“So what if corporations aren’t people?”

by Walter Olson on December 29, 2011

“Rights-bearing individuals do not forfeit those rights when they associate in groups” argue my Cato colleagues Ilya Shapiro and Caitlyn McCarthy in the John Marshall Law Review [SSRN via Cato at Liberty]:

Much of the criticism of Citizens United stems from the claim that the Constitution does not protect corporations because they are not “real” people. … This essay will demonstrate why the common argument that corporations lack rights because they aren’t people demonstrates a fundamental misunderstanding of both the nature of corporations and the First Amendment.

Meanwhile, Virginia blogger/attorney Doug Mataconis [via the much missed Larry Ribstein] analyzes a constitutional amendment advanced by a number of Democratic representatives and Sen. Bernie Sanders (I-Vt.) which would, among other provisions, propose to abolish the constitutional rights of incorporated businesses, with the possible exception of rights held by “the press.” The measure would also impose a constitutional prohibition on (not just authorize official regulation of) such businesses’ engagement in “expenditures,” such as buying newspaper ads expressing their views, during initiative and referendum campaigns as well as elections for office.

Along with abolishing incorporated businesses’ rights, the Sanders proposal contains a further provision of high importance (flagged by Eugene Volokh) that would abolish the constitutional rights of any and all non-profits and similar private entities that are “established … to promote business interests,” and would impose on them the same constitutionally mandated silence during initiatives, referenda and the like. Note the results of this language, which we must presume are intentional: in, say, a fight over a ballot measure that would increase some business tax, the citizens’ committee organized to agitate against the tax would be forbidden to expend money upon a determination that it had been “established … to promote business interests.” Such a private group would also be deemed to have no constitutional rights of any other sort — rights against, say, having its meetings stormed and broken up by police. Meanwhile, the citizens’ committee organized to agitate for the tax would retain not only its rights to speak and to spend money on behalf of its views but also all its other constitutional rights. Rarely do politicians, in this country at least, make it so clear in advance that their intent is to silence their opponents.

Who are the lawmakers who would propose such a measure? The House version was introduced by Rep. Theodore Deutch [FL] and its co-sponsors are Reps. Steve Cohen [TN], John Conyers, Jr. [MI], Peter DeFazio [OR], Keith Ellison [MN], Sam Farr [CA], Barney Frank [MA], Marcia Fudge [OH], Raul Grijalva [AZ], Alcee Hastings [FL], Sheila Jackson Lee [TX], “Hank” Johnson, Jr. [GA], Rick Larsen [WA], John Larson [CT], Barbara Lee [CA], Carolyn Maloney [NY], Jim McDermott [WA], Frank Pallone, Jr. [NJ], Chellie Pingree [ME], Charles Rangel [NY], Betty Sutton [OH], Chris Van Hollen [MD], and Peter Welch [VT].

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1 Nicholas 12.29.11 at 10:55 am

Hmmm. I can’t say I agree with that. A group of humans organized has the rights of the individuals, but it does’t (or, at least, shouldn’t) have its own rights. That’s the difference. If humans have the right to get together and plan some action, then that’s fine. But the organization they create doesn’t have that right — how could it, it’s an organization, organizations aren’t physical things so they can’t “get together”.

The real question here is whether corporations enjoy the right to speech. Despite the Citizens decision, which is preposterous and one of the top fifty worst decisions in Court history, no, corporations do not have speech rights. That doesn’t affect the speech rights of the individual humans who work there: if a bunch of CEOs want to go down and Occupy The Homeless Shelter, then they have the right to do that. If a bunch of CEOs want to stand on soap boxes and convince people that the government has no business helping the poor eat and get health care, then they have that right. But a corporation doesn’t have that right — how could it? It’s not a physical thing; it can’t speak; and even if it were, it’s not a human, and only humans have human rights. Dogs don’t have the right to speech, despite their barking; nor do corporations have the right to speech, despite their comprising humans.

2 marco73 12.29.11 at 10:58 am

Ted Deutch and Alcee Hastings? As a Floridian, I’d like to apologize to the other 49 states that these gentlemen represent this fine state in Congress.
I’ve always wondered what part of “Congress shall make no law…” that is just so unclear to Congressmen.

3 shg 12.29.11 at 11:18 am

The position would be so much more persuasive if it wasn’t predicated on a facile strawman argument. Corporations exist for a dedicated legal purpose, to maximize shareholder value. Corporations are “owned” by United States Citizens, non citizens, other legal entities, some of whom have no lawful role asserting influence in American political issues. Individual shareholders of a corporation do not associate for the purpose or with the intent of influencing political thought, but to obtain a return on investment. Individual shareholders do not have the capacity to opt out of political expression by the corporation with which they disagree except by selling their stock, which reflects on an entirely unrelated interest in the corporation.

No, it’s not just that corporations aren’t “real” people. When an article beats up a strawman, it suggests that the underlying position is incapable of addressing the real arguments against it, and thus fails.

4 Jonathan Bailey 12.29.11 at 11:53 am

So, SHG, if some proposed legislation or other government action threatens the shareholders return on investment in the corporation they should not have any right to say anything about it as a group? If I own shares in a corporation I want the managers of that corporation to speak up on my behalf to protect my investment.

The intent of this proposed amendment is not just about silencing corporate speech. It’s about laying the ground work to pretty much loot the corporations at the whims of the politicians without the corporations being able to defend themselves or their shareholders interests.

5 shg 12.29.11 at 12:51 pm

The “say” referred to in Citizens United is financial support of political candidates. Corporations (and the shareholders, individually), have always been free to express positions on laws that impact their business and to protect corporate interests, but this has nothing to do with what Citizens United addresses. Details matter.

And if there wasn’t a Citizens United decision, there wouldn’t be a wrong-headed constitutional amendment to “fix” it.

6 David Smith 12.29.11 at 1:22 pm

How do I differ from a human? Let me count the ways:

1) It is not murder to kill a corporation
2) It is not kidnap to relocate a corporation
3) A corporation may not be convicted of treason
4) A corporation may not be convicted of murder
5) A corporation may not be convicted of kidnap (torture and too many other things to list)
5.5) A corporation may not be convicted of rape (manslaughter, a long list . . .)
6) A corporation may not hold public office
6.5) A corporation MAY NOT VOTE
7) A corporation may not serve in the military
8) A corporation may not serve on a jury (of ANY kind)
9) A corporation may not serve as a judge
10) A corporation may not serve as a prosecutor
11) A corporation may may not perform as a lawyer (or even hold that title)
12) A corporation can not be traumatized (and a long list . . . )
13) A corporation has no spousal rights (and EVERYTHING that exists under family law . . . such as alienation of affection , etc. . . . . )
14) A corporation does not pay and can not receive: Social security, food stamps, medicare, etc. . . .)
15) A corporation is not protected by the XIII th amendment
16) A corporation is not protected by the XV th amendment
17) A corporation is not protected by the XIX th amendment
18) A corporation is not protected by the XXIV th amendment
19) A corporation is not protected by the XXVI th amendment
20) Most of the rest can’t even be stretched by a lawyer to even apply to a corporation
21) Corporations are treated differently than individuals under tax law
22) A corporation is immortal

I’m getting tired. Anyone else want to expand this exercise in non SCOTUS common sense?

7 John Burgess 12.29.11 at 2:37 pm

I can live with for-profit corporations losing their freedom of speech if and only if non-profits lose them too. Non-profits certainly profit their officers and employees. So much so, in fact, that many–I include examples like AARP and Sierra Club–are in the business of staying in business more than they are for actually promoting the concerns of their supposed clientele. They are a political force as strong as anything GE or Chase can muster and exert as much influence, for better and worse.

8 ps 12.29.11 at 3:19 pm

perhaps all of the sharholders of Enron, arthur andersen, worldcom etc should have been prosecuted rather than just select members of upper management.

9 Farside 12.29.11 at 3:31 pm

Yes. I want to expand the exercise in non SCOTUS common sense.

1) It is not murder to kill a labor union
2) It is not kidnap to relocate a labor union
3) A labor union may not be convicted of treason
4) A labor union may not be convicted of murder
5) A labor union may not be convicted of kidnap (torture and too many other things to list)
5.5) A labor union may not be convicted of rape (manslaughter, a long list . . .)
6) A labor union may not hold public office
6.5) A labor union MAY NOT VOTE
7) A labor union may not serve in the military
8) A labor union may not serve on a jury (of ANY kind)
9) A labor union may not serve as a judge
10) A labor union may not serve as a prosecutor
11) A labor union may may not perform as a lawyer (or even hold that title)
12) A labor union n can not be traumatized (and a long list . . . )
13) A labor union has no spousal rights (and EVERYTHING that exists under family law . . . such as alienation of affection , etc. . . . . )
14) A labor union does not pay and can not receive: Social security, food stamps, medicare, etc. . . .)
15) A labor union is not protected by the XIII th amendment
16) A labor union is not protected by the XV th amendment
17) A labor union is not protected by the XIX th amendment
18) A labor union is not protected by the XXIV th amendment
19) A labor union is not protected by the XXVI th amendment
20) Most of the rest can’t even be stretched by a lawyer to even apply to a labor union
21) Labor union are treated differently than individuals under tax law
22) A labor union is immortal.

10 Bumper 12.29.11 at 4:19 pm

Those who espouse the shareholders return on investment might be interested in the following:

http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/

It might also be worth noting that Apple, except for the time when it was run by the “suits” and almost went under, never gave a royal RA what the shareholders thought.

That said the proposal in question is typical of liberal short sight-ness, as apparently in their myopic view all corporations are conservative and therefore must be held under the liberal boot heel, even though the leader of the aforementioned mega-corporation was very liberal.

The proposed amendment is bad, not only because it proposes to answer a question that no one but liberals are asking, but because of it’s blatant attempt to segregate corporations by an arbitrary standard that appears to be based on the perceived usefulness to “their side.”

11 Hans Bader 12.29.11 at 9:11 pm

Corporations do have free speech rights, and courts around the world have recognized that. One reason is that they are associations of persons, and people have rights. Corporations’ free speech rights have been recognized under the European Convention on Human Rights, and court rulings under it, for example.

Here is a discussion of such rulings and the well-established principle that companies have free speech, due process, and other rights:

http://www.examiner.com/scotus-in-washington-dc/why-intel-s-billion-dollar-fine-violates-human-rights-convention

12 Melvin H. 12.30.11 at 12:11 pm

Hmmm, take a look at that list of co-sponsors and think about something for a minute: More than a few names on that list have been either opposed by a group in the past for something they did, something they support, and/or something they are personally; impeached; or investigated for something they did.

13 Yeaah 12.30.11 at 3:28 pm

@Farside someone is claiming that labor union is a person? Never heard of that.

14 Bumper 12.30.11 at 8:13 pm

Way to lazy to research it, but probably most unions are incorporated and for all the same reasons that businesses are incorporated.

15 DensityDuck 01.04.12 at 6:29 pm

Do you have money in a bank or credit union?

Then you’re an investor in a corporation.

Which means that you’re part of that corporation, in the sense of voting your proxy stock.

Which means that, if “speech by corporations” is wrong, then you shouldn’t be speaking.

16 Ted Frank 01.05.12 at 7:07 am

Do corporations have Third Amendment rights, or can the government billet its troops in the Marriott for no charge?

17 DensityDuck 01.05.12 at 5:46 pm

@Ted: Or commandeer airliners to use as troop transports.

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