Corporations and the First Amendment: Free Speech Rules (Episode 6)

Here are five rules of free speech and corporations. 

Rule #1: Corporations have First Amendment rights. The Supreme Court's first decision protecting individuals' free expression rights came in 1931. Its first decision protecting a corporation's free expression rights came just five years later, in 1936. That decision involved a newspaper corporation; but the Court's first decision protecting a nonmedia business corporation's free expression rights came five years after that, in 1941. From the 1950s onwards, many Court decisions protected for-profit corporations. Indeed, the very first American court decision striking down a state statute on free speech grounds took place in 1894, and it protected the rights of a corporation.

When the Supreme Court split sharply over corporate speech in the 2010 Citizens United case, no-one doubted that the First Amendment protects corporations generally; the question was whether there was an exception for corporate speech supporting or opposing political candidates.

Why is this so? Partly because corporations are, after all, made up of people. If the government takes a corporation's property, that doesn't hurt the "corporation" in some abstract sense—it hurts the corporation's stockholders. If the government stops The New York Times Co. from criticizing the President, that restricts the First Amendment rights of editors at The New York Times. 

Rule #2: The media doesn't have any greater First Amendment rights than other speakers. The "freedom of the press" isn't the freedom of a business category called "the press." It has been understood, since the 1700s, as the freedom of all to use the printing press (and its technological heirs). There are some statutes that give institutional media special additional rights beyond what the First Amendment gives them—but the Constitution doesn't distinguish reporters from bloggers, or media businesses from other businesses.

This means that the First Amendment protects General Motors and Walmart as much as it protects The New York Times or CNN or The New Republic. If GM's corporate speech could be restricted, then the New York Times' speech could be, too. And because The New York Times' speech can't be restricted, then neither can GM's.

This, by the way, means that First Amendment law doesn't have to decide who is media and who isn't. Is Google media? How about Amazon, which sells electronics, sells books, and makes movies? The Supreme Court doesn't have to decide, because all corporations have First Amendment rights, regardless of whether they are "media."

Rule #3: Unions have free speech rights, too. Citizens United struck down a federal law that banned both corporations and unions from speaking out for or against political candidates.

Rule #4: Individual stockholders can't veto corporations' political spending—whether those corporations publish newspapers or make widgets. Generally speaking, American corporations are run on a majority-of-shares-rules basis; individual objectors can generally sell their stock, but they can't order managers around.

That's a familiar rule for all sorts of spending. If you don't like Ben & Jerry's liberal messages, you don't have to buy their ice cream. But you can't just buy a share and then demand that they stop saying things that you, as a minority stockholder, dislike. Likewise, if you don't like a company's charitable contributions, or the tone of its advertising, or its speech opposing unionization, you can't stop such corporate action even if you own shares. And you can't control The New York Times' editorial policy even if you are a stockholder.

The same is true for spending about political candidates. If a corporation wants to endorse a candidate, dissenting shareholders can't stop that any more than they can stop any of the corporation's other action or speech.

Rule #5:  Corporate and union direct contributions to candidate campaigns can be sharply limited, though independent spending is fully protected. The rationale for this is complicated, but basically direct contributions of money to candidates, whether by corporations or individuals, are less constitutionally protected than speech (including expensive speech) by those corporations or individuals.

So, to sum up:

Rule #1: Restrictions on corporate speech generally violate the First Amendment, to the same extent that restrictions on individual speech do. Some Justices think there should be an exception for speech supporting or opposing candidates and maybe ballot measures, but all the Justices agree that the general rule is that corporations have free speech rights.

Rule #2: That's in part because the institutional media get no special First Amendment rights beyond what others have. So if corporate speech could be restricted, speech by corporate-owned newspapers, magazines, book publishers, movie studios, and the like could be restricted, too.

Rule #3: Union speech is constitutionally protected, also.

Rule #4: Objecting minority shareholders can't block corporate speech with which they disagree, just as they can't block corporate charitable contributions, advertising campaigns, or product designs with which they disagree.

Rule #5: Corporate and union direct contributions to candidate campaigns can be sharply limited, though independent spending is fully protected.

Written by Eugene Volokh, who is a First Amendment law professor at UCLA.
Produced and edited by Austin Bragg, who is not.
Additional graphics by Joshua Swain.

This is the fifth episode of Free Speech Rules, a video series on free speech and the law. Volokh is the co-founder of The Volokh Conspiracy, a blog hosted at Reason.com.

This is not legal advice.
If this were legal advice, it would be followed by a bill.
Please use responsibly.

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Music: "Lobby Time," by Kevin MacLeod (Incompetech.com)
Licensed under Creative Commons: By Attribution 3.0 License
http://creativecommons.org/licenses/by/3.0/