In December 2007, Citizens United, a 501(c)(4) organization, filed a lawsuit against the Federal Election Commission (FEC) in the U.S. District Court for the District of Columbia claiming that television ads for its film, Hillary: The Movie, should not be subject to donor disclosure requirements under FEC rules. On Jan. 15, a three-judge panel ruled against the group. The organization has since asked the U.S. Supreme Court to consider its case. The suit is a response to the FEC's new rule implementing the Supreme Court's Wisconsin Right to Life (WRTL) decision that allows genuine issue broadcasts to air in the period before federal elections.

The Citizens United suit contends that its ads for a film about Sen. Hillary Clinton (D-NY) are purely commercial, that the film itself is no different from documentaries seen on television, and that it should be exempt from any type of regulation. Additionally, the group argues that FEC donor disclosure and disclaimer requirements are unconstitutional as applied to its three advertisements for the movie.

The FEC issued a new electioneering communications rule defining exemptions from the general ban on corporate funding for broadcasts that refer to federal candidates within 60 days of a general election or 30 days of a primary, in order to comply with the WRTL decision. The rule allows broadcasts of genuine issue ads but requires disclosure of donors who contribute $1,000 or more to pay for the ads. It also requires a disclaimer as to who is responsible for the ad content. The rule also includes an exemption for commercial messages.

The district court rejected two major arguments put forward by Citizens United. First, the court ruled that the group could not run ads for its film without complying with the donor disclosure requirements. The court said that any exception to disclosure requirements for TV ads for the movie would have to be granted by the Supreme Court. "Whether the Supreme Court will ultimately adopt that line as a ground for holding the disclosure and disclaimer provisions unconstitutional is not for us to say." In addition, they offered no evidence that disclosing donors would lead to retaliation.

Second, the court determined that the film was not a constitutionally protected discussion of issues, under the test the Supreme Court established in the WRTL case, because it was "susceptible of no other interpretation than to inform the electorate that Senator Clinton is unfit for office, that the United States would be a dangerous place in a President Hillary Clinton world, and that viewers should vote against her." The three-judge panel said the film does not address legislative issues but criticizes Clinton's positions and record, comparing her to "a European Socialist." Consequently, the film and its ads were deemed "electioneering communications."

The Associated Press detailed the exchange in the court room: "What's the issue?" asked Judge A. Raymond Randolph. Citizens United attorney James Bopp replied, "That Hillary Clinton is a European Socialist. That is an issue." Judge Randolph further responded, "Once you say, 'Hillary Clinton is a European Socialist,' aren't you saying vote against her?" Bopp disagreed because the movie did not use the word "vote."

Citizens United has filed a notice with the U.S. District Court that it will be taking its challenge to the Supreme Court. They have asked for an expedited decision, requesting the Court consider the case at its Feb. 15 conference so that the group could air the ads during the election season if the Supreme Court rules in its favor.