LI 07 Hobby Lobby

Hobby Lobby: Latest in Evolution of Corporate Consitutional Rights

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The History of Corporate Constitutional Rights

In light of this week’s Hobby Lobby ruling that corporations are persons under the law which can hold religious beliefs, I thought it would be good to revisit the origin and evolution of corporate personhood and corporate constitutional rights.

While the word corporation never appears in the Constitution, the Supreme Court has been slowly expanding rights for corporations since the early 19th century. These are judge-made “Constitutional” rights granted to corporations through misguided interpretations of the law; some might call these activist judges. The modern Roberts Court has been the most radical.

The model brief (pdf) by the Community Environmental Legal Defense Fund (CELDF) describes how Supreme Court judges have gradually found rights for corporations in the Constitution:

1819: Beginning with Dartmouth College v. Woodard, the Supreme Courted granted Constitutional Contracts clause protections to Corporations for the first time. This right is historically used by corporations holding property rights to sue communities and states to overturn regulations on harmful environmental practices such as fracking.

1886: Then, with Santa Clara County v. Southern Pacific Railroad Company, the Court granted Constitutional rights for the first time to Corporations and created the concept of corporate personhood.

The Courts found personhood for corporations by abominably leveraging the equal protection clause of the Fourteenth Amendment, building power on the successful work of abolitionists who fought against slavery:

“For much of the nation’s first century, corporations were seen as a means to an end, not unlike associations. They were ‘chartered,’ or called into existence, by the states, and their charters could be revoked at any time; they were not considered ‘persons’ until after the Civil War, when business magnates began to avail themselves of the 14th Amendment’s antidiscrimination protections.” – When is a Corporation Like a Freed Slave (Mother Jones)

1889: Minneapolis & St. Louis Railroad Company v. Beckwith - the Court granted Due Process protections to corporations.

1893: Noble v. Union River Logging the court grants Corporations Fifth Amendment protections of double jeopardy.

1906: Hale v. Henkel - the court grants Corporations Fourth Amendment protections for unreasonable search and seizure.

1978: First National Bank of Boston v. Bellotti – the Court Grants First Amendment protections to corporations.

2010: Citizens United v. Federal Elections Commission – the Court significantly expands the First Amendment rights of Corporations ruling that they can spend unlimited amounts on elections.

2014: This week, Burwell v. Hobby Lobby – the Court holds that for profit corporations are persons under the law which can hold religious beliefs.

You may also be interested in Seattle’s Stand Against Treating Corporations as People, which highlights how these laws confer Constitutional rights upon the foreign investors holding interest in many corporations as they sue American communities.

My personal view is that the long term impact of money on the makeup of government at all levels in the United States has now fundamentally corrupted our democracy, a view recently backed up by a Princeton research study. You can read more about this and my theory of change here: It’s Time for a Populist Culture War on Corruption.

The Constitution Initially Expanded Rights for People

This trend of increasing corporate power reverses the early evolution of the Constitution which historically expanded rights for people, beginning with its first ten amendments (The Bill of Rights). But these rights did not apply to slaves or women at the time. More amendments were needed over time to include these groups:

1865: The Thirteenth Amendment abolished slavery.

1868: The Fourteenth Amendment extended Due Process and Equal Protection for all persons.

1870: The Fifteenth Amendment provides the right to vote to former slaves and minorities (but not women).

1920: The Nineteenth Amendment provided the right to vote for women.

1971: The Twenty-Sixth Amendment provided the right to vote for 18 year olds, reversing Oregon v. Mitchell (1970)

The question of whether corporations are persons is not one of perception. It is not clouded by whether corporations come to life at some moment of conception. In fact, the rule of corporate personhood is best ridiculed by dissenting Montana State Supreme Court Justice James C. Nelson:

“Corporations are artificial creatures of law. As such, they should enjoy only those powers—not constitutional rights, but legislatively-conferred powers—that are concomitant with their legitimate function, that being limited-liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people—human beings—to share fundamental, natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.”

It is past time that the application of human rights to corporate legal entities be eliminated.

The Supreme Court Trails Culture

Supreme Court decisions tend to trail cultural sentiment by many years. But I believe that cultural change is occurring with regards to corporate “constitutional rights” and corporate speech. Supreme Court approval ratings remain near 25 year lows and 65 percent of citizens of both parties disapprove of Citizens United. Congress’ approval rating recently dropped to its lowest ever, 16%.

The makeup of the Supreme Court and the impact of cultural changes does deliver change over time. Whether changed by the adoption of new amendments or the Supreme Court’s own decisions and reversals, there is ample evidence of Constitutional law as a living, breathing, ever-changing entity.

  • peted66616

    To sum up: inasmuch as society is eventually finding abhorrent the idea of corporate personhood, the law will eventually come around to this idea.
    Yes?
    It’s a proposition that holds promise. But I have to admit, as much as I hate the idea of corporate personhood and the consequences to which it leads, some of the judgments described here don’t seem unreasonable. Government should be restricted when it comes to actions that can irreparably harm (4th amendment) or unreasonably deprive of a legal defense (5th amendment), even in the case of corporations, even though they are not persons per se.
    So by what legal framework do we recognize as fundamental these rights as they apply to corporations, but not others which should not? (Note that I’m talking about “fundamental” as in “worthy of constitutional protection”…simply passing a law doesn’t seem sufficient, for the same reason that doing so is insufficient for protection a true person).

    • http://jeffreifman.com/consulting Jeff Reifman

      Most corporations are held in part by foreign citizens who have now received the benefit of constitutional protections by the court – often overturning or harming actual American citizens. Conferring Constitutional rights is an inappropriate framework for business law.

      • peted66616

        Sorry, you’re losing me.
        Foreign status isn’t relevant. If constitutional rights are justified, then they are justified regardless of nationality. Foreigners in the US legally are afforded the same protections as US citizens, and to do otherwise is hypocritical.
        What would be relevant is if you’d actually answer the question I posed: if we assume that, being non-persons, corporations are afforded only some constitutional rights, what legal framework do you use to determine which ones apply?
        Or is it your position that corporations deserve no constitutional rights. That, for example, it would be perfectly reasonable and morally correct to allow the government to break into a business and seize property or search the premises without any warrant, probable cause, or due process at all?
        Throwing the baby out with the bathwater isn’t going to cut it with any level-headed person considering your argument. If you don’t want some of the constitution to apply to corporations, you need to provide a legitimate alternative.

  • John R. Christiansen

    Thanks for this. So whatever happened to I-103? Also, some additional implications of Hobby Lobby: “If You Don’t Profess a Mainstream Religion, Hobby Lobby Just Made You a Second-Class Citizen” – posted here: http://anneleighparrish.com/guest-post-attorney-john-r-christiansen-analyses-the-hobby-lobby-decision/

    • http://jeffreifman.com/consulting Jeff Reifman

      We didn’t gather enough signatures to make it on the ballot in Seattle. Bellingham gathered enough signatures for their anti-coal train initiative – but a single judge barred it from the ballot – against Wa. state precedent of letting voters vote and allowing legal issues to be dealt with if they pass… the appeals court didn’t overturn him.

  • Anonymous

    If the court grants full personhood to corporations, then isn’t it illegal to own a person?

    What about laws that say a person can’t do things until such person has reached a certain age? Can my corporate owned bar be kept from serving alcohol because the corporation is under 18? Can my Corporation be prevented from entering a contractual obligation until it is at least 18 years old?

  • beb

    If corporations are people shouldn’t they be required to die after “three score and ten” the biblical length of a person’s life?

  • Allen Taylor Garvin

    “created the concept of corporate personhood”

    Uh, I suggest you go back at least a century before then. Blackstone’s 1769 Commentaries on the Laws defines corporations as legal, artificial persons–he spent an entire book on them. And Blackstone was just summarizing the past two centuries of English legal thought, not setting out to create something new. Corporations have been persons since the mid to late 16th century in English law.

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