The argument was extraordinary in its timing, length and participants. It took place during the court’s summer break, almost a month before the start of the new term in October; lasted more than 90 minutes instead of the usual hour; and featured the Supreme Court debuts of Justice Sonia Sotomayor and the solicitor general, Elena Kagan.
It was, moreover, a rare re-argument. When the case was first heard in March, it centered on whether the restrictions on corporate spending in the 2002 McCain-Feingold campaign finance law applied to the documentary “Hillary: The Movie,” which was produced by a nonprofit advocacy corporation called Citizens United. In the request for re-argument, the court raised the much broader question of whether it should sweep away restrictions on political speech by corporations.
On Wednesday, Ms. Kagan all but said that a loss for the government would be acceptable, so long as it was on narrow grounds.
She suggested to the justices that Citizens United might not be the sort of corporation to which some campaign finance restrictions ought to apply. What the Supreme Court should not do, she said, is overrule two earlier decisions and thereby allow all kinds of corporations to spend money to support or oppose political candidates, principally through television advertisements.
Chief Justice John G. Roberts Jr., on hearing the government’s position, accused it of engaging in strategic behavior.
“So you want to give up this case,” Chief Justice Roberts said to Ms. Kagan, “change your position, and basically say you lose solely because of the questioning we have directed on re-argument?”
Ms. Kagan did not go that far. But she said, “If you are asking me, Mr. Chief Justice, as to whether the government has a position as to the way it loses, if it has to lose, the answer is yes.”
Chief Justice Roberts and several of the court’s more conservative justices seemed frustrated with the complex state of modern campaign finance law and appeared ready to take bold action. Justice Sotomayor, like some of the court’s more liberal members, seemed inclined to take a narrower approach.
“Wouldn’t we be doing some more harm than good,” she asked Floyd Abrams, “by a broad ruling in a case that doesn’t involve more business corporations, and actually doesn’t involve the traditional nonprofit corporation?”
“Your honor,” Mr. Abrams responded, “I don’t think you’d be doing more harm than good in vindicating the First Amendment rights here, which transcend that of Citizen United.” Mr. Abrams represented Senator Mitch McConnell of Kentucky, the Republican leader and a longtime foe of campaign finance regulation.
The order calling for re-argument in the case, Citizens United v. Federal Election Commission, No. 08-205, asked the parties to offer their views on whether the court should overrule a 1990 decision, Austin v. Michigan Chamber of Commerce, which upheld restrictions on corporate spending to support or oppose political candidates, and part of McConnell v. Federal Election Commission, the 2003 decision that upheld the central provisions of the McCain-Feingold campaign finance law.
The McCain-Feingold law bans the broadcast, cable or satellite transmission of “electioneering communications” paid for by corporations in the 30 days before a presidential primary and in the 60 days before the general election. The law requires the government, Justice Anthony M. Kennedy said, to make an array of distinctions — among speakers, what they say and when they say it — that raise serious First Amendment concerns.
The court could rule in favor of Citizens United without making fundamental changes to the political landscape. It could say that the McCain-Feingold law was not meant to address 90-minute documentaries like the one at issue. It could say that the way Citizens United wanted to distribute the documentary, on a cable video-on-demand service, was not covered by the law. Or it could, as Ms. Kagan suggested, carve out some kinds of corporations.
Justice Sotomayor asked Theodore B. Olson, a lawyer for Citizens United, whether his side had abandoned earlier arguments based on the McCain-Feingold law rather than the First Amendment rights of all corporations.
Mr. Olson indicated that he was prepared to accept any sort of victory. But he added that the court would have to confront the larger question in the case soon enough and that whatever interim lines the court drew would chill free speech in the meantime.
Mr. Abrams reminded the court that it could have decided New York Times v. Sullivan, the 1964 decision that revolutionized the law of libel, on quite narrow grounds. When First Amendment rights are in danger, Mr. Abrams said, a broad ruling can be the correct one.
“Hillary: The Movie,” a caustic critique of Mrs. Clinton, was shown in theaters in six cities, and it remains available on DVD and the Internet. A three-judge panel of the Federal District Court said last year that it could not be transmitted on cable because it had only one purpose: “to inform the electorate that Senator Clinton is unfit for office, that the United States would be a dangerous place in a President Hillary Clinton world and that viewers should vote against her.”
Ms. Kagan disavowed a statement that a government lawyer made when the case was first argued in March. The lawyer said the government could ban the distribution of books paid for by corporations before elections.
“The government’s answer has changed,” Ms. Kagan said, adding that the Federal Election Commission had never tried to regulate distribution of books.
Chief Justice Roberts bristled at that statement. “We don’t put our First Amendment rights in the hands of F.E.C. bureaucrats,” he said.
He then asked about pamphlets. “A pamphlet would be different,” Ms. Kagan said. “A pamphlet is pretty classic electioneering.”
Much of the argument was taken up by discussions of whether the speech of corporations might be treated different from that of individuals. Mr. Olson and Justice Antonin Scalia noted that most corporations were small, had limited assets and often were owned by a single shareholder. Justice Ruth Bader Ginsburg asked about “megacorporations” with foreign investors.
Changes at the court, particularly the replacement of Justice Sandra Day O’Connor by Justice Samuel A. Alito Jr. in 2006, have substantially altered its attitude to campaign finance laws. A five-justice majority of the Roberts court has been hostile to such laws, but Chief Justice Roberts and Justice Alito have so far moved in cautious increments.
Judging by the request for re-argument and the tenor of the questioning on Wednesday, that may be about to change.