Welcome to the Acme Corporation. Check Your Rights at the Door

Ilya Shapiro:

Well of course they aren't "” but that's constitutionally irrelevant:  Corporations aren't "real people" in the sense that the Constitution's protection of sexual privacy or prohibition on slavery make no sense in this context, but that doesn't mean that corporate entities also lack, say, Fourth Amendment rights.  Or would the "no rights for corporations" crowd be okay with the police storming their employers' offices and carting off their (employer-owned) computers for no particular reason? "” or to chill criticism of some government policy.

Or how about Fifth Amendment rights?  Can the mayor of New York exercise eminent domain over Rockefeller Center by fiat and without compensation if he decides he'd like to move his office there?

So corporations have to have some constitutional rights or nobody would form them in the first place.  The reason they have these rights isn't because they're "legal" persons, however "” though much of the doctrine builds on that technical point "” but instead because corporations are merely one of the ways in which rights-bearing individuals associate to better engage in a whole host of constitutionally protected activity.

That is, the Constitution protects these groups of rights-bearing individuals. The proposition that only human beings, standing alone, with no group affiliation whatsoever, are entitled to First Amendment protection "” that "real people" lose some of their rights when they join together in groups of two or ten or fifty or 100,000 "” is legally baseless and has no grounding in the Constitution. George Mason law professor Ilya Somin, also a Cato adjunct scholar, discusses this point here.

  • the other coyote

    What surprises me (or I guess shouldn't considering who runs the media) is that the Citizens United case applies to ANY organization, not just a for-profit corporation. Labor organizations have been under the same restrictions on electioneering communications as corporations. In fact, the entire section of the election laws dealing with PACs contemplates that a corporate or trade organization PAC and a labor union PAC are all treated approximately the same way with respect to what and how much money they can spend and/or donate. The difference is that big unions force their members to contribute to its PAC, through union dues. So their PACs have always been much better funded than the trade, non-profit, and corporate-established PACs. Corporations do not force their employees to contribute to corporate PACs (and in fact it's made really difficult, under the election laws, to solicit the rank and file to contribute), and as a result, they have less to spend.

    Labor unions have had the bankroll to say whatever they want, whenever they want, forever. The only thing that has changed is now corporations don't have to speak through their PACS; they can use Treasury funds to communicate. I think that's what's really scaring the Democrats; a point of view they DON'T agree with might now have as much money to spend as the unions.

  • morganovich

    so here's the part of this analysis where i always get stuck:

    corporations are assemblages of people. therefore they have the rights of those people on a pass trough basis. however, the whole purpose of a limited liability corporation is to create an entity which bears certain responsibilities and which shields its shareholders and employees from certain kinds of liability. you don't sue ford shareholders for a manufacturing defect, you sue ford.

    this shielding behind the corporate veil is a key and vital part of corporate structure. it allows people of scant acquaintance to assemble and take risks in a way that they never could if all were personally liable for anything the group did. i imagine most of us can agree that this is a good thing.

    but, if a corporation has responsibilities and liabilities separate from it's owners and shareholders, can it be said that a corporation also has rights that are different as well? why do rights pass through but obligations not so? this starts to get quite complex when you look at various obligations that can be transmitted through marriage or parentage or even association.

    how does one draw a clear standard as to what is to be transmitted and what not? if a corporation can enter a contract for which only it is liable, is it really just an assemblage? it seems to me not. it is an entity in its own right.

    or is it simpler to just say that it is property and can be used as it's owners see fit within their rights and prevailing legal strictures. this seems the case to me as it gets us out of the other forest.

    anyone here have some deeper legal background to walk though how this has been framed and ruled on in the past?

  • Roy Lofquist

    Quick quiz:

    What do the NYT, LAT, ABC, NBC, CBS, FNC and Gannett have in common?

    a. They are sailing clubs.
    b. They are fraternal organizations.
    c. They are corporations.

  • IgotBupkis

    > Or would the “no rights for corporations” crowd be okay with the police storming their employers’ offices and carting off their (employer-owned) computers for no particular reason? — or to chill criticism of some government policy.

    Ummm. If the corporation "has no rights", then the citizens who make up the corporate entity DO have rights, and the actions prevented would presumably represent a violation of their individual rights.

    Offhand, and without thinking of deeper consequences, I think I can live with that idea. I'm not wedded to either position, but that claim doesn't hold water by itself.

  • IgotBupkis

    > why do rights pass through but obligations not so?

    Because the entire purpose of the concept of "corporation" is devised that way, and corporate law has developed to support it, and it's appeared to be a good, workable concept as-is and in actual practice and experience.

    Where it fails, particularly where corporations have developed unexpected and overwhelming powers as a result (think Anti-trust laws) corporate laws tend to be revised.

  • John Dewey

    morganovich,

    The First Amendment is not protecting the speaker but rather the speech. Justice Scalia was very clear in this ruling:

    "The Amendment is written in terms of “speech,” not speakers. Its text offers no foothold for excluding any category of speaker, from single individuals to partnerships of individuals, to unincorporated associations of individuals, to incorporated associations of individuals"

    The First Amendment protects the citizen from a powerful government that would decide what speech the citizen may hear or read. It's the listener who is being protected from censorship.

  • John Dewey

    morganovich,

    Peter Ferrara, general counsel of the American Civil Rights Union, explained last April how the First Amendment is protecting the rights of the listener:

    "In Rossignol v. Voorhaar, the U.S. 4th Circuit Court of Appeals held in 2003 that the First Amendment protects both a speaker's right to communicate information and ideas to a broad audience and the intended recipients' right to receive that information and those ideas. Similarly, in U.S. West Inc. v. FCC, the U.S. 10th Circuit Court of Appeals held in 1999 that the two components of effective speech are a speaker and an audience, and a restriction on either of these components is a restriction on speech. In De La O v. Housing Authority of City of El Paso, the 5th Circuit added in 2005 that the right to receive information is as equally protected under the First Amendment as is the right to convey it."

    http://www.washingtontimes.com/news/2009/apr/05/rushs-fans-have-rights-too/

  • morganovich

    bupkis-

    i understand where you are coming from, but i think it's an unsatisfying answer. you are basically saying "it's like that because we made it like that" but now drawing what we made back to any kind of first principles to explain why we did so and whether such a thing is just and internally consistent.

    john-

    the point on speech is well taken, but can a corporation really speak? it's just an inert entity until people make it do things. people write press releases and attribute them to a corporation, just as they sign contracts likewise. certainly, the speech of the writer is protected and so perhaps it can be said to pass through, but, again, we wind up in an odd one way pass trough where our rights flow through to the corporation, but the repercussions of their exercise do not rebound back to us. if i write a defamatory release for a corporation, the corp in liable, not me.

    this has always seemed to me a messy and inconsistent construction of rights. it seems in some ways easier to see a corporation as property rather than an entity. thus, if i speak through a corporation, it's as if i speak through a megaphone. of course, this creates a new issue because if i use my megaphone to defame, them i am liable, not the device.

    this is the odd sort of no man's land that exists around limited liability association.

    i think ferrara likely goes too far in his construction. scalia would eat him alive on that.

    i think in this specific case of speech the very clear wording of the first amendment bails us out. read strictly, it does not actually promise any sort of rights to anyone. instead, it prohibits specific kinds of congressional actions.

    "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech,..."

    with such clear letter and intent, it seems odd to me that 4 justices could dissent (and i have not read the rationale and likely should) without arguing that political speech is somehow different, a proposition that is clearly utterly contrary to the intent of our constitutional authors.

    but this odd dichotomy of limited liability and the rights of entities is still left a bit unclear in other areas. i doubt we've heard the last of this issue.