Document: 539 U.S. 146 FEDERAL ELECTION COMMISSIONv.BEAUMONT ET AL. No. 02-403. Supreme Court of United States. Argued March 25, 2003. Decided June 16, A corporation is prohibited from making "a contribution or expenditure in connection with" certain federal elections, 2 U. S. C. § 441b(a), but not establishing, administering, and soliciting contributions to a separate fund be used for political purposes, 441b(b)(2)(C). Such PAC (so called after the action committee that runs it) free make other expenditures with elections. Respondents, nonprofit advocacy known as North Carolina Right Life, Inc., others (collectively NCRL), sued petitioner Federal Election Commission (FEC), challenging constitutionality 441b its implementing regulations applied NCRL. As relevant here, District granted NCRL summary judgment ban on direct contributions, Fourth Circuit affirmed. Held: Applying prohibition corporations consistent First Amendment. Pp. 152-163. (a) An attack corporate goes against current century congressional efforts curb corporations' potentially deleterious influences Since 1907, law has barred such contributions. Much subsequent attention activity been meant strengthen original, core Comm'n v. National Work Comm., 459 197. focuses structure's special characteristics threaten integrity process. Id., at 209. In barring earnings turning into "war chests," was intended "preven[t] corruption appearance corruption." Conservative Political Action 470 480, 496-497. The also protects individuals who have paid money union purposes having their support candidates whom they may opposed, Work, supra, 208, hedges use conduits circumventing "valid limits," Colorado Republican Campaign 533 431, 456, n. 18. 152-156. (b) all decided NCRL's position 441b's unconstitutional corporations. There, this upheld part restricting nonstock membership when concluding regulate involvement warrants considerable deference reflects permissible assessment dangers pose electoral S., 207-211. It would hard read conclusion, except practical understanding corporation's capacity legitimately limited indirect donations within scope allowed PACs. And specifically rejected argument made judgments about limits turns details form affluence particular repeatedly approving even by without great financial resources. Equal significance must accorded Massachusetts Citizens 479 238, which relied. holding independent corporation, there distinguished ground it addressed regulation expenditures. 156-159. (c) This could hold recasting risks harm posed expressive consequent owed legislative what do them. unsettle existing these points. Its Life-type no potential threat system rejected. Concern corrupting underlying implicated corporations, which, like for-profit counterparts, benefit state-created advantages able amass substantial war chests. Also application should subject strict scrutiny because bars, rather than limits, based source. When reviewing restrictions, level importance issue effective speech association, restrictions long treated marginal relatively complaisant Amendment review lie closer edges expression. Thus, limit passes muster if closely drawn match sufficiently important interest. time consider difference between applying selected, selecting standard itself. But rests false premise provision complete ban. fact, allows participation through does think regulatory burdens PACs, including ability solicit funds, renders an sole avenue See 201-202. 159-163. 278 F. 3d 261, reversed. SOUTER, J., delivered opinion Court, REHNQUIST, STEVENS, O'CONNOR, GINSBURG, BREYER, JJ., joined. KENNEDY, filed concurring judgment, post, p. 163. THOMAS, dissenting opinion, SCALIA, joined, 164. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR FOURTH CIRCUIT. Deputy Solicitor General Clement argued cause petitioner. With him briefs were Olson, Assistant Attorney McCallum, Gregory G. Garre, Douglas N. Letter, Edward Himmelfarb, Jonathan H. Levy. James Bopp, Jr., respondents. brief Richard E. Coleson Thomas J. Marzen.* JUSTICE SOUTER Court. 1 contributing directly office. We * statute makes "unlawful . any whatever 90 Stat. 490, renumbered amended, "contribution expenditure" each being defined include "anything value," 441b(b)(2). not, however, forbid "the establishment, administration, solicitation segregated utilized purposes." 441b(b)(2)(C); see 431(4)(B). wholly controlled sponsoring whose employees stockholders members generally solicited §§ 441b(b)(4)(B)-(C); 197, 200, 4 (1982). While requires PACs register disclose activities, 432-434; 253-254 (1986), leaves them well 3 Respondents are three officers, voter (here, together, Commission, agency set up "administer, seek obtain compliance with, formulate policy respect to" laws. 437c (b)(1). challenges FEC's section, 11 CFR 114.2(b), 114.10 (2003), only so far apply organized under laws provide counseling pregnant women urge alternatives abortion, exempted taxation 501(c)(4) Internal Revenue Code, 26 501(c)(4).1 shareholders and, although receives some traditional business "overwhelmingly funded private individuals." App. 14. state federal, owing 441b. Instead, established PAC, Committee, contributed candidates. Inc. Bartlett, 168 705, 709 (CA4 1999), cert. denied, 528 1153 (2000). held both 137 Supp. 2d 648 (EDNC 2000). divided Appeals affirmed, 261 (2002), relying primarily respects ruled, first, Although panel acknowledged unlike NCRL, had formal accepting donations, 263-264 (describing feature organization "essential our holding"), nevertheless materially indistinguishable Life. 5 To point present went likewise majority court recognized campaign received greater cases expenditures, 3d, 274 (citing Nixon Shrink Missouri Government 377, 386-388 (2000)), unjustified "[Massachusetts Life]-type corporations," thought "pose[d] risk `unfair deployment wealth purposes.'" 275 (quoting 259). reasoned "[t]he rationale [Massachusetts Life] declare prohibitions [the involved there] equally applicable context contributions." 275. Judge dissented point, since he saw way square conclusion Court's reasoning Work. 282. 6 After 7 denying rehearing en banc, FEC petitioned certiorari solely contributions.2 Because conflict Sixth, Kentucky Terry, 108 637, 645-646 (1997) (upholding analogous 441b), we certiorari, 537 1027 (2002). now reverse. II Any "deleterious elections," canvassed number times before. States Automobile Workers, 352 567, 585 (1957); id., 570-584; 208-209; Pipefitters States, 407 385, 402-412 (1972); CIO, 335 106, 113-115 (1948). grew out "popular feeling" late 19th "that aggregated capital unduly influenced politics, influence stopping short 570. demand gathered force 1904, national leverage exerted election new revelations overreaching, President Theodore Roosevelt banning priority. R. Mutch, Campaigns, Congress, Courts: Making Finance Law 1-8 (1988); 571-575. proposals "prohibited [only] classes 573, momentum "for elections `free power money,'" 575 (citation omitted), Congress acted President's call outright ban, half measures, Tillman Act, ch. 420, 34 864. "first finance law," xvii, banned "any whatever" 864-865. 8 continual activity, sometimes resulting refinement law, overhaul.3 One feature, stayed intact throughout "careful adjustment laws," 209, much periodic amendment Foreign Corrupt Practices Act 1925, example, broadened criminalized act receiving criminality one. Ch. 368, 302, 313, 43 1070, 1074. So, another instance, 1947 Labor Management Relations drew labor unions permanently law's reach invigorated earlier "expenditure[s]" well. 120, 304, 61 159; Pipefitters, 402. 9 Today, "special structure" 209; 207; Austin Michigan Chamber Commerce, 494 652, 658-659 (1990); 257-258; 500-501 (1985). explained Austin, "State grants advantages—such liability, perpetual life, favorable treatment accumulation distribution assets— enhance attract deploy resources ways maximize return shareholders' investments. These allow play dominant role Nation's economy, permit `resources amassed economic marketplace' `an unfair advantage marketplace.'" 257). 10 Hence, public interest "restrict[ing] chests funneled form." 500-501; 207 ("[S]ubstantial aggregations go converted `war chests' incur debts legislators"). excerpts recent opinions show, original endured, rationales law. conversion 496-497; Nat. Bank Boston Bellotti, 435 765, 788, (1978) ("The governmental preventing [corruption] never doubted"). always done further duty protecting opposed." 208; 113; 673-678 (Brennan, concurring). 12 Quite aside war-chest interests contributors owners, reason regulating emerged individual various organizations "circumvention [valid] limits." 18 (2001); 664. degree contribute candidates, "who created it, own employs," Cedric Kushner Promotions, Ltd. King, 158, 163 (2001), exceed bounds imposed diverting cf. Republican, 446-447. said limiting coordinated parties, experience "demonstrates how donors, parties test shows beyond serious doubt eroded inducement circumvent enhanced." 457. 13 sum, represent "legislative structure require particularly careful regulation." 209-210. understood choice warranted regulates carrying plain warrant counter reality misuse advantages. See, e. g., Buckley Valeo, 424 1, 26-28, 47 (1976) (per curiam). "limits more clearly justified link kinds of. spending (corruption quid pro quo agreements, undue officeholder's influence)." 440-441 omitted). B 14 That historical prologue discourage broadside accordingly questions extent places itself general focused challenge can claim blank slate, rightly his dissent explanation position. 15 PAC,4 considered whether usual sort violate donation one corporation. 199-200. sustained drive broad "members" permitted 441b, invoked history distilled above statutory restriction infringement those associational rights akin speech. 206-209. concluded "warrants deference" "reflects [corporations] process." 16 constitutional, 208 (reviewing exceptions"). proper same breath, remarked applicability "corporations resources, fortunately situated," refusing "second-guess determination need prophylactic measures where evil feared." 210. 17 Later acknowledged, questioning, reading "without resources." Ibid. spoke well-established constitutional validity office," reaffirm case "rightly might include, along traditionally though latter exhibit economically exhibit." 495, 500; 500 giving "proper rule"). Relying again similar Michigan's "include[d] possess vast reservoirs capital." 661. "Although just publicly ones, accumulated significant amounts wealth, receive State benefits conferred distorting distortion justifies law's] corporations." stand alone bearing equal very upon placed principal reliance. "potential purposes" fell justifying groups Life "do danger corruption," majority's response pointed different resolution case. 259. CHIEF JUSTICE's noted "was unlike" supporting 269. Without disagreeing similarity two organizations, nonetheless addressing 259-260 ("[R]estrictions less compelling justification spending"). "In light process, rule [against contributions] thus sufficient [National Work]." 260. C 19 upshot that, squarely efforts, fail 20 First, argues class-wide basis system," combating weak relation Brief 19. generalization up. For will assume improbability end causes approve. 260-262.5 concern indeed They, "state-created advantages," 659, "political chests,'" 207. Not qualify tax Code lack category covers most politically powerful AARP, Rifle Association, Sierra Club.6 Nonprofit are, moreover, susceptible companies individuals. Cf. 664 (noting capable "serv[ing] conduit spending").7 21 Second, scrutiny, merely bans 14-16. argument, overlooks basic followed setting standards restrictions: issue" association. 259; 440-442, nn. 6-7; Nixon, 386-388. Going back (1976), "marginal" Amendment, 440.8 "While result expression spent candidate association ., transformation debate involves someone contributor." Buckley, 20-21. instead requiring narrowly tailored serve interest, involving `significant interference' rights" satisfies lesser "`closely drawn' `sufficiently interest.'" 387-388 25); 657; 44-45.9 22 Indeed, recognition nature regulated leading cases: approved 201-202, whereas invalidate burdens, 252-255; 265-266 (opinion J.). Each all, "ban" "sources" cases. 23 ignored; urges precisely asserts "closely drawn," still premise, simply wrong characterizing before, section "permits process allowing establish pay administrative expenses [PACs]." 201; 660; 252. option temptation funds influence, quite possibly odds sentiments members, lets registration disclosure, 432-434, jeopardizing organizations' NAACP Alabama ex rel. Patterson, 357 449, 462 (1958) (holding "[c]ompelled disclosure engaged beliefs" Amendment). 24 cannot prevail, then, arguing bad tailoring. demonstrate violated PAC's burdens. unanimous did rendered There burden today, here. III 25 ordered. Notes: Briefs ofamici curiae urging reversal Association Trial Lawyers America Jeffrey Robert White; Brennan Center Justice New York University School Burt Neuborne, Frederick A. O. Schwarz, Deborah Goldberg; Public Citizen, et al. Scott L. Nelson, Alan B. Morrison, David Vladeck. amici affirmance American Taxpayers Alliance P. Dye; Pacific Legal Foundation La Fetra; RealCampaignReform.org, William John Miles, Herbert W. Titus. Section 501(c)(4)(A) exemption "[c]ivic leagues profit operated exclusively promotion social welfare, net devoted charitable, educational, recreational "may carry lawful activities remain exempt promote welfare." Rev. Rul. 81-95, 1981-1 Cum. Bull. 332. Unlike 501(c)(3) deductible. SeeRegan Taxation Representation Wash., 461 540, 543 (1983). occasion say correctly entitled so-called "Massachusetts exception" statute's See,e. 1910, 392, 36 822; Aug. 19, 1911, 33, 37 25; 1070; July 1940 (Hatch Act), 54 767; War Disputes 1943, 144, 9, 57 167; 1947, Oct. 31, 1951, 21, 65 718; 1971 (FECA), 86 3; FECA Amendments 1974, 88 1263; 1976, 475; 1979, 93 1339; Bipartisan Reform 2002, 116 81. 441b(b)(4)(A) bars specified categories persons. 441b(b)(4)(C), specific inNational provides, part, "shall prevent stock [a corporation] corporation." said, inapplicable "persons desire cause, want opposition cause."Massachusetts 261. event, intimated insufficient (1982); 388-389 http://www.aarp.org/press/disclosure.html (as visited 12, 2003) (available Clerk file) (AARP); http://www.give.org/reports/index.asp (National Club). examples answer theMassachusetts exception "self-limiting."See 27 ("If begins generating income definition, automatically longer corporation" (1986))). mentioned (one has, Life]-type" status Appeals, see, Assn., 254 173, 192 (CADC 2001)) show chests'" members' suggests Government's circumvention met earmarking 441a(a)(8), provides "contributions earmarked otherwise directed intermediate [a] candidate" (thus triggering requirements 434(b)(3)(A)). 31. precise inFederal 431 "ignores difficulty identifying actual conditions." 462. "The clumsy attempts pass treat outer acceptable tailoring disarm effort [circumvention]." Within realm generally, furthest expression, derived largely see,e. 458-459 (1958), information, 777 (1978). deprives little material information. Judicial where, deal remained essentially unchanged adjustment."National 391 quantum empirical evidence needed satisfy heightened judicial vary down novelty plausibility raised"). judgment. 28 My position, expressed previous cases, erred sustaining misapprehended principles doing so. 409 (2000) (KENNEDY, dissenting); 699 (1990) Comm. Comm'n, 518 604, 626 (1996) part). I adhere view, give weight authorities instant 29 238 (1986) (MCFL), contains language here relies tends reconcile tension approach MCFL decision 197 30 Were presented distinction whole scheme review, join THOMAS' opinion. undertake comprehensive examination however. supports today's holding, concur 31 SCALIA joins, dissenting. 32 continue believe scrutiny. 465-466 (2001) (Colorado II) (THOMAS, 640 I) 427 dissenting). II, argue survives rigorous standard. not. "[U]nder caps unconstitutional," I, 640-641, because, meet 641-644; 427-430. 465-466. Accordingly, affirm respectfully contrary disposition.

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