In a unanimous opinion, the all-Republican Texas Supreme Court has sided with the Texas Democratic Party in upholding the state's ban on corporate campaign contributions.
Justice Eva Guzman wrote for the court in a decision Friday that the ban on political donations by corporations and nonprofit groups established in the Texas Election Code does not violate the First Amendment and is consistent with U.S. Supreme Court jurisprudence.
"Because we lack power to overturn United States Supreme Court precedent, we uphold the Texas Election Code's restrictions on corporate contributions," Guzman wrote.
Guzman noted that while the U.S. Supreme Court allowed certain political spending by corporations under its 2010 opinion in Citizens United, that decision did not overturn an earlier ruling in Federal Election Commission v. Beaumont that permitted legislative restrictions on direct campaign contributions by corporations.
In a concurrence, Justice John Devine agreed with his colleagues that the Texas restriction is permissible under the law but emphasized his view that Beaumont "does violence to the First Amendment" and is inconsistent with Citizens United. "The Supreme Court must overrule Beaumont to bring its caselaw in line with the First Amendment," Devine wrote.
The case stems from a suit by the Texas Democratic Party in 2010 against a Houston-area organization called the King Street Patriots, alleging that the group is a "sham domestic nonprofit corporation" that exclusively aids Republicans in state and national campaigns. The Democratic Party alleged that King Street was in fact operating as an unregistered "political committee" and thus in violation of the Election Code.
The King Street Patriots, represented by The Akers Firm in Houston, responded by launching a constitutional challenge of key provisions in the Election Code including its definition of a "political committee" and its ban on corporate campaign contributions. A trial court denied King Street's claims and concluded there was no constitutional infirmity in Texas' Election Code, a ruling that was later upheld by Austin's Third Court of Appeals.
The ruling by the Texas Supreme Court appears to have little direct bearing on the King Street Patriots. Guzman wrote that the record of the case was "silent" as to whether donors to the group primarily intend to help those holding or running for office, and that there was no evidence that the group's "principal purpose" is to collect such funds. As a result, the court found the group is not a "political committee" under the Election Code.