Did the U.S. Supreme Court change the construction referendum game in Indiana?

By: Andrew J. Mallon

On January 21, 2010, the U.S. Supreme Court in Citizens United v. Federal Election Commission pressed the reset button on decades old First Amendment law addressing whether governments can restrict political speech by limiting a corporation’s or union’s ability to directly advocate for a political candidate. In short, the government can no longer impose restrictions based simply on the fact that it is a corporation or union that is speaking or paying for the speech. In other words, government cannot restrict someone’s speech based on who is doing the speaking-namely, in this case, a corporation or union.

Now, given that this is a Construction Law Blog, you may be asking “What does this have to do with the Indiana construction industry?” The answer resides with the Indiana Referendum Law – a law enacted in 2008 that requires large capital building projects by public owners in Indiana must first be approved by the voters through a referendum election. This law is part of the reason public construction projects have almost dried up in Indiana. Aside from a few really big projects in big cities, referendum initiatives throughout the state have been largely unsuccessful. As we have discussed in previous articles addressing the 2008 and early 2009 referenda initiatives in Indiana, part of the reason so many of these referenda have failed is that the public owners’ hands are tied when they try to explain to voters why new construction is needed. The same piece of legislation that requires a referendum election prohibits public owners and their contractors, engineers, architects, etc. from spending any money to advocate a position as to the success or failure of that referendum. How do you successfully explain the purpose and need for your project without spending money?

The question now created by the Citizens United opinion is this: are the Indiana referendum restrictions actually campaign finance and free speech restrictions? They certainly have the look and feel of them as the referendum restrictions are based on “who” is doing the speaking (i.e. public owners, contractors, architects, lawyers, consultants, etc.).

The Citizens United case addressed federal campaign finance restrictions on corporations and unions only. But, U.S. Supreme Court opinions and findings on U.S. constitutional issues like the First Amendment is controlling for every level of government, including the State of Indiana. If they say you cannot base campaign contribution restrictions on “who” the speaker is, then you simply cannot – there is no further discussion. Now, it is important to note that the Indiana Referendum Law is in effect and enforceable and will remain so until it is formally challenged, and perhaps overturned, as unconstitutional. The Citizens United decision does not change this fact. However, what happened in
the high ivory chambers of the Roberts Court in the Citizens United v. Federal Election Commission case may just have helped change the game for public construction projects back home in Indiana.

A copy of the full Citizens United v. Federal Election Commission decision can be found at: http://www.supremecourtus.gov/opinions/09pdf/08-205.pdf

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Daniel M. Drewry

Daniel M. Drewry

Daniel M. Drewry

About This Blog

The DSV Construction Law Blog is hosted by Daniel M. Drewry. Dan is a Partner with the law firm Drewry Simmons Vornehm, LLP and concentrates his practice in the areas of Construction Law and Litigation, and Labor & Employment Law.

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