Austin v. Michigan State Chamber of Commerce
In Austin v. Michigan Chamber of Commerce, 494 U.S. 652, 110 S.Ct. 1391, 108 L.Ed.2d 652 (1990), the Court upheld a Michigan law preventing corporations from using general treasury funds to support or oppose candidates for state office.
The Court reasoned that corporations use state-created advantages to dominate both the economic and the political arena. Austin, 494 U.S. at 659, 110 S.Ct. 1391 (citing Federal Election Comm'n v. Massachusetts Citizens for Life, 479 U.S. 238, 257, 107 S.Ct. 616, 93 L.Ed.2d 539 (1986)).
The Court held that the statute "ensures that expenditures reflect actual public support for the political ideas espoused by corporations ... corporate wealth can unfairly influence elections when it is deployed in the form of independent expenditures, just as it can when it assumes the guise of political contributions." Id. at 660, 110 S.Ct. 1391.
The Court did not define "actual public support," but appellants would like us to read it as support for Oregon's limitation of out-ofdistrict contributions.
The holding in Austin, however, addresses the "unique state-conferred corporate structure that facilitates the amassing of large corporate treasuries" and the attendant risk of unfair corporate influence in the electoral process. Id.
In Austin v. Michigan State Chamber of Commerce, 494 U.S. 652 (1990), Michigan restricted the political expenditures of corporations in support of or opposition to candidates for state office.
The compelling interest for such regulation was the concern that entities that amassed wealth in the economic marketplace would parlay that wealth into unfair advantage in the political marketplace, id. at 659, because their ability to spend corporate money bore no relation to political support for the ideas the corporations spent their money to promote, id. at 659-60 (opinion of Court) and 670, 672 (Brennan, J., concurring).
The Chamber of Commerce attacked the Michigan law as underinclusive because it did not regulate expenditures by unincorporated labor unions, which also amassed political war chests. Id. at 665.
Austin rejected the underinclusiveness challenge, reasoning that the corporations enjoyed greater government-conferred legal advantages enhancing their ability to accumulate wealth. 494 U.S. at 665. These legal advantages of corporate form made a crucial distinction between corporations and unions. Id. at 666 (Michigans decision to exclude unincorporated labor unions from the scope of 54(1) is therefore justified by the crucial differences between unions and corporations.).
Additionally, case law permitted union members to opt out of contributing to the unions political activities, which meant that the funds available for a unions political activities more accurately reflects members support for the organizations political views than does a corporations general treasury. Id.