Corporate Governance

Corporate Governance and Campaign Finance: Citizens United v. FEC (The Politics of Judicial Activism, Part 1)

By J Robert Brown Jr.

Whatever the merits of Citizens United, it was a fairly clear example of judicial activism.  There was at least one obvious way to avoid the constitutional question through statutory analysis.

The specifics of the case involved a movie created by Citizens United about Hillary Clinton.  Because Citizens United received some corporate funding for the movie, it potentially fell within the definition of electioneering communication.  But the phrase did not include every communication that mentioned a candidate, only those that were "publicly distributed."  Publicly distributed in turn meant that the communication '[c]an be received by 50,000 or more persons in a State where a primary election . . . is being held within 30 days.'  11 CFR §100.29(b)(3)(ii).

Citizens United wanted to make the movie available to cable subscribers.  Rather than broadcast the movie, however, subscribers would access the movie through on demand transmission.  In other words, the movie had to be requested and then would be seen by viewers within the household.  Citizens United asserted that "a single video-on-demand transmission is sent only to a requesting cable converter box and each separate transmission, in most instances, will be seen by just one household—not 50,000 or more persons." 

The Court rightfully disagreed with the argument.  The regulation went to the total number of possible viewers for the relevant communication. As the relevant regulation noted:

• (G) In the case of a communication appearing exclusively on a cable or satellite television system, but not on a broadcast station or network, that the viewership of the cable system or satellite system lying within a Congressional district or State is 50,000 or more;

11 CFR §100.29(b)(7)(i)(G).  Because the cable system that would provide the video-on-demand system had 34.5 million subscribers nationwide, the numerical test in the regulation would have been met. 

Yet a review of the entire regulation reveals a detailed definition that entirely deals with materials that are involuntarily disseminated to the public.  Thus, subsection (7)(i)(A) - (D) addresses communications broadcast over AM and FM radio.  Subsection (F) deals with television broadcasts.  These subsections rely on population counts, which reflect the number of people who could have heard the relevant communication.

In (G) and (H), the focus is on cable and satellite and, with equal logic, the focus is on the number of subscribers.  This is the number of persons who, at any one time, might have heard/viewed a communication sent out over these mediums.  Indeed, an exception contained in subsection (7)(iii) provides that the definition is not met where the evidence shows that the cable or satellite systems "did not carry the network on which the communication was publicly distributed." 

In other words, the regulation is keyed to an affirmative distribution by the relevant station, network, or cable/satellite system, and uses as a metric the number of people who were able to actually hear the communication when it was distributed.  The regulation does not in any way contemplate circumstances where the relevant system only released a communication upon request.  The counting rules of potential listeners would presumably need to be different since a single distribution of the communication to a single household could not possibly meet the test.  In other words, the activities conducted by Citizens United were not contemplated by the regulation.  This is consistent with the administrative history to the provision which makes no mention of these types of communications.  See Interim final rules with requests for comments, FEC Notice 2002-21, Oct, 23, 2002.

Said another way, the majority could have ducked the whole constitutional issue by concluding that a movie distributed through an "on demand" process did not fall within the definition of "Can be received by 50,000" as defined in 11 CFR §100.29(b)(7).  Instead, the Court simply referred to the number of cable subscribers as if this was an acceptable method of determining the number of persons who could receive an on demand movie. 

The fact that it could have ducked the constitutional issue through an interpretation of the regulation suggests a judicially active approach to the issue, with the majority wanting to reach the constitutional question.

Full post as published by The Race to the Bottom on February 11, 2010 (boomark / email).