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Citizens United and Compelled Speech

By Dan Filler, Laura Appleman et al.

<p>In <em>Citizens United </em>the government argued that the ban on corporate political speech was justified by the need to protect dissenting shareholders.  The Court brushed that argument aside, noting that it was not applicable to non-profit advocacy corporations and that the usual principles of corporate governance adequately protected dissenting shareholders.  Presumably that was an oblique reference to the exit option and waste remedies.  Waste is ineffectual and exit can come at a price.  Let's assume for the moment that a dissenting shareholder is in much the same position as a person who takes a job in a union shop and is forced to pay union dues.  In <em>Beck</em> and<em>  Abood</em> the Court concluded that such a person could not be compelled to pay the portion of dues that is attributable to the advocacy spending to which the dissenter objects.  One might argue that a shareholder has considerably more options to enter or exit corporate ownership than does the employee in the union shop, but for sake of argument grant that these are equivalent roles.  Now suppose that Congress wishes to legislate to protect the corporate dissenter's right to be free of compelled speech as closely as possible to the union dissenter's right.  What can/should Congress do?  Legislation that requires publicly held for-profit corporatiosn to obtain the consent of a majority of shareholders does not do the job, because there will still be dissenters without a remedy.  Perhaps legislation could require corporations that engage in advocacy spending to remit a special dividend to dissenting shareholders that is the percentage of such spending that is equal to the percentage ownership of the corporation held by the dissenting shareholder. </p> <p>Eric Muller takes me to task for calling President Obama's rebuke to the Court a display of puerile anger, and one of his commenters asks whether I think the President ought not ask Congress for legislation in his State of the Union address.  Of course the President can ask Congress for legislation, and of course the President can act as juvenile as he desires in his State of the Union.  My point remains that a dignified response would have been something along the lines of the following:  "The Supreme Court has ruled that the Constitution's free speech guarantee requires that corporations be free to spend their money to influence elections.  But shareholders ought not be required to support this speech.  I ask Congress to produce a bill that will prevent corporations from using their shareholders' money to deliver political speech that shareholders do not desire.  And I ask Congress to strengthen the existing limits that ban foreign nationals and corporations from influencing American elections."   And if the President thought that the Court's intepretation of the Constitution was wrong, he could have asked Congress to propose a constitutional amendment to overturn the decision.  Something along either of those lines would have been presidential; but of course there is no requirement that a President act presidential. </p>

Full post as published by The Faculty Lounge on February 05, 2010 (boomark / email).