Yes, Corporations Do Have Free Speech Rights
As a free speech near-absolutist, it’s been fun for me to watch my progressive friends cheer as major corporations threaten to boycott states accused of striking the wrong balance on gay and transgender rights. I’m bothered by most of the same state laws that my progressive friends are, but I marvel nevertheless that they think the solution is for big business to throw its weight around. Still, I’m happy to welcome them aboard the yes-corporations-do-have-free-speech-rights ship.
Before you object that the controversy has nothing to do with corporate free speech, imagine that North Carolina or Mississippi or some other state under fire were to adopt the following law: “No private for-profit corporation shall refuse or threaten to refuse to do business within this state, or to do business with any government entity within this state, on the basis of any disagreement with the state’s laws, regulations, or policies.” The statute would then go on to set forth penalties, including heavy fines, for violation.
Imagine further that pursuant to the new law, the state attorney general brings civil lawsuits or even criminal prosecutions against businesses threatening to boycott based on such disagreements. Following the example of New York’s Eric Schneiderman, we might even see a racketeering investigation to make the companies open their books so that we can find out to which groups they’ve been making donations – um, I mean, with which groups they’ve been conspiring.
Before we get too far into this, let me be clear: I am not advocating such a law. I think it would be a terrible idea. I am simply wondering whether it might be constitutional. Consider this a thought experiment, to test our ideas about corporate free speech and corporate power.
My own view is that such an enactment would amount to a flatly unconstitutional assault on speech the state dislikes -- just as Schneiderman's investigation is a flatly unconstitutional assault on speech the state dislikes. I find something terrifying in the notion that the government can go after a private entity, even a for-profit one, because it doesn’t like the entity’s views. And you needn’t agree with me on the proper reading of the First Amendment to see the danger of crafting a rule that says corporations are allowed to take some political positions and not others.
Still, the scope of the First Amendment lies at the heart of my thought experiment. We live in an era when criticisms of corporate speech can become overwrought. Many activists deny that corporations have any free speech rights at all.
Not even the four dissenters in Citizens United v. Federal Elections Commission took that position. They conceded that corporations possess First Amendment rights. They simply argued that the government, with sufficiently strong reason, can limit some avenues for the expression of those rights as long as it leaves other avenues open. So would the dissenters approve of our hypothetical statute?
In Citizens United, all that was at issue was the right of a nonprofit corporation to engage in electioneering during the 30 days leading up to a primary election or the 60 days leading up to the general election. As the dissent noted and the majority conceded, plenty of other paths existed for the group to distribute its message.
The same would be true in the case of my hypothetical statute. The law would ban only the threat of a boycott of the state. The corporation would still be free to spend its money filling the airwaves with advertisements attacking the state’s policies as discriminatory.
Would the government’s reasons for regulation be sufficiently strong? If a worry about the influence of corporate power on an election meets the standard, it’s difficult to see why a worry about the influence of corporate power on actual policymaking wouldn't. After all, the reason we care about who wins the election is that we care about what laws and policies governments produce. So under the test propounded by the dissenters in Citizens United, the statute probably would not violate the First Amendment.
But what would the majority think? Justice Anthony Kennedy’s opinion for the court held the restrictions unconstitutional in part because they singled out corporate speech: “We find no basis for the proposition that, in the context of political speech, the Government may impose restrictions on certain disfavored speakers.” One might argue, then, that if best-selling authors are allowed to boycott North Carolina, corporations must be too.
But matters might not be so straightforward. In striking down the anti-electioneering rules that applied to corporate expenditures, the court distinguished the many cases allowing limits on speech that interferes with core government functions. Surely a corporation’s threat of a boycott, by pressuring the legislature, does exactly that. Thus it’s possible that the Citizens United majority might also uphold such a hypothetical law.
Nevertheless, I still think my hypothetical statute would be flatly unconstitutional. If you agree with me, you evidently hold a fairly robust view of the free speech rights that attach to private for-profit corporations. After all, the sole ground of the companies’ threatened refusal to deal is a strong disagreement with the states' policies on the rights of lesbian, gay, bisexual and transgender people. I, too, wish the states would take a more open view of human possibility, and not rush to legislate for eventualities exceedingly unlikely to arise. But that's a simple and straightforward political tussle -- exactly what the First Amendment exists to protect.
I quite agree with my Bloomberg colleague Megan McCardle that it’s impossible to understand Schneiderman’s actions any other way.
What about a company that is threatening not to do business in a state because of tax laws or other regulations that affect not the conscience but the bottom line? I leave the resolution of that problem as an exercise for the reader. See General Electric, departure from Connecticut of. And corporate “inversions,” Treasury Department punishment of.
This is particularly true if our reason for worrying about corporate speech is a concern that it amounts mainly to rent-seeking.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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