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Corporations and the First Amendment: Free Speech Rules (Episode 6)


Here are the five rules of free speech and corporations. Rule one. Corporations have First Amendment rights. The Supreme Court’s first decision protecting individual’s free expression rights came in 1931. It’s first decision protecting a corporation’s free expression rights came just five years later in 1936. That decision involved a newspaper corporation. But the courts first decision protecting a non-media business corporation’s free expression rights came five years after that in 1941. From the 1950’s onward, many court decisions protected for-profit corporations. Indeed the very first American court decision striking down a state’s statute on free speech grounds took place in 1894. And it protected the rights of a corporation. When the Supreme Court split sharply over corporate speech in the 2010 Citizens United case, no one doubted that the First Amendment protects corporations generally. The question was whether there was an exception for corporate speech supporting or opposing political candidates. Why is this so? Partly because corporations partly are, after all, made up of people. If the government takes a corporations property, that doesn’t hurt the corporation in some abstract sense, it hurts the corporation’s stockholders. If the government stops the New York Times company from criticizing the president, that restricts the First Amendment rights of the newspaper’s editors. Rule two. The media doesn’t have any greater First Amendment rights than other speakers. The freedom of the press isn’t the freedom of a business category called “the press.” It has been understood since the 1700’s as the freedom of all to use the printing press and its technological heirs. There are some statutes that give institutional media special additional rights beyond what the First Amendment gives them. But the Constitution doesn’t distinguish reporters from bloggers, or media businesses from other businesses. This means that the First Amendment protects General Motors and Walmart as much as it protects the New York Times or CNN or the New Republic. If GM’s corporate speech could be restricted, then the New York Time’s speech could be too. And because the New York Times’ speech can’t be restricted, neither can GM’s. This, by the way, means that First Amendment law doesn’t have to decide who is media and who isn’t. Is Google media? How about Amazon? Which sells electronics, sells books, and makes movies. The Supreme Court doesn’t have to decide because all corporations have First Amendment rights regardless of whether they are media. Rule three. Union’s have free speech rights too. Citizens United struck down the federal law that banned both corporations and unions from speaking out for or against political candidates. Rule four. Individual stockholders can’t veto corporations political spending, whether those corporations publish newspapers or make widgets. Generally speaking, American corporations are run on majority of shared rules basis. Individual objectors can generally sell their stock, but they can’t order managers around. That’s a familiar rule for all sorts of spending. If you don’t like Ben and Jerry’s liberal messages, you don’t have to buy their ice cream. But you can’t just buy a share and then demand that they stop saying things that you, as a minority stockholder, dislike. Likewise, if you don’t like a company’s charitable contributions, or the tone of it’s advertising, or it’s speech opposing unionization, you can’t stop such corporate action even if you own shares. And you can’t control the New York Times editorial policy even if you are a stockholder. The same is true for spending about policital candidates. If a corporation wants to endorse a candidate, dissenting shareholders can’t stop that anymore than they can stop any of the corporations other action or speech. Rule five. Corporate and union direct contributions to candidate campaigns can be sharply limited, though independent spending is fully protected. The rationale for this is complicated, but basically direct contributions of money to candidates, whether by corporations or individuals, are less constitutionally protected than speech. Including expensive speech by those corporations or individuals. So to sum up. Restrictions on corporate speech generally violate the First Amendment to the same extent that restrictions on individual speech do. Some justices think there should be an exception for speech supporting or opposing candidates, and maybe ballot measures, but all the justices agree that the general rule is that corporations have free speech rights. The institutional media get no special First Amendment rights beyond what others have. So if corporate speech could be restricted, speech by corporate-owned newspapers, magazines, book publishers, movie studios, and the like, could be restricted too. Union speech is constitutionally protected also. The objecting minority shareholders can’t block corporate speech with which they disagree. Just as they can’t block corporate charitable contributions, advertising campaigns, or product designs with which they disagree. Corporate and union direct contributions to candidate campaigns can be sharply limited. Though independent spending is fully protected. I’m Eugene Volokh and I approve this message.

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