UNITED STATES SUPREME COURT DECISIONS ON-LINE

Section 316 of the Federal Election Campaign Act (FECA) prohibits corporations from using treasury funds to make an expenditure "in connection with" any federal election, and requires that any expenditure for such purpose be financed by voluntary contributions to a separate segregated fund. Appellee is a nonprofit, nonstock corporation, whose purpose is to foster respect for human life and to defend the right to life of all human beings, born and unborn, through educational, political, and other forms of activities. To further this purpose, it has published a newsletter that has been distributed to contributors and to noncontributors who have expressed support for the organization. In September, 1978, appellee prepared and distributed a "Special Edition" exhorting readers to vote "pro-life" in the upcoming primary elections in Massachusetts, listing the candidates for each state and federal office in every voting district in the State, and identifying each one as either supporting or opposing appellee's views. While some 400 candidates were listed, the photographs of only 13 were featured, all of whom were identified as favoring appellee's views. The publication was prepared by a staff that had prepared no regular newsletter, was distributed to a much larger audience than that of the regular newsletter, most of whom were members of the general public, and was financed by money taken from appellee's general treasury funds. A complaint was filed with appellant Federal Election Commission (FEC) alleging that the "Special Edition" violated § 316 as representing an expenditure of funds from a corporate treasury to distribute to the general public a campaign flyer on behalf of certain political candidates. After the FEC determined that there was probable cause to believe that appellee had violated the statute, the FEC filed a complaint in Federal District Court, seeking a civil penalty and other relief. The District Court granted appellee's motion for summary judgment, holding that § 316 did not apply to appellee, but that, if it did it, was unconstitutional as a violation of the First Amendment. The Court of Appeals held that the statute applied to appellee and, as so applied, was unconstitutional. clubjuris

Page 479 U. S. 239

Held: The judgment is affirmed.

769 F.2d 13, affirmed.

JUSTICE BRENNAN delivered the opinion of the Court as to Parts I, II, III-B, and III-C, concluding that:

1. Appellee's publication and distribution of the "Special Edition" violated § 316. Pp. 479 U. S. 245-251.

(a) There is no merit to appellee's contention that preparation and distribution of the "Special Edition" does not fall within § 316's definition of "expenditure" as the provision of various things of value "to any candidate, campaign committee, or political party or organization, in connection with any election," especially since the general definitions section of the FECA broadly defines "expenditure" as including provision of anything of value made "for the purpose of influencing any election for Federal office." Moreover, the legislative history clearly confirms that § 316 was meant to proscribe expenditures in connection with an election. That history makes clear that Congress has long regarded it as insufficient merely to restrict payments made directly to candidates or campaign organizations. Pp. 479 U. S. 245-248.

(b) An expenditure must constitute "express advocacy" in order to be subject to § 316's prohibition. Here, the publication of the "Special Edition" constituted "express advocacy," since it represented express advocacy of the election of particular candidates distributed to members of the general public. Pp. 479 U. S. 248-250.

(c) Appellee is not entitled to the press exemption under the FECA reserved for any news story, commentary, or editorial distributed through any "periodical publication," since even assuming that appellee's regular newsletter is exempt under this provision, the "Special Edition" cannot be considered comparable to any single issue of the newsletter, in view of the method by which it was prepared and distributed. Pp. 479 U. S. 250-251.

2. Section 316's restriction of independent spending is unconstitutional as applied to appellee, for it infringes protected speech without a compelling justification for such infringement. The concern underlying the regulation of corporate political activity -- that organizations that amass great wealth in the economic marketplace not gain unfair advantage in the political marketplace -- is absent with regard to appellee. Appellee was formed to disseminate political ideas, not to amass capital. It has no shareholders or other persons having a claim on its assets or earnings, but obtains its funds from persons who make contributions to further the organization's political purposes. It was not established by a business corporation or a labor union, and its policy is not to accept contributions from such entities. Pp. 479 U. S. 256-265. clubjuris

Page 479 U. S. 240

JUSTICE BRENNAN, joined by JUSTICE MARSHALL, JUSTICE POWELL, and JUSTICE SCALIA, concluded in Part III-A that the practical effect of applying § 316 to appellee of discouraging protected speech is sufficient to characterize § 316 as an infringement on First Amendment activities. As a corporation, appellee is subject to more extensive requirements and more stringent restrictions under the FECA than it would be if was not incorporated. These include detailed recordkeeping and disclosure obligations, the requirement of a complex and formalized organization, and a limitation on whom can be solicited for contributions, all of which create a disincentive for such an organization to engage in political speech. Pp. 479 U. S. 251-256.

JUSTICE O'CONNOR, agreeing that § 316 is unconstitutional as applied to appellee's conduct at issue, concluded that the significant burden on appellee comes not from the statute's disclosure requirements that appellee must satisfy, but from the additional organizational restraints imposed upon it by the statute. These restraints do not further the Government's informational interest in campaign disclosure, and cannot be justified by any of the other interests identified by the FEC. Pp. 479 U. S. 265-266.

BRENNAN, J., announced the judgment of the Court and delivered the opinion for a unanimous Court with respect to Parts I and II, an opinion of the Court with respect to Parts III-B and III-C, in which MARSHALL, POWELL, O'CONNOR, and SCALIA, JJ., joined, and an opinion with respect to Part III-A, in which MARSHALL, POWELL, and SCALIA, JJ., joined. O'CONNOR, J., filed an opinion concurring in part and concurring in the judgment, post, p. 479 U. S. 265. REHNQUIST, C. J., filed an opinion concurring in part and dissenting in part, in which WHITE, BLACKMUN, and STEVENS, JJ., joined, post, p. 479 U. S. 266. WHITE, J., filed a separate statement, post, p. 479 U. S. 271. clubjuris

Page 479 U. S. 241