The Supreme Court announced yesterday that it will consider whether to uphold a ban on corporate spending in federal elections, a move that campaign finance experts said could have a dramatic effect on the 2010 and 2012 federal elections.
In a surprise move, the court said it would delay a decision on whether a conservative group's film criticizing then-Sen. Hillary Rodham Clinton ran afoul of the McCain-Feingold campaign finance act.
Instead, the court scheduled a rare September hearing on whether the law itself raised constitutional questions and it said it would reexamine a 1990 decision that said restricting corporations from spending money from their general treasuries to support or oppose political candidates did not violate constitutional guarantees of free speech.
"This has the potential to be a blockbuster," said Michael E. Toner, a former chairman of the Federal Election Commission. He said the issues have implications for "the whole architecture of the federal campaign financing system."
The court said it would withhold its decision about "Hillary: The Movie" until it received briefings this summer about the larger issues. It will hear arguments Sept. 9. The court begins its new term Oct. 5.
The court will be without Justice David H. Souter, who has been one of the most consistent supporters of the McCain-Feingold Act, formally called the Bipartisan Campaign Reform Act of 2002. Its main sponsors were Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.).
The White House and supporters of court nominee Sonia Sotomayor said the September hearing should be additional motivation for the Senate to vote on her confirmation before it adjourns for its August recess.
It is unclear whether Sotomayor's replacement of Souter would make a difference in the case's outcome.
At issue in the case is a part of the law that forbids corporations, unions and special interest groups from using money from their general treasuries for "any broadcast, cable or satellite communications" that refer to a candidate for federal office within a certain time frame before an election.
In the past, that has meant 30-second to one-minute campaign ads. But a lower court said the same rule applied to the conservative group Citizens United's production of a scathing 90-minute movie on Clinton as she pursued the Democratic presidential nomination.
The three-judge panel applied a ruling written in 2007 by Chief Justice John G. Roberts Jr. that an ad is covered by the law when it is "susceptible of no reasonable interpretation other than as an appeal to vote for or against a specific candidate."
Citizens United's attorney, former solicitor general Theodore B. Olson, had told the court that it should use the case to overturn the corporate spending ban the court recognized in Austin v. Michigan Chamber of Commerce, as well as its decision in 2003 to uphold McCain-Feingold as constitutional.
But the court apparently decided it could not make such decisions without specific briefings on what would be a bold move.
McCain-Feingold's ban on "soft money" contributions is not part of the court's review.
Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas have said in past decisions that they did not think the restrictions on speech in the Campaign Reform Act could be squared with the First Amendment. But Roberts and Justice Samuel A. Alito Jr., although joining them to chip away at the act, have not indicated they are willing to go that far.
Supporters of campaign finance reform, such as Fred Wertheimer, president of Democracy 21, said overruling the court's precedents "would fundamentally undermine our democracy and change the character of federal elections."
"Banks like Citigroup, investment firms like Merrill Lynch, insurance companies like AIG and corporations like General Motors and Chrysler would be free to spend hundreds of millions of dollars of their corporation's wealth" to support some federal officeholders and to oppose others, Wertheimer said.
Others, such as Trevor Potter, president of the Campaign Legal Center, said the court's decision to review its precedents "shows the potential for a disturbing lack of judicial restraint."
But Olson told the court in his brief on behalf of Citizens United that the ban on corporate expenditures is "flatly at odds with the well-established principle that First Amendment protection does not depend upon the identity of the speaker."
The case is Citizens United v. Federal Election Commission.