Last week and today were very important for unions and campaign finance gurus across the nation. Several cases were in the Supreme Court that could have broad reaching effects on campaign finance and our political system as a whole.
The first major case was American Tradition Partnership, Inc. v. Bullock. In this case, an anti-corporate spending statute in Montana was challenged by American Tradition Partnership with the assistance of Jim Bopp and his law firm. The statute prevented corporations from spending from their general treasury and required that corporations spend money on politics through a separate segregated fund with harsh limits on how that money could ultimately be spent. Believing that Montana's state statute was unconstitutional because of the recent Citizens United decision, ATP challenged the law in state court. The Montana Supreme Court determined that Montana's anti-corporate spending law was constitutional under the First Amendment because Montana had experienced actual corruption at the expense of rich "copper baron" corporations in the early 20th century.
Today the supreme court summarily reversed the Montana Supreme Court. This means that, without hearing oral argument or having any kind of briefing, the Supreme Court disagreed completely with the Montana Supreme Court. In a 5-4 vote, with the same justices in the majority and dissent as in Citizens United, the Court, citing to Citizens United, held that the Montana Supreme Court was in error and remanded the case back to Montana.
The second case, decided last week, was Knox v. SEIU. This case involves a political fight in California against then governor Schwarzenegger. The California governor attempted to limit the power of public employee unions in California which, not too surprisingly, resulted in an intense political fight between the governor and several allied unions. California is a state that requires individuals to pay dues even if they do not wish to be a part of a union. California instituted this system to ensure that nonmembers did not free ride on the success of union negotiations, like in right to work states. In prior cases, such as Hudson, the Supreme Court has noted that unions can demand payment for those union dues that go to non political activities. However Hudson demanded that employees be given notices letting the employees know how much money the union anticipates on spending for chargeable expenses (offices, rents, negotiators, and other fees associated with union bargaining) and non-chargeable expenses (political activities). Employees that are not associated with the union were then allowed to opt-out of paying the non-chargeable expenses but still must pay the chargeable expenses. The fight in California resulted in unions charging an extra amount on top of regular union dues, however, the public sector unions did not give employees any notice about the additional fee. Knox, as well as 20,000 other employees who opted out of the non-chargeable portion of their dues filed a class action resulting in this case.
The Supreme Court held that failure to provide a Hudson notice about the additional fee was an unconstitutional abridgment of the First Amendment. The Court held that by failing to provide notice to the public sector employees who were not a part of the union, the state was requiring these individuals to subsidize the speech of the union and forcing the employees to associate with the unions despite the fact that they opted out of the union's non-chargeable expenses.
What do these two cases portend for the future of campaign finance law? First, it is unmistakably clear that as long as the current composition of the Court remains unchanged, Citizens United will not be revisited. Summary reversal is a very drastic move by the Supreme Court, and it does not occur frequently. The Supreme Court made it clear, by summarily reversing the Montana Supreme Court, that state laws that force entities to speak through separate segregated funds, or PACs, are unconstitutional. A couple weeks ago I was in Idaho Falls speaking to the Idaho AFL-CIO and I predicted that the Court was going to reverse the Montana Supreme Court. Although it is good to see that I can sometimes correctly predict the outcomes of Supreme Court cases, the Supreme Court has guaranteed that Citizens United is the law of the land for the time being. The only silver lining is that unions can use Citizens United at the state level to their advantage as well. As I mentioned in an earlier post, unions must take advantage of the Bullock and Citizens United decisions by challenging state laws that force unions to spend through PACs or else state level unions will be unable to compete with the money that corporations pump into state elections.
Secondly, the Court mentioned that laws that force non-union members to pay union dues can quickly cross the line from permissible fees to an unconstitutional violation of the First Amendment, depending on the state law. Unions would be well advised to provide notice to their members and non-members whenever they are increasing their fees and unions would do well to be very cautious when it comes to fundraising practices. In Justice Alito's opinion, he noted that mandatory payments for union activity is an anomalous situation for the First Amendment and it seemed he was apprehensive about the entire union franchise wherein nonmembers are forced to pay for services despite an employee's lack of membership in the union. Alito made clear that nonunion members must opt in before their funds are used for any political activity. This will obviously hurt public employee union funds across the board. Worse, it is not hard to see that the next step in Alito's logic is to say that unions cannot force nonmembers to pay for any union activity chargeable or not. In Knox, unions were lucky that the question before the Supreme Court was not the constitutionality of California's anti-free rider law. However, I would not be surprised if the next Supreme Court challenge brings this issue directly before the Court. If and when such a case arrives at the Supreme Court, I anticipate a grave ruling for unions in that matter.
Finally, the Supreme Court will likely determine the constitutionality of the Affordable Care Act this week. If it is going to happen this week it will likely occur on Thursday. I'll be blogging my thoughts about the opinion as soon as I can digest the Court's opinion.
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