A federal appeals court last week dealt a blow to legislative efforts to limit the effects of the Supreme Court’s 2010 Citizens United decision. Following Citizens United, campaign finance reformers attempted to restrain independent corporate political speech by pushing for laws which prohibited corporations from funding independent political advertisements unless shareholders first vote to approve them.
Puerto Rico became the first major jurisdiction to turn some of those ideas into law. Shortly after Citizens United, Puerto Rico overhauled its campaign finance laws by passing “Law 222.” Law 222 prohibited corporations and unions from spending money on political campaigns unless certain burdensome procedures were followed. Among other things, prior to making an independent expenditure, the corporation or union was required to hold a “membership meeting” during which the organization’s members must vote to approve the political expenditure. To be valid, more than half of the organization’s members (including, for corporations, shareholders) had to both attend the meeting and vote to approve the political activity.
Last week, the First Circuit effectively struck down this provision by requiring the District Court to enter an order enjoining its enforcement. In a strongly-worded opinion, the Court held that because the law was “designed to regulate the if and how” of corporate and union political speech, it struck “deeply” at “core First Amendment rights.” Such meddling into the “mechanics” of an “organization’s internal processes,” the Court held, was not likely to withstand strict scrutiny. While the Court’s decision was focused on the especially onerous requirements of the Puerto Rican law, the opinion is no doubt a cautionary one for those seeking to regulate corporate political speech by requiring corporations to first jump through rigorous internal hoops.