Federal Election Commission v. Beaumont

PETITIONER:Federal Election Commission
LOCATION:United States Court of Appeals for the Ninth Circuit

DOCKET NO.: 02-403
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 539 US 146 (2003)
ARGUED: Mar 25, 2003
DECIDED: Jun 16, 2003

James Bopp, Jr. – Argued the cause for the respondents
Paul D. Clement – Department of Justice, argued the cause for the petitioner

Facts of the case

In 1971 Congress passed the Federal Election Campaign Act, banning direct corporate donations to federal election campaigns. In 2000, Christine Beaumont and the North Carolina Right to Life (NCRL), an anti-abortion advocacy group, challenged the act, saying it violated their right to free speech. The group is an incorporated non-profit that lobbies and backs political candidates friendly to its cause, but under the act it cannot make political donations. The district court ruled in favor of NCRL. The 4th Circuit Court of Appeals affirmed.


Does the Federal Election Campaign Act’s ban on corporate political donations violate the freedom of speech for incorporated, non-profit advocacy groups?

Media for Federal Election Commission v. Beaumont

Audio Transcription for Oral Argument – March 25, 2003 in Federal Election Commission v. Beaumont

Audio Transcription for Opinion Announcement – June 16, 2003 in Federal Election Commission v. Beaumont

William H. Rehnquist:

The opinion of the Court in No. 02-403, Federal Election Commission versus Beaumont will be announced by Justice Souter.

This case comes to us on writ of certiorari to the Court of Appeals for the Fourth Circuit.

Federal Election law prohibits a corporation from making contributions or expenditures in connection with certain federal elections, but the law allows a corporation to solicit donations to a separate fund called a PAC that may make electoral contributions and expenditures.

The respondents who include a non-profit advocacy corporation known as North Carolina Right to Life, Inc. brought a First Amendment challenge to these restrictions as applied to the corporation which I will call NCRL.

It is relevant to our case, the District Court granted summary judgment in favor of NCRL, and held it so far as the ban on direct contributions applied to NCRL, it was unconstitutional.

A divided Fourth Circuit affirmed.

In an opinion filed today with the Clerk of the Court, we reverse.

The core ban on direct electoral contribution by corporations has been in effect since the first federal campaign finance law in 1907.

Today, then the law focuses on special characteristics of the corporate structure that can threathen the integrity of the political process.

By preventing corporate wealth from being converted into political war chests, the ban was and is intended to prevent corruption and the appearance of corruption; the ban also protects individuals who have paid money into a corporation from having their money used to support political candidates to whom they may be opposed, and the ban hedges against the use of corporations whose conduits were circumventing valid contribution limits for individuals.

Based with the historical pedigree of the ban on direct, contributions, corporate contributions, NCRL limits its challenge to the laws and application to nonprofit advocacy corporations.

We all but rejected this focused argument in 1982, however in a case called FEC against National Right to Work Committee.

Although that case involved a specific provision restricting PAC solicitation, it is hard to read our opinion there except on the practical understanding that limiting an advocacy corporation to indirect contributions through a PAC is constitutional.

Moreover, we specifically rejected the argument pressed by NCRL here.

The deference to congressional judgments about corporate contribution restrictions should turn on details of corporate form or on the affluence of particular corporations.

Another significant case is our later decision in FEC against Massachusetts Citizens for Life in which we held the laws ban on independent expenditures unconstitutional as applied to a non-profit advocacy corporation.

In so doing, we specifically reaffirmed our explanation in National Right to Work and distinguish the earlier cases involving regulation of contributions not expenditures.

In short, we could not rule in NCRL’s favor without revising or understanding of the potential risks of corporate contributions, of the expressive significance of contributions, and of the consequent deference owed for legislative judgments on the subject of contributions.

NCRL’s efforts to unsettle these points are without merit.

First non-profit advocacy corporations no less than the for-profit counterparts benefit from state created advantages and maybe able to a mass substantial political war chest as the examples of the National Rifle Association, the AARP, and the Sierra Club may clear.

Second, contrary to NCRL’s argument, the level of scrutiny, we apply a campaign finance regulation, it turns on whether a regulation is a ban or a limit, but on the relationship of the political activity it issued a speech in associational interest.

Going back almost 30 years, restrictions on contributions, they have been treated as merely marginal speech restrictions subject to relatively complaisant First Amendment review.

Applying the appropriate level of scrutiny, we reaffirm that making a PAC, the sole avenue for an advocacy corporations political contributions, is consistent with the First Amendment.

Justice Kennedy has filed a separate opinion concurring in the judgment; Justice Thomas has filed a dissenting opinion which Justice Scalia joins.