United States: Supreme Court Decision Relaxes Political Advertising Restrictions

Supreme Court Eases Corporate and Union Issue Advertising Restrictions Prior to Federal Elections

On June 25, the United States Supreme Court issued a decision that is likely to increase the amount of issue advertising during pre-election periods. The sharply divided Court’s 5-4 decision in Federal Election Commission v. Wisconsin Right to Life, Inc., concluded that the Bipartisan Campaign Reform Act of 2002 ("BCRA") does not prohibit corporations and unions from placing ads that mention a candidate’s name as long as the ad can reasonably be interpreted to serve some purpose other than persuading the public to vote for or against a specific candidate.

Section 203 of BCRA makes it a crime for any labor union or incorporated entity to use its general treasury funds to pay for an "electioneering communication," which is defined as a broadcast, cable, or satellite communication that refers to a candidate for federal office and that is aired within 30 days of a federal primary election or 60 days of a federal general election in the jurisdiction in which that candidate is running for office.

In its initial review of BCRA (McConnell v. Federal Election Commission), the Supreme Court ruled that Section 203 was not facially overbroad under the First Amendment. It held that the First Amendment did not bar restrictions on corporate and union "express advocacy" that urges the election or defeat of a specific candidate, or which is the "functional equivalent" of express campaign speech. In this more recent decision, the Court indicated, however, that in certain circumstances, the prohibition may violate the First Amendment.

Wisconsin Right to Life ("RTL") sought to run a series of radio ads urging the Senate to vote on pending judicial nominations that allegedly were being filibustered, and the ads urged listeners to contact their U.S. Senators by name, one of whom was a candidate for reelection. Nothing in the ad expressly advocated the election or defeat of any candidate, and on its face the ad focused on the issue of pending federal judicial nominations. The FEC argued that the ad was a prohibited electioneering communication and therefore could not lawfully be sponsored during the pre-election period by RTL because it was a corporate entity.

The case presented the question of whether issue ads which mention the name of a candidate are inherently the functional equivalent of express advocacy ads. The FEC argued that a number of factors—including the fact that one of the senators mentioned was publicly known to oppose Senate approval of several judicial candidates, that the ad ran during a period when no judicial nominations were up for vote, and referred listeners to the RTL web site, which contained an express request that voters defeat the incumbent Senator— demonstrated that it was the intent of RTL to affect the outcome of the election. This, the FEC said, made the ad the functional equivalent of an express advocacy ad.

The Court declined to delve into the advertiser’s intent, and instead held that, in the future, a court should find that an ad is the functional equivalent of express campaign advocacy only if the ad cannot reasonably be interpreted to be anything other than an appeal to vote for or against a specific candidate. In finding in favor of RTL, the Court concluded that the ads at issue could readily be interpreted to have a legitimate basis unrelated to the election of a particular candidate. It found that the ads focus on a legislative issue, take a position on that issue, exhort the public to adopt a particular position, and urge the public to contact public officials with respect to that matter. The Court noted that the ads did not mention an election, candidacy, political party, or challenger, and did not take a position on a candidate's character, qualifications, or fitness for office. Under the circumstances, the Court held that the ads were not the functional equivalent of express advocacy, and were therefore entitled to protection under the First Amendment.

In concurring decisions, four justices either directly asserted or suggested a willingness to reconsider the McConnell decision, and to hold that the entire provision prohibiting express advocacy by corporations and unions is facially inconsistent with the First Amendment.

The Wisconsin Right to Life decision has been widely reported as a major diminishment of BCRA. While it should result in increased political advertising dollars for broadcasters in the period leading up to an election, we do not believe the decision is as far-reaching as has been suggested in the popular press. Express advocacy ads and ads that are the functional equivalent of express advocacy ads by corporations and unions are still prohibited in pre-election periods. The difference is that the intent of the advertiser will no longer be the subject of significant scrutiny so long as there is a rational justification for the ad unrelated to affecting the outcome of an election.

This decision should benefit radio and television stations by increasing demand for available inventory, particularly given that issue ads placed by corporations and unions are not entitled to lowest unit rate treatment.

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