US Chamber of Commerce sues Hawaii over law targeting Citizens United

The nation's largest business lobby argues Hawaii's first-in-the-nation law stripping corporations of election-spending power cannot survive First Amendment scrutiny.

by Jeremy Yurow, Court House News, September 24, 2026

HONOLULU (CN) — Sixteen years after the U.S. Supreme Court ruled that corporations have a First Amendment right to spend money on elections, Hawaii lawmakers challenged that right within their own state.

But on Thursday, the nation’s largest business lobby sued to block the state’s attempt.

The U.S. Chamber of Commerce sued Hawaii Attorney General Anne Lopez and Department of Commerce and Consumer Affairs Director Nadine Ando.

The chamber is asking the court to strike down Act 11, signed into law in May after the Legislature passed it earlier this year. The law — intended to take effect July 1, 2027 — will bar corporations, nonprofits, labor unions, trade associations and other organizations from spending money to support or oppose candidates, political parties or ballot measures.

Lawmakers designed the bill to challenge the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling. Their theory: Because the state creates corporations and grants them their powers, Hawaii can decide what political powers those corporations get to keep.

The chamber zeroes in on what it calls a fatal flaw in that theory. Act 11 also polices corporations formed in other states, entities Hawaii never created in the first place.

“Hawaii cannot define away the First Amendment rights of non-Hawaii corporations, much less silence them by threatening to revoke their authority to transact business within the State,” the chamber said in its complaint.

The chamber, a Washington D.C.-based nonprofit representing businesses across the country, says the contradiction was flagged during the bill’s own legislative hearings by the official now defending the law in court.

Attorney General Lopez, a Democrat, testified against Act 11 while it was still a bill. She told lawmakers it would be “likely impossible to defend” unless the Supreme Court overturned Citizens United, and warned that fighting it out in court could result in substantial legal fees for the state’s taxpayers.

Republican State Representative Chris Muraoka made a similar argument on the House floor before casting the lone vote against the bill. Residents already struggling with the cost of living, he said, “will have to foot another bill.”

The chamber says Act 11 would block concrete plans it has for the 2027-2028 election cycle. The group intends to spend money telling Hawaii voters where state candidates stand on free enterprise, including their positions on Act 11 itself. The push is part of a national initiative called the New Fight for Free Enterprise.

The group kicked off that campaign with a cross-country bus tour in September. It plans a parallel digital advertising push aimed at states, including Hawaii, where it says Democratic Socialists of America-endorsed candidates are running. Campaigns like these take months of lead time to plan, the chamber argues, so Act 11 is already chilling that work.

Organizations that break Act 11’s rules face a menu of penalties: suspension of their authority to operate, a ban on government contracts, loss of tax-exempt status, revocation of their corporate charter and, ultimately, forced dissolution.

The chamber’s lawsuit is the second constitutional challenge to Act 11 this year. The Grassroot Institute of Hawaii, a Honolulu think tank, sued over the law in June, arguing it is unconstitutionally vague as well as an outright speech ban.

“The First Amendment does not allow government officials to decide who gets to participate in public debate,” Daryl Joseffer, president of the U.S. Chamber Litigation Center, said in a written statement. “Hawaii’s law would silence businesses, nonprofits, trade associations and countless other organizations simply because lawmakers disagree with who is speaking.”

The chamber argues Act 11 is a content- and viewpoint-based speech restriction. It also says the law imposes an unconstitutional condition on the corporate form by tying incorporation to giving up speech rights. And it claims the law is overbroad, regardless of any narrower interest Hawaii might have.

They also point to Act 11’s inseverability clause. If a court strikes down even the provisions covering out-of-state corporations, the law says the entire act falls.

The chamber is asking the court to declare Act 11 unconstitutional and permanently block Lopez and Ando from enforcing it.

Representatives for Lopez’s office and the Chamber of Commerce didn’t immediately respond to a request for comment.