On March 24, the U.S. Supreme Court heard oral arguments in Citizens United v. Federal Election Commission (FEC), a case that could overturn or limit portions of the Bipartisan Campaign Reform Act (BCRA), commonly called the McCain-Feingold campaign finance law. Citizens United, a 501(c)(4) organization, produced a 90-minute film, Hillary: The Movie, which was highly critical of then-presidential candidate Hillary Clinton. The case challenges as unconstitutional FEC electioneering communications rules as applied to the movie and to ads promoting the movie. It also challenges as unconstitutional donor disclosure rules as applied to the ads.

BCRA prohibits corporations, including nonprofits, from airing broadcasts that refer to a federal candidate 30 days before a primary election and 60 days before a general election. This electioneering communications rule was modified by the Supreme Court in Wisconsin Right to Life v. FEC (WRTL) in 2007 to limit the prohibition to ads that are "susceptible of no reasonable interpretation other than as an appeal to vote for or against a clearly identified Federal candidate."

The Citizens United lawsuit charges that the ads for the Hillary Clinton film should not be subject to donor disclosure and disclaimer requirements because they are purely commercial. It also argues that the film itself is no different from other journalistic documentaries and therefore is not a political communication. Furthermore, it argues that the film did not specifically tell viewers how to vote in the 2008 presidential election and thus, the film and its ads should be exempt from any type of regulation.

Citizens United wanted to make the film available for free via a video-on-demand service during the presidential primary campaign and accepted some for-profit corporate funding. Citizens United also sought an order declaring that ads for the movie were not "electioneering communications" within the meaning of Section 203 of BCRA.

The federal district court ruled that the film was not a constitutionally protected discussion of issues, under the test the Supreme Court established in the WRTL case, because it was "susceptible of no other interpretation than 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." Thus, the film and its ads were deemed "electioneering communications." The FEC wants the Supreme Court to uphold the federal district court's ruling, asserting that the film was clearly an appeal against then-presidential candidate Clinton. The government brief also states that a video-on-demand program is nothing more than a political "infomercial," which is banned by BCRA. Oral arguments, however, seemed to indicate that the Court may reject the lower court's ruling.

According to The New York Times, "It seemed at least possible that five justices were prepared to overturn or significantly limit parts of the court's 2003 decision upholding the McCain-Feingold campaign finance law, which regulates the role of money in politics."

Furthermore, SCOTUSblog, a blog that focuses exclusively on the U.S. Supreme Court, highlighted some of the issues that specific justices raised during oral arguments. Several justices seemed to think that the government's view of the current law could be interpreted to expand beyond ads, to possibly restrict using corporate funding for books.

The justices appeared incredulous when Deputy Solicitor General Malcolm Stewart said, "The government could ban an advocacy group from using its own funds to pay for a 90-minute documentary if only the first minute was devoted to urging voters whom to choose, and the rest was a recital of information about the candidate without further direct advocacy." The justices could possibly create an exception for documentaries. Congress did not specifically address documentaries in BCRA.

SCOTUSblog also mentions that Justice Antonin Scalia outlined that "the First Amendment provides 'heightened' protection when a campaign message involves an exchange between someone wanting to speak and someone willing to listen – as, for example, Citizens United’s 'Hillary' film when offered as video-on-demand on cable television." Questioning during oral arguments suggests that the Court could end up adopting this position.

Several justices did question Citizens United's attorney Ted Olson about the movie and expressed the view that the movie is designed to tell viewers how to vote and thus, the implication is that they would be open to regulation. These justices, however, seemed to be in the minority.

Rick Hasen, a Loyola University law professor who runs the Election Law Blog, said in a blog posting that the disclosure rules appear to be safe. The only instance Hasen highlighted concerning the disclosure rules was when "Chief Justice Roberts questioned whether the Brown v. Socialist Workers exemption for disclosure requirements was too harsh on those seeking an exemption. Under the exemption, a person or group claiming they face threats of harassment if their contributors were disclosed must demonstrate a likelihood of actual harassment. The Chief questioned whether this standard was too harsh on some groups." This, however, was not a topic that the other justices seemed to grasp onto. Citizens United's attorney did not mention the disclosure rules at all during oral arguments.

The Court is expected to rule on the case in late spring or early summer of 2009.