TX State Courts Wrestling with Corporate Contribution Restrictions post-Citizens United

November 20, 2017

By: Evan Lewis

This summer, the Texas Supreme Court, Texas’s highest court for civil, family, and probate matters, released their highly anticipated opinion in King Street Patriots v. Texas Democratic Party. This case, amongst other issues, contemplated whether or not corporate contribution restrictions are constitutional after the Supreme Court of the United States’ decision Citizens United. The overall decision was unanimous, but only eight of the nine justices agreed that corporate contribution restrictions are constitutional.

The King Street Patriots (KSP) is a Texas-based Tea Party aligned group self-described as a “group of concerned residents from the Houston area” who “engage[d] in the political process” by forming a Texas nonprofit corporation to “provide education and awareness [to] the general public on important civic and patriotic duties.” Before the 2010 election, they trained and dispatched hundreds of poll watchers. The Texas Democratic Party sued KSP after the 2010 election, alleging that KSP was a “sham” nonprofit explicitly created to serve Republican interests, despite KSP’s claim to be a non-partisan organization. The Texas Democratic Party further alleged that KSP’s provision of poll-watchers and training materials constituted an in-kind corporate contribution to the Texas Republican Party. KSP counterclaimed, challenging certain provisions of the Texas Election Code, including the provisions restricting corporate contributions.

Citizens United famously held that the First Amendment bars corporate expenditure restrictions. However, the Texas Supreme Court held that Citizens United did not explicitly overrule the earlier Supreme Court case Federal Election Commission v. Beaumont. In Beaumont, the Supreme Court held that laws barring corporate political contributions are “consistent with the First Amendment” and are not subject to strict scrutiny. KSP challenged Beaumont’s continued validity on the basis that later Supreme Court decisions undermine Beaumont’s precedential value. However, the majority declined to do what they would consider an “expansion” of Citizens United. The Court further found Beaumont binding precedent on this issue, and terminated their inquiry after noting that “only the Supreme Court has the prerogative … to overrule one of its precedents.”

Justice Devine wrote a separate opinion concurring in the ultimate judgment but disagreeing with the majority on this point. In his opinion, he stated that while he agreed with the majority’s “application of [Beaumont] a case [which the Court] unfortunately must follow,” “Beaumont does violence to the First Amendment and is inconsistent with Citizens United.” Devine wrote that Texas’s corporate-contribution ban violates the First Amendment because he would treat corporate contributions as the same kind of speech as corporate expenditures. Devine believes that the only justifiable reason for a state restriction on such political speech is to prevent quid pro quo corruption or its appearance. Justice Devine further explains that merely the “possibility that an individual who spends large sums may garner influence over or access to elected officials or political parties” is not enough to justify such restrictions, but would require contributions to be exchanged directly for political favors.

While it seems that King Street Patriots will not be the latest case concerning corporate political activity to make it to the Supreme Court, it exemplifies the turmoil that still exists within state institutions attempting to parse Citizens United and the limits of the decision. For some examples of that conflict, please see the discussion of this Maine bill, the controversy surrounding this municipal ordinance in St. Petersburg, Florida, or this article discussing Citizens United’s impact over the last several years.