of equal protection. That court, properly doubting that it could distin- guish between media corporations and others, interpreted Sec- tion 6(3)(d) to make “no distinction between media and non- media corporations,” and rujed that “Any corporation . . . may avail itself of the exemption.” J.S. App. 73a. Under that interpretation, the State Chamber was apparently free, under the Michigan statute, to spend corporate furmis to have ten thousand copies of its proposed advertisement printed as a handbill and distributed around town—a classic exercise of freedom of the press, see Lovell v. City of Griffin, 303 U.S. 444, 452 (1938) (“[t]he liberty of the press . . . necessarily embraces pamphlets and leaflets”). What possible legitimate state interest can it serve to permit that activity but prohibit the same entity from paying to have the same message published as an advertisement in the newspaper? Or, in an election in which a major issue dividing the candidates is free trade vs. protectionist tarriffs, what sense can it make to permit a corporation to publish an advertisement explaining why it is important to encourage free trade, but send its CEO to jail if the advertisement also identifies which candidate favors free trade or which favors high tarriffs? After all, the “|ajdvocacy of the election or defeat of candi- dates for [public] office is no less entitled to protection under the First Amendment than the discussion of political policy generally or advocacy of the passage or defeat of legislation,” Buckley, 424 U.S. at 48—in both of which activities corpora- tions have a constitutionally-protected right to engage. Likewise, a regulatory scheme permitting corporations to speak freely on the “issues” but criminalizing any speech endorsing or opposing candidates draws such an indiscernable line that it must inevitably result either in self-censorship by 28 corporations anxious to stay out of jail, or the prosecution of companies engaged in protected speech, or both. Even appellees’ bright-line rule against independent expenditures by non-profit corporations that receive funds from business firms cannot resolve these difficulties, which illuminate the profound inadequacy of the government’s regu- latory approach to political speech. The only approach that avoids the sorts of arbitrary and discriminatory line-drawing noted above is to draw the bright line in the other direction: declaring that freedom of speech extends to corporations in this area as in others. 3. Moreover, there are positive features of corporate independent expenditures that, like the one proposed here, take the form of direct, open and public expression of political opinion and preference. Appellants and their amici dwell on the various ways in which corporations are allowed to use their funds for political activity: subsidizing the operation of separate segregated funds, lobbying, debating public issues, and the like, see Brief for Appellants at 49-56; Common Cause brief at 9-10, and conclude that corporations already have "enough" political speech alloted them and do not need the additional right to make independent political expenditures. We draw a different conclusion: since there is already such significant corporate-generated expressive activity, what is the incremental harm in interpreting the First Amendment to per- mit independent political expenditures as well? Indeed, a paid editorial advertisement in a local newspaper, openly sponsored by particular corporation, is not only political speech of the purest kind, but, unlike some of the less visible sorts of corporate expenditures that are already allowed, it can be assessed by-the public at face value. As the Court recently and unanimously observed: “the people in our democracy are entrusted with the responsibility for judging and evaluating the nee Le ee 29 relative merits of conflicting arguments. ... The State's fear that voters might make an ill-advised choice does not provide the State with a compelling justification for limiting speech.” Meyer v. Grant, 108 S. Ct. at 1894 n.7 (internal quotations and citations omitted). 4. Finally and even more basically, the attempt to keep money out of politics is both futile and dangerous. Common Cause correctly observes that “[mjoney is fungible.” Com- mon Cause brief at 21. But that is only half the story. Money is also the universal medium of exchange, and in a society in which communication and advocacy can be carried out in an infinitude of ways, it is, ultimately, simply not possible to prevent those who have money and care about politics from using their resources in the political world. If you are rich enough, you can buy (or establish) a newspaper. This is not to say that some uses of money cannot be effectively prevented—bribery, for example, or other direct quid pro quo arrangements. But the attempt to sweep money utterly out of politics will not only fail, but will result in ever- greater restrictions on First Amendment freedoms while pushing money into new and perhaps even less desirabie channels. This Court has never upheid a direct restriction on the independent expenditure of funds used to create political speech. It has emphasized, rather, that “legislative restrictions on advocacy of the election or defeat of political candidates are wholly at odds with the guarantees of the First Amendment.” Meyer v. Grant, 108 S. Ct. at 1895, quoting Buckley v. Valeo, 424 U.S. at 50. Here, Michigan has made such conduct a criminal offense for corporations and their agents. “The bur- den that [it] must overcome to justify this criminal law is well- 30 nigh insurmountable.” /d at 1894. It has not been sur- mounted here. CONCLUSION The judgment of the Court of Appeals should be affirmed. Respectfully submitted, ARTHUR B. SPITZER AMERICAN CIVIL LIBERTIES UNION OF THE NATIONAL CAPITAL AREA 1400 20th Street, N.W. Washington, D.C. 20036 (202) 457-0800 Of Counsel: Counsel of Record for Amicus Curiae JOHN A. POWELL JOEL M. GORA AMERICAN CIVIL LIBERTIES UNION FOUNDATION 132 West 43rd Street New York, N.Y. 10036 (212) 944-9800 —_ July 28, 1989 . --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385012_0465%3A14. Public record. Not legal advice.