A federal judge in Honolulu signaled Tuesday she will allow a constitutional challenge to proceed against Hawaii’s novel attempt to sidestep the Supreme Court’s Citizens United decision by rewriting state corporate law to ban political spending.
U.S. District Judge Leslie Kobayashi told attorneys she’s inclined to find the Grassroot Institute of Hawaii has standing to sue and that the state’s Act 11 restricts core political speech. The law, set to take effect July 1, 2027, doesn’t regulate campaign finance directly. Instead, it strips corporations, nonprofits, and unions of the legal authority to spend money supporting or opposing candidates or ballot measures. Violators face penalties up to complete dissolution.
How Hawaii Tried to Reverse Citizens United
Supporters pitched Act 11 as a workaround to the Supreme Court’s 2010 Citizens United ruling, which struck down limits on independent corporate election spending as violations of the First Amendment. Rather than challenge that precedent head-on, Hawaii legislators rewrote the state’s corporate code itself, removing the power to make political expenditures from the bundle of rights corporations receive at formation.
The Grassroot Institute, a limited-government advocacy nonprofit, sued to block the law before it takes effect. The group argues the restriction would prevent it from doing its core work: engaging in political speech about candidates and ballot measures.
Judge Questions State’s Defense Strategy
“What Grassroot does is, of course, the very essence of political speech,” said Kobayashi, an Obama appointee, during Tuesday’s hearing. Deputy Solicitor General Ewan Rayner argued throughout the session that Grassroot lacks standing to bring the challenge, though the judge appeared unconvinced.
While Kobayashi stopped short of issuing a ruling from the bench on either side’s motions, her comments suggest Hawaii faces an uphill battle defending its first-in-the-nation approach. The case tests whether states can accomplish through corporate law what the Supreme Court said they cannot do through campaign finance regulation.
The outcome will determine whether other states adopt Hawaii’s model or whether the First Amendment protections established in Citizens United extend beyond direct spending limits to the corporate powers that make such spending possible. A decision is expected in coming weeks.
Key Points
- Hawaii’s Act 11 bans political spending by rewriting corporate powers, not campaign finance rules
- Federal judge indicated the law restricts core political speech and plaintiffs have standing to sue
- The case tests whether states can use corporate law to accomplish what Citizens United forbids in campaign finance
https://www.courthousenews.com/challenge-to-hawaiis-anti-citizens-united-law-likely-to-proceed/ – October 14, 2026
