Court Opinion

ID: 4221309
Source: CourtListenerOpinion
Date Created: 2017-11-17 06:01:46.425279+00
Date Added: 2024-06-11T14:42:27.395578
License: Public Domain

IN THE SUPREME COURT OF TEXAS
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                                                 NO . 15-0320
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                 KING STREET PATRIOTS, CATHERINE ENGELBRECHT,
               BRYAN ENGELBRECHT, AND DIANE JOSEPHS, PETITIONERS,
                                                       v.

TEXAS DEMOCRATIC PARTY; GILBERTO HINOJOSA, SUCCESSOR TO BOYD RICHIE ,
     IN HIS CAPACITY AS CHAIRMAN OF THE TEXAS DEMOCRATIC PARTY ;
   JOHN WARREN, IN HIS CAPACITY AS DEMOCRATIC NOMINEE FOR DALLAS
  COUNTY CLERK; AND ANN BENNETT, IN HER CAPACITY AS THE DEMOCRATIC
            NOMINEE FOR HARRIS COUNTY CLERK, RESPONDENTS

            4444444444444444444444444444444444444444444444444444
                               ON PETITION FOR REVIEW FROM THE
                        COURT OF APPEALS FOR THE THIRD DISTRICT OF TEXAS
            4444444444444444444444444444444444444444444444444444

                                        Argued February 7, 2017

        JUSTICE DEVINE, concurring.

                 Freedom of speech is the great bulwark of liberty; they prosper and
                 die together: And it is the terror of traitors and oppressors, and a
                 barrier against them.1

        In recognition of this truth, the First Amendment to the United States Constitution enshrines

the freedom of speech in our law, U.S. CONST . amend. I, which includes the right to participate in

the democratic process by contributing to political candidates, McCutcheon v. Fed. Election

        1
            Thomas Gordon, No. 15 Saturday, February 4, 1721. Of Freedom Of Speech: That The Same Is Inseparable
From Publick Liberty, reprinted in C ATO ’S L ETTERS : V O LU M E 1 79, 81 (Ronald Hamowy ed. 1995), available at
http://lf-oll.s3.amazonaws.com/titles/1237/Trenchard_0226-01_EBk_v6.0.pdf.
Comm’n, 134 S. Ct. 1434, 1441 (2014). This right protects natural persons and corporations like the

King Street Patriots. See Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 342 (2010) (“First

Amendment protection extends to corporations.”).                    When individuals with a common goal

incorporate under state law, government cannot exact as the price of incorporation those individuals’

First Amendment rights. Id. at 351.

         But that is what Texas’s ban on corporate contributions does. Under Texas law, no

corporation, regardless of its size or purpose, may contribute any amount of money to any candidate

for public office. I concur in the Court’s judgment because the Court has correctly applied Fed.

Election Comm’n v. Beaumont, 539 U.S. 146 (2003) and because Texas law says we must apply a

Supreme Court case, even if called into doubt by later cases, until the Supreme Court itself overrules

the case. Bosse v. Okla., 137 S. Ct. 1, 2 (2016); Owens Corning v. Carter, 997 S.W.2d 560, 571

(Tex. 1999).

         I write separately to emphasize two things. First, Beaumont does violence to the First

Amendment and is inconsistent with Citizens United and McCutcheon. The Supreme Court must

overrule Beaumont to bring its caselaw in line with the First Amendment. Second, schemes like

Texas’s that ban corporate contributions to political candidates violate the First Amendment.

                                                            I

         Texas has banned corporations—large and small, rich and poor, for-profit and

not-for-profit2—from contributing to political candidates. Any contribution to a candidate would

         2
           Certain incorporated political committees are not “corporations” under the subchapter of the Election code
that bars corporate contributions. “If a political committee the only principal purpose of which is accepting political
contributions and making political expenditures incorporates for liability purposes only, the committee is not considered

                                                           2
be a “campaign contribution” or an “officeholder contribution.” TEX . ELEC. CODE § 251.001(3), (4).

A “campaign contribution” is a “contribution to a candidate or political committee that is offered or

given with the intent that it be used in connection with a campaign for elective office or on a

measure. Whether a contribution is made before, during, or after an election does not affect its status

as a campaign contribution.” Id. § 251.001(3). And an “officeholder contribution” is a “contribution

to an officeholder or political committee that is offered or given with the intent that it be used to

defray expenses that” are “incurred by the officeholder in performing a duty or engaging in an

activity in connection with the office; and [are] . . . not reimbursable with public money.”

Id. § 251.001(4). Every campaign contribution and every officeholder contribution is a “political

contribution.” Id. § 251.001(5). But the Election Code allows corporations to make only political

contributions allowed by law. Id. § 253.094(a). Nowhere does the Election Code authorize

corporations to make political contributions to candidates—even through political committees.3 A

person who makes an unauthorized political contribution commits a felony of the third degree.

Id. § 253.094(c). Thus, the Election Code prohibits corporations from contributing to candidates.

to be a corporation for purposes of this subchapter.” T EX . E LEC . C O D E § 253.092. This is a narrow exception. Any
incorporated political committee having as one of its principal purposes making political contributions, see id.
§ 251.001(5) (defining “political contribution”), is still a corporation subject to the ban on corporate contributions.

         3
             The Texas Democratic Party misrepresents the Election Code. The Party claims a corporation can donate as
much as it wants to a candidate as long as it does so through a political committee. In support of this proposition, TDP
cites T EX . E LEC . C OD E § 253.096, which states, “A corporation or labor organization may make campaign contributions
from its own property in connection with an election on a measure only to a political committee for supporting or
opposing measures exclusively.” Clearly, this provision excludes elections for office and is restricted to measure
elections.

                                                           3
                                                   II

        Texas’s corporate-contribution ban violates the First Amendment. The government can

regulate protected political speech in certain circumstances. McCutcheon, 134 S. Ct. at 1441.

Courts therefore use a balancing test to determine whether restrictions on speech violate the First

Amendment. See id. at 1445 (“[W]e must assess the fit between the stated governmental objective

and the means selected to achieve that objective.”). Applying such tests involves assessing the

government’s interest in limiting speech and determining whether the government’s means are

sufficiently tailored to the government’s interest. Id. The Supreme Court has left unclear the level

of scrutiny that applies to government regulation of political contributions. In Buckley v. Valeo, the

Court did not apply to political contributions the exacting scrutiny it applies in cases involving “core

First Amendment Rights of political expression.” 424 U.S. 1, 44–45 (1976). Rather, the Court

applied a lesser but “still rigorous” standard of review under which the government must

demonstrate a “sufficiently important interest” to which its means must be “closely drawn.” Id. at

25–26. Under the “exacting scrutiny” the Court applies in cases involving core First Amendment

speech, including political expenditures, the government must demonstrate a compelling interest and

that the means chosen to further that interest are the least restrictive means possible. McCutcheon,

134 S. Ct. at 1444. In other words, if the government wants to regulate political speech, it must have

a good reason to do so, and it must not prevent more protected speech than necessary to achieve its

goal.

        The Court most recently discussed political contributions in McCutcheon. There, the Court

struck down the federal aggregate contribution limits. Id. at 1442. Whereas the federal base limits,

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which are constitutional, cap the amount an individual may contribute to a single candidate, the

aggregate limits capped how much an individual could donate overall during an election cycle. Id.

The Court did not say what standard of scrutiny applied. Id. at 1445. Rather, it found “substantial

mismatch” between the government’s ends and means and therefore held the aggregate limits

unconstitutional “even under the ‘closely drawn’ test.” Id. at 1446.

       After Citizens United and McCutcheon, only one interest justifies states’ restrictions on

political speech: preventing quid pro quo corruption or its appearance. Id. at 1450–51. Quid pro quo

corruption entails contributions to candidates in exchange for political favors. Id. at 1451. However,

“spending large sums of money in connection with elections, but not in connection with an effort to

control the exercise of an officeholder’s official duties, does not give rise to such quid pro quo

corruption.” Id. at 1450. Nor does the mere “possibility that an individual who spends large sums

may garner influence over or access to elected officials or political parties.” Id. at 1451 (internal

quotations and citations omitted). Thus, restrictions on speech must be at least closely drawn to

preventing contributors from donating to candidates or officeholders in exchange for political favors

or the appearance of such arrangements.

       Beaumont gives the government more leeway to restrict political speech than the First

Amendment allows. In Beaumont, the Court upheld the federal ban on corporations contributing “in

connection” with federal elections. 539 U.S. at 149. But Beaumont relied on government interests

other than that in preventing quid pro quo corruption to uphold the ban. In addition to the quid pro

quo corruption interest, Beaumont relied on interests in preventing corporations from distorting the

political process, id. at 153–54, and in protecting minority shareholders, id. at 154. The Court relied

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also on an interest in preventing people from circumventing valid contribution limits. Id. at 155.

But the government can no longer use the antidistortion interest or minority-shareholder-protection

interest to justify limitations on corporate political speech. See Citizens United, 558 U.S. at 361–63

(discrediting antidistortion and minority-shareholder-protection interests).

       The antidistortion interest came from Austin v. Mich. Chamber of Commerce, 494 U.S. 652,

658–59 (1990), which the Court overruled in Citizens United. 558 U.S. at 363. Under the

antidistortion interest, the government could limit corporate contributions in order to prevent

corporations from distorting the political process by using special state-granted privileges to amass

“political war chests” and use those war chests to influence the democratic process. Beaumont,

539 U.S. at 153–54 (internal quotations omitted).

       As Citizens United recognized, though, the antidistortion rationale is inconsistent with the

First Amendment and has no place in our law. 558 U.S. at 363. “If the antidistortion rationale were

to be accepted, however, it would permit Government to ban political speech simply because the

speaker is an association that has taken on the corporate form.” Id. at 349. But “[p]olitical speech

is indispensable to decision-making in a democracy, and this is no less true because the speech

comes from a corporation rather than an individual.” Id. (internal quotations and citations omitted).

Government simply cannot require people to forfeit their First Amendment rights in exchange for

corporate privileges. Id. at 351.

       As to Austin’s worry about corporations gaining an unfair advantage in the political

marketplace by using resources amassed in the economic marketplace, the government has no

interest in “equalizing the relative ability of individuals and groups to influence the outcome of

                                                  6
elections.” Id. at 350. “The First Amendment’s protections do not depend on the speaker’s financial

ability to engage in public discussion.” Id. In short, the government may no longer rely on the

antidistortion interest to justify banning corporate contributions.

       Because Citizens United discredited the antidistortion rationale, Beaumont’s holding is no

longer grounded in the law. The antidistortion interest played a key role in Beaumont. See

539 U.S. at 153–54, 158. There, the Court considered whether the government could keep nonprofit

corporations lacking “vast reservoirs of capital” from making political contributions. Id. at 157–58

(internal quotations and citations omitted). According to the Court, nonprofits have the same

special, state-granted privileges as for-profit corporations and therefore have the same ability to

distort the political process. Id. at 158. “This potential for distortion justifie[d] [the state law’s]

general applicability to all corporations.” Id. (internal quotations and citations omitted). The Court

in Beaumont did not—and could not—rely on the interest in preventing quid pro quo corruption or

its appearance to justify banning contributions by small nonprofit corporations.

                                                  III

       Without the antidistortion interest, the government cannot impose a blanket ban on corporate

contributions. If Beaumont were decided today, the government could rely only on the interest in

preventing quid quo pro corruption or its appearance. But banning all corporate contributions is

simply not tailored to that goal. Such a ban prevents corporations from contributing merely to

support a candidate. It prevents also contributions by numerous corporations that lack sufficient

resources to secure a quid pro quo and contributions small enough to avoid even the appearance of

a quid pro quo arrangement.

                                                  7
       Consider the difference between the federal aggregate limits struck down in McCutcheon and

the federal base limits, which are constitutional. 134 S.Ct. at 1445 (citing Buckley, 424 U.S. at

29–30). The federal base limits cap the amount an individual can give to any particular candidate.

Id. at 1442. The base limits are constitutional because, by limiting the amount of money a person

can give to a candidate, they prevent candidates from receiving from individuals large sums of

money that might give rise to a political quid pro quo or the appearance of a quid pro quo

arrangement. Buckley, 424 U.S. at 29–30; McCutcheon, 134 S.Ct. at 1445.

       Aggregate limits, however, are unconstitutional. McCutcheon, 134 S.Ct. at 1442. Rather

than restricting the amount of money a donor can give to particular candidate, aggregate limits cap

the amount a donor can donate overall. Id. For example, during the 2013–2014 election cycle an

individual could donate only up to $48,600 to federal candidates. Id. The aggregate limits were not

sufficiently tailored to the interest in preventing quid pro quo corruption or its appearance because

limiting the total amount a donor could give during an election cycle had nothing to do with

preventing a donor from securing a political favor in exchange for money from any particular

candidate. Id. at 1452. Rather, the ban served only to prevent donors from supporting more

candidates after donating the aggregate limit to a collection of other candidates. Id.

       Preventing corporate contributions, like Texas does, also is unrelated to preventing quid pro

quo corruption or its appearance. A donation does not create a risk of quid pro quo corruption just

because it comes from a corporation rather than a natural person or other business association. Are

we to believe a $1,000 check from a corporation somehow brings with it a greater threat of a quid

pro quo arrangement than a check from a person or a partnership? I think not. As with the aggregate

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contribution limits in McCutcheon, there is a “substantial mismatch” between Texas’s

corporate-contribution ban and the interest in preventing quid quo pro corruption or its appearance.

See McCutcheon, 134 S.Ct. at 1446 (“Because we find a substantial mismatch between the

Government's stated objective and the means selected to achieve it, the aggregate limits fail even

under the ‘closely drawn’ test.”). The time has come, therefore, for blanket bans on corporate

contributions to end.

                                                IV

       In sum, I concur in the Court’s judgment because I agree with the Court’s application of a

case we unfortunately must follow. That said, Beaumont is incorrect and cannot be reconciled with

Citizens United, McCutcheon, or, most importantly, the First Amendment. Nor can Texas’s blanket

ban on corporate contributions.

                                              ________________________________________
                                              John P. Devine
                                              Justice

OPINION DELIVERED: June 30, 2017

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