[EL] Pensions as compelled speech

Fri Jul 13 15:22:01 PDT 2012

It seems to me that the real distinctions here have to do with remoteness and intent. There is also the problem that the argument made by Prof. Sachs may prove too much.

The pension funds who receive the employees' money do not engage in political speech. Instead, they invest in shares of stock in corporations that engage in political speech. For this reason (and others) the political speech to which Prof. Sachs objects is more remote than it was in Abood and Beck (and in Keller with regard to use of state bar dues). (A related question: Jamie refers to Abood and Beck as giving union members the right to opt out of funding of political speech, but I thought it was only non-union members - who are required to pay representation fees - that could opt out. I also can't remember whether it is clear that Abood and Beck apply to unions that represent private sector workers or only to public employee unions.)

Remoteness matters. We all are required to pay taxes. Some of the tax money is used to buy goods and services from corporations that engage in political spending. Some of it is used to pay government workers' salaries, with those workers in turn spending some of it to fund their own political speech, to fund unions' political speech, and even to fund religious activities through donations to churches and other religious organizations, the Establishment Clause notwithstanding.

There is also a different kind of remoteness. Money invested to purchase shares of a corporation on the market is not given to the corporation; it is given to the prior owner of the shares. The corporation cannot use any such money, which it never receives, to fund any political speech. Instead, the corporation may use money earned from its operations to fund its political speech. Shareholders do not own the corporation's assets nor do they own the money earned by the corporation. (Corporation law scholars argue that the shareholders should not even be thought of as owning the corporation, but that's a subject for a different list.) The corporation would have made the money whether or not the pension fund had purchased its shares. It is true that the money earned by the corporation could have been used to pay dividends to the shareholders, including to the pension fund, or it could have been reinvested in the corporation to make it more profitable in the future and increase the value of its shares, including shares owned by the pension fund. But this is all more remote than the dues-paying situation, because the money spent by the corporation on political speech is not money that a pension-fund that becomes a shareholder is required to pay to the corporation, or money that the corporation receives as a result of the pension fund's investment, or even money that the corporation would otherwise be required by law to pay to the pension fund as shareholder. [Even more remotely, a pension fund's purchases of shares may cause the price of a corporation's shares to go up, which decreases the cost of capital to the corporation (by allowing it to issue new shares at a higher price), thereby subsidizing the corporation's activities generally, including its political speech activities.]

In addition, the pension fund trustees generally do not invest in corporations with the intent of furthering the corporations' political speech. (The argument made by Prof. Sachs does not rely on any such intent, which in any event is very unlikely to be present, except perhaps for "progressive" public-employee pension funds like CALPERS.) Thus, the entity that takes the money from the workers - the pension fund - does not take it for the purpose of engaging in political speech. Unions, on the other hand, take money from workers with the intent to spend it on political speech. It seems to me that it is more of an intrusion on a person's right not to be forced to fund political speech where the required assessment is taken for the purpose of engaging in the political speech.

Finally, Professor Sachs's argument perhaps proves too much. It would require pension funds to avoid investment in newspapers or media companies in general or to demand that such companies set up elaborate opt-out refund systems for costs of political speech engaged in by them. Much of what passes for news these days is politically slanted (as I suppose has always been the case), and for many media companies their news divisions are losing operations that are subsidized by other corporate activities. It seems likely that media companies spend more on a percentage basis on political speech, even explicit political speech like endorsements and editorials, than non-media companies spend on political speech. His argument might also require such opt outs for all corporations for costs of speech that is not germane to the corporations' money making, like funding of the arts or of public service announcements. Of course such funding can be said to be good for the corporation's business, but I suppose the same could be said for political speech.

Mark S. Scarberry
Professor of Law
Pepperdine Univ. School of Law

From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Bill Maurer
Sent: Friday, July 13, 2012 10:43 AM
To: Jamin Raskin; Rick Hasen; law-election at UCI.edu
Subject: Re: [EL] Pensions as compelled speech

No, I don't.  As I said in my original post, this is not compelled speech in the sense that no pension plan is compelled to invest in any private company.  People are compelled to contribute to the pension plan, but the pension plan may choose to not invest in any company.  If they were compelled to invest in the companies (as workers are compelled to "invest" in the union), then it would be a different story.

The real point of this plan is to try to prevent money from going to corporations so they can use it for political purposes.  Because no one is forced to invest in a corporation, the analogy fails.  My original point still remains-where was the deep concern for compelled speech during the debates on public financing?  Why the sudden change of heart by those who support campaign finance reform now?

Bill

From: Jamin Raskin [mailto:raskin at wcl.american.edu]<mailto:[mailto:raskin at wcl.american.edu]>
Sent: Friday, July 13, 2012 10:33 AM
To: Bill Maurer; Rick Hasen; law-election at UCI.edu<mailto:law-election at UCI.edu>
Subject: RE: [EL] Pensions as compelled speech

I am curious why you say that Professor Sachs' proposal is "yet another attempt to limit First Amendment freedoms . . . "  Do you think that the Supreme Court decisions in Abood and Beck, which gave dissenting union members the right to opt out of union political expenditures they opposed and receive a fractional rebate for them, were also efforts to limit the First Amendment freedoms of unions?

From: law-election-bounces at department-lists.uci.edu<mailto:law-election-bounces at department-lists.uci.edu> [mailto:law-election-bounces at department-lists.uci.edu]<mailto:[mailto:law-election-bounces at department-lists.uci.edu]> On Behalf Of Bill Maurer
Sent: Friday, July 13, 2012 12:51 PM
To: Rick Hasen; law-election at UCI.edu<mailto:law-election at UCI.edu>
Subject: Re: [EL] Pensions as compelled speech

Professor Sachs' piece for the New York Times is interesting-for decades, campaign finance reformers have tried to pass public financing systems that would compel taxpayers to support political speech with which they do not agree or to which they are indifferent.  Then, compelled speech was good, because it yielded more speech (see Justice Kagan's dissent in Arizona Freedom Club PAC v. Bennett). Yet, all of a sudden, compelled speech is bad because of ... Citizens United<http://www.youtube.com/watch?v=a1Y73sPHKxw> (even though what Professor Sachs describes is not compelled speech because no public pension plan is compelled to invest in any private company).

This proposal thus appears to be yet another attempt to limit First Amendment freedoms under the guise of protecting the First Amendment.

Bill

From: law-election-bounces at department-lists.uci.edu<mailto:law-election-bounces at department-lists.uci.edu> [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Rick Hasen
Sent: Friday, July 13, 2012 8:51 AM
To: law-election at UCI.edu<mailto:law-election at UCI.edu>
Subject: [EL] ELB News and Commentary 7/13/12

...

"How Pensions Violate Free Speech"<http://electionlawblog.org/?p=36883>
Posted on July 13, 2012 7:55 am<http://electionlawblog.org/?p=36883> by Rick Hasen<http://electionlawblog.org/?author=3>

Benjamin Sach as written this NYT oped<http://www.nytimes.com/2012/07/13/opinion/under-citizens-united-public-employees-are-compelled-to-pay-for-corporate-political-speech.html?_r=1&ref=opinion>, which begins: "A CENTRAL principle of American political life is that everyone gets to choose which candidates to support. The idea that the government could force us to support those we oppose is anathema. But this unacceptable state of affairs is one of the unintended consequences of the Supreme Court's decision in the 2010 Citizens United<http://www.law.cornell.edu/supct/html/08-205.ZS.html> case."
[cid:image001.png at 01CD6101.7EA3FBB0]<http://www.addtoany.com/share_save#url=http%3A%2F%2Felectionlawblog.org%2F%3Fp%3D36883&title=%E2%80%9CHow%20Pensions%20Violate%20Free%20Speech%E2%80%9D&description=>
Posted in campaign finance<http://electionlawblog.org/?cat=10> | Comments Off

...

--

Rick Hasen

Chancellor's Professor of Law and Political Science

UC Irvine School of Law

401 E. Peltason Dr., Suite 1000

Irvine, CA 92697-8000

949.824.3072 - office

949.824.0495 - fax

rhasen at law.uci.edu<mailto:rhasen at law.uci.edu>

http://law.uci.edu/faculty/page1_r_hasen.html

http://electionlawblog.org

Pre-order The Voting Wars: http://amzn.to/y22ZTv

www.thevotingwars.com<http://www.thevotingwars.com>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20120713/b0d46830/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 1504 bytes
Desc: image001.png
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20120713/b0d46830/attachment.png>