On July 11, 2025, the US Court of Appeals for the First Circuit affirmed a federal district court ruling that temporarily blocked a state law to prohibit corporations significantly owned or influenced by foreign governments from spending in Maine local and state elections. As a result, foreign-government-influenced corporations remain temporarily able to spend freely in Maine’s elections, against the will of 86% of Maine voters who supported the 2023 ballot measure behind the law in order to protect the state’s democratic self-government.

To support its conclusion, the First Circuit misconstrues Supreme Court precedent, ascribes nefarious motivations to Maine voters not supported by the evidence, and misstates the outcome the law will have on corporate speech. Maine voters deserve a better and more thoughtful engagement with the state law by the federal judges tasked with overseeing it. 

Supreme Court Precedent Does Not Support the First Circuit’s Ruling. 

Federal law prohibits foreign nationals from spending any money either “directly or indirectly” in U.S. elections. This law has been upheld by the Supreme Court, in a summary affirmance of a 2011 decision written by then-Judge (now Justice) Kavanaugh on behalf of a three-judge district court panel. In Bluman v. FEC, that panel concluded that the government has a compelling interest in “limiting the participation of foreign citizens in activities of American democratic self-government, and in thereby preventing foreign influence over the political process.”

This decision—and the Supreme Court’s affirmance—came less than two years after the Supreme Court ruled in Citizens United v. FEC that corporations could spend money on U.S. elections. The Supreme Court reasoned that corporations derive First Amendment rights from their status as “associations of citizens.”

But corporations partially owned by foreign entities—including foreign governments—are not associations of citizens. These multinational companies are, at best, mixed associations of citizens and foreign governments. We know that foreign entities cannot obtain First Amendment rights merely by associating with U.S. entities. And we know—from then-Judge Kavanaugh’s ruling—states have a compelling interest in prohibiting any U.S. election spending, whether direct or indirect, by foreign entities.

This is precisely the compelling interest that guided an overwhelming majority of Maine voters to pass a narrowly tailored law that prohibits foreign-government-influenced corporations from spending on U.S. elections. The law specifically prohibited spending by three classes of entities: (1) foreign governments; (2) corporations in which foreign governments hold at least 5% ownership; and (3) corporations whose decision-making is directed by foreign governments. The First Circuit has temporarily allowed all of these entities to continue spending on Maine’s local and state elections, presuming that parts of the law are not narrowly tailored to serve the state’s compelling interest. In other words, it decided that the law probably curtails speech that doesn’t need to be prohibited in order to protect the state’s democratic self-government. It does not. 

The law is not overbroad and does not unnecessarily curtail speech. 

As Free Speech For People explained in its amicus briefs and elsewhere, Maine set reasonable parameters for its law. Indeed, states have a compelling interest in prohibiting spending by corporations with even less foreign ownership. And as Maine voters recognized, the federal government (through the SEC) and business experts understand that for publicly traded companies, only a handful of owners hold more than 1% or 5% stake in the company. Their ownership—usually millions of dollars worth of shares—allows them to wield significant influence, both directly—through shareholder proposals, hostile takeovers, and even just picking up the phone—and indirectly, as corporations are necessarily responsive to its most powerful shareholders and investors. When foreign-influenced corporations spend on U.S. elections, they are drawing from treasuries boosted by foreign owners and responding to the goals of these owners. 

But for the First Circuit, this is not persuasive, in part because it holds against voters’ inability to obtain from corporations jealously guarded secrets of their business decisions; and in part because it wrongly ascribed bad faith motivations to the voters.

Though the court claimed to be “sympathetic to Maine and amici on the difficulty of ascertaining when foreign shareholders are wielding influence over a domestic corporation’s decisions on political speech,” it still held this difficulty against Mainers—without addressing the fact that this “difficulty” is caused by the corporations themselves. It decided that because businesses conceal this information, voters cannot reasonably analyze corporate spending and well-understood business practices to prohibit foreign-government-influenced corporations from spending in its elections. It even decided that during the pendency of the lawsuit, Maine cannot prohibit spending by corporations that are proven to be influenced by foreign governments. 

In addition, the court’s ruling is influenced by two presumptions it makes about Mainers’ motivations in passing this law: (1) that they sought merely to target certain corporations and their viewpoints; and (2) that they sought to “silence” these corporations by doing an “end-run” around Citizens United. The text of the statute does not support either of the court’s presumptions. 

First, the court intimated that Maine voters were merely trying to target certain corporations and certain corporations’ viewpoints and blocked other corporations almost by happenstance. The fact that foreign-government-influenced corporations recently spent millions of dollars on Maine elections in order to protect a deeply unpopular power project was taken by the First Circuit as proof that the law was targeted at these corporations—and not as evidence to support Maine voters’ legitimate concerns that foreign money and influence can enter, and in fact is entering, their elections. 

Second, the First Circuit also repeatedly accused Maine voters of trying to “silence” the plaintiffs and other foreign governments and foreign-government-influenced corporations. They do not. They merely block these governments and corporations from spending money on Maine’s elections. Each one of these entities retain numerous avenues to speak. They can give interviews and answer journalists’ questions about projects, policies, and ballot measures. They can establish PACs to which only its U.S. owners and employees contribute. Individual owners and employees can speak individually and on behalf of the corporation in person, in public, on social media, in traditional media. Multiple avenues for speech remain open to these corporations. Maine voters did not, and did not attempt to, silence their speech or their viewpoint. What they did attempt to do is to limit foreign money from entering their elections. 

As discussed above, this limitation is constitutional. It is not an “end-run” around Citizens United, as the law neither affects the type of corporations at issue in Citizens United, nor pertains to the same state interests at issue in Citizens United. In Citizens United, the Supreme Court granted First Amendment to U.S. corporations that are “associations of citizens.” The multinational corporations affected by Maine’s law do not qualify. Moreover, the purpose of this law is to protect Maine’s democratic self-government, an issue never applied or addressed in Citizens United. Where it was applied—in Bluman—the Supreme Court affirmed a ruling that found this to be a compelling state interest sufficient to support a complete ban on political spending by non-citizen, non-permanent-resident individuals or entities. 

Read properly, and without ascribing bad motivations to Mainers or overstating the consequences of the law on corporations, it is clear that Maine’s law is reasonable, narrowly tailored, and limits no more speech than is necessary to protect its democratic self-government.   

Maine’s law is unique and is not wholly comparable to other FIC legislation.

The First Circuit got this case wrong, but it did so by analyzing a law unique to Maine. Maine’s law is distinct from the FIC model legislation that FSFP has championed in other cities and states, including Seattle and San Jose (where the law is still in effect) and Minnesota (where it was wrongly struck down by a district court earlier this year). The First Circuit and other courts should be cautious about presuming Mainers’ rationale is applicable to other jurisdictions that block foreign-influenced corporations:

•     Maine’s law prohibits only foreign-government-influenced corporate spending at the 5% threshold. Although the court found this law to be overinclusive, it did so in part because it was unpersuaded that Maine could explain why it chose this threshold. While the 5% threshold was far from arbitrary, in fact the 1% threshold has the support of constitutional law and business law experts.

•     It arose in the aftermath of corporate political spending unique to specific elections in Maine. While the First Circuit made certain unsupported assumptions about the role this history may have played in influencing Maine voters, they are assumptions that, at the very least, should not carry over to analyses of other pending FIC legislation elsewhere in the country. 

•     The law creates sanctions for social media companies that accept payment to post political advertisements funded by foreign governments and foreign-government-influenced corporations. These sanctions are unique to Maine’s law and not part of other foreign-influenced corporate political spending laws championed by FSFP. 

Mainers deserve careful consideration of its law after robust fact development. 

The First Circuit’s ruling is not a final determination. Maine will be able to defend the law in the ongoing lawsuit, and is entitled to robust fact development. When the district court and First Circuit next consider the substance of this case, they should provide Maine’s law, Supreme Court precedent, and the facts with careful consideration. Free Speech For People will continue to support Maine and its defense of this critically important law, so that the state can preserve its democratic self-government.

Read the First Circuit’s decision here.

Read Free Speech For People’s amicus brief here.

To learn more about this case, visit our case page.