By James Vicini
WASHINGTON (Reuters) - In a blow to those trying to restrict corporate spending in U.S. elections, the U.S. Supreme Court on Monday ruled against a century-old law in Montana that set limits on business spending for political campaigns in the state.
By a 5-4 vote, the country's highest court ruled for three corporations - the American Tradition Partnership Inc political advocacy group, a nonprofit group that promotes shooting sports, and a small family-owned painting business - all of which challenged the law as violating their free-speech rights.
The ruling effectively applies to state and local elections and said there was "no serious doubt" the Montana law was covered by same legal reasoning as the U.S. Supreme Court's January 2010 ruling in the federal campaign finance case known as Citizens United v. Federal Election Commission.
In that case the court split 5-4 along conservative-liberal ideological lines to rule that corporations had a constitutional free-speech right to spend freely to support or oppose political candidates in federal elections, a ruling sharply criticized by President Barack Obama.
That decision triggered a massive increase in campaign spending that affected the elections for Congress in 2010 and has reshaped the political races ahead of the November 6 U.S. presidential and congressional votes.
The Montana Supreme Court upheld the state law, ruling the 2010 decision did not control the outcome because Montana's law was different and justified by the state's interest in preventing corporate corruption and influence in politics.
The state court cited Montana's history when the voter-approved law was adopted in 1912, with mining and other corporate spending resulting in political corruption.
Attorneys for the three corporations appealed to the Supreme Court, arguing that Montana was bound by the 2010 ruling and that it applied to state as well as federal elections.
James Bopp, lead attorney for the corporations, said when he filed the appeal, "If Montana can ban core political speech because of Montana's unique characteristics, free speech will be seriously harmed. Speakers will be silenced because of corruption by others over a century ago."
The Supreme Court summarily ruled for the corporations in a two-paragraph opinion on Monday and reversed the ruling of the Montana Supreme Court.
The four liberal justices dissented. Justice Stephen Breyer wrote that the court should reconsider the 2010 ruling, or at least its application in this case. He cited the history and political landscape in Montana.
"Montana's experience, like considerable experience elsewhere since the court's decision in Citizens United, casts grave doubt on the court's supposition that independent expenditures do not corrupt or appear to do so," he wrote.
Montana Attorney General Steve Bullock opposed the appeal.
"As Montana's history attests, corporate independent expenditures can corrupt," he wrote in a brief filed with the Supreme Court. "No state in the union has detailed a more compelling threat of corruption by corporate campaign expenditures than Montana."
The Supreme Court in February put on hold the state court ruling while it considered the appeal.
Liberal Justice Ruth Bader Ginsburg, joined by Justice Stephen Breyer, wrote in February that the Montana case provided the court with the chance to reconsider the 2010 ruling in view of the huge amounts of money being spent to "buy candidates' allegiance."
Obama criticized the 2010 ruling in his State of the Union address that year, with a number of Supreme Court justices present. Many of Obama's fellow Democrats in Congress also have opposed the ruling.
Some Republicans, including Senate Republican leader Mitch McConnell, have praised the ruling. McConnell filed a brief with the Supreme Court supporting the challenge to the Montana law.
Senators John McCain, the unsuccessful Republican presidential candidate in the 2008 race against Obama and a longtime supporter of campaign finance laws, and Sheldon Whitehouse, a Democrat, supported Montana.
Montana was also backed by 22 states while the three corporations received the support of the U.S. Chamber of Commerce business group.
The Supreme Court case is American Tradition Partnership Inc v. Steve Bullock, attorney general of Montana, No. 11-1179.
(Editing by Howard Goller and Will Dunham)