A HISTORY OF CORPORATE PERSONHOOD

(Photo courtesy of Flickr.)

In 2012, Mitt Romney famously said, "Corporations are people, my friend," which resulted in his being accused of being out of touch with real people. Romney later explained his meaning, saying raising taxes on corporations affects real people because, "everything corporations earn ultimately goes back to people." Whether or not his explanation helped his presidential campaign is unclear. The fact of the matter is that corporate earnings do go back to real people, but not to the real people who most rely on their earnings to support themselves and their families. Employees and vendors who provide a corporation with labor, materials or services do benefit from corporate earnings insofar as they continue to realize income from uninterrupted employment or contracts.  Shareholders and CEO's benefit primarily from improved corporate earnings in the form of increased dividends and larger bonuses.

In the recent Hobby Lobby case, Justice Samuel Alito wrote that corporate personhood is, "a familiar legal fiction that retains its usefulness." Alito also wrote, "It is important to keep in mind that the purpose of this fiction is to provide protection for human beings."

Thus far, corporations have been granted protection from unreasonable searches and seizures, under the Fourth Amendment, Hale v. Henkel, 201 U.S. 43 (1906). The following is an excerpt from the Syllabus on the Supreme Court case:

"A corporation is but an association of individuals with a distinct name and legal entity, and, in organizing itself as a collective body, it waives no appropriate constitutional immunities, and, although it cannot refuse to produce its books and papers, it is entitled to immunity under the Fourth Amendment against unreasonable searches and seizures, and, where an examination of its books is not authorized by an act of Congress, a subpoena duces tecum requiring the production of practically all of its books and papers is as indefensible as a search warrant would be if couched in similar terms."

Corporations have the right to free speech under the First Amendment, Citizens United v. Federal Election Commission, 558 U.S. (2010). The ruling allowed for a flood of private money from corporations and labor unions to enter political campaigns. This ruling equated free speech with money and resulted in the unique situation we now see in American politics. The more money an individual, corporation or union has to donate to a political candidate, the more free speech they enjoy.  Greater donations to a candidate truly equate with greater access to, and responsiveness by, an elected political office-holder.

With the recent Hobby Lobby case, First Amendment protection of religious liberty has also been extended to corporate entities.  Justice Alito wrote in his majority opinion that, closely held corporations are, "often small, family run businesses," and that the ruling, "protects the religious liberty of the humans who own and control them."  No definition of "small, family run businesses" has been offered that makes much sense.  On the one hand, Hobby Lobby is a closely-held corporation, with shareholders from the Green family.  However, Hobby Lobby has 579 retail locations, averaging 55,000 square feet.  There are 23,000 employees (as of 2013).  Hobby Lobby is listed by Fortune and Forbes as a major private corporation, and is one of America's largest private companies.  Hobby Lobby carries no long-term debt.

These facts suggest that referring to Hobby Lobby as "small" is a misnomer, at minimum.  And suggesting that the daily operations in each of the 579 stores are handled by a family member is silly, so we must extrapolate that Alito's reference to "family run" implies that running the business from afar by the Green family must meet the criterion, at least in Alito's mind.  However, it is difficult to reconcile the image of Hobby Lobby as a "small, family run" business with the reality of Hobby Lobby being among the largest companies in the U.S.

Corporations do not presently have rights under the Second Amendment.  The Third Amendment does not apply, since it specifies that people can not be forced to quarter troops in their homes.  Corporations do not have Fifth Amendment rights, which deal with the rights of a person accused of crimes.  The Sixth, Seventh and Eighth Amendments do not apply to corporations, nor does the Ninth Amendment which holds that people's rights are not limited to those listed in the Constitution.

We can probably expect more freedoms to be granted to corporate entities under the First Amendment, however, before we can expect to see any correction of judicial rulings in the future.  It is highly likely that corporations will take every advantage of First Amendment rights, in a multitude of ways before all is said and done.  And the Ninth Amendment opens the door to the creation of rights and protections that aren't enumerated in the Constitution, if we hold that corporations are people.

The granting of rights to corporations has been allowed under the Fourteenth Amendment.

As a matter of interpretation of the word "person" in the Fourteenth Amendment, U.S. courts have extended certain constitutional protections to corporations. Opponents of corporate personhood seek to amend the U.S. Constitution to limit these rights to those provided by state law and state constitutions.

"The basis for allowing corporations to assert protection under the U.S. Constitution is that they are organizations of people, and the people should not be deprived of their constitutional rights when they act collectively. In this view, treating corporations as "persons" is a convenient legal fiction which allows corporations to sue and to be sued, provides a single entity for easier taxation and regulation, simplifies complex transactions that would otherwise involve, in the case of large corporations, thousands of people, and protects the individual rights of the shareholders as well as the right of association."

In fact, corporations began exploring avenues to gaining protections under the Bill of Rights in 1809, (Bank of the United States v. Deveaux), and started making significant gains during the 1880's.  So while none of this is new, it wasn't until 2010's Citizens United decision that corporations began to enjoy actual political influence not limited by campaign funding and finance regulations. 

image credit: wolfpac.com