435 U.S. 765 (1978)
Mass. Gen. Laws Ann., ch. 55, § 8 prohibits banks and business corporations from making contributions or expenditures for the purpose of influencing the vote on any referendum question other than one materially affecting the corporation's property, business, or assets.1 The statute also specifies that no question solely concerning the taxation of individuals would be deemed to have such an effect.2
Appellants, the First National Bank of Boston, New England Merchants National Bank, the Gillette Company, Digital Equipment Corporation, and Wyman-Gordon Company, wished to spend corporate funds to publicize their opposition to a proposed constitutional amendment authorizing the legislature to impose a graduated personal income tax.3 That amendment was scheduled for submission to voters on November 2, 1976.4
Appellants brought suit in the Supreme Judicial Court of Massachusetts seeking a declaration that the statute was unconstitutional as applied to their proposed expenditures.5 The case was submitted on an expedited basis upon agreed facts to a single justice of that court, who referred the matter to the full bench the same day.6
The statement of agreed facts reflected disagreement among economists on whether a graduated personal income tax would affect corporate business or assets.7 Appellants' management nevertheless believed the tax would have a significant effect on their businesses.8
The Supreme Judicial Court upheld the statute in a 1973 decision.9 After the United States Supreme Court vacated the judgment and remanded for further consideration in light of Buckley v. Valeo, the Massachusetts court again upheld the statute in a February 1977 opinion. It construed the law to bar the proposed corporate expenditures on the individual-tax referendum.10
Although the November 1976 referendum was held and the amendment defeated, the United States Supreme Court addressed the merits.11 The controversy fell within the class of cases capable of repetition yet evading review.12 Similar graduated-income-tax amendments had been submitted to voters four times in recent years.13 The interval between legislative authorization and election was only about eighteen months.14
The statute prescribed a maximum fine of $50,000 for a violating corporation.15 It also prescribed a maximum fine of $10,000 or imprisonment for up to one year, or both, for a violating corporate officer, director, or agent.16
Whether the case is moot after the 1976 referendum on the proposed constitutional amendment was held and the amendment defeated?17
A case is not moot if it falls within the class of controversies capable of repetition yet evading review.18 This holds when the challenged action was in its duration too short to be fully litigated prior to its cessation or expiration.19 It also holds when there is a reasonable expectation that the same complaining party will be subjected to the same action again.20
No. The Supreme Court addressed the merits because the controversy fell within the class of cases capable of repetition yet evading review.21 The interval between legislative authorization and election was only about eighteen months. That period was too short for plenary review.22 Similar graduated-income-tax amendments had been submitted to voters four times in recent years.
There was every reason to believe appellants would face the same threat of prosecution under the statute again.23 The criminal penalties of the statute discourage challenge by violation.24 The effect on arguably protected speech persists.25
The case is not moot and the Court properly reached the merits.26
Whether the corporate identity of the speaker deprives proposed speech on a referendum issue of First Amendment protection?27
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.28 The First Amendment protects speech on matters of public concern regardless of the speaker's corporate identity.29 Freedom of speech and of the press are fundamental components of the liberty safeguarded by the Due Process Clause of the Fourteenth Amendment.30
No. The proposed speech by the banks and corporations on the graduated income tax referendum is at the heart of First Amendment protection.31 The referendum issue falls squarely within the description of speech indispensable to decisionmaking in a democracy.32 This is no less true because the speech comes from a corporation rather than an individual.33 The court below framed the principal question as whether corporations have First Amendment rights coextensive with those of natural persons.34
The proper question is whether the statute abridges expression that the First Amendment was meant to protect.3536 The speech proposed by appellants is entitled to the highest level of First Amendment protection because it is political speech on a matter of public concern.37 The corporate identity of the speaker does not deprive this proposed speech of what otherwise would be its clear entitlement to protection.38
The corporate identity of the speaker does not deprive the proposed speech of First Amendment protection.39
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Chief Justice Burger joined the opinion and judgment but wrote separately to raise questions likely to arise in the future.40 He focused on the difficulty of distinguishing media corporations from other corporations such as the appellants.41 Some media enterprises have amassed vast wealth and power through corporate ownership extending to unrelated business activities.42 Media conglomerates could pose a more realistic threat to valid interests than appellants.43 Burger emphasized that the history of the Press Clause does not suggest the Framers contemplated a special institutional privilege limited to the organized press.44 The liberty encompassed by the Press Clause is not confined to newspapers and periodicals.45 It comprehends every sort of publication.46
He concluded that the First Amendment does not belong to any definable category of persons or entities.47 It belongs to all who exercise its freedoms.48 Massachusetts' position posed serious questions about limiting the First Amendment rights of corporations as such.49
Whether Mass. Gen. Laws Ann., ch. 55, § 8 abridges expression that the First Amendment was meant to protect?50
In the realm of protected speech the legislature is constitutionally disqualified from dictating the subjects about which persons may speak and the speakers who may address a public issue.51 A prohibition directed at speech itself and intimately related to the process of governing survives only upon a showing that the state employs means closely drawn to avoid unnecessary abridgment of a subordinating interest that is compelling.52
Yes. Section 8 permits a corporation to communicate to the public its views on certain referendum subjects but not others.53 It also singles out one kind of ballot question as a subject about which corporations may never make their ideas public.54 The legislature has drawn the line between permissible and impermissible speech according to whether there is a sufficient nexus between the issue presented to the voters and the business interests of the speaker.55 The statute is both underinclusive and overinclusive.56 It prohibits speech by corporations but not by other associations or wealthy individuals.57 It prohibits speech on some issues but not on others.58
The fact that the speech is funded by a corporation does not diminish the value of the speech to the public.59 The identity of the speaker is not a valid basis for prohibiting the speech.60 The statute cannot be justified as a means of preventing the use of corporate funds for political purposes without the consent of the shareholders.61 It does not require shareholder approval and simply prohibits the expenditures.62
The statute abridges expression that the First Amendment was meant to protect.
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Joined by Justices Brennan And Marshall
Justice White dissented, joined by Justices Brennan and Marshall.63 He argued that the Massachusetts statute is a reasonable regulation of corporate political activity.64 Corporations are creatures of the State. The State may properly regulate their activities to ensure that they do not use their economic power to distort the political process.65 The majority's decision will allow corporations to use their vast resources to influence the outcome of referenda on issues of public policy.66 This will undermine the role of the individual citizen in the democratic process.67 White emphasized that there is no meaningful distinction between contributions to candidates and expenditures on referenda.68 Both can be used to corrupt the political process.69 Corporations do not have the same rights as natural persons.70 They are artificial entities created by the State for limited purposes.71
He would affirm the judgment of the Supreme Judicial Court.7273
Whether the state's interests in sustaining the active role of individual citizens in the electoral process and protecting shareholders justify the prohibition on corporate expenditures?74
Preserving the integrity of the electoral process, preventing corruption, and sustaining the active role of the individual citizen in a democracy are interests of the highest importance.75 A state-imposed restriction of freedom of speech directed at speech itself and intimately related to the process of governing requires the state to show a subordinating interest that is compelling.76 The state must also employ means closely drawn to avoid unnecessary abridgment.77
No. Appellee advanced the state's interest in sustaining the active role of the individual citizen in the electoral process and preventing diminution of the citizen's confidence in government.78 There has been no showing that the relative voice of corporations has been overwhelming or even significant in influencing referenda in Massachusetts.79 There has been no threat to the confidence of the citizenry in government.80 Referenda are held on issues, not candidates for public office.81 The risk of corruption perceived in cases involving candidate elections simply is not present in a popular vote on a public issue.82
The statute is both underinclusive and overinclusive with respect to the interest in protecting shareholders.83 Corporate expenditures with respect to a referendum are prohibited while corporate activity with respect to the passage or defeat of legislation is permitted.84 The statute would prohibit a corporation from supporting or opposing a referendum proposal even if its shareholders unanimously authorized the contribution or expenditure.85 Ultimately shareholders may decide through the procedures of corporate democracy whether their corporation should engage in debate on public issues.86
The state's asserted interests do not justify the prohibition on corporate expenditures.87
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Justice Rehnquist dissented, joining the dissent of Justice White and writing separately to emphasize that the Court has never before held that corporations have a constitutional right to engage in political speech on matters of general public interest.88 A corporation is an artificial being possessing only those properties which the charter of creation confers upon it.89 It cannot be readily concluded that the right of political expression is equally necessary to carry out the functions of a corporation organized for commercial purposes.90 Rehnquist noted that the Supreme Judicial Court had construed the statute not to forbid political expression by a corporation when a general political issue materially affects the corporation's business, property, or assets.91 He could see no basis for concluding that the liberty of a corporation to engage in political activity with regard to matters having no material effect on its business is necessarily incidental to the purposes for which the Commonwealth permitted these corporations to be organized.92
He would affirm the judgment of the Supreme Judicial Court.