Another organization has sued Hawai‘i over Act 11, the law passed this year that limits corporate spending in political campaigns.
Act 11, which Gov. Josh Green signed into law in May, limits “artificial-person powers” granted by the state to corporations; in particular, the law rescinded the power of corporations to spend money on political campaigns.
The law challenges the 2010 U.S. Supreme Court verdict in Citizens United v. Federal Election Commission, wherein the court found laws prohibiting corporate political spending violates corporations’ First Amendment. Proponents of Act 11 have argued that the law does not impede corporations’ rights, but instead their powers.
The Chamber of Commerce of the United States of America disagrees. Last month, the national chamber sued state Attorney General Anne Lopez and Nadine Ando, Director of the state Department of Commerce and Consumer Affairs, over Act 11 in U.S. District Court.
In its complaint, the Chamber argues that the law “extinguishes the power to speak on certain topics and viewpoints, enforces that … prohibition with significant corporate penalties up to involuntary dissolution … in direct defiance of binding Supreme Court precedent.”
The Chamber claims that the U.S. Supreme Court has rejected the fundamental premise of Act 11 — that a corporation’s “powers” conferred by the state are distinct from their “rights” — in Citizens United. It adds that Act 11 applies to foreign entities that Hawai‘i has no authority over.
Furthermore, Act 11 is discriminatory, the Chamber argues, because it permits media corporations to publish content concerning political campaigns while simultaneously prohibiting other corporations from doing the same.
Because the U.S. Chamber of Commerce regularly participates in political speech — including repeated endorsements of Rep. Ed Case and a planned voter-education tour this year about “the virtues and benefits of free enterprise and the dangers of socialism” — the Chamber argues that it has been directly harmed by Act 11.
The Chamber’s complaint notes that its arguments are not original. In fact, it points out that Lopez herself testified against the bill as it passed through the state Legislature, calling it “likely impossible to defend” and warning that passing the law would all but guarantee costly legal challenges.
A previous lawsuit, filed in June by Grassroot Institute of Hawai‘i, followed much the same arguments. Progress in that case has been slow; a hearing for a proposed preliminary injunction that would suspend Act 11 until the case is resolved, which was proposed in June, is scheduled for Oct. 13.
The Chamber has also moved for a similar preliminary injunction in its case, but no hearing has yet been scheduled on the matter.
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