No. 08-205 

================================================================ 

In The 

Supreme Court of the United States 

--------------------------------- ♦ --------------------------------- 

CITIZENS UNITED, 

Appellant, 

vs. 

FEDERAL ELECTION COMMISSION, 

Appellee. 

--------------------------------- ♦ --------------------------------- 

On Appeal From The United States District Court 

For The District Of Columbia 

--------------------------------- ♦ --------------------------------- 

BRIEF OF THE STATES OF MONTANA, ARIZONA, 

CONNECTICUT, FLORIDA, HAWAII, ILLINOIS, 

IOWA, KANSAS, MARYLAND, MASSACHUSETTS, 

MICHIGAN, MINNESOTA, MISSISSIPPI, 

NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, 

NORTH CAROLINA, NORTH DAKOTA, OHIO, 

OKLAHOMA, PENNSYLVANIA, RHODE ISLAND, 

SOUTH DAKOTA, TENNESSEE, VERMONT, 

WEST VIRGINIA, AS AMICI CURIAE ADDRESSING 

JUNE 29, 2009 ORDER FOR SUPPLEMENTAL 

BRIEFING AND SUPPORTING NEITHER PARTY 

--------------------------------- ♦ --------------------------------- 

STEVE BULLOCK

Montana Attorney General 

ANTHONY JOHNSTONE* 

Solicitor 

MONTANA DEPARTMENT OF JUSTICE

P.O. Box 201401 

Helena, MT 59620 

Telephone: (406) 444-2026 

*Counsel of Record

TERRY GODDARD

Arizona Attorney General 

MARY R. O’GRADY

Solicitor General 

ARIZONA ATTORNEY

 GENERAL’S OFFICE

1275 W. Washington 

Phoenix, AZ 85007 

Telephone: (602) 542-8986 

[Additional Counsel On Inside Cover] 

================================================================ COCKLE LAW BRIEF PRINTING CO. (800) 225-6964 

OR CALL COLLECT (402) 342-2831 
RICHARD BLUMENTAL

Attorney General of 

 Connecticut 

55 Elm Street 

Hartford, CT 06106 

BILL MCCOLLUM

Attorney General of Florida 

The Capitol PL-01 

Tallahassee, FL 32399 

MARK J. BENNETT

Attorney General of Hawaii 

425 Queen Street 

Honolulu, HI 96813 

TOM MILLER

Attorney General of Iowa 

2nd Floor Hoover Bldg. 

Des Moines, IA 50319 

LISA MADIGAN

Attorney General of Illinois 

100 West Randolph Street 

Chicago, IL 60601 

STEVE SIX

Attorney General of Kansas 

120 SW 10th Avenue, 

 2nd Floor 

Topeka, KS 66612 

DOUGLAS F. GANSLER

Attorney General of 

 Maryland 

200 Saint Paul Place 

Baltimore, MD 21202 

MARTHA COAKLEY

Attorney General of 

 Massachusetts 

GENERAL COUNSEL’S OFFICE

One Ashburton Place 

Boston, MA 02108 

MICHAEL A. COX

Attorney General of 

 Michigan 

P.O. Box 30212 

Lansing, MI 48909 

LORI SWANSON

Attorney General of 

 Minnesota 

102 State Capitol 

75 Rev. Dr. Martin Luther 

 King, Jr. Blvd. 

St. Paul, MN 55155 

JIM HOOD

Attorney General of 

 Mississippi 

P.O. Box 220 

Jackson, MS 39205 

ORVILLE B. FITCH II 

Acting Attorney General of 

 New Hampshire 

Deputy Attorney General of 

 New Hampshire 

33 Capitol Street 

Concord, NH 03301 

ANNE MILGRAM

Attorney General of 

 New Jersey 

The Hughes Justice Complex 

P.O. Box 080 

25 Market Street 

Trenton, NJ 08625 
GARY K. KING

Attorney General of 

 New Mexico 

P.O. Drawer 1508 

Santa Fe, New Mexico 

 87504-1508 

ROY COOPER

Attorney General of 

 North Carolina 

DEPARTMENT OF JUSTICE

P.O. Box 629 

Raleigh, NC 27602 

WAYNE STENEHJEM

Attorney General of 

 North Dakota 

600 E. Boulevard Avenue 

Bismarck, ND 58505-0040 

RICHARD CORDRAY

Attorney General of Ohio 

30 East Broad Street, 

 17th Floor 

Columbus, OH 43215 

W.A. DREW EDMONDSON

Attorney General of 

 Oklahoma 

313 N.E. 21st Street 

Oklahoma City, OK 

 73105-4894 

THOMAS W. CORBETT, JR. 

Attorney General of 

 Pennsylvania 

16th Floor, Strawberry 

 Square 

Harrisburg, PA 17120 

PATRICK D. LYNCH

Attorney General of 

 Rhode Island 

150 South Main Street 

Providence, RI 02903 

LAWRENCE E. LONG

Attorney General of 

 South Dakota 

1302 E. Highway 14, 

 Suite 1 

Pierre, SD 57501 

ROBERT E. COOPER, JR. 

Attorney General and 

 Reporter of Tennessee 

P.O. Box 20207 

Nashville, TN 37202-0207 

WILLIAM H. SORRELL

Attorney General of 

 Vermont 

VERMONT ATTORNEY

 GENERAL’S OFFICE

109 State Street 

Montpelier, VT 05609-1001 

DARRELL V. MCGRAW, JR. 

Attorney General of 

 West Virginia 

OFFICE OF THE

 ATTORNEY GENERAL

State Capitol, Room 26-E 

Charleston, WV 25305 
i 

TABLE OF CONTENTS 

Page 

TABLE OF AUTHORITIES ................................. ii 

INTEREST OF THE AMICI CURIAE ................. 1 

SUMMARY OF ARGUMENT .............................. 1 

ARGUMENT ........................................................ 3 

I. THE COURT NEED NOT ADDRESS 

AUSTIN ..................................................... 3 

II. AUSTIN CORRECTLY SETTLED THE 

BOUNDS OF STATE CORPORATE 

ELECTIONEERING LAWS ........................ 5 

A. Austin Confirmed the Settled Expectations of Governments, Corporations, 

and Campaigns .................................... 7 

B. Regulation of Corporate Electioneering Remains a Compelling State Interest .................................................... 14 

C. Segregated Funds Are Narrowly Tailored to Serve State Interests ............. 19 

CONCLUSION ..................................................... 21 

APPENDIX 

State Laws Prohibiting Corporate Electioneering ............................................................................ 1a 
ii 

TABLE OF AUTHORITIES 

Page 

CASES

Austin v. Michigan Chamber of Commerce, 494 

U.S. 652 (1990) ................................................ passim

Buckley v. Valeo, 424 U.S. 1 (1976) ...................... 10, 19 

Caperton v. A.T. Massey Coal Co., 129 S. Ct. 

2252 (2009) ........................................................ 15, 16 

Crawford v. Marion County Election Bd., 128 

S. Ct. 1610 (2008) ...................................................... 5 

FEC v. Beaumont, 539 U.S. 146 (2003) ......... 12, 14, 18 

FEC v. Colo. Republican Fed. Campaign 

Comm., 533 U.S. 431 (2001) ................................... 14 

FEC v. Massachusetts Citizens for Life, Inc., 

479 U.S. 238 (1986) ......................................... passim

FEC v. Nat’l Conservative Political Action 

Comm., 470 U.S. 480 (1985) ................................... 11 

FEC v. Nat’l Right to Work Comm., 459 U.S. 

197 (1982) .......................................................... 11, 17 

FEC v. Wis. Right to Life, Inc., 551 U.S. 449 

(2007) ....................................................................... 13 

First National Bank of Boston v. Bellotti, 435 

U.S. 765 (1978) .................................................. 10, 14 

Jones v. Harris Assocs. L.P., 537 F.3d 728 (7th 

Cir. 2008) ................................................................. 18 

Marsili v. Pacific Gas & Elec. Co., 124 Cal. 

Rptr. 313 (App. Ct. 1975) .......................................... 8 
iii 

TABLE OF AUTHORITIES – Continued 

Page 

McConnell v. Combination Mining & Milling, 

76 P. 194 (Mont. 1904) .............................................. 7 

McConnell v. FEC, 540 U.S. 93 (2003) ........... 13, 14, 18 

Montana Right to Life v. Eddleman, 343 F.3d 

1085 (9th Cir. 2003) ................................................ 16 

Nixon v. Shrink Mo. Gov’t PAC, 528 U.S. 377 

(2000) ....................................................................... 14 

Northwest Austin Mun. Util. Dist. No. One v. 

Holder, 129 S. Ct. 2504 (2009) .................................. 3 

People ex rel. Perkins v. Moss, 187 N.Y. 410 

(1907) ......................................................................... 8 

People v. Gansley, 158 N.W. 195 (Mich. 1916) ............. 9 

Pipefitters Local Union No. 562 v. United 

States, 407 U.S. 385 (1971) ............................... 10, 19 

Randall v. Sorrell, 548 U.S. 230 (2006) ................... 4, 6 

State v. Alaska Civil Liberties Union, 978 P.2d 

597 (Alaska 1999).................................................... 13 

State v. Joe Must Go Club of Wisconsin Inc., 70 

N.W.2d 681 (Wisc. 1955) ........................................... 9 

United States v. Congress of Indus. Orgs., 335 

U.S. 106 (1948) .......................................................... 9 

United States v. Int’l Union United Auto., 

Aircraft & Agric. Implement Workers of Am., 

352 U.S. 567 (1957) ......................................... passim

Wash. State Grange v. Wash. State Republican 

Party, 128 S. Ct. 1184 (2008) .................................... 5 
iv 

TABLE OF AUTHORITIES – Continued 

Page 

CONSTITUTIONAL PROVISIONS 

Ky. Const. § 150 (1891) ................................................. 8 

STATUTES

Acts of Tennessee, ch. 18 (April 29, 1897) ................... 9 

General Laws of Nebraska, ch. 19 (April 3, 

1897) .......................................................................... 8 

Laws of Florida, ch. 4538 (June 2, 1897) ..................... 8 

Missouri Laws, p. 108 (March 20, 1897) ...................... 8 

Tillman Act, ch. 420, 34 Stat. 864-65 

(1907) ....................................................... 9, 16, 17, 19 

2 U.S.C. § 441b (“FECA”) ........................................... 10 

OTHER AUTHORITIES

FEC, Number of Federal PACs Increases 

(March 9, 2009), http://www.fec.gov/press/ 

press2009/20090309PACcounts.html ..................... 20 

Val Burris, The Two Faces of Capitalism: 

Corporations and Individual Capitalists as 

Political Actors, 66 Am. Soc. Rev. 361 (2001) ......... 14 

Edwin M. Epstein, The PAC Phenomenon: An 

Overview, 22:2 Ariz. L. Rev. 355 (1980) .................. 19 

Jill E. Fisch, How Do Corporations Play 

Politics: The FedEx Story, 58 Vand. L. Rev. 

1495 (2005) .............................................................. 19 
v 

TABLE OF AUTHORITIES – Continued 

Page 

James J. Lopach, Montana’s Role in the Free 

Speech vs. Equal Speech Debate, 60 Mont. L. 

Rev. 475 (1999) .......................................................... 7 

William P. Marshall, The Last Best Chance for 

Campaign Finance Reform, 94 Nw. U.L. Rev. 

335 (2000) .................................................................. 5 

Robert E. Mutch, Before and After Bellotti: The 

Corporate Political Contribution Cases, 5 

Election L.J. 293 (2006) ........................................ 8, 9 

Robert G. Natelson, The General Welfare Clause 

and the Public Trust: An Essay in Original 

Understanding, 52 Kan. L. Rev. 1 (2003) ............... 15 

Louise Overacker, Money in Elections, Politics 

and People: The Ordeal of Self-Government 

in America (1932) ...................................................... 9 

Robert Sitkoff, Corporate Political Speech, 

Political Extortion, and the Competition for 

Corporate Charters, 69 U. Chi. L. Rev. 1103 

(2002) ................................................................. 16, 17 

Zephyr Teachout, The Anti-Corruption 

Principle, 94 Cornell L. Rev. 341, 393 n.245 

(2009) ....................................................................... 15 

Melvin I. Urofsky, Campaign Finance Reform 

Before 1971, 1 Albany Gov’t L. Rev. 1 (2008) ......... 17 

Adam Winkler, McConnell v. FEC, Corporate 

Political Speech, and the Legacy of the 

Segregated Funds Cases, 3 Election L.J. 361 

(2004) ......................................................................... 6 
vi 

TABLE OF AUTHORITIES – Continued 

Page 

Adam Winkler, “Other People’s Money”: 

Corporations, Agency Costs, and Campaign 

Finance Law, 92 Geo. L. J. 871 (2004) ............. 17, 18 
1 

INTEREST OF THE AMICI CURIAE

Amici States have a fundamental interest in 

ensuring their authority to police the powers and 

duties of corporations and to oversee and conduct 

state elections. For more than a century, states have 

regulated corporate campaign electioneering, encouraging corporations’ employees and shareholders to 

participate in election campaigns through segregated 

funds that protect the integrity of the political process 

by providing a well-established means of accountable 

corporate campaign speech. Today, twenty-four states 

limit or prohibit corporate electioneering paid with 

general treasury funds. Although not all Amici States 

regulate corporate spending on candidate elections, 

they all recognize the importance of preserving the 

discretion of state policy-makers to enact campaign 

finance regulations that may include regulation of 

corporate electioneering. Amici States, therefore, ask 

this Court to resolve this case without overruling 

Austin v. Michigan Chamber of Commerce, 494 U.S. 

652 (1990). 

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SUMMARY OF ARGUMENT 

 I. This case does not concern the traditional 

regulation of corporate campaign spending by state 

laws. Instead, it presents the application of a recent 

federal statute to a novel form of political campaigning through the medium of video-on-demand 

and the message of a ninety-minute film. These and 
2 

other political campaign innovations present an 

occasion to draw on state law experiments—not end 

them. The Court cannot reach the validity of these 

laws under Austin without departing from its conventional approach to constitutional avoidance and 

as-applied review of campaign finance statutes, and 

ignoring its cautions against facial challenges in 

election law generally. 

 II. Austin follows a century of campaign finance 

law at the state and federal level honed by six 

decades of this Court’s holdings. Those decisions, and 

the state and federal laws that gave rise to and rely 

on them, delineate a workable segregated-fund 

requirement for corporate electioneering that is 

embedded in campaign laws and practice at the 

federal and state level. While imposing minimal 

burdens on corporations, the segregated fund protects 

the integrity of the political process from the 

corrupting influence of corporate executives funding 

political campaigns that have no proven support from 

the shareholders or customers whose money pays for 

the advocacy. The flourishing of corporate speech 

through PACs, and continued harms of direct 

corporate electioneering, has vindicated rather than 

undermined Austin’s approval of segregated funds. 

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3 

ARGUMENT 

I. THE COURT NEED NOT ADDRESS AUSTIN. 

1. “[N]ormally the Court will not decide a constitutional question if there is some other ground 

upon which to dispose of the case.” Northwest Austin 

Mun. Util. Dist. No. One v. Holder, 129 S. Ct. 2504, 

2513 (2009) (quoting Escambia County, Fla. v. 

McMillan, 466 U.S. 48, 51 (1984)). As both Citizens 

United and the BCRA sponsors suggest, this case 

presents at least one such ground in the construction 

of the statutory term “electioneering communication.” 

See Appellant’s Br. at 26 n. 2; Br. of Amici Curiae Sen. 

McCain et al. at 18-19 (same). Both the thin record in 

this case and Citizens United’s abandonment of its 

facial constitutional challenge below further counsel 

avoidance. This Court refrains “from avoidable constitutional pronouncements” unless “absolutely necessary to a decision.” United States v. Int’l Union 

United Auto., Aircraft & Agric. Implement Workers of 

Am., 352 U.S. 567, 590-91 (1957) (“UAW”) (internal 

quotation marks omitted). 

 2. If it is necessary to reach a constitutional 

decision, the factual record does not provide a basis 

for reevaluating Austin. Once Citizens United abandoned its facial challenge on summary judgment, 

there was no reason for the parties to present or the 

lower court to consider “the concrete factual setting 

that sharpens the deliberative process especially 

demanded for constitutional decision.” UAW, 352 U.S. 

at 591. 
4 

 a. This case does not address the medium or 

message of mainstream campaign materials that are 

the central subject of Austin and state- and federalcorporate-electioneering laws. In Austin, “[a]lthough 

the Chamber had established and funded a separate 

political fund, it sought to use its general treasury 

funds to place in a local newspaper an advertisement 

supporting a specific candidate.” 494 U.S. at 656. In 

contrast, Citizens United raises novel issues concerning the application of BCRA to a ninety-minute 

movie distributed to people who chose to view it 

through a video-on-demand subscription service on 

cable. The record below does not evince any burdens 

or benefits of requiring the use of segregated funds to 

pay for the corporate express advocacy at issue in 

Austin. Such evidence would be critical to an 

assessment of whether, as Citizens United alleged, 

§ 203 “has not proven workable in application.” (J.A. 

24a.) “Such an incomplete presentation is reason 

enough to refuse [Appellants’] invitation to reexamine” Austin. Randall v. Sorrell, 548 U.S. 230, 

263 (2006) (Alito, J., concurring). 

 b. The sparse record below is particularly illsuited to a facial challenge that would call into 

question the century of state and federal laws and 

decisions that led to Austin. Overruling Austin in this 

case necessarily would “rest on speculation” as to 

the broader benefits and burdens of corporateelectioneering laws, ask for “a rule of constitutional 

law broader than is required by the precise facts” of 

Citizens United’s anomalous communication, and 
5 

“prevent[ ] laws embodying the will of the people from 

being implemented in a manner consistent with the 

Constitution” at the state and federal level. Wash. 

State Grange v. Wash. State Republican Party, 128 

S. Ct. 1184, 1191 (2008). Even as to advocacy groups 

funded by corporate donations, the lack of detail 

about Citizens United’s funding makes it impossible 

“to quantify either the magnitude of the burden on 

this narrow class of [corporations] or the portion of 

the burden imposed on them that is fully justified.” 

Crawford v. Marion County Election Bd., 128 S. Ct. 

1610, 1622 (2008). 

 Thus, this Court should not transform this case 

from an as-applied challenge concerning the regulation of a single video-on-demand campaign movie to a 

facial challenge that would affect the variety of longstanding state campaign finance regulations throughout the country regardless of their particular purposes and effects. See William P. Marshall, The Last 

Best Chance for Campaign Finance Reform, 94 Nw. 

U.L. Rev. 335, 383 (2000) (“Each state has its own 

political traditions, structures, and exigencies, and 

these differences can have profound effects on campaign finance concerns.”). 

II. AUSTIN CORRECTLY SETTLED THE 

BOUNDS OF STATE CORPORATE ELECTIONEERING LAWS. 

The rule of Austin reflects over a century of law 

and practice dating to states’ first efforts at campaign 
6 

finance reform, and remains vital to the campaign 

laws of nearly half of the states and the federal 

government. This case presents no “special justification” to depart from the principles of stare decisis. 

Randall v. Sorrell, 548 U.S. at 243-44 (plurality 

opinion). To the contrary, Austin is part of a decadeslong line of state and federal cases developing the 

segregated-fund requirement “through iteration and 

reiteration,” thus “avoid[ing] the instability and 

unfairness that accompany disruption of settled legal 

expectations” in Congress and the state legislatures 

that have relied on these cases. Randall, 548 U.S. at 

244. And that line continues unbroken: cases since 

Austin have reinforced rather than undermined 

Austin’s basic legal principles. See Part II.A, below. 

Moreover, there has been no demonstration that 

political campaigns have changed so radically as to 

undermine Austin’s critical factual assumptions. See

Parts II.B & II.C, below. If the Court overrules 

Austin, “[n]ot just one case, but a half-century of 

election law would be tossed aside in favor of a new 

regime of corporate and union political participation 

of uncertain shape and effect.” Adam Winkler, 

McConnell v. FEC, Corporate Political Speech, and 

the Legacy of the Segregated Funds Cases, 3 Election 

L.J. 361, 368 (2004). 
7 

A. Austin Confirmed the Settled Expectations of Governments, Corporations, and 

Campaigns. 

 1. The states were the first to react to the surge 

of corporate money into political campaigns in the 

late Nineteenth Century. In Montana “[p]olitical 

commentators reserved the phrase, ‘the company,’ for 

the special economic and political synergy of the 

Anaconda Company and the Montana Power 

Company, and to ‘the company’ they ascribed 

astounding political control.” James J. Lopach, 

Montana’s Role in the Free Speech vs. Equal Speech 

Debate, 60 Mont. L. Rev. 475, 485-86 (1999) (footnotes 

omitted). In 1898 mining company shareholders 

brought a derivative suit alleging misappropriation of 

corporate funds for political expenditures to promote 

“the silver cause” and lobby for the formation of a 

new county. McConnell v. Combination Mining & 

Milling, 76 P. 194, 198 (Mont. 1904), modified on 

other grounds, 79 P. 248 (Mont. 1905). The Montana 

Supreme Court held that the expenditures, made “for 

strictly political purposes,” were ultra vires, noting 

that “[t]he stockholders of the company . . . were not 

unanimous in their political beliefs.” Id. at 199. 

 In 1904, a New York state legislative committee 

found that insurance company campaign contributions were “wholly unjustifiable” uses of the 

policyholders’ funds. UAW, 352 U.S. at 573. If the 

contributions were “made for the purpose of supporting political views,” then “executive officers have 

sought to impose their political views upon a 
8 

constituency of divergent convictions.” Id. If they 

were made “with the desire to obtain protection for 

the corporation” from policyholders in the legislature, 

the officers “have been guilty of a serious offense 

against public morals.” Id. The New York state courts 

echoed these concerns in a resulting prosecution of an 

insurance executive for grand larceny, but ultimately 

held that the contributions, although ultra vires, were 

not crimes. People ex rel. Perkins v. Moss, 187 N.Y. 

410 (1907). 

 Piecemeal derivative actions were a crude tool to 

protect the integrity of campaigns and corporate 

treasuries, however, given the costs of derivative 

actions and the decline of ultra-vires liability as 

courts deferred to management under the business 

judgment rule. See, e.g., Marsili v. Pacific Gas & Elec. 

Co., 124 Cal. Rptr. 313, 323 (App. Ct. 1975). 

Moreover, one state’s corporate law cannot take into 

account the effects of corporate electioneering that 

arise in the other jurisdictions where a corporation 

operates. 

 So states imposed statutory limits on corporate 

electioneering. As early as 1891, Kentucky prohibited 

corporate campaign spending in its Constitution. See

Ky. Const. § 150 (1891). By 1897, Florida, Missouri, 

Nebraska, and Tennessee had enacted similar 

statutes. See Robert E. Mutch, Before and After 

Bellotti: The Corporate Political Contribution Cases, 5 

Election L.J. 293, n.1 (2006) (citing Laws of Florida, 

ch. 4538 (June 2, 1897); Missouri Laws, p. 108 (March 

20, 1897); General Laws of Nebraska, ch. 19 (April 3, 
9 

1897); Acts of Tennessee, ch. 18 (April 29, 1897)). The 

federal government followed the states’ lead with the 

Tillman Act of 1907. Tillman Act, ch. 420, 34 Stat. 

864-65 (1907). By the early 1930s, thirty-four states 

had enacted “corrupt practices laws” that prohibited 

direct corporate campaign spending. See Louise 

Overacker, Money in Elections, Politics and People: 

The Ordeal of Self-Government in America, 294-95 

(1932). 

 2. Courts have repeatedly upheld these state 

and federal corporate-electioneering restrictions from 

their inception. See Mutch, 5 Election L.J. at 296-98. 

For example, the Michigan Supreme Court held that 

a corporation’s charter did not allow it to “us[e] its 

funds for the purpose of influencing public sentiment 

in connection with any election” in violation of a state 

corrupt practices act, but if “the stockholders . . . 

desired, as individuals, to contribute to the campaign 

fund, it was their privilege so to do.” People v. 

Gansley, 158 N.W. 195, 201 (Mich. 1916). State courts 

also narrowed corrupt practices acts to focus on 

“money from corporate treasuries,” exempting nonprofit voluntary associations long before MCFL. State 

v. Joe Must Go Club of Wisconsin Inc., 70 N.W.2d 681, 

682 (Wisc. 1955). 

 Later, this Court conformed the Tillman Act to 

constitutional bounds in the Segregated Fund Cases. 

First, it held that the Act did not cover political 

advocacy to members and stockholders within an 

organization concerning its interests. United States v. 

Congress of Indus. Orgs., 335 U.S. 106, 120-22 (1948). 
10 

Second, it rejected constitutional challenges to the Act 

where the record did not answer whether a union’s 

broadcast was paid with mandatory dues, reached the 

general public, or constituted “active electioneering,” 

UAW, 32 U.S. at 592. Third, it recognized the 

segregated fund by holding that the Act allowed 

campaign contributions paid out of a voluntary 

political fund instead of union dues and assessments. 

Pipefitters Local Union No. 562 v. United States, 407 

U.S. 385 (1971). The Federal Election Campaign Act 

codified the segregated-fund requirement. 2 U.S.C. 

§ 441b (“FECA”). The requirement was not 

questioned in Buckley v. Valeo, 424 U.S. 1 (1976), 

where the Court observed that segregated funds “do 

not foreclose the making of substantial contributions 

to candidates by some major special-interest groups” 

including corporations and labor unions. Id. at 29 

n.31. 

 State corporate campaign law came before the 

Court in First National Bank of Boston v. Bellotti, 435 

U.S. 765 (1978), which harmonized a state restriction 

with the free-speech principles recognized in the 

Segregated Fund Cases. Massachusetts had enacted 

“a complete prohibition of corporate expenditures” 

without a segregated-fund option. Id. at 775. 

Although the Court struck down the categorical ban 

as “an impermissible legislative prohibition of 

speech,” id. at 784, it remained open to recognizing 

“the existence of a danger of real or apparent 

corruption in independent expenditures by corporations to influence candidate elections.” Id. at 787 
11 

n.26. Soon after, recognizing the “dangers . . . to the 

electoral process” posed by “the particular legal and 

economic attributes of corporations and labor 

organizations,” the Court unanimously endorsed the

segregated fund in upholding the FECA limitation of 

corporate PAC solicitations to members and shareholders. FEC v. Nat’l Right to Work Comm., 459 U.S. 

197, 208-10 (1982); see also FEC v. Nat’l Conservative 

Political Action Comm., 470 U.S. 480, 495 (1985) 

(noting “the well-established constitutional validity of 

legislative regulation of corporate contributions to 

candidates for public office”). 

 In FEC v. Massachusetts Citizens for Life, Inc., 

479 U.S. 238 (1986) (“MCFL”), the Court firmly 

rooted corporate-electioneering laws in “the conviction that it is important to protect the integrity of 

the marketplace of political ideas.” Id. at 257; see also

id. at 266 (Rehnquist, C.J., dissenting) (careful regulation of corporate campaign spending “is constitutionally sound and entitled to substantial deference”). 

Reinforcing four decades of segregated-fund cases, the 

Court in MCFL held that corporate-electioneering 

regulation could extend only as far as the logic of the 

segregated-fund principle itself. Id. at 263. A 

nonprofit ideological corporation like MCFL, supported solely by individual contributions from donors 

sympathetic with its political ideas, more closely 

resembled the segregated fund solution than the 

corporate-electioneering problem. Id. at 259. Because 

MCFL refused corporate contributions, it and similar 

organizations could not “serve[ ] as conduits” for 
12 

direct campaign spending by corporations that posed 

the threats addressed by segregated funds. Id. at 264. 

 3. Austin is more an application of these cases 

than a culmination of them. The segregated fund for 

corporate electioneering is “a narrowly tailored 

solution” to the problem of a “significant possibility 

that corporate political expenditures will undermine 

the integrity of the political process.” Austin, 494 U.S. 

at 668. 

 The line drawn by state legislatures and 

Congress, clarified in cases from UAW to MCFL, and 

confirmed in Austin, has proven workable for the vast 

majority of corporations over more than a century. 

Since Austin, this Court has maintained the steady 

course set by decades of precedent, noting that this 

“historical prologue would discourage any broadside 

attack on corporate campaign finance regulation.” 

FEC v. Beaumont, 539 U.S. 146, 156 (2003). Thus, in 

upholding the federal-corporate-electioneering law as 

applied to a nonprofit advocacy corporation partly 

funded by business contributions, the Court repeated 

its endorsement of the segregated fund as “allow[ing] 

corporate political participation without the 

temptation to use corporate funds for political 

influence, quite possibly at odds with the sentiments 

of some shareholders or members.” Id. at 163 

(citations omitted). 

 In the most recent step of the Court’s as-applied 

approach to corporate electioneering, it held that the 

interest “justifying regulation of corporate campaign 
13 

speech” has no application to issue advocacy. FEC v. 

Wis. Right to Life, Inc., 551 U.S. 449, 470 (2007) 

(“WRTL”) (plurality opinion). This fits squarely 

within the framework articulated in MCFL’s holding 

“that an expenditure must constitute ‘express 

advocacy’ ” to be subject to a segregated fund 

requirement. MCLF, 479 U.S. at 249. It therefore 

remains true that “Congress’ power to prohibit 

corporations and unions from using funds in their 

treasuries to finance advertisements expressly 

advocating the election or defeat of candidates in 

federal elections has been firmly embedded in our 

law.” McConnell v. FEC, 540 U.S. 93, 203 (2003). 

 States and campaigns have long relied on the 

constitutionality of corporate-campaign-finance regulation confirmed in Austin, as demonstrated by nearly 

half the states’ adoption of corporate-electioneering 

restrictions, and the widespread emergence of corporate 

PACs. See Appendix hereto; Part II.C, below. Since 

Austin, states have relied on it and other “substantial 

evidence” confirming Austin’s corruption concerns to 

revise and review state corporate-electioneering laws 

within the segregated-fund framework. See, e.g., 

State v. Alaska Civil Liberties Union, 978 P.2d 597, 

609 (Alaska 1999). The Court should not unsettle the 

foundations of a century of state laws. 
14 

B. Regulation of Corporate Electioneering 

Remains a Compelling State Interest. 

1. “[N]ot only has the original ban on direct 

corporate contributions endured, but so have the 

original rationales for the law.” Beaumont, 539 U.S. 

at 154. It “has never been doubted” that the people 

through their legislatures may prevent “the problem 

of corruption of elected representatives through the 

creation of political debts.” Bellotti, 435 U.S. at 788 

n.26. As this Court has understood, corruption occurs 

“not only as quid pro quo agreements, but also as 

undue influence on an officerholder’s judgment, and 

the appearance of such influence.” FEC v. Colo. 

Republican Fed. Campaign Comm., 533 U.S. 431, 441 

(2001); see also Nixon v. Shrink Mo. Gov’t PAC, 528 

U.S. 377, 389 (2000) (the corruption concern 

“extend[s] to the broader threat from politicians too 

compliant with the wishes of large contributors”). 

 More than individuals’ campaign spending, 

corporations’ spending disproportionately favors 

incumbent officeholders, who unlike challengers can 

easily return the favor, or simply entrench the status 

quo. See Val Burris, The Two Faces of Capitalism: 

Corporations and Individual Capitalists as Political 

Actors, 66 Am. Soc. Rev. 361 (2001). Thus, the Court 

has “repeatedly sustained legislation aimed at ‘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.’ ” McConnell, 540 U.S. at 
15 

205 (quoting Austin, 494 U.S. at 660); see also MCFL, 

479 U.S. at 257-59 (explaining “concern over the 

corrosive influence of concentrated corporate wealth”). 

 a. The corruption threat posed by corporate 

electioneering does not arise from any partisan 

viewpoint, or inequality of wealth or economic scale 

alone. Nor is it new. Indeed, the Framers aptly 

described the paramount threat of corruption not as 

theft or bribery, but as “the use of government power 

and assets to benefit localities or other special 

interests (‘factions’).” Robert G. Natelson, The General Welfare Clause and the Public Trust: An Essay in 

Original Understanding, 52 Kan. L. Rev. 1, 48 (2003). 

Corporate electioneering corrupts the relationship 

between public officials and the public interest by 

encouraging political dependence on narrowly concentrated private interests embodied in the corporate 

form, backed only by “the economically motivated 

decisions of investors and customers,” MCFL, 479 

U.S. at 258, at the expense of the broader and more 

dispersed interests represented by the people themselves. See generally Zephyr Teachout, The AntiCorruption Principle, 94 Cornell L. Rev. 341, 393 

n.245, 406 (2009). Corporate-electioneering laws 

therefore aim “not merely to prevent the subversion 

of the integrity of the electoral process,” but “to 

sustain the active, alert responsibility of the individual citizen in a democracy for the wise conduct of 

government.” UAW, 352 U.S. at 575. 

 In Caperton v. A.T. Massey Coal Co., 129 S. Ct. 

2252 (2009), this Court reiterated the potential threat 
16 

of “significant and disproportionate influence” posed 

by campaign spending. Id. at 2264-65. In such instances, it is not enough to rely on a public servant’s 

good faith to not be corrupted by $1000 in campaign 

contributions, $2.5 million in spending for a political 

organization supporting the candidate, and $500,000 

in independent expenditures. Id. at 2257. In the 

majority of states with judicial elections at some 

level, corporate-electioneering laws help ensure that 

such situations remain “extraordinary” acts of a 

single individual, see id. at 2265, rather than business as usual. Beyond judicial campaigns, most state 

campaigns are waged with thousands rather than 

millions of dollars, and could be easily overwhelmed, 

as they were a century ago, by national corporations’ 

campaign spending. See id. at 2264; see also Montana 

Right to Life v. Eddleman, 343 F.3d 1085, 1089 (9th 

Cir. 2003) (a state legislative campaign in Montana 

costs between $3,000 and $9,000). 

 b. Recent scholarship also has recognized 

corruption in the other direction, in the form of 

“systemic shakedowns of corporations” by “politicianmaximizers” exercising increased regulatory powers. 

Robert Sitkoff, Corporate Political Speech, Political 

Extortion, and the Competition for Corporate Charters, 69 U. Chi. L. Rev. 1103, 1127 (2002). This kind of 

corruption, demonstrated by today’s “pay-to-play” 

scandals, had its roots in the migration of political 

fundraising from pre-civil-service kickbacks from 

public employees based on salary (called assessments) to pre-Tillman-Act shakedowns of major 
17 

corporations based on capitalization (also called 

assessments). See Melvin I. Urofsky, Campaign 

Finance Reform Before 1971, 1 Albany Gov’t L. Rev. 1, 

8-12 (2008); Adam Winkler, “Other People’s Money”: 

Corporations, Agency Costs, and Campaign Finance 

Law, 92 Geo. L. J. 871, 84 (2004). Thus, corporateelectioneering laws may help “protect society from the 

purchase of special-interest regulation by corporations and their shareholders.” Sitkoff, 69 U. Chi. L. 

Rev. at 1118; see also id. at 1152-53 (noting corporations’ support of new spending bans). 

 2. Second, the Court has unanimously held that 

“individuals who have paid money into a corporation 

or union for purposes other than the support of 

candidates” should not have “that money used to 

support political candidates to whom they may be 

opposed.” Nat’l Right to Work Comm., 459 U.S. at 

208. Beyond coercion, the original corrupt practices 

acts recognized that “[p]olitical spending was different from other types of corporate spending because 

the former could be used to disempower the owners of 

[an] enterprise relative to management,” itself a kind 

of corruption of corporate governance. Winkler, 92 

Geo. L. J. at 896. 

 Efforts short of a segregated-fund requirement 

have proven ineffective. Before the Tillman Act and 

similar state laws, “publicity laws” intended to unveil 

corporate campaign spending “either became dead 

letters or were found to be futile.” UAW, 352 U.S. at 

571. Derivative actions premised on ultra-vires

liability failed due to their cost and jurisdictional 
18 

limitations. See Part II.A.1, above. Both attempts 

foundered on the ease with which corporations can 

conceal campaign spending through accounting and 

other means, and the difficulty shareholders face in 

policing it. See Winkler, 92 Geo. L. J. at 884-85; cf.

Jones v. Harris Assocs. L.P., 537 F.3d 728, 730 (7th 

Cir. 2008) (Posner, J., dissenting from denial of 

rehearing en banc), cert. granted, 129 S. Ct. 1579 

(“Competition in product and capital markets can’t be 

counted on to solve the problem [of protecting mutual 

fund shareholders]”). Without the segregated fund, 

political-dissident shareholders, members, and employees could lose retirement savings, member benefits, or a job, simply to enjoy the same protection of 

their speech rights enjoyed by employees in a collective bargaining unit with respect to a union’s political 

activities. See Austin, 494 U.S. at 665-66; MCFL, 479 

U.S. at 260-61. 

 3. Finally, “certain restrictions on corporate 

electoral involvement permissibly hedge against” 

circumvention of other valid campaign spending regulations. McConnell, 540 U.S. at 205. Corporate 

officers “diverting money” for campaign expenditures 

through the corporate treasury could transform the 

corporation itself into an informal PAC while avoiding 

PAC regulations. Beaumont, 539 U.S. at 155 (citation 

and quotation marks omitted). Complex corporate 

structures would either enable evasion of disclosure 

requirements, coordinated expenditure restrictions, 

and other unchallenged campaign laws, or demand 

an added level of regulatory complexity to rival 
19 

securities and corporate tax law. The regulation of 

non-MCFL corporations as political actors per se, 

rather than through segregated funds, heightens 

rather than resolves Appellant’s concern about the 

complexity of campaign finance laws. Oral Arg. Tr. at 3. 

C. Segregated Funds Are Narrowly 

Tailored to Serve State Interests. 

 Over a century after the Tillman Act and similar 

state laws, nearly four decades after Pipefitters and 

FECA, and two decades after Austin, it is no longer 

possible to claim that corporate-electioneering laws 

amount to a prohibition on corporate speech. Importantly, most corporate political speech occurs through 

speech “such as lobbying, testimony, and other direct 

contacts” rather than “naked corporate money expenditures” to or for candidates. Jill E. Fisch, How Do 

Corporations Play Politics: The FedEx Story, 58 Vand. 

L. Rev. 1495, 1566 (2005). 

 Still, the Court’s prediction in Buckley about “the 

potential for proliferation” of corporate and union 

PACs has proven true. Buckley, 424 U.S. at 29 n.31. 

Corporate speech has increased markedly under the 

segregated-fund requirement. Before Pipefitters and 

FECA, business interest groups spent $1.4 million on 

federal elections in 1968; a decade later business 

PACs spent $37 million. Edwin M. Epstein, The PAC 

Phenomenon: An Overview, 22:2 Ariz. L. Rev. 355, 357 

(1980). In Austin itself, the Michigan Chamber of 

 
20 

Commerce amassed $140,000 of voluntary contributions in a segregated campaign fund. 494 U.S. at 663. 

Today, at the federal level alone, there are 1,598 

corporate PACs, the largest single category of PACs 

and more than one-third of all PACs. See FEC, 

Number of Federal PACs Increases (Mar. 9, 2009), 

available at http://www.fec.gov/press/press2009/2009 

0309PACcount.shtml. Aside from this increase in 

corporate speech, the only proven result of the segregated fund is that shareholders, law enforcers, and 

the public know that the speech belongs to the 

speakers and has not been purchased with other 

people’s money. 

 Meanwhile, corporate-electioneering laws reflect 

the lesson of MCFL that “[s]ome corporations have 

features more akin to voluntary political associations 

than business firms, and therefore should not have to 

bear burdens on independent spending solely because 

of their incorporated status,” while other corporations 

may “serv[e] as conduits for the type of direct spending that creates a threat to the political marketplace.” 

MCFL, 479 U.S. at 263-64. Citizens United may 

intend to test the line drawn in MCFL by accepting 

as little as $2000 from business corporations in a 

presidential campaign. (J.A. at 252a.) But this minimal solicitation suggests less a constitutionally cognizable burden than an attempt “to shape litigation, so 

far as it is within their control, in order to secure [a] 

comprehensive ruling[ ].” UAW, 352 U.S. at 592. 
21 

 The steady development of the Segregated Fund 

Cases has ensured not only that corporateelectioneering laws are “firmly embedded,” McConnell, 

540 U.S. at 203, but also that they are “precisely 

targeted to eliminate the distortion caused by corporate spending while also allowing corporations to 

express their political views.” Austin, 494 U.S. at 660. 

This case presents no reason to call those laws into 

question. 

--------------------------------- ♦ ---------------------------------

CONCLUSION 

 For these reasons, the amici States respectfully 

request that this Court resolve this case without 

overruling Austin. 

Respectfully submitted, 

STEVE BULLOCK

Montana Attorney General 

ANTHONY JOHNSTONE* 

Solicitor 

MONTANA DEPARTMENT

OF JUSTICE

PO Box 201401 

Helena, MT 59620 

Telephone: (406) 444-2026 

*Counsel of Record

TERRY GODDARD

Arizona Attorney General 

MARY R. O’GRADY

Solicitor General 

ARIZONA ATTORNEY

 GENERAL’S OFFICE

1275 W. Washington 

Phoenix, AZ 85007 

Telephone: (602) 542-8986 
1a 

APPENDIX TO STATE AMICUS BRIEF 

STATE LAWS PROHIBITING 

CORPORATE ELECTIONEERING 

ALASKA: Alaska Stat. § 15.13.074(f) 

ARIZONA: Ariz. Const. art. XIV, § 18; Ariz. Rev. Stat. 

§§ 16-919(A), -920 

COLORADO: Colo. Const. XXVIII, § 3(4)(a) 

CONNECTICUT: Conn. Gen. Stat. § 9-613(a) 

IOWA: Iowa Code § 68A.503 

KENTUCKY: Ky. Rev. Stat. § 121.150(20) 

MASSACHUSETTS: Mass. Gen. L. ch. 55, § 8 

MICHIGAN: Mich. C. L. S. § 169.254(1) 

MINNESOTA: Minn. Stat. § 211B.15 

MONTANA: Mont. Code Ann. § 13-35-227 

NORTH CAROLINA: N.C. Gen. Stat. §§ 163-278.15, 

-278.19 

NORTH DAKOTA: N.D. Cent. Code § 16.1-08.1-03.3 

OHIO: Ohio Rev. Code Ann. § 3599.03(A)(1) 

OKLAHOMA: Okla. Stat. tit. 21, § 187.2 ch. 62, 

Appx., 257: 10-1-2(d) 

PENNSYLVANIA: 25 Pa. Stat. § 3253(a) 

RHODE ISLAND: R.I. Gen. Laws § 17-25-10.1(h), (j) 

SOUTH DAKOTA: S.D. Codified Laws § 12-27-18 
2a 

TENNESSEE: Tenn. Code Ann. § 2-19-132 

TEXAS: Tex. Elec. Code § 253.094 

WEST VIRGINIA: W. Va. Code § 3-8-8 

WISCONSIN: Wis. Stat. § 11.38 

WYOMING: Wyo. Stat. § 22-25-102(a) 

STATE LAWS LIMITING 

CORPORATE ELECTIONEERING 

ALABAMA: Ala. Code §§ 10-2A-70, 10-2A-70.2 

NEW YORK: N.Y. Elec. Law § 14-116.