Supreme Court Amicus Brief of 22 Corporate Law Professors, Mark Janus v. American Federation of State, County and Municipal Employees, Council 31, et aL, No. 16-1466

56 Pages Posted: 2 Jan 2018

See all articles by John C. Coates, IV

John C. Coates, IV

Harvard Law School; European Corporate Governance Institute (ECGI)

Lucian A. Bebchuk

Harvard Law School; European Corporate Governance Institute (ECGI); National Bureau of Economic Research (NBER)

John C. Coffee

Columbia Law School; European Corporate Governance Institute (ECGI); American Academy of Arts & Sciences

Bernard S. Black

Northwestern University - Pritzker School of Law

Lawrence A. Hamermesh

Widener University Delaware Law School; Institute for Law and Economics

James D. Cox

Duke University School of Law

Marcel Kahan

New York University School of Law; European Corporate Governance Institute

Reinier Kraakman

Harvard Law School; European Corporate Governance Institute

Jeffrey N. Gordon

Columbia Law School; European Corporate Governance Institute (ECGI)

Ronald J. Gilson

Stanford Law School; Columbia Law School; European Corporate Governance Institute (ECGI); Stanford Law School

Vikramaditya S. Khanna

University of Michigan Law School; European Corporate Governance Institute (ECGI)

Michael Klausner

Stanford Law School; European Corporate Governance Institute (ECGI)

Henry Hansmann

Yale University - Law School; European Corporate Governance Institute (ECGI)

Donald C. Langevoort

Georgetown University Law Center

Brian JM Quinn

BC Law School

Michal Barzuza

University of Virginia School of Law; ECGI

Mira Ganor

University of Texas at Austin - School of Law

Edward B. Rock

New York University School of Law; European Corporate Governance Institute

Mark J. Roe

Harvard Law School

Helen S. Scott

New York University (NYU)

Holger Spamann

Harvard Law School; ECGI

Randall S. Thomas

Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - Law School

Date Written: December 7, 2017

Abstract

The Supreme Court has looked to the rights of corporate shareholders in determining the rights of union members and non-members to control political spending, and vice versa. The Court sometimes assumes that if shareholders disapprove of corporate political expression, they can easily sell their shares or exercise control over corporate spending. This assumption is mistaken. Because of how capital is saved and invested, most individual shareholders cannot obtain full information about corporate political activities, even after the fact, nor can they prevent their savings from being used to speak in ways with which they disagree. Individual shareholders have no “opt out” rights or practical ability to avoid subsidizing corporate political expression with which they disagree. Nor do individuals have the practical option to refrain from putting their savings into equity investments, as doing so would impose damaging economic penalties and ignore conventional financial guidance for individual investors.Most individual shareholders cannot obtain full information about a corporation’s speech or political activities, even after the fact, nor can most shareholders prevent their savings from being used for political activity with which they disagree. More generally, the Court's focus on whether union non-members are effectively forced to fund political speech or activity with which they disagree should reflect the fact that most Americans must routinely fund speech with which they disagree. While some of this compulsion is from practical reality rather than law there are numerous examples outside the union context of laws that require individuals to fund expressive activities. There is, simply put, very little way for most individuals in modern America to avoid subsidizing speech with which they disagree.

Keywords: corporate politics, union politics, First Amendment, shareholder rights, corporate speech

JEL Classification: D91, G32, G11, G18, G34, G38, K22, K31, J83

Suggested Citation

Coates, John C. and Bebchuk, Lucian A. and Coffee, John C. and Black, Bernard S. and Hamermesh, Lawrence A. and Cox, James D. and Kahan, Marcel and Kraakman, Reinier H. and Gordon, Jeffrey N. and Gilson, Ronald J. and Khanna, Vikramaditya S. and Klausner, Michael D. and Hansmann, Henry and Langevoort, Donald C. and Quinn, Brian JM and Barzuza, Michal and Ganor, Mira and Rock, Edward B. and Roe, Mark J. and Scott, Helen S. and Spamann, Holger and Thomas, Randall S. and Thomas, Randall S., Supreme Court Amicus Brief of 22 Corporate Law Professors, Mark Janus v. American Federation of State, County and Municipal Employees, Council 31, et aL, No. 16-1466 (December 7, 2017). Available at SSRN: https://ssrn.com/abstract=3086666 or http://dx.doi.org/10.2139/ssrn.3086666

John C. Coates (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
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1000 Brussels
Belgium

Lucian A. Bebchuk

Harvard Law School ( email )

Cambridge, MA 02138
United States
617-495-3138 (Phone)
617-812-0554 (Fax)

HOME PAGE: http://www.law.harvard.edu/faculty/bebchuk/

European Corporate Governance Institute (ECGI) ( email )

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National Bureau of Economic Research (NBER) ( email )

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John C. Coffee

Columbia Law School ( email )

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European Corporate Governance Institute (ECGI)

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American Academy of Arts & Sciences

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Bernard S. Black

Northwestern University - Pritzker School of Law ( email )

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Lawrence A. Hamermesh

Widener University Delaware Law School ( email )

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Institute for Law and Economics

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James D. Cox

Duke University School of Law ( email )

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Marcel Kahan

New York University School of Law ( email )

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European Corporate Governance Institute ( email )

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Reinier H. Kraakman

Harvard Law School ( email )

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Hauser 406
Cambridge, MA 02138
United States
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617-496-6118 (Fax)

European Corporate Governance Institute ( email )

c/o the Royal Academies of Belgium
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Jeffrey N. Gordon

Columbia Law School ( email )

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European Corporate Governance Institute (ECGI)

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Ronald J. Gilson

Stanford Law School ( email )

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Columbia Law School ( email )

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European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
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1000 Brussels
Belgium

Stanford Law School ( email )

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Stanford, CA 94305-8610
United States
650-723-0614 (Phone)
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Vikramaditya S. Khanna

University of Michigan Law School ( email )

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Ann Arbor, MI 48109-1215
United States
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European Corporate Governance Institute (ECGI) ( email )

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Michael D. Klausner

Stanford Law School ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Henry Hansmann

Yale University - Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
203-432-7101 (Phone)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
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Belgium

HOME PAGE: http://www.ecgi.org

Donald C. Langevoort

Georgetown University Law Center ( email )

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Brian JM Quinn

BC Law School ( email )

885 Centre Street
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Michal Barzuza

University of Virginia School of Law ( email )

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Charlottesville, VA 22903
United States

HOME PAGE: http://https://www.law.virginia.edu/faculty/profile/mb9fg/1144316

ECGI ( email )

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HOME PAGE: http://https://ecgi.global/users/michal-barzuza

Mira Ganor

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

Edward B. Rock

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

European Corporate Governance Institute ( email )

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Belgium

Mark J. Roe

Harvard Law School ( email )

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Helen S. Scott

New York University (NYU) ( email )

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Holger Spamann

Harvard Law School ( email )

Cambridge, MA 02138
United States

ECGI ( email )

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Rue Ducale 1 Hertogsstraat
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Belgium

Randall S. Thomas

Vanderbilt University - Owen Graduate School of Management

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United States

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
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