Few decisions in the Supreme Court’s history have been more unpopular than its 2010 ruling in Citizens United v. Federal Election Commission, which declared unconstitutional any restrictions imposed on how much corporations can spend on speech related to elections. One poll found that 85 percent of Democrats, 81 percent of independents, and 76 percent of Republicans think the case was wrongly decided. Nineteen states have passed resolutions calling for a constitutional amendment to overturn the Court’s decision, which is routinely blamed for the influx of vast amounts of money into political campaigns, although the lion’s share still comes from individuals, not corporations.
But what precisely did the Court get wrong in Citizens United? The two most common criticisms are that the decision erroneously extended constitutional rights to corporations, and that it improperly treated a restriction on money as a restraint on speech. A resolution adopted in 2011 by the New York General Assembly of Occupy Wall Street, for example, called for a constitutional amendment “to firmly establish that money is not speech, that human beings, not corporations, are persons entitled to constitutional rights, and that the rights of human beings will never again be granted to fictitious entities or property.” These criticisms are so often repeated that they have become virtual gospel to many on the left.
Yet neither of these familiar critiques holds up. Citizens United was hardly the first Supreme Court decision to recognize a corporation’s constitutional rights; corporations have received constitutional protection almost since America’s founding. Indeed, from 1868 to 1912, the Supreme Court heard more than 10 times as many 14th Amendment cases involving corporations as it did cases concerning African Americans. Nor did the decision break new ground in treating restrictions on the amount of money that can be spent on political campaigns as limits on speech itself, and therefore subject to searching scrutiny. The Supreme Court had established that principle more than three decades earlier, in Buckley v. Valeo (1976), which struck down limits on how much individuals could spend on their own independent speech concerning electoral campaigns, while upholding the limits on how much they could contribute directly to candidates.
Corporations have long been granted constitutional rights, including the rights of property and contract, the right to sue in federal court, protection against unreasonable searches and seizures, the right to equal protection and due process of law, the rights of association and speech, and virtually all of the rights exercised by criminal defendants (with the exception of the privilege against self-incrimination). Moreover, there are sound reasons for extending these rights to corporations. Individuals often create corporations to own and sell property or to engage in contractual relations, so to deny these entities property and contract protections would defeat their central purpose. Likewise, if corporations can be criminally prosecuted—and they can—shouldn’t they have the same protections we generally accord to all criminal defendants? And should courts deny the right of association, speech, or a free press to the NAACP, the ACLU, or The New York Times because these institutions are incorporated? It’s simply not evident on its face why the corporate form or the profit motive should be disqualifying with respect to many constitutional rights.
Nor is it wrong to treat a restriction on how much money can be spent on political-campaign speech as akin to a restriction on speech. A law that limited how much a person could spend each year on political magazines, newspapers, or books, for example, would plainly restrict speech rights, even though in form it regulated only money. Campaign-finance laws raise First Amendment concerns because they single out spending on speech of a particular kind—namely, concerning political campaigns. Indeed, given the inherent advantages of incumbency in electoral contests, there is nearly always a danger that restrictions on campaign spending will serve legislators’ self-interest.
This doesn’t mean that Citizens United was correctly decided. But it does mean that in order to persuasively critique the Court’s reasoning, one must move beyond the most common sound bites. We the Corporations: How American Businesses Won Their Civil Rights, an engaging and accessible new historical account by Adam Winkler of the very long road to Citizens United, should help inform the debate. Just as he did for the Second Amendment in his previous book, Gunfight: The Battle Over the Right to Bear Arms in America, Winkler offers a balanced guide to a controversial constitutional issue, and succeeds in showing that the issue is far more nuanced than advocates on either side care to admit.
There is little evidence that, when the framers sat down to write the Constitution, they considered whether corporations should be protected by the Bill of Rights. This is likely because there were so few corporations around at the time. In all of the United States, there were two incorporated banks, two insurance companies, six canal companies, two bridge-toll companies, and a handful of nonprofit corporations, including Yale and Harvard. This changed at the turn of the 19th century: With industrialization, corporations began to proliferate and quickly found themselves in legal disputes and asserting constitutional protections. The Supreme Court first granted a constitutional right to corporations in 1809. That case, Bank of the United States v. Deveaux, involved the technical but important question of whether the Bank of the United States, a federally chartered corporation, could sue in federal court to challenge a tax that the state of Georgia had imposed on it. The Court ruled that it could, even though, under the literal terms of the Constitution, that right applied only to “citizens.”
The result in Deveaux made sense because, as Winkler explains, “the very reason the corporation was invented was to enable the establishment of a durable, legal entity that could exercise at least some legal rights.” Similarly, concerns about out-of-state litigants getting a fair shake when suing an in-state defendant apply equally to out-of-state individuals and corporations. Corporations are evidently not “citizens”; they cannot vote or serve on juries, for example. But since corporations are made up of citizens, the Court reasoned, they should have the same right to sue as their members.
That reasoning would prove to be a predicate for many of the rights subsequently afforded corporations. In 1819, the Court recognized that Dartmouth College, a charitable corporation, had rights under the Constitution’s contract clause that precluded New Hampshire from unilaterally rewriting its charter in what amounted to a hostile takeover. As in Deveaux, the Court reasoned that a corporation was an association of citizens and should have roughly the same rights, as a collective, as its members did as individuals.
Later, in a 1906 decision that arose from an investigation into price-fixing by tobacco companies, the Court recognized that corporations have Fourth Amendment rights against unreasonable searches and seizures; but it also held that the privilege against self-incrimination, which seeks to protect individual conscience, does not extend to corporations. In 1936, the Court extended free-press protections to the American Press Company, a corporation subjected to discriminatory state taxes in Louisiana by Governor Huey Long because its papers criticized Long. So while the Court has not unthinkingly equated corporations and persons, it has often found that many of the rights of the collective are linked to those rights held by the individuals who compose it.
Winkler is critical of the proposition that corporations should receive constitutional protections because they are associations of individuals who enjoy the same. In his view, if a corporation is a distinct legal entity—one separate from its owners for purposes of limited liability—then the courts should not extend to it rights based on the rights its members have, but rather should consider whether the entity itself deserves rights. He is less clear, however, on what basis he thinks the courts should decide the latter question. The courts, however, have generally granted associations the collective rights of their members, and it is not evident why associations that assume a corporate form should forfeit these rights. Thus, the Court was right to rule, in its 1958 decision in NAACP v. Alabama ex rel. Patterson, that the state of Alabama could not demand that the NAACP disclose the identity of its members despite its corporate form. Allowing Alabama to impose this obligation would violate the right of association of the NAACP’s members—and of the NAACP itself.
Winkler is fond of anomalies and contradictions, and these certainly abound in the history of corporate constitutional law. For example, two of the Supreme Court’s foremost proponents for limits on corporate rights were Roger Taney, author of the Dred Scott decision, and the notorious conservative William Rehnquist. Another example: The use of political-action committees, or PACs, to engage in campaign spending was first developed by labor unions, but it soon became a tool of corporations—by 2002, there were over 1,670 corporate PACs and only about 325 union PACs.
Sometimes, however, Winkler strains too hard to find a contradiction. For example, he traces the notion that speech should be protected because of its value to listeners, irrespective of the identity of the speaker—an argument used to protect corporate speech—to Ralph Nader’s consumer-advocacy group Public Citizen. In 1975, Public Citizen successfully advanced that argument to extend constitutional protection to price advertising about pharmaceutical drugs. Winkler notes that, three years later, the same argument was used to support the extension of speech rights to corporations in a campaign-spending case when the Supreme Court ruled, in First National Bank of Boston v. Bellotti, that the public’s interest in hearing what a corporation had to say regarding a ballot referendum justified extending First Amendment protection to that speech, without regard to whether the corporation itself had a right to speak. But, in fact, this argument had already been accepted a little over a decade earlier, in Lamont v. Postmaster General, when the Court struck down a limit on the receipt within the United States of communist literature mailed from abroad. The argument used in Bellotti, therefore, was available long before Public Citizen’s efforts to protect consumer access to drug-pricing information.
Perhaps the most important lesson of Winkler’s book is that we should have seen Citizens United coming. It did not spring, fully formed, from the head of Justice Anthony Kennedy, much less Zeus; it has deep roots in our nation’s constitutional and economic history. And its premises are not self-evidently wrong—unless you think the NAACP and The New York Times should not be entitled to First Amendment protection, or that restrictions on how much money people can spend on political books and newspapers do not affect their speech rights.
The real problem with Citizens United lies not in the Court’s recognition that limiting corporate spending on political speech raises First Amendment concerns, but rather in its overly narrow conception of the permissible justifications for such limits. To say that speech is protected does not mean that it can’t be regulated, but only that the government must have very important reasons for doing so. In 1990, the Supreme Court upheld the same law that it would eventually strike down in Citizens United. That decision, Austin v. Michigan Chamber of Commerce, recognized that a restriction on campaign spending raised First Amendment concerns, but held that the restriction was justified by the state’s interest in combating the distorting effects of corporate wealth on the electoral process. In Citizens United, the Court rejected this justification, overruled Austin, and held that the only acceptable rationale for limiting campaign spending is to counter bribery and its appearance. And because the Court had long held that “independent expenditures”—money spent to advocate a candidate’s election, but not in coordination with the candidate—were unlikely to lead to bribes, it struck down the limits on such expenditures by corporations.
To understand more precisely what is wrong with Citizens United is critical to any effort to reverse or modify the decision. Reflexive opposition to all constitutional protections for corporations fails to grapple with the many settings in which these rights are warranted. And government restrictions on how much one can spend on political speech do, in fact, limit one’s speech. The problem with Citizens United is more nuanced: Its failure is not in its protection of corporate rights or its view of money as speech, but in its inability to recognize a broader set of justifications for limiting the distorting effects of concentrated wealth. Winkler’s careful history will help us do a better job of getting it right about what Citizens United got wrong.