First National Bank of Boston v. Bellotti
435 U.S. 765 (1978)
- Massachusetts had a law that prohibited corporations from spending money to influence the vote on any referendum other than those that materially affected the corporation.
- Basically, corporations couldn’t donate to candidates or place ads to try to sway an election, unless it was for a bill that directly affected the corporation.
- A bunch of bankers, led by First National, sued, claiming that the law was unconstitutional.
- The bankers were worried about the high tax rates on rich people in Massachusetts, and wanted the rates lowered. That didn’t directly affect the banks themselves, but it certainly affected the people who would otherwise put their money in the bank.
- The Massachusetts Supreme Court found the law constitutional. The bankers appealed.
- The Court found that since corporations are not people in the eyes of the law, they should not be covered by the 1st Amendment.
- The US Supreme Court reversed and found the law unconstitutional.
- The US Supreme Court found that if the law had restricted human beings from spending money to influence the political process, it would clearly be a violation of the 1st Amendment.
- The Court found that the 1st Amendment wasn’t about the rights of people to speak, but the rights of other citizens to hear speech. The Court found that the public would benefit from hearing the view of the corporations.
- Massachusetts argued that they had a compelling government interest in preventing wealthy corporations from drowning out the voices of individual citizens. However, the Court found no evidence that this was a problem.
- Massachusetts argued that the law protected the rights of shareholders who didn’t want their profits wasted on causes they didn’t believe in. However, the Court found that it was both underinclusive and overinclusive.
- Underinclusive because it only prohibited spending money on referendums, not other kinds of elections.
- Overinclusive because a corporation was still prevented from spending money even if 100% of the shareholders wanted to.
- In a dissent it was argued that when a corporation speaks, it expresses the purely personal views of the corporate management. It is wrong to use shareholder money to support causes some of the shareholder may not approve of.
- In response, the majority argued that shareholders can also sell their stock if they don’t like the way the management is spending corporate money.
- Contrast this case with Austin v. Michigan Chamber of Commerce (494 U.S. 652 (1990)), which came to pretty much the opposite decision.