*1 ASSOCIATION OF INTERNATIONAL AND
MACHINISTS AEROSPACE WORKERS, al., Plaintiffs, et COMMISSION, FEDERAL ELECTION al., et Defendants. 81-1664.
No. Appeals, United Court of States Columbia District of Circuit. Argued Banc En Oct. April
Decided
1976 FECA amendments unconstitu- tional?___________________________1099 Background the 1976 amend- ________________________1100 ments
imbalance___________1103 alleged
2. The *3 review__________1105
3. standard of
governmental 4. The interest.......1106 Means to what extent 5. scrutiny: sim- and labor unions for situated ilarly purpose hand?______________ em- career the statute impair B. Does right of First Amendment Silard, C., ployees’ Washington, John D. permitting the abstention by political Rauh, Joseph Jr., whom L. James C. Turner as detailed PAC solicitation corporate Judy Wolf, and Lyons C.,D. Washington, record?_____________________U09 in the brief, were plaintiffs. for of career Is solicitation 1. coercive?----------------1110 inherently U. Carolyn Oliphant, Sp. Asst. Gen. Coun- judgment Con- of The considered sel, Com’n, Federal Election Washington, D. it___1112 gress due and the deference C., with Steele, whom Charles N. Gen. assets general the use of Does corporate C. Counsel, Bader, Richard B. Gen. Asst. Coun- to establish and support sel, and Jeffrey rights Bowman, H. Atty., Federal Amendment violate the First shareholders?___________1115 dissenting of Com’n, C., Election Washington, D. were on V. Conclusion __________________________ms brief, for defendants. Kathleen Imig
Perkins, Atty., Federal Com’n, Election I. INTRODUCTION Washington, C.,D. also an appear- entered en court ques- Before this banc are three ance for defendants. concerning tions the constitutionality of provisions two of the Federal Election Cam- ROBINSON, Before Judge, Chief and (“FECA” paign “Act”)1 Act or the TAMM, ROBB, WILKEY, WALD, MIKVA, regulate the practices solicitation of corpo- GINSBURG, EDWARDS and Circuit rations and labor unions. na- Plaintiffs —a Judges. tional organization labor and six individu- argue that Congress has acted with- als2 — out Opinion PER CURIAM. regard political sufficient speech rights political speech rights Opinion concurring part and concur- proliferation others in face of the ring in the result filed by Circuit Judge action committees T. HARRY EDWARDS. (“PACs”) and their concomitant increased influence in federal elections. Specifically, OF OPINION OUTLINE Page plaintiffs allege (1) III. IV. II. I. History Introduction_________________________ Standing---------------------------- Analysis A. porations Is the asserted of the ____________________________ Case-------------------- labor imbalance between unions under cor- reer) former, licit unconstitutional rations 1976 FECA amendments has created an their executive and administrative employees; by allowing labor imbalance between (2) unions, such corporate solicita- in favor of the PACs to so- corpo- (ca- Act, 321(a), (b)(2) pension plan; Sections of the IAMA and trustee of U.S.C. the Union’s 441b(a), 441b(b)(2). Morrison, joint All §§ citations will be to Alan and Anne shareholders of specified. (one the current code Corporation unless otherwise common stock the Eaton corporations targeted of the eleven infra) Plaintiffs are the complaint, International Association of administrative see note 4 Aerospace (“IAMA” Machinists and elections; Judy eligible Workers voters federal Rear- “Union”); Winpisinger, Ward, William President of eligible don and Rebecca individuals eligible IAMA and an individual to vote in fed- vote in federal elections. elections; Glover, Eugene eral officer an involved, which em- for the circuit shall Appeals tion of executive administrative inherently Finding under coer- matter en banc.” ployees, sitting which occurs hear the circumstances, per- First plaintiffs’ arguments legally cive violates none suasive, each against Amendment we rule them on (3) expression; abstain and hold that questions, the certified provision the Act that authorizes us does not congressional product before and administrative financing operating limitations. transgress constitutional cor- general costs of a PAC from THE II. OF CASE HISTORY
porate violates the First Amendment assets dissenting shareholders. filed On October complaint with Federal 3, 1981, the certi- On June district court (“FEC” or “Commis- Election Commission allega- fied these questions matching three sion”), 437g(a)(l), to 2 Act, pursuant U.S.C. § pursuant 315(a) tions to section *4 practices the alleging that solicitation 437h(a), judi- the extraordinary U.S.C. § corporations,4 obtaining Act, cial the eleven selected provision pro- review which committees, political action immediately vides: district funds for their court “[t]he prohibitions the in section shall all contravened certify questions of constitutionali- argued ty 441b(b).5 Alternatively, plaintiffs this Act United States Court separate controversy brought a here on of contributions to Because this solicitation segregated dispositive questions, political no order of the certified district court fund to utilized for be ap- by organiza- is before us for review. It purposes tion, membership corporation, a labor pears questions, at least as to the certified cooperative, organization, origi- appeals vested the court capital corporation stock. or without jurisdiction. 437h(a) (“the nal 2See § U.S.C. 441b(b)(7) or “executive ad- Section defines immediately certify ques- all district court tions (“[A]ny shall (also personnel” referred to herein ministrative constitutionality”); 437h(b) § id. employees”) “individuals em- as “career as a matter shall decision on certified ... paid by ployed are on a a who appeal directly by be preme to the Su- renewable hourly, salary, who rather than basis and have ”). IAMA and the Therefore Court.... managerial, professional, policymaking, or su- plaintiffs six and retain their status as individuals responsibilities.” pervisory Commission, its status the Federal Election commonly segregated Separate funds as defendant. (“PACs”). called action committees 441b(b)(3) prac- limits the solicitation Section corporations plaintiffs’ 4. The named in com- PACs, providing tices of plaint Company, Paper are: the International It shall be unlawful— (AMOCO), Standard Oil of Indiana Dart Indus- (A) a contribution tries, for such fund to make Inc., Stores, Inc., Winn-Dixie the General money any- by utilizing expenditure or Company, Corporation, or Camp Electric General Motors gies Union force, by job thing discrimination, physical Corporation, of value secured United Technolo- Corporation, reprisals, Corporation, or Eaton Union Oil financial California, discrimination, force, Corporation. job of are ed. All or Grumman finan- threat of publicly dues, fees, by whose trad- reprisal; stock is or or other mon- cial eys required membership as a condition organization as a condition of a labor employment, or 441b(a) general principle Section states by moneys any or obtained any corporation that it or labor is unlawful for transaction; commercial campaign union penditure except or ex- to make a contribution any person soliciting employee (B) an for permitted elsewhere fund to fail to such a for a contribution to 441b(b)(2), or ex- § 441b. In “contribution § pur- employee such inform poses penditure” is defined to exclude fund the time of such solici- of such (A) by corporation to its communications tation; and stockholders and executive or administrative soliciting employee (C) person an for personnel and their a labor families a fund fail to for a contribution to such organization fami- to its members and their employee, time of at the such inform such any subject; (B) regis- non-partisan lies on solicitation, to so of his to refuse con- campaigns by get-out-the-vote tration and any reprisal. tribute without corporation aimed at its stockholders and Restated, PAC must be to a a contribution personnel and executive or administrative wholly voluntary. cannot Such a contribution families, organization a labor threat, be it must con- force or be obtained families; aimed at its members and their (C) purpose sensual, may only be after it made establishment, administration, and if were relief if the Commission construed rele- denied on statu- permit vant provisions of the Act to tory sought count. Plaintiffs certification challenged the com- conduct of the issues to this court constitutional plaint, then those FECA vio- provisions of 437h(a). pursuant to section late the First and Fifth Amendment judgment for summary On cross-motions plaintiffs. Acting on a recommenda- claim, on the the district court statutory tion Commission’s General Counsel upheld plain- the Commission’s dismissal there was no “reason to believe” complaint. tiffs’ administrative Com- violated, Commission, Act had been previously mission had filed a motion to 13, 1979, unanimously December voted to dismiss the counts for failure constitutional the complaint dismiss without further in- to state a claim which relief can be upon vestigation and without additional state- granted and for the further reason that ment of reasons. standing lacked to sue. The dis- February On plaintiffs filed a trict court denied the motion to dismiss and for complaint injunctive four-count and de- certify the three consti- announced would court, relief claratory pursu- in the district banc en questions tutional court’s ant 437g(a)(9)(A),6seeking to section review determination. The court found of the Commission’s dismissal their com- “neither constitutional claims frivolous nor plaint. alleged The first count “corpo- so warrant insubstantial as to dismissal for rate of unprotected PAC solicitations *5 failure standing, to state a claim.”7 As to are yielding which donations the court concluded that each the plain- of not free voluntary, and and constitute cor- showing tiffs made a of inju- had threshold porate political contributions because they ry in to satisfy result fact sufficient Article III.8 employment from the relationship.” that, Plaintiffs maintained that although because these so- The court further ruled no Act, licitations the violated the Commission corporate executive or administrative em- failed to its discharge statutory duty to ployee party litigation, plain- was to the the investigate; thus, the Commission’s dismiss- tiffs possessed standing to assert vicariously al was contrary to law. the First Amendment of such em- ployees.9 January 1981, plaintiffs On second,
The third and fourth counts all alleged appeal noticed their from the constitutional district violations. Plaintiffs made clear in complaint upholding their court’s order the Commission’s sought relief on their dismissal, constitutional claims D.C.Cir. Docket No. 81-1044. then, 441b(a). the PAC has been disclosed even ed and under § limited written solici- potential 441b(b)(4)(B) if the permitted contributor knows he has tation in is not at § give “Solicitation,” the to refuse to to the fund with issue in no this case. as the term is reprisal. Corporate permitted opinion, risk of PACs are used in this refers to the oral and corporation’s permitted, prohibited, solicit the stockholders written solicitations or corporation’s 441b(a), 441b(b)(2)-(4). their families and the executive restricted §§ personnel families, or administrative and their 437g(a)(8) provides pertinent part: 6. Section PACs, and labor union the union’s members “Any party aggrieved by an the order of Com- families, subject only prohibi- and their complaint dismissing mission filed such 441b(b)(3). tions of § party petition file a the ... United 441b(b)(4)(B), corporate Under § solicitation States District the Court for District Colum- hourly employees (neither shareholders nor bia.” employees) or executive administrative and la- bor solicitation of non-member shareholders Opinion, 7. Ass'n Memorandum International must be confined to two written Aerospace FEC, solicitations, Machinists Workers v. addressed and mailed to the em- 80-354, (D.D.C. Civil at ployees Action No. Decem- residence, shareholders 16, 1980) Op.], App. ber designed [Mem. union, so that the or labor PAC, or their cannot determine who makes a Op., supra App. 8. Mem. $50 contribution of note or less as a result such solicitation and does who not make such a prohibit- contribution. All other solicitation Id. 437h(a) 26, 1981, requires district court On October this court
Section
issued a
questions of
certify immediately all
the
judgment
affirming
No. 81-1044
the dis-
However,
constitutionality
Act.
of the
trict court’s
disposition
statutory
Buckley Valeo,
recognized
court
claim, thereby putting squarely in issue
(en
(D.C.Cir.1976)
banc),
F.2d 817
it is
plaintiffs’ three constitutional challenges.
to decide a constitutional issue
undesirable
court
order
III. STANDING
concerning
discovery of facts
the solicita-
The Commission contends initially that
practices
corpora-
of four
the eleven
tion
plaintiffs possesses
none
the “voter
tions named in
standing”
437h(a) requires;
section
accord-
complaint.
April
parties
On
ingly,
plaintiffs
eligible
are not
to in-
agreement
signed
stipulating two hun-
the expedited
Second,
voke
procedure.
findings
ten
dred
of fact.
district
argues
plaintiffs
Commission
have
court,
on June
certified
three
failed to meet the Article III “case or con-
questions11
constitutional
and submitted as
troversy” requirement.
reject
We
both ar-
agreed
fact
findings
the record
guments
deny
therefore
Commis-
parties.
This
gave
court
certified
sion’s motion to dismiss at the threshold.
regular
constitutional case a
docket num-
ber, No. 81-1664.
The text of section 437h states that
The Commissionrenewed
this court its
categories
these
may invoke
motion to dismiss for lack of standing.
the certification procedure:
Commis
“[t]he
sitting
court
en
consolidated
This
banc
sion, the
any political
national committee of
statutory appeal in
81-1044 with the
No.
party,
eligible
individual
to vote in
questions
certification
constitutional
any election for the office of President.” 2
No.
deferred decision on the mo-
437h(a).
U.S.C.
Bread
§
Political Action
argument,
to dismiss
tion
until after
*6
-
FEC,
-,
Committee v.
U.S.
expedited
contemplated
two cases as
102
(1982),
the Act.12
71
S.Ct.
L.Ed.2d 432
the Su-
Supreme
recently
The
through
separate
that
Court stated
“as
make
seg-
contributions
its
matter,
practical
adjudication
regated
money
a
immediate
fund with
solicited from its
through
pro-
members,
a §
constitutional
claims
437h
create an unconstitutional
imba-
ceeding
improper
would be
cases where the
lance between
and labor unions
questions
required
fully
resolution of such
rights
in violation
of the
labor unions and
developed factual
California
record.”
Medical
protected
their members as
the First and
FEC,
v.
Ass’n
453
101
U.S.
S.Ct.
Fifth Amendments?
n.14,
(1981).
dure.
IAMA lacks
statutory
site
must be dis-
standing and
find no
apart,
Tractor
we
Martin
as
Commission
party plaintiff.
missed
support
position
Commission’s
standing”
further
maintains
“voter
raise
437h(a)
voters to
con
qualifies
section
437h(a)
granted in section
is con-
to their
issues
in relation
stitutional
plaintiffs
fined to
who
issue their
put in
language
voters. Neither the
rights as
rights
First Amendment
voters. The
qua
voter,
(any eligible
all constitu
the statute
plaintiffs,
individual
under the Commis-
legislative history
tional
nor its
questions)
analysis,
sion’s
lack
utilize sec-
standing to
an
suggests
interpretation so constricted.
437h; although
eligible
tion
vot-
each is an
We note further
the Commission’s
er,
individual
plaintiff
no
has raised
is-
California
view is
to reconcile with
difficult
Rather,
right
sue as
his or her
to vote.
FEC,
(1981),
v.
Medical Ass’n
Only one decision has embraced this delineation, standing disapprove ed voter pinched 437h(a). construction of section adopted the Martin Tractor to the extent it FEC, Martin Tractor v. 460 F.Supp. Co. view, plain that the Commission’s and hold (D.D.C.1978), aff’d other are “individuals to vote” eligible tiffs who grounds, 627 (D.C.Cir.), F.2d 375 cert. de standing elections have statutory federal nied, 954, 101 L.Ed.2d pro to invoke the section 437h certification the court stated: Ass'n v. California Medical cedure. See individual plaintiffs do not sue in [T]he FEC, (1981); Buckley at 2717 n.6 capacities protect their individual 612, 631, Valeo, individual to vote or even to make L.Ed.2d 659 They contributions. sue vindicate a right employer claimed of their corporate the indi We are also satisfied that to influence its to make employees ... standing vidual have Article III plaintiffs voluntary political While contributions. constitutional claims. un raise the doubt, question is not free ion suf allege member Court has concluded that this kind of fer in their a relative diminution derivative was not the constitution- *7 elec voices—their influence in federal right al “an individual to vote” eligible a direct result of the discriminato tions—as Congress which “appropriate” considered to have ry Congress alleged imbalance is for vindication in a special declaratory amendments; the 1976 ordered in FECA 437h, judgment particu- action under § declaring assert that a they ruling further where, larly statutory under the scheme discrim unconstitutionally the amendments is an there alternative for process resolu- likely injury. redress their inatory would tion of the substantive issue in the con- allege Similarly, plaintiffs stockholder of a particular text transaction .... assets to use of “their” us, In the case before plaintiffs proceed upon did support impinges establish and PAC freedoms; under the “alternative invalidat process ruling resolu- political tion” their challenges; pursued eliminate they ing authorizing statute would 437g section The arguments enforcement action. dis- harm. These asserted plain trict court removed the constitutional issues to establish the individual sufficient from the section III to assert 437g standing action and certified tiffs’ under Article rights. them this pursuant to court 437h. and Fifth Amendment to section their First the proper This is mode v. Environmental procedure for Duke Power Co. Carolina
1099 Inc., 59, 72, respect alleged First Amend 438 98 S.Ct. Study Group, U.S.
2620, 2630,
(1978);
595
Warth v.
rights
employees.
57 L.Ed.2d
ment
of career
See Cali
490, 498-99,
2197,
Seldin,
Ass’n,
95
422
S.Ct.
fornia Medical
101
at 2717 n.6
U.S.
S.Ct.
However,
(1975).
(1981)
grant
alleged
rights
First Amendment
of career
12,
(1976) (“It
at
at 631
is clear
U.S.
96 S.Ct.
political expres-
employees to abstain
437h],
Congress,
enacting
[section
sion.
judicial review to the
provide
intended to
cf.
III.”).
extent
Art.
But
permitted
repeated
has
Court
FEC,
v.
Bread Political Action Committee
ly
prudential
cited the
limitation
stand
1235, 1239,
-U.S.-,-,
102 S.Ct.
ing
plaintiff generally may
that a
assert
(1982) (In
71
432
the context of
L.Ed.2d
interests,
legal
his own
may
considering
expedited
who
invoke the
Gladstone,
parties.
raise those of third
Re
437h, the
stat
procedures of section
Court
Bellwood,
91,
altors
441
Village
v.
U.S.
juris
the maximum
ed: “We do not assume
100,
99 S.Ct.
428 U.S.
setting alleged long-standing balance be- activities at the general public, directed unions, corporations tween and labor in vio- which courts prohibited, and [the have] lation of First Fifth Amendment stric- by corporation communications a to its tures. families, by stockholders and their a organization labor to its members and their
1. Background of 1976 amendments. families, any subject, which the courts Congressional regulation corporate po- latter, permitted.”20 have held is As activity litical with the Tillman Act began voluntary, to ensure that contributions are 1907,14 Congress prohibited wherein cor- prohibited the amendment the use of funds porations from making money contributions force, force, threat of re- by job obtained in connection with federal election. discrimination, fees, prisal or a safe- dues strengthened has this prohibition guard now found 2 U.S.C. several times since in a continuing effort to 441b(b)(3)(A). Representative Hansen § political system free the of inordinate and concluded that amended “Section improper corporate influence.15 It was not strikes a balance organizational between 1943,16 until the Disputes War Labor Act of rights corporations and labor [of unions] however, Congress brought un- labor and the of those who wish to retain ions within the prohibition.17 reach of the shareholding membership interest or In Congress, major in a undertaking status disagree majority’s but who with the laws, to reform the federal election enacted political views.”21 the Federal Election Campaign Act. Con- In the over the debate Hansen amend- gress dealt with and labor union ment, Congress respective focused on the political activity Act,18 in section 205 of the individual, organization interests of a originally section offered as an amend- on any balancing and labor ment Representative Hansen. Repre- Congress appeared influence. satisfied sentative Hansen stated that the purpose of existing law conformed to the legislature’s the amendment “is to codify court deci- wish treat corporations and labor unions sions interpreting 610], U.S.C. and to § [18 evenhandedly so that no alteration spell out in more detail what a labor union Thus, was corporation required.22 FECA as amended can or cannot do in connec- tion with a section 610 when federal election.”19 The read the Act became law amendment “draws a distinction between were permitted to so- 14. 34 Stat. 864. 21. Id. at 43380.
15. In Corrupt in § 313 of the Federal Representative spoke Hansen of his amend- Act, Congress Practices broadened the ban to clearly “spelling] ment governing more out the rules prohibit all contributions in connec- apply equally election activities that tion with a federal election. 43 Stat. 1070. corporations.” to labor unions and Id. 1947, Congress prohibition extended the to in- floor, colloquy Rep- 43379. resentative Dellenback asked on the House contributions, expenditures clude as well as Representative primaries, conventions, and to cover and cau- Hansen: following year cuses. 61 Stat. 159. The Con- your way you intention have [I]s gress general prohibition re-enacted this with- propose drafted the amendment to that cor- change out substantive as 18 U.S.C. 610. § absolutely porations and unions be treated equally? 16. 57 Stat. Rep. Hansen: That is correct. And, further, Labor-Management (Taft- Rep. 17. In Relations if situation Dellenback: Hartley) 1947, Congress Act of proper proper made this ex- is it is also for a permanent. union, tension 61 Stat. proper if for a union and it is corporation. proper for a then it is also 18. This section is now codified at 2 U.S.C. extremely important I think it that what 441b(b)(2). § you proposed have here is an amendment bring equity. that seeks to about 19. Cong.Rec. Id. at 43382. *9 20. Id through Report
licit contributions ac- The House explicitly states that opinion tion committees from their Sun Oil destroys shareholders “[t]he [SUNPAC] families, the intent of the to establish and their rules and labor unions were that apply equally to labor unions and cor- allowed to through solicit contributions porations.” proposed House Bill their PACs from their members and their law,” “three limited clarifications of the all families. of them intended the Committee to en- amendments, In the 1976 Congress added sure even-handed of corporations treatment a corporation’s “executive or administrative allowing and labor unions. personnel and their families” to whom those PAC to communicate with and solicit con- may solicit. This altera- officers,” tributions from its “executive SUNPAC, tion was a direct response to an Committee noted that it viewed “manage- Advisory Opinion the Commission issued in stockholders, ment personnel,” like “to be SUNPAC, ruled, 1975. In the Commission among corpora- beneficial owners of a alia, inter could, that a corporate PAC con- tion.” The main purpose of the bill was Act, sistent with the corpo- solicit all of the stated as Report: follows the House ration’s employees as well as its sharehold- H.R. 12406 continues rule that unions ers. The debate in both Houses confirms solicit only they represent— those single purpose of the alteration their members —and reaffirms the intent the sweeping SUNPAC inter- reject was to of the 1971 Congress pretation and restore in large measure the must also confine their activities to a balance thought to exist between corpora- roughly comparable group namely, — tions and labor prior unions to the Commis- stockholders and executive officers28 SUNPAC sion’s opinion. provided The bill also that any method of Bill, The House H.R. would have solicitation or communication which the law allowed a corporate PAC to solicit its permitted corporations permit- must also be “executive officers” in addition to the cor organizations.29 ted labor poration’s shareholders. Representative Bill, The Senate employed S. Thompson stated that the House amend phrase “executive or person- ment “specifically corrects the FEC’s erro officers,” nel” instead of “executive but in neous interpretation” in SUNPAC.23 Ac respects all other relevant here tracked cording to Thompson, SUNPAC “drastically the House version.30 The Senate’s intent to modified the equitable balance which had broad SUNPAC overturn the ruling is clear been the national policy during established from the treatment accorded two amend- the 92d Congress.”24 The House Bill would ments to the bill offered Pack- Senator the congressionally deter “reestablish[ ] wood on the floor. Pack- Senate Senator mined balance between interests of the wood first introduced an amendment which business community stockholders, and its essence, “in everybody everybody lets solicit ”31 and the interests of the labor community in the corporation Specifically, .... his and its membership.”25 first amendment would have allowed a un- 26. Cong.Rec. (1976). H.R.Rep.No.917, 23. 122 Cong., 94th 2d Sess. (1976). Id. 27. Id. (remarks Id. See also id. at 8882-83 28. Id. (emphasis added). Representative Gaydos) (“[T]he bill seeks to establish a balance between the activities of 29. Id. corporate political union and action commit- ....”); (remarks tees Represent- id. at 8883 Cong., H.R.Conf.Rep. 30. See 94th 2d Maguire) all, (“All provision ative now in Cong. Sess. 59-62 Admin. U.S.Code & appears equitable symmetrical the bill 1976, p. News respect privileges of solicita- by corporations unions.”). tion of funds Cong.Rec. 31. 122 *10 concerning PACs speaking provision non-member
ion PAC to solicit bill, and, the vote on the entire stat- symmetrically, just and shareholders would before ed, compromise to solicit reached permitted “Although have a em- employees including all of the of funds from corporation’s respect to solicitation Packwood ac- consistent with totally members. Senator not be ployees much, knowledged “pretty decision, amendment rep- it also the SUNPAC probably puts the where the Federal situation back issue.”37 resents a fair settlement of the Election had left it with their Commission reported The substitute bill as out of what was known rulings in the creation language employed conference Senate SUNPAC as the decision.” But he believed personnel.” “executive or administrative corporations treated labor unions and defined “executive Report The Conference debate, Senate, “equitably.”32 The without “employ as personnel” or administrative rejected amendment, this 40-45.33 a rather than paid salary, who ee[s] [are] introduced next “the Senator Packwood policymaking, and who hourly, basis ha[ve] amendment,” responsibilities.” ground proposal middle a managerial, professional, supervisory which would have extended Report explained 38 employees. union solicitation to middle level further: Conceding strong opposition labor The term “executive or SUNPAC justified ruling some restric- is intended to include indi- personnel” employees, tions on solicitation of busi- corporation’s viduals who run the Packwood pointed nevertheless out un- executives, ness, officers, such as other der “nonsupervisory, Bill nonu- Senate division, managers, plant, and section employees, nionized who are half of the following recog- as well as individuals major work force corporations this as professions, lawyers nized such country, cannot be solicited the union engineers, sepa- who have not chosen to and cannot be solicited the employer.”34 management rate themselves from These level employees, middle Packwood choosing bargaining representative; urged, have a corpora- stake what both profession- but is not intended to include them, tion and labor union do that affects organiza- of a labor als who are members therefore both union PACs and tion, supervi- or foremen who have direct PACs should be allowed to solicit them. or other low- hourly employees, sion over Other expressed Senators concern over the supervisors er level such as “strawboss- coercion, potential for perceived, actual and es”.39 in permitting solicitation of these non-su- the balance intended Concerning pervisory, employees.35 non-union Al- amendments, the Confer to restore in these though attempted Packwood to assure his passing refer Report ence contains colleagues that coercion illegal was under rule inherent in the present general law ence to “the and would remain so under his amendment, the entire section —that unions inso rejected plan the Senate amendment, too, Dole, 33-47.36 in the employers,[40] Senator far as stand Id, H.R.Conf.Rep. Cong., 32. 38. 94th 2d Sess. 62 1976, p. Cong. & Admin.News U.S.Code 33. Id. 977. 34. Id. at 6959. 1976, p. Cong. & Admin.News 39. Id. U.S.Code 577. (remarks 35. See id. at 6959-60 of Senator Bumpers); (remarks id. at 6960 of Senator “Employers” read should 40. Footnote added. Brock). “solicitors,” Congress did not autho- because Id. at employ- solicit nonmember rize union PACs to ees. Id. at 7923. similar, identical, .41 tablish balance but not same shoes Con *11 unaware, however, 1971; was gress (2) not to the one codified in Congress balance struck in 1976 was different from general there was a consensus to the SUNPAC prior the one that existed purpose amendments achieved this and did In Bill ruling. presenting Conference equitably.44 so House, Representative Hays stated: corporation whom a
The individuals ... alleged 2. imbalance. for may ... contributions to a solicit[] Plaintiffs, histo- light legislative political fund was broadened to include recounted, ry just do not claim that Con- professional employees rep- who are not intended tip the balance in gress bargaining agent resented and su- Rather, they favor of accuse corporations. pervisory employees other than foremen Congress lacking prescience of to com- directly supervise who rank-and-file em- the effect of prehend unleashing corporate ployees.42 employees: PACs to solicit career an “ex- Representative Brademas concluded that both in the number of cor- plosive” growth Congress has restored the ante-SUNPAC in their influence in porate PACs and feder- balance “in a manner is fair and even- elections, al to that of un- disproportionate handed .... the word ‘fairness’ im- [I]f ion PACs. plies balancing rights, of bill repre- this sents an equitable balance between the following figures Plaintiffs cite the rights corporations and labor unions. It invite comparison. product deliberation, is the negotiation million; PACs raised 226 union PACs $5.8 compromise.”43 1980, however, raised million. By $18.5 sum, there were 1204 PACs with a legis- our review of the relevant lative combined chest history things: campaign convinces us of two million. $34 (1) Congress intended to overrule the SUN- The number labor increased in PACs PAC decision in 297; part period substantial and re-es- same only incrementally H.R.Conf.Rep. Cong., Speaker, system 41. 94th 2d Sess. 64 Mr. this worked well for a Cong. p. years, U.S.Code & Admin.News until winter number of last when a 979. majority of the members of the Federal Elec- arrogated tion Commission to themselves the Cong.Rec. (1976) (emphasis add- change the rules.... [W]hat ed). Brademas, Representative Remarks of conference committee has done is to restore however, indicate that some members believed governed the rules which Federal elections mistakenly simply that the 1976 amendments from 1971 until the Commission’s Sun Oil quo restored the status ante. decision December. last sought [in to establish a added). 1971] (emphasis Id. at 12203-04 The ration- balance between the activities al- Representative ale neatly Brademas recites fits more lowed to and labor unions in adding the 1976 amendments executive order that the extent of activities and administrative than entity might carried on either kind of not prohibited corporate Act which its terms burgeon completely so as to overwhelm the soliciting all em- PACs ployees. non-stockholder activities of the other. Congress specifically did not allow either corporations or labor unions to cross-solicit Id. at 12204. respective contributions from each other’s constituencies. Because the rationale al- Ironically, protest members who rose to lowing corporation play a role in Federal objected the amendments to what unfairness of legitimate elections was the interests of its they perceived pro-labor as a bias the bill. management, Congress owners and restricted (remarks Representative See id. at 12204 rights the solicitation of a to its Rhodes); (remarks Representa- id. at 12206 managerial employees. stockholders Rousselot); (remarks Representative tive id. allowing And because the rationale for labor Devine); H.R.Rep.No.917, Cong., see also 94th play unions to a role in Federal elections was (minority Repre- (1976) 2d Sess. 92 views legitimate members, interests of its Con- Frenzel); (minority views sentative id. at 95-96 gress restricted the solicitation of a Representative Moore). labor union to its members. provision authoriz- argue specifically estimate million.45 Plaintiffs raised $26 — employ- are de- of career funds solicitation ing corporate 90% and administrative large rived from executive invites a “allows and ees—that in- figures Plaintiffs’ do employees.46 imbalance between growing were many us form how funds.”48 union PAC sharehold- pre-1976 to solicitation open fig- a host of recite Although labor Nor, taking ers.47 into account the imba- disparity, ures to dramatize ago were more just years a few PACs purely is not they complain lance of which wealthier, powerful more prevalent, *12 Instead, the imba- one of dollars and cents. PACs, entertain plaintiffs do corporate than to have created lance is said strength the relative possibility institutional, capacity, matter of 1976 is a swing pen- may PACs corporate and labor unions power of labor and thus outside with the for- step dulum-like in there According plaintiffs, to correct. a Plaintiffs demonstrate day. tunes of the major corporations many more simply are (and a causal con- argue in time connection to be (and employees more career many nection) between the SUNPAC ruling, unions solicited) major there are labor than amendments, proliferation and the ).49 most employees statute, (and Because they union PACs. It is the corporate members, 45. Brief for Plaintiffs at employees. whether Fig. Union member union, certainly employees form a or not 46. Id. at 18 & n.6: “Discovery of the four substantially larger pool which labor corporations in the District Court revealed may em- than union PACs ployees. solicit contributions average proportion funds de- of their PAC argue be- elsewhere that Plaintiffs do employee contributions was rived from employees in- 91.5% solicited under cause career herently are specifically Defendants do not con- 1979.” circumstances, B in- see Part coercive trovert estimate. this fra, they likely contribute than are more PACs, solicited union union members 47. No today pre-1976 and are doubt there were likely greater to contribute a amount also more many shareholdings employees career money average member is than the union However, employ them. willing or able to contribute. not the materials before us do indicate invites us to look at the The Commission category employ- extent “career to which the First, angle. figures same from another category overlaps “shareholders” ees” with the balance, corporate “parity,” between analysis any rely in and we do not speculation our say plaintiffs existed before labor funds PAC regard. in this was, at and the 1976 amendments SUNPAC numerically, thing ($18.5 no such million least 48. Brief for Plaintiffs at 20. 1976, compared $5.8 mil- for labor PACs 49. Plaintiffs cite these figures: PACs; corporate 226 labor PACs lion for This, PACs). corporate major corporations are in the contrast course, to 139 [T]here 2,500 only for a claim of each with refutes basis nation or more parity Among pre-existing and num- (5%) in funds collected .... them at least 125 at each capacity, company there As a matter of are administrative and executive ber of PACs. parity personel employ- may have between shareholders been combined [sic].... H.R.Rep.No.917, large corporations 94th members. See ment force of these is 18.9 and union Cong., many ...; (1976) (“There are as million workers 2d Sess. executive 5% portion rep- corporate shareholders as there are of that work force Nonetheless, 945,000 members.”). compared with the resents major corporations career workers whom these situation, disparity tap employee-de- in favor the 1980 can million) ($35 corporate corporate $26 rived million to funds used in federal elec- PACs appear startling. tions. not does that, Second, points By comparison, ac- out Brief for Plaintiffs at 14. “the the Commission corpo- cepting plaintiffs’ estimate that combined number of national and local unions 90% employees] only employee-derived, without 125 or more rate PAC funds [with 23,645 authorizing such solicita- amendments have a total workforce of the 1976 paltry added). employees.” (emphasis corporate would have raised Id. at 15 tion PACs compared Although figures plaintiffs pro- $26 million labor to the $3.5 cite are million vocative, they fully persuasive Defendants at 26. raised. Brief for are less than PACs that, creating suggests plaintiffs far from the institutional imbalance of which Commission imbalance, brought complain cor- amendments in this suit. The amendments the 1976 roughly in line plaintiffs challenge porate labor PAC funds allow a labor PAC to solicit supra. families, see note 47 its members non- with each other. But and their albeit not up set PACs to solicit their career em- major corporations yet have not committee,50 shareholders, action ar- in addition to their ployees continues, the chasm between cor- gument equal protection component violate the promises labor funds porate and the Fifth the Due Process Clause even more. widen They argue conjunctively Amendment.52 disparate treatment violates their however, object, Plaintiffs do linked rights. Urging First Amendment solicitation of proscription on labor PAC consideration of these two constitutional (or non-mem- non-member union safeguards, plaintiffs rely on decisions fo- employees). ber Even if Con- equal protec- cused on the “intersection” of gress drew the 1976 amendments in a fa- guarantees, manner and labor tion and First Amendment cially equal (corporate Valeo, v. may respective PACs solicit notably, Buckley most employees; and labor PACs
alike all employees, solicit Department Mosley, Police regardless membership, of union and all They 33 L.Ed.2d shareholders), press would still must maintain that the 1976 amendments sum, their discrimination claim.51 In *13 be scrutinized and assert that the strictly union plaintiffs challenge congression- here justified adequately Commission has not the al action that frees corporate PACs to impact corporate disparate amendments’ amass funds that labor alleged- union PACs and labor PACs. ly they per- could not attract even if were mitted to try. at heightened scrutiny While often classification to legislative alleged tends
3. The standard of review.
interests,53
on First Amendment
impinge
reject plaintiffs’
argument
that
we
plaintiffs argue
The union
the 1976
amendments,
stringent
ap
review
should
which authorize
labor
most
standard
PACs
to solicit their
which
ply
point may
members but
authorize
in this case.54 Decisions in
Finally,
they
amici in No.
alert
that a
amend-
81-1044
us to the
for which
work so
FECA
spent by
authorizing
massive amounts raised and
PACs not
their
ment
labor PACs to solicit
connected to either a
ion,
or labor un-
employees
in an
nonmember
would not result
association, cooperative,
such as trade
appreciable
At
increase in labor PAC funds.
ideological
reported
PACs. The Commission
argument
for IAMA estimated that
oral
counsel
group spent
money
that this third
more
in 1980
IAMA
are members
900 of the 1100
in federal elections than all
and labor
of the union.
PACs combined. Brief for Amici General Elec-
tric, et al. at 5 & n.2.
challenge congressional
plaintiffs
52. Because
action,
50. “More than two-thirds of Fortune’s 1000
the Fifth Amendment rather than the
leading
yet
Implicit
governs.
industrial
do not
have
Fourteenth Amendment
Again,
a PAC.” Brief for
at 14.
Plaintiffs
the Due Process
ment,
of the Fifth Amend-
Clause
plaintiffs
inevitably
inferences
draw are not
has several
times
Court
FEC,
According
correct.
growth
the rate of
noted,
approx-
equal protection guarantee
is an
PACs has declined recent-
imating
explicit guarantee contained in the
Further,
ly.
point
amici in No. 81-1044
out
Hampton
Amendment.
v. Mow
Fourteenth
likely
corporation,
that the smaller the
the less
100,
1895,
88,
Wong,
Sun
426 U.S.
96 S.Ct.
committee;
will
establish a
action
if
1903,
Valeo,
(1976); Buckley v.
formed,
likely
the size of the PAC will
corre-
612,
46 L.Ed.2d
spond to the
size
the firm. Brief for Amici
Wiesenfeld,
(1976); Weinberger
v.
Electric,
Thus,
General
et al. at 5.
the estimate
n.2,
43 L.Ed.2d
95 S.Ct.
nearly
of a total workforce of
a million execu-
susceptible
tive and administrative officers
to
solicitation,
supra
note
See,
Broadcasting
Community-Service
e.g.,
highly exaggerated.
supra
be
See also note 47
Mid-America,
FCC,
v.
593 F.2d
Inc.
(shareholding corporate
open
officers are
to
(en banc).
(D.C.
1978)
1122-23
Cir.
regard
solicitation without
to
status as
employees).
career
Against Rent Control/Coalition
Citizens
Cf.
Berkeley,--U.S.
Housing
City
51. We
Fair
v.
assume that a
substantial number of
434, 436, 438,
-,
70 L.Ed.2d
are also members of the union
102 S.Ct.
electoral mes-
between
maintain a balance
crystal clarity,
consistency
perfect
lack
the nature
and those
by corporations
sages
spread
do reveal
they
but
action at
issue
legislative
quality of the
unions.56
spread by
intensity
judicial
review
determine
review
Mosley itself
enunciated
Amend-
protection, First
equal
intertwined
exacti
not
the most
that were
standards
light
note in that
We
ment claims.55
v. Valeo drew
distinc
Buckley
ng,57
congressional
plain-
action
particular
of review
rigorousness
bearing on
tions
or, on
directly
does not encroach
tiffs assail
legis
several
based on the character
face, place
limits on
individual’s
its
scrutinized.
proc-
in the electoral
Court
participation
proscriptions
lative
speech
Mosley,
involv-
See,
respect,
In this
neither
at 671.
e.g., ess.
group,
one
but
allowing
an ordinance
ing
the matter
confident
We are therefore
Valeo,
Buckley
others,
nor
picket,
review stan
not call for a
us does
before
campaign
limitations on
contribu-
involving
elevated,
than this
demanding
dard more
expenditures,
tions and
nears
leg
strictest,58
challenged
test:
but not
Moreover,
again
mark.
we underscore
rela
a substantial
must bear
islative action
do not seek for union PACs
intere
governmental
important
tion to an
granted
permission
st.59
Rather,
employees.
career
PACs to solicit
tighten or reinstate
plaintiffs want
governmental
4. interest60
limitation on
activi-
governmental
objection to the
phrase their
i.e., Plaintiffs
preclude corporate
would
PACs
ty,
ends Con-
in terms of the
1976 amendments
soliciting
employees,
order
“compel
judicial
(1981) (subjecting
“exacting
standard demands
scruti-
58. The strictest
ny”
ling” governmental
a classification
a limitation on the size of contributions to
interest and
*14
support
oppose
compelling
“necessary”
ballot
committees formed to
interest.
to achieve the
referenda,
438,
Baird,
See,
a restriction the
e.g.,
measure
majority
Court’s
447
405 U.S.
Eisenstadt v.
directly
po-
encroaching
1029,
n.7,
viewed as
on
n.7,
349
1035
31 L.Ed.2d
92 S.Ct.
expression).
337,
litical
Blumstein,
330,
(1972);
405 U.S.
Dunn v.
1000,
(1972);
995,
Sha
31 L.Ed.2d
particularly Perry
55. See
Local Educators’
634,
618,
piro
Thompson,
v.
Hohlt,
(7th
1981)
F.2d 1286
Ass’n v.
Cir.
(1969).
gener
66. But see note 56 supra accompanying note and text note 43 Conceivably, Congress might (congressional recognition corporate have believed in 1976 of only by permitting corporate interests). that See also First National Bank of Bos- PACs to so- Bellotti, employees 765, 776-83, licit rough ton v. would there be a strength 1407, 1415-19, (1978) (corpo- balance in the and labor 55 L.Ed.2d support prop- speech pro- union PACs. We find no for this rate entitled to First Amendment legislative history. osition tection). in the To restore a ever, practical have effect' this would scant of this extended the exercise simply majority that vast ca- appears solicitation of since it communications with and leaders employees thus tendered employees. Congress reer union career back As has been response it cut members.70 sensible to SUNPAC: are also union by excluding Congress decision noted, Report the Commission’s House indicates the bulk of the corporate solicitation was drawn the 1976 classification believed workforce, that ech- upper but it recognized fairly: corpo- with identify personnel may elon that unions the rule 12406 continues H.R. as shareholders do. ration at least as much they represent— solicit those may only the intent members —and reaffirms Second, their corpora- to treat attempting that Congress of the 1971 equally, Congress and labor tions unions to a their activities was in 1976—as it was must also confine necessary believed it group —namely, comparable in 1971—to take into account their structur- roughly Technically, differences. shareholders officers.71 al and executive stockholders union members corporation. own the While organi- conclusion differences Our not “own” union in the same tech- do their to shape Congress allow zational structure sense, more than a kernel of nical there is laws to reflect those differences the election as describing truth in members “owners.” decisions involv- is two recent supported membership corpora- The union resembles a challenges FECA. ing protection equal group tion’s in that each is the stockholders Committee In Political Action Bread power the or- legitimacy source of (7th 1980) (en banc), FEC, 635 F.2d Cir. leadership. ganization’s management grounds,-U.S.-, rev’d on other Thus, con- Congress it follows that would trade union members analogy: sider sound the section argued association PAC to their are to union as shareholders equal protection 441b(b)(4)(D) deprived it of directors, corporation. theory, offi- statute, a trade PAC because under cers, upper corpo- run the management of a member prior approval must obtain pursuant wishes of the share- ration corpora- corporation soliciting before democracy holders. But is in rejecting solicitees. permissible tion’s respects than real. many more theoretical claim, pointed the court out is, corpo- if anything, likely It more that a dissimilar treatment the somewhat identify ration’s career will labor mem- organizations, corporations, direction, wel- purpose, trade associa- organizations and bership will fare than a shareholder who does 441b(b)(4) follows tions under Section took controlling own a interest. that each of from the rather obvious facts thought note of likelihood in a different groups has the different it reasonable to allow a kind constit- structure and different ap- If there solicit these employees. somewhat requires and that each uency ca- propriate might be either: analogy, abuses to curb regulations different reer are to their *16 to intended halt. Act was union, to its or union leadership is Medi- 635 at 630.72 And in California F.2d employees to their union. To career are FEC, 182, 101 S.Ct. 453 cal Ass’n v. U.S. Congress might in symmetry achieve Supreme the 567 69 L.Ed.2d have PACs to solicit their authorized union claim protection an rejected equal leadership employees. How- Court their career not conclude at We do supra. 653 F.2d 70. See note 51 ties.” are so corporations unions “dis- and labor that H.R.Rep.No.917, Cong., protection similarly equal scruti- Sess. that 94th 2d situated” (1976) added). Indeed, legislative (emphasis ny may the be avoided. Congress con- indicates that scheme of FECA plaintiffs “similarly many 72. The court that respects “fail[ed] concluded situ- them in sidered 441b(b)(2), la- See, (5). to demonstrate trade associations and e.g., 441b(a), how §§ ated.” ‘similarly organizations par- bor are situated’ Constitution, PACs, 441a(a)(l)(C) greater porate section and labor the as imposed that on and unincorporated burden associations it, the Court now reads forbid than and labor corporations individuals on See act Congress to such a manner. The unions.73 Court commented: Valeo, 48-49, Buckley v. 96 S.Ct. differing on in- placed restrictions Bent quoted Against Citizens associations, unincorporated dividuals and City for Fair Housing Control/Coalition hand, the one on and and cor- on unions of Berkeley,-U.S.-, other, porations, judg- on the reflect a Congress, L.Ed.2d by Congress ment these entities have attempted corpora- and to treat differing purposes, structures and tions unions in relatively and labor com- they may require therefore different parable manner. We hold that the 1976 of regulation forms to protect order plaintiffs challenge amendments integrity process. of the electoral related to this ob- substantially important at 2724. jective, therefore do deprive plain- Congress might have established a differ- protection. tiffs of equal Indeed, ent scheme. it might simply have directed return to the 1971 “balance.” the statute em- impair Does career B. however, convinced, are not We First ployees’ right Amendment balance would be any “equal” more abstention by permitting the one than struck in 1976.74 PAG solicitation as detailed is unlikely Congress It will ever be able in the record?75 perfect to achieve a balance between the second In their constitutional claim relative influence and labor plaintiffs champion First Amendment event, in federal any unions elections. employees of career to ab Constitution, and cur- historically allege that corporate stention. Plaintiffs interpreted, rently any does not afford PACs solicit their executive and administra guarantee against one person’s group’s ability personnel to tive under circumstances that are speech fund more can than anoth- fact, statutorily er. far from even inherently though coercive imposing obligation equalize to unobjectionable.76 They argue voices cor- that because later, 441a(a)(l)(C) explain prohibits pages 73. Section we individuals succeed. As see 1110- unincorporated infra, associations from contribu- we conclude that the record before $5,000 ting year more than calendar establishing us falls far short coercion. any multicandidate PAC. rephrases question Commission way: Congress’s prohibit decision to “whether supra. 74. See notes 49-50 coercive solicitations of executive personnel question sufficient 75. The certified the district court protect rights sophistication been under the first amend- has parties’ restated with in the simply (emphasis briefs. The district court asked for Defendants at ment.” Brief added). Plaintiffs, provision however, authorizing corporate argue whether that Con- solicitation gress permitted administra- executive and has solicitation under inherent- employees ly respond tive violated Amendment the First in this coercive circumstances. We state, employees. of those Plaintiffs section to the issue tender. elaboratively, impairs the statute plaintiffs alleged Originally, in their adminis- liberty politi- “First Amendment (1) inherently complaint trative coer- cal abstension” “if authorizes a [it] practices cive PACs pressure payments solicitation its to make solicitation, in-person solicitation, (group company 31; PAC.” Brief for Plaintiffs at solicitation) supervisor 441b(b)(3); Reply violated § Brief at 8. Plaintiffs would thus focus inherently (2) supervisor findings because coercive our attention on the detailed of fact beget involuntary rely upon inherently contributions— solicitations to demonstrate the *17 employment derived from re- corporate contributions the coercive nature of solicitation of PAC pierce lationship the personnel. Commission should executive and administrative We —the evidence, corporate employee accompanying veil and treat as address this see career text infra, plain- of notes 78-85 the individual contributions but note at the outset contributions apparent employees. finding So tiffs’ concession that absent a executive and treated, coercion constitutional claim cannot contributions would run afoul law, v. Board Abood Detroit of the cf. relationship employment nature of the n.12, Education, 97 S.Ct. “pregnant renders these solicitations coercion,” sur- Reit n.12, (1977); must employees 1782, 1790 career often politi- compromise render their Mulkey, man as to avoid expression
cal so we con association L.Ed.2d because corporate their incurring displeasure action requisite state that even if clude because conclude that superiors. Plaintiffs would challenge present, plaintiffs’ were amendments explicitly Congress in the 1976 not succeed. execu- solicitation of corporate authorized explain we that follows In the discussion this cor- employees, tive and administrative argument we why reject plaintiffs’ imprimatur bears the porate activity executive allowing PACs solicit corporate of the state and therefore contravenes so- sanctions personnel and administrative First Amendment. On “inherently coercive.” licitation that is of a consti Essential to claim us, of the view record before (state) “governmental tutional is a violation with which coercion safeguards against main action” foothold. Commission PAC solici- corporate Congress brigaded has by simply tains a decision tation,77 such solic- we conclude that cannot career em permit PACs solicit corporate career inevitably forces itation ployees stamp not as “state action” does in order to political beliefs compromise their corporate its private otherwise conduct. positions. jeopardizing avoid point, most recent statement on Su rejected expansive application preme Court in- of career 1. Is solicitation may of the that state action be concept coercive? herently private by indicated state authorization of are “employees complain Plaintiffs activity. sector Court summarized: political fund be- donating 'that a responsible “Our cases state State is relationship and employment cause when the private party act of a [the] company which the pressures pressures its State, law, by has the act.’ compelled its — effectively ex- consciously and solicitations however, Court, has This never held there is an add that ploit.” They because private in a ac acquiescence State’s mere relation- unequal “inherently sensitive tion converts that action into that employ- employer and his ship between an Bros., Brooks, Inc. v. Flagg State.” ‘pregnant ees[,] ... solicitations are these 1729, 1737, 56 L.Ed.2d ”79 particular, plaintiffs with coercion.’ (1978) (UCC-authorized sale bailed solicitation, in- supervisor argue goods to lien is not satisfy warehouseman’s solicitation, solicitation group person state action and therefore need not be at are in- PACs employ80 methods regard guarantees tended constitutional coercive, notwithstanding literal herently ing hearings). pretermit minimal We de restrictions however, observance of the solicitation cision on the state action question, 441b(b)(3)(A)-(C).81 altogether in view of not settled state section supra 441b(b)(3)(A)-(C), 5. note general § the Act’s ban on contribu- 77. See 441b(a). tions The Commis- § contained pro- interpretation sion’s of the Act —that at 31. 78. Brief for Plaintiffs specifically scribes described in what 441b(b)(3)(A)-(C) upheld by the dis- Id § —was trict court as reasonable and consistent with 5-8, Op., supra App. corpo- law. Mem. note methods the four 80. The solicitation was 14-17. The district court’s decision af- court are district rate PACs examined Fact, en Findings banc court. Interna- firmed order of this the certified summarized in Aerospace 1-79, 93-102, App. tional Machinists Work- Ass’n of & 55-57. FEC, 1981) (en ers v. banc). (D.C. 672 F.2d Cir. argue that the Corporate Thus left to or threat use force PACs discrimination, repris- permits force, job solicitation the statute is rendered im- financial Also, employees. permissible by solicitating cor- the Constitution. al
HU these of they perceive demonstrate that methods to further what be their To to per coercive, se are solicitation own best interests or the best interests of heavily corporation, lean on statistics assembled in the have they the and because the so, point record. Plaintiffs out that to they executive wherewithal do because are administrative “give the employees to coerced intimidated. con corporate political amounts [83] far beyond fund those rates[82] which obtain in sonnel, sidered executive and administrative like shareholders, to have benefi per give corporation; when donors are not solicited to the to cial stake the welfare of the institution that them.”84 de employs expressly permitted corporate We it therefore mur to statement. Plaintiffs infer with PAC communications and solicitation figures cite that career em higher employees.85 of these level As noted ployees earlier, that, contribute at such rates and in such may general, it be executive amounts “employment because of the rela employees are more tionship” its pressures. inherent But to likely identify (and with their employer this inference is not the or even the employer’s political therefore interests plainest one the suggest. statistics From expressed PAC) its is through than the very figures same one could argue non-employee corpora shareholder with the equal that employees force career purchased contrib tion whose shares he has in the ute to us, their PACs out of a desire market.86 On the record it suf before porate routinely employees they rely PACs afford 83. Footnote added. Plaintiffs on dis- rough analogue rights: 73-79, 84, solicit a Miranda Findings App. The court’s of Fact trict 51-53, purpose PAC informs solicitee indicating con- that PAC and the to to with- refuse contribute twenty large tribute amounts ten to times as reprisal. out fear of average presi- as the to national contribution 1976, $26.86; 1980, (for dential candidates picture plaintiffs paint added. Footnote The $49.50). Among management” “senior misleading. They in their demonstrating is brief cite statistics executives,” course, “senior the amounts are executives,” “sen- “senior larger still. Id. Shareholders of Dart Indus- management employees,” ior “executive em- tries, by comparison, contributed in 1979 an ployees,” presidents, and officers contribute at average Findings $27.45 to Dart PAC. compared 95%, rates between 60 and to a rate 85, App. Fact 53. These statistics are not sur- percent of less one than for shareholders. prising. Because executive and administrative figures drop considerably when one considers employees, especially management” “senior of- percentage of aii executive and administra- (many ficials of whom well be sharehold- personnel corpora- tive that contribute to their subject capacity), ers and to solicitation tion’s PAC. The district court found likely substantially higher have incomes those career solicited PAC, contribute adult, expect average might than ore corporation’s substantially to employee amount the career contributed to be percentage smaller chose contribute. Find- too, commensurately larger. Then there 1978, ings (Dart: 1979, 15.8%; of Fact 63 for figures: variable difficult to reduce to gree the de- 1980, 1977, 16.8%; (Eaton: 11.8%); 66 for affinity employee a career has toward 1981, 51.8%; 45%); (United Technologies: corporation, his and the he shows enthusiasm 1978, 1980, 6.6%; 2.9%; 7.8%); for pages for its PAC. See text 1107-1108. (Winn-Dixie: 10.2%; 14.5%; supra. 1980, 15%), App. figures gener- These 49-51. ally fall within rates the has Court 84. Brief for at 33. Plaintiffs analogous in an considered situation to indicate Pipefitters absence coercion. Un- Local pages supra. text at See 1102-1103 States, ion No. 562 v. United Comm., Right See National to Work Inc. v. also n.30, (1972) FEC, (D.C. 1981) 665 F.2d 375 n.9 Cir. (“Indeed, the amount of individual contribu- (“[Section] 441b(b)(4)(A) restricts actually tions collected evidences organizations successfully and labor to the solicitation of informed members that do- CIO likely by corpo- mandatory assessments.”). those individuals to be harmed nations were not 800,000 overindulgence in Pipefitters rate or union arena.”). Court estimated in million CIO members contributed five rely high PAC. We do not or low rates as absence; litmus indicia or its we coercion supra. accompanying text notes 68-71 See simply point figures out that the record substantially do not aid case. *19 1112 413 improper from influences.” ciently free offer proof plaintiffs to say
fices
564,
at 563. While the
at
93 S.Ct.
woefully
falls
short.
U.S.
legitimacy
congres-
of
recognized
Court
support
to extract
attempt
Plaintiffs’
employees
to secure federal
sional action
rely
They
fares no better.
from case law
express or tacit
and from
“pressure
from
rejecting
decisions
on two
Court
or
way
per-
in a certain
to vote
invitation
to restrictions
challenges
constitutional
favor
curry
in order to
political chores
form
of
political activities
Congress placed on the
than to act out
rather
superiors
with their
Curtis,
Ex Parte
public employees:
566,
beliefs,”
93
413
at
their own
U.S.
371,
381,
(1882); Civil
1
the salary promotions. raises and This Brock, although spoke he for the Senator fundamental principle major was a rea- amendment, sounded a second Packwood particular son for the balance established similar theme: section 610 in which the SUN- President, I MR. BROCK. Mr. want to advisory opinion drastically so al- we are very be sure we understand what tered very here.... I would like to be doing
This bill
pacts [sic], they
corrects
Commission-cre
of these
all
honest:
th[is]
problem[
pact
ated
There is
in a
implicit
bother me.
].90
Cong.Rec.
(1971)
(remarks
administrative
when confined to executive and
88. 117
per
employees,
Representative Hansen)
added).
se coercive.
(emphasis
is nevertheless
Cong.Rec.
(1976) (remarks
Rep-
89. 122
added).
(emphasis
Id.
Thompson).
resentative
Since this statement
was made in reference to the Commission’s
See
rejected
this amendment.
The Senate
ruling,
SUNPAC
which
allowed
supra.
accompanying
text
notes 34-36
corporation’s
employ-
PAC to solicit all of the
ees,
support
it does not offer substantial
for the
Cong.Rec.
92. 122
6959-60
solicitation,
proposition
even
441b(b)(4)).
(section
chose to overrule
least the
[sic],
opportu-
if not the fact at
me
union
pressure.
protect
That bothers
in an effort to
nity
Congress,
It
in a
greatly.
just
much
occurs
shareholders
members
shop
solicitation,
as it does
arm-twisting
enacted
against
management
soliciting
group,
its lower
at section
safeguards
codified
several
—now
something
ought
I think
we
it is
these
441b(b)(3)(A)-(C). Congress believed
about,
ought
we
to be
be troubled
eliminate,
at least sub-
would
measures
we do.
extremely careful what
deter,
tactics. When
coercive
stantially
I do not know how to resolve
solicitation
extended
voluntary
limit
because I do
how to
know
person-
reach executive
I think
public purposes.
associations for
protec-
well the
nel
it extended as
*21
very
but,
trou-
they
good,
boy,
are
does
members and
tions earlier afforded union
setting
things
ble me to
law
these
have a
indication that
There is no
shareholders.
understanding,
full
in
up
posture
with
to believe its
Congress
or had cause
believed
abused,
at least
whereby
can be
or
people
interim be-
ineffective in the
safeguards
being
be
abused. That
concerned about
the 1976
enactment of FECA and
tween the
know
danger. They
is the real
do not
is
evident rea-
amendments. Nor
there
going
happen. They
what is
do not
to
Congress re-
protections
son
that
to believe
they
going
know if
are
to have their
against
members
upon
lied
to secure union
pulled
going
union card
or if
to
adequate in
would be less
pressure
promotion.93
lose that
opportunity
employees against
career
securing
statements,
isolation, might
These
read in
pressure.95
undifferentiated,
to
thought
be
reflect an
domain,
of
in this
judgment Congress
The
across-the-board concern about solicitation
is entitled to
suggests,
as Letter Carriers
employees,
of all
in
regardless
place
CBS, Inc. v.
particular respect. See also
But
employment hierarchy.
the
read in the
Committee, 412
Democratic National
the
legislative history,
context
entire
2086-87,
94,
2080,
102-03,
93 S.Ct.
statements
a dominant
in
confirm
concern
took
(1973). Congress
into
L.Ed.2d
Congress
about the risk
coercion and
“in the context
competing
account
interests
hourly employees.94
intimidation
The
expertise
arena where the
political
statutory
plainly
language
demonstrates
its
that of
legislators
peak
judges
is at
and
that concern:
hourly employ-
solicitation of
Bank
very
is at its
lowest.” First National
restricted;
ees is
solicitation of
severely
804,
Bellotti,
765,
v.
435 U.S.
Boston
employees
generally
career
permitted,
(1978)
55 L.Ed.2d
brigaded
but is
to
protections designed
(White, J., dissenting).
legislative
his-
prevent overreaching. We recall here the
tory
attention
congressional
demonstrates
Congress
evil
in the
perceived
SUNPAC
speech
to
multi-faceted
and
ruling
solicit
(allowing corporate PACs to
Plaintiffs
employees)
Congress
all
concerns at stake.96
participation
and
method
Brock).
(remarks
among
concerns
Id.
at 6960
96.
count
these
of Senator
We must
corporation
communicating
of a
interest
Representative Thompson
soliciting its
and em-
believed that
with and
shareholders
ployees,
emphasized by
problem
an interest
amendments
“corrected”
coercion,
explicitly
employee
spoke
amendment and
acknowl-
Hansen
favor of the
edged
First Amendment
accompanying
sheltered within the
See text
amendments.
note 90
supra.
Bank of
See First Nat’l
Bumpers
Court.
statements of Senators
Bellotti,
776-83,
Boston v.
and Brock concerned the second Packwood
(1978); Buckley
amendment,
cor-
which would have extended
Valeo,
non-union,
porate
46 L.Ed.2d
solicitation to include
non-
Medical Ass’n v.
But cf. California
supervisory
employees.
FEC,
(Marshall,
(1981)
2721-22
Stevens,
J.,
Brennan, White,
JJ.)
court,
plain-
joined by
95. The district
its
evaluation of
(trade
statutory
argument,
PAC is
tiffs’
was of a similar
association’s
contribution
supra
App.
speech-by-proxy
full First
mind. See
Op.,
note
entitled
Mem.
protection).
Amendment
rate PAC solicitation of executive
ad-
convincing argument
no
have offered
we
plea
upset
of their
curtail
that
support
employees
ministrative
does not
Congress made.
decision
in-person,
right. We thus conclude
solicitation of career
group,
supervisor
alleged
recite a host of cases97
Plaintiffs
allows, subject
the statute
“in
areas
principle
to stand for the
abuse,
against
to controls
does not unconsti-
First Amendment
within the reach of the
upon
rights
individual
tutionally encroach
can
inhibit
individual
government
neither
expression.
political association
of the individ-
compel
freedom nor
activism
argument.
desperate
ual.”
But this is
cite, the
each of
Court
the cases
general corporate
Does the use of
C.
requirements government
struck down
a cor-
support
assets to establish and
an individual
compelled
actions
violate the First Amend-
porate PAC
speak
against personal political
or associate
dissenting
ment
sharehold-
government
Here,
religious
beliefs.
ers?
requires
neither
to con-
The third certified constitutional
against
their PAC
their will nor
tribute to
question
alleged
also concerns
requires
up
to set
au
Congress, by
abstention: Has
employees; government
solicit their career
use its assets to
thorizing
solicitation,
permits
such
and en-
merely
*22
finance
costs of
its
administrative
to check at-
designed
forces
restrictions
PAC,99
impermissibly impinged upon
tempts
to coerce contributions. Whatever
of shareholders
rights
First Amendment
of an individual’s First Amend-
scope
such use of
ass
abstention,
object
who
to
right
political
ment
of
we hold
corpo-
authorization
ets?100
Plaintiffs
reason that
statutory
seek,
ruling plaintiffs
property
exemption
receiving
that the solicitation
tax
violates First
per
Amendment);
Updegraff,
at issue
se violates the First Amendment
Wieman v.
344 U.S.
rights
employees, might
require
183,
215,
(state
of career
well
(1952)
tion’s PAC constituted “the use of their monies
union-shop agreement
103. Under the
the Court
political purposes
for
prove.”
ap-
which
do not
Railway Employees’
held constitutional
Complaint,
App.
j|
4. The com-
Hanson,
225, 238,
Dep’t v.
76 S.Ct.
plaint
IAMA,
allegation
also
an
includes
as
714, 721,
employee
1117
(1978):
retention. 431
at
shareholder invests in a cor-
job
tion of
U.S.
“[T]he
quoted
poration
at 1794-95. The
an
of his own volition
free
97 S.Ct.
Court
and is
any
withdraw his investment at
time and
opinion:
earlier
n.34,
for any reason.” 435
at 794
98
U.S.
federal statute is the source of the
[T]he
at
n.34.105
S.Ct.
1425
authority
pri-
which
power
vate
are lost or sacrificed....
explained
Bellotti
further
the “critical
The enactment of the federal statute au-
regard plain-
distinction” that
leads us to
thorizing
shop agreements
union
is the
argument
tiffs’
as insubstantial:
governmental action on which the Consti-
employees were
[Street
Abood]
operates....
tution
either
required,
by agree-
state law or
n.12,
at 218
at
U.S.
1791 n.12
ment between
and the un-
employer
ion,
(quoting Railway Employees Department v.
for a
pay dues
“service fee” to the
Hanson,
714, 718,
bargaining representative.
U.S.
exclusive
To
(1956))
(emphasis added).
L.Ed.
the extent
that these
funds were used
political
union
furtherance
equating
But
reach too far in
unrelated to
goals,
bargaining,
collective
the situation of a worker
compelled
who is
they were held to be unconstitutional be-
union,
join
pay
pain
union dues on
compelled
cause they
dissenting
of losing
employment,
his
with that of a
“
member
‘to furnish contributions of
shareholder
in a publicly-held company
propagation
opinions
for the
money
whose livelihood does not depend on retain-
which he disbelieves ....’”[]
ing
corporation
stock in a
politi-
involved in
The critical distinction here is that no
cal activity
opposes
he
and whose invest-
“compelled"
shareholder has been
to con-
ment
is tenuously linked to the establish-
anything....
tribute
A
relevant
more
operation
ment and
corporation’s
therefore,
analogy,
is the situation where
PAC. The worker’s situation
often in-
union,
an employee voluntarily joins a
coercion,
shareholder’s,
stinct with
at
voluntarily joins
individual
an associa-
least
held,
when the
is publicly
tion,
disagree-
and later finds himself in
will not bear
generally
the same character-
ment with its stance on a
issue.
ization. As the
Court noted in
First
Bellotti,
n.34,
National Bank of Boston v.
U.S.
794-95
added) (citation omitted).106
(emphasis
n.34
Bellotti,
105. In
on First
Court invalidated
tion’s First Amendment
ex-
grounds
Here,
pression.
plaintiffs present
Amendment
a Massachusetts criminal
the converse
prohibiting
expenditures by
statute
question:
recogni-
certain
whether a statute enacted in
*24
pur-
banks and business
pose
proposals.
corporation’s right
for the
tion of a
with its shareholders
to communicate
influencing
of
the vote on referendum
and
considering justifications
(see
Massa-
accompanying
supra)
text
notes 68-69
vio-
urged
support
suppression
in
chusetts
of
dissenting
the
lates a
ment
shareholder’s First Amend-
corporate speech, the
right
Court said that the as-
abstention.
rights
“protecting
serted state interest in
shareholders whose views differ from those ex-
the
disagreed
majority’s
106. Justice White
with the
assessment;
pressed by management
he stated:
corpo-
on behalf of the
by
ration” was belied
the under- and over-in-
The
free to seek other
be
they disagreed,
in Street and Abood were also
(The
clusiveness of the statute.
Court ob-
jobs
they
where
would not
served that the state’s asserted interests in re-
compelled
which
to finance causes with
stricting
“weighty”
expression may be
but we held Abood that
partisan
in the context of
candidate
rights
First
could not be so bur-
Amendment
elections,
overriding
regu-
where the
concern of
Clearly
strong
dened.
the State has a
inter-
latory
problem corruption
laws was “the
of
the creation of
assuring
est in
that its citizens
not
forced
representatives through
elected
political debts.”)
supporting
propaga-
to choose between
tion of views
passing up
the
n.26,
J., added) (footnotes dissenting) (emphasis in the analysis Because the cal abstention. sum, omitted). Court’s suggest be read to majority opinion point relevant to claim analyses legiti- have no dissenting stockholders dissenting to this securely conclusion: use of their invest- mate interest in the company who publicly-held shareholder in a ideological partisan political ments for legal practical obliga- does not allege any view the my investment, purposes, and because is not com- tion to continue his compelled by Su- First court’s conclusion pelled speak, in violation of his parable passing up opportunities to invest he did not conclude id. at companies. publicly-held a constitu- note that shareholders could establish We disagreement any question present tional violation based on their re- case does not corporation’s political posi- with the advertised minority spect in a close- owner of shares to a (“Pre- tions. See id. at 1435 ly-held corporation we do not address sumably, presented by unlike situations situation of such shareholder. Abood, Street the use of funds invested opposing supra. Massa- shareholders with views 107. See note *25 chusetts in connection with refer- state enda or elections would not constitute opinion addresses court’s 1. Part IV.C. of the and, consequently, action the would not violate question: provisions “Do the the third certified added). Amendment.”) (emphasis First Rath- 441b(b)(2)) (2 441b(a) § § of FECA U.S.C. er, he Amendment concerns” considered “First general corporate as- the use of that authorize evaluating in the the context of Massachusetts corpora- operating pay a the costs of sets to corporate political restricting in activi- interest segregated separate that makes fund tion’s ty, speech corporate and concluded that the violate the to federal candidates contributions harmony imposed restriction the state was rights who of a stockholder First Amendment Moreover, all re- with the Amendment. for objects assets to the use of his spect, job relinquishing we believe that one’s political purposes?” seeking employment elsewhere is not com- agency shop] precedent, separately arrangement I write preme Court [the violate[d] from those grounds government to concur on different the constitutional em- In upon by majority. particular, ployees relied the unions object public-sector who prevail I cannot as such would hold that or to various union activities fi- a nanced political on the abstention issue due to the service fees.” compulsory 211,97 (governmental) in this at lack of “state action” U.S. at 1787. The Court S.Ct.
case. held that fees mandatory agency shop could over spent, objection, not be an employee’s
I. views, expression political “for the on political candidates, behalf of that, or towards approving Plaintiffs contend “[i]n the advancement of other ideological causes general the use of the corporate assets for germane duties as collec- operating (2 costs of its PAC union’s] U.S.C. [a representative.” tive-bargaining 441b(b)(2)(C)), the statute stock- requires § (footnote at omitted). S.Ct. at political opera- holders to bear the costs of conclusion, In reaching this the Court ac- which frequently tions do not meet their will, course, knowledged that be political own interests and desires.... “[t]here Thus, problems drawing difficult lines between Congress approved when the use of activities, collective-bargaining for which operat- the stockholders’ assets to meet the compelled, contributions be and ideo- PAC’s, ing costs of it authorized logical activities unrelated to collective bar- use a citizen’s involuntary assets for gaining, compulsion pro- for which such support political candidates whom he at hibited.” 431 U.S. at 1800 may not wish S.Ct. support may actively (footnote omitted). (foot- oppose.” Plaintiffs’ brief at 41-42 omitted).
note
Relying primarily
Abood
in the in
Although
majority opinion
Education,
v. Detroit Board of
431 U.S.
case
members
recognizes
stant
“union
(1977),
plain-
allowing
n.34,
1407, 1425n.34,
for “agency shop” agreements.
Under
agency shop agree-
authorized
the court reasons that
ment,
public
employee represented by
use of a
share of
stockholder’s
required
pay
union could be
to the un-
assets is'never coercive because the stock
employment
practical
ion —as a condition of
ser-
“legal
obligation
holder has no
—a
vice fee equal
Majority opin
in amount
to union dues.
to continue
investment.”
his
contrast,
The issue before
ion at
the Court was “whether
1118.2
the majority
Bellotti,
informative,
although
ly rejected
protecting
2. Footnote 34 of
the state interest
dis-
controlling
senting
is not
A number
here.
of features
stockholders because the underinclu-
First,
distinguish this case.
the case before us
siveness and overinclusiveness
of the Massa-
partisan
purpose.
concerns
candidate
elections
rather
chusetts
statute belied that
case,
proposal
than a referendum
or ballot initiative.
at 1424-26.
In this
explicitly
however,
in Bellotti
dissenting
The Court
refrained from
stockholder’s
interest
considering
directly
presented.
the First
Amendment
interests of
abstention is
dissenting
Third,
partisan
stockholders
of dissent-
candidate
noted the absence
Court
n.26,
ing
complaining
elections.
posits
makes
that run
to its
agency shop agreement
gen-
ion or
such situations
counter
“[t]he
analysis.
worker’s situation ...
instinct with coer-
eralized
As Justice Frankfurter
cion.”
Id.
noted: “Generalizations are treacherous
at 1117.
constitutional con-
application
large
respect,
With all
I
that the
due
believe
Court,
cepts.” Hughes
Superior
339 U.S.
drawn by majority
distinctions
between
460, 469,
718, 723,
1121 Second, 715, 722, 856, 860, partisan political purposes. 81 6 U.S. S.Ct. L.Ed.2d 45 (1961). possibly corollary proposi- governmental as a to the first I can find no such tion, I assume that the Federal Election in this encouragement involvement or case. Campaign (FECA), legislative Act as a en- legal The fact is actment, constitutionally compelled. is not pursuant to a state’s entity created laws Therefore, I although recognize FECA does not imbue all of its actions with the regulates the creation of corporate PACs authority purposes. state’s for constitutional imposes certain on political limitations Co., Metropolitan Jackson v. Edison 419 Cf. contributions, I do not view the Act as 345, 350-51, 449, 450, 42 95 U.S. S.Ct. authorizing activity would otherwise (action (1974) regulated pub- L.Ed.2d 477 be unlawful. note 6 infra. See action); Moose utility Lodge lic not state
Furthermore,
Irvis,
163,
1965,
I am
assume
407
92
unwilling to
No. 107 v.
U.S.
S.Ct.
“[c]orporate
(1972) (action
use
private
of stockholder assets
With these assumptions in I have great difficulty that, in comprehending how It would seem to me but for the perceived FECA can be satisfying confused state of the law reflected in the “state action” requirement. cases,7 agency shop and union the “state activity in this question case—without action” in this case would be rela- more —is purely private Although action. tively simple. principal source of con- is true that the “state action” majority standard fusion is the Court’s rarely susceptible definition, to a simple Abood, opinion supra. Although Abood the least we know that public conversion of involved public employers and em- private action governmental there, into ployees, majority action for opinion relying purposes of adjudication constitutional heavily Railway Employees’ Department re- quires governmental in, some Hanson, 225, 714, involvement 100 S.Ct. of,
or encouragement
the private
(1956),
action in L.Ed. 1112
assumed that
dif-
“[t]he
question.
See, e.g., Peterson v. City
public-
private-sector
ferences between
Greenville,
244, 247-48,
373 U.S.
collective bargaining simply
S.Ct.
do not trans-
1119, 1120-21, 10
(1963);
L.Ed.2d 323
Bur-
late into differences in First Amendment
Wilmington
ton v.
Parking Authority,
rights.”
431 U.S. at
at 1798.
Obviously,
permissive piece
was
with Reid v.
FECA
unlike Hanson and no involving govern- here the “sanction of judicial enforcement ment” attributable to agree- constitutionally suspect private ments. legal respect being are restricted as the
8. With to the issue considered insofar here, FECA, considered, (or realistically regulated corporations. As noted limits owners of FECA, statute, above, regulates) like cor- at least absent some porate to federal election cam- make in federal elec- contributions contributions unregulated. designed paigns both lawful and tions. The Act was not to limit the would be plaintiffs’ rights political expression, except