First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978), is a U.S. constitutional law case which defined the free speech right of corporations for the first time. The United States Supreme Court held that corporations have a First Amendment right to make contributions to ballot initiative campaigns.. The ruling came in response to a Massachusetts law that prohibited corporate donations in ballot initiatives unless the corporation's interests were directly involved.
In 1976 several corporations, including the First National Bank of Boston, were barred from contributing to a Massachusetts referendum regarding tax policy and subsequently sued. The case was successfully appealed to the Supreme Court, which heard oral arguments in November 1977. On April 26, 1978, the Court ruled 5–4 against the Massachusetts law.
As a result of the ruling, states could no longer impose specific regulations on donations from corporations in ballot initiative campaigns. While the Bellotti decision did not directly affect federal law, it has been cited by other Supreme Court cases such as McConnell v. FEC and Citizens United v. FEC.
Background
Corporate funds and federal elections Since the early 1900s, federal law has prohibited the use of corporate funds to influence federal elections.Greenwood, Daniel J. Encyclopedia of the Supreme Court of the United States, s.v. “First National Bank v. Bellotti, 435 U.S. 765 (1978). Detroit: Macmillan Reference USA, 2008. In 1907, Congress passed the Tillman Act, prohibiting corporations and national banks from contributing to federal campaigns.18 U.S.C. Sec. 610. Act of January 26, 1907, 34 Stat. 864.“Turn of the Twentieth Century Timeline,” Central Connecticut State University, accessed 4/5/14.“Appendix 4: The Federal Election Campaign Laws: A Short History” , Federal Election Commission. Accessed 4/5/14. Forty years later, the Taft-Hartley Act banned direct election contributions by labor unions and corporations to federal elections.Kirk Nahra, “Political Parties and the Campaign Finance Laws: Dilemmas, Concerns, and Opportunities,” Fordham Law Review, vol. 56, issue 1 (1987).
In 1971, the Federal Election Campaign Act (FECA) initiated sweeping reforms by requiring full reporting of contributions to federal elections.“The FEC and the Federal Campaign Finance Law,” Federal Election Commission. February 2004.Federal Election Campaign Act of 1971. 2 U.S.C § 431. In 1974, amendments to the FECA created the Federal Election Commission and enacted stricter limits on election contributions and expenditures.
That same year, Buckley v. Valeo (decided in 1976) challenged the 1974 FECA amendments in the U.S. Supreme Court on the grounds that they violated the First Amendment's guarantees of free speech.Buckley v. Valeo. 424 U.S. 1 (1976). The Court, introducing the concept of spending money as a form of unrestricted political speech, overturned limits on campaign expenditures.”Litigation CCAB” , Federal Election Commission. Accessed 4/5/14. However, it upheld contribution limits because such limits served the government's interest in reducing election corruption.
Before the Massachusetts Supreme Court In 1976, Massachusetts passed Massachusetts General Laws ch. 55 § 8,, Annotated Laws of Massachusetts GL ch. 55 § 8. which expanded the 1974 FECA amendment's prohibitions. The new criminal statute disallowed the use of "corporate funds to purchase advertising to influence the outcome of referendum elections, unless the corporation's business interests were directly involved."
That same year, Massachusetts proposed a constitutional amendment (to be voted upon in a referendum election) modifying income tax laws. The First National Bank of Boston, New England Merchants National Bank, the Gillette Co., Digital Equipment Corp., and Wyman-Gordon claimed that this amendment affected their business interests and that they should be allowed to spend corporate funds on relevant advertising.First Nat. Bank of Bos. v. Attorney Gen., 371 Mass. 773, 359 N.E.2d 1262 (1977). The Massachusetts Attorney General's Office, applying Massachusetts General Laws. ch. 55 § 8, disagreed.
In response, the corporations sued Massachusetts Attorney General Francis Bellotti, the Coalition for Tax Reform, and United Peoples, Inc., contending that Massachusetts General Law ch. 55 § 8 was unconstitutional because it violated their right to free speech. The Supreme Judicial Court of Massachusetts heard The First National Bank of Boston & others v. Attorney General & others on June 8, 1976.
On February 1, 1977, the Massachusetts Supreme Court ruled in favor of the defendants, stating that Massachusetts General Laws ch. 55 § 8 was constitutionally applied because of a failure to find a material effect on the corporations' business interests. The plaintiffs appealed the decision to the United States Supreme Court."Syllabus, First Nat’l Bank of Boston v. Bellotti – 435 U.S. 765 (1978).” Justia. Accessed 3/22/14.
Before the Supreme Court The U.S. Supreme Court heard First National Bank of Boston et al. v. Bellotti, Attorney General of Massachusetts, on November 9, 1977.
Francis H. Fox presented the oral arguments on behalf the appellant, the First National Bank of Boston in representation of national banking associations and business corporations.Lexis Summary. 435 U.S. 765; 98 S. Ct. 1407; 55 L. Ed. 2d 707; 1978 U.S. LEXIS 83; 3 Media L. Rep. 2105. Date Accessed: 2014/03/23."First National Bank of Boston v. Bellotti" The Oyez Project at IIT Chicago-Kent College of Law, accessed April 5, 2014. E. Susan Garsh joined him on the briefs. Massachusetts Assistant Attorney General Thomas R. Kiley spoke during oral argument for the appellee. The Attorney General Francis X. Bellotti and Assistant Attorney General Stephen Schultz joined him on the brief. Main issues addressed during oral arguments included corporations as persons, the scope of freedom of speech, and the power of the states.
The Associated Industries of Massachusetts, Inc. and the U.S. Chamber of Commerce filed briefs of amici curiae supporting a reversal of the lower courts' ruling.Lexis Summary. 430 U.S. 964; 97 S. Ct. 1642; 52 L. Ed. 2d 354; 1977 U.S. LEXIS 1460. Date Accessed: 2014/03/23.Lexis Summary. 429 U.S. 876; 97 S. Ct. 199; 50 L. Ed. 2d 159; 1976 U.S. LEXIS 3046. Date Accessed: 2014/03/23. The Federal Election Commission filed briefs of amici curiae supporting an affirmation of the constitutionality of the statue. The State of Montana, the New England Council, and the Pacific Legal Foundation also filed amicus briefs.Lexis Summary. 431 U.S. 963; 97 S. Ct. 2918; 53 L. Ed. 2d 1058; 1977 U.S. LEXIS 2336. Date Accessed: 2014/03/23. The Northeastern Legal Foundation's motion to file a brief was denied.Lexis Summary. 432 U.S. 904; 97 S. Ct. 2947; 53 L. Ed. 2d 1076; 1977 U.S. LEXIS 2471. Date Accessed: 2014/03/23.
Opinions of the Court
Overview The Supreme Court issued its decision on April 26, 1978, with a 5-to-4 majority vote in favor of the First National Bank of Boston.Bellotti, 435 U.S. at 766. Justice Powell delivered the majority opinion and was joined by Justices Stewart, Blackmun, and Stevens, with Burger writing a separate concurring opinion. Justice White was joined by Justices Brennan and Marshall in his dissent, with Justice Rehnquist issuing a separate dissent.Bellotti, 435 U.S. at 767. The Supreme Court ruled that corporations have First Amendment speech protections extending beyond material commercial interests, reversing the decision made by the Massachusetts Supreme Court.59 S. Cal. L. Rev. 1227 (1985-1986). Free Speech and Corporate Freedom: A Comment on First National Bank of Boston v. Bellotti; Schneider, Carl E. Page 1227.
Majority opinion In opinion written by Justice Powell, the court held: the case was not moot because it was one of a category of cases that is "capable of repetition, yet evading review;" the statute was unconstitutional and the argument that a corporation's speech regarding issues not relevant to the business loses its First Amendment protection is invalid.
In its ruling, the Court first considered whether the case was moot.Bellotti, 435 U.S. at 774. The constitutional amendment that the appellants had opposed had been defeated by the time the case came to the Court's attention. The Court used the scrutiny described in Weinstein v. Bradford in its determination that the case was not, in fact, moot.."First Amendment--Corporate Free Speech", Journal of Criminal Law & Criminology 69 (1978): 545, accessed April 20, 2014. The Court's rationale was twofold: first, the interval between the amendment's proposal and its referendum was too short for complete judicial review to have occurred; and second, the Court found that there was a reasonable expectation that the appellants would be adversely affected by the statute again.Bellotti, 435 U.S. at 774-775.
Then, the Supreme Court held that the Massachusetts statute in question violated corporate speech rights protected under the First Amendment.Bellotti, 435 U.S. at 786-787. The majority wrote that "commercial speech is accorded some constitutional protection not so much because it pertains to the seller's business as because it furthers the societal interest in the 'free flow of commercial information.'"
The majority opinion asserted that "the inherent worth of the speech in terms of its capacity for informing the public does not depend upon the identity of its source, whether corporation, association, union, or individual." In deciding the case, the Court rejected the argument that the Fourteenth Amendment did not apply to corporations.Bellotti, 435 U.S. at 784. The Court overruled Pierce v. Society of Sisters, which stated that corporations "cannot claim for themselves the liberty which the Fourteenth Amendment guarantees," declaring the decision to be "untenable under decisions of this Court".. Instead, the Court asserted that the Due Process Clause extends freedom of speech and other First Amendment liberties to corporate entities.1979 Utah L. Rev. 98 (1979) Prohibition of Corporate Political Expenditures: The Effects of First National Bank v. Bellotti; Green, Thomas B. Page 98.
The majority rejected the argument that the First Amendment rights of a corporation derive purely from their business and property interests.67 Geo. L. J. 1347 (1978-1979). O'Kelley, Charles R. Jr. Constitutional Rights of Corporations Revisited: Social and Political Expression and the Corporation after First National Bank v. Bellotti, The. Pages 1370-1371. Furthermore, the Court asserted that "the Court's decisions involving corporations in the business of communication or entertainment are based not only on the role of the First Amendment in fostering individual self-expression, but also on its role in affording the public access to discussion, debate, and the dissemination of information and ideas".Bellotti, 435 U.S. at 783. The Supreme Court cited Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, in which the Court held that whether "the advertiser's interest in a commercial advertisement is purely economic does not disqualify him from protection under the First and Fourteenth Amendments. Both the individual consumer and society in general may have strong interests in the free flow of commercial information.". The Court found that there was no evidence that corporations lost speech protections if their speech did not materially affect the business of the corporation.59 S. Cal. L. Rev. 1227 (1985-1986), at 1229. Thus, the Court held the statute violated the First Amendment rights of the corporation.