We the Corporations: How American Businesses Won Their Civil Rights. Adam Winkler.
The earliest version of a corporation, the societas publicranum, was created in ancient Rome in about 300 B.C. as an organization with an identity separate from its owners. Corporations facilitated commerce because they were authorized to own property and make contracts in their own names and did not need to be dissolved if a member died or went bankrupt. The form persisted through the centuries, such as with the Catholic Church in the fourth century A.D., with Oxford University in the eleventh century A.D., and eventually with the formation of the English colonies in America, including the 1606 Virginia Company and the 1639 Massachusetts Bay Company.
England did not have a written constitution, but in 1758 Sir William Blackstone published Commentaries of the Law in England, which is still commonly cited in US Supreme Court rulings. In Commentaries, Blackstone describes corporations as “artificial persons” distinct from the people who form them with certain legally enforceable rights. The three core rights were to own property, to make contracts, and to have access to courts to sue. Corporations were both public and private in that they required the king’s consent and had to be of service to the public, but could take home profits. Their rights and duties were distinct from those of ordinary citizens.
As best we can tell, the people who wrote and ratified the US Constitution simply never considered whether the Constitution applied to corporations. The word “corporation” appears neither in the constitution nor in the Federalist Papers. Records of the Constitutional Convention mention only that a proposal to give Congress the power to charter corporations was defeated. Nevertheless, business lawyers soon began a two century campaign to extend all the Constitutional rights of citizens to corporations, which originally had no Constitutional rights. The relentless, incremental, prolonged pursuit of that goal through a multitude of individual well-funded cases is the topic of this book.
Since the earliest days of the nation, corporate lawyers have known that it is far easier to get what they want by changing the interpretation of the Constitution than by the almost impossible task of trying to change it by amending it. Hence, many of their cases seek judicial review, by which the Supreme Court claims the authority of five justices to determine the constitutionality of laws and strike them down, even when the other four justices disagree and when the laws represent the democratic will of the entire US by way of the president and Congress. The origin of this power of the courts to invalidate duly passed laws has long been obscure. Chief Justice Marshall has been credited with inventing this process out of the “constitutional vapors”.
For most of American history, the Supreme Court has used judicial review to benefit business. In doing so, the Court has often used “piercing the corporate veil” as the conceptual tool to justify extending a wide variety of personal constitutional rights to corporations. This tool retains corporate personhood as a barrier to protect members from liability but looks past this barrier to allow members to assign their individual rights to corporations. This tool has been used since 1809, when the US Bank ruling pierced the corporate veil to assign members’ rights to sue in Federal Court to the corporation. It continues to be used, such as in 2014, when the Hobby Lobby ruling pierced the corporate veil to assign members’ right to religious freedom to the corporation, which had never before had any such right.
After piercing the veil, corporate lawyers repeatedly claimed constitutional protections meant for citizens for the corporate artificial persons who were their clients. Egregious examples of this practice include the 1882 and 1886 rulings that granted 14th Amendment “due process” and “equal protection” rights to the Southern Pacific Railroad as a corporate person. Meanwhile, states’ rights were claimed as a justification to deny enforcement of this same protection to the freed slaves for whom it was intended. In 2010, the Citizens United ruling gave corporate artificial persons a 1st Amendment right to influence elections with unlimited secret funding by essentially equating free speech with money.
Thus, in a two-hundred year struggle, corporate “persons” succeeded in moving from having no constitutional rights at all to having almost all of the original constitutional rights intended only for actual, non-corporate persons. This sequence progressed from first winning the English Commentaries’ rights of property, contract, and access to court, then 14th Amendment rights of due process and equal protection and protections for criminal procedures, followed by property rights but not liberty rights, and finally by liberty rights such as freedoms of the press, association, and political speech.
While these corporate victories may seem to be the result of a handful of landmark cases, a main point of the book is that corporate victories often reflect a less visible and much more incremental process of the cumulative effect of many small victories by coming back to the Supreme Court over and over and over again. This process can only be achieved by the far greater resources possessed by corporations and the super wealthy rather than by their opponents. Another important factor is the usual make-up of the court by justices from privileged backgrounds and elite institutions who have very little sympathy or understanding for the lives of ordinary people and who tend to perpetuate and defend social, economic, and racial inequality.
The author supports this narrative of progressive expansion of corporate rights with many cases too numerous for inclusion in a brief review. A list limited to representative cases follows:
Before the Constitution
- 300 BC Societas Publicoranum: Corporations were invented in ancient Rome.
- 1758 William Blackstone: In English law, corporations were described as “artificial persons” with rights to property, contracts, and access to court.
1787-1860 First Corporate rights cases
- 1809 Bank of the United States v. Deveaux: Corporation artificial persons were found to be entitled to access to federal court, just as real people are.
- Dartmouth College v. Woodward: Corporations were found to be private entities, akin to individuals, without public responsibilities.
- Marshall v. B & O Railroad: The Taney Court used personhood for corporations to limit their powers.
1861-1935 Property rights but not liberty rights
- 1882 & 1886 San Mateo & Santa Clara County v. Southern Pacific Railroad: After being misled by Lawyer Roscoe Conkling, the Court assigned 14th Amendment due process and equal protection to corporate artificial persons, while in other rulings claimed states’ rights to deny enforcement of those rights to benefit the freed slaves for whom they were intended.
- 1888 Pembina Consolidated v. Pennsylvania: A majority led by industry-connected Stephen Field ruled that corporations are persons entitled to 14th Amendment due process and equal protection.
- 1896 Marc Hanna: Corporate political money was solicited for William McKinley’s presidential race.
- 1897-1936 Lochner Era: Although friendly to business, this era gave corporations property rights but not liberty rights.
- 1906 Hale v. Henkel: Corporations have 4th Amendment right against unreasonable searches and seizures but do not have 5th Amendment right against self-incrimination.
- 1907 Tillman Act: Congress enacts campaign finance law banning corporate contributions after the Great Wall Street Scandal of 1904 that included enormous illegal secret campaign contributions, particularly to Republicans William McKinley and Theodore Roosevelt.
- 1907 & 1908 Western Turf Association & Berea College: Corporations do not have freedom of association, a liberty right.
- 1916 Brewers Cases: Corporations do not have the right to influence elections with corporate money, a liberty right.
- 1919 Dodge Brothers v. Ford: Business corporations must be run in the interest of stockholders, not for the interest of consumers, workers, or the public (as desired by Ford).
1936-current Liberty Rights
- 1936 Grosjean v. American Press: The 1st Amendment right of freedom of the press extends to newspaper corporations.
- 1942 Valentine v. Chrestensen: Corporate commercial speech is not protected by the 1st Amendment.
- 1958 NAACP v. Alabama: A voluntary membership corporation can assert its members’ rights of association (to deny a hostile state access to membership lists).
- 1971 Lewis Powell Memo: Powell issued a militant plan for business, including using the courts, distributed by the Chamber of Commerce months before he was named to the Supreme Court.
- 1976 Virginia Pharmacy Board: Corporate commercial speech is protected by 1st Amendment (overturning 1942 Valentine), according to a Ralph Nader theory—a Pyrrhic victory for Nader.
- 1978 First National Bank of Boston v. Bellotti: Corporations have 1st Amendment free speech right to influence ballot measure campaigns (partially overturning 1907 Tillman Act).
- 1990 & 2003 Austin & McConnell: Restrictions on corporate money in candidate elections are upheld.
- 2010 Citizens United: Corporations are now found to have a 1st Amendment right to unlimited and secret financing to influence candidate elections (overturning Austin & McConnell and prior election law).
- 2014 Burwell v. Hobby Lobby: Corporations are found to have religious freedom under a federal statute.
