1A Auto, Inc. v. Sullivan

Massachusetts law bans for-profit corporations and other business entities from contributing to political candidates and committees. And, unlike federal law, it doesn’t even allow businesses to make contributions indirectly through a PAC.

On the other hand, Massachusetts allows unions to give as much as $15,000 to the political candidates, committees, and parties they favor, and it allows them to create PACs to give even more.

In 2015, two small businesses represented by the Goldwater Institute sued to challenge this scheme for violating their rights under the First Amendment, the Equal Protection Clause of the Fourteenth Amendment, and similar provisions of the Massachusetts Constitution. In September 2018, the Massachusetts Supreme Judicial Court ruled against them.

The Massachusetts court concluded it was bound to uphold the ban under FEC v. Beaumont, in which the U.S. Supreme Court rejected a First Amendment challenge to the federal ban on corporate political contributions.

But the court did note that “the landscape of campaign finance law has changed significantly since Beaumont,” particularly with Citizens United v. FEC. And it acknowledged that Beaumontupheld the federal ban based partly on two supposed government interests that Citizens Uniteddeclared to be illegitimate purposes for campaign finance rules: protecting dissenting corporate shareholders and countering the “misuse” of corporate wealth to wield “undue influence [over] an officeholder’s judgment.” Still, the court believed it had to follow Beaumont because Citizens Uniteddidn’t overrule it.

The plaintiffs, however, maintain that Beaumont shouldn’t have doomed their claims in any event because the federal ban it upheld differed from the Massachusetts ban in two key respects: It gave corporations the option to make contributions indirectly through a PAC, and it applied equally to corporations and unions.

The Massachusetts court also rejected the plaintiffs’ equal protection claim. It concluded that, if the ban on corporate contributions would tend to prevent corruption or the appearance of corruption at all (as the court assumed it would), it could survive the less-than-strict scrutiny the Supreme Court prescribed for challenges to campaign-contribution limits in Buckley v. Valeo. The court saw no problem with the state’s failure to likewise limit unions, citing a Supreme Court decision stating that “policymakers may focus on their most pressing concerns.”

A separate opinion from Massachusetts Chief Justice Scott L. Kafker concurred in the result but criticized the majority for so easily brushing aside the statute’s discrimination in favor of unions and against businesses. But he too found Beaumont controlling unless and until the Supreme Court applies the reasoning of Citizens United to subject corporate-contribution bans to greater scrutiny.

The plaintiffs will file a petition for certiorari asking the U.S. Supreme Court to take their case on December 5.  If accepted, the case could give the Court the opportunity to: (1) clarify that Beaumontdoesn’t require courts to automatically uphold state bans on corporate contributions; and (2) direct lower courts to subject campaign finance schemes that favor some donors over others to more rigorous scrutiny than the Massachusetts court (among others) has given them.