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Dykema Statement on U.S. Supreme Court Decision in Citizens United v. Federal Elections Commission

January 21, 2010

Today the U.S. Supreme Court issued its opinion in Citizens United v. Federal Elections Commission, reversing its 1990 decision in Austin v. Chamber of Commerce. The Court also struck down part of the McCain-Feingold campaign finance law that barred union and corporate issue ads in the final days before an election.

Dykema acted as legal counsel in the original 1990 Austin case, and was asked to file an amicus brief in the current Citizens United case arguing that Austin should be reversed. Dykema attorneys Gary Gordon, Jason Hanselman and Alan Wilk authored the amicus brief in Citizens United, contending that the corporate expenditure restrictions that were upheld in Austin are unconstitutional. Gordon, former Chief Deputy of the Michigan Attorney General's Office, had represented Austin in the 1990 case.

The opinion in Citizens United v. Federal Elections Commission will have immediate and potentially far-reaching impact on Michigan's elections. Of specific interest to Michigan corporations is the Court's reversal of its 1990 decision in Austin v. Chamber of Commerce. The Court in Austin had confirmed Michigan's statutory ban on corporate direct expenditures in candidate elections.

Justice Kennedy wrote the primary opinion for the 5-4 majority, with Justice Stevens authoring the dissent, joined by Justices Ginsburg, Sotomayor, and Breyer. The Court stated that Austin's "censorship is vast in reach, suppressing the speech of both for-profit and nonprofit, both small and large, corporations." The Court went on to hold that "There is no basis for the proposition that, in the political speech context, the government may impose restrictions on certain disfavored speakers," explaining that "the government may regulate corporate speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether."

Until today, corporations desiring to address issues related to candidates for office were prevented from acting directly in these elections. A result of today's ruling is that businesses operating under a corporate form will now be able to make direct expenditures in support or in opposition to individual candidates. Other reporting requirements and disclosure of the source of the expenditure may still apply.

This case levels the playing field and allows corporations to participate in certain ways in candidate elections. Dykema's amicus brief argued that there is no valid reason that chambers of commerce, trade associations, and other corporations should be prohibited from meaningful participation in elections merely due to their business structure.

This decision will allow those organizations currently involved to have new options for the upcoming elections. In addition, it may open the door for new organizations to enter the election process who may not have been involved before. We have been working with several interested clients on these matters to explore how this decision might affect them and how they can implement a strategy given this change in law. We expect that the timing of the decision will mean that such strategies will have to be reviewed quickly so that they are available for the 2010 elections."

Our job now as campaign finance lawyers is to effectively and creatively turn what were previously considered "soft money" expenditures into "hard money expenditures" while still complying with the restrictions that the Supreme Court did not address in Citizens United. We have plans to conduct a seminar in the next few weeks to discuss this decision. If you have any questions, please feel free to contact a member of our political compliance team.


As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2010 Dykema Gossett PLLC. 

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2017 Dykema Gossett PLLC.