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January/ February 2014 The Corporate “Free Speech” Racket

How corporations are using the First Amendment to destroy government regulation.

By Haley Sweetland Edwards

This question bubbled all the way up to the U.S. Supreme Court in 1978. A few years before, Massachusetts had passed a law barring companies from spending money to sway public referenda, unless their business was directly affected. The First National Bank of Boston sued Massachusetts Attorney General Francis Bellotti, arguing that spending money was a corporations’ form of political speech, and therefore protected by the First Amendment at the highest standard of scrutiny. The Supreme Court agreed: prohibiting corporate spending on political ends indeed violates corporations’ “protected speech in a manner unjustified by a compelling state interest.” The decision threw legal theorists into a tizzy. If the First Amendment treats corporations’ political speech the same way it treats citizens’ political speech, does that make corporations citizens? And if so, do corporations get the same rights as citizens? Justice Lewis Powell, writing for the majority in the Bellotti decision, sidestepped that burning question: it doesn’t matter “whether corporations have First Amendment rights and, if so, whether they are coextensive with those of natural persons,” he wrote. The only question that matters is whether speech “that the First Amendment was meant to protect” is being abridged. In other words, it was all about the speech itself. Political speech, no matter who—or what!—the speaker was, or what was said, enjoys the fullest First Amendment protections, the Court decided.

Three decades later, Justice Anthony Kennedy would cite the Bellotti case as precedent twenty-four times in the Citizens United opinion, claiming that “the Government lacks the power to restrict political speech based on the speaker’s corporate identity.” But at the time, traditional conservatives were appalled by the idea that corporations and other commercial entities would be afforded the same rights as people when it came to political speech. Rehnquist argued that since the government allows corporations to exist by providing them with “special privileges or immunities different from those of natural persons,” it’s only logical that those entities would “be subject to like regulation.” The government, furthermore, allows corporations to exist so that they may perform a circumscribed economic purpose, not so that they can become political participants, he wrote. “[L]iberties of political expression are not at all necessary to effectuate the purposes for which States permit commercial corporations to exist.”

Yet while traditional conservatives fulminated, a younger generation of conservatives was outright celebratory. Unlike their elders, these more radical conservatives “saw a link between the First Amendment and the larger project of restoring the ‘economic liberty’ that they believed had been eroding since the New Deal,” wrote Columbia law professor Wu. By granting complete, unlimited, inviolable protections to commercial entities’ political speech, Bellotti dramatically elevated the stature of corporations under the First Amendment. If liberals insisted on brandishing the First Amendment to protect anarchists and communists, they reasoned, why couldn’t they could use it to protect businesses and restrict government interference in the economy? And that is more or less exactly what they did. Beginning in the early 1970s, a new crop of conservative think tanks, clubs, and legal funds, like the Pacific Legal Foundation, the Heritage Foundation, and what later became the CATO Institute, funded by the Koch brothers, formed alliances with the U.S. Chamber of Commerce and other powerful trade groups, in an effort to push an anti-regulatory, pro-business agenda, with expanded corporate free speech rights as a key weapon.

This revolution was aided in no small part by many in the liberal establishment, who, even today, continue to support the Bellotti decision on the grounds that it was framed as an anti-discriminatory measure: all political speech by all speakers enjoyed First Amendment protection—even if the speaker was a bank or a corporation. Many of the traditionally liberal First Amendment lawyers, like Floyd Abrams, Laurence Tribe, and Walter Dellinger, who made their names in the ’70s as defenders of the oppressed, have in more recent years dedicated themselves to advancing and defending this idea—that the identity, even the corporate identity, of a speaker cannot be a determining factor of whether or not speech is regulated. As a result, they have, along with organizations like the ACLU, lent their talents, as well their credibility and respectability, to corporations’ First Amendment attacks, often finding themselves among unlikely allies, like the National Rifle Association, Monsanto, and Exxon.

Abrams, for example, who earned his reputation defending the New York Times in the Pentagon Papers case, later wrote the brief in support of Mitch McConnell in Citizens United and, in 2012, successfully argued on behalf of the tobacco industry. In that case, the tobacco industry had claimed that a Food and Drug Administration rule, mandated by the 2009 Family Smoking Prevention and Tobacco Control Act, that required newer, more graphic warning labels on cigarette packaging was a violation of companies’ First Amendment-protected speech. Abrams now represents the massive credit rating agency Standard & Poor’s, which has argued, repeatedly and successfully, that its irresponsible, dangerous, and overly optimistic ratings are just speech—the “world’s shortest editorials,” as one legal scholar put it—and that the company therefore cannot be held responsible for using those ratings to line its own pockets while fleecing investors of billions of dollars and contributing to the collapse of the housing market.

By the early 2000s, First Amendment jurisprudence had become a vague, messy, and sometimes-contradictory mess, vulnerable to exploitation. On the commercial speech side, it was clear that the First Amendment provided some limited protections to companies, but it wasn’t clear what activities were included under the definition of commercial speech, or where that “lower standard of scrutiny” began or ended. On the political speech side, the Supreme Court had clearly ruled that the First Amendment provided total protection at the “highest standard of scrutiny” to all speakers, including corporations, but it wasn’t clear what speech should be considered political, or what would happen in circumstances in which a company’s political and economic speech overlapped. And in the area of compelled speech—requiring companies to disclose certain information, say, or refrain from making false claims—things were even murkier.

Take, for example, the recent cases brought against the government by Hobby Lobby, a Christian-owned national craft supply chain with 578 stores and tens of thousands of employees across the country. Hobby Lobby argues that the mandate in Obamacare requiring businesses of a certain size to pay for their employees’ contraception violates the company’s First Amendment-protected rights of religious expression. The company’s owners do not believe personally in using certain types of contraception. While that case is slightly different since it involves First Amendment protections of religious expression, rather than speech, much of the same case law applies. In October, the U.S. Court of Appeals in the Tenth Circuit, based in Colorado, cited the First Amendment precedent of Citizens United to decide in favor of Hobby Lobby, leaving its thousands of employees, including those who do not share the religious beliefs of their employers, out of luck. “We see no reason the Supreme Court would recognize constitutional protection for a corporation’s political expression but not its religious expression,” wrote Judge Timothy M. Tymkovich for the majority. The U.S. Supreme Court will hear the case this year.

Haley Sweetland Edwards is an editor of the Washington Monthly.

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