MONTEREY COLLEGE OF LAW Michelle A. Welsh, Professor. Question No. 2 Final Examination Spring 2010

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1 Question No. 2 Final Examination Spring 2010 MONTEREY COLLEGE OF LAW Michelle A. Welsh, Professor In response to a decision by the United States Supreme Court confirming the right to freedom of speech when exercised by a corporation, Congress held hearings and made findings that corporations in the United States unduly influence politics and threaten the voting rights of the United States citizens. Congress then enacted the "Corporate Personhood Act" prohibiting any state from permitting formation of corporations without an express waiver of rights secured to human persons by the First Amendment to the United States Constitution. If any corporation exercises any rights secured to human persons by the First Amendment to the U.S.Constitution with the intent to influence the outcome of any federal election, the Corporate Personhood Act then prohibits that corporation from engaging in interstate commerce. Pursuant to the Corporate Personhood Act, the State of Columbia amended its Corporations Code statute as follows: "Section 100. One or more natural persons, partnerships or associations may form a corporation under this statute by executing and filing articles of incorporation which shall include an express waiver of any rights secured to human persons under the First Amendment to the United States Constitution. The corporate existence begins upon the filing of the articles of incorporation and continues perpetually, unless expressly provided by law or in the articles of incorporation. Section 101. Any corporation engaging in conduct pursuant to rights expressly waived in its articles of incorporation shall be subject to revocation of its corporate existence." The federal "Corporate Personhood Act" and the amendment to the State of Columbia Corporation's code are challenged in a lawsuit by two corporations: Tireco, a manufacturer of truck tires located in the State of Columbia, was formed after the amendment to the Columbia Corporations Code and included in its articles of incorporation a waiver of all rights secured to human persons by the First Amendment to the United States Constitution. Tireco made a $100,000 campaign contribution to a candidate running in the State of Columbia for a seat in the United States Senate. After that contribution, Tireco was prohibited from exporting its products in interstate commerce under the "Corporate Personhood Act" and the State of Columbia revoked Tireco's status as a corporation existing under the laws of the State of Columbia. Reprorights, a nonprofit corporation in the State of Columbia, was formed after the amendment to the Columbia Corporations Code and included in its articles of incorporation a waiver of all rights secured to human persons by the First Amendment to the United States Constitution. Reprorights was prohibited by the State of Columbia from erecting a billboard in an area zoned for billboards along a state highway. The Reprorights billboard advocated for reproductive rights and provided contact information for medical providers of abortion services. Another billboard by a corporation opposing abortion was permitted along the same highway. 1. What arguments should Tireco and Reprorights make to challenge the federal "Corporate Personhood Act" and how will the federal government respond? 2. What arguments should Tireco and Reprorights make to challenge the amendments to the Columbia Corporations Code, and how should the state government respond? 3. How is the Supreme court likely to rule and why? 3 ***************

2 Constitutional Law - Final Exam QUESTION 2- OUTLINE ANSWER I. Is the Corporate Personhood Act unconstitutional? A. Congress' Power 1) Commerce Clause: per Lopez and Morrison factors a) Tires sold and used in channels of commerce; effects of campaign contribution prohibition maybe too attenuated per Morrison- findings: corporate political influences effects voting rights, not commerce b) Repro Rights: nonprofit corporation not engaged in commerce, advocacy for rights has no effect on commerce, but highway billboard is on channel of commerce: effects too attenuated per Morrison 2) Congress' remedial power under 5 of 14th Amendment re voting rights violations a) Must remedy a violation: findings of corporate influence may not prove actual voting rights violations b) Must be congruent and proportional (City of Boerne): waiver of 1st Amendment and prohibition on interstate commerce is excessive, not congruent to violation or proportional to remedy B. State's Rights per 10th Amendment 1) Violates State's authority per police power to form and define corporations and to provide for general welfare 2) Congress cannot commandeer States to enforce federal law (NY v. U.S., Printz) C. Violates 1st Amendment Freedom of Speech 1) Even if waiver is valid, Act is vague and overbroad a) Vague: no clear notice re scope of 1st Amendment rights secured to human persons, no definition of "intent to influence" Federal elections 2) Overbreadth: encompasses more speech than necessary e.g. Reprorights advocacy for reproductive freedom

3 D. Act violates Due Process: prohibition on engaging in interstate commerce without notice, hearing or neutral decision maker II. Amendments to Columbia Corporations Code A. Requiring waiver of fundamental rights under U.S. Constitution as condition of incorporating is beyond State's police power: but specifically authorized by Congress B. Revocation of Tireco's corporate status: beyond State's power (per above) or preemption by Corporate Personhood Act occupying the field No due process: deprived of fundamental right of expressive conduct (campaign contribution) without notice, hearing or neutral decision maker C. Denial of Reprorights Billboard permit 1) Waiver of all 1 51 Amendment rights for a nonprofit corporation is beyond power of Congress or State's police power 2) Discriminatory application of law: violates free speech a) Content-based restriction on speech because of viewpoint requires strict scrutiny: no compelling interest to limit nonprofit's speech advocating reproductive rights, not narrowly tailored to government's interest in protecting voting rights b) Time, place and manner restriction in a public forum: highways zoned for billboards may be public forum, but denial of permit is content-based If billboard is commercial speech: Central Hudson test, content based restriction on speech not false or misleading Ill. Conclusions

4 2) 1. Challenges to the Corporate Personhood Act (CPA) Does Congress have the power to enact the Corporate Personhood Act? Congress has broad power to regulate interstate commere;e under Article 1, section 8 of the --- Constitution. Under Lopez, Congress has the power to regulate (1) the channels of interstate commerce, (2) the instrumentalities of commerce, and (3) activities that substantially affect interstate commerce. In Morrison, the court explained that an activity substantially affects interstate commerce if it regulates economic activities, the law contains a jurisdictional element, there are Congressional findings of a substantial affect on interstate commerce and that affect is not too attenuated. Here, the area Congress is regulating is unrelated to a traditional channel_of interstate commerce. There may be an argument that Corporations engage in business, which drive interstate commerce and such, corporations are an instrumentality of interstate commerce, just a phone or the internet may be deemed an instrumentality. Further, the government may argue that the law should be upheld because the corporations have a substantial effect on commerce, and thus, the law involves economic activities effecting commerce However, plaintiffs will argue that this argument is without merit because the findings indicate that Congress' intent was to prevent what it preceived to be injury to corporate influence in elections and impact on voting rights, neither of which ~re su!2!5!_nti~y re.@!e!l.cj.!qll}!llj:!~te commerce. Thus, it is unlikely the court will find that this was within Congress' commerce powers to enact. Since this law does not deal with either t~~ifl_f!_a.f19 ~[lelr1.9ln_ l. spending clause for the general welfare. it is not proper under the tax and The government may argue that Congress was exercising its remedial powers under section 5 r ~ ~ of the 14th amendment to protect individual's fundamental right to vote and participate equally in the process. However, Congress' power under the 14th amendment is not as broad as it is under its Article 1 powers, and instead the law must be congruent and proportional to the harm being sought to be remedied. Here, Congress is responding to a Supreme Court ruling that Page 1 of 5

5 (Question 2 continued) found corporations have the same freedom of speech as individuals. There was no long standing, wide-spread discrimination against individuals in exercising their fundamental right to vote that Congress needed to remedy. Thus, it is likely that the court could find that Congress was not properly exercising its 14th amendment legislative powers either. Thus, it is unlikely that Congress can articulate the source of power to enact the CPA in the first place. However, for the purposes of this essay, we will assume they did have such a powej" ) c?lt>\ \ (... rv t~~ ~ ~ 1 '/"r vv-...) Does the CPA violate separation of powers by impermissibly seeking to overrule a constitutional holding without passing a constitutional amendment? Separation of powers prevents one branch of government from usurping a core function of another branch of government. In Marbury v. Madison, the court explained that it is e~.,.,_r\.-\o...rl(~~ ( empathicall)fthe province of the court to say what the law is, i.e. the power of judicial review. Once the court has interpreted the Constitution to provide a right, Congress lacks the power to remove that right except by a Constitutional amendment. The supremacy clause provides that the US Constitution is supreme over all other laws. Thus, even if Congress had the source of power to enact such legislation, the CPA would still fail because its an unconstitutional attempt to circumvent a Supreme Court interpretation of constitutional law. AISJ: J.-~ VtrJv,~f. tala pv)}ctm 'ts)(j-<c N.. p.-v\o,i.,tt~ ;._1-e-GAt:X.. Ct;v--<MPuc_ (.c-/./v-o,...jfu.-.\1vj<-ic.w\ + V c-s lr'l l ~!H--1\ { thjv-uvv-} ""' I' S'l c 1' lv w I 2. Challenges to the Columbia amendments to the Corporations Code Do the Columbia amendments impermissibly violate the 1st amendment's freedom of speech by conditioning a benefit on consent to forego the fundamental right to free speech? The 1st amendment protects the right to free speech. Free speech is violated where the government conditions receipt of benefits on waiving speech rights. In order to determine what standard of review the court will apply to a regulation infringing on free speech, the primary inquiry is on whether the law regulates based on the agreement or disagreement with the :~~t~-~t of the speech or otherwise silences one side of the debate. if the law is_~cj~_t!l!:ll::~-a~el~' the state must show a compelling state interest in regulating the speech which is narrowly ~ ~ tailored to achieve that objective. If it is found to be content-neutral, the state need only show an important state interest in maintaining the regulation ~ ~----- The state will argue that this is not a content-based regulation because it does not regulate Page 2 of 5

6 (Question 2 continued) what corporations say, but rather the regulation regulates corporations as a whole, equally, and ireespective of what their position is on any issue. The plaintiffs will! argue that this is a viewpoint-based content-based regulation because it silences all corporations from exercising free speech, or any other rights afforded to humans under the first amendment. Thus, the court will likely find that this is a viewpoint based regulation, and thus, strict scrutiny applies. The state may argue that they passed the law to comply with the Federal CPA, but given the fact that the CPA is likely unconstitutional, this will hardly amount to a compelling state interest The state will also argue that protecting their citizens fundamental right to have their vote counted equally and participate in the election process is a compelling state interest which allowing corporate speech interferes with. In light of the Congressional findings that corporations are unduly influencing election and threaten voting rights, the state was compelled to act. However, the plaintiff's will argue that even if this was a compelling interest, the law here is r:j~ narrowly tailore~d to meet the specific interest in preventing the dilution of individual's voting power and influence in the election process because the law prohibits ALL first amendment activity by corporations. Thus, the court will likely find that conditioning corporate status upon an express waiver of 1st amendment rights cannot be sustained by a compelling state interest because it is...rl_c>!_n~rro~ly tailored. ~------~... Is Section 100 unduly vague because a reasonable person would not know what "any rights secured to human persons" would entail? A law will be deemed unconstitutional on its face if a reasonable person of ordinary intelligence would not know what actions/speech was prohibited and what was permissible. The plaintiff will argue that a reasonable person would not know what a corporation could or could not permissibly do under this law. Does the law prohibit them from advertising for their business? Can they post a sign at the entrance of their establishment or does this also violate the first amendment? Trying to figure out what "any rights secured to human persons" would Page 3 of 5

7 (Question 2 continued) likely lead to a~ng_eff~t on corporations engaging in any speech whatsoever, whether related to elections or not, because they would be afraid to have their corporate status revoked_ Further, the fact that the anti-abortion corporation was permitted to erect a billboard tends to suggest that there are some permissible exercises of speech that the state will permit, thus, leading to unfettered discretion by state officials. This further confuses a reasonable person in , trying to determine what is an is not permitted. Thus, the court will likely find that this law is unconstitutional because it is unduly vague. Is Section 100 substantially overbroad? A law is unconstitutional if it is overbroad, that is, it prohibits substantially more speech than is necessary, thus causing a chilling effect on free expression. The plaintiffs will argue that the law here is not narrowly tailored and sweeps in a lot of ~ protected speech (at least according to the Supreme Courts recent holding) because the law prohibits ALL first amendment activity by corporations. Given the fact that corporations do have 1st amendment protection, a law that prohibits all first amendment speech upon penalty of losing corporate status is unconstitutionally overbroad. fllf >i v-~ ;'ii--\t""'-~- Do the Columbia amendments deprive Tireco and Reprorights of their property without due ~---- process of law because they were never afforded an notice and opportunity to respond before a neutral decision maker before they were prevented from engaging in interstate commerce and having their corporate status revoked> Due process requires that notice and opportunity to be heard at a meaningful time and in a meaningful manner before a neutral decisionmaker to prevent erroneous deprivation of life, liberty or property. Here, the statute provides no procedural due process for corporations to ' ~ challenge the revocation of their corporate status as a penalty for exercising their 1st amendment rights. Thus, Section 101 likely violates due process. Did the State of Columbia have a compelling state interest to justify the prohibition of Reprorights billboard promoting abortion in a area zoned for billboards? In order to determine what standard of review the court will apply to a regulation infringing on free speech, the primary inquiry is on whether the law regulates based on the agreement or Page 4 of5

8 (Question 2 continued) disagreement with the~entpf the speech or otherwise silences one side of the debate.. if the law is content-based, the state must show a compelling state interest in regulating the speech which is narrowly tailored to achieve that objective. If it is found to be content-neutral, the state need only show an important state interest in maintaining the regulation. Here, the state prohibited Reprorights from erecting a billboard advocating reproductive rights including abortion, while they permitted an anti-abortion group to place a billboard along the same highway. This is a content based decision, thus, strict scrutiny applies. ----~ ~ The facts make clear that the area in which the billboard was sought to be erected was zoned for billboards, so it is unlikely that the court will find this is a reasonable time, place and manner restriction (which wouldn't apply anyway because this is content-based, not content-neutral). V-1\ 1 Thus, it is likely that the state can show a compelling state interest in prohibiting the billboard, and thus, this state action was unconstitutional under the 1st amendment. 3. How is the Supreme Court likely to rule and why The Court will likely find that both the federal and state laws are unconstitutional. Y ' la- c{ IS( ("f( r- CVv). V/).1/~v, ~<. 115 K; 0-..,...A f-c-~ l-<:_ v<m C (Tr ") /Lt_ [.Jy"y{ LA. V vvu..-1\, j Ce"-p 1' \LL 5, o d l-"11 "'- 1h ov7 \S) v:\ v'v' I)':l \Ali<--, fv--> (;-{._ (/) J., Av-c.,.,L<. ~ "'As/,. v-~~t '/l<-'1: -\'TviCo lr"''' r, 0t:1 1t f'zh<a-- r:c.~,;. fu-..-\'1r" (tjvfvn--{-c. S'ri/Tl.v.o y-\ epsc,,iye) Vt<.c.u(J (),\\0vr,~1;\. tv (/Vvo.e;-..,At-' S'f ''vc l 6c.-T / ~) 'f 1 I \ C-(} \r "jc--\r"{,. b!l J.C1~.\_) Page 5 of 5