In a recent speech at Bloomberg’s Big Law Business Summit (video and discussion by my colleague Sam Kazman here), Schneiderman justified a 20-state investigation of Exxon and so-called “climate change deniers” by quoting Justice Rehnquist of the Supreme Court: specifically, a passage (starting at 9:16 in the video) in which Rehnquist argued that “the liberties of political expression are not at all necessary to effectuate the purposes for which States permit commercial corporations to exist.”
Listeners doubtless took away the misleading impression that the Supreme Court was on Schneiderman’s side, but the reality is quite the opposite: Schneiderman’s view was soundly rejected by the Supreme Court. Schneiderman didn’t mention this, but the language he quoted was from a dissent by Justice Rehnquist, not a majority ruling. After quoting Rehnquist, Schneiderman added that Rehnquist is not a justice he frequently cites – while leaving out the far more pertinent fact that he was not quoting from a majority ruling. The ruling was in First National Bank of Boston v. Bellotti (1978), which struck down as a violation of free speech a state ban on corporate political spending on ballot referendums that do not affect “the property, business or assets of the corporation." The language cited was from a passage by Justice Rehnquist disagreeing with the Supreme Court’s ruling that the First Amendment broadly protects corporate free speech rights.
Even then-Justice Rehnquist’s pinched view of the First Amendment as to profit-making companies wouldn’t justify the scope of the investigation that Schneiderman is defending As the Free Beacon notes, one participant in the 20-state investigation, the attorney general of the U.S. Virgin Islands,
is targeting dozens of conservative and libertarian organizations in a racketeering lawsuit against climate change skeptics that has been widely described as an effort to silence political opponents. In a subpoena issued in March, the office of USVI attorney general Claude Walker demanded from Exxon Mobil copies of communications between the oil company and 90 different political and policy organizations “and any other organizations engaged in research or advocacy concerning Climate Change or policies.” The subpoena was part of a national, coordinated legal campaign by state attorneys general and left-wing advocacy groups to use the legal system against companies and organizations that disagree with and advocate against Democratic policies to address global climate change.
As part of that investigation, an incredibly burdensome subpoena was issued to the Competitive Enterprise Institute, a non-profit 501(c)(3) think-tank, demanding 10 years’ worth of documents relating to a wide range of topics (CEI’s First Amendment objections to that subpoena are found here). The subpoena was sent to CEI shortly after CEI’s Myron Ebell and I had criticized the investigation in the press. Earlier, I had also criticized the investigation on the Internet, arguing that it violated court rulings protecting free speech against speech-chilling investigations and lawsuits, such as White v. Lee (2000).
But even Justice Rehnquist believed that non-profits like CEI have political speech rights, as he made clear starting in the 1980s, in cases like FEC v. NCPAC (1985), which ruled in favor of a First Amendment challenge by non-profit corporations to restrictions on their campaign-related speech. And Rehnquist later repudiated many of his original restrictive attitudes towards the First Amendment rights of even for-profit companies by repeatedly ruling that they had rights to engage in commercial speech, a position he had once rejected.
While corporations’ election-related spending has long been subject to greater regulation than the general public’s (for example, they cannot make contributions directly to Congressional or Presidential candidates), their non-election-related political speech rights are broader, and even Justice Rehnquist did not argue that corporations have no political speech rights outside the context of elections, such as the right to engage in lobbying. His Bellotti dissent merely questioned whether a company had the right “to engage in political activity with regard to matters having no material effect on its business” – not whether Exxon could spend money to speak about an issue that does have a material effect on its business, like climate-change regulations.
The multistate investigation of Exxon similarly raises obvious First Amendment issues, as the editorial boards of newspapers across the political spectrum have noted, such as USA Today, Bloomberg News and The Washington Post. In his talk Schneiderman repeatedly used the phrase “First Amendment opportunism.” Judging from his legal reference, a better phrase would be “attorney general opportunism.”