Tuesday, June 26, 2007

Supreme Court rejects political ads curbs

Supreme Court rejects political ads curbs
By Patti Waldmeir in Washington
Copyright The Financial Times Limited 2007
Published: June 25 2007 22:05 | Last updated: June 25 2007 22:05

US companies and trade unions will have more power to influence election campaigns after the US Supreme Court on Monday limited the reach of federal campaign finance law.

Ruling in the midst of campaigning for next year’s presidential poll, the court yesterday rejected efforts by Congress to limit the role of money in politics. By a 5-4 margin, it refused to apply a provision of a federal law restricting corporate or union advertising that airs just before voting begins.

The ruling marks a significant shift for the high court, which in 2003 upheld limits on pre-election corporate advertising about political issues. It underscores the influence of the two new conservative justices appointed to the court by President George W. Bush, including Chief Justice John Roberts, who wrote the majority opinion.

The US Chamber of Commerce welcomed the ruling: “This decision is a clear vindication of the rights of all Americans – including the private sector – to speak out and publicly petition their government.”

The opinion “is a major victory for those who oppose campaign finance regulation, and will likely lead to a new proliferation of corporate and union funded campaign ads in the 2008 election season”, said Rick Hasen, an election law expert at Loyola Law School.

But the four dissenting justices, from the court’s liberal wing, sharply criticised the decision. The ruling would reinforce public cynicism about the electoral process, Justice David Souter wrote for the dissent. “After today, the ban on contributions by corporations and unions and the limitation on their corrosive spending when they enter the political arena are open to easy cicumvention.”

The ruling was a victory for a Wisconsin anti-abortion group that said the campaign finance law violated its free speech rights. But it can easily be applied to corporations, unions and interest groups such as the American Civil Liberties Union.

The justices announced several other decisions on Monday that could have a big impact on US business. In their new term, which begins in October, the justices will decide whether medical device companies should face product liability lawsuits in state courts, even when the device they sell has been approved by the Food and Drug Administration (FDA).

Such lawsuits could cost device manufacturers many millions of dollars.

But the court delayed a decision on whether to intervene in a lawsuit that could be worth billions of dollars to defrauded Enron investors. That case asks whether Enron shareholders can sue Wall Street investment banks that did business with the energy company.


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