Free Speech

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

Episode 6 of Free Speech Rules, from UCLA law professor Eugene Volokh

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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/

NEXT: Walmart's Ammo Sales Decision Doesn't Violate the Second Amendment. But the Government Ordering Them To Stop Selling Ammo Would.

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  1. But money isn’t speech!

    1. If that was supposed to be sarcasm, then you need to work on it some more.
      If that was not sarcasm, then your username is entirely appropriate.

  2. I seem to remember a lot of people asserting that corporations have no civil rights, including speech and press rights in the run up to Citizens United and beyond. Indeed, that rhetoric still animates the people who think the case was wrongly decided. The assertion that no one doubted the 1st Amendment protected corporate speech is certainly untrue.

    1. I believe that assertion was about the Justices in Citizens United.

      1. If that is the case then the authors were playing the pronoun game because it is not clear from context that “one” refers to SCOTUS members exclusively.

  3. I’ve never understood that carve-out for campaign donations. So many court decisions seem more like after-the-fact rationalizations for pre-concieved notions than well-thought-out conclusions from first principles. Yes, I’ve read a couple of articles “explaining” the rulings, but they are no more explanatory than saying a plane crashed because a wing fell off.

    1. Money is only speech to the entity spending the money – not the entity receiving it. To the entity receiving it, money is only money. Which means a campaign contribution is not speech but potentially bribery.

      1. If I pay $100 for ad space on a billboard saying “Bob for President”, is this political speech, or a bribe being paid to Bob?

        If I give Bob $100 to put an ad on a billboard saying “Bob for President”, is this political speech, or a bribe being paid to Bob?

        If I and nineteen other people each give $5 to Bob to put an ad on a billboard saying “Bob for President”, is this political speech, or a bribe being paid to Bob?

        If I and nineteen other people each give $5 to an organization that puts an ad on a billboard saying “Bob’s opponent is a poopy head”, is this political speech, or a bribe being paid to Bob?

        1. “If I pay $100 for ad space on a billboard saying “Bob for President”, is this political speech, or a bribe being paid to Bob?”

          It’s political speech. It may also be a bribe paid to Bob, but that doesn’t matter, because the fact that it’s speech places it beyond regulation anyway. The key point here is that you could have spent that same money to say “Eat at Joe’s!” or “Sue, please marry me!”; Regulating the spending based on the content of the speech makes it regulating speech: The government is precluded from conditioning the regulation based on the content of the speech.

          “If I give Bob $100 to put an ad on a billboard saying “Bob for President”, is this political speech, or a bribe being paid to Bob?”

          Bob may spend it on speech, but giving him money isn’t itself speech. It may be regulated as giving money. (Which isn’t necessarily a bribe.)

          “If I and nineteen other people each give $5 to Bob to put an ad on a billboard saying “Bob for President”, is this political speech, or a bribe being paid to Bob?”

          Ditto, it’s giving money.

          “If I and nineteen other people each give $5 to an organization that puts an ad on a billboard saying “Bob’s opponent is a poopy head”, is this political speech, or a bribe being paid to Bob?”

          Back to being speech, because the government isn’t allowed to condition regulation on the content of what you say.

    2. It is assuming that donations can be bribes and made illegal as such. That the line between a legitimate and corrupt purpose is unclear.

      I think that gives to much leeway for restriction but that seems to be the rationale.

    3. I’ve heard that bribery angle before and I don’t buy it (heh heh). It seems to me like saying you can’t ban or tax guns or newspapers out of existence, but you can ban or tax or otherwise limit ammo or ink. The right doesn’t disappear just because the hampering is one step removed.

  4. For Rule #4, isn’t that just an internal corporate rule?

    Supposed the corporation’s Articles of Incorporation actually stated, “Minority shareholders can block corporate speech, charitable contributions, advertising campaigns, or product designs.”

    Or another way, “All decisions about corporate speech, charitable contributions, advertising campaigns, or product designs shall be approved by 100% vote and agreement of all shareholders.”

    1. I am sure those rules COULD be incorporated into the by-laws, but one might find it very, very difficult to get folks to buy any or their stock.

  5. Using money to promote one’s political preferences is, indeed, a form of free speech. Just as voting is a form of free speech.

  6. Proggies don’t like it when corporations engage in free speech.
    But then again, proggies don’t like anyone engaging in free speech.

  7. “Rule #3: Union speech is constitutionally protected, also.”
    The argument is faulty: union members can opt out of having their dues used for political speech, whereas stockholders cannot do the same with their “share” of the corporation’s profits (or spending). And in some cases and/or states, unions must get affirmative permission from members before spending money on politics.

    Also: Good for Volokh for pointing out that the rule allowing corporations free speech protects both the New York Times and General Motors and WalMart.

    But one thing that many “liberal” critics of Citizens United miss is that the same rule protects the ACLU, EFF, Planned Parenthood, etc.

    1. “The argument is faulty: union members can opt out of having their dues used for political speech, whereas stockholders cannot do the same with their “share” of the corporation’s profits (or spending). And in some cases and/or states, unions must get affirmative permission from members before spending money on politics.”

      This is as a statutory matter, and is compensation for the fact that people are being compelled to be members of unions, while nobody is being forced to buy stock in any particular company. There would be no excuse for such laws if union membership were as voluntary as stock ownership.

      As it should be.

  8. There is really only one rule.

    Restricting speech is illegal and employing or otherwise paying them for any service doesn’t entitle you to.

    The definition of “restriction” needs to be clarified. Harassing someone is coercion to restrict their speech as much as any form of harassment is abusive.

  9. I’ve always thought the key point here is that the 1st amendment is phrased as a prohibition upon Congress, “Congress shall make no law…” rather than a protection of some entity’s rights. So who the entity the law applies to is a question you never reach, the analysis stops at, “Is Congress making a law, and does it abridge freedom of speech?” If the answer is “Yes”, the law is unconstitutional, and whose freedom of speech is being abridged is immaterial.

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