Citizens United v. Federal Election Commission - September 9 2009 Oral Reargument before US Supreme Court

You'll hear reargument this morning in case 08205, Citizens United versus the Federal Election Committee Commission. Mister Olson?

Mister chief justice, and may it please the court, robust debate about candidates for elective office is the most fundamental value protected by the First Amendment's guarantee of free speech, yet that is precisely the dialogue that the government has prohibited if practiced by unions or corporations, any union or any corporation. The government claims it may do so based upon the Austin decision that corporate speech is by its nature corrosive and distorting because it might not reflect actual public support for the views expressed by the corporation. The government admits that that radical concept of requiring public support for the speech before you can speak would even authorize it to criminalize books and signs. This court needs no reminding that the government, when it is acting to prohibit, particularly when it is acting to criminalize speech that is at the very core of the First Amendment, has a heavy burden to prove that there is a compelling governmental interest that judge that justifies that prohibition and that the regulation adopted, in this case, a criminal statute, is the most narrowly tailored necessary to accomplish that compelling governmental interest.

Mister Olson, are you taking the position that there is no difference in the First Amendment rights of an individual? A corporation, after all, is not endowed by its creator with inalienable rights. So is there any distinction that Congress could draw between corporations and natural human beings for purposes of campaign finance.

What the court has said in the First Amendment context, New York Times versus Sullivan, Grosjean versus Associated Press, and over and over again is that corporations are persons entitled to protection under the First Amendment. Now, judge

Would that would that include, today's megacorporations where many of the investors may be foreign individuals or entities?

The the court in the past has made no distinction based upon the nature of the entity that might own a share of a corporation. Own many shares. Pardon?

Nowadays, there are foreign interests, even foreign governments that own not one share, but a goodly number of shares.

I submit that the court's decisions in connection with the First Amendment and corporations have, in the past, made no such distinction.

Could they, in your view, in the in the view that you're putting forth, that there is no distinction between an individual and a corporation for First Amendment purposes, then any mega corporation, even even if most of the investors are from abroad, Congress could not limit their spending.

I'm not I'm not saying that, justice Ginsburg. I'm saying that the First Amendment applies. Then the next step is to determine whether congress and the government has established a compelling governmental interest and a narrowly tailored remedy to that interest. If the congress and there's no record of that in this case of which I'm aware, certainly, the government has not advanced it in its briefs, that there is some compelling governmental interest because of foreign investment in corporations. If there was, then the Court would look at, determine how serious is that interest, how destructive has it been to the process, and whether the maybe the limitation would have something to do with the ownership of shares of a corporation or something.

Do you think Congress could prevent foreign individuals from, funding, speech in, United States elections? The the the Private individuals, foreigners who who want to

That's, of course, a different question. I haven't studied it, Justice Scalia. But I

asked it because I thought it was related

to the question. Point here is and let me start with this, and I think we should we should start with this, and the government hardly mentions this. The language of the First Amendment,

Congress shall make Mister Olson, would you answer justice Ginsburg's question? Yes or no? Can the leave me aside foreign investors. Can the can does the First Amendment permit any distinction between corporate speakers and individual speakers?

I have not I'm not aware of a case that Justice

Breyer asking you that. I mean, in your view, does it permit that distinction?

My view is based upon the decisions of this Court, and my view would be that unless there's a compelling governmental interest and a narrowing If there is

a compelling government, can there be any case in which there's a different treatment of corporations and individuals in your region?

I would not rule that out, Justice Stevens. I mean, there may be I can't imagine all of the infinite varieties of potential problems that might exist. But but we would eventually come back to the narrow tailoring problem anyway. What the government has done here is prohibit speech. I don't know how many unions there are in this country, but there are something like 6,000,000 corporations that filed tax returns in 02/2006.

Mister Olson, do you think that media corporations that are owned or principally owned by foreign shareholders have less First Amendment rights than other media corporations in The United States?

I don't think so, justice Alito. And certainly, there is no record to suggest that there is any kind of problem based upon that. And I come back to the language of the First Amendment. Congress shall make no law. Now what this court has repeatedly said is that there may be laws inhibiting speech if there's a compelling governmental interest and a narrowly tailored remedy, but there is no justification for this.

I was going to say that 97% of the 6,000,000 corporations that filed tax returns in 02/2006 had assets less than $5,000,000 assets, not net worth. So we're talking about a prohibition that covers every corporation in The United States, including nonprofit corporations, limited liability corporations, subchapter s corporations, and every union in The United States.

You you used the word prohibition, mister Olson. One answer to that is that no entity is being prohibited. That it's a question of not whether corporations can contribute, but how. They can use PACs. And that way, we assure that the people who contribute are really supportive of the issue of the candidate.

But so the the corporation can give, but it has to use a PAC.

I respectfully disagree. The corporation may not expend money. It might find people, stockholders or officers, who wanted to contribute to a separate fund who could then speak that one to use the words of one justice, that's ventriloquist speak. I would say that it's more like surrogate speech. If you can find some other people that will say what you want to say and get them to contribute money through a process that this justice is

Who is the you? I mean, the you you those are the directors, the CEO, not the shareholders. We don't know what they think.

Well, this statute is not limited to cases where the shareholders agree or dis don't agree with what the corporation said. It says, the court said in the Pilates case, the prohibition would exist whether or not the shareholders agreed. But let me go back to your question.

It covers totally totally owned corporations too, doesn't it? Yes.

And I

mean, if I own all the stock in a corporation, I corporations still can't.

Yes. And it includes membership corporations such as Citizens United that

The individual contribution also covers people who'd like to give $2,500 instead of 2,400, which is the limit. And maybe there are a hundred million or 200,000,000 people in The United States who, if they gave 2,500 rather than 2,400, nobody could say that that was really an effort to buy the senator or the congressman.

So is that unconstitutional too? No. Well, what this court has said is that in connection with contribution limitations

Mhmm.

There is a potential compelling governmental interest. This is what Buckley says. Yeah. Then that and that but expenditures, which is what we're talking about today, do not concern the the question the actual threat of quid pro quo corruption or the appearance of quid pro corruption. And you know, justice Breyer, what the court said in that case is because it's not inhibiting someone from actually speaking.

It's it's giving So here,

the obvious argument is, look, they said the compelling interest is that people think that representatives are being bought. Okay? That's to put it in a paracaricature, but you don't understand what I'm driving at. Okay? That's what they say in Buckley v.

Valeo. So Congress now says precisely that interest leads us to want to limit the expenditures that corporations can make on electioneering communication in the last thirty days of a primary over the air television, but not on radio, not on books, not on pamphlets, not on anything else. All right. So in what respect is there not, conceptual at least, a compelling interest and narrow tailoring?

Well, in the first place, I accept what the court said in Buckley, that expenditures do not raise that concern at all. Congress has not made that finding. You're talking and you mentioned just just just a matter of radio and television, but in Buckley versus Valeo, the court specifically said that that is the most important means of communicating

It's important.

Election, and the court used the words indispensable. So what and and what the court said in Buckley versus Filejo is it compared a limitation on expenditures, independent, uncoordinated expenditures, with the prohibition that the court addressed when it had a statute before it that said newspapers couldn't endorse candidates on the day of election and the Tornillo case where it required a right of reply to be given. And the court said those restrictions, which were unconstitutional, were considerably less and that the restriction in Buckley v. Valeo on expenditures

I agree that I agree that Buckley made the distinction between contributions and expenditures. And it seems to me that the government's argument necessarily wants to water down that distinction. But in response to or just in furtherance of Justice Breyer's point, you have two cases, one in which an officeholder goes to a corporation and says, will you please give me money? They said, we can't do that. The other is in which a corporation takes out an ad for the for the candidate, which believes that candidate the responsibility of of substantial television coverage on the isn't that about the same?

Well, in the first place, if there's any court And I and I and I

think Buckley says no. Buck but as a practical matter, is is

is that always true? Well, it it may not always be true. The in the infinite potential applications of something like that, justice Kennedy, anything might possibly be true. And justice Breyer said, well, what if Congress thought or what if Congress thought the people might think that that was kind of somehow suspect? That is not a basis for prohibiting speech by a whole class of

Well, well, of course, it it did was a basis for prohibiting, speech by, in the sense of giving contributions above $2,400 by 300,000,000 people in The United States. But the point, which I think is the one Justice Kennedy was picking up, is are we arguing here between you and my questions, is the argument in this case about the existence of a compelling interest? Because Congress seemed to think that there was certainly that. It's this concern about the perception that people are, say, buying candidates. Are we arguing about narrow tailoring?

Congress thought it was narrow tailoring. Or are we arguing about whether we should second guess Congress on whether there is enough

of a compelling interest and the tailoring is narrow enough? You must always second guess Congress when the First Amendment is in play. And we're arguing, we're not we're discussing

Mhmm.

Both the compelling both the compelling governmental interest and the narrow tailoring. And what the what there is not a sufficient record. The reason the government has shifted position here, they were, first of all, talking about the so called distortion rationale in Austin. The distortion rationale, which they seem to have abandoned in the, in the supplemental briefs filed in connection with this argument, and they resorted to the corruption appearance of corruption. There isn't a sufficient record of this.

There isn't

What about the district court's finding? Wasn't there a finding, before the three judge court that federal officials know of and feel indebted to corporations or unions who finance ads urging their election or the defeat of their opponent. There was a finding of fact to that effect, was there not?

The the find yes. I there is something to that effect in the district court opinion, but it doesn't cover all corporations. It didn't focus in specifically on

So if they did if they just covered large corporations, so you take out the mom and pop single shareholder

Well, that's 97% of the corporation.

Not 97% of the contributions. I mean, the contributions that count are the ones from the corporations that can amass these huge sums in their treasuries.

I think that goes back to justice Kennedy's question and my response, which distinguishes between contributions and expenditures. The point that justice Kennedy was making in his question is that under under some circumstances, an expenditure might coincide or resonate with what the candidate wishes to do, but the court looked at that very carefully in Buckley versus Valeo and said that might not be the case. It might, in fact, be these expenditures might be counterproductive. When they're independent, they're not coordinated with the candidate. They are more directly expression by the party spending the money.

They're not like a contribution. So they're more of an infringement on the right to speak, and they're less of a threat of corruption because there is less of there's no quid pro quo there. And if there is, it would be punishable as a crime.

Counsel, in your discussion of Austin, you rely on its inconsistency with Villadi. Villadi, of course, involved a referendum. Austin, expenditures in an individual election. Why isn't that a significant distinction?

Well, it is a dis it is the what the Bellotti court said is that we're not deciding that question. And and Austin did address, you're correct, expenditures, but it based it on a rationale.

It more more than said we're not deciding. It said they're entirely different situations. You read that long footnote in which has been cited six or eight times by our later cases.

Yes. And I also read the footnote 14 in the Bellotti case that cited case after case after case that said corporations had rights or protected rights under the First Amendment. I'm not disagreeing with what you just said, justice Stevens. The court said it was it would it was dicta, because the court did not deal with it.

But it's been repeated. That footnote has been repeatedly cited in subsequent cases, most of which were unanimous.

Well, because it was and I agree that the Belotti court was not discussing that, but the Belotti court

It did discuss it precisely in that footnote. It said it's a different case.

I understand, and I don't disagree with what you've just said, Justice Stevens. It didn't

say it had come out differently. It just said we're not deciding.

That's that is that's the point I'm trying to I

don't mind citing that. What what didn't decide that.

What What What Bilotti also said is, and I think that this is also in many decisions of this court, the inherent worth of speech in terms of its capacity for informing the public does not depend upon the identity of the source, whether corporation, association, union, or individual.

Now that, now that we've cleared up that Bellotti didn't decide the question, what what is the distinction that, why don't you think that distinction makes sense? In other words, a corporation, you don't have the potential for corruption if a corporation is simply speaking on a referendum that may directly affect its interest? If you're dealing with a candidate, what the Court has said in the past is that you do have that problem of corruption. In other words, why isn't that distinction a way to reconcile the Blotty and Austin?

There is a distinction, but I think the distinction goes back to, a, expenditures versus contributions, number one. And then secondly, it goes back to what this Court said in conjunction with the impossibility of finding a distinction between issue ads and candidate ads, the line dissolves on practical application. The interest of a court

Where did we say that?

You said that repeatedly, including most recently in the Wisconsin Right to Life case. And and it's the first appeared in in Buckley itself. The distinction is very hard to draw between the interest that the speaker is addressing and whether it's a candidate or an issue because issues are wrapped up in candidates, the corporation interest and and the interest that its fiduciary officers are representing when it speaks on behalf of the corporation

But I don't think you're correct to say the court said there was no distinction. It said the distinction requires the use of magic words, And that's what they said in Wisconsin, right the right to life too. Both of them said there is a distinction.

Well, but the the words

of It's difficult to draw in some cases, but nobody has said there's no distinction that I'm aware of.

Well, what the court The U to use the words of the court, which occurred repeatedly, is that the distinction dissolves in practical application. That, justice Stevens, I think, addresses the very common sense point that when you're addressing an issue, whether you're addressing a referendum matter, whether it's a proposed legislation or a candidate that is going to raise taxes on the corporation,

those distinctions dissolve. It's all First Amendment freedom. I I thought that Buckley had narrowed the statute precisely to magic words and still found it unconstitutional as applied to corporations that made independent expenditures.

Isn't that

what happened in Buckley?

The thousand dollar limit in Buckley was, first of all, limited to the magic words, candidacy, expression. Then secondly, the court and it and the and the words of the statute were any person, which included corporations, found the statute as narrowed, unconstitutional, and said

And some of the plaintiffs were corporations.

Some of the plaintiffs were corporations. And the plaintiff was the case

discussed in the opinion, was it?

It wasn't discussed in the opinion. But what was just discussed in the opinion was the breadth of the definition of person, which did include corporation. Corporations were parties in the case. And in that part of the Buckley case, the court repeatedly cites cases involving corporations, including NAACP versus Alabama and New York Times versus Sullivan, all cases involving corporations. So while it wasn't specifically discussed, it was a part of the decision of the court that a thousand dollar limitation was worse, more restrictive than the than the restriction of editorials appearing on Election Day or requiring a newspaper to give a right of reply.

The the court in Buckley, in fact, says this is with respect to that expenditure limitation, the words of the court were, this is the most drastic of the limitations imposed by the Federal Election Campaign Act. It goes to the core of First Amendment freedom.

If that's so, this is a point that is concerning me. I don't know the answer precisely. But suppose you're right. Suppose we overrule these two cases. Would that leave the country in a situation where corporations and trade unions can spend as much as they want in the last thirty days on television ads, etcetera, of this kind, but political parties couldn't because political parties can only spend hard money on this kind of expenditure.

And therefore, the group that is charged with the responsibility of building a platform that will appeal to a majority of Americans is limited, but the in the groups that have particular interests, like corporations or trade unions, can spend as much as they want. Am I right about the consequence? If I'm right, what do we do about it?

I think you're wrong about the consequence. There are 27 States that have no limitations on either contributions or expenditures, and that the Earth has not No,

I'm not I'm not I'm not, I'm saying, am I right in thinking that if you win, the political party can't spend this money. It's limited to hard money contributions, but corporations and trade unions

can spend unlimited funds. Well, if if the court decides in favor of the arguments that we are making here, I think what you're suggesting is that because there are other limitations that someone has not challenged in this case, that that would be somehow unfair and unbalanced.

No. I'm not suggesting that. I am suggesting we'll make a hash of this statute. And if we're going to make a hash of the statute, what do we do about it? And that's why I want you to take a position on another important part of that statute, and that is the part that says political parties themselves cannot make these expenditures that we're talking about except out of hard money.

Well,

I want to address that in this way. And I said when we were here before, the most fundamental right that we can exercise in a democracy under the First Amendment is dialogue and communication about political candidates. We have in wrap wrapped up that freedom, smothered that freedom with the most complicated set of regulations and bureaucratic controls. Last year, the Federal Election Commission that was supposed to be able to give advisory opinions didn't even have a quorum for six months of the year 02/2008 when people would have needed some help from the Federal Election Commission. What I'm saying in answer to your question, justice Breyer, there are, I suspect, all kinds of problems with federal election laws, where they apply to parties and where they apply to what candidates might do and so forth, but that has never been a justification.

We will uphold a prohibition on all kinds of people speaking because if we allowed them to speak, someone else might complain that they don't get to speak as much as they would like.

Well, with with reference to any incongruities that might flow from our adopting your position. Are you aware of any case in this court which says that we must refrain from addressing an unconstitutional aspect of the statute because the statute is flawed in some other respects as well?

No. I'm not. And that's I think that was what I was attempting to say in response to what justice Breyer was asking me.

Mister Olson, are you giving up on your earlier arguments that there are ways to avoid the constitutional question to resolve this case? I know that we asked for further briefing on, this particular issue of overturning two of our court's precedents, but are you giving up on your earlier arguments that there are statutory interpretations that would avoid the constitutional question?

No, justice Sotomayor. What what there are all kinds of lines that the court could draw which would provide a victory to my client. There are so many reasons why the federal government did not have the right to criminalize this ninety minute documentary that had to do with elections. But what what the court addressed specifically in the Washington Right to Life case is that the lines, if they are to be drawn, must be not be lines that in that are ambiguous, that invite litigation, that hold the threat of prosecution over an individual. And in practical application, that is what the

Miss Olson, my difficulty is that you make very impassioned arguments about why this is a bad system that the courts have developed in in its jurisprudence, but we don't have any record developed below. You make a lot of arguments about how far and the nature of corporations, single corporation, single stockholder corporations, etcetera, but there's no record that I'm reviewing that actually goes into the very question that you're you're arguing exists, which is a patchwork of regulatory and jurisprudential guidelines that are so unclear.

There I would like to answer that. There are several answers to it, and I'd like to reserve the balance of my time for rebuttal. It is the government has has the burden to prove the record that justifies telling someone that wants to make a ninety minute documentary about a candidate for president that they will go to jail if they broadcast it. The government has the obligation, and the government had a long legislative record and plenty of opportunity to produce that record, and it's their obligation to do so.

Mister Paul, can I ask you one question you can answer on rebuttal? No one has commented on the National Rifle Association's amicus brief. None of none of the litigants have. That's in response to justice Sotomayor's thought that there are narrow ways of resolving the problem before us. On rebuttal, will you tell us what your view on their solution to this problem is?

I will, justice Stevens.

Thank you.

Mister, why don't you tell us now? We'll give you time for rebuttal. Don't

keep us in suspense.

Every every line, including the lines that would be drawn in several of the amicus briefs, and they're not the same, could put the entity who wishes to speak before you again a year from now because the the movie might be shorter. It might be video on demand. It might be a broadcast. It it might have a different tone with respect to a candidate. Every one of those lines puts the speaker at peril that he will go to jail or be prosecuted, or there will be litigation, all of which chills speech and inhibits individuals.

To answer my question, the line suggested by the NRA is the line identified by Congress in the Snow Jeffords Amendment dealing with individual financing of speech, which would separate all of these problems. What is your comment on that possible solution to that?

I would I would like to take advantage of justice Stevens' offer and and respond

to that during the rebuttal, mister chief justice.

Thank you, mister Olson. Mister Abrams?

Mister chief justice, and may it please the court, the first case cited to you by mister Olson, happened to be New York Times against Sullivan. And I'd like to begin by urging two propositions on you from that case. In that case, the court was confronted with a situation where The Times made three arguments to the court. They said, for us to win, they said, you either have to revise, basically, federalize libel law to a considerable degree, by which they did, Or they said, we only sold 390 copies in Alabama, so you could rule in our favor by saying there was no jurisdiction. Or they said, we didn't even mention sheriff Sullivan's name, so you could rule in our favor on the ground that they haven't proved a libel case.

The Court did the first. It did the first, which is the broader rather than the narrowest way to address the question. And I suspect they did it. Don't know, but I suspect they did it because they had come to the conclusion that the degree of First Amendment danger by the sort of lawsuits which were occurring in Alabama and elsewhere was something that had to be faced up to by the court now. Or Mister

Abrams, the Times against Sullivan was not did not involve overruling precedents of this court that have been followed by this court and others. So I think the situation

It's true, your honor. It did it did involve overruling a hundred fifty years of American jurisprudence. I mean, there there was no law at that point that said

There was no there was no discretion of this court. I mean, we do tend to adhere to our precedent, especially

Yes.

A case like Austin, which was repeating the business about amassing large funds in corporate treasuries, was not a new idea in Austin, and it was repeated after after Austin. But there was still times that against Sullivan, I think, is quite distinct. The question that was posed here is, is it a proper way to resolve this case to overrule one precedent in full and another in part?

And and what I'm urging on you, your honor, is that by a parody of reasoning, although not precisely the same situation, that there are cases in which there is a an ongoing threat to freedom of expression, which may lead if if you were to agree to that, which may lead the Court to say, rather than taking a narrower route to the same result, it is worth our moving away in this case from looking for the narrowest way out, and and determining it now rather than the next as applied challenge. There there there

are two separate questions that that that have been raised in opposition to your position. One is, one is that we should not resolve a broad constitutional issue where there are narrower grounds, and that's the question you're responding to. An entirely separate question is the issue of stare decisis. Yes. And you you acknowledge that stare decisis wasn't involved in New York Times versus Sullivan, but the first question obviously was.

Right. And stare decisis, of of course, is a question much much briefed, by the parties, And, it it is one which involves, of course, a consideration, not only of the merits of the decision, but certain other factors, the length of time the decision has been in effect and the like. The time in this case for, the McConnell case, of course, is only six years. The time for the Austin case is nineteen years, which is less than one ruling of this court just last term.

But what the court said in Austin, it also said in the NRWC case, which was, I think, eight years before Austin. So Austin was not a new invention.

Well, Austin was the first time that corporate speech was barred corporate independent expenditures were barred by a ruling at this Court. That had not happened prior to Austin, and the solicitor general's brief acknowledged his doubt. Now

But there have been limits on corporate spending in aid of a political campaign since the turn of the twentieth century?

There had been limits on corporate contributions since the turn of the century. Corporate independent expenditures came much later, And that's something that that I think is worth

Much later in 1947. Right?

Yes, your honor. Nineteen forty seven, President Truman vetoed that bill saying that it was a dangerous intrusion into free speech. That has always been an area of enormous controversy, not just in the public sphere, but in the judicial sphere. The early cases about Taft Hartley were ones in which what the court did was to basically say in one case after another that the statute did not govern the particular facts of the case so as to avoid But those were union cases, weren't they rather than court cases? Yes.

They they they were three union cases. And the case after that, essentially, was Buckley. And and Buckley held unconstitutional the limits posed there to independent expenditures. So all I'm saying is that it it this is not a situation as if we have an unbroken amount of years throughout American history in which it has been accepted that independent expenditures could be barred. It has always been a matter of high level of controversy with with courts at first and understandably shying away from facing up to the issue directly, and then the first ruling on point.

But have you read justice Rehnquist's dissent in the Blotty case?

I'm I'm sorry, your honor?

Have you read justice Rehnquist's dissent in the Blotty case?

Yes, sir. Yeah. I have.

Which is somewhat inconsistent with what you said.

It is. And also inconsistent with his later view. Correct?

That's right.

Yes. Yes. Yes, ma'am.

Going back to the question of stare decisis, the one thing that is very interesting about this area of law for the last hundred years is the active involvement of both State and Federal legislatures in trying to find that balance between the interests of protecting, in their views, how the electoral process should proceed and the interests of the First Amendment. And so my question to you is, once we say they can't accept

on

the basis of a compelling government interest narrowly tailored, are we cutting off or would we be cutting off that future democratic process? Because what you are suggesting is that the courts who created corporations as persons gave birth to corporations as persons. And there could be an argument made that that was the court's error to start with, not Austin or McConnell, but the fact that the courts imbued a creature of State law with human characteristics. But we can we can go back to the very basics that way. But wouldn't we be doing some more harm than good by a broad ruling in a case that doesn't involve four business corporations and actually doesn't even involve the traditional nonprofit corporation.

It involves an advocacy corporation that has a very particular interest.

Your honor, I don't think you'd be doing more harm than good in vindicating the First Amendment rights here, which transcend that, of Citizens United. I mean, I I think, reading my friend's brief on the right, they come some of them at least come pretty close to saying there must be a way for Citizens United to win this case other than, a broad way. In in my view, the principles at stake here are the same. Citizens United happens to be a a sort of a paradigmatic example of the sort of group speaking no less about who to who to vote for or not who to vote for or what to think about a potential ongoing candidate for president of the United States. But but in lots of other situations, day by day, there is a a block to public discourse caused as a result of this congressional legislation.

And and so we think it is not a matter of cutting off what legislatures can do. They can still pass legislation doing all sorts of things. They could do public funding. They could do, many other things that don't violate the First Amendment. If we're right in saying that independent expenditures, that category of of money leading to speech that we're talking about today, If we're right that that that is is the sort of speech which is at the core of the First Amendment, then you would be doing only good, only good, by ruling that way today across the board.

Thank you, your honor.

Thank you, mister Abrams. General Kagan.

Mister chief justice, and may it please the court. I have three very quick points to make about the government's position. The first is that this issue has a long history. For over a hundred years, Congress has made a judgment that corporations must be subject to special rules when they participate in elections, and this court has never questioned that judgment. Number two.

Wait. Wait. Wait. Wait. Wait.

We never questioned it, but we never approved it either. And and and we gave some really weird interpretations to the Taft Hartley Act in order to avoid confronting the question.

I'll repeat what I said, justice Scalia. For a hundred years, this court, faced with many opportunities to do so, left standing the legislation that is at issue in this case. First, the contribution limits, then the expenditure limits that came in by way of Taft Hartley, and then, of course, in, in Austin, specifically approved those limits.

I don't understand what you're saying. I mean, we're we're we're we're not a self, self starting, institution here. We we we only, disapprove of something when somebody asks us to. And if there was no occasion for us to approve or disapprove, it proves nothing whatever that we didn't disapprove it.

Well, you're not a self starting institution, but many litigants brought many cases to you from nineteen o seven onwards. And in each case, this court turns down, declines the opportunity to invalidate or otherwise interfere with this legislation.

But that judgment was validated by Buckley's contribution expenditure, line. And you're correct if you look at contributions, but this is an expenditure case. And I think, that it doesn't clarify the situation to say that for a hundred years, to suggest that for a hundred years we would have allowed expenditure limitations, which in order to work at all have to have a speaker based distinction, exemption for media, content based distinction, time based distinction. We've never allowed that.

Well, I think Justice Stevens was right in saying that the expenditure limits that are in play in this case came into effect in 1947. So it's been sixty years rather than a hundred years. But in fact, even before that, the contribution limits were thought to include independent expenditures. And as soon as Congress saw independent expenditures going on, Congress closed what it perceived to be a loophole. So, in fact, for a hundred years, corporations have made neither contributions nor expenditures, save for a brief period of time in the middle nineteen forties, which Congress very swiftly reacted to by passing the Taft Hartley Act.

Now the reason that Congress has enacted these special rules, and this is the second point that I wanted to make.

Before you go to your second point, may I ask you to clarify one part of the first, namely your answer to the question I posed to just to to mister Olson. Namely, why isn't the Snow Jeffords Amendment, which was picked on by Congress itself, an which is argued by the NRA, an appropriate answer to this case?

That was my third point, justice Stevens.

Oh, I'm sorry.

So we'll just skip over the second. My third point is that this is an anomalous case in part because this is an atypical plaintiff. And the reason this is an atypical plaintiff is because this plaintiff is an ideological nonprofit.

So you're giving up you're giving up the distinction from MCFL that you defended in your opening brief? There you said this doesn't qualify as a different kind of corporation because it takes corporate funds, and now you're changing that position? No.

I I don't think we're changing it. MCFL is the law, and the FEC has always tried to implement MCFL faithfully, and that's what the FEC has tried to do. But if you So

I guess do you think MCFL applies in this case even though the corporation takes, corp corporate funds from for profit corporations?

I don't think MCFL as written applies in this case, but I think that the Court could, as lower courts have done, adjust MCFL, potentially to make it apply in this case, although I think that that would require a remand. What lower courts have done, MCFL was set up, it was written in a very strict kind of way so that the organization had to have a policy of accepting no corporate funds whatsoever. Some of the lower courts, including the D. C. Circuit, which, of course, sees a lot of these cases, have suggested that MCFL is too strict, that it doesn't do you

do you think it's too strict?

I I the FEC has no objection to MCFL being adjusted in order to to give it some flexibility. What the

FEC So you want to give up this case, change your position, and basically say you lose solely because of the questioning that we've directed on reargument?

Solely because I'm sorry.

Because of the question we've posed on reargument.

No, I don't think that that's fair. We think we we continue to think that, the the judgment below should be affirmed. If you're asking me, Mr. Chief Justice, as to whether the government has a preference as to the way in which it loses if it has to lose, the answer is yes.

MR. What case of ours what case of ours suggests that there is a hierarchy of bases on which we should rule against a party, when both of them involve constitutional questions? Extending, modifying MCFL would be, I assume, by virtue of the First Amendment. Overruling Austin would be by virtue of the First Amendment. So what case says we should prefer one as opposed to the other?

I I think the question really is the Court's standard practice of deciding as applied challenges before facial challenges. And this case certainly raises a number of tricky as applied questions. One is the question of how the the statute applies to nonprofit organizations such as this one. Another is the question of how it applies to VOD transmissions. Yet another is the question of how it applies to a ninety minute infomercial as opposed to smaller, advertisements.

But if you if you insist on, as the as applied challenge, isn't that inconsistent with the whole line of cases that began in Thornhill v. Alabama and Coats v. Cincinnati? What about the Thornhill doctrine? It was not cited in the briefs, but that doctrine is that, even a litigant without standing to object to a particular form of conduct can raise that if the statute, covers it in order that the statute does not have an ongoing chill against speech.

And there's no place where an ongoing chill is more dangerous than in the elections context. So you're asking us to have an ongoing chill where we have as applied challenges, which are based on, as I indicated before, speaker, content, time. And this is the kind of chilling effect that the Thornhill doctrine stands directly against.

You know, I think even in the First Amendment context, Justice Kennedy, the Court will not strike down a statute on its face unless it finds, very substantial overbread, many applications of the statute that are unconstitutional, as opposed to just a few or just some. What I'm suggesting here is that the Court was right in McConnell and then confirmed in WRTL defined that Bicra, which is, of course, the only statute directly involved in this case, did not have that substantial overbrit.

Let me ask you this. Suppose that we were to rule that nonprofit corporations could not be covered by the statute, would that would the statute then have substantial

override? Well, I would urge you not to do that in that kind of sweeping way, because the the reason for the nonprofit corporations being covered is to make sure that the nonprofit corporations don't, function as conduits for the for profit corporation.

Suppose we were to say that, would the statute then not be substantially overbroad?

Well, I don't think that the statute is substantially overbroad right now. So if you took out certain applications, I can't see I'm

asking you to assume that we draw the nonprofit profit distinction. Then the statute, it seems to me, clearly has to fall because number one, we couldn't sever it based on the language.

I see what you're saying. Well, you could do a couple of things. You could do what justice Stevens suggested. So justice Stevens suggested I suggested to chief justice Roberts. I don't think

you I don't think you really caught what I suggested because you treated it as an an an enlargement of the MCFL exhibit.

I was going to go back.

That is not what the National Rifle Association argues or what's an old Jefferson code. It covers, ads that are financed exclusively by individuals even though they are sponsored by a corporation.

Yes. That's exactly right. What you're suggesting, Justice Stevens, is essentially stripping the Willstone amendment from Bicra second to a

Correct. You're treating the Snow Jeffords Amendment as being the correct test. And nobody's explained why that wouldn't be a proper solution, not nearly as drastic as is being argued here.

Yes. And there are some, you know, there there there are some reasons that that might, that might be appropriate. The Walston Amendment was a funny kind of thing that was passed very narrowly. But beyond that, it was passed with the pretty substantial support of many people who voted against the legislation in the end, presumably as a poison pill. Because I

mean, if we go to if we go that route, what we're doing is creating an accounting industry, aren't we? Corporations give huge amounts of money to the (four) organization, and then somebody, perhaps the FEC, has to decide whether, in fact, that's a way of subverting the prohibition against the direct payment for the for the communication. Right? Okay. So Congress said we don't want that.

Congress said that's going to be a nightmare, and we decide Wellstone for whatever reason. Now, don't we have to focus on whether Congress can say that or whether it can't?

But Congress said no one can't. I don't know why

it can't say it. Congress also said if you strike down the Wellstone Amendment, we want this no Jeffords Amendment extra. And why shouldn't we follow that direction?

If you strike down the Wellstone Amendment, what is left is the Snow Jeffords Amendment, which allows nonprofit organizations of the kind here to fund these ads out of separate bank accounts, not PACS, just separate bank accounts, which include only individual expenditures.

Why is that not the the wisest, narrow solution to the problem before us?

Well, it is it is it is certainly a narrower and, I think, better solution than a facial invalidation of the whole statute.

Counsel, what do you what do you understand to be the compelling interest that the court articulated in Austin?

I think that the what the court articulated in Austin, and, of course, in the the the government briefs, we've suggested that Austin did not articulate what we believe to be the strongest compelling interest, which is the anticorruption interest. But what the court articulated in Austin, was essentially a concern about corporations using the corporate form to appropriate other people's money for expressing purposes.

Right. So but you you've more or less abandoned is too strong a word, but as you say, you've relied on a different interest, the quid pro quo, corruption. And you you articulate in page 11 of your brief you recognize that this Court has not accepted that interest as a compelling interest. So isn't it the case that as you view Austin, it's kind of up for play in the sense that you would ground it on an interest that the court has never recognized?

Well, a couple of points. The first thing is, as you say, we have not abandoned Austin. We have simply said that in addition to the other people's money interest that

where in your where in your supplemental briefing do you say that this aggregation of wealth interest, supports Austin?

I would not really call it an aggregation of wealth interest. I would say that it's it's it's a concern about corporate use of other people's money to election

Putting it outside, putting the quid pro interest aside, where in your supplemental briefing do you support the interest that was articulated by the court in Austin?

Where we talk about shareholder protection and where we talk about the distortion of the electoral process that occurs when corporations use their shareholders' money who may or may not

I understand that to be a different interest. That's the shareholder protection interest as opposed to the fact corporations have such wealth and they they distort the marketplace.

Well, I I think that they're connected because both come

So so am I right then in saying in the supplemental briefing you do not rely at all on the market distortion rationale on which Austin relied, not the shareholder rationale, not the quid pro quo rationale, the market distortion issue. These corporations have a lot of money.

We do not rely at all on Austin to the extent that anybody takes Austin to be suggesting anything about the equalization of a speech market. So I know that that's the way many people understand the distortion rationale of Austin. And if that's the way the Court understands it, we do not rely at all on that.

And so if we have to preserve if

I I would say either the quid pro quo interest, the corruption interest, or the shareholder interest, or what I would say is a is is something related to the shareholder interest that is, in in truth, my view of Austin, which is a view that when corporations use other people's money to election year, That is a harm not just to the shareholders themselves, but a sort of broader harm to the public that comes from distortion of the electioneering that's done by corporations.

Let's talk about overbreadth. You you you let's assume that that is a valid interest. What percentage of the total number of corporations in the country are not single shareholder corporations? The local hairdresser, the local, auto repair shop, the the local, new car dealer. I don't know any small business in this country that isn't incorporated, and the vast majority of them are are are sole shareholder owned.

Now now this statute makes it unlawful for all of them to do the the the things that you're worried about, you know, distorting, other the the interests of other shareholders. That is vast overbreadth.

You know, I think that the single shareholders, can present these corruption problems. Many many closed corporations, single shareholder corporations

I'm not talking about the corruption interest. You you you have your quid pro quo argument. That's another one. We we can get to that when we get there. But but as far as the interest you're now addressing, which is those shareholders who don't agree with this political position are being somehow cheated.

That doesn't apply probably to the vast majority of corporations in this country.

You're quite right, Justice Scalia, that when we when it comes to single shareholders, the the kind of other people's money interests, the shareholder protection interests do not apply.

Well, so that can't be

the justification because if it were, the the statute would be vastly overbroadened.

There, the strongest justification is the anti corruption interest.

With respect to that, what what is your answer to the argument that more than half the states, including, California and Oregon, Virginia, Washington State, Delaware, Maryland, a great many others, permit independent corporate expenditures for just these purposes? Now have they all been overwhelmed by corruption? A lot of money is spent on elections in California. Has is there a record that the corporations have corrupted the political process there?

I I I think the experience of some half the states cannot be more important than the hundred year old judgment of Congress that these expenditures would corrupt the federal system. And I think that they're Congress

has a self interest. I mean, we we are suspicious of of, congressional action in the First Amendment area precisely because we at least I am, I doubt that one can expect a body of incumbents to draw election restrictions that do not favor incumbents. Now is that excessively cynical of me? I don't think so.

I think, Justice Scalia, it's wrong. In fact, corporate and union money go overwhelmingly to incumbents. This may be the single most self denying thing that Congress has ever done. If you look if you look at the last election cycle and look at corporate PAC money and ask where it goes, it goes 10 times more to incumbents than to challengers, and in the prior election cycle, even more than that. And for an obvious reason, because when corporations play in the political process, they want winners.

They want people who will produce outcomes for them. And they know that the way to get those outcomes, the way to get those winners is to invest in incumbents. And so that's what they do, as I said, in double digits times more than they invest in challengers. So I think that that that that rationale, which is undoubtedly true in many contexts, simply is not the case with respect to

the system. Under your position, if corporations a, b, and c are called to Washington every Monday morning by a high ranking administrative official or a high ranking member of the congress with with a committee chairmanship and and told to tow the line and to tell their directors and their shareholders what the policy ought to be, some other corporation can't object to that during the election cycle. The government silences a corporate objector, and those corporations may have the most knowledge of this on the subject. Corporations have lots of knowledge about environment, transportation issues, and and you're silencing them during the election.

Well I

mean, other corporations, by your by because of the very fact you just point out, have already been used and are being used by the government to express its views. And you say another corporation can't object to that.

Well, to the extent, Justice Kennedy, that you're talking about what goes on in the halls of Congress, of course, corporations can lobby members of Congress, in the same way that they could before this legislation. What this legislation is designed to do because of this anti corruption interest is to make sure that that lobbying is just persuasion, and it's not coercion. But in addition to that, of course, corporations have many opportunities to speak outside, the halls of Congress.

One of the amicus briefs, objects response to Justice Kennedy's problem by saying the problem is that we've got to contribute to both parties, and a lot of them do, don't they?

A lot of them do, which is a suggestion about how corporations engage the political process and how corporations are different from individuals in this respect. You know, an individual can be the wealthiest person in the world, but few of us, maybe some, but few of us are only our economic interests. We have beliefs, we have convictions, we have likes and dislikes. Corporations engage the political process in an entirely different way, and this is what makes them so much more damaging.

Well, that's not I'm sorry, but that seems rather odd. A large corporation, just like an individual, has many diverse interests. A corporation may want to support a particular candidate, but they may be concerned, just as you say, about what their shareholders are going to think about that. They may be concerned that their shareholders would rather they spend their money doing something else. The idea that corporations just are different than individuals in that respect, I I just don't think holds up.

Well, all I was suggesting, Mr. Chief Justice, is that corporations have actually a fiduciary obligation to their shareholders to increase value. That's their single purpose, their goal.

So if a candidate take a tobacco company and a candidate is running on the platform that they ought to make tobacco illegal, presumably that company would maximize its shareholders' interests by opposing the election of that individual.

But everything is geared, through the corporation's self interest in order to maximize profits, in order to maximize revenue, in order to maximize value. Individuals are more complicated than that. So that when corporations engage the political process, they do it with that set of, you know, blinders or what I don't mean it to be pejorative because that's what we want corporations to do, is to care. Well,

I suppose some do. But let's say if you have 10 individuals and they each contribute a thousand dollars to a corporation and they say, we want this corporation to convey a particular message, why can't they do that? Well, if they did that as a partnership, it would be all right.

Well, it's it sounds to me as though the corporation that you're describing is the corporation of a kind that we have in this case, where one can assume that the members all sign on to the corporation's ideological mission, where the corporation, in fact, has an ideological mission.

General Kagan, most most corporations are indistinguishable from the individual who owns them, the local hairdresser, the, new auto dealers dealer who has just lost his dealership and and who wants to oppose whatever congressman he thinks was responsible for this happening or whatever congressman won't, try to patch it up by by by getting the, the auto company to to undo it. There's no distinction between the individual interest and the corporate interest, and that is true for the vast majority of corporations.

What

Yet this law freezes all of them out.

You know, to the extent that we're only talking about single shareholder corporations, I guess I would ask why it's any burden on that single shareholder to make the expenditures to participate in the political process in the way that person wants to outside the corporate form. So single shareholders aren't aren't suffering any burden here. They can do everything that they could within the corporate form, outside the corporate form. They probably don't get the tax break that they would get inside the corporate form, but I'm not sure anything else is very different.

Oh, he he wants to put up a sign

would take care of about 90% of the smaller corporations that Justice Scalia is talking about. They can't just they can't even give money to charity sometimes because of ultra violence giving political contributions. It's not typical corporate activity.

And is I I remember spending, quite a few days one summer reading through a thousand pages of opinion in the D. C. Circuit, and I came away with the distinct impression that Congress has built an enormous record of support for this bill in the evidence. And my recollection is that it's now a couple of years old, that there was a lot of information in that which suggested that many millions of voters think, at the least, that large corporate and union expenditures or contributions in favor of a candidate lead the benefited political figure to decide quite specifically expanding organization, the corporation or the union.

Yes, that's

Now, it was on the basis of that, I think, that this Court upheld the law in Bicra. But we've heard from the other side there isn't much of a record on this. So if you can save me some time here, perhaps you could point me, if I'm right, to those thousand pages of opinion and tens of thousands of underlying bits of evidence where there might be support for that proposition.

Yes. That's exactly right, Justice Breyer, that in addition to just the hundred year old judgment that Congress believes this is necessary, that very recently, members of Congress and others created a gigantic record showing that there was corruption and that there was the appearance of corruption. And in that record, many times, senators, former senators, talk about the way in which fundraising is at the front of their mind in everything that they do, the way in which they grant access, the way in which they grant influence, and the way in which, outcomes likely change as a result of that fundraising.

And, Counsel, can I ask it seems, to your shareholder protection rationale, isn't it extraordinarily paternalistic for the government to take the position that shareholders are too stupid to keep track of what their corporations are doing and can't sell their shares or object in the corporate context if they don't like it?

I I don't think so, Mr. Chief Justice. I mean, I, for one, can't keep track of what my, the where where I hold. Very Well,

you have a busy job.

You can't expect that. But

It's not that it's not that I But it is extraordinary.

I mean, the it's the idea, and as I understand the rationale, is we we the government, big brother, has to protect shareholders from themselves. They might give money, they might buy shares in a corporation, and they don't know that the corporation is taking out radio ads. The government has to keep an eye on their interests.

I I I appreciate that. It's not that I have a busy job. It's that I, like most Americans, own shares through mutual funds. You don't know where your mutual funds are investing, so you don't know where you're going. MR.

So it is. I mean, I understand. So it is a paternalistic interest. We, the government, have to protect, you naive shareholders.

In in a world in which most people own stock through mutual funds, in a world in which most people own stock through retirement plans in which they have to invest, they have no choice, I think it's very difficult for individual shareholders to be able to monitor what each company they own assets in is doing or even to know the extent of the

In that in that respect, it's unlike the union because the the the worker who does not want to affiliate with the union cannot have funds from his own pocket devoted to political causes, but there's no comparable check for a corporation.

That that that's exactly right, Justice Ginsburg. In the union context, of course, it's a constitutional right that the unions, give back essentially the funds that any union member or employee in the workplace does not want used for electoral purposes.

Does that mean that unions should be taken out because there isn't the same, the the shareholder protection interest? No. There's no parallel for the union.

You're right about that. But, the government believes that with respect to unions, the anticorruption interest is is as strong and that unions should be kept in. I think what your point suggests, the the the the the the union member point suggests why Congress might have thought that there was a compelling interest to protect corporate shareholders in the same way that, let's say, dissenting union members are protected by the Constitution. There's no State action, of course, so there's no constitutional right in the corporate context. But Congress made a judgment that it was an important value, that shareholders have this choice, have the ability both to invest in our country's assets and also to be able to choose our country's leaders.

But it's not investing in our countries

argument. In the course of this argument, have you have you covered point two?

I very much appreciate that. I don't

know what it is, so, like, my notes are complete.

I very much appreciate that, Justice Kennedy. I think I did cover point two, which was an explication of of some of the questions that the chief justice asked me about what interests the government was suggesting motivated these laws and are compelling enough such that, this Court certainly should not invalidate these laws.

I think that we have never accepted your shareholder protection interest. This is a new argument.

You you know, I think that that's fair. Certainly, Belotti does not accept it. I would say, you know, National Right to Work is a is a interesting opinion because National Right to Work accepts for a unanimous court both the shareholder protection argument and the anticorruption argument with respect to section four forty one in particular. Now, in later cases, the Court has suggested that National Right to work was only focused on contributions. If you read, national right to work, that distinction really does not, it's not evident on the face of the opinion.

And I think Chief Justice Rehnquist in later in a later dissent suggested that he had never understood it that way. But so national right to work is is a is a confusion on this point. It might have been that I guess that

but Other than that, and I I think there may be some ambiguity there, but I wouldn't say that NRWC is a holding on shareholder protection. So to the extent you've abandoned the original rationale in Austin and articulated different rationales, you have two, the quid pro quo corruption interest and the shareholder protection interest.

Which we think was in Austin.

Austin, I thought, was based on the aggregation of, immense wealth by corporations.

You know, again, Austin is not the most pellucid opinion. But the way we understand Austin, what Austin was suggesting was that the corporate form gave corporations, significant assets, other people's money, that when the corporation spent those assets

Can you can you give

me the citation to the page in Austin where we accepted the shareholder protection rationale?

I think it comes, when the, when when the court is distinguishing MCFL. And the the the message of that distinction of MCFL is the shareholder protection interest. But, you

Do the words shareholder I I don't know. Do the words shareholder protection appear in the Austin opinion?

I honestly don't know, mister chief justice. And and look look, I don't want to put this too far.

Let's let's assume they don't. Then I I'll get back to my question, which is you are asking us to defend the Austin or support or continue the Austin opinion on the basis of two rationales that we have never accepted, shareholder protection and quid pro quo corruption.

Well, I would say on the quid pro quo corruption, of course, you've accepted that rationale in many countries,

not expenditures.

That's correct. And I think what has changed since, since that time is the BIPRA record that justice Breyer suggested, which was very strong on the notion that there was no difference when it came to corporate contributions and expenditures, that there actually was no difference between the two. The default Is

that a yes? Is that a yes? In other words, you're asking us to uphold Austin on the basis of two arguments, two principles, two compelling interests we've never accepted In in this in the expenditure.

In this particular context, fair enough. You know, I And

to undercut Buckley in so doing?

Well, I don't think so, because I I do think Buckley was about individuals rather than corporations. And Buckley was in 1976, not in 02/2009, after the very extensive record that was created in BCRA. I see my time is up. I don't May

I ask just one one question that was highlighted in the prior argument, and and that was, if Congress could say no TV and radio ads, could it also say no newspaper ads, no campaign biographies? Last time, the answer was, yes, Congress could, but it didn't. Is that is that still the government's answer?

The the government's answer has changed, Justice Ginsburg. It it it it is still true that Bicra two zero three, which is the only statute involved in this case, does not apply to books or anything other than broadcast. Four forty one b does, on its face, apply to other media. And, we took what the court what the court's, the court's own reaction to some of those hypotheticals very seriously. We went back.

We considered the matter, carefully. And the government's view is that although four forty one b does cover full length books, that there would be a quite good as applied challenge, to any attempt to apply four forty one b in that context. And I should say that the FEC has never applied four forty one b in that context. So for sixty years, a book has never been at issue.

What happened to the overbreadth doctrine? I mean, I I thought our doctrine in the Fourth Amendment is if you write it too broadly, you we're not gonna pare it back to the point where it's constitutional. If it's overbroad, it's invalid. What happened to that?

I I don't think that it would be substantially overbroad, Justice Scalia, if I tell you that the FEC has never applied the statutes to a book. To say that it doesn't apply to books is to take off, you know, essentially nothing from the historic You don't

put our first we don't put our First Amendment rights in the hands of FEC bureaucrats. And if you say you're not going to apply it to a book, what about a pamphlet?

I think a a a a pamphlet would be different. A pamphlet is pretty classic electioneering. So there just is no attempt to take video and not to print.

Well, what if the particular what if

the particular movie involved here had not been distributed by video on demand? Suppose that, people could view it for free on Netflix over the Internet. Suppose that free DVDs were passed out. Suppose people could attend the movie for free in a movie theater. Suppose the exact text of this was distributed in a printed form.

Now in light of your retraction, I I have no idea where the government would draw the line with respect to the medium, that could be, prohibited.

Yes. Well, none of those things again are covered.

No. But could they? Which of them could and which could not? I I I understand you to say books could not.

Yes. I I think what we're saying is that, there has never been an enforcement action for books. Nobody has ever suggested, nobody in Congress, nobody in the administrative apparatus has ever suggested that books pose any kind of corruption problem. So I think that there would be a good as applied challenge with respect to that.

So you're you're a lawyer advising somebody who's about to come up with a book, and you say, don't worry. The f c the FEC has never tried to send somebody to prison for this. The statute covers it, but don't worry. The FEC has never done it. That gonna comfort your client?

I don't think so.

But this this statute doesn't cover. It doesn't cover books.

No. No. That's exactly right. The only statute that's involved in this case does not cover books. So, four forty one, which,

Does cover books.

Which which which does cover books, except that I've just said that there would be a good as applied challenge and that there has been no administrative practice of ever applying it to the books, and also only applies to express advocacy. Right? Two zero three has is is has a a broader category of the functional equivalent of express advocacy, But four forty one b is only express advocacy, which and part of the reason why it's never applied to a book is one cannot imagine very many books that would meet the definition of express advocacy as this Court has understood that.

Well, I'm sorry. That we suggested some in the last argument. You have a history of union organizing and union involvement in the politics in politics. And the last sentence says, in light of all this, vote for Jones.

I I think that that wouldn't be covered, Mr. Chief Justice. The FEC is very careful and and says this in all its regulations to view matters as a whole. And as a whole, that book would not count as express advocacy.

Thank you, general.

Mister Waxman. Mister chief justice, and may it please the court, the requirement that corporations fund electoral advocacy the same way individuals do, that is, with money voluntarily committed by people associated with the corporation, is grounded in interests that are so compelling that fifty two years ago, before Buckley was decided, before FECA was enacted, before Buckley style quid pro quo corruption was ever addressed, this Court explained that, quote, what is involved here is the integrity of our electoral process and not less the responsibility of the individual citizen for the successful functioning of that process. If the Court now wishes to reconsider the existence and extent of the interests that underlie that sentiment expressed for the Court by Justice Frankfurter in the context of a prosecution of union officials for running television ads supporting political candidates, it should do so in a case in which those interests are forthrightly challenged with a proper and full record below.

One of the amicus briefs I'm not maybe it's Professor Hayward, if I'm getting that right suggested the history, of this 1947 provision was such that it really wasn't enforced because people were concerned about the First Amendment interest, and that the courts, to the extent cases were brought, did everything they could to avoid, enforcing the limitations.

Well, I I don't recall who the professor was either, mister Chief Justice, but I do recall pretty well the history that was recounted. I mean, I would say the history that was recounted by this Court in the auto workers' case, in CIO, in the pipefitters' case, which is quite inconsistent with that. We've never had a case until this Court's supplemental order. We've never had a case that challenged directly, quote, Austin and Austin style corruption, which is a term, I think, that is quite misleading. When the sober minded Elihu Root was moved to stand up in 1894 and urge the people of The United States and urge the Congress of the United States to enact legislation that would address, quote, a constantly growing evil which has done more to shake the confidence of plain people of small means of this country in our political institutions than any practice which has ever obtained since the founding of our government.

He was not engaging in a high level discussion about political philosophy.

But he was talking about contributions in that context. That's quite

clear. I with all due respect, Justice Kennedy, I don't think that there was any distinction whatsoever in that time between the distinction that this Court came to understand, as a result of FECA and its adjudication of FECA, and and that really the prehistory of Taft Hartley between contribution expenditures. For this reason, Justice Kennedy, what Root said was the idea and I'm quoting now from his speech, which is also partly reprinted in this Court's opinion in McConnell the idea is to prevent the great companies, the great aggregations of wealth from using corporate funds directly or indirectly to send members of the legislature to these halls in order to vote for their protection and the advancement of their interests as against those of the public. Now, great.

Great. Regulations of wealth.

The the brief by the, Chamber of Commerce, the amicus brief by the Chamber of Commerce, points out that 96% of its members employ less than a hundred people. These are not aggregations of great wealth. You're not talking about the railroad barons and the and the, rapacious trusts of the Elihu Root era. You're you're talking mainly about small business corporations.

Justice Scalia, I I take your point, and I I think you have made this point forcefully many times before. A unanimous court in National Right to Work Committee concluded that Congress was entitled to make the judgment that it would treat, in order to address this root evil, a a problem of such concern that it goes to the very foundation of the Democratic Republican exercise, that is, the notion of integrity and representative government. Now, this this case, of course, is not a case that

I don't understand that answer. I mean, if if that's what you're concerned about, what Elihu Root was concerned about, you could have said all corporations have a net worth of more than, you know, so much or or whatever. That isn't what Congress did. It said all corporations.

Right. And, justice Scalia, if

a small

corporation or even any corporation of any sort wants to bring an as applied challenge to four forty one or a State law analog and say, you know, I am not the problem that Theodore Roosevelt and Elihu Root was addressed at. There isn't a compelling interest because I only have three employees and $8,000 in my bank account. That's fine. But what is extraordinary, truly extraordinary, given the sentiments that underlay the Tillman Act and the Taft Hartley Act, is that we would be having a discussion today about the constitutionality of a law that has been on the books forever when no party, no corporation has ever raised the challenge.

I I well recall. It's been

on it's been on the books forever. Number number one, the phenomenon of of television ads where we get information about scientific discovery in the in environment, transportation issues of from corporations who, after all, have patents because they know something, that that that is different. And the the history you applied applied to contributions, not to those kinds of expenditures.

Justice Kennedy, first of all, I I think it is actually true that patents are owned by individuals and not corporations. But be that as it may, there is no doubt I'm not here saying that this Court should reconsider Bellotti on first principles any more than I'm saying that it shouldn't consider Austin on first principles. Corporations can and do speak about a wide range of public policy issues. And since the controlling opinion was issued in Wisconsin Right to Life, the the kind of campaign related speech that corporations can't engage in in the pre election period is limited to the functional equivalent of express advocacy and nothing else.

Mister Waxman, all this talk about a hundred years and fifty years is perplexing. It sounds like, the sort of sound bites that you hear on TV. The fact of the matter is that the only cases that are being that may possibly be reconsidered are McConnell and Austin. And they don't go back fifty years, and they don't go back a hundred years.

My point here is, Justice Alito, and I don't mean to be to be demeaning this Court with soundbites. The point is that what Austin was, to be sure, the very first case in which this Court had to decide, actually had to decide, whether or not the prohibition on corporate treasury funded campaign speech could properly be limited and was supporting by a compelling interest. All that I'm suggesting, and I hope that if you take nothing else from my advocacy today, it will be this, is that we have here a case in which the Court has asked a question that essentially goes to the bona fides, that is, the factual predicates of the interests that have been viewed as compelling in Austin, in MCFL, in McConnell itself, whether you call it the corrosive effect of corporate wealth, whether you call it, quote, shareholder protection

And my point is that there is nothing unusual whatsoever about a case in which a party before the court says my constitutional rights were violated, and there is no prior decision of this court holding that what was done is constitutional. And in that situation, is it an answer to that argument that this has never been challenged before? The court has never, held that it was unconstitutional. It has been accepted up until this point, by the general public that this is that this is, constitutional. No.

That's not regarded as an answer to

that question.

But but you mister Olson is was quite right. It was either Mr. Olson or Mr. Abrams. I find it so difficult to tell the two apart.

One of them was saying, well, it's

you know, yes, there I think in response to Justice Sotomayor's question, you know, about, well, there's no factual record here. There's absolutely nothing in this case. And it's the response was, well, it's the government's burden. The government has to prove that any restriction that it imposes passes strict scrutiny. Fair enough.

But the question has to be raised. The issue has to be raised if the if Austin, Justice Alito, or the compelling interests that Austin and McConnell relied on were forthrightly challenged in a case, the government would have the option to

do that. Well, Mr. Waxman, the government did have that opportunity, and the government compiled a record. And when the, Citizens United abandoned that position you're quite right, they changed their course the government and the district court complained that it had to go to all this work to develop this record, and yet we hear nothing about what the record showed.

Well, that's because the I assume I have your permission to answer your question. The the only challenges that were litigated in the district court, and they largely were related to disclosure, were very direct as applied challenges that had that did nothing whatsoever to implicate the foundation of McConnell or Austin. And all I'm saying is if you want to reexamine the predicates, the existence and magnitude of interests that Congress is going back a whether it's sixty years or a hundred years, and courts, whether it has been the actual rationale of the decision or a predicate of the rationale of the decision. You ought to do it in a case where the where the issue is squarely presented so that the government can do what it did in McConnell and in another context in Michigan versus Gruder when it was suggested that Atteran had undermined this court's controlling opinion in Bakke. Thank you.

Thank you, mister Waxman. Mister Olson, five minutes.

Thank you, mister chief justice. The words I would leave with this court are the solicitor general's. The government's position has changed. The government's position has changed as to what media might be covered by congressional power to censor and and ban speech by corporations. Now we learn, contrary to what we heard in March, that books couldn't be prohibited, but pamphlets could be prohibited.

We've also learned

that's not the the statute that we're involved in in this case does not cover those. Unless

they're engaged in, quote, express advocacy. And the other way in which the government has changed its position, if I listen carefully, is what type of corporation might be covered. The government now says that it wouldn't the the FEC, is now willing to recede from its regulations, which explicitly cover this corporation. And I don't know, as I stand here today, what kind of corporations the government would choose to prosecute. Remember, the Federal Election Commission, which didn't even have a quorum and couldn't function at all for six months during the important election year of February to

choose to prosecute only those who do not who who do not rely exclusively on individual contribution. Well, that that that's

your question from before Yes. Justice Stevens. And that, a, it wouldn't this corporation accepted a small amount, $2,000 out of the out of the funding of this. So that wouldn't solve the problem for my corporation, my client's corporation.

Would solve it for the advertising. They're two different things. There's the the long Hillary document and the advert advertisements that would cover those.

It but the

But the They're the only only ones that are clearly violating the statute.

My point is that the overbreadth of this statute, that solves the problem by saying that corporations still can't speak. And if you don't have anything to do with them, if you you they wear a scarlet letter that says, see, if you accept $1 of funding and you better make darn sure that when a check comes in for a hundred dollars from the x y z hardware store in the neighborhood, that it wasn't a corporation that you used to to make a documentary about a candidate. The other way in which the government's position has changed is we do not know Does that

mean you disagree with the NRA's submission?

I I submit that it does not solve the problem it would lead exactly. If it solved the problem as it would for the advertising,

would it be an appropriate

It does it I can't say that if it solved the problem because it doesn't solve the problem of prohibiting all corporate speech. And I think and I'm submitting, justice Stevens, that that's unconstitutional. I think what you're suggesting is that some limitation that what what you're suggesting is not a whole lot different than PAC. It would lead, I think, justice Breyer was saying, an accounting nightmare.

It would be very nightmare that congress endorsed in the Snow Jefferson

Well, but the but that the Wellstone Amendment

sort of, in a sense, repealed it. We've held the Wellstone Amendment literally cannot be applied.

Well We unanimously held it. I I think what what the my response is that that does not solve the problem of inhibiting of what's called the not endorse the NRA's position. No. We don't, justice Stevens. And and as I said, it wouldn't exempt my clients.

The other the third way in which the government's changed its position is its rationale for this prohibition in the first place. Is it corruption? Is it shareholder protection? Is it equalization? There was some dispute.

I heard the solicitor general say that the equalization rationale was something the government disavowed. It wasn't what Austin said the government

But but

government said. And I

Justice Marshall said that he was not trying to equalize all voices in the political process. Here's a sentence that says, somehow, that's not what the rationale of this case is.

I don't I don't with all due respect, justice Ginsburg, the words that jump out at me are the words from page six sixty five that say the desire to counterbalance those advantages unique to the corporate form is the state's compelling interest in this case. That sounds to me like like equalization. I don't know. I'm I'm representing an individual who wants to speak about something that's the most important thing that goes on in our democracy. I'm told it's a felony.

I'm not and I don't I don't know what the rational basis is. It's overbroad. Now I hear about this shareholder protecting shareholders. There's not a word in the congressional record with respect to the which was before the court in the McConnell case about protecting shareholders. As the Bellotti case pointed out, that would be overbroad anyway because this statute applies to every Actually, I

read that sentence that you just read as meaning the corporation is an artificial person, in respect to which the State creates many abilities and capacities, and the State is free also to create some disabilities and capacities. It's not a statement about balancing rich and poor.

Well, it it it strikes me that it is because it follows the words that say corporations are given unique advantages to aggregate wealth, and then we must take away that advantage by equalizing the process. I think that's a plain meaning. But my point, I guess, is if I may finish this sentence briefly, just my point is that the government here has an overbroad statute that covers every corporation irrespective of what its stockholders think, irrespective of whether it's big whether it's general, a big railroad baroners, anything like that. And it doesn't know, as it stands here today, two years after this movie was offered for for to the public for its view, what media might be covered, what type of corporation might be covered, and what compelling, justification or narrow standard would be applied to this form of speech?

Thank you, counsel. The case is submitted.

The honorable court is now adjourned until Monday, October at 10AM.