After Citizens United, can Tennessee still ban corporations from spending money to support or oppose state candidates?

Plain-English summary

Representative Glen Casada asked the AG whether Tennessee's longstanding ban on corporate political spending could survive the U.S. Supreme Court's January 2010 decision in Citizens United v. FEC. The Tennessee statute (Tenn. Code Ann. § 2-19-132) makes it unlawful for the officers or representatives of a corporation doing business in Tennessee to use corporate funds, money, or credit "for the purpose of aiding either in the election or defeat in any primary or final election" of a candidate for any national, state, county, or municipal office, or to contribute to a political party.

That language sweeps in two different things: direct contributions to a candidate, and independent expenditures (money the corporation spends on its own to advocate for or against a candidate, without coordinating with the campaign). Citizens United dealt only with the second category at the federal level. The Court struck down a federal ban on corporate independent expenditures in 2 U.S.C. § 441b, holding that political speech does not lose First Amendment protection because its source is a corporation and that the government had no interest sufficient to justify restricting independent corporate political speech.

AG Cooper concluded the same logic almost certainly invalidates Tenn. Code Ann. § 2-19-132 as applied to independent expenditures. A Tennessee court applying Citizens United would likely strike down that part of the statute. The opinion does not extend that conclusion to the statute's ban on direct corporate contributions to candidates, because Citizens United expressly did not reach the federal contribution-ban question (see footnote 1 of the opinion). Tennessee's restriction on direct corporate contributions to a campaign therefore continues to stand on different constitutional footing under Citizens United, even if the prohibition on independent expenditures does not.

The opinion is short, narrow, and forward-looking. It does not formally repeal the statute (only the legislature can do that). It tells Tennessee election officials and prosecutors what they can expect a court to do if anyone tries to enforce § 2-19-132 against a corporation that, on its own dime, runs an ad supporting or opposing a Tennessee candidate.

Currency note

This opinion was issued in 2010. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

In the years after this opinion, Tennessee restructured large parts of its campaign-finance code. Anyone working on a real-world Tennessee campaign or corporate compliance question should look at the current version of Title 2 (and the Registry of Election Finance's interpretive rules), not just § 2-19-132 as it read in 2010, and should also consult the FEC's post-Citizens United jurisprudence (including SpeechNow.org v. FEC and McCutcheon v. FEC) for the federal context.

Common questions

Q: What did Citizens United actually hold?
A: That the federal government cannot ban corporations (or unions) from spending their own money on independent political advertising for or against a candidate. The Supreme Court found that political speech does not lose First Amendment protection because the speaker is a corporation, and that there was no compelling government interest justifying the ban. It did NOT strike down disclosure or disclaimer requirements (the "I'm so-and-so and I approved this message" rules), and it did NOT touch limits on direct contributions to a candidate's campaign.

Q: What's the difference between an independent expenditure and a contribution?
A: A contribution is money or in-kind support given directly to a candidate's campaign or to a political party. An independent expenditure is money the spender controls and spends on its own (typically for ads) to support or oppose a candidate, without coordinating with the campaign. Citizens United addressed independent expenditures, not contributions.

Q: Did Tenn. Code Ann. § 2-19-132 just disappear?
A: No. AG opinions are not court rulings. The statute stayed on the books until the legislature amended it or a court actually struck it down in litigation. What changed was the practical enforcement risk: the AG signaled that prosecuting a corporation for an independent political expenditure would likely fail in court.

Q: Does this mean a corporation can give money straight to a candidate in Tennessee?
A: No. The opinion is careful to note that Citizens United did not address direct corporate contributions to candidates (see footnote 1, citing 130 S. Ct. at 909). Restrictions on direct corporate contributions remained on different constitutional footing.

Q: What about disclosure and disclaimer rules?
A: Citizens United expressly upheld the federal disclosure and disclaimer requirements at issue in that case. Tennessee disclosure and disclaimer requirements are similarly subject to a different (and lower) constitutional standard than outright bans on speech.

Q: Where does corporate political speech live in Tennessee today?
A: That requires looking at the current statute (post-2010 amendments), at Tennessee Registry of Election Finance regulations, and at any court decisions interpreting them. This 2010 opinion is the starting point for that history, not the current rule book.

Background and statutory framework

Tenn. Code Ann. § 2-19-132 originated in the early-twentieth-century wave of state corrupt-practices acts that mirrored federal law (the 1907 Tillman Act and its successors) banning corporate participation in elections. The Tennessee statute as in force in 2010 read in pertinent part:

"It is unlawful for the executive officers or other representatives of any corporation doing business within this state, to use any of the funds, moneys, or credits of the corporation for the purpose of aiding either in the election or defeat in any primary or final election, of any candidate for the office, national, state, county or municipal, or in any way contributing to the campaign fund of any political party, for any purpose whatever."

That sentence reaches both contributions and independent expenditures, and reaches both federal and state offices. The opinion notes (at footnote 3) that the AG's office had previously concluded the statute was unconstitutional as applied to federal candidates because of conflict with federal law (Op. Tenn. Att'y Gen. 85-081 (March 14, 1985)).

Citizens United v. FEC, 130 S. Ct. 876 (2010), invalidated 2 U.S.C. § 441b, which prohibited corporations and unions from using their general treasury funds to make independent expenditures for express advocacy or for "electioneering communications" (broadcast, cable, or satellite ads referring to a clearly identified federal candidate within 30 days of a primary or 60 days of a general election). The Court held that the prohibition was a content-based restriction on political speech, that strict scrutiny applied, and that the asserted government interests (anti-distortion of the political process, anti-corruption, shareholder protection) were insufficient. It overruled Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), and partially overruled McConnell v. FEC, 540 U.S. 93 (2003).

Two earlier cases supplied the doctrinal foundation: First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978), held that the First Amendment protects corporate political speech in the referendum context, and Buckley v. Valeo, 424 U.S. 1 (1976), held that limits on independent expenditures by individuals could not be justified by an interest in equalizing political voices.

The Tennessee opinion pulls those threads together to conclude that the same First Amendment problem afflicts the state statute. If the federal ban on independent corporate expenditures cannot survive strict scrutiny, neither can the state's, because Tennessee cannot identify a state interest greater than the federal one the Court already found insufficient.

Two notable boundaries on the opinion. First, it addresses only the independent-expenditure half of the statute. The contribution-restriction half is preserved by the Court's footnote in Citizens United disclaiming any view on contribution limits. Second, the opinion does not opine on disclosure, disclaimer, or reporting obligations Tennessee imposes on corporate political activity. Those were upheld in Citizens United itself and rest on different constitutional analysis.

Citations and references

Statutes:

• Tenn. Code Ann. § 2-19-132 (corporate funds for elections)
• 2 U.S.C. § 441b (federal ban on corporate independent expenditures, struck down in Citizens United)
• 2 U.S.C. § 434(f)(3) (electioneering communication definition)
• 11 C.F.R. § 100.29(a)(2) ("publicly distributed" definition)
• Bipartisan Campaign Reform Act of 2002, Sections 201, 203, and 311

Cases:

• Citizens United v. Federal Election Commission, 130 S. Ct. 876 (2010), U.S. Supreme Court
• First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978), U.S. Supreme Court
• Buckley v. Valeo, 424 U.S. 1 (1976), U.S. Supreme Court

Prior AG opinions:

• Op. Tenn. Att'y Gen. 85-081 (March 14, 1985) (Tenn. Code Ann. § 2-19-132(a) unconstitutional as applied to federal candidates)

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2010/op10-030.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

March 11, 2010

Opinion No. 10-30

Constitutionality of Tenn. Code Ann. § 2-19-132

QUESTION

Whether Tenn. Code Ann. § 2-19-132 is unconstitutional in light of the United States Supreme Court's decision in Citizens United v. Fed. Election Comm'n, 130 S.Ct. 876 (2010).

OPINION

In light of the Supreme Court's decision in Citizens United, concluding that there is no legitimate governmental interest that would justify a ban on independent corporate expenditures, a court likely would hold that Tenn. Code Ann. § 2-19-132 is unconstitutional to the extent that it prohibits corporations from making independent expenditures for the purpose of aiding either in the election or defeat in any primary or final election of a candidate for public office.

ANALYSIS

You have asked whether Tenn. Code Ann. § 2-19-132 is unconstitutional in light of the United States Supreme Court's recent decision in Citizens United v. Fed. Election Comm'n, 130 S.Ct. 876 (2010). That case involved a challenge to 2 U.S.C. § 441b, as amended by Section 203 of the Bipartisan Campaign Reform Act of 2002 (BCRA), which prohibited corporations and unions from using their general treasury funds to make independent expenditures for speech that expressly advocates the election or defeat of a candidate or for speech that is an "electioneering communication". 2 U.S.C. § 441b. An electioneering communication is defined as "any broadcast, cable, or satellite communication" that "refers to a clearly identified candidate for Federal office" and is made within thirty (30) days of a primary election, 2 U.S.C. § 434(f)(3), and that is "publicly distributed." 11 CFR § 100.29(a)(2).

Citizens United, a non-profit corporation, issued in January 2008 a "documentary" entitled Hillary: The Movie, critical of then-Senator Hillary Clinton, a candidate for her party's presidential nomination. Citizens United wanted to make Hillary: The Movie available through video-on-demand and to promote the video by running advertisements on broadcast and cable television. 130 S.Ct. at 887. It feared, however, that both the film and the ads would be covered by § 441b's ban on corporate-funded independent expenditures. Accordingly, Citizens United brought suit in federal court seeking a declaratory judgment that § 441b was unconstitutional as applied to Hillary: The Movie. Citizens United also asserted that the disclaimer and disclosure requirements of Sections 201 and 311 of the BCRA were unconstitutional as applied to the movie and the three ads for the movie. Id. at 888. The lower court found that 2 U.S.C. § 441b did cover the film and that the act was constitutional. It further rejected Citizens United's challenge to the disclaimer and disclosure requirements of the BCRA. Id.

The Supreme Court reversed the decision of the lower court with regard to the ban on independent corporate expenditures. In doing so, it first noted that the prohibition on corporate independent expenditures was a ban on political speech and, therefore, subject to strict scrutiny. Id. at 898. The Court then reaffirmed that First Amendment protection extends to corporations and that political speech does not lose First Amendment protection "simply because its source is a corporation." Id. at 899-900 (citing First Nat. Bank of Boston v. Bellotti, 435 U.S. 763, 784 (1978)). The Court then noted that in Buckley v. Valeo, 424 U.S. 1 (1976), it had rejected statutory limits on so-called "independent expenditures" — money spent advocating a candidate's election or defeat independent of any campaign — when made by individuals, partly on the rationale that Congress was not at liberty to curb the speech of wealthy persons simply on account of their wealth. Id. at 908. Further, in Bellotti, the Court had rejected a state-law prohibition on independent corporate expenditures related to a state referendum. Id. at 902. The Court then concluded that no legitimate governmental interest justified the ban on independent corporate expenditures. In the absence of any legitimate governmental interest, and relying heavily on its earlier decisions in Buckley and Bellotti, the Supreme Court found that § 441b's ban on independent corporate expenditures was unconstitutional. Id. at 913.¹

The Supreme Court did not strike down the disclaimer and disclosure provisions of the BCRA², finding that, since these provisions did not prevent anyone from speaking, they placed no significant burden on First Amendment rights. The Court further found that a strong governmental interest existed in providing the electorate with accurate information about the source of various campaign claims. Id. at 915-16.

Tenn. Code Ann. § 2-19-132 provides, in pertinent part, as follows:

(a) It is unlawful for the executive officers or other representatives of any corporation doing business within this state, to use any of the funds, moneys, or credits of the corporation for the purpose of aiding either in the election or defeat in any primary or final election, of any candidate for the office, national, state, county or municipal, or in any way contributing to the campaign fund of any political party, for any purpose whatever.

This statute prohibits the use of corporate funds for the purpose of aiding either in the election or defeat in any primary or final election of a candidate for any state, county, or municipal office, which would include both direct contributions to a candidate and independent expenditures.³ In light of the Supreme Court's decision in Citizens United, concluding that there is no legitimate governmental interest that would justify a ban on independent corporate expenditures, a court likely would hold that Tenn. Code Ann. § 2-19-132 is unconstitutional to the extent that it prohibits corporations from making independent expenditures for the purpose of aiding either in the election or defeat in any primary or final election of a candidate for public office.

ROBERT E. COOPER, JR.
Attorney General and Reporter

MICHAEL E. MOORE
Solicitor General

JANET M. KLEINFELTER
Deputy Attorney General

Requested by:

The Honorable Glen Casada
State Representative
112 War Memorial Building
Nashville, TN 37243-0163

¹ Citizens United only challenged the limits in 2 U.S.C. § 441b on its independent corporate expenditures. It did not challenge, and the Court did not address, the limits contained in 2 U.S.C. § 441b on corporate contributions. 130 S.Ct. at 909.

² Sections 201 and 311 of the BCRA require that any televised electioneering funded by someone other than the candidate must include a disclaimer that the candidate is not responsible for the ad and that the funder or funding organization must then identify its name and address.

³ This Office has previously opined that Tenn. Code Ann. § 2-19-132(a) is unconstitutional insofar as it conflicts with federal law regarding candidates for federal office. See Op. Tenn. Att'y Gen. 85-081 (Mar. 14, 1985) (copy attached).