August 19, 2009

The FEC's Supplemental Reply Brief in Citizens United: Subtly Distorting the Distortion Rationale

The simultaneous reply briefs in Citizens United v. FEC are now available. Via SCOUTSBlog, you can find the government's brief here. I have posted Citizens United's brief here. The CU brief pounds the government for its failure in its opening supplemental brief to defend the anti-distortion rationale of Austin (a point I raised originally here). It says the government has "abandoned" this rationale. For its part, the government's supplemental reply brief brief tries very hard to recast the Austin anti-distortion/equality rationale into a shareholder protection rationale. I don't think the attempt succeeds, because the language of Austin is not susceptible to this reading.

To understand this point, let me begin with the relevant background. When the government filed its opening supplemental brief in Citizens United v. FEC, I characterized the brief as "remarkable." I wrote:

    There is much to like about the government's brief, and I have more about that below. But let me begin with the most interesting feature of the brief: the government does not even mention the central holding of Austin, much less defend it.... The key passage in Austin is the following:

      The Chamber argues that this concern about corporate domination of the political process is insufficient to justify restriction on independent expenditures. Although this Court has distinguished these expenditures from direct contributions in the context of federal laws regulating individual donors, Buckley, 424 U. S., at 47, it has also recognized that legislature might demonstrate a danger of real or apparent corruption posed by such expenditures when made by corporations to influence candidate elections, Bellotti, supra, at 788, n. 26. Regardless of whether this danger of "financial quid pro quo" corruption, see NCPAC, supra, at 497; post, at 702-705 (KENNEDY, J., dissenting), may be sufficient to justify restriction on independent expenditures, Michigan's regulation aims at a different type of corruption in the political arena: the corrosive and distorting effects of immense aggregations of wealth that are accumulated with the help of the corporate form and that have little or no correlation to the public's support for the corporation's political ideas. See supra, at 658-659. The Act does not attempt "to equalize the relative influence of speakers on elections," post, at 705 (KENNEDY, J., dissenting); see also post, at 684 (SCALIA, J., dissenting); rather, it ensures that expenditures reflect actual public support for the political ideas espoused by corporations. We emphasize that the mere fact that corporations may accumulate large amounts of wealth is not the justification for s54; rather, the unique state-conferred corporate structure that facilitates the amassing of large treasuries warrants the limit on independent expenditures. Corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures, just as it can when it assumes the guise of political contributions. We therefore hold that the State has articulated a sufficiently compelling rationale to support its restriction on independent expenditures by corporations.
    (my emphasis)

    Though the Austin Court spoke of a "different type of corruption (like the "other white meat"), the anti-distortion rationale is better thought of as a type of equality argument, rejecting "disproportionate" corporate spending that can "unfairly influence elections." (I've written more on this "barometer equality" argument here.) As I expected, CU's brief goes right against this anti-distortion rationale in its supplemental brief. The brief opens: "For the proper disposition of this case, the Court should rejected the anti-distortion rationale for suppressing corporate political speech formulated in Austin and relied upon in McConnell..." But the government brief does not mention the rationale, even in passing as it did in its original brief ... On the one hand, it is no surprise that the government does not want to emphasize Austin anti-distortion. After all, as I detail here, this equality rationale has already been undermined by the Court'' recent opinion in FEC v. Davis, and the equality rationale is not likely to find a receptive audience in either "swing" voters on the question in Citizens United, Chief Justice Roberts and Justice Alito. On the other hand, the government surely anticipated that Ted Olson and company in CU would be all over the Austin rationale. I suppose that the government figured it would just save its points on this question for its August 19 supplemental reply brief. The closest the government comes in this brief is to stress that corporations are not natural persons (p. 10.) But in passing on discussing the equality/anti-distortion rationale, the government puts a great deal of effort into an argument that only Justice Stevens has embraced (in his Austin concurrence): that the government can justify limits on corporate independent spending to prevent quid pro quo corruption of candidates. ... The other point the government makes, which is perhaps a bit more promising, is that corporate spending limits in elections are necessary to protect shareholders, a point Justice Brennan emphasized in his Austin concurrence. But that theory is in great tension with Bellotti, which rejected it in the context of ballot measure elections.

In its supplemental brief, the government does mention "distortion," bit it tries to recast the distortion rationale as the shareholder protection rationale (pp. 6-7 of the brief):
    A business corporation's use of treasury funds for electoral advocacy distorts the political process because the communication does not correspond to the electoral preferences of the individuals whose money is used to fund it. Dissenting in McConnell, Justice Scalia alluded to the signers of the Declaration of Independence, who pledged their "Fortunes" alongside their "sacred Honor." 540 U.S. at 255. But John Hancock pledged his own fortune; when the CEO of John Hancock Financial uses corporate-treasury funds for electoral advertising, he pledges someone else's. Corporate electoral spending is thus distortive because it converts the resources of individuals into political expression with which they may well disagree--or, otherwise said, because such spending fails to "reflect actual public support for the political ideas espoused by corporations." Austin, 494 U.S. at 660.3
    Even before Austin, this Court had recognized the government's interest in protecting corporate shareholders "from having [their] money used to support political candidates to whom they may be opposed."...
Footnote 3 from the first excerpted paragraph reads:
    Austin's reference to "public support" is best understood to refer, not to popularity within the community at large (see U.S. Chamber Supp. Br. 13-14), but to support among those in whose name the message is propagated---i.e., the shareholders whose resources are funding the electioneering.

With this footnote, the government tries valiantly to read Austin's use of the word "public" as "shareholder." I don't think that reading works in the context of the Austin quote. If the Austin Court were really talking about shareholders in that quote, it never would have added: "Corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures..." It is the public whose elections are "unfairly influenced" under the Austin reasoning, not shareholders. And the fact that corporations "amass large treasuries" is related to the public's concern over elections, not shareholders. A shareholder of a corporation with a small treasury would be even more upset by the corporation spending corporate resources on political campaigns.
I cannot fault the government for trying. The real anti-distortion/equality rationale of Austin will be hard to sell to five members of this Court. Perhaps Seth Waxman, arguing on the government's side for the BCRA sponsors, will be able to defend the Austin rationale for what it is: a recognition that "''there is no good reason to allow disparities in wealth to be translated into disparities in political power. A well-functioning democracy distinguishes between market processes of purchase and sale on the one hand and political processes of voting and reason-giving on the other.' Sunstein, Political Equality and Unintended Consequences, 94 Colum. L.Rev. 1390 (1994). " FEC v. Davis, 128 S.Ct. at 2782 (Stevens, J., dissenting).
Posted by Rick Hasen at August 19, 2009 11:23 AM