By Kathy Kirby, Wiley Rein LLP

Last week, the U.S. Supreme Court held that corporations and unions have the same right to engage in independent political speech as do individuals, including the right to expressly advocate the election or defeat of candidates.  The much-anticipated opinion, from Citizens United v. Federal Election Commission, No. 08-205 represents a significant victory for unions, businesses, and trade associations.  Certainly, the lifting of restrictions on corporate and union spending on campaign advertising could mean more political advertising dollars will flow to local media.

The case involved a 90-minute documentary produced by Citizens United, a small nonprofit advocacy corporation.  Hillary: The Movie examines the record, policies and character of now Secretary of State Hillary Rodham Clinton, and was set to be broadcast during Mrs. Clinton's presidential primary campaign.  The broadcast was banned, however, when the Federal Election Commission determined that its airing would violate the McCain-Feingold campaign finance law.  When Citizens United appealed the FEC’s decision, it was upheld by a lower court, which stated that the film was effectively a campaign ad "susceptible of no other interpretation than to inform the electorate that Senator Clinton is unfit for office, that the United States would be a dangerous place in a President Hillary Clinton world, and that viewers should vote against her."

Reversing two decisions that held political speech could be banned merely because the speaker was a corporation, the U.S. Supreme Court last week held:

•    Laws may not prohibit a corporation from using its own corporate treasury funds to independently advocate the election or defeat of political candidates. Thus, a corporation may use its own treasury funds to pay for an ad that urges the public to "vote for" or "vote against" a particular candidate.

•    Similarly, laws may not prohibit a corporation from using its own funds to make independent "electioneering communications." (Generally speaking, "electioneering communications" are broadcast, cable, and satellite communications that refer to a candidate for federal office and are made within 30 days of a primary election or 60 days of a general election.)

The decision upheld the requirements for disclaimer and disclosure by sponsors of advertisements, however, and the ban on direct contributions from corporations or unions to candidates.

Interestingly, Justice Anthony Kennedy, writing for the majority, found that the rationale used by supporters of the restrictions — that big corporations will distort public discussion of campaign issues because of their accumulated wealth — could be used by Congress to restrict speech by the news media.  The law’s exception for media corporations, Kennedy wrote, "is, on its own terms, all but an admission of the invalidity of” its rationale.  According to Kennedy, "There is no precedent supporting laws that attempt to distinguish between corporations which are deemed to be exempt as media corporations and those which are not."

Last week's ruling may be the first of several to reshape the First Amendment in a more conservative direction.  Currently pending before the court is a First Amendment establishment clause case challenging a cross that has stood for decades in California — it is speculated that the justices could broadly free government officials from legal constraints on the display of religious symbols.  The court will also decide whether a  Christian student group in San Francisco should have lost its funding at the University of California Hastings law school because it said it would not accept gays and lesbians.  Finally, the court is scheduled to hear an appeal by parties from Washington state who claim their rights to free speech and privacy would be violated if the public were permitted to see who signed ballot petitions opposing the state's domestic partner law.