Corporate free-speech ruling speaks of shift in Supreme Court

Reporting from Washington — 

The Supreme Court’s ruling last month giving corporations the right to spend freely on elections reflects a profound shift among the conservative justices on the importance of the 1st Amendment and the nature of corporations.

In the 1970s, Justices William H. Rehnquist and Byron R. White said business corporations were “creatures of the law,” capable of amassing wealth but due none of the rights of voters.

By contrast, the court’s current majority described a corporation as an “association of citizens” that deserves the same free-speech rights as an individual. Because speech and debate are good for democracy, they said, the public should welcome more corporate-funded campaign ads.

“To exclude or impede corporate speech is to muzzle the principal agents of the modern economy,” Justice Antonin Scalia said. “We should celebrate rather than condemn the addition of this speech to the public debate.”

The change is a product of the Reagan era of the 1980s, when the administration sought to free business from government regulation. All five justices who made up the majority in last month’s case, Citizens United vs. Federal Election Commission, were either appointed by Reagan or worked as young lawyers in the Reagan administration.

“This is a different brand of conservatism,” said Trevor Potter, an election law expert who served as counsel to Arizona Republican Sen. John McCain’s presidential campaign. “The justices are shaped by society. Those that came after the Great Depression saw government regulation of corporations as natural and necessary. This younger generation sees it very differently. They have a real distrust of government.”

To the earlier generation of justices, corporations were both powerful and potentially dangerous if unchecked by government.

But in the Jan. 21 opinion, Justice Anthony M. Kennedy portrayed corporations as victims of discrimination.

“Premised on mistrust of governmental power, the 1st Amendment stands against attempts to disfavor certain subjects or viewpoints,” Kennedy said. “Yet certain disfavored associations of citizens -- those that have taken the corporate form -- are penalized for engaging in political speech.”

The victory for business corporations did not arise from a case involving a business corporation.

Citizens United, a small nonprofit group of conservative activists, had produced a 90-minute DVD called “Hillary: The Movie,” which they hoped would derail the presidential candidacy of Hillary Rodham Clinton in 2008.

Because the group had received some corporate money, the high court used its case to rule broadly on the free-speech protection for all corporations.

In 1907, Congress began prohibiting corporations from contributing money to candidates and their campaigns. And in 1947, the law began barring corporations and unions from spending money on their own to elect or defeat candidates for Congress and the White House.

The movement to lift those restrictions dates back to the 1970s. In 1971, Lewis F. Powell, a corporate lawyer from Richmond, Va., sent a confidential memo urging the U.S. Chamber of Commerce to fight for corporate rights in the courts.

Two months later, President Nixon nominated Powell to the Supreme Court. In 1978, Powell wrote the court’s first opinion setting out a corporate free-speech right.

The 5-4 ruling struck down a Massachusetts law that prohibited banks and other corporations from spending money to oppose a ballot measure on taxes. Liberal Justices Harry Blackmun and John Paul Stevens joined Powell’s majority. The dissenters included Rehnquist and White.

In the 1990s, Justices Kennedy, Scalia and Clarence Thomas said they would strike down these laws. When President George W. Bush’s two appointees -- Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr. -- joined with them, they had a majority.

Fred Wertheimer, a longtime champion of campaign finance laws, faults the five-justice majority for judicial activism in its January ruling. “They threw out 100 years of national policy, and they did it by inventing a brand-new right for corporations to participate in politics,” he said.

But Allison Hayward, a George Mason University law professor and critic of the campaign funding laws, said the court’s decision stood up for the very old right of free speech in politics.

“This was a moment for them to say, ‘Enough is enough,’ ” she said. “There’s been a constitutional cloud over the expenditure bans for a very long time.”

The court’s support for corporate speech rights now casts doubt on the money limits placed on political parties.

The McCain-Feingold Act in 2002 restricted how much corporations, unions or wealthy persons could give to parties, and it put new limits on campaign ads that were funded by corporate or union money.

The January ruling struck down the second part of the law. The Republican National Committee and the California Republican Party also have sued on free-speech grounds to knock down the limits on money given to parties. That suit is still pending.

david.savage@latimes.com