US Chamber of Commerce sues Hawaii to stop a new state law that would bar corporations and other organizations from spending money in elections, arguing the measure cannot withstand First Amendment scrutiny.
Sixteen years after the U.S. Supreme Court’s Citizens United ruling affirmed that corporations have a speech right to spend on elections, Hawaii lawmakers moved to curtail that power. On Thursday, the nation’s largest business lobby filed suit to block the effort.
The lawsuit names Attorney General Anne Lopez and Department of Commerce and Consumer Affairs Director Nadine Ando. The chamber is asking a federal court to strike down Act 11, which was signed in May and set to take effect July 1, 2027. The statute would prohibit corporations, nonprofits, labor unions, trade associations and other entities from spending to support or oppose candidates, political parties or ballot measures.
US Chamber of Commerce sues Hawaii over Act 11
Lawmakers crafted Act 11 to directly test the Supreme Court’s 2010 Citizens United v. Federal Election Commission decision. Their premise is that because the state creates corporations and defines their powers, Hawaii can decide what political powers corporate entities may exercise.
The chamber argues that theory fails for a key reason. Act 11 also regulates corporations formed in other states, entities that Hawaii did not create.
“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 complaint states.
The Washington, D.C.-based nonprofit, which represents businesses nationwide, says this conflict was identified during the bill’s hearings by the very official now defending the law. Attorney General Lopez, a Democrat, testified against the proposal while it was still pending, warning it would be “likely impossible to defend” unless the Supreme Court reverses Citizens United and that litigation could impose significant costs on taxpayers.
On the House floor, Republican Representative Chris Muraoka raised similar concerns before casting the lone vote against the measure, saying residents already burdened by the cost of living “will have to foot another bill.”
The chamber says Act 11 would derail its concrete plans for the 2027–2028 cycle, including spending to inform Hawaii voters about state candidates’ stances on free enterprise and on Act 11 itself. That work is part of a broader initiative, the New Fight for Free Enterprise, which launched with a nationwide bus tour in September and will include a digital ad campaign targeting states such as Hawaii where the chamber says Democratic Socialists of America-endorsed candidates are running. Because such efforts require months of preparation, the group argues the law is already chilling its activities.
Penalties, prior challenge and requested relief
Organizations that violate Act 11 could face suspension of their authority to operate in the state, a ban on public contracts, loss of tax-exempt status, revocation of their charters and even dissolution.
This is the second constitutional challenge to the law this year. The Grassroot Institute of Hawaii, a Honolulu-based think tank, filed suit in June, arguing Act 11 is both unconstitutionally vague and an outright speech ban.
In a written statement, Daryl Joseffer, president of the U.S. Chamber Litigation Center, said the First Amendment does not allow officials to choose who may take part in public debate and that the law would silence businesses, nonprofits and trade associations because lawmakers disagree with the speakers.
The chamber contends Act 11 is a content- and viewpoint-based speech restriction, imposes an unconstitutional condition by tying incorporation to surrendering speech rights, and is overbroad even if the state asserts narrower interests. The complaint also highlights the law’s inseverability clause, which provides that if any portion, including the provisions covering out-of-state corporations, is struck down, the entire act must fall.
The lawsuit asks the court to declare Act 11 unconstitutional and to permanently bar Lopez and Ando from enforcing it. Representatives for the Attorney General’s office and the chamber did not immediately respond to requests for comment.
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