1A Auto v. Sullivan: Protecting Free Speech and Ending the Union Loophole

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Posted by Olivia Grady on Friday, December 7th, 2018, 9:29 AM PERMALINK

On December 5, 2018, the Goldwater Institute and the Massachusetts Fiscal Alliance asked the U.S. Supreme Court to hear the case 1A Auto v. Sullivan.

The case challenges a Massachusetts law that forbids for-profit businesses from donating to political candidates and committees. The law, however, allows unions and nonprofits to contribute.

1A Auto began on February 24, 2015, when two Massachusetts corporations sued the Director of the Massachusetts Office of Campaign and Political Finance, Michael Sullivan, for First Amendment and Equal Protection Clause violations. The Massachusetts Superior Court unfortunately rejected the corporations’ arguments, and the case was appealed to the Massachusetts Supreme Judicial Court, which affirmed the lower court’s decision on September 6, 2018.

The lower courts held that FEC v. Beaumont, a case where the U.S. Supreme Court upheld a federal law banning corporations, unions, and other organizations from making direct political contributions, required it to reject the corporations’ claims. However, the decision noted that more recent campaign finance cases have reached different conclusions from Beaumont. The court also said that the campaign contribution limit was not subject to strict scrutiny under the Equal Protection Clause because it passed intermediate First Amendment scrutiny.

In their petition to the Supreme Court, the corporations make three arguments. Their first argument is that Beaumont should be overruled because it conflicts with newer decisions and does not protect First Amendment rights. Recent decisions have found that campaign-finance restrictions are only allowed to prevent quid pro quo corruption or the appearance of corruption. Under Beaumont, these restrictions were allowed for several broader reasons, including preventing corporations from exerting substantial influence over the political process. In addition, the corporations argue that the Court should overrule Beaumont because the lower courts continue to use it for their decisions since it has not been overruled by the Supreme Court. The Supreme Court has, however, acknowledged that the case conflicts with other more recent decisions. Finally, Beaumont is discriminatory, allowing campaign contribution bans on some groups, but not on others.

The second argument is that the Court should decide the case so that all donors receive rigorous scrutiny under the First Amendment and Equal Protection Clause. Lower courts currently do not have guidance on how to decide cases with discriminatory contribution limits. As a result, some courts have forced plaintiffs with Equal Protection Clause violation claims to prove that the government purposefully discriminated against them. Instead, the government should have to prove the need for differences in campaign finance limits. Guidance from the Supreme Court is, therefore, clearly needed to protect First Amendment rights and ensure equal protection.

The final argument of the corporations is that the Supreme Court should still overrule the lower court’s decision because it conflicts with Supreme Court decisions even if Beaumont isn’t overruled. For example, the Supreme Court has always allowed contributions to corporate PACs before. The Massachusetts law , however, forbids these types of contributions. In addition, allowing businesses to contribute to PACs greater protects their First Amendment rights than just allowing corporations to make independent expenditures. An independent expenditure simply does not allow a corporation to support a candidate in the same way that contributing to a PAC does. For these reasons, the corporations are asking the Supreme Court to invalidate Massachusetts’ campaign finance law.

Interestingly, six states currently have campaign finance limitations on businesses, while they do not have the same limitations on nonprofits, unions and other associations. In close races, these discriminatory laws make a difference. It’s time to close this union loophole. 

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