Opinion ID: 2223139
Heading Depth: 1
Heading Rank: 4

Heading: Government Speech/Subsidy Cases

Text: In Regan, a nonprofit corporation, Taxation With Representation of Washington (TWR), was denied tax-exempt status under section 501(c)(3) of the Internal Revenue Code (26 U.S.C. § 501(c)(3)) because the Internal Revenue Service determined that a substantial part of its activities would consist of attempts to influence legislation. Under section 501(c)(3), tax-exempt status was not available to any organization if a substantial part of its activities consisted of attempting to influence legislation. TWR brought a declaratory judgment action, claiming that section 501(c)(3)'s prohibition against substantial lobbying violated the first amendment. Relying on Speiser v. Randall, 357 U.S. 513, 78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958), TWR argued that section 501(c)(3) imposed an unconstitutional condition and that to `deny an exemption to claimants who engage in certain forms of speech is in effect to penalize them for [the same] speech.' Regan, 461 U.S. at 545, 103 S.Ct. at 2001, 76 L.Ed.2d at 136, quoting Speiser, 357 U.S. at 518, 78 S.Ct. at 1338, 2 L.Ed.2d at 1468. The Supreme Court agreed with TWR that government may not deny a benefit to a person because he engages in speech, but denied that that had happened in the case before it. The Supreme Court explained that [b]oth tax exemptions and tax deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income. Regan, 461 U.S. at 544, 103 S.Ct. at 2000, 76 L.Ed.2d at 136. Thus, the Supreme Court concluded that Congress had not infringed any constitutional rights or regulated any first amendment activity. It had simply chosen not to pay for TWR's lobbying. Regan, 461 U.S. at 546, 103 S.Ct. at 2001, 76 L.Ed.2d at 137. The Court also rejected the Court of Appeals' view that strict scrutiny applies whenever a statute affects `first amendment rights on a discriminatory basis.' Regan, 461 U.S. at 548, 103 S.Ct. at 2002, 76 L.Ed.2d at 138. The Court explained that strict scrutiny does not apply every time Congress subsidizes some speech but not all speech, and that Congressional selection of particular entities or persons for entitlement to this sort of largesse `is obviously a matter of policy and discretion not open to judicial review unless in circumstances which here we are not able to find.' Regan, 461 U.S. at 549, 103 S.Ct. at 2002-03, 76 L.Ed.2d at 139, quoting Cincinnati Soap Co. v. United States, 301 U.S. 308, 317, 57 S.Ct. 764, 768, 81 L.Ed. 1122, 1130 (1937). Rust involved a facial challenge to Department of Health and Human Services regulations that limit the ability of Title X recipients to engage in abortion-related activities. Title X of the Public Health Service Act provides federal funding for family-planning services, but section 1008 of the Act provides that `[n]one of the funds appropriated under this subchapter shall be used in programs where abortion is a method of family planning.' Rust, 500 U.S. at 178, 111 S.Ct. at 1765, 114 L.Ed.2d at 246, quoting 42 U.S.C. § 300a-6. Regulations later clarified that Congress intended Title X funds to be used only to support preventative family-planning services. Rust, 500 U.S. at 179, 111 S.Ct. at 1765, 114 L.Ed.2d at 246. Regulations promulgated pursuant to Title X also specifically provided that Title X recipients could `not provide counseling concerning the use of abortion as a method of family planning or provide referral for abortion as a method of family planning.' Rust, 500 U.S. at 179, 111 S.Ct. at 1765, 114 L.Ed.2d at 246, quoting 42 C.F.R. § 59.8(a)(1) (1989). A group of Title X grantees and doctors brought suit challenging the facial validity of the regulations and seeking declaratory and injunctive relief to prevent their implementation. The plaintiffs claimed, inter alia, that the regulations violated their first amendment rights by impermissibly discriminating based on viewpoint. They claimed that the regulations placed viewpoint-discriminatory conditions on government subsidies, thereby penalizing their free speech rights. The plaintiffs conceded that government may place certain conditions on the receipt of federal subsidies, but could not discriminate in such a manner as to aim at the suppression of dangerous ideas. Rust, 500 U.S. at 192, 111 S.Ct. at 1771-72, 114 L.Ed.2d at 254-55. The court rejected the plaintiffs' argument, concluding that [t]here is no question but that the statutory prohibition contained in § 1008 is constitutional. Rust, 500 U.S. at 192, 111 S.Ct. at 1772, 114 L.Ed.2d at 255. The Court explained: Here the Government is exercising the authority it possesses under Maher and Harris v. McRae, 448 U.S. 297 [100 S.Ct. 2671, 65 L.Ed.2d 784] (1980), to subsidize family planning services which will lead to conception and childbirth, and declining to `promote or encourage abortion.' The Government can, without violating the Constitution, selectively fund a program to encourage certain activities it believes to be in the public interest, without at the same time funding an alternative program which seeks to deal with the problem in another way. In so doing, the Government has not discriminated on the basis of viewpoint; it has merely chosen to fund one activity to the exclusion of the other. `[A] legislature's decision not to subsidize the exercise of a fundamental right does not infringe the right.' Regan, supra, at 549 [103 S.Ct. 1997]. See also Buckley v. Valeo, 424 U.S. 1[, 96 S.Ct. 612, 46 L.Ed.2d 659]; Cammarano v. United States, supra . `A refusal to fund protected activity, without more, cannot be equated with the imposition of a penalty on that activity.' McRae, supra, at 317, n. 19 [100 S.Ct. 2671]. `There is a basic difference between direct state interference with a protected activity and state encouragement of an alternative activity consonant with legislative policy.' Maher, supra, at 475 [97 S.Ct. 2376].    To hold that the Government unconstitutionally discriminates on the basis of viewpoint when it chooses to fund a program dedicated to advance certain permissible goals, because the program in advancing those goals necessarily discourages alternative goals, would render numerous Government programs constitutionally suspect. When Congress established a National Endowment for Democracy to encourage other countries to adopt democratic principles, 22 U.S.C. § 4411(b), it was not constitutionally required to fund a program to encourage competing lines of political philosophy such as communism and fascism. Petitioners' assertions ultimately boil down to the position that if the Government chooses to subsidize one protected right, it must subsidize analogous counterpart rights. But the Court has soundly rejected that proposition. Regan v. Taxation with Representation of Wash., supra ; Maher v. Roe, supra ; Harris v. McRae, supra . Within far broader limits than petitioners are willing to concede, when the Government appropriates public funds to establish a program it is entitled to define the limits of that program. Rust, 500 U.S. at 193-94, 111 S.Ct. at 1772-73, 114 L.Ed.2d at 255-56. The dissent argued unsuccessfully that the counseling and referral provisions at issue    constitute content-based regulation of speech. Rust, 500 U.S. at 209, 111 S.Ct. at 1781, 114 L.Ed.2d at 266 (Blackmun, J., dissenting, joined by Marshall and Stevens, JJ.). Finley involved a facial challenge to section 954(d)(1) of the National Foundation on the Arts and Humanities Act of 1965 (20 U.S.C. § 954(d)(1)). This section requires the Chairperson of the National Endowment for the Arts (NEA) to ensure that artistic excellence and artistic merit are the criteria by which [grant] applications are judged, taking into consideration general standards of decency and respect for the diverse beliefs and values of the American public. 20 U.S.C. § 954(d)(1). The four people who brought the suit were performance artists who were initially recommended for NEA grants by an advisory panel, but then were denied funding after section 954(d)(1) was enacted. The Supreme Court found no first amendment violation, concluding that section 954(d)(1) would not give rise to suppression of protected expression: Any content-based considerations that may be taken into account in the grant-making process are a consequence of the nature of arts funding. The NEA has limited resources, and it must deny the majority of the grant applications that it receives, including many that propose `artistically excellent' projects. Finley, 524 U.S. at 585, 118 S.Ct. at 2177-78, 141 L.Ed.2d at 514-15. The Court explained that it would be a different case if the NEA were to leverage its power to award subsidies on the basis of subjective criteria into a penalty on disfavored viewpoints. Finley, 524 U.S. at 587, 118 S.Ct. at 2178, 141 L.Ed.2d at 516. This is because, even in the provision of subsidies, the Government may not `ai[m] at the suppression of dangerous ideas.' Finley, 524 U.S. at 587, 118 S.Ct. at 2178, 141 L.Ed.2d at 516, quoting Regan, 461 U.S. at 550, 103 S.Ct. at 2003, 76 L.Ed.2d at 139. Moreover, the Court explained that a more pressing constitutional question would arise if Government funding resulted in the imposition of a disproportionate burden calculated to drive `certain ideas or viewpoints from the marketplace.' Finley, 524 U.S. at 587, 118 S.Ct. at 2179, 141 L.Ed.2d at 516, quoting Simon & Schuster, Inc. v. Members of New York State Crime Victims Board, 502 U.S. 105, 116, 112 S.Ct. 501, 508, 116 L.Ed.2d 476, 487 (1991). However, the Court again reiterated that there is a difference between the government acting as regulator and the government subsidizing the arts: Finally, although the First Amendment certainly has application in the subsidy context, we note that the Government may allocate competitive funding according to criteria that would be impermissible were direct regulation of speech or a criminal penalty at stake. So long as legislation does not infringe on other constitutionally protected rights, Congress has wide latitude to set spending priorities. See Regan, supra, at 549 [103 S.Ct. 1997]. In the 1990 amendments that incorporated § 954(d)(1), Congress modified the declaration of purpose in the NEA's enabling Act to provide that arts funding should `contribute to public support and confidence in the use of taxpayer funds,' and that `[p]ublic funds ... must ultimately serve public purposes the Congress defines.' § 951(5). And as we held in Rust, Congress may `selectively fund a program to encourage certain activities it believes to be in the public interest, without at the same time funding an alternative program which seeks to deal with the problem in another way.' 500 U.S., at 193 [111 S.Ct. 1759]. In doing so, `the Government has not discriminated on the basis of viewpoint; it has merely chosen to fund one activity to the exclusion of the other.' Ibid.; see also Maher v. Roe, 432 U.S. 464, 475[, 97 S.Ct. 2376, 53 L.Ed.2d 484] (1977) (`There is a basic difference between direct state interference with a protected activity and state encouragement of an alternative activity consonant with legislative policy'). Finley, 524 U.S. at 587-88, 118 S.Ct. at 2179, 141 L.Ed.2d at 516-17. Justices Scalia and Thomas concurred in the judgment. These justices concluded that section 954(d)(1) unquestionably discriminated on the basis of viewpoint, but found this to be perfectly constitutional in the subsidy context. Justices Scalia and Thomas argued that [i]t is preposterous to equate the denial of taxpayer subsidy with measures ``aimed at the suppression of dangerous ideas.'' (Emphasis in original.) Finley, 524 U.S. at 596, 118 S.Ct. at 2183, 141 L.Ed.2d at 522 (Scalia, J., concurring, joined by Thomas, J.), quoting Regan, 461 U.S. at 550, 103 S.Ct. at 2003, 76 L.Ed.2d at 139, quoting Cammarano v. United States, 358 U.S. 498, 513, 79 S.Ct. 524, 533, 3 L.Ed.2d 462, 472 (1959), quoting Speiser v. Randall, 357 U.S. 513, 519, 78 S.Ct. 1332, 1338, 2 L.Ed.2d 1460, 1468 (1958). The concurring justices would have held that there is a fundamental divide between abridging speech and funding other speech, and that the first amendment is inapplicable in the later situation. Finley, 524 U.S. at 599, 118 S.Ct. at 2184, 141 L.Ed.2d at 523 (Scalia, J., concurring, joined by Thomas, J.). Justice Souter dissented, arguing that the provision amounted to unconstitutional viewpoint-based discrimination. Finley, 524 U.S. at 600-01, 118 S.Ct. at 2185, 141 L.Ed.2d at 524-25 (Souter, J., dissenting). In Rosenberger v. Rector & Visitors of the University of Virginia, 515 U.S. 819, 115 S.Ct. 2510, 132 L.Ed.2d 700 (1995), a University of Virginia student organization that published a Christian newspaper brought an action against the University, challenging its denial of funds from a fund specifically created by the University to make payments to outside contractors for the printing costs of student publications. Payment was withheld for the publication in question because it `primarily promotes or manifests a particular belie[f] in or about a deity or an ultimate reality.' Rosenberger, 515 U.S. at 822-23, 115 S.Ct. at 2513, 132 L.Ed.2d at 711. The Supreme Court held that the University's denial of funds violated the students' rights under the free speech clause of the first amendment. The Court held that the University had created a limited public forum through its student activities fund, and, once it had done so, it could not discriminate on the basis of viewpoint. The Court stated that content discrimination may be permissible if it preserves the purposes of the limited forum, but viewpoint discrimination is presumed impermissible when directed against speech otherwise within the forum's limitation. Rosenberger, 515 U.S. at 829-30, 115 S.Ct. at 2516-17, 132 L.Ed.2d at 715-16. The Court distinguished Rust on the grounds that, when the government appropriates public funds to promote a particular policy of its own it is entitled to say what it wishes, but that viewpoint-based restrictions were not proper when the University does not itself speak or subsidize transmittal of a message it favors but instead expends funds to encourage a diversity of views from private speakers. Rosenberger, 515 U.S. at 833-34, 115 S.Ct. at 2519, 132 L.Ed.2d at 718. Thus, the Court concluded that [h]aving offered to pay the third-party contractors on behalf of private speakers who convey their own messages, the University may not silence the expression of selected viewpoints. Rosenberger, 515 U.S. at 835, 115 S.Ct. at 2519, 132 L.Ed.2d at 719. Legal Services Corp. v. Velazquez, 531 U.S. 533, 121 S.Ct. 1043, 149 L.Ed.2d 63 (2001), involved a first amendment challenge to a provision of the Legal Services Corporation Act (42 U.S.C. § 2996 et seq. ). The Act established a nonprofit corporation, the Legal Services Corporation (LSC), to distribute funds to provide financial support in noncriminal proceedings to people who cannot afford legal assistance. One of the provisions prohibited a lawyer working for an LSC grantee from challenging existing welfare law. The provision had been interpreted to mean that an attorney could not argue that a state statute conflicts with a federal statute or that either a state or local statute is unconstitutional. Lawyers employed by New York City LSC grantees brought suit to declare this portion of the Act invalid because it instituted impermissible viewpoint-based discrimination in violation of the first amendment. Velazquez, 531 U.S. at 536-37, 121 S.Ct. at 1046, 149 L.Ed.2d at 69. In a 5-4 decision, the Supreme Court held that the statute violated the first amendment. The Court reiterated the principles that viewpoint-based funding decisions can be upheld when the government is the speaker or when the government uses private speakers to transmit information pertaining to its own program. The Court cautioned, however, that [n]either the latitude for government speech nor its rationale applies to subsidies for private speech in every instance. Velazquez, 531 U.S. at 542, 121 S.Ct. at 1049, 149 L.Ed.2d at 72. The Court explained that Rosenberger was such a situation because in that case the program was designed to encourage a diversity of views, and once it had opened up such a forum, the government could not engage in viewpoint-based discrimination. The Court again reiterated that [w]hen the government creates a limited forum for speech, certain restrictions may be necessary to define the limits and purposes of the program. [Citations.] The same is true when the government establishes a subsidy for specified ends. Velazquez, 531 U.S. at 543, 121 S.Ct. at 1050, 149 L.Ed.2d at 73-74. The Court then noted that this was a subsidy case rather than a limited forum case, but that the limited forum cases provided some instruction. Velazquez, 531 U.S. at 544, 121 S.Ct. at 1050, 149 L.Ed.2d at 74. The Court concluded that, because the purpose of the program was to provide legal representation for those who could not afford it, once the Congress established such a program, it could not limit the arguments that lawyers could make because to do so would distort the legal system by altering the traditional role of LSC attorneys in advising their clients and presenting arguments. Velazquez, 531 U.S. at 544, 121 S.Ct. at 1050, 149 L.Ed.2d at 74. The Court found problematic the attempt to draw lines around the LSC program to exclude from litigation those arguments and theories that Congress finds unacceptable. Velazquez, 531 U.S. at 546, 121 S.Ct. at 1051, 149 L.Ed.2d at 75. The Court explained that: Congress was not required to fund an LSC attorney to represent indigent clients; and when it did so, it was not required to fund the whole range of legal representations or relationships. The LSC and the United States, however, in effect ask us to permit Congress to define the scope of the litigation it funds to exclude certain vital theories and ideas. The attempted restriction is designed to insulate the Government's interpretation of the Constitution from judicial challenge. The Constitution does not permit the Government to confine litigants and their attorneys in this manner. Velazquez, 531 U.S. at 548, 121 S.Ct. at 1052, 149 L.Ed.2d at 76-77. The Court distinguished Rust on the basis that advice from an attorney to his client and the advocacy by the attorney to the courts cannot be classified as governmental speech even under a generous understanding of the concept. Velazquez, 531 U.S. at 542-43, 121 S.Ct. at 1049, 149 L.Ed.2d at 73. Justice Scalia, joined by Chief Justice Rehnquist, Justice O'Connor, and Justice Thomas, dissented, arguing that the majority's decision had no foundation in the Court's precedents because there had never been a distorts an existing medium of expression test. Velazquez, 531 U.S. at 555, 121 S.Ct. at 1056, 149 L.Ed.2d at 81 (Scalia, J., dissenting, joined by Rehnquist, C.J., and O'Connor and Thomas, JJ.). The dissent would have found the subsidy program perfectly constitutional because no coercion of belief was involved and there was no threat that the subsidy would `drive certain ideas or viewpoints from the marketplace.' Velazquez, 531 U.S. at 552-53, 121 S.Ct. at 1054, 149 L.Ed.2d at 79 (Scalia, J., dissenting, joined by Rehnquist, C.J., and O'Connor and Thomas, JJ.), quoting Finley, 524 U.S. at 587, 118 S.Ct. at 2178, 141 L.Ed.2d at 516. The dissent found that the case was indistinguishable from Rust, and that the majority's attempt to distinguish Rust was so unpersuasive it hardly needs response because if the private doctors' confidential advice to their patients    in Rust constituted `government speech,' it is hard to imagine what subsidized speech would not be government speech. (Emphasis in original.) Velazquez, 531 U.S. at 554, 121 S.Ct. at 1055, 149 L.Ed.2d at 80 (Scalia, J., dissenting, joined by Rehnquist, C.J., and O'Connor and Thomas, JJ.).