The U.S. Court of Appeals in Cincinnati has given companies new freedom to spend on political advocacy, throwing out a Michigan limitation that held corporate contributions to $40,000 each for campaigns for or against referendums or other ballot questions. The First Amendment bars any curbs at all on such spending, the judges said, as long as the public knows where the money is coming from.

The ruling is a major victory for the Michigan Chamber of Commerce, which chafed at the $40,000 ceiling.

It is also a departure from the rule laid down by the U.S. Supreme Court 11 years ago. The justices then approved a spending limit in federal election law, over objections that it interferes with a person's right to associate with whomever he wants. Those rights of association are important, the high court said, but less important than the right of the legislature to fight political corruption by trying to see to it that rich contributors can't buy candidates.

As the Cincinnati judges read that 1976 ruling, preventing corruption is virtually the only excuse that can constitutionally justify a limit on campaign spending. And they decided, in Michigan State Chamber v. Austin, that there's no risk of corruption in a campaign about a ballot issue, where it is the public that must be persuaded and no identifiable individual benefits from the spending.

The state argued that other issues were at stake, including the need to prevent corporations from deceiving the public about the source of support or opposition to an issue and the need to preserve voter confidence in the whole process of referendum voting.

But the Nov. 4 ruling dismisses both arguments. Since other provisions of the Michigan Campaign Finance Act (not struck down by the appellate court) impose strict disclosure requirements on committees campaigning on either side of ballot issues, any interested voter will know the businesses behind the bucks, the judges reasoned. And they found that the state had presented no evidence at all to show that large corporate contributions will undermine the confidence of the citizenry in the basic fairness of the process.

In other cases, courts ruled that:

A lawyer who is about to be punished has to be warned. Courts are getting tougher about lawyers who waste their time, and are beginning to slap penalties on those who pursue cases that have no merit at all. A typical sanction: forcing the lawyer to pay the other side's legal costs in fighting an appeal when there was obviously nothing wrong with the trial court outcome of the case.

But the U.S. Court of Appeals in Denver decided that constitutional notions of fair play mean that no matter how outrageous the conduct, a lawyer can't be made to pay up unless there has been a notice that the appeal looks frivolous and has been given an opportunity to enter a defense. (Braley v. Campbell, Nov. 9)

Condos affect interstate commerce. The managers of a nonprofit corporation running a Florida condominium refused to bargain with the union selected by its employes, and were slapped with an order from the National Labor Relations Boards to change their policy. They argued that it was none of the business of the NLRB because its only authority is over businesses that are involved in interstate commerce, and that their apartment building has virtually no economic impact outside of the state.

But the U.S. Court of Appeals in Atlanta told the outfit it had to deal with the union. Its payroll and purchases from companies that are involved in interstate trade are enough to put it under NLRB scrutiny, the judges said. They upheld the Board's standard that any condo or housing cooperative that has more than $500,000 a year in gross revenue can be considered to be affecting interstate commerce. (NLRB v. Imperial House, Nov. 6)

The Occupational Safety and Health Act lets states off the hook on job safety questions. A worker who severely injured his arm trying to unjam a stuck conveyor belt tried to sue the state of Montana for his injuries. The Montana Safety Act tells state labor officials to inspect job sites and keep a record of any hazards found, and the worker claimed that the state's failure to conduct such inspections led to his accident.

But the Montana Supreme Court ruled that when Congress passed OSHA in 1970, it gave the federal government control of all occupational safety questions. That leaves the state statute inoperative and relieves the state government of any obligation it might have had. (Thornock v. Montana, Nov. 4)

A company that has an Express Mail package lost is out of luck. With the U.S. Postal Service not quite a government agency and not quite a private concern, a shipper argued that when USPS ventures into a strictly commercial venture like Express Mail it should be on the same legal footing as a private express carrier. But the U.S. District Court in St. Paul, Minn., threw out a suit for a lost package, ruling specifically that the Postal Service has no liability for lost or misdelivered mail of any sort, even if the problem stems from out-and-out negligence.

Allied Coin v. USPS, Nov. 5Moskowitz covers legal affairs for McGraw-Hill World News.

Moskowitz covers legal affairs for McGraw-Hill World News.