On this day in 1978, the Supreme Court decided First National Bank of Boston v. Bellotti, a seminal case involving corporate speech rights.
In a 5-4 ruling, the Court struck down a Massachusetts law that prohibited corporations from spending money to influence the outcome of referenda, unless the referenda issue “materially affected” them.
Justice Lewis Powell Jr. wrote the majority opinion. The Court had repeatedly upheld the speech rights of media outlets and the right of corporations to advertise, Powell noted. These First Amendment decisions were based not on corporate business interests, but on a concern for “the preservation of free and uninhibited dissemination of information and ideas.” By denying corporations the ability to spend money to advance their views on issues that cannot be “proved to affect adversely their property or business interest,” the Massachusetts law deprives the public of their views on issues of general public interest. Massachusetts failed to identify an interest that was important enough to justify the restriction of public access to ideas and information, Powell wrote. “The inherent worth of the speech in terms of its capacity for informing the public does not depend upon the identity of its source, whether corporation, association, union, or individual.”
In a footnote to his opinion, Powell noted that the Court’s ruling “implies no comparable right in the quite different context of participation in a political campaign for election to public office.” The Court would later recognize the right for corporations to spend their money in political campaigns in the controversial 2010 Citizens United case.
Chief Justice Burger and Justices Blackmun, Stewart, and Stevens joined Justice Powell’s opinion.
Justice White wrote a dissent in which Justices Brennan and Marshall joined. The First Amendment does not forbid the state from interfering with “managerial decisions of this kind,” wrote Justice White. “Government has a strong interest in assuring that investment decisions are not predicated upon agreement or disagreement with the activities of corporations in the political arena.” Because of their wealth, White explained, corporations can “acquire an unfair advantage in the political process.” He noted that the Court’s holding invalidated a longstanding statute and brought into question similar statutes in 30 other states as well as federal law.
Justice Rehnquist filed a separate dissent in which he argued a corporation does not necessarily need the right of political expression to carry out its functions, and the state law does not violate corporations’ Fourteenth Amendment protections. “Court observers were startled by the view of Justice Rehnquist, almost universally regarded as the most conservative member of the Burger court, on an issue with such powerful ideological consequences” the New York Times reported.