New research: Citizens United Can Be Made Irrelevant Via Changes To State Corporation Law

[MayReasonRule]

47. Here Ya' Go...

"Corporations are pure creatures of law; they do not exist without law and have zero powers until a government grants them some."


Though the Supreme Court did not use these exact terms, Citizens United centered on the ability of government to regulate the right of corporations to exercise powers of political speech that the state had granted them. When the court wrote,

“Citizens United is a nonprofit corporation,”25 it was a bit of shorthand. The long version is: Citizens United is a nonprofit corporation to which the Commonwealth of Virginia has granted the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, among them (since Virginia law does not specify otherwise), the power to spend independently in candidate elections.

And because Citizens United was an entity to which Virginia had granted the power to spend in elections, the court found that Citizens United was an entity that had the right to spend in elections. Had Citizens United shown up in court as an entity to which Virginia had not given the power to spend in elections, the analysis would have to have been quite different.

A footnote in Citizens United itself underscores that the First Amendment comes into play only after a state chooses to grant corporations the power to engage in political spending. In his concurrence, Justice Scalia dismissed as irrelevant the dissent’s claim that the common law was generally interpreted as prohibiting corporate political spending: “Of course even if the common law was ‘generally interpreted’ to prohibit corporate political expenditures as ultra vires [beyond its authority and therefore void], that would have nothing to do with whether political expenditures that were authorized by a corporation’s charter could constitutionally be suppressed.”26 The necessary inverse is clear: When the state does withhold that power, it may treat any corporate political spending as unauthorized and void without triggering First Amendment scrutiny.

Think of it this way: Humans are born with the inherent power to live freely, pursue happiness, and shape their destiny. But they have not been granted the power to fly. Birds have, bats, pterodactyls—but not humans. It is useless to discuss whether humans have a right to fly, because without the power to do so, the right to do so has no meaning. Even if the Supreme Court decreed that humans had a constitutional right to fly, there is no amount of arm flapping that would result in humans taking to the skies, because they would still lack that ability. This lack of power to fly could not be held to infringe on the right to fly that the Supreme Court had recognized. It is simply an underlying reality that no court—not even the Supreme Court—can touch.

Likewise, when a state exercises its authority to define corporations as entities without the power to spend in politics, it will no longer be relevant to discuss whether the corporations have a right to spend in politics, because without the power to do so, the right to do so has no meaning.

Every scrap of corporate speech jurisprudence centers on rights and the authority of government to regulate them—and courts have consistently held that authority to be sharply circumscribed. The jurisprudence regarding states’ authority to grant powers to the corporations they create is entirely separate, and for more than a century, courts have consistently held that power-granting authority to be all but absolute.