AUSTIN v. MICHIGAN CHAMBER OF COMMERCE

Legal Principle at Issue

Did the Michigan Campaign Finance Act violate the First and Fourteenth Amendments?

Action

Reversed. Petitioning party received a favorable disposition.

Facts/Syllabus

Appellee Michigan State Chamber of Commerce is a nonprofit corporation, whose bylaws set forth both political and nonpolitical purposes. Its general treasury is funded through annual dues required of all members, three-quarters of whom are for-profit corporations. Section 54(1) of the Michigan Campaign Finance Act prohibits corporations, excluding media corporations, from using general treasury funds for, inter alia, independent expenditures in connection with state candidate elections. However, they may make such expenditures from segregated funds used solely for political purposes. 

Because the Chamber wished to use general treasury funds to place a local newspaper advertisement in support of a specific candidate for state office, it brought suit in the U.S. District Court for the Western District of Michigan for injunctive relief against § 54(1)'s enforcement, arguing that the expenditure restrictions are unconstitutional under the First and Fourteenth Amendments. The court upheld the section, but the U.S. Court of Appeals for the Sixth Circuit reversed, reasoning that, as applied to the Chamber, Section 54(1) of the Michigan Campaign Finance Act violated the First Amendment.