National Bank v. Bellotti Case:

¶ … NATIONAL BANK v. BELLOTTI

Case: FIRST NATIONAL BANK v. BELLOTTI 435 U.S. 765 (1978)

What did the Massachusetts legislature do?

The state legislature passed a criminal statute that forbade certain expenditures, such as public advertising and lobbying, by banks and business corporations for the purpose of influencing the vote on referendum proposals.

What did the Massachusetts Supreme Judicial Court decide?

The First National Bank of Boston, New England Merchants National Bank, the Gillette Co., Digital Equipment Corp., and Wyman-Gordon Co. all wanted to publicly express their views on a proposed amendment to the state constitution for a graduated income tax, in direct violation of the abovementioned law. The state's statute prohibited banks and corporations from attempting to influence the opinion of voters. When fined for violating the law, they appealed to the state supreme court, and sought to have the statute declared unconstitutional. The Massachusetts Supreme Judicial Court held that the First Amendment rights of a corporation were limited to issues that materially affect its business, property, or assets and rejected the appellants' claim that the statute abridged freedom of speech of corporations as 'persons' in violation of the corporation's First and Fourteenth Amendments rights.

Its reasoning?

The court said the central issue of the case was to what extent corporations were persons under the law. For liability purposes, business corporations are considered persons -- the CEOs and shareholders do not go bankrupt if the corporation goes bankrupt. In this case, the court asked if the appellants had First Amendment rights similar to natural persons or associations of natural person. The court said that corporations had limited constitutional rights as persons under the Fourteenth Amendment. Corporations had the right not to be deprived of property without due process of law. Distinguishing the First Amendment rights of a natural person from the more limited rights of a corporation, the court concluded that "whether its rights are designated 'liberty' rights or 'property' rights, a corporation's property and business interests are entitled to Fourteenth Amendment protection" but "only when a general political issue materially affects a corporation's business, property or assets may that corporation claim First Amendment protection for its speech or other activities entitling it to communicate its position on that issue to the general public," which was not the case in the graduated income tax.

How did the U.S. Supreme Court rephrase the initial question?

The U.S. Supreme court disagreed with the lower court that the principal question was whether and to what extent corporations had First Amendment rights. The majority opinion, authored by justices Burger, Stewart, Blackmun, and Stevens noted: "The Constitution often protects interests broader than those of the party seeking their vindication. The First Amendment, in particular, serves significant societal interests. The proper question therefore is not whether corporations 'have' First Amendment rights and, if so, whether they are coextensive with those of natural persons. Instead, the question must be whether [the law] abridges expression that the First Amendment was meant to protect." In short, when it comes to the First Amendment, greater issues are at stake beyond the immediate interests of the corporations in question. There must be a compelling state interest to limit freedom of expression.

Why doesn't it make a difference whether the corporate speech is about matters that materially affect its business interests?

It is not the state's place to regulate when and if First Amendment rights apply in certain areas. Rather: "Freedom of discussion, if it would fulfill its historic function in this nation, must embrace all issues about which information is needed or appropriate to enable the members of society to cope with the exigencies of their period.... 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." The right to express one's political views was held to be particularly important, and the individual's right to do so would not have been called into question, if the appellants were not business corporations. "Speech concerning public affairs is more than self-expression; it is the essence of self-government."

What is the constitutional standard used to determine whether government regulation of political speech is permissible?

Only if the democratic process as a whole is endangered, which the state could not prove, "thereby denigrating rather than serving First Amendment interests," can such regulations be permitted

What state interests did Massachusetts assert to justify its regulation of corporate political speech? What was the Supreme Court's response to them?