Lead Opinion
delivered the Opinion of the Court.
¶1 The Attorney General of Montana and the Commissioner of Political Practices appeal from the District Court’s Order on Cross-Motions for Summary Judgment filed October 18, 2010. We reverse.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 Western Tradition Partnership (WTP), Champion Painting and Montana Shooting Sports Foundation (MSSF) sued the Montana Attorney General and the Commissioner of Political Practices seeking a declaration that § 13-35-227(1), MCA, violated their freedom of speech protected by the United States and Montana Constitutions by prohibiting political expenditures by corporations on behalf of or opposing candidates for public office. The parties filed cross-motions for summary judgment along with briefs and supporting materials. The District Court declared the statute unconstitutional, granted summary judgment for the plaintiffs and denied summary judgment to the State defendants. The District Court enjoined enforcement of the statute and denied the motion of Champion and MSSF for an award of attorney fees. The State appeals the order of summary judgment in favor of the plaintiffs, and Champion and MSSF cross-appeal from the denial of their request for attorney fees.
STANDARD OF REVIEW
¶3 This Court reviews a district court’s decision on summary judgment using the same standards as the district court under M. R. Civ. P. 56. Where there are cross- motions for summary judgment and the district court is not called upon to resolve factual issues, but only to draw conclusions of law, we review to determine whether those conclusions are correct. Bud-Kal v. City of Kalispell,
DISCUSSION
¶4 Section 13-35-227, MCA, was originally enacted as an initiative by the Montana voters in 1912. It provides:
(1) A corporation may not make a contribution or an expenditure in connection with a candidate or a political committee that supports or opposes a candidate or a political party.
(2) A person, candidate or political committee may not accept or receive a corporate contribution described in subsection (1).
(3) This section does not prohibit the establishment or administration of a separate segregated fund to be used for making political contributions or expenditures if the fund consists only of voluntary contributions solicited from an individual who is a shareholder, employee or member of the corporation.
(4) A person who violates this section is subject to the civil penalty provisions of 13-37-128.
Section 13-37-128, MCA, provides the sanction for a violation of §13-35-227, MCA, and allows the Commissioner of Political Practices to recover a civil penalty up to $500 or triple the amount of the unlawful expenditure. A corporation may establish a separate segregated fund called a political committee or PAC to make political expenditures ‘if the fund consists of only voluntary contributions solicited from an individual who is a shareholder, employee, or member of the corporation. Section 13-35-227(3), MCA. Montana lawrequires that all political communications must include the name and address of the person or entity that paid for the communication. Section 13-35-225, MCA.
¶6 MSSA is a voluntary association of persons who support and promote firearm safety, shooting sports, education, shooting facilities and Second Amendment rights. It was incorporated in 1990 to provide liability shelter for its officers and directors. It has no employees or shareholders and its funding comes primarily from member dues and donations from other organizations. MSSA is led by its founder Gary Marbut, who is active in Montana politics on behalf of the Association. He and the MSSA have operated a political committee under Montana law for over ten years and publicize its grading and endorsements of political candidates in state and national elections. Marbut believes that the MSSA ‘has a political presence in Montana, and a political reputation that carries some weight with the Montana public by virtue of our long history of activism in Montana.”Nonetheless Marbut wants to use MSSA member dues to support or oppose candidates and believes that §13-35-227(1), MCA, prohibits MSSA from doing so.
¶7 Western Tradition Partnership is an entity incorporated in Colorado in 2008 and registered to do business in Montana. WTP reveals no more than that about itself in this case. Evidence presented by the State in District Court and not refuted by WTP is that its purpose is to act as a conduit of funds for persons and entities including corporations who want to spend money anonymously to influence Montana elections. WTP seeks to make unlimited expenditures in Montana elections from these anonymous funding sources. WTP’s operation is premised on the fact, or at least the assumption, that its independent expenditures have a determinative influence on the outcome of elections in Montana.
¶8 Upon the plaintiffs’ motion for summary judgment, the District Court considered whether § 13-35-227(1), MCA, violates the First Amendment to the United States Constitution to the extent that it restricts WTP, MSSA or Champion from making independent corporate expenditures on behalf of candidates.
¶9 We take note that Western Tradition appears to be engaged in a multi-front attack on both contribution restrictions and the transparency that accompanies campaign disclosure requirements. In addition to this case, it is currently engaged in separate litigation in the same District Court involving the Montana laws on campaign spending disclosures.
¶10 The District Court erroneously construed and applied the Citizens United case. That case considered the constitutionality of Federal statutes and regulations that prohibited corporations from “electioneering” (making a communication that refers to a clearly identified candidate for Federal office) within 30 days of a primary election or 60 days of a general election.
¶11 Citizens United was a case decided upon its facts, and involved “unique and complex” rules that affected 71 distinct entities and included separate rules for 33 different types of speech in Federal elections. Since 1975, the Federal Election Commission adopted 568 pages of regulations, 1,278 pages of explanatory materials, and 1,771 advisory opinions to implement and enforce the Federal law. The FEC adopted a two-part, 11-factor test in response to the holding in a single Supreme Court decision. If parties want to avoid litigation and possible penalties they must either refrain from political speech or seek an advisory opinion. All of this, the Supreme Court found, allows the FEC to “select what political speech is safe for public consumption by applying ambiguous tests.” Citizens United,
¶12 A premise of Citizens United was that First Amendment protections extend to corporations. Citizens United,
¶13 The Court found that the Government did not claim that corporate expenditures had actually corrupted the political process and concluded that “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” Citizens United,
¶14 The Court determined that the government had not provided a compelling interest to justify the speech restrictions at issue. The Court considered and rejected arguments that preventing the distorting effect of large expenditures; preventing corruption or
¶15 While Citizens United was decided under its facts or lack of facts,
¶16 In this case both sides moved the District Court for summary judgment. The WTP parties conducted no discovery in the case and presented two brief affidavits, one from the MSSF and one from Mr. Champion in support of summary judgment. The State presented a more extensive record consisting of the deposition transcripts of both Mr. Champion and Mr. Marbut of the MSSF, along with seven affidavits and attached exhibits. The plaintiffs did not contest any of this evidence. Nonetheless, the District Court failed to give adequate consideration to the record in determining whether the State had demonstrated a compelling interest for the restrictions imposed by § 13-35-227(1), MCA. We do so now because, unlike Citizens United, this case concerns Montana law, Montana elections and it arises from Montana history.
¶17 First, the depositions of Marbut (on behalf of MSSF) and Champion demonstrate that both have been very active politically in Montana on a range of issues that concern them. Neither could demonstrate any material way in which Montana law hindered or censored their political activity or speech. Mr. Marbut, on behalf of MSSF, has been an active fixture in Montana politics and in the legislative process for many years. He stated that he believed that while Montana law allowed MSSF to obtain and spend donations from other organizations on political activities, it did not allow MSSF to use dues paid by its members for the same purposes. No such distinction appears in Montana law, and the affidavit of the Commissioner of Political Practices affirms his construction of Montana law that it places no such restriction on MSSF. MSSF, therefore, failed to demonstrate that its speech was impaired by the statute.
¶18 Similarly, Mr. Champion described his many political activities both on a local and state level. He affirmed that he regularly speaks, blogs, and meets with others,
¶19 WTP, as noted, has been terse in its explanations of its organization, funding, activities, and intent. It claims to be a foreign corporation but it is not a business corporation. Its purpose, according to un-rebutted evidence submitted to the District Court by the State, is to solicit and anonymously spend the funds of other corporations, individuals and entities to influence the outcome of Montana elections. In a promotional presentation directed to potential donors, WTP represented:
There’s no limit to how much you can give. As you know, Montana has very strict limits on contributions to candidates, but there is no limit to how much you can give to this program. You can give whatever you’re comfortable with and make as big of an impact as you wish.
Finally, we’re not required to report the name or the amount of any contribution that we receive. So, if you decide to support this program, no politician, no bureaucrat, and no radical environmentalist will ever know you helped make this program possible. The only thing we plan on reporting is our success to contributors like you who can see the benefits of a program like this. You can just sit back on election night and see what a difference you’ve made.
Western Tradition Partnership, 2010 Election Year Program Executive Briefing. (Emphasis added.)
¶20 Organizations like WTP that act as conduits for anonymous spending by others represent a threat to the “political marketplace.” Mass. Citizens for Life, Inc.,
¶21 Second, a material factual distinction between the present case and Citizens United is the extent of the regulatory burden imposed by the challenged law. As noted above, the Court in Citizens United emphasized the length, complexity and ambiguity of the Federal restrictions, including the power of the FEC to determine what speech is “safe for public consumption,” and the difficulty of establishing a PAC as an alternative to direct corporate spending. In contrast, under Montana law a political committee can be formed and maintained by filing simple and straight-forward forms or reports. (See e.g. §§13-37-201 and -210; 13-35-402, MCA.) Mr. Marbut in his deposition described that MSSF has established its own political committees and used them to actively participate in the Montana political process over a period of years. The evidence submitted by the State in the District Court similarly demonstrates that corporations, through their political committees organized under Montana law, are and have been a substantial presence and active participants in Montana politics. The many lobbyists and political committees who participate in each session of the Montana Legislature bear witness. Under the undisputed facts here, the political committee is an easily implemented and effective alternative to direct corporate spending for engaging in political speech.
¶22 Third, the Montana law at issue in this case cannot be understood outside the context of the time and place it was enacted, during the early twentieth century. (Montana became a state in 1889.) Those tumultuous years were marked by rough contests for political and economic domination primarily in the mining center of Butte, between mining and industrial enterprises controlled by foreign trusts or corporations. These disputes had profound long-term impacts on the entire State, including issues regarding the judiciary, the location of the state capitol, the procedure for election of U.S. Senators, and the ownership and control of virtually all media outlets in the State.
¶23 Examples of well-financed corruption abound. In the fight over mineral rights between entrepreneur F. Augustus Heinze and the Anaconda Company, then controlled by Standard Oil, Heinze managed to control the two State judges in Butte, who routinely decided cases in his favor. K. Ross Toole, Montana, An Uncommon Land, 196-99 (Univ. of Okla. Press 1959) the Butte judges denied being bribed, but one of them admitted that Anaconda representatives had offered him $250,000 cash to sign an affidavit that Heinze had bribed him. Toole, Montana, An Uncommon Land, 204.
¶24 In response to the legal conflicts with Heinze, in 1903 Anaconda/Standard closed down all its industrial and mining operations (but not the many newspapers it controlled), throwing 4/5 of the labor force of Montana out of work. Toole, Montana, An Uncommon Land, 206. Its price for sending its employees back to work was that the Governor call a special session of the Legislature to enact a measure that would allow Anaconda to avoid having to litigate in front of the Butte judges. The Governor and Legislature capitulated and the statute survives. See e.g. Patrick v. State,
¶25 W. A. Clark, who had amassed a fortune from the industrial operations in Butte, set his sights on the United States Senate. In 1899, in the wake of a large number of suddenly affluent members, the Montana Legislature elected Clark to the U. S. Senate. Clark admitted to spending $272,000 in the effort and the estimated expense was over $400,000. Complaints of Clark’s bribery of the Montana Legislature led to an investigation by the U. S. Senate in 1900. The Senate investigating committee concluded that Clark had won his seat through bribery and unseated him. The Senate committee “expressed horror at the amount of money which had been poured into politics in Montana elections ... and expressed its concern with respect to the general aura of corruption in Montana.” Toole, Montana, An Uncommon Land, 186-94.
¶26 In a demonstration of extraordinary boldness, Clark returned to Montana, caused the Governor to leave the state on a ruse and, with assistance of the supportive Lt. Governor, won appointment to the very U. S. Senate seat that had just been denied him. Toole, Montana, An Uncommon Land, 192-93. When the Senate threatened to investigate and unseat Clark a second time, he resigned. Clark eventually won his Senate seat after spending enough on political campaigns to seat a Montana Legislature favorable to his candidacy.
¶27 After the Anaconda Company cleared itself of opposition from Heinze and others, it controlled 90% of the press in the state and a majority of the legislature. C. B. Glasscock, The War of the Copper Kings, 290 (Grosset & Dunlap, N.Y. 1935). By 1915 the company, after having acquired all of Clark’s holdings as well as many others, “clearly dominated the Montana economy and political order... [and] local folks now found themselves locked in the grip of a corporation controlled from Wall Street and insensitive to their concerns.” Michael Malone and Richard Roeder, Montana, a History of Two Centuries, 176 (Univ. of Wash. Press, Seattle 1976). Even at that time it was evident that industrial corporations controlled the state “thus
¶28 In 1900 Clark himself testified in the United States Senate that <'[m]any people have become so indifferent to voting” in Montana as a result of the ‘large sums of money that have been expended in the state....” Toole, Montana, An Uncommon Land, 184-85. This naked corporate manipulation of the very government (Governor and Legislature) of the State ultimately resulted in populist reforms that are still part of Montana law. In 1906 the people voted to amend the state Constitution to allow for voter initiatives. Not long thereafter, in 1906 this new initiative power was used to enact reforms including primary elections to choose political candidates; the direct election of United States Senators; and the Corrupt Practices Act, part of which survives as § 13-35-227, MCA, at issue in this case.
¶29 The State of Montana was still contending with corporate domination even in the mid-20th century. For example, the Anaconda Company maintained controlling ownership of all but one of Mont ana’s major newspapers until 1959. Writing in 1959, historian K. Ross Toole so noted and described the state:
Today the influence of the Anaconda Company in the state legislature is unspectacular but very great. It has been a long time since the company showed the mailed fist. But no informed person denies its influence or the fact that the basic use to which it is put is to maintain the status quo-feo keep taxes down, not to rock the boat. New of the company personnel either in Butte or in New York remember F. Augustus Heinze, or even for that matter, [U. S. Senator] Joseph M. Dixon, but it would be foolish for anyone to deny that the pervasive influence of the Anaconda Company in Montana politics is part and parcel of the Montana heritage.
Toole, Montana, An Uncommon Land, 244. A study of Montana in the early 1970s concluded that corporate influence of the Anaconda Company had been “replaced by a corporate power structure, with interlocked directorates, the same law firms and common business interests” among the Anaconda Company, Montana Power Company, Burlington Northern Railway and the First Bank System. Malone and Roeder, Montana, a History of Two Centuries, 290. History professor Dr. Harry Fritz, in his affidavit presented in the District Court, affirmed that the “dangers of corporate influence remain in Montana” because the resources upon which its economy depends in turn depend upon distant markets. He affirmed: “What was true a century ago is as true today: distant corporate interests mean that corporate dominated campaigns will only work ‘in the essential interest of outsiders with local interests a very secondary consideration.’” While specific corporate interests come and go in Montana, they are always present. Montana’s mineral wealth, for example, has historically been exported from the State, and that is still true today. Commonwealth Edison Co. v. State of Montana,
¶30 Furthermore, in the evidence presented below the State demonstrated aptly how even small expenditures of money can impact Montana elections. The State submitted affidavits from two respected and experienced politicians and public servants. Bob Brown, a Republican, served in the Montana House of Representative, in the Montana Senate, as the Montana Secretary of State and as an unsuccessful candidate for Governor. He retired in 2010 as a Senior Fellow at the Center for the Rocky Mountain West and the Mansfield Center, at the University of Montana. Mike Cooney, a Democrat, served in the Montana House of Representatives, in the Montana Senate, as the Montana Secretary of State, and also as an unsuccessful candidate for Governor. Both affirmed that
¶31 Cooney, for example, ran his first state legislative campaign for $750 as a “grassroots” effort that he believed could have been derailed by an opposing expenditure of even a couple of thousand dollars. Brown affirmed that Montana politics are more susceptible to corruption than Federal campaigns, and that infusions of large amounts of corporate independent expenditure on just media coverage “could accomplish the same type of corruption of Montana politics as that which led to the enactment of’ § 13-35-227, MCA. Cooney recounted his experience from his most recent campaign when he found that voters were concerned that they “didn’t really count”in the political process unless they can make a material financial contribution, and that special interests therefore hold sway. This is much the same sentiment described by W. A. Clark to the United States Senate committee over a century ago, quoted above.
¶32 The State also presented the affidavit of Edwin Bender of the National Institute on Money in State Politics. He confirmed that under Montana law corporations can now make unlimited contributions (in amount) for independent expenditures from their corporate PACs to support or oppose candidates, directly to ballot measure committees, and to support or oppose ballot measures, and can make unlimited expenditures on lobbyists. Corporations can make contributions with the same limits as all donors from their PACs to candidates and to party committees. Bender also affirmed the low cost of political races in Montana, in comparison to other states,
¶33 Bender also affirmed that studies of election spending in the United States show that the percentage of campaign contributions from individual voters drops sharply from 48% in states with restrictions on corporate spending to 23% in states without. Evidence presented in the District Court showed that in recent years in Montana, corporate independent spending on ballot issues has far exceeded spending from other sources. He provided an extensive 2010 joint study by the Hofstra University School of Law, the Brandéis Center at the NYU School of Law and the National Institute on Money in State Politics that concluded that polling shows that 3 of 4 Americans believe that campaign contributions affect judicial decisions in states where judges are elected. The New Politics of Judicial Elections 2000-2009, Charles Hall ed., Justice at Stake Campaign, 2010.
¶34 Laws that impact speech in some way must be evaluated by using the proper level of scrutiny. This is determined by the type of speech that the law affects and the type of burden that the law imposes. Davis v. Fed. Election Comm.,
¶35 Montana law has long incorporated a requirement of a compelling state interest in evaluating cases involving claims that governmental action infringes upon constitutional rights. The Montana Constitution, Art. 2 § 10, expressly incorporates the standard for
¶36 Based upon the background of §13-35-227(1), MCA, the State of Montana, or more accurately its voters, clearly had a compelling interest to enact the challenged statute in 1912. At that time the State of Montana and its government were operating under a mere shell of legal authority, and the real social and political power was wielded by powerful corporate managers to further their own business interests. The voters had more than enough of the corrupt practices and heavy-handed influence asserted by the special interests controlling Montana’s political institutions. Bribery of public officials and unlimited campaign spending by the mining interests were commonplace and well known to the public. Referring to W. A. Clark, but describing the general state of affairs in Montana, Mark Twain wrote in 1907 that Clark ‘is said to have bought legislatures and judges as other men buy food and raiment. By his example he has so excused and so sweetened corruption that in Montana it no longer has an offensive smell.”Mark Twain, Mark Twain in Eruption, 72 (Harper & Bros. 1940).
¶37 The question then, is when in the last 99 years did Montana lose the power or interest sufficient to support the statute, if it ever did. If the statute has worked to preserve a degree of political and social autonomy is the State required to throw away its protections because the shadowy backers of WTP seek to promote their interests? Does a state have to repeal or invalidate its murder prohibition if the homicide rate declines? We think not. Issues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor, and low campaign costs make Montana especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government. Clearly Montana has unique and compelling interests to protect through preservation of this statute. ¶38 While Montana has a clear interest in preserving the integrity of its electoral process, it also has an interest in encouraging the full participation of the Montana electorate. The unrefuted evidence submitted by the State in the District Court through the affidavit of Edwin Bender demonstrates that individual voter contributions are diminished from 48% of the total raised by candidates in states where a corporate spending ban has been in place to 23% of the total raised by candidates in states that permit unlimited corporate spending. The point is illustrative of Montana, a state where citizens generally support candidates with modest campaign donations. In the case of ballot issues, where corporations may make unlimited donations, the characteristics of donors are markedly different from those who give to candidates. In 2004, for example, 97 institutional donors gave 95% of the total money raised in ballot initiative campaigns, while 760 individual donors accounted for the remaining 5%. Similarly, in 2008, 34 institutional donors gave 95% of the total money donated to ballot campaigns. Moreover, unlimited corporate money would irrevocably change the dynamic of local Montana political office races, which have historically been characterized by the low-dollar, broad-based campaigns run by Montana candidates. At present, the individual contribution limit for Montana House, Senate and District Court races is $160, and for Supreme Court elections it is $310. Section 13-37-216, MCA, as adjusted as provided in (4). With the infusion of unlimited corporate money in support of or opposition to a targeted candidate, the average citizen candidate would be unable to compete against the corporate-sponsored candidate, and Montana citizens, who for over 100 years have made their modest election contributions meaningfully count would be effectively shut out of the process.
¶40 The people of the State of Montana have a continuing and compelling interest in, and a constitutional right to, an independent, fair and impartial judiciary. The State has a concomitant interest in preserving the appearance of judicial propriety and independence so as to maintain the public’s trust and confidence. In the present case, the free speech rights of the corporations are no more important than the due process rights of litigants in Montana courts to a fair and independent judiciary, and both are constitutionally protected. The Bill of Rights does not assign priorities as among the rights it guarantees. Neb. Press Assoc. v. Stuart,
¶41 Clearly the impact of unlimited corporate donations creates a dominating impact on the political process and inevitably minimizes the impact of individual citizens. As to candidates for political office, §13-35-227(1), MCA, is designed to further the compelling interest of the people of Montana in strong voter participation in the process. While corporations have first amendment rights in political speech, they do not have the vote.
¶42 The importance of and compelling interest in an independent judiciary is reflected as a matter of policy in Montana’s Code of Judicial Conduct.
An independent, fair and impartial judiciary is indispensable to our system of justice. The United States legal system is based upon the principle that an independent, impartial, and competent judiciary, composed of men and women of integrity, will interpret and apply the law that governs our society.
Mont. Code of Judicial Conduct, Preamble. Montana expects its judges to act to promote “public confidence in the independence, integrity, and impartiality of the judiciary” and to “avoid impropriety and the appearance of impropriety.” Mont. Code of Judicial Conduct, Rule 1.2. Because it is the duty of a judge to make decisions based upon the facts and law of every case, a judge must “to the greatest extent possible, be free and appear to be free from political influence and political pressure.” Mont. Code of Judicial Conduct, Rule 4.2, Comment [1]. ‘Public confidence in the independence and impartiality of the judiciary is eroded if judges or judicial candidates are perceived to be subject to political influence.” Mont. Code of Judicial Conduct, Rule 4.2, Comment [3].
¶43 The United States Supreme Court has affirmed the importance of judicial integrity and in maintaining public respect for the judiciary.
‘Courts, in our system, elaborate principles of law in the course of resolving disputes. The power and the prerogative of a court to perform this function rest, in the end, upon the respect accorded to its judgments. The citizen’s respect for judgments depends in turn upon the issuing court’s absolute probity. Judicial integrity is, in consequence, a state interest of the highest order.” [Emphasis added.]
Caperton v. A. T. Massey Coal Co., Inc.,
¶44 Montana judicial elections would be particularly vulnerable to large levels of independent spending, both in terms of fairness and in terms of the public perception of impartiality. Litigants appearing before a judge elected after a large expenditure of corporate funds could legitimately question whether their due process rights were adversely impacted. In the 2008 contested election for Chief Justice of the Montana Supreme Court, evidence presented by the State in the District Court indicated that the total expenditure for media advertising was about $60,000. It is clear that an entity like Massey Coal, willing to spend even hundreds of thousands of dollars, much less millions, on a Montana judicial election could effectively drown out all other voices. The historic Heinze-Anaconda conflict noted above illustrates the obvious negative and corrupting effects of a “bought” judiciary.
¶45 Sandra Day O’Connor recently wrote in her introduction to The New Politics of Judicial Elections that the “crisis of confidence in the impartiality of the judiciary is real and growing.” The Executive Summary in that same report noted a study of the nation’s ten most costly judicial elections shows the extraordinary spending power of “super spender groups,” which are mostly corporate funded. Montana is not immune from such influence and has a compelling interest in precluding corporate expenditures on judicial elections based upon its interest in insuring judicial impartiality and integrity, its interest in preserving public confidence in the judiciary and its interest in protecting the due process rights of litigants.
¶46 As discussed above, the statute has no or minimal impact on MSSF and Champion. Because of this minimal impact, the State is not required to demonstrate a compelling interest to support § 13-35-227(1), MCA. It is required only to demonstrate the less exacting sufficiently important interest. For the same reasons discussed above with regard to the compelling state interest, the statute is clearly supported by important governmental interests. Therefore, as to MSSF and Champion, it passes constitutional muster as well.
¶47 Finally, § 13-35-227(1), MCA, is narrowly tailored to meet its objectives. The statute only minimally affects entitles like MSSF and Champion. Even if it applies directly to WTP, WTP can still speak through its own political committee/PAC as hundreds of organizations in Montana do on an ongoing basis. Unlike the Federal law PACs considered in Citizens United, under Montana law political committees are easy to establish and easy to use to make independent expenditures for political speech. As the Bender affidavit submitted by the State in District Court confirms, corporate PACs can make unlimited independent expenditures on behalf of candidates. The difference then is that under Montana law the PAC has to comply with Montana’s disclosure and reporting laws. And as noted earlier, corporations are allowed to contribute to ballot issues in Montana, which is a significant distinction because ballot issues often have a direct impact on corporate business activities within Montana but present less danger of corruptive influences that have concerned Montana voters since 1912. The statute only addresses contributions regarding candidates for state political office.
CONCLUSION
¶48 Citizens United does not compel a conclusion that Montana’s law prohibiting independent political expenditures by a corporation related to a candidate is unconstitutional. Rather, applying the principles enunciated in Citizens United, it is clear that Montana has a compelling interest to impose the challenged rationally-tailored statutory restrictions. We reverse the District Court and enter summary judgment in favor of the Montana Attorney General and the Commissioner of Political Practices and against WTP, MSSF and Champion. Consequently, the cross-appeal on the issue of attorney fees is moot.
Notes
Under Montana law corporations are allowed to make independent expenditures on ballot issues. Montana Chamber of Commerce v. Argenbright,
In a decision in October, 2010, the Montana Commissioner of Political Practices found that WTP had created a sham organization through which to channel campaign funds, and that its arguments to the contrary were deceptive. The Commissioner further concluded that WTP’s failure to register as a political committee and to disclose the true source and disposition of the funds it raised ‘frustrates the purpose of Montana’s Campaign Finance and Practices Act [and] raises the specter of corruption of the electoral process....”
The Court noted, for example, the “scant evidence” of the effects of independent expenditures. Citizens United,
Montana is the fourth largest state in size, covering over 145,000 square miles, and has a population less than one million people.
The State has additionally argued that it has a compelling interest in protecting the rights of dissenting shareholders who disagree with the political stance of corporate spending. We do not reach that issue because it has not been presented in the factual framework of this case.
Dissenting Opinion
dissenting.
¶49 I agree with Justice Nelson that we are constrained by Citizens United to declare §13-35-227(1), MCA, unconstitutional to the extent it prohibits independent corporate expenditures for political speech. In my view, the State of Montana made no more compelling a case than that painstakingly presented in the 90-page dissenting opinion of Justice Stevens and emphatically rejected by the majority in Citizens United. Though I believe Citizens United requires us to affirm the District Court, we must in any event anticipate the consequences should the Court’s holding today be reversed. Rather than inventing distinctions in what I fear will be a vain attempt to rescue Montana’s Corrupt Practices Act, I would construe the statute in a manner to preserve what remains of its constitutionality and to further the legislature’s underlying intent to prevent corruption.
¶50 Citizens United holds unequivocally that Tn]o sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.”
¶51 This Court attempts to construe statutes in a manner that avoids unconstitutional interpretation. Oberson v. USDA,
¶52 Plaintiffs seek a ruling invalidating subsection (1) of §13-35-227, MCA. That subsection prohibits a corporation from making “a contribution or an expenditure in connection with a candidate or a political committee that supports or opposes a candidate or a political party.” Subsection (2) of the statute, not challenged here, prohibits a person, candidate, or political committee from accepting or receiving a corporate contribution. Subsection (3) of the same statute allows ‘the establishment or administration of a separate, segregated fund to be used for making political contributions or expenditures if the fund consists only of voluntary contributions solicited from an individual who is a shareholder, employee, or member of the corporation.”
¶53 Section 13-35-227(3), MCA, when read in the context of Montana’s overall campaign
¶54 I would therefore hold that the Commissioner constitutionally may extend Montana’s disclosure and reporting laws to independent expenditures by corporate entities made on behalf of candidates or political committees, just as the Commissioner has done for corporate expenditures on ballot issue campaigns. Without such a holding, and given that the Montana Legislature will not meet in general session prior to the next election, Montana voters may be left in the dark if § 13-35-227(1), MCA, is invalidated by the nation’s highest court.
¶55 Applying § 13-35-227(3), MCA, in a constitutionally-permitted fashion to expenditures from a corporate treasury will further the government’s interest in disclosure requirements and will not disrupt the statute’s integrity. As noted by the Majority, only part of the original Corrupt Practices Act survives in §13-35-227, MCA. Opinion, ¶ 28. The statute has been amended numerous times in its 100-year history. Subsection (3) was added in 1979. 1979 Mont. Laws ch. 404, 1011. The statute’s most recent modification was in 2003, after federal courts invalidated the law’s prohibition against corporate contributions and expenditures in ballot issue campaigns. Mont. Chamber of Com. v. Argenbright,
¶56 Through the years, while legislative history is scant, the legislature’s palpable intent was to prevent corruption in Montana elections. Opinion, ¶¶ 22-28. Prohibition of corporate contributions has been one means to achieve that goal; disclosure has been another. State Senator Miles Romney, sponsor of the 1975 amendment that first introduced the ban on corporate spending in ballot issue campaigns, commented in part that “everyone should know who is giving how much” and statements of contributions would facilitate that knowledge. Mont. H. Jud. Comm., Hearing on SB 97, at 5 (Mar. 7, 1975). Through its various iterations, inducement for the legislation has been the legislature’s desire to prevent corruption in elections. Absent constitutional authority for an outright ban on corporate spending, prohibiting application of the “voluntary contributions” clause to expenditures made under subsection (1) will further, not frustrate, the accountability that fosters prevention of corruption.
¶57 Construing the statute to preserve its requirement for a separate segregated fund from which corporate expenditures are made will facilitate disclosure under requirements promulgated by the Montana Commissioner of Political Practices. The Affidavit of Dennis Unsworth, submitted by the State before the District Court, described the disclosure process in place at the present time for corporate spending on ballot issue measures. Unsworth stated that independent expenditures from a corporate treasury to support or oppose a ballot measure must be reported on the Commissioner of Political Practices’ Form C-4. The C-4 form is for ‘incidental political committees,” which are defined in the Commissioner’s rules as “a political committee that is not specifically organized or maintained for the primary purpose of influencing elections but that may incidentally become a political committee by making a contribution or expenditure to support or oppose a candidate and/or issue.” Admin. R. M. 44.10.327(2)(c). The only other types of political committees are “principal campaign committees” and ‘independent committees,”
¶58 The integrity and purpose of the law can be salvaged by permitting the Commissioner to apply ‘incidental committee” status to a separate fund in a corporation’s treasury from which election-related expenditures are made. This would ensure that corporate contributions are on the same footing, and are given the same public daylight, as contributions from individuals, political action committees, and political parties. See generally, §13-37-225, MCA; Admin. R. M. 44.10.321 -44.10.333.
¶59 The value of disclosure in preventing corruption cannot be understated. ‘tB]y revealing information about the contributors to and participants in public discourse and debate, disclosure laws help ensure that voters have the facts they need to evaluate the various messages competing for their attention.” Human Life of Wash., Inc. v. Brumsickle,
¶60 In conclusion, I believe it is our unflagging obligation, in keeping with the courts’ duty to safeguard the rule of law, to honor the decisions of our nation’s highest Court. “Americans today accept the [United States Supreme] Court’s role as guardian of the law. They understand the value to the nation of following Court decisions,... even when they disagree with a Court decision and even when they may be right and the decisions may be wrong.” Stephen Breyer, Making Our Democracy Work: A Judge’s View 214 (Alfred A. Knopf 2010). Citizens United makes clear that a state’s outright ban on corporate political expenditures violates the First Amendment. Since § 13-35-227(1), MCA, imposes just such a ban, I respectfully dissent from the Court’s decision to uphold the statute in its entirety. I would instead uphold only those provisions necessary to ensure independent corporate expenditures properly are reported and full disclosure is made to inform citizens and shareholders of the corporation’s election-related spending.
Dissenting Opinion
dissenting.
¶61 I respectfully dissent from the Court’s decision.
I. INTRODUCTION
¶62 The Supreme Court
¶63 As a result, the critical question presented in the case now before us is simply this: Has the State of Montana identified a compelling state interest, not already rejected by the Supreme Court, that would justify the outright ban on corporate expenditures for political speech effected by § 13-35-227(1), MCA? Having considered the matter, I believe the Montana Attorney General has identified some very compelling reasons for limiting corporate expenditures in Montana’s political process. The problem, however, is that regardless of how persuasive I may think the Attorney General’s justifications are, the Supreme Court has already rebuffed each and every one of them. Accordingly, as much as I would like to rule in favor of the State, I cannot in good faith do so.
¶64 The Court, on the other hand, views the matter differently. The Court concludes that Montana may bar corporations from using general treasury funds for political speech-Citizens United notwithstanding-because ‘Montana has unique and compelling interests to protect.” Opinion, ¶ 37. What “unique” interests render Montana exempt from Citizens United? One searches the Court’s Opinion in vain to find any. The Court states that Montana has “a clear interest in preserving the integrity of its electoral process” and “an interest in encouraging the full participation of the Montana electorate.” Opinion, ¶ 38. Yet, Montana is hardly unique in this regard. Every state in the Union is interested in preserving the integrity of its electoral process and in encouraging the full participation of its electorate. The Court asserts that Montana has interests in “protecting and preserving its system of elected judges,” “preserving the appearance of judicial propriety and independence so as to maintain the public’s trust and confidence,” and “protecting the due process rights of litigants.” Opinion, ¶¶ 39, 40, 45. But surely every state with an elected judiciary has these same interests. The Court also cites ‘the compelling interest of the people of Montana in strong voter participation in the process.” Opinion, ¶ 41. Again, however, the people of Montana are certainly not the only people in the United States with a compelling interest in strong voter participation. ¶65 The fact is that none of the interests identified by the Court are unique to Montana. What the Court is really saying is that Montana has a unique history and unique qualities which make Montana uniquely susceptible to the corrupting influence of unlimited corporate expenditures. Indeed, the Court points to Montana’s history involving the Copper Kings-their bribery of public officials, their manipulation of state government, and their control over local judges in the late 1800s and early 1900s. Opinion, ¶¶ 22-28. Based on this history, the Court concludes that Montana voters ‘had a compelling interest to enact the challenged statute in 1912.’’Opinion, ¶ 36. Furthermore, the Court concludes that the dangers of corporate influence and domination still exist in Montana. Opinion, ¶¶ 29-31. In fact, the Court asserts that Montana is “especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government.” Opinion, ¶ 37. According to the Court, this is owing to Montana’s sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor, and low campaign costs. Opinion, ¶ 37. Given these characteristics, the Court opines that unlimited corporate money would ‘irrevocably change the dynamic of local Montana political office races, which have historically been characterized by the low-dollar, broad-based campaigns run by Montana candidates.” Opinion, ¶ 38. Moreover, the infusion of unlimited corporate money in support of or opposition to a targeted candidate would “tninimize[ ] the impact of individual citizens” in the political process and leave the average citizen “effectively shut out of the process.” Opinion, ¶¶ 38, 41. Accordingly, the Court holds that Montana may flat-out prohibit direct political spending by corporations.
¶66 Respectfully, I cannot agree that this ‘Montana is unique” rationale is consistent with Citizens United. And I seriously doubt
If elected officials succumb to improper influences from independent expenditures; if they surrender their best judgment; and if they put expediency before principle, then surely there is cause for concern. We must give weight to attempts by [the legislative branch] to seek to dispel either the appearance or the reality of these influences. The remedies enacted by law, however, must comply with the First Amendment; and, it is our law and our tradition that more speech, not less, is the governing rule. An outright ban on corporate political speech during the critical preelection period is not a permissible remedy.
¶67 The federal law struck down in Citizens United (2 U.S.C. §441b, as amended by §203 of the Bipartisan Campaign Reform Act of 2002) prohibited corporations from expressly advocating the election or defeat of candidates and from broadcasting electioneering communications within 30 days of a primary election and 60 days of a general election. Citizens United,
¶68 Unquestionably, Montana has its own unique history. No doubt Montana also has compelling interests in preserving the integrity of its electoral process and in encouraging the full participation of its electorate. And Montana may indeed be more vulnerable than other states to corporate domination of the political process. But the notion argued by the Attorney General and adopted by the Court-fehat these characteristics entitle Montana to a special ‘ho peeing” zone in the First Amendment swimming pool4s simply untenable under Citizens United.
¶69 Admittedly, I have never had to write a more frustrating dissent. I agree, at least in principle, with much of the Court’s discussion and with the arguments of the Attorney General. More to the point, I thoroughly disagree with the Supreme Court’s decision in Citizens United. I agree, rather, with the eloquent and, in my view, better-reasoned dissent of Justice Stevens. As a result, I find myself in the distasteful position of having to defend the applicability of a controlling precedent with which I profoundly disagree.
¶70 That said, this case is ultimately not about my agreement or disagreement with the Attorney General or our satisfaction or dissatisfaction with the Citizens United decision. Whether we agree with the Supreme Court’s interpretation of the First Amendment is irrelevant. In accordance with our
¶71 Granted, there are some in the legislative and executive branches of government who would call-and, in fact, have called-for Montana to thumb its nose at the federal government, to disregard federal law, and to boldly ignore the Supremacy Clause (U.S. Const., art. VI, cl. 2). See e.g. Mike Dennison, Bills Test State’s Power to Nullify Fed Laws, Helena Independent Record (Feb. 13,2011). Regardless of those views, however, all elected officials in Montana-legislative, executive, and judicial-are sworn to “support, protect and defend the constitution of the United States.”Mont. Const, art. Ill, §3. Obviously, this means in accordance with the Supreme Court’s interpretations of the United States Constitution. Thus, when the highest court in the country has spoken clearly on a matter of federal constitutional law, as it did in Citizens United, the highest court in Montana-fehis Court-is not at liberty to disregard or parse that decision in order to uphold a state law that, while politically popular, is clearly at odds with the Supreme Court’s decision. This is the rule of law and is part and parcel of every judge’s and justice’s oath of office to “support, protect and defend the constitution of the United States.” In my view, this Court’s decision today fails to do so.
¶72 The Supreme Court has emphatically rejected the notion that corporate political speech may be restricted based on interests in protecting against political and campaign corruption, safeguarding the ability of individual citizens to compete and participate in the political process, and preserving judicial integrity and impartiality. It makes no sense whatsoever that a state may rely on these very same interests-despite their rejection by the Supreme Court-as grounds for muzzling corporate speech simply because the state’s history, demographics, economics, and elections are in some way “unique.” It also makes no sense that, on one hand, the First Amendment protects corporate expenditures for political speech at the federal level and, apparently, throughout the rest of the country
¶73 Therefore, and with all due respect to my colleagues, I believe this Court is simply wrong in its refusal to affirm the District Court. Like it or not, Citizens United is the law of the land as regards corporate political speech. There is no ‘Montana exception.” The proof of the Court’s error is found in a comparison of the rationales provided in the Court’s Opinion with the statements by the
II. CITIZENS UNITED
¶74 A significant portion of the Citizens United decision is devoted to the threshold question whether the Supreme Court should even be deciding the constitutional matters that it ultimately does decide. Indeed, the five Justices in the majority-justice Kennedy joined by Chief Justice Roberts, Justice Scalia, Justice Thomas, and Justice Alito-eonsumed numerous pages attempting to explain why they were (1) addressing a claim that Citizens United had expressly dismissed in the district court (its facial challenge to the law’s constitutionality), (2) deciding the case on grounds that arguably were broader than necessary to resolve Citizens United’s claim, and (3) overruling prior precedents notwithstanding the doctrine of stare decisis. See Citizens United,
[sJtare decisis protects not only personal rights involving property or contract but also the ability of the elected branches to shape their laws in an effective and coherent fashion. Today’s decision takes away a power that we have long permitted these branches to exercise. State legislatures have relied on their authority to regulate corporate electioneering, confirmed in [Austin v. Mich. Chamber of Commerce,494 U.S. 652 ,110 S. Ct. 1391 (1990)], for more than a century. The Federal Congress has relied on this authority for a comparable stretch of time, and it specifically relied on Austin throughout the years it spent developing and debating BCRA. The total record it compiled was 100,000 pages long. Pulling out the rug beneath Congress after affirming the constitutionality of §203 six years ago shows great disrespect for a coequal branch.
Citizens United,
¶75 While I believe the Citizens United dissent makes a persuasive argument that the majority need not and should not have rendered such a broad constitutional holding, the fact remains that the majority did so, striking down the federal law as facially invalid. Thus, my focus hereafter is on what the majority specifically held regarding corporate independent expenditures on political speech. I approach this in step-by-step fashion.
A. The First Amendment Applies to Political Speech by Corporations
¶76 The First Amendment provides that ‘Congress shall make no law ... abridging the freedom of speech.” This protection extends to corporations and to the context of political speech. Citizens United, 130 S. Ct. at 899, 900. Political speech does not lose First Amendment protection simply because its source is a corporation. Citizens United,
B. Section 441b Burdens Corporate Political Speech
¶77 The law at issue (2 U.S.C. §441b, as amended by §203 of the BCRA) prohibits corporations and unions from using general treasury funds to make independent expenditures that expressly advocate the election or defeat of candidates. It also prohibits the broadcast of electioneering communications within 30 days of a primary election and 60 days of a general election. Citizens United,
C. Standard of Review: Strict Scrutiny
¶78 “While it might be maintained that political speech simply cannot be banned or restricted as a categorical matter,’’the following standard “provides a sufficient framework for protecting the relevant First Amendment interests in this case.” Citizens United,
D. The Governmental-Function Interest
¶79 The First Amendment prohibits restrictions that distinguish among different
E. The Antidistortion Interest
¶80 The Supreme Court in Austin v. Mich. Chamber of Commerce,
¶81 The problem with this “antidistortion rationale,” however, is that it is inconsistent with the First Amendment. Citizens United,
Buckley rejected the premise that the Government has an interest ‘in equalizing the relative ability of individuals and groups to influence the outcome of elections.” Buckley was specific in stating that “the skyrocketing cost of political campaigns” could not sustain the governmental prohibition. The First Amendment’s protections do not depend on the speaker’s “financial ability to engage in public discussion.”
Citizens United,
¶82 Additionally, the antidistortion rationale interferes with the “open marketplace” of ideas protected by the First Amendment by permitting the government to ban the political speech of millions of associations of citizens. Citizens United,
F. The Anticorruption Interest
¶83 The Government argues that corporate political speech may be banned in order to prevent corruption or its appearance. The Buckley Court found this interest sufficiently important to allow limits on contributions. Citizens United,
¶84 “‘The hallmark of corruption is the financial quid pro quo: dollars for political favors.’ ” Citizens United,
¶85 Independent expenditures, in contrast, have a substantially diminished potential for abuse. Citizens United,
¶86 “When Buckley identified a sufficiently important governmental interest in preventing corruption or the appearance of corruption, that interest was limited to quid pro quo corruption.” Citizens United,
¶87 The fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt. Citizens United,
‘Favoritism and influence are not ... avoidable in representative politics. It is in the nature of an elected representative to favor certain policies, and, by necessary corollary, to favor the voters and contributors who support those policies. It is well understood that a substantial and legitimate reason, if not the only reason, to cast a vote for, or to make a contribution to, one candidate over another is that the candidate will respond by producing thosepolitical outcomes the supporter favors. Democracy is premised on responsiveness.”
Citizens United,
¶88 In sum, the hallmark of corruption is the financial quid pro quo: dollars for political favors. Citizens United,
G. The Shareholder-Protection Interest
¶89 The Government argues that corporate independent expenditures can be limited in the interest of protecting dissenting shareholders from being compelled to fund corporate political speech with which they do not agree. The First Amendment, however, does not allow the government to restrict corporate speech based on a shareholder’s disagreement with the political views of the corporation. Citizens United,
H. Foreign Influence
¶90 ‘We need not reach the question whether the Government has a compelling interest in preventing foreign individuals or associations from influencing our Nation’s political process.” Citizens United,
I. Conclusion
¶91 Based on the foregoing, the Supreme Court overruled its decision in Austin. ‘We return to the principle established in Buckley and Bellotti that the Government may not suppress political speech on the basis of the speaker’s corporate identity. No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporations.” Citizens United,
III. THE PLAINTIFFS’ CLAIMS
¶92 Before examining this Court’s rationales
¶93 First, the Court asserts that neither Gary Marbut, the founder of Montana Shooting Sports Association (MSSA), nor Kenneth Champion, the sole shareholder of Champion Painting, Inc., has demonstrated “any material way” in which Montana law has hindered or censored their political activity or speech. Opinion, ¶ 17. Of course, Marbut and Champion are not parties to this lawsuit, and their speech rights are not at issue here. Hence, whether Marbut and Champion, as individuals, have been hindered or censored in their political activity or speech is totally irrelevant. The question is whether the speech rights of MSSA and Champion Painting, as incorporated entities, have been infringed.
¶94 Second, the Court asserts that MSSA has failed to demonstrate that its speech has been impaired by § 227 because Montana law places no restriction on MSSA to spend its members’ dues on political advocacy. Opinion, ¶ 17. As support for this, the Court cites the affidavit of former Commissioner of Political Practices Dennis Unsworth. What Unsworth specifically says, however, is this: TMSSA] has been and continues to be free to spend its member dues and donations from its treasury regardless of its corporate status, as long as it complies with the filing requirements described above and meets the criteria for a voluntary association.” (Emphasis added.) The affidavit of Mary Baker, program supervisor in the Office of the Commissioner of Political Practices, likewise states that “there is nothing in Montana’s campaign finance laws that would prohibit [MSSA] from registering itself as a committee and making independent expenditures from its corporate treasury, if it meets our office’s criteria for a voluntary association.”
A voluntary association that incorporates can spend its members’ dues and donations on campaign contributions and independent expenditures from its treasury, if it: (1) is formed for the express purpose of promoting political ideas, and could not engage in business activities; (2) has no shareholders or other persons affiliated so as to have a claim on its assets or earnings; (3) is not established by a business corporation, and does not accept contributions from business corporations.
¶95 Contrary to the Court’s implication, there has been no determination in this case that MSSA in fact meets the criteria of a “voluntary association.” And one of the exhibits attached to Unsworth’s affidavit indicates that MSSA does not satisfy the criteria. The exhibit is an “advisory opinion” issued by former Commissioner Linda Vaughey on September 25, 2003, in which she addresses whether the nonprofit corporation People for Responsible Government (PRG) may engage in political activities in connection with candidates for public office. Vaughey starts with the premise that §227 “appears on its face to prohibit all corporations, including nonprofit corporations, from making contributions or expenditures in connection with candidates, other than through separate, segregated funds.” Vaughey then observes that, based on Fed. Election Commn. v. Mass. Citizens for Life, Inc.,
[njothing in the Articles of Incorporation, the Bylaws, or the other information youhave provided confirms that PRG was not established by a business corporation or a labor organization. Moreover, you have not provided any information establishing that PRG does not directly or indirectly accept donations or contributions of anything of value from business corporations or labor organizations. [Emphasis added.]
Likewise here, there is no evidence in the record-mot in Marbut’s affidavit, in MSSA’s Articles of Incorporation (attached to Marbut’s affidavit), in Unsworth’s affidavit, in Baker’s affidavit, or in any other document-establishing that MSSA “does not directly or indirectly accept donations or contributions of anything of value from business corporations or labor organizations.” Hence, MSSA does not qualify as a ‘Voluntary association” under the Commissioner’s definition, and MSSA is not allowed to use its general treasury funds to make independent expenditures in connection with candidate elections. MSSA states in the First Amended Complaint that it wishes to “use its corporate funds to directly support or oppose candidates.” In light of the foregoing discussion, §227(1) bars MSSA from doing so. The Court is flat wrong, therefore, in stating that “the statute has no or minimal impact” on MSSA. Opinion, ¶ 46.
¶96 Third, the Court likewise misstates the impact on Champion Painting. For one thing, the Court again seems to be improperly focused on Champion’s speech rights, which are not at issue, rather than Champion Painting’s speech rights, which are at issue. Opinion, ¶ 18. The Court also suggests that the only reason Champion Painting is participating in this lawsuit is so that its shareholder (Champion) can be allowed to make “candidate endórsemenos]” using the company name. Opinion, ¶ 18. Finally, the Court asserts that because Champion, as sole shareholder, can simply establish a PAC to advocate for Champion Painting’s interests and expend funds that he will decide to contribute, Opinion, ¶ 18, “the statute has no or minimal impact on ... Champion,” Opinion, ¶ 46. The Court is wrong on all counts.
¶97 According to the First Amended Complaint,
Champion Painting intends to spend corporate funds to educate the citizens of Montana and Bozeman about political candidates and ballot issues that will either positively or negatively impact Montana’s small businesses, and Champion Painting intends to publicly support or oppose candidates and issues relating to Montana’s small businesses. The corporate funds will be spent to purchase TV spots and radio advertisements, and to create and distribute brochures and fliers ....
Champion’s affidavit is to the same effect: “In addition to being politically active as an individual, I would like for Champion Painting to be politically active. . . . Since Champion Painting is a small business, its voice will be more effective than my voice when supporting or opposing candidates who may have an impact on small businesses.” It is apparent, then, that Champion Painting’s claim is about the corporation’s ability to speak, not its shareholder’s ability to speak. And as the Court concedes, §227(1) forbids the expenditure of Champion Painting’s corporate funds to support or oppose candidates. Opinion, ¶ 18. Nothing in §227 exempts corporations held by a sole shareholder. As for the Court’s theory that Champion Painting could speak through a PAC, Opinion, ¶ 18, the Supreme Court rejected this approach as discussed above and noted again below.
IV. COMPARISON
¶98 I now turn to a comparison of the rationales provided in the Court’s Opinion with the statements by the Supreme Court rejecting those rationales. Again, the specific issue is the constitutionality of § 227(1)’s prohibition on corporate expenditures in connection with a candidate or a political committee that supports or opposes a candidate or a political party. The disclosure laws, the prohibition on direct corporate contributions, and the Corrupt Practices Act as a whole have not been challenged. Opinion, ¶¶ 2, 8.
A. The Political Committee Alternative
¶99 Section 227(1) states that “[a] corporation may not make a contribution or an expenditure in connection with a candidate or a
¶100 The Court asserts that, in Montana, political committees are “easy to establish,”“easy to use,” and an “effective alternative to direct corporate spending for engaging in political speech.” Opinion, ¶¶ 21, 47. The Supreme Court, however, stated: “A PAC is a separate association from the corporation. So the PAC exemption from [the law’s] expenditure ban does not allow corporations to speak.” Citizens United,
¶101 The Court ignores the Supreme Court’s holding that a PAC is “separate” from the corporation and, thus, is not a valid alternative to direct corporate expenditures. Indeed, the Court asserts that the Supreme Court rejected PACs ‘because of the burdensome, extensive, and expensive Federal regulations that applied.” Opinion, ¶ 12. This is false. Granted, the Supreme Court briefly noted that ‘PACs are burdensome alternatives; they are expensive to administer and subject to extensive regulations.” Citizens United,
B. Anticorruption and Restraining Corporate Influence
¶102 The Court cites various examples of “well-financed corruption” perpetrated by F. Augustus Heinze, the Anaconda Company, and W. A. Clark. Opinion, ¶¶ 23-28. Notably, some of these examples involved blatant bribery and quid pro quo corruption (i.e., dollars for political favors), but it is not clear that any of them involved independent expenditures (i.e., political speech presented to the electorate that is not coordinated with a candidate) in exchange for political favors. In any event, the Court then proceeds to paint a dismal picture of the corporate “domination” and Influence” that has persisted in Montana. Opinion, ¶ 29. From this discussion, the Court concludes as follows. First, voters had a “compelling interest”to enact the challenged statute in 1912 because ‘the real social and political power [in Montana] was wielded by powerful corporate managers to further their own business interests,” and the voters were fed up with the “corrupt practices” and ‘heavy-handed influence” asserted by the special interests controlling Montana’s political institutions. Opinion, ¶ 36. Second, the statute ‘has worked to preserve a degree of political and social autonomy” from “shadowy” corporate figures who seek to promote their own interests. Opinion, ¶ 37. And finally, there is still a sufficient interest to support the statute because ‘Tissues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor, and low campaign costs make Montana especially vulnerable to continued efforts of corporate control.” Opinion, ¶ 37.
¶ 103 It is patently unconstitutional, however, for the government to silence a speaker on the ground that the speaker might otherwise exert an undesired amount of ‘influence” or “control” in government and politics. Under such a rationale, any disfavored class of speakers could be censored if thought to be too ‘influential.” The Supreme
¶104 ‘Favoritism and influence are not ... avoidable in representative politics,” and ‘Tr]eliance on a generic favoritism or influence theory... is at odds with standard First Amendment analyses because it is unbounded and susceptible to no limiting principle.” Citizens United,
¶105 The Court tries to distinguish Citizens United as “decided upon its facts” and involving only federal laws and federal elections, while this case “concerns Montana law, Montana elections and ... Montana history.” Opinion, ¶¶ 11,16. Yet, Bellotti involved a state law, and the Supreme Court in Citizens United expressly noted that
[Bellotti] rested on the principle that the Government lacks the power to ban corporations from speaking. Bellotti did not address the constitutionality of the State’s ban on corporate independent expenditures to support candidates. In our view, however, that restriction would have been unconstitutional under Bellotti’s central principle: that the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.
Citizens United,
¶106 Like its influence”rationale, the Court’s “corruption”rationale is also untenable. Regardless of the history of‘bribery,” “control,” and “naked corporate manipulation” recounted by the Court, Opinion, ¶¶ 23,25,28, plaintiffs here do not challenge the statutory prohibition on corporate contributions. Rather, they challenge the prohibition on corporate expenditures. And the Supreme Court stated very clearly “that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.” Citizens United,
¶107 As for the Court’s fear that invalidation of § 227(l)’s prohibition on independent expenditures by corporations will return Montana to its pre-1912 days of corruption and corporate domination, the Supreme Court answered this concern as follows:
If elected officials succumb to improper influences from independent expenditures; if they surrender their best judgment; and if they put expediency before principle, then surely there is cause for concern. We must give weight to attempts by [the legislature] to seek to dispel either the appearance or the reality of these influences. The remedies enacted by law, however, must comply with the First Amendment; and, it is our law and our tradition that more speech, not less, is the governing rule. An outright ban on corporate political speech ... is not a permissible remedy.
Citizens United,
C. Citizen Protection
¶108 The Court observes that allowing unlimited independent expenditures of corporate money into the Montana political process would “drastically change campaigning by shifting the emphasis to raising funds.”Opinion, ¶ 30. Direct political spending by corporations could also “significantly affect the outcome of elections.” Opinion, ¶ 32. The Court explains that Montana has a small population and enjoys political campaigns marked by person-to-person contact and a low cost of advertising compared to other states. Opinion, ¶ 30. Thus, the infusion of unlimited corporate money in support of or opposition to a targeted candidate would leave the average citizen candidate “unable to compete against the corporate-sponsored candidate.” Opinion, ¶ 38. ¶109 Furthermore, Montana voters feel they do not really “count”in the political process unless they can make a material financial contribution; and they are concerned, therefore, that special interests hold sway. Opinion, ¶ 31. The percentage of campaign contributions from individual voters is much less in states that do not have restrictions on corporate spending. Opinion, ¶ 33. At present, the individual contribution limit for Montana House, Senate, and District Court races is $160 and for Supreme Court elections is $310. Opinion, ¶ 38. Thus, with the infusion of unlimited corporate money in support of or opposition to a targeted candidate, ‘Montana citizens, who for over 100 years have made their modest election contributions meaningfully count[,] would be effectively shut out of the process.” Opinion, ¶ 38. ‘Clearly the impact of unlimited corporate donations creates a dominating impact on the political process and inevitably minimizes the impact of individual citizens.” Opinion, ¶ 41. The State ‘has an interest in encouraging the full participation of the Montana electorate.” Opinion, ¶ 38; accord Opinion, ¶ 41.
¶110 While I understand the Court’s desire to protect the ability of citizen candidates to compete, and the ability of citizens to meaningfully participate and be heard in the political process, this rationale has been rejected. “ ‘[T]he concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment.’ ” Citizens United,
Austin sought to defend the antidistortion rationale as a means to prevent corporations from obtaining “an unfair advantage in the political marketplace” by using “resources amassed in the economic marketplace.”But Buckley rejected the premise that the Government has an interest ‘in equalizing the relative ability of individuals and groups to influence the outcome of elections.” Buckley was specific in stating that the skyrocketing cost of political campaigns could not sustain the governmental prohibition. The First Amendment’s protections do not depend on the speaker’s financial ability to engage in public discussion.
D. Elected Judges
¶111 The Court next discusses Montana’s interests in “protecting and preserving its system of elected judges,” providing “an independent, fair and impartial judiciary,” and “preserving the appearance of judicial propriety and independence.”Opinion, ¶¶ 39-40. The Court fears that ‘Montana judicial elections would be particularly vulnerable to large levels of independent spending, both in terms of fairness and in terms of the public perception of impartiality.’’Opinion, ¶ 44. The Court cites Sandra Day O’Connor’s recent observation that the “‘crisis of confidence in the impartiality of the judiciary is real and growing.’ 5,
¶112 While I share some of the Court’s concerns,
¶113 Secondly, Caperton v. A.T. Massey Coal Co.,
¶114 Third, Justice Stevens raised this exact issue in his dissent, pointing out that
[t]he majority of the States select their judges through popular elections. At a time when concerns about the conduct of judicial elections have reached a fever pitch, the Court today unleashes the floodgates of corporate and union general treasury spending in these races. Perhaps “Caperton motions” will catch some of the worst abuses. This will be small comfort to those States that, after today, may no longer have the ability to place modest limits on corporate electioneering even if they believe such limits to be critical to maintaining the integrity of their judicial systems.
¶115 Lastly, the Supreme Court’s decision in White,
preserving the impartiality of the state judiciary and preserving the appearance of the impartiality of the state judiciary. Respondents reassert these two interests before us, arguing that the first is compelling because it protects the due process rights of litigants, and that the second is compelling because it preserves public confidence in the judiciary.
White,
¶116 Of relevance to the present discussion, the Supreme Court observed in White that “the notion that the special context of electioneering justifies an abridgment of the right to speak out on disputed issues sets our First Amendment jurisprudence, on its head. Debate on the qualifications of candidates is at the core of our electoral process and of the First Amendment freedoms, not at the edges.”
There is an obvious tension between the article of Minnesota’s popularly approved Constitution which provides that judges shall be elected, and the Minnesota Supreme Court’s announce clause which places most subjects of interest to the voters off limits.... The disparity is perhaps unsurprising, since the ABA, which originated the announce clause, has long been an opponent of judicial elections. That opposition may be well taken (it certainlyhad the support of the Founders of the Federal Government), but the First Amendment does not permit it to achieve its goal by leaving the principle of elections in place while preventing candidates from discussing what the elections are about. The greater power to dispense with elections altogether does not include the lesser power to conduct elections under conditions of state-imposed voter ignorance. If the State chooses to tap the energy and the legitimizing power of the democratic process, it must accord the participants in that process ... the First Amendment rights that attach to their roles.
White,
Minnesota has chosen to select its judges through contested popular elections .... In doing so the State has voluntarily taken on the risks to judicial bias described above. As a result, the State’s claim that it needs to significantly restrict judges’ speech in order to protect judicial impartiality is particularly troubling. If the State has a problem with judicial impartiality, it is largely one the State brought upon itself by continuing the practice of popularly electing judges.
White,
¶118 Perhaps most telling are the remarks of Justice Kennedy-who, as noted, authored the majority opinion in Citizens United. Justice Kennedy agreed that “judicial integrity is ... a state interest of the highest order.” White,
What [a state] may not do, however, is censor what the people hear as they undertake to decide for themselves which candidate is most likely to be an exemplary judicial officer. Deciding the relevance of candidate speech is the right of the voters, not the State. The law in question here contradicts the principle that unabridged speech is the foundation of political freedom.
The State of Minnesota no doubt was concerned, as many citizens and thoughtful commentators are concerned, that judicial campaigns in an age of frenetic fundraising and mass media may foster disrespect for the legal system. Indeed, from the beginning there have been those who believed that the rough-and-tumble of politics would bring our governmental institutions into ill repute. And some have sought to cure this tendency with governmental restrictions on political speech. See Sedition Act of 1798, ch. 74, 1 Stat. 596. Cooler heads have always recognized, however, that these measures abridge the freedom of speech-not because the state interest is insufficiently compelling, but simply because content-based restrictions on political speech are expressly and positively forbidden by the First Amendment. The State cannot opt for an elected judiciary and then assert that its democracy, in order to work as desired, compels the abridgment of speech.
White,
¶119 The principle espoused by Justice Kennedy in White-ttiat a state may not “censor what the people hear as they undertake to decide for themselves which candidate is most likely to be an exemplary judicial officer”4s consistent with the theme of the Citizens United opinion: “[I]t is our law and our tradition that more speech, not less, is the governing rule,”
E. Summary
¶120 In sum, what has happened here is essentially this: The Supreme Court in Citizens United (and in White) rejected several asserted governmental interests; and this Court has now come along, retrieved those interests from the garbage can, dusted them off, slapped a ‘Made in Montana” sticker on them, and held them up as grounds for sustaining a patently unconstitutional state statute. The erroneous premise underlying the Court’s entire approach here is its belief that the Supreme Court rejected the asserted governmental interests only as applied to federal elections. Opinion, ¶¶ 11, 16. Nowhere in its decision did the Supreme Court state that there was something unique about federal elections that precluded the PAC-as-an-alternative theory, the antidistortion rationale, or the anticorruption interest as justifications for restricting independent expenditures by corporations. The Supreme Court simply rejected all of these arguments outright, in broad and unqualified language. Not only that, the Supreme Court expressly noted that “Bellotti did not address the constitutionality of the State’s ban on corporate independent expenditures to support candidates. In our view, however, that restriction would have been unconstitutional under Bellotti’s central principle: that the First Amendment does not allow political speech restrictions based on a speaker’s corporate identity.” Citizens United,
V. CONCLUSION
¶121 As demonstrated, the Supreme Court’s decision in Citizens United is clear with regard to the First Amendment’s protection of corporate political speech. Section 13-35-227(1), MCA, impermissibly restricts such speech by prohibiting corporations from making “an expenditure in connection with a candidate or a political committee that supports or opposes a candidate or a political party.” The statute is, therefore, facially unconstitutional under Citizens United.
¶122 That said, and as noted above, I agree, at least in principle, with the arguments and concerns expressed by the Attorney General and the amici curiae supporting the State. I am deeply frustrated, as are many Americans, with the reach of Citizens United. The First Amendment has now been elevated to a vaunted and isolated position so as to endow corporations with extravagant rights of political speech and, with those rights, the exaggerated power to influence voters and elections.
¶123 Professor Howell suggests that ‘tt]he disconnect between ['Citizens United’s and Caperton’s] statements about corruption” provides Montana an opportunity to preserve its Corrupt Practices Act as applied to judicial elections. See Larry Howell, Once Upon a Time in the West: Citizens United, Caperton, and the War of the Copper Kings, at 26 (available at http://mtlr.org). For my own part, I doubt that approach will be successful. In its zeal to grant corporations unlimited rights of political speech, the Supreme Court summarily dismissed its decision in Caperton with the statement that Caperton ‘is not to the contrary” because its holding “was limited to the rule that the judge must be recused, not that the litigant’s political speech could be banned.” Citizens United,
¶124 Once Citizens United is imposed on elected state judiciaries, I am concerned-as were Justices Stevens, Ginsburg, Breyer, and Sotomayor; as are my former colleagues (see Amicus Brief of Former Montana Supreme Court Justices William Hunt, William Leaphart, James Regnier, Terry Trieweiler and John Warner (Apr. 27, 2011)); and as is the Court in today’s Opinion-that judicial elections will become little better than the corporate bidding wars that elections for partisan offices have already become. I have suggested, therefore, that Montana’s voters may-and probably should-amend the Montana Constitution to implement a merit system for selecting judges. See James C. Nelson, Introduction, 72 Mont. L. Rev. 1, 5-6 (2011); cf. W. William Leaphart, First Right of Recusal, 72 Mont. L. Rev. 287 (2011) (suggesting that Montana adopt an enforceable mechanism for removing Montana justices when potential bias exists).
¶ 125 'While, as a member of this Court, I am bound to follow Citizens United, I do not have to agree with the Supreme Court’s decision.
¶126 Second, I disagree with the premise that unlimited corporate political speech is essential to “enlightened self-government” and aids the electorate in making “informed choices.” Citizens United,
¶127 Furthermore, it defies reality to suggest that millions of dollars in slick television
¶ 128 Third, with respect to the interests of shareholders in not being compelled to fund corporate political speech with which they disagree, I do not believe that participation in “corporate democracy” actually accounts for anything-nnless, of course, the objecting shareholder is an insider or owns a controlling percentage of the outstanding stock. I cannot agree that “corporate democracy” will cause big business and multinational corporations to exercise responsibly their new unlimited power to speak and spend. It won’t, because money, influence, and access are at stake. Any notion to the contrary is simply the triumph of hope over experience.
¶129 Fourth, I absolutely do not agree that corporate money in the form of‘independent expenditures” expressly advocating the election or defeat of candidates cannot give rise to corruption or the appearance of corruption. Of course it can. Even the most cursory review of decades of partisan campaigns and elections, whether state or federal, demonstrates this. Citizens United held that the only sufficiently important governmental interest in preventing corruption or the appearance of corruption is one that is limited to quid pro quo corruption. This is simply smoke and mirrors. See Citizens United,
¶130 Fifth, therefore, I cannot agree with the holding that the prevention of corruption in the form of independent expenditures is not a compelling state interest. There is no plausible reason why a state would not want to protect the integrity of its election process against corruption and undue influence; to do otherwise would render the fundamental right to vote a meaningless exercise. To my knowledge, the First Amendment has never been interpreted to be absolute and gloriously isolated from other fundamental rights and values protected by the Constitution. Yet, Citizens United distorts the right to speech beyond recognition. Indeed, I am shocked that the Supreme Court did not balance the right to speech with the government’s compelling interest in preserving the fundamental right to vote in elections.
¶131 At the same time, though, I am not persuaded that Montana’s experience with corruption is as “unique” as the Attorney General and this Court posit. Each state has its own corruption horror stories and has battled political and election corruption at one time or another. Even a casual examination of the daily newspaper or the evening news proves that battling political corruption is ongoing; like painting the Golden Gate Bridge, when you reach one end, you start over at the other. It should be noted that Montana’s Corrupt Practices Act was adopted in 1912 at a time when the country’s focus was on preventing political corruption, not on protecting corporate influence. Due to intervening changes in the composition and philosophy of the Supreme Court, that focus has now flip-flopped. See Zephyr Teachout, The Historical Roots of Citizens United v. FEC: How Anarchists and Academics Accidentally Created Corporate Speech Rights, 5 Harv. L. & Policy Rev. 163 (2011). Montana’s Corrupt Practices Act has become an historical-and unconstitutional-artifact, and it will have to be legislatively revised to accommodate a changed time and a changed Supreme Court. A number of our sister states have modified their laws in the wake of Citizens United (see ¶ 72 n. 4, supra), and I expect that Montana’s 2013 Legislature
¶132 Lastly, I am compelled to say something about corporate “personhood.” While I recognize that this doctrine is firmly entrenched in the law, see Bellotti,
¶133 Having said all this, I must return to the central point of this Dissent. Regardless of my disagreement with the views of the Citizens United majority, the fact remains that the Supreme Court has spoken. It has interpreted the protections of the First Amendment vis-á-vis corporate political speech. Agree with its decision or not, Montana’s judiciary and elected officers are bound to accept and enforce the Supreme Court’s ruling-in the same way that this Court demands obedience to its rulings, like them or not.
¶134 For these reasons, I dissent from the Court’s analysis in the instant case. I disagree with the Court’s decision to parse Citizens United in a fashion so as to “send a message” to, or be the next “test case” before, the Supreme Court. In my view, this approach is disingenuous. Montana is in the same First Amendment swimming pool as every other state, and the Supreme Court has dictated that its waters are expansive and deep when it comes to corporate political speech. Citizens United is the law of the land, and this Court is duty-bound to follow it. When this case is appealed to the Supreme Court, as I expect it will be, a summary reversal on the merits (see U.S. Sup. Ct. R. 16) would not surprise me in the least.
¶135 In my opinion, District Court Judge Sherlock’s well-reasoned and courageous-though politically unpopular-decision should be affirmed. I cannot agree with this Court’s determination not to do so. Therefore, I respectfully and regretfully dissent.
1 refer to the United States Supreme Court as ‘the Supreme Court.” References to the Montana Supreme Court include ‘the Court,”‘this Court,” “we,” and “our.”
As the Court notes, direct contributions are not at issue here. Opinion, ¶ 8.
The task is all the more distasteful in light of Western Tradition Partnership’s questionable tactics and blatant hypocrisy. See Opinion, ¶¶ 7, 9,19; Br. of Appellants 10-11, 22-23 (Apr. 15, 2011).
See Robert Barnes, Citizens United Decision Reverberates in Courts across Country, Washington Post (May 22, 2011) (‘The [Supreme Court’s] January 2010 decision freeing corporations and unions to spend whatever they like for and against candidates wiped out laws in 24 states banning such spending. Only Montana still wages a lonely court battle to maintain the ban.”); Natl. Conf. of State Legislatures, Citizens United and the States, http://www.ncsl.org/default.aspx?tabid=19607 (updated Jan. 4, 2011) (noting that ‘Ti]n 17 of the 24 states with laws affected by the Citizens United decision, legislation has been introduced to amend the law,” and listing the bills).
Unfortunately, remaking cases is not a phenomenon exclusive to the Supreme Court. See e.g. Western Sec. Bank and Glacier Bancorp, Inc. v. Eide Bailly LLP,
In addition to the foregoing criticisms by the dissent, I note that the Citizens United majority’s approach has also been criticized for flouting the very rhetoric that conservatives have espoused for decades against so-called ‘judicial activism.” See e.g. Erwin Chemerinsky, Op., Conservatives Embrace Judicial Activism in Campaign Finance Ruling, L.A. Times (Jan. 22, 2010); see also Reza Dibadj, Citizens United as Corporate Law Narrative, 16 Nexus 39,40-48 (2010-2011) (noting “technical concerns” and “constitutional problems” with the majority’s approach); J. Harvie Wilkinson III, Of Guns, Abortions, and the Unraveling Rule of Law, 95 Va. L. Rev. 253 (2009) (criticizing the same five-justice majority for not adhering to a conservative judicial methodology in Dist. of Columbia v. Heller,
1 occasionally refer to §13-35-227, MCA, hereafter as ‘Section 227” or “§227.”
An exemption for ‘Voluntary associations”is not codified in the statute. Rather, it is the Commissioner’s “policy”to except such associations from §227(1). Prior to 2003, a narrow category of nonprofit corporations was statutorily permitted to make contributions to or expenditures in connection with ballot issues, notwithstanding the general prohibition on corporate contributions and expenditures. See §13-35-227(1), (4), MCA (2001). But in light of Mont. Chamber of Commerce v. Argenbright,
It is somewhat ironic that the Court would cite Justice O’Connor in the context of discussing Montana’s ‘interest in protecting and preserving its system of elected judges,” given that she has been openly critical of this form of selecting judges. See Republican Party of Minn. v. White,
See James C. Nelson, Keeping Faith with the Vision: Interpreting a Constitution for This and Future Generations, 71 Mont. L. Rev. 299, 311 (2010).
Notably, the Supreme Court eight years earlier rejected as “not a true picture of the American system” the notion that an elected judiciary is completely separate from the enterprise of “representative government.” White,
As reflected in the discussion of White (¶¶ 116-118, supra), and as I have previously noted (Nelson,
Perhaps, ironically, it will come to pass that the best way to insure that a judge or justice does not sit on a case involving a particular corporation is for the corporation to run a vigorous and expensive campaign supporting the judge’s election.
Cf. J. Harvie Wilkinson III, Of Guns, Abortions, and the Unraveling Rule of Law, 95 Va. L. Rev. 253, 255-56 (2009) (‘It is the solemn duty of judges on the inferior federal courts to follow, both in letter and in spirit, rules and decisions with which we may not agree. Our oath demands it, and our respect for the Supreme Court as an institution and for the able and dedicated individuals who serve on it requires no less. But esteem can likewise be manifest in the respectful expression of difference-that too is the essence of the judicial craft.’).
Milton Friedman: the guru, popularizer, and propagandist for unrestrained free-market economics. See Naomi Klein, Shock Doctrine: The Rise of Disaster Capitalism (Henry Holt & Co. 2007).
For example, the Los Angeles Times recently reported that Crossroads GPS, the conservative group co-founded by Karl Rove, released an ad slamming Montana Senator Jon Tester for supporting an Environmental Protection Agency regulation on farm dust. However, one Montana cable show pulled the ad “because the network determined that it was false; the regulation was actually never proposed, and the vote cited in the ad was a procedural measure.”Tom Hamburger & Melanie Mason, Chamber of Commerce Getting Early Start with Attack Ads, L.A. Times (Nov. 16, 2011).