1A Auto, Inc. v. Dir. of the Office of Campaign & Political Fin.

• Decision Date: 06 September 2018
• Docket Number: SJC-12413
• Citation: 105 N.E.3d 1175,480 Mass. 423
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: 1A AUTO, INC., & another v. DIRECTOR OF the OFFICE OF CAMPAIGN AND POLITICAL FINANCE.

480 Mass. 423

105 N.E.3d 1175

1A AUTO, INC., & another¹

v.DIRECTOR OF the OFFICE OF CAMPAIGN AND POLITICAL FINANCE.

SJC-12413

Supreme Judicial Court of Massachusetts, Suffolk..

Argued March 6, 2018

Decided September 6, 2018

James Manley, of Arizona (Gregory D. Cote also present) for the plaintiffs.

Julia Kobick, Assistant Attorney General (William W. Porter, Assistant Attorney General, also present) for the defendant.

Ben T. Clements, M. Patrick Moore, Jr., Ryan P. McManus, John C. Bonifaz, Ronald A. Fein, & Shann M. Cleveland, for Common Cause & another, amici curiae, submitted a brief.

Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

GANTS, C.J.

For more than a century, Massachusetts law, like Federal law, see 52 U.S.C. § 30118(a) (2012 & Supp. II), has prohibited business corporations from making contributions to political candidates or their campaigns. See St. 1907, c. 581. The plaintiffs here are business corporations who challenge Massachusetts's ban on corporate contributions, G. L. c. 55, § 8, claiming that it imposes an unconstitutional restraint on their rights to free speech and association. The corporations also claim that, because § 8 prohibits corporations from making contributions but does not also prohibit other entities -- such as unions and nonprofit organizations -- from doing so, it denies them their right to equal protection under the law. We affirm the Superior Court judge's grant of summary judgment in favor of the defendant, the director of the Office of Campaign and Political Finance (OCPF), on both claims.²

Background. 1. Limits on corporate political spending. Laws limiting the political spending of corporations have a long historical pedigree. The earliest such laws emerged more than a century ago, as growing public concern over the influence of corporations in politics led to widespread calls for regulation. Federal Election Comm'n v. Beaumont, 539 U.S. 146, 152, 123 S.Ct. 2200, 156 L.Ed.2d 179 (2003) ( Beaumont ). See R.E. Mutch, Buying the Vote: A History of Campaign Finance Reform 16-17, 33, 43-44 (2014). In 1905, President Theodore Roosevelt urged Congress to take action, recommending a total ban on corporate political contributions in order to prevent "bribery and corruption in Federal elections." 40 Cong. Rec. S96 (Dec. 5, 1905). Congress responded in 1907 by enacting the Tillman Act, 34 Stat. 864 (1907), which prohibited "any corporation" from "mak[ing] a money contribution in connection with any election to any political office."

The same year that Congress enacted the Tillman Act, the Massachusetts Legislature enacted its own law prohibiting corporations from making campaign contributions. See St. 1907, c. 581, § 3.³ Over the next few decades, the Legislature further refined this ban on corporate contributions, while integrating it into its broader efforts to combat corruption in State elections. See, e.g., St. 1913, c. 835, §§ 353, 356 ("Corrupt Practices" section of "An Act to codify the laws relative to primaries, caucuses and elections"); St. 1946, c. 537, § 10 ("An Act relative to corrupt practices, election inquests and violations of election laws"). In 2009, the Legislature extended the ban to apply not only to traditional business corporations but also to any "professional corporation, partnership, [or] limited liability company partnership." St. 2009, c. 28, § 33.

Massachusetts's current ban on corporate contributions, G. L. c. 55, § 8, prohibits business corporations and other profit-making entities from making contributions with respect to State or local candidates. It states, in relevant part:

"[N]o business or professional corporation, partnership, [or] limited liability company partnership under the laws of or doing business in the commonwealth ... shall directly or indirectly give, pay, expend or contribute[ ] any money or other valuable thing for the purpose of aiding, promoting or preventing the nomination or election of any person to public office, or aiding or promoting or antagonizing the interest of any political party."

To understand what a business corporation may and may not do to support a political candidate under current Massachusetts law, we need to describe the different possible ways in which money can be used to support a political candidate's campaign. One way is to make contributions, in cash or things of value, directly to the candidate or to a committee organized on the candidate's behalf. See G. L. c. 55, § 1. A second way is to establish and pay the administrative expenses of a political action committee (PAC), which may then raise money from various sources, and use that money to support a candidate's campaign. See G. L. c. 55, §§ 1, 5. A third way is to make contributions to a PAC. See G. L. c. 55, § 1. A fourth way is to make "independent expenditures," which are expenditures made to advocate for or against a candidate -- for example by purchasing newspaper, radio, or television advertising praising the candidate or criticizing his or her opponent -- that are not made in cooperation with or in consultation with any candidate. See id. A fifth way is to make contributions to independent expenditure PACs, sometimes called "super PACs," which, unlike ordinary PACs, may only make independent expenditures and may not contribute to candidates. See G. L. c. 55, § 18A (d ). See also OCPF, Interpretive Bulletin, OCPF-IB-10-03 (Oct. 2010) (rev. Jan. 2015); OCPF, Campaign Finance Activity by Political Action Committees in Massachusetts, 2011 & 2012, at 12 (July 2013).

Under Massachusetts law, corporations may not make any contributions to a candidate or to a candidate's committee, may not establish or administer a PAC, and may not contribute to a PAC that is not an independent expenditure PAC. See Op. Atty. Gen. No. 10 (Nov. 6, 1980), in Rep. A.G., Pub. Doc. No. 12 at 118-120 (1981). See also OCPF, Advisory Opinion, OCPF-AO-00-05 (Apr. 21, 2000); OCPF, Advisory Opinion, OCPF-AO-98-18 (July 31, 1998). Corporations may, however, make unlimited "independent expenditures," subject to certain disclosure requirements. See G. L. c. 55, §§ 18A, 18C, 18G. They may also make unlimited contributions to independent expenditure PACs. See 970 Code Mass. Regs. § 2.17 (2018). See also OCPF, Interpretive Bulletin, OCPF-IB-10-03, supra.

To illustrate, if a Massachusetts corporation wants to support a certain John Hancock for Massachusetts governor, it may not contribute money directly to Hancock or to Hancock's campaign committee. Nor may it establish and administer a PAC to solicit contributions for Hancock, or contribute to a PAC that in turn makes campaign contributions to Hancock. The corporation may, however, spend as much money as it likes advocating on behalf of Hancock, as long as it does so independently from him and his campaign. For example, it may, on its own initiative and without coordinating with Hancock, pay for a television advertisement urging viewers to vote for Hancock. It may also contribute to an independent expenditure PAC, which, provided it does not coordinate with Hancock, may spend money promoting him to the public.

2. The present action. The plaintiffs in this case are two separate family-owned corporations doing business in Massachusetts. 1A Auto, Inc., is an automobile parts retailer in Pepperell. 126 Self Storage, Inc., operates a self-storage facility in Ashland. Under § 8, the plaintiffs are barred from making political contributions that they would otherwise choose to make.

The plaintiffs filed suit against the director of OCPF in his official capacity, seeking declaratory and injunctive relief against the continued enforcement of § 8. The plaintiffs alleged that, in banning corporate contributions, § 8 violates their free speech and association rights guaranteed under the First Amendment to the United States Constitution and arts. 16 and 19 of the Massachusetts Declaration of Rights. The plaintiffs also alleged that § 8 violates their right to equal protection of the law under the Fourteenth Amendment to the United States Constitution and art. 1 of the Massachusetts Declaration of Rights, because it prohibits corporations from making political contributions without also prohibiting other entities, like unions and nonprofit organizations, from doing so.

The plaintiffs moved for a preliminary injunction against the enforcement of § 8. A Superior Court judge denied the motion, finding that the plaintiffs were unable to show a likelihood of success on the merits. Following discovery, the parties filed cross motions for summary judgment. Another Superior Court judge denied the plaintiffs' motion and granted OCPF's motion. As to the plaintiffs' free speech and association claim, the judge noted that in Beaumont, 539 U.S. at 154-155, 162-163, 123 S.Ct. 2200, the United States Supreme Court rejected a constitutional challenge to the Federal ban on corporate contributions, holding that it was justified by the government's important interest in preventing corruption and the appearance of corruption. The judge concluded that, under that controlling precedent, § 8 was not unconstitutional under the First Amendment because its ban on corporate contributions is "closely drawn to serve the State's interest in preventing corruption or the appearance of corruption." He also concluded that arts. 16 and 19 of the Massachusetts Declaration of Rights grant a corporation no greater rights to make political contributions than the First Amendment. As to the plaintiffs' equal protection claim, the judge concluded that, because the plaintiffs had failed to demonstrate that corporations and unions are similarly situated, § 8 did not violate the equal protection clause of the Fourteenth Amendment or its parallel in art. 1. The plaintiffs appealed from the judge's grant of summary judgment, and we allowed their application for direct appellate review.

Discussion. We review a decision to grant summary judgment de novo. See Twomey v. Middleborough, ...