In a rebuke to the United States Supreme Court, the Supreme Court of Montana has held that Citizens United does not apply to Montana campaign finance law.

Last Friday, the Montana Supreme Court upheld the constitutionality of a 1912 voter initiative – the Corrupt Practices Act – that prohibits corporations from making contributions to or expenditures on behalf of state political candidates and political parties. In 2010, the Supreme Court ruled that a similar federal prohibition was unconstitutional, prompting a wave of bills and court rulings that erased prohibitions on corporate and union political expenditures around the country.

“For over 100 years, Montana has had an electoral system that preserves the integrity of the political process, encourages full participation and safeguards against corruption,” state Attorney General Steve Bullock said in a statement after the ruling, adding, “the [Montana] Supreme Court's decision upholds that system and is truly a victory for all Montanans.”

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The Montana Court cited the state's “unique” history, culture and economy in justifying the decision not to follow Citizens United.

“With the infusion of unlimited corporate money in support of or opposition to a targeted candidate,” wrote Chief Justice Mike McGrath, in a 5-2 decision, “the average citizen candidate would be unable to compete against the corporate-sponsored candidate, and Montana citizens, who for over 100 years have made their modest election contributions meaningfully count would be effectively shut out of the process.”

Under the First Amendment, limits on speech are justified only if the government can demonstrate a “compelling” interest for the limitation. The Montana high court ruled that the state had several compelling interests: preventing the corrupting influence of large political expenditures; guarding against Montana's susceptibility to corruption because of its low-cost, grass roots political culture; and stemming the threat posed by out-of-state economic interests that have a financial stake in Montana's agriculture and resource-extraction based economy.

But in Citizens United, Justice Anthony Kennedy held that the government may “not deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration.” In other words, the government may not quiet the voice of some speakers in an effort to boost the voice of others. The Supreme Court also held that there is no compelling interest in limiting so-called “independent expenditures,” because such limitations do not prevent corruption.

UCLA law Professor Eugene Volokh wrote on his influential legal blog, The Volokh Conspiracy, that “the disagreement with Citizens United is so striking that it is likely that the Supreme Court will agree to hear the case and will reverse the Montana Supreme Court's decision.”

Previously, a lower court in Montana ruled the state's law limiting campaign spending unconstitutional, saying, “Citizens United is unequivocal: the government may not prohibit independent and indirect corporate expenditures on political speech.”

Montana's Corrupt Practices Act

Montana's 1912 initiative was adopted in response to considerable corruption in the state government, according to the opinion. Around the turn of the century, the so-called “Copper Kings,” powerful mining barons, ruled Montana through campaign spending and bribery. One such baron, William A. Clark, was elected to the United States Senate in 1899 after buying votes in the Montana Legislature. He was unseated and the scandal helped lead to the passage of the 17th Amendment, which requires the direct election of senators.

Before the adoption of the Corrupt Practices Act, “the State of Montana and its government were operating under a mere shell of legal authority,” said the court in Friday's majority opinion, “and the real social and political power was wielded by powerful corporate managers to further their own business interests.”

The court reasoned that the interest in protecting against the corrupting influence of money on the political system remains meaningful 100 years after Montana voters adopted the Corrupt Practices Act. “Does a State have to repeal or invalidate its murder prohibition if the homicide rate declines? We think not. Issues of corporate influence, sparse population, dependence upon agriculture and extractive resource development, location as a transportation corridor and low campaign costs make Montana especially vulnerable to continued efforts of corporate control to the detriment of democracy and the republican form of government.”

Justice James Nelson wrote in dissent that “[t]he language of Citizens United … is remarkably sweeping and leaves virtually no conceivable basis for muzzling or otherwise restricting corporate political speech in the form of independent expenditures…. As much as I would like to rule in favor of the State, I cannot in good faith do so.”

Montana First Court to Challenge Supreme Court on Citizens United Ruling

The Montana Supreme Court is the only state court so far to uphold a ban on corporate political expenditures in the wake of Citizens United. The Colorado Supreme Court held its own corporate expenditure ban unconstitutional in March 2010. According to the National Conference of State Legislatures, 11 states have also repealed bans on corporate expenditures, and administrative agencies in five states have declared corporate political expenditure bans unconstitutional.

States may still ban direct corporate contributions to candidates or expenditures coordinated with candidates.

The three plaintiffs who sued to roll back Montana's election law limiting campaign contributions are a sole-proprietor painting business, an influential Montana gun-rights organization and an out-of-state advocacy group. The advocacy group, Western Tradition Partnership, has renamed itself American Tradition Partnership (ATP). According to its web site, ATP is “dedicated to fighting environmental extremism and promoting responsible development and management of land, water and natural resources.”

“The Montana Supreme Court, through this decision, has shown contempt for the overriding law of the land and has thumbed its nose at the United States Supreme Court, which has specifically held that the State of Montana has no interest in prohibiting people who associate together from speaking,” said ATP Executive Director Donald Ferguson.

John Bonifaz, director of Free Speech for People, a group dedicated to overturning Citizens United, said in a statement that the ruling sets up “the first test case for the US Supreme Court to revisit its Citizens United Decision, a decision which poses a direct and serious threat to our democracy.”

The plaintiffs have until March 29 to seek review by the United States Supreme Court.