Corporate "Personhood"

At various times in our discussions, we have touched on the legal nature of the corporation, and especially its personhood.  There have been several references to the expected decision of the Supreme Court in Citizens United v. Federal Elections Commission.  Let me be clear that I am not an expert on this area, though I have some understanding of the broad contours of the legal issues.  So I make a couple of points here with the caveat that there are other facts and opinions that should amplify (or contradict) what I post here. 

The readings for this week very much show how corporations used public relations to fashion an identity.  This is a fascinating question of cultural history and we should recognize that this cultural dynamic took place in response to the impersonal nature of giant industrial combinations.  It is indeed the rise of industrial enterprises that both creates a problem of public perception and that provides the tools by which that problem may be addressed. 

The legal concept of a corporation as a "person," though, seems to me to be within a more narrow context, indeed I think it should be seen through the lense of intellectual history rather than social or cultural history.  In the late nineteenth century, under the intellectual leadership of Justice Stephen Fields, the courts developed theories of a "liberty of contract" and of "substantive due process"  based in the 14th Amendment.  Essentially the theories held that economic regulations of the relationship between members of society, such as a worker and an employer, inteferred with both the liberty of the worker and the employer to contract with each other based on their own self-determined interests.  These theories are entirely discredited today, but through the 1930s the courts used these doctrines to restrict many, though not all, government regulations of economic activity. 

In Santa Clara County v. Southern Pac. R.R. Co. (1886), a California state agency sought to collect a tax on various real estate owned by the railroad.  The railroad argued that the assessment improperly included fences between the land owned by the railroad and that owned by another.  The county brought suit to recover its proportion of the tax based on the fences.  The lower court and the Supreme Court render their decisions on the underlying merits of the dispute, the Supreme Court doing so unanimously.  However, the parties had made other arguments as to the constitutionality of the tax under the equal protection  clause of the Fourteenth Amendment, arguments that would logically precede any decision on the merits of the case.  In an unusual preface to the opinion, Chief Justice Waite stated that "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does."  The Supreme Court's obiter dictum is in the context of the 14th Amendment and the court's embrace of a liberty of contract and substantive due process.  Through another line of cases in the mid-20th century, the Supreme Court held that most (if not all) of the restrictions on government enshrined in the Bill of Rights are applicable to the states through the 14th Amendment. 

Yet the interesting thing about the arguments in Citizens United v. FEC, argued last September, is that the arguments deal almost entirely with the First Amendment issue and presume the personhood of the corporation at issue.  Here is a link to an article at the First Amendment Center on the issues at stake in Citizens United v. FEC.  http://www.firstamendmentcenter.org/analysis.aspx?id=22030.  The Washington Post's article is at http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031401603.html.  Finally, a New York Times article is at http://www.nytimes.com/2009/08/30/us/30scotus.html.  Moreover, the issues as raised by the parties deal with government regulation of corporate campaign contributions and that can be dealt with without addressing whether the corporation is a person. 

As a result, I am not sure that a decision in Citizens United v. FEC will tell us a great deal about the legal status of a corporation as a person in the early 21st century.  But I do think there is a connection between the social and cultural dynamics of corporate public relations in the first third of the 20th century and the intellectual currents about the legal nature of the corporation.  And part of that story seems to be the acceptance of corporations as a partial solution to the problems of economic expansion in the late 19th and early 20th centuries.  

Comments

[Lindsey Bestebreurtje]

Very informative post! I really enjoy all of the further insight into the issues addressed in the week's readings.

Whenever I think about the fact that the 14th Amendment was used to give personhood to corporations, I can't help but think about how mad I would have been if I were a freed slave at the time. Its just kind of like "Seriously? This Amendment isn't for you AT&T!" Sigh.

[Brian Jordan]

Wow. Your post reminds me just why I did not end up pursuing a law degree, particularly corporate law. I know that we talked about this at length at the beginning of the semester, but I am constantly amazed at how much freedom corporations are given.