Prices, Money, Speech, and Democracy
by Michael Dorf
In my latest Verdict column, I question the wisdom of last week's Supreme Court decision in Expressions Hair Design v. Schneiderman. The case involves a NY statute that--as construed by the Supreme Court in reliance on the earlier opinion by the Second Circuit--forbids merchants from placing a "surcharge" on credit card purchases, while allowing a discount for cash purchases. Because these are economically identical, the Court said, the NY law is really a regulation of how merchants communicate with their customers and thus a regulation of commercial speech. Accordingly, the SCOTUS remanded to the Second Circuit for application of commercial speech precedents.
In my column, I connect Expressions Hair Design with the Court's campaign finance case law and express the concern that under the guise of freedom of speech, the Roberts Court may be undermining the New Deal settlement, by which courts grant near-complete deference to elected officials in regulating the economy. Here I want to elaborate the campaign finance point.
Non-lawyer (and quite a few lawyer) critics of the Court's campaign finance jurisprudence (including especially Citizens United v. FEC) argue that "money isn't speech." This complaint is relatively easy for free speech libertarians to dispatch. For example, a few years ago Prof. Eugene Volokh put together a pithy video presentation for the Federalist Society in which he explains that the claim "money isn't speech" is a non sequitur. True, he says, money isn't speech, but laws that target the spending of money for speech infringe speech.
I mostly agree with Prof. Volokh, including with his bottom line that even if the "money isn't speech" claim fails to establish the constitutional validity of various forms of campaign finance regulation, other considerations might. I also agree with the dissenters in recent SCOTUS campaign finance cases who argue that the government's interest in combating corruption should be defined more broadly than the current case law defines it. Under current doctrine, the government may seek to combat quid pro quo corruption but not much more. In arguing for a broader conception of corruption, the dissenters make an argument for the validity of campaign finance regulation of a form that says, not that campaign finance regulation does not regulate speech, but that it permissibly regulates speech.
Another way to put that point would be to say that most of the campaign finance laws that have been struck down by the Roberts and Rehnquist Courts should have been deemed "narrowly tailored" to advance the government's "compelling interest" in combating not just quid pro quo corruption but the sort of corruption that occurs when elected officials serve the interests of wealthy individuals, corporations, and unions that either contribute to their campaigns or use nominally independent expenditures to support their candidacies, rather than serving the interests of their constituents.
Is that the best way to make an argument for the constitutionality of campaign finance regulation? Maybe not. In my column I say that even if the Second Circuit upholds the challenged New York law on credit card surcharges, the mere fact of applying the commercial speech doctrine could undermine important regulatory interests, because the application of heightened scrutiny (should it come to that) would invite additional litigation, some of which likely would succeed in blocking what are ultimately merely economic regulations over which legislatures ought to have near-total discretion. Something similar could be said with respect to campaign finance regulation.
Indeed, the doctrinal picture looks even worse with respect to campaign finance. In Expressions Hair Design, the Court left it to the Second Circuit in the first instance to decide whether to apply the Zauderer test applicable to mandatory disclosures--a test that is quite deferential--or to apply the more demanding Central Hudson test applicable to restrictions on commercial speech--which is akin to intermediate scrutiny. In the campaign finance context, the choice is between something like intermediate scrutiny for laws limiting campaign contributions and strict scrutiny for laws limiting campaign (and independent) expenditures. If we have reason to worry that the mere prospect of litigation could undermine effective regulation when that litigation will subject the challenged regulation to no more than intermediate scrutiny, then we have even greater reason to worry in the campaign finance arena, where challenged regulations will be subject to no less than intermediate scrutiny.
What is the solution? In the short run, nothing. Although the Supreme Court would allow Congress to require disclosure of the sources of the "dark money" that has lately been funding independent expenditures through (ab)use of 501(c)(4) organizations, Congress does not appear interested in doing so, mostly because such dark money disproportionately favors GOP candidates and causes. Meanwhile, I see no near-term prospect of the Supreme Court changing course to allow greater campaign finance regulation.
But assuming our political institutions survive the Trump administration, both of those circumstances might change some day. Should Congress pass salutary campaign finance laws that are invalid under current doctrine, it would be a giant step in the right direction were the SCOTUS to overrule that doctrine so as to uphold such laws under the existing difficult standards of review. It would be even better if the Court were to discard that doctrine and start anew.
In my view, the Court ought to uphold all campaign finance regulations unless they are so restrictive as to substantially impair the practical ability of candidates to raise or spend money sufficient to run competitive primary or general-election campaigns. Put differently, I would like to see something like a reasonableness test applied in this area.
Why? Partly because the "money isn't speech" argument is not quite so bad as Prof. Volokh and others suggest. He's right, of course, that a law that specifically limits money spent on speech should be treated as a regulation of speech. But much campaign spending is on things other than speech, like transportation, food, and lodging for the candidate and campaign staff. Restrictions on campaign contributions and expenditures are thus restrictions on a class of activities that include speech but are not entirely speech.
To be sure, restrictions on independent expenditures do target speech qua speech, but they do so to serve an anti-circumvention goal. In my view, such restrictions could and should be upheld as a means of backstopping legitimate campaign contribution and expenditure limits.
In any event, I see these issues chiefly in normative rather than categorical terms. Ultimately, the best reason to subject campaign finance regulation to a permissive reasonableness test is the concern that the First Amendment should be construed to serve rather than to undermine liberal democratic values. If someone objects that the First Amendment requires strict (or at least heightened) judicial scrutiny of any and all regulations of speech, my answer is no it doesn't.
The First Amendment itself says nothing about strict scrutiny, intermediate scrutiny, commercial speech, or any of the myriad doctrines the courts have invented to implement it. If you think that the Supreme Court's case law has done a good job of allowing those campaign finance regulations that serve the liberal democratic values at the heart of the First Amendment and disallowing those regulations that dis-serve such values, then you should resist changes to the case law. But if you think that the Court's doctrine has gone off the rails, then you should not be wedded to the framework that the Court has invented.
In my latest Verdict column, I question the wisdom of last week's Supreme Court decision in Expressions Hair Design v. Schneiderman. The case involves a NY statute that--as construed by the Supreme Court in reliance on the earlier opinion by the Second Circuit--forbids merchants from placing a "surcharge" on credit card purchases, while allowing a discount for cash purchases. Because these are economically identical, the Court said, the NY law is really a regulation of how merchants communicate with their customers and thus a regulation of commercial speech. Accordingly, the SCOTUS remanded to the Second Circuit for application of commercial speech precedents.
In my column, I connect Expressions Hair Design with the Court's campaign finance case law and express the concern that under the guise of freedom of speech, the Roberts Court may be undermining the New Deal settlement, by which courts grant near-complete deference to elected officials in regulating the economy. Here I want to elaborate the campaign finance point.
Non-lawyer (and quite a few lawyer) critics of the Court's campaign finance jurisprudence (including especially Citizens United v. FEC) argue that "money isn't speech." This complaint is relatively easy for free speech libertarians to dispatch. For example, a few years ago Prof. Eugene Volokh put together a pithy video presentation for the Federalist Society in which he explains that the claim "money isn't speech" is a non sequitur. True, he says, money isn't speech, but laws that target the spending of money for speech infringe speech.
I mostly agree with Prof. Volokh, including with his bottom line that even if the "money isn't speech" claim fails to establish the constitutional validity of various forms of campaign finance regulation, other considerations might. I also agree with the dissenters in recent SCOTUS campaign finance cases who argue that the government's interest in combating corruption should be defined more broadly than the current case law defines it. Under current doctrine, the government may seek to combat quid pro quo corruption but not much more. In arguing for a broader conception of corruption, the dissenters make an argument for the validity of campaign finance regulation of a form that says, not that campaign finance regulation does not regulate speech, but that it permissibly regulates speech.
Another way to put that point would be to say that most of the campaign finance laws that have been struck down by the Roberts and Rehnquist Courts should have been deemed "narrowly tailored" to advance the government's "compelling interest" in combating not just quid pro quo corruption but the sort of corruption that occurs when elected officials serve the interests of wealthy individuals, corporations, and unions that either contribute to their campaigns or use nominally independent expenditures to support their candidacies, rather than serving the interests of their constituents.
Is that the best way to make an argument for the constitutionality of campaign finance regulation? Maybe not. In my column I say that even if the Second Circuit upholds the challenged New York law on credit card surcharges, the mere fact of applying the commercial speech doctrine could undermine important regulatory interests, because the application of heightened scrutiny (should it come to that) would invite additional litigation, some of which likely would succeed in blocking what are ultimately merely economic regulations over which legislatures ought to have near-total discretion. Something similar could be said with respect to campaign finance regulation.
Indeed, the doctrinal picture looks even worse with respect to campaign finance. In Expressions Hair Design, the Court left it to the Second Circuit in the first instance to decide whether to apply the Zauderer test applicable to mandatory disclosures--a test that is quite deferential--or to apply the more demanding Central Hudson test applicable to restrictions on commercial speech--which is akin to intermediate scrutiny. In the campaign finance context, the choice is between something like intermediate scrutiny for laws limiting campaign contributions and strict scrutiny for laws limiting campaign (and independent) expenditures. If we have reason to worry that the mere prospect of litigation could undermine effective regulation when that litigation will subject the challenged regulation to no more than intermediate scrutiny, then we have even greater reason to worry in the campaign finance arena, where challenged regulations will be subject to no less than intermediate scrutiny.
What is the solution? In the short run, nothing. Although the Supreme Court would allow Congress to require disclosure of the sources of the "dark money" that has lately been funding independent expenditures through (ab)use of 501(c)(4) organizations, Congress does not appear interested in doing so, mostly because such dark money disproportionately favors GOP candidates and causes. Meanwhile, I see no near-term prospect of the Supreme Court changing course to allow greater campaign finance regulation.
But assuming our political institutions survive the Trump administration, both of those circumstances might change some day. Should Congress pass salutary campaign finance laws that are invalid under current doctrine, it would be a giant step in the right direction were the SCOTUS to overrule that doctrine so as to uphold such laws under the existing difficult standards of review. It would be even better if the Court were to discard that doctrine and start anew.
In my view, the Court ought to uphold all campaign finance regulations unless they are so restrictive as to substantially impair the practical ability of candidates to raise or spend money sufficient to run competitive primary or general-election campaigns. Put differently, I would like to see something like a reasonableness test applied in this area.
Why? Partly because the "money isn't speech" argument is not quite so bad as Prof. Volokh and others suggest. He's right, of course, that a law that specifically limits money spent on speech should be treated as a regulation of speech. But much campaign spending is on things other than speech, like transportation, food, and lodging for the candidate and campaign staff. Restrictions on campaign contributions and expenditures are thus restrictions on a class of activities that include speech but are not entirely speech.
To be sure, restrictions on independent expenditures do target speech qua speech, but they do so to serve an anti-circumvention goal. In my view, such restrictions could and should be upheld as a means of backstopping legitimate campaign contribution and expenditure limits.
In any event, I see these issues chiefly in normative rather than categorical terms. Ultimately, the best reason to subject campaign finance regulation to a permissive reasonableness test is the concern that the First Amendment should be construed to serve rather than to undermine liberal democratic values. If someone objects that the First Amendment requires strict (or at least heightened) judicial scrutiny of any and all regulations of speech, my answer is no it doesn't.
The First Amendment itself says nothing about strict scrutiny, intermediate scrutiny, commercial speech, or any of the myriad doctrines the courts have invented to implement it. If you think that the Supreme Court's case law has done a good job of allowing those campaign finance regulations that serve the liberal democratic values at the heart of the First Amendment and disallowing those regulations that dis-serve such values, then you should resist changes to the case law. But if you think that the Court's doctrine has gone off the rails, then you should not be wedded to the framework that the Court has invented.