SCOTUS versus SCOTUS

“Austin is a dud and we’re getting rid of it. Never happened. Off the books. Fuhgeddaboudit.”

by Colby Cosh

The U.S. Supreme Court’s ruling in the Citizens United case on campaign-spending limits [PDF] is pretty extraordinary. The Court was presented with the problem that an earlier incarnation of itself had licensed the state suppression of corporate-funded political speech in the Austin v. Michigan Chamber of Commerce decision of 1990. When I heard word of Citizens United I was curious to see how the Court had tried to make Austin fit more comfortably into the great jigsaw puzzle of First Amendment jurisprudence. Such farcical exercises in providing for the uglier offspring of stare decisis are always entertaining.

But the Court didn’t try to make it fit. They just said “Austin is a dud and we’re getting rid of it. Never happened. Off the books. Fuhgeddaboudit.”

The relevant factors in deciding whether to adhere to stare decisis, beyond workability—the precedent’s antiquity, the reliance interests at stake, and whether the decision was well reasoned— counsel in favor of abandoning Austin, which itself contravened the precedents of Buckley and Bellotti. As already explained, Austin was not well reasoned. It is also undermined by experience since its announcement. Political speech is so ingrained in this country’s culture that speakers find ways around campaign finance laws. Rapid changes in technology—and the creative dynamic inherent in the concept of free expression—counsel against upholding a law that restricts political speech in certain media or by certain speakers. In addition, no serious reliance issues are at stake. Thus, due consideration leads to the conclusion that Austin should be overruled. The Court returns to the principle established in Buckley and Bellotti that the Government may not suppress political speech based on the speaker’s corporate identity.

The “undermined by experience” bit is the key cheat, really. What experience has demonstrated should already have been apparent in 1990. (As it was to Justices Kennedy and Scalia, who dissented from Austin and have clung to the bench long enough to taste its gore.) Ilya Somin contributes an interesting reaction to Citizens United at volokh.com.




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SCOTUS versus SCOTUS

  1. It's been known to happen. The highest court can correct the mistakes of itself. A Canadian example would be M v. H in 1997, which decided that homosexuals were entitled to legal equality despite fairly recent cases which said they weren't.

    • And the correct corrected this mistake when, exactly?

  2. My knowledge of American political campaign advertising by third-parties might be near zero, but my gut tells me this is going to lead to a lot of libel court cases and political pissing matches via proxy.

    The cold war (Democrat vs. Republican) just took on 1,000 new fronts?

    • Here's hoping! American politics stopped being serious with Clinton, if not earlier. The more over the top they get, the more entertaining for those of us relatively unaffected by the madness. It's just more money in the end to promote both sides every-crazier interventionist policies. A pox on both their houses.

  3. II think the timing is just awful here for Obama come November : I am starting to feel sorry for the guy as the expectations were so high which only makes the fall from grace so much harder.

    • You're talking as if the "fall from grace" is somehow an unfortunate occurence unrelated to his performance.

  4. Perhaps the greatest ongoing lesson from this? The courts are from from perfect.

    Liberals generally loath any criticism of the judiciary, especially when it furthers their cause, and except when it doesn't, but these are human beings, appointed by human beings, with their own failings, biases, leanings, and so on.

    Which is one reason why I never understood this notion that once judges rule on something that it tends to serve as unrelenting precedent.

    Judges can make bad law, just like politicians or anyone else can.

    In this case, I've actually never been crazy about the idea of placing arbitrary limits on political activity. Just make it transparent. And create tight conflict of interest guidelines so that those who donate are restricted from receiving favourable treatment in return.

    For example, there are no limits or restrictions on how the media can cover politics. They're corporations with their own interests and biases. If you think fairness in political discourse and activity should be legislated, why not involve them, too? Or how about just let freedom ring?

  5. I don't buy Ilya Somin's position. Here is a comment from the post that makes more sense than Somin's ramblings:

    But here's the problem when people associate as a corporation they gain special rights and privileges not available to individuals. Because of this they should be subject to special regulation to make sure they don't abuse their preferred position in society.

    And here is an excerpt from John Robb's "Global Guerrillas" blog:

    The hollow state has the trappings of a modern nation-state ("leaders", membership in international organizations, regulations, laws, and a bureaucracy) but it lacks any of the legitimacy, services, and control of its historical counter-part. It is merely a shell that has some influence over the spoils of the economy. The real power rests in the hands of corporations and criminal/guerrilla groups that vie with each other for control of sectors of wealth production. For the individual living within this state, life goes on, but it is debased in a myriad of ways.

    SCOTUS, with it's new make-up seems to be abetting the deterioration of the U.S. as a successful "nation-state".

    • If the limited-liability corporation is a suboptimal form of social organization, the answer is to GET RID OF IT, not to put restrictions on all collectives as an unrelated, arbitrary way of "balancing" things. That way lies madness. But of course the people who write about corporations as if they were comic-book villains are well along that road already. (Do any of them EVER count labour unions, whose political rights were also vindicated in Citizens United, as part of the "hollow state"? Just askin'.)

      • (Do any of them EVER count labour unions, whose political rights were also vindicated in Citizens United, as part of the "hollow state"? Just askin'.)

        Don't ask me. Maybe they do, maybe they don't.

        Here is a quote from Somin's penultimate post (emphasis mine):

        "UPDATE: I should clarify that in this post, as before, I'm not arguing that corporations themselves are “persons” with constitutional rights. Rather, I'm asserting that their owners and employees are such persons and that that status enables them to use corporations to exercise their constitutional rights. Similarly, partnerships, universities, schools, and sole proprietorships aren't people either. But people can use them to exercise their constitutional rights, and the government can't forbid it on the sole ground that they are using assets assets assigned to “state-created entities.” This distinction was unfortunately obscured in the current post by my shorthand references to “corporations'” rights. I only used that terminology because it's cumbersome to always write something like “people exercising their constitutional rights through corporations.”

        Me too.

        I found this quote in the NYT — it pretty much sums up what I have been thinking:

        "The dissenters included the three Democratic appointees: Justices Ruth Bader Ginsburg, Stephen G. Breyer and Sonia Sotomayor. They joined a 90-page dissenting opinion written by Justice John Paul Stevens, who was appointed by President Ford, a Republican. Stevens, who will turn 90 in April, spoke in a halting voice as he read part of his dissent in the courtroom Thursday.

        He called the decision "a radical change in the law." He predicted that the ruling would "cripple the ability of ordinary citizens, Congress and the states to adopt even limited measures to protect against corporate domination of the electoral process."

        As to the "failed state" reference — it is decisions like this that have the potential to erode "one person, one vote" and represent the "snowball that can become an avalanche".

      • The answer is to get rid of it? You're setting this up as a black or white proposition, where corporations either function as they do now or should be made illegal? Am I reading that right?

        Though I come at most of the stuff you post from a completely different viewpoint than you, I still enjoy reading it 'cause it's generally well done and it's good to have my assumptions challenged on a regular basis. However, I can't take you seriously if I'm reading that correctly…

        • If it's the limited liability of the limited-liability corporation we object to, let's not limit it. This isn't rocket science. But if we did that, people would still be left with plenty of means to take collective action of various kinds, and they'd invent some new ones. Proscribing speech acts done performed in the name or with the resources of social units more powerful than any individual is a wild-goose chase.

          • I'm still totally baffled by why you're suggesting such an extreme solution (and I am still not convinced that you're proposing this seriously) rather than a more moderate approach.

            My really basic understanding of things is that the LLC is the cornerstone of the modern (where by modern I mean the past 100 years and more) economy, as it allows business to raise funds by selling ownership stakes without transmitting financial responsibility to the shareholders if the company fails. So, in other words, if a partnership fails then creditors can go after the partners, but if a LLC fails then the shareholders just lose their investment.

            So again, why are you suggesting something which appears to me to be entirely ludicrous as opposed to measures such as, say, legislating better corporate governance and better accountability to shareholders? My question here isn't about free speech, but why you're setting this up as a black or white "leave corporations exactly as they are now or crush the economy" kind of proposition?

        • It's not the speech that is the worry, it's the pulpit from which to deliver that speech — wider, higher, more distributed — the best that money can buy, potentially further unbalancing an already unbalanced playing field for politics. It might favour the Republicans today, the Democrats tomorrow, or worse, increase pressure on legislators to go along with bad legislation owing to pressure from rich special interests.

  6. Austin is not unlike R v Marshall in some ways. It isn't exactly the same because R V Marshall was the court itself playing silly political games when it ought not to have and the impetus for Austin was Congress playing stupid political games with McCain Feingold when it ought not to have. But the rest of it played out the same way. The dubious decision was made, it had unfortunate consequences and cooler legal heads prevailed when the court had a chance to re-examine the issue.

    The Democrats got much, much more money (in individual donations) from Wall Street the last time around so this doesn't necessarily play to any party's advantage, although Obama had better do something, anything, right pretty damn soon if he doesn't want to lose Wall Street support for his party for a generation.

  7. Republicans seem to be happy about this decision but I don't think they've contemplated what it truly means in a world where corporations are global. As far as I can tell, the doors seem to have been flung wide open to direct foreign influence on their political system.

    • I think you mean indirect foreign influence, since contributions from foreign sources – however "global" in nature, are still forbidden. I'm also not sure why these 'forces" would work only against "Republicans."

      • As you pointed out, neither party is innocent on any way when it comes to receiving corporate contributions, but I kind of doubt you’ll find many liberals celebrating this decision.

        • Why? For example, Democrats receive MORE donations from Wall St. than Republicans do. One of the great hidden truths of the Obama administration is that it is loaded with finance insiders who contributed to this current mess. It's also my understanding that unions – a Democrat staple – also benefit from this ruling.

          • Well, I still don't see a lot there as to why this is somehow bad for liberals. The principled argument is that the lifting of these bans give corporations too much power. Yet political history on both sides of the border indicates that liberals are as much of a beneficiary of corporate influence, if not more so, than conservatives are.

            Of course, the opposing principled argument is that bans are an arbitrary restriction on political activity, which in the end should be about freedom.

          • The principled argument is, I like to think, that corporations aren't people. Unless we're willing to give corporations the vote and find a way to put them in jail, they aren't people and so shouldn't get the rights of people.

            Those individuals within the corporation? They're free to do whatever they want. But don't let them use corporate assets to do it it. Make them put the assets in their own personal name first. At least then we can truly see what's going on.

          • No, corporations aren't people, but public policy has a direct impact on their activities and interests, so I'm not sure why they wouldn't be able to pursue those interests within the sphere of free political activity. They do pay taxes, don't they? Or should they be exempt from that, according to your argument?

  8. I think people are reading too much into this reading. The court overturned the ban on the ban-on-corporate expenditures provisions of the BCFRA, but it let stand disclosure requirements, ban on contributions to individuals, and (so far at least) let stand the dollar limits established as part of McCain-Feingold.

    I've read the executive summary of this 183-page opinion, and it's very well written and reasoned. The Kennedy opinion will simplify matters a lot by removing the need for these PACs and whatnots which are really conduits for corporate money to influence the political process.

    The influence of media organizations to influence the political process through their coverage is far more "corrupting", as the Court seems to imply in parts of its reasoning, than an independent expenditure by a corporation or a union on some issue or another.

    This is much ado about nothing.

    • While this may not do much to change the reality on the ground right now, this ruling means that there is no way for Congress to legislate corporate spending on advertising and the like. Before this, it would have been possible for Congress to try and legislate PACs out of the picture but with this decision there is no way to change things except to either stack the Supreme Court and re-examine this or to amend the Constitution.

      Essentially, this has taken this issue entirely out of play for *at least* a decade.

      • I'd disagree. Congress can no longer ban donations, but it sure can add provisions in Sarbanes-Oxley requiring, for example, a majority shareholder vote before corporations can involve themselves in political expenditures. That, couple with the disclosure requirements, would actually make things better.

        Money is like water. It will always find a nook or cranny to flow through.

        • That sounds like a perfectly reasonable solution.

  9. Man, wish one could preview and edit these things before pressing "submit."

  10. Well, if you join IntenseDebate, you can at least edit after the fact.

    • Yes, but then being Anon would no longer be quite as simple :-)

  11. The discussion about the reasoning is besides the point in this case: even if it is the correct interpretation of the Constitution, this decision isn't in the public interest (corporations already have a disproportionate amount of influence on legislation, allowing them further access to influence elections isn't going to help anything) and it appears that the only way to change this is either to stack the Supreme Court or amend the Constitution.

    What I suspect is that this will lead to further erosion of citizen's rights in favour of entrenched corporate interests as elected officials feel more and more beholden to those who helped get them into office and keep them there. Eventually, as people realize that the law and their political parties aren't really there for them and don't really answer to them there will be a crisis and the political and legal order in the US will change, with Constitutional amendments and serious reform of their political system. This specific issue on it's own isn't enough to push it there in the near term, but as things like this keep building up that's where I see this going.

    • Yeah, you know, now that this ruling is in effect, you just know that some wealthy bastard is going to exploit it to buy tons of influence. My bet is the first plutocrat to do so will be George Soros.

      • You don't understand the ruling. It was about corporate contributions, not contributions by individuals like Soros.

        • He doesn't control any corporations?

          • No. Corporations are controlled by their board of directors, who must answer to the shareholders. He's probably on a few boards.

          • Well, there are various types of corporations, including those that are privately held, and Soros certainly appears to be in control of at least one: Soros Fund Management LLC, founded by George Soros, is a privately held corporation…. http://en.wikipedia.org/wiki/Soros_Fund_Managemen

            He's been a major shareholder and investor in corporations, and serving as a director on a board certainly influences the direction of a corporation, doesn't it?

            So, I definitely believe that he has interests that would be affected by political finance laws. And I only did a very quick search.

          • Well, I'm not an expert, but according to wikipedia, and according to my own memory, once a company is incorporated it is not controlled by an individual, even if it's name matches the founder, like Soros Fund Management, McDonald's or Tim Horton's. I'm sure there are a lot of conditions to satisfy in order for a company to be incorporated.

            http://en.wikipedia.org/wiki/Corporate_governance

            I agree that he has a lot of influence, but influence is different than control. To influence means that you share control, not that you maintain control.

            Therefore, a wealthy bastard cannot exploit a corporation to buy influence.

          • Soros is the chairman of at least one privately held corporation. He's only accountable to an extremely small set of private investors, most of them personally approved by him, since he founded the company. I think that qualifies as "a wealthy bastard" being in a position to "exploit a corporation to buy influence."

            I think it's safe to say that Soros is in now way barred from influencing the political process through corporations. At least not to a lesser degree than anyone else.

          • Frankly, I see absolutely no difference in Soros' ability to influence now than he had before this SCOTUS decision. What's the difference?

          • Well that's good in theory. But what shareholders have ever okayed box seats at a sporting venue, f'rinstance, or a corporate yacht, etc. And how would this be different?

          • So, shareholders have no say over what a corporation does, especially the political contributions it makes? I somehow doubt that.

          • Seriously? Do you seriously think the shareholders would rather give the CEO a bonus of 23 million dollars, and avoid paying dividends altogether–to the shareholders? Or even when companies do give dividends, increasing them with a large chunk of the 100 million they give to executive bonuses I'm thinking would be looked on favourably, if the shareholders had a say in it. But these things don't come up for a shareholders vote–or at least they didn't until fairly recently when some shareholders got so fed up. They get to vote on whether to keep the board of directors, or not. And if the company's stock is going up, or they are being paid dividends, most shareholders will stick with the board, even though the board is pillaging their investment return.

          • I don't think corporate yachts exist. Corporate jets do, their function being to get their leaders around quickly and easily to make deals and run the show. Box seats exist to entertain potential customers. Obviously they serve as perks as well, part of the compensation of the highest level employees. But they have a purpose, and that is why they are approved.

            You can't exploit a corporation for purely personal gain. Ask Conrad Black.

        • Turn on your sarcasm detector; it seems to be malfunctioning.

          My point is that there's nothing magic about the corporate form that suddenly makes the influence of money more or less evil. Soros already spends tremendous amounts of money trying to influence politics through unincorporated "527s"; why should I suddenly now fear that the ACLU, an incorporated entity, is allowed to do the same?

  12. Corporations are made of people, so their interests should be adequately represented by the people therein.

    Should they pay corporate taxes? That's a more interesting argument. I tend to suggest that yes, they should, not on the grounds that they are people, however, but on the grounds that we give the people who are involved in corporations special rights and privileges for protecting and disbursing their assets that private individuals do not have. As such, corporate taxes are the national dues we take for giving them those privileges.

    • Special privileges to corporations? Such as?

      How do corporations not have the interests of their people represented when making corporate donations, but apparently they are represented when making taxes.

      On the one hand, you have no problem having their money taken away from them. On the other hand, you do have a problem with how they spend it in a political democracy.

      • Well, the most obvious one is that my income is taxed basically on the gross, while a corporation's income is taxed on the net.

        Corporations can shield assets. I can't, except through a corporation.

        Corporations cannot be put in jail when they violate the law.

        Corporations can take advantage of various "incentive programs" that I, as an individual, have no access to.

        Really, there are quite a number of ways.

        I never said corporations are represented when paying taxes. Please don't put words in my mouth. I said that, IMO, corporate taxes serve as the national dues for the privileges we provide corporations. Ergo, they have nothing to do with representation in any form.

        • Well, according to your argument, any "privileges" that any entity receives from government should be paid for by their taxes. So, welfare should be paid for by taxes from welfare recipients, and so on. Lots of "privileges" that individuals get corporations don't get. Yet, somehow, you only want corporations to pay for them.

          I also don't quite understand your characterization of individual representation within corporations. The moment that people use their own resources for their own interest is the moment that they stop acting in the interest of the corporation. Corporations have various ways in which individuals within are represented – and that are tied to their membership within that corporation.

          Frankly, you seem to be jumping through hoops to justify why corporations, as entities, should pay taxes, but they should not be able to pursue their own interests within democracy.

          • Faulty generalization. Corporations only have existance in the eyes of the state, and all corporations consist of people, who can take advantage of all the programs we offer to people.

            People exist regardless of the state, and people do not consist of corporations, so people cannot take advantage of all the programs we offer to corporations. This is the fundamental difference.

            The corporations don't need to be there, and as such, everything about them is artificial. This means they have no rights. You seem to be arguing this from a standpoint of people have a right to "No taxation without representation", but corporations are not people, and as such hold no such right. I think this is the fundamental disconnect we're having. You seem to believe that a corporation has a right to be heard if it is being taxed. I assert that this is simply not true because, again, corporations are not people.

          • Do policies by government not affect corporations and, as such, should they not participate in the political process? We're not talking about human rights here. We're talking about political activity.

            Corporations take advantages of programs, too. Again, your definitions here appear to be completely arbitrary. You don't like corporations, so you support policies that punish them.

            My comments about personal interests were related to yours about individuals being able to act alone on behalf of the corporation. But this is nonsensical. The corporation acts on behalf of all the individuals within it. They can't exercise their rights in this regard apart from the corporation. The moment they do, they no longer pursue the corporation's interests. They pursue their own, which can be in complete contradiction of the corporation.

            So, the only way that a corporation can pursue it's own political interests is as an entity in and of itself, just as the only way it can pay taxes is as an entity in an of itself – apart from the taxes that individuals within it have to pay, too.

            Anyhow, some of these debating points are rather arcane, which might be why you decided to choose them. I don't know. For example, I don't know what you're talking about regarding economic policy. I'm talking about the rights of organizations such as corporations to have a say in the political process. You're saying they should have no say, but that they should pay taxes. And your distinctions regarding their responsibilities in both seem, again, arbitrary and based on your views of corporations in general.

            Like Cosh said, if some of you don't like corporations, then get rid of them. But if they're there, and they pay taxes, then why can't they participate?

          • No, as I keep explaining, I don't believe that corporations have any rights. They are not people. This is the salient point and the one you don't seem to understand.

            Corporations are not people. Corporations thus do not have rights.

            They have privileges, and they have obligations, all granted to them by the people through the government. They do not have rights, and they deserve no voice in government because, once more, they are not people.

            The people who make up the corporations have rights, and they deserve a voice in our governance, and they have that. The corporations they own or run do not.

            I really don't know how I can explain it to you any better than that.

          • Reductio ad absurdum isn't argument, people, it's rhetoric.

  13. Cosh–you aren't nearly as effective now that we know you're so funny lookin'.

  14. As a bit of a side note: debates about the constitution in the US almost invariably make me glad to be Canadian (and I say this as someone who lived in the US, went to school there, and honestly loved the place). Down there, the founding fathers are pratically deified and the constitution has become something like the 10 Commandments instead of just another document (a good one!) written by a bunch of guys.

    Their constitution has become essentially untouchable, they've left themselves with no way to have a rational debate about even the possibility of changing it since that would be blasphemy. I'm so glad I live in a place where people can and do say stuff like "damn that bastard Trudeau", and where we can honestly discuss things like changes to our electoral system as if they're actually possible rather than handed to us by the divine.

    • The US Constitution untouchable? Ever heard of the Patriot Act (to name but one of the many pieces of legislation and EOs that are in direct violation of the letter and spirit of the Constitution)?

      Everything that Jefferson, Adams, Madison, etc. codified in the Constitution was put there for one reason – to protect individual liberty and allow the establishment of a society impervious to government tyranny. Despite what many modern legal scholars would have us believe, there is nothing antiquated about it.

      As a reality check, did you know that many law enforcement agencies in the US, including the FBI, have warned that those displaying a strong knowledge and allegiance to the Constitution are to be regarded as potential terrorists? The notion of the Constitution being untouchable is something they teach kids in grade school to brainwash them into believing they live in "the greatest country in the world" where they can "pursue the American dream". The reality of it is the polar opposite.

  15. err rather than that we shouldn't touch them because they were handed to us by the divine.

  16. Another thing about the campaign finance laws: it's absurd that one corporation (the New York Times) can influence elections while another (Procter and Gamble) cannot is absurd.

  17. Places where the constitution is flimsy and easily changed are the kinds of places (eg Venezuela, central America, Russia) where you end up with no rights at all.

    • Careful, I just said I was happy I was Canadian because the US has gone overboard in one direction, not that I wanted to go completely the other way. I'd say the balance we have here is about right: practically, it'd be hugely difficult to change the constitution but at least we're honest about it not being a perfect document and we can discuss improving it.

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