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Citizens United And Hobby Lobby Are About Individual Rights, Not ‘Corporate Rights’

bill-of-rights

The Supreme Court’s ruling in the Hobby Lobby case has revived an old debate about corporate personhood and the rights of individuals who choose to organize in the form of a corporation and, as usual, much of the analysis of the case itself and the issue in general is completely missing the point. In many respects, this debate started when the Supreme Court handed down its decision in the Citizens United v. FECa case which has been a particular whipping boy on the left and which President Obama openly criticized during a State of the Union Address that most of the Court attended. Democrats have campaigned against the decision in each of the last two Federal election cycles, and, most recently, Senate Democrats opened a quixotic campaign to back a Constitutional Amendment that would effectively overturn the decision. Central to all of these criticisms of Citizens United, and becoming apparent in the criticisms of Hobby Lobby, is the contention that the Supreme Court is deciding that corporations have rights under the First Amendment. For several reasons, that is both a completely incorrect representation of what the two decisions said, and a fundamental misunderstanding of what the idea of the “rights” of corporations actually means.

Corporations, most especially the closely held corporations at issue in Hobby Lobby and the non-profit corporations at issue in Citizens United, are in the end nothing more than groups of people organized together to achieve a common goal. It doesn’t matter whether that goal is to make a profit or to advance a set of public policies. In either case, the corporation exists primarily as a means for the individuals to achieve a personal agenda and, typically, the main reason for adopting the corporate form is for tax purposes or to allow the business to expand beyond the kind of smaller operations that partnerships are capable of handling. Ilya Somin addressed this point quite well in a post at The Volokh Conspiracy written shortly after Citizens United was handed down:

It’s true, of course, that corporations “are not human beings.” But their owners (the stockholders) and employees are. Human beings organized as corporations shouldn’t have fewer constitutional rights than those organized as sole proprietors, partnerships, and so on. In this context, it’s important to emphasize that most media organizations and political activist groups also use the corporate form. As Eugene points out, most liberals accept the idea that organizational form is irrelevant when it comes to media corporations, which were exempt from the restrictions on other corporate speech struck down by the Court today. The Supreme Court (including its most liberal justices) has repeatedly recognized that media corporations have First Amendment rights just as broad as those extended to media owned by individuals. Yet the “corporations aren’t people” argument applies just as readily to media corporations as to others. After all, newspapers, radio stations, and TV stations “are not human beings” and they too “have no consciences, no beliefs, no feelings, no thoughts, no desires.” We readily reject this reasoning in the case of media corporations because we recognize that even though the corporations in question are not people, their owners and employees are. The same point applies to other corporations.

Somin points out here the mistake that nearly every critic of Citizens United would go on to make. Namely, the fact that the Court’s opinion in that case wasn’t really about the rights of corporations, it was about freedom of speech in the context of a political campaign. The fact that the entity that wished to exercise that speech happened to be organized as a corporate entity was relevant from a legal point of view because of the law at issue in the case, but it wasn’t relevant at all when it comes to the question of whether or not the First Amendment can apply to a corporate entity. The easiest way to understand this is to realize that every single media company in the United States is organized as a corporation or some other form of corporate entity. Nobody would suggest, however, that the First Amendment doesn’t apply to The New York Times, or that CNN could not assert protections under the Fourth Amendment if a group of police officers just decided to show up at their Atlanta headquarters and start looking through computers to see what they could find without first producing a search warrant. These are both corporate entities, but nobody would question that they have rights of a sort under the Constitution. Vox’s Dylan Matthews catalogs a range of other situations where we have long recognized the fact that corporate entities have Constitutional rights, including several why people on the political left should support the idea of corporate personhood. Mitt Romney was criticized for it, but in the end he was right. Corporations are people and people don’t lose their rights just because they organize in a corporate form.

Some will argue that the Court’s decision in Hobby Lobby is different because it purports to extend religious liberty rights to corporate entities in general, and for-profit corporations specifically. As with Citizens United, though, this is a misreading of what the Court decided and a misunderstanding of the issues at stake in the case. As I noted in my post on the Court’s decision last week, the Court’s decision was specifically limited to closely-held corporations, which are generally privately held corporations where the stock is owned by a very small number of people. While there are many closely held corporations in the United States — one estimate says that nearly 40% of Americans work for a closely held corporation — many of these companies are so small that they aren’t going to be covered by the PPACA’s insurance coverage mandate to begin with. More importantly, as Steve Chapman notes, the actual number of closely held corporations that are likely to be asserting these kind of religious liberty claims is probably going to be fairly small.

Obviously, there are going to be questions about what kinds of actions and lawsuits the Court’s holding in Hobby Lobby will inspire in the future. As I noted in my post last week, one of the most obvious areas where it will likely be tested is in the area of religious objections to same-sex marriage in states that have laws that ban businesses from discriminating on the basis of sexual orientation. It’s worth noting with regard to that specific issue that Justice Alito’s opinion specifically says that the decision wouldn’t necessarily apply to a claim for a religious exemption to generally applicable laws against discrimination. Additionally, one could see how the balancing test that courts are required to apply under the RFRA would come down in favor of the anti-discrimination law rather the claim of religious liberty, especially since there would not seem to be a “less intrusive means” for the government to accomplish the goal of the law as the Court pointed out existed in the case of the contraceptive coverage mandate. We can’t know how any court will handle questions like this until they are actually before a court of law, of course, but it strikes me that much of the reaction regarding what the Court’s ruling will lead to is as much partisan panic mongering as anything else.

As with Citizens United, the Court’s holding in Hobby Lobby isn’t about the creation of new rights for corporate entities, it is an answer to the question of whether or not individuals lose their Constitutional rights when they organize as a corporate entity. In both Citizens United and Hobby Lobby, the Court’s answer to that question has been no, and that isn’t nearly as controversial an outcome as most of the rhetoric about these cases would have you believe.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Mu says:

    Your legal analysis might be correct, but I still think it’s wrong to allow people to shield themselves and their assets using a corporate veil and at the same time use the shielded assets to exercise their constitutional rights. This doesn’t apply to religious organizations or the press as they actually have enumerated rights of their own.

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  2. michael reynolds says:

    What baloney.

    I own a corporation (Reynolds Applegate Inc.) I am not the corp, the corp is not me, if it were I wouldn’t need to have the corp. I understand that under the law the corp has certain uses and responsibilities, and that I, Michael Reynolds, have certain rights and responsibilities. RA Inc. has no religious convictions. RA Inc. has no opinions at all, oddly enough. RA Inc. is a legal tool I use to protect my personal assets and to allow me to have a group health insurance policy – it no more has rights than my laptop (another tool) has rights.

    If you want a corp to be a person then it must of necessity to be a person other than me. Otherwise I’m just cloning myself.

    The original Supreme Court decision was stupid, and this stupidity compounds that initial stupidity. Having dug a hole, the Supremes now have to keep digging. When does my corporation get the vote? When can my corporation begin to receive government benefits? When does it get to start driving? I mean, it’s only five years old, but it’s really precocious, I’m pretty sure it could drive.

    Stupid decision leading to stupider decisions leading to stupid defenses of stupidity.

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  3. Scott says:

    If you accept the premise that corporations are just extension of people, I wonder if it makes sense to ensure that shareholders have a say in the exercise of these constitutional rights. For example, to exercise political speech, should not the managers of the corporation ensure that shareholders agree with that speech prior to exercising it. Seems to me that if I am a shareholder and my equity is being spent on speech I don’t agree with, I should have a say.

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  4. James Joyner says:

    @michael reynolds: But that’s Doug’s point. RA, Inc. has no opinions, no religious beliefs, and no rights. But neither do you, by virtue of having formed RA, Inc., lose your constitutional rights. It would be absurd if RA, Inc. could be sued because its fiduciaries, Reynolds and Applegate, expressed religious beliefs or opinions. It can’t, because Reynolds and Applegate retain their free speech and free exercise rights even in their corporate context.

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  5. James Joyner says:

    @Scott: Presumably, the corporate bylaws specify who is allowed to act for the membership. Some things require a vote. Most things don’t.

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  6. CET says:

    While the Citizens United is arguably a technically correct decision, my understanding is that its de facto effect (along with McCutcheon) was to neuter the Buckley vs. Valeo decision by allowing an end-run around campaign contribution limits.

    As for the larger picture . . . while I generally have strong libertarian leanings, I cannot for the life of me figure out the libertarian infatuation with deregulating campaign finance. American democracy was fragile enough before – why make oligarchy that much more likely?

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  7. Tillman says:

    @Mu: This is what I thought was always the essential problem with the rulings. Unless the corporate entities were formed with religious overtones baked in at the beginning, it speaks of duplicity for them to assert a religious claim later.

    And Citizens United had the ridiculous notion that spent money can be equated with political speech.

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  8. Scott says:

    @James Joyner: Yes, that is way it is today. I just happen to think this is a road which we don’t need to follow. And requiring approval for certain expenditures ahead of time could provide a roadblock.

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  9. Franklin says:

    I think the bigger problem with Citizens United is equating bribery (oops, sorry, I mean giving money to a political campaign) to free speech.

    EDIT: Sorry, didn’t see Tillman’s last comment where he says the same thing more politely.

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  10. beth says:

    @James Joyner: This whole thing makes my head swim. I get that Reynolds and Applegate get to retain their rights but why are they allowed to exercise them through RA Inc? Does this mean RA Inc gets the right to vote too? Or own guns?

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  11. grumpy realist says:

    @Tillman: If $ == free speech, then why should we have laws against bribery for votes? After all, isn’t that just the same as talking to someone and convincing them to vote your way?

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  12. James Joyner says:

    @beth: Because the purpose of RA, Inc. is to achieve their purpose. Legally speaking, RA, Inc. is putting out those books, not R and A as individuals. To allow RA, Inc. to be sued for conduct that would be perfectly legal for R and A individually is absurd.

    Obviously, as RA, Inc. gets bigger, the rules change somewhat. General Motors isn’t acting for its founders—or even its biggest shareholders—in the same way that RA, Inc. is for R&A. That was why the “closely held” distinction was made in Hobby Lobby. It’s still a mom and pop business, even though they have lots of locations, because it’s still owned by a tiny number of people.

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  13. Stonetools says:

    I can’t wait to see what Doug does when these so called corporate persons start asking for and getting religious exemptions from discrimination laws and start firing gays and further screwing women on religious grounds. ” My religion tells me women should only work at home. Before Hobby Lobby I couldn’t follow through on my sincerely held religious belief but now thank SCOTUS I can follow through on my religious beliefs because now ANY burden on religious beliefs is forbidden.”

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  14. rudderpedals says:

    How about no. This broad ruling impacts somewhere around 60% of Americans who are employed by closely held corps and companies. If I were religious I’d be worried about the pendulum swinging back and knocking off the other privileges like property tax exemptions gifted to faith institutions.

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  15. Francis says:

    Corporations, most especially the closely held corporations … are in the end nothing more than groups of people organized together to achieve a common goal.

    Bullshit. Unmitigated unrepentant absolute bullshit. You are assuming your conclusion.

    Corporations are statutory inventions that allow groups of people to share capital and avoid risk. Those who avail themselves of the protections of that statutory law forgo constitutional rights available to citizens. There are countless examples. Corporate persons don’t vote. Corporate persons can be immortal. Corporate persons are taxed differently. Corporate persons are punished differently. Corporate persons that are formed for the purpose of making a profit can be sued by their shareholders if they stray too far from that purpose.

    Libertarians are just awful on corporate issues. One fine day, it’s all about limited liability and respect for separate corporate existence. The next, they insist that corporations are just groups of people. You can get whiplash trying to follow the ball.

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  16. mantis says:

    The Supreme Court (including its most liberal justices) has repeatedly recognized that media corporations have First Amendment rights just as broad as those extended to media owned by individuals. Yet the “corporations aren’t people” argument applies just as readily to media corporations as to others. After all, newspapers, radio stations, and TV stations “are not human beings” and they too “have no consciences, no beliefs, no feelings, no thoughts, no desires.” We readily reject this reasoning in the case of media corporations because we recognize that even though the corporations in question are not people, their owners and employees are. The same point applies to other corporations.

    Nonsense. Is it possible Volokh and Somin forgot about the 1st Amendment’s mention of freedom of “the press,” or just that they’re full of shit? If the 1st Amendment guarantees for people extended to the press, as the SCOTUS insists they do for corporations, why would the amendment specifically name the press?

    Lawyers who lie about the law to further their political agenda should not be listened to.

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  17. Davebo says:

    @James Joyner:

    That was why the “closely held” distinction was made in Hobby Lobby. It’s still a mom and pop business, even though they have lots of locations, because it’s still owned by a tiny number of people.

    Surely you meant to say “controlled” by a small group of people right James? Because Hobbby Lobby is certainly not “owned” by a tiny group of people.

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  18. michael reynolds says:

    @James Joyner:

    Let me try it this way. I own my car (just as I own my corporation.) Both are tools I use.

    My car must comply with certain standards – four wheels, brakes, etc… No matter how strong my religious conviction that the car needs Ben Hur blades on the wheels, I still can’t do it. Because cars have to meet certain standards. My religious ecstasy at the thought of Ben Hur blades on the rims is irrelevant.

    I am a person. My car is a tool. That tool has to meet certain standards.

    I am a person. My corporation is a tool. That tool has to meet certain standards.

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  19. Just Another Ex-Republican says:

    Corporations are formed by groups to limit liability of various types (tax and legal, mostly). Limited liability comes with limited rights. I don’t give a damn about what Hobby Lobby’s founders choose to believe privately. I care quite a bit about what happens when they choose to inflict their religious beliefs on their employees. You want a better way to have that religious belief reflected in public policy? Win enough elections to get the law changed.

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  20. mantis says:

    @michael reynolds:

    Well clearly all you need to do to get around all those automotive laws is incorporate your vehicle. Above the law!

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  21. Ebenezer_Arvigenius says:

    I am a person. My corporation is a tool. That tool has to meet certain standards.

    Yes but those standards should not vary according to whether your car has been bought by your LL.C. or yourself. That’s pretty much the point here.

    A lot of liberals want to have the discussion “company cars should have different standards than private cars” instead of the pertinent “those are stupid standards, let’s upgrade them”.

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  22. michael reynolds says:

    @Ebenezer_Arvigenius:

    Corporations should all obey the laws pertaining to corporations, including paying taxes, and conforming to employment practices and health insurance requirements. Hobby Lobby wants special rules that exempt their corp from obeying rules that apply to others.

    The parallel would be if I sold my car to my corporation and then said, “And now it can have machine guns under the headlights!” A tool is a tool is a tool. All tools from cars to hammers to laptops have to meet certain standards we apply to tools.

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  23. Stonetools says:

    It seems that the Democrats have finally gotten around to “growing a pair” and have introduced a bill in the Senate to reverse this decision before it does any more damage. Of course it can’t pass but it does make clear which party stands for women’s reproductive rights and which stands for the rights of employees to impose their religious values on employees. For make no mistake : this is what this decision and all Doug and James’ tap dancing can’t escape that. What business is it of my employers how i use the insurance coverage that MY labor bought? I’d like both or either of them to answer that question , right after they explain how my decision to buy a particular contraceptive infringes on their religious freedom.

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  24. sam says:

    @James Joyner:

    It would be absurd if RA, Inc. could be sued because its fiduciaries, Reynolds and Applegate, expressed religious beliefs or opinions. It can’t, because Reynolds and Applegate retain their free speech and free exercise rights even in their corporate context.

    and

    Because the purpose of RA, Inc. is to achieve their purpose. Legally speaking, RA, Inc. is putting out those books, not R and A as individuals. To allow RA, Inc. to be sued for conduct that would be perfectly legal for R and A individually is absurd.

    Hmmm. And if those expressed opinions are libelous? What then? Isn’t this where it gets tricky? R&A libel JJ in an R&A publication. JJ sues…who? Well, JJ sues the corporation. He has to sue the coporation because R&A claim it was not them — as individuals — who published the offending screed, (although they wrote it), it was R&A Corp., which was formed to shield the assets of R&A. Ok, R&A are protected from personal penury by virtue of the corporate form. The corporation takes it in the shorts, but not R&A. Their personal assets are protected.

    sam libels JJ. JJ sues sam, and sam, not having availed himself of incorporation, discovers his personal assets are forfeit. He loses and is thereafter homeless.

    In both instances, human persons perform an act of libel. However, the outcomes are significantly different. In the one case, the offending party claims the benefits of free speech, but when that speech is deemed libelous, escapes penalty. The other guy, not so lucky.

    Sounds to me like someone is having their bakery and eating it, too.

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  25. HankP says:

    Doug, I have to assume that your area of practice does not include corporate law. The statement “Corporations … are in the end nothing more than groups of people organized together to achieve a common goal.” is not true as a matter of custom or law. Corporations are legal entities formed to protect owner’s personal assets from whatever befalls the corporation. In exchange for that protection (and many, many others) corporations have never been considered to share in the rights inherent to human beings – at least not before the current group of radicals had anything to say about it. I’m pretty sure the mention of corporate religious rights to those who voted for the RFRA would get you a quizzical look and a hasty retreat.

    The problem here is that we see corporate owners able to practice their religious rights twice – first as an individual and second as a corporation. They also are able to use not only their own assets but also the corporate assets to advance their beliefs. On the other hand, employees have the extent of their religious rights dictated to them by the corporation that employs them.

    What will happen is that the greedy will overreach (as they always do) and they will pay a political price for it. I only hope the price they pay is sufficiently severe to allow corrective legislation.

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  26. PD Shaw says:

    “It heads nowhere to call a corporation a fiction. If it is a fiction, it is a fiction created by law with the intent that it should be acted on as true. The corporation is a person . . ..” — Oliver Wendell Holmes

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  27. PD Shaw says:

    @sam: “And if those expressed opinions are libelous? What then? Isn’t this where it gets tricky? R&A libel JJ in an R&A publication. JJ sues…who? Well, JJ sues the corporation. He has to sue the corporation because R&A claim it was not them — as individuals — who published the offending screed”

    This is not true. In torts like libel, both the corporation and any individual in the corporation that personally participated in the tort are liable. Corporate officers in our legal system are expected to act reasonably to avoid foreseeable injury to others. Civic morality.

    When people think of the corporate shield, they are mainly thinking about liability in contract, which are always voluntary.

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  28. Grewgills says:

    Human beings organized as corporations shouldn’t have fewer constitutional rights than those organized as sole proprietors, partnerships, and so on.

    Everyone that supports these decisions glosses over the fact that incorporating shields the incorporators from certain responsibilities and shields them from the consequences of failing in responsibilities. If you chose to incorporate to reduce your legal obligations you should expect to lose some rights along with the responsibilities. That’s part of what we call being an adult.

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  29. sam says:

    I wasn’t aware of that PD. I thought corporate shielding was comprehensive.. I’d downvote myself if I could.

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  30. Grewgills says:

    @Scott:

    Seems to me that if I am a shareholder and my equity is being spent on speech I don’t agree with, I should have a say.

    Republicans strongly support that sentiment if we’re talking about unions. Somehow when it comes to corporations less so.

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  31. Ebenezer_Arvigenius says:

    If you chose to incorporate to reduce your legal obligations you should expect to lose some rights along with the responsibilities.

    There is no logical argument to be had why this should be so. Corporate shields have a specific goal – increasing economic risk-taking to benefit society – and this does not require “losing some rights”.

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  32. Grewgills says:

    @PD Shaw:
    Say instead that they make pajamas and bed sheets based on the characters in their books and through negligence those pajamas and sheets are more flamable than is legal and children die as a result. In that instance aren’t R&A protected by their incorporation?

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  33. JKB says:

    @beth:

    Corporations can own guns. Well, unless one of their corporate officers or other officials with corporate authority are prohibited persons. Even then, corporate ownership of guns can be accomplished if the prohibited person is in someway sufficiently restricted from access. But corporations are also responsible to ensure that any employee who is a prohibited person (to young, felon, etc.) does not have access and is not permitted access to the firearms.

    You see the corporation can own guns but that “right” is limited by the rights of the corporate officers and that could include board members and even share holders (of a closely held corporation)

    You may also be surprised that corporations involved in defense work can own NFA-controlled select fire weapons that are no longer permitted to be owned by private citizens. How do you think those private defense contractors got their assault rifles they carried in the war zones.

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  34. JKB says:

    @Stonetools: getting religious exemptions from discrimination laws and start firing gays and further screwing women on religious grounds.

    Except for the government’s compelling interest in preventing discrimination and the fact that the least intrusive means to accomplish that interest is to prevent the discrimination.

    As Chief Justice Roberts said in an earlier case, the way to stop discrimination is to not discriminate.

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  35. Lounsbury says:

    A close re-association of personal liberties and rights that are not directly associated with the primary purpose of the corporate entity strikes me as a most unwise course to follow, and that from the point of view of preserving the largest liberty for corporations to pursue their economic purposes.

    This would seem to me to have a long-run potential undermining the corporate veil (since over time the interests are likely to flow both ways).

    @mantis: I am unaware that the Press is defined as something corporate, as such (certainly at the time of writing your constitution it was not), so your intemperate response would seem rather misplaced.

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  36. PD Shaw says:

    @Grewgills: I don’t see any difference because of the change in your hypothetical. There may be some vagaries that differ from state to state or area of law, but individuals are responsible for their own torts. But perhaps what you might be getting at is the tendency for large corporations to use specialization so that responsibility can become diffuse. R. designs the pajamas, but doesn’t utilize the proper fire retardant protections because he thinks the bed sheets are simply going to be used in a play. A. sells the bed sheets to an orphanage, thinking that they are designed to code. Maybe there is no individual responsibility because their individual conduct was not wrongful.

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  37. mantis says:

    @Lounsbury:

    I am unaware that the Press is defined as something corporate, as such (certainly at the time of writing your constitution it was not), so your intemperate response would seem rather misplaced.

    Who cares if it was/is defined as something corporate. Somin’s point was “liberals defend freedom of speech for media corporations, so why not all corporations?” She ignores that the 1st specifically names the press and protects its freedom. The corporate nature of a press entity is irrelevant.

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  38. mantis says:

    @Ebenezer_Arvigenius:

    There is no logical argument to be had why this should be so. Corporate shields have a specific goal – increasing economic risk-taking to benefit society – and this does not require “losing some rights”.

    The stance that a corporation should have all of the rights, but far fewer liabilities and responsibilities than people may be popular among owners of such entities, but it’s wrong. A corporation, though a “person” in some legal respects, cannot vote, or marry, or run for office, as we humans can. You are, quite simply, wrong.

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  39. Rick DeMent says:

    Just to add another idea here, no one at Hobby Lobby would have lost anything had the decision went the other way. All of those individuals retained all of their religious rights. No one would have lost anything The government did not force them to buy birth control for their employees. The government didn’t even force them to buy health insurance. They willingly paid for health insurance with birth control before without out it weighing on their religious beliefs.

    Also it has already been said but, if you are going to rely on government for liability protection then you as an individual surrender a certain amount of control over that entity. Basically what is happening is you are petitioning every single person in the US (as represented buy their elected officials) to recognize this corporate a separate and distinct from the people who run it for the tax benefits and the liability protection. No one puts a gun to your head and says you must incorporate. Which is why this decision is so completely wrong and why going even farther down this road is simply some of the worst law that has come down the pipe in a long time. There is no lipstick for this pig. to support it is to twist yourself into a legal knot that we are going to have to spend the next 50 years trying to untangle.

    The individuals who run hobby lobby are still, as they have always been, free to practice their religion as they see fit.

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  40. Stonetools says:

    Here is an excerpt from an ACLU email detailing the ACLU response to Hobby Lobby. They certainly don’t take the view that the Hobby Lobby decision was benign.

    Just yesterday, the ACLU withdrew support for the Employment Non-Discrimination Act because of a loophole that would grant religiously affiliated organizations free rein to engage in workplace discrimination against LGBT people–the very thing ENDA is intended to prevent.

    There is a clear line connecting the Court’s ruling about contraception and the hiring and firing of LGBT employees. That line is allowing bosses to use their personal religious beliefs to discriminate against their employees.

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  41. grumpy realist says:

    @Ebenezer_Arvigenius: But since a corporation is a fiction created by the State, the State can also decide what rights it has.

    If you’re wondering about human rights, then we’ve got a whole backload of history dating from the 11th century developing and shoring up the law of human rights.

    Corps, not so much. Which is why the Hobby Lobby decision was so stupid.

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  42. Roger says:

    @PD Shaw:

    When people think of the corporate shield, they are mainly thinking about liability in contract, which are always voluntary.

    That’s really not even close to true. Protection from tort liability is one of the biggest selling points for the corporate form. While it’s true that the owner of a closely held corporation can still be held liable for negligent acts that he personally participated in, the corporate form shields him from personal liability for actions where he ordinarily would be liable in tort if he had not incorporated.

    If David Green personally spills oil in the entrance to a Hobby Lobby and doesn’t clean it up, he is still liable to the old woman who slips and falls because of it even though his business is incorporated. But I suspect Mr. Green does not spend much of his time personally cleaning the entrances to his stores–Hobby Lobby hires other people to do that. If it were not for incorporation, those people would be Mr. Green’s agents, and he would be personally liable every time someone injured herself falling in his store due to the negligence of his employees. Because of incorporation, however, those employees are the agents of Hobby Lobby, not of Mr. Green, so he is not liable. If someone tried to sue him for the negligence of a store employee, his lawyers would file a motion saying the case against him should be dismissed, because Mr. Green did not do that, the corporation did. And that motion would be granted.

    Corporations and their owners are legally distinct, different “people” with different rights and different obligations. Those are the rules of the game–or at least, those were the rules until recently. I just want the rules to be exercised consistently. If Hobby Lobby is Mr. Green’s alter ego, such that his prayers are its prayers, that’s fine with me–but only if the street runs both ways, and he is willing to accept the liability that comes from treating the corporation’s acts as his acts. I suspect, though, that if some aggressive plaintiff’s lawyer uses the Hobby Lobby case to sue Mr. Green personally the next time someone falls in his store, we’ll find that, once again, the corporation and he are completely separate.

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  43. Dave D says:

    @Roger: I think we learned originally in Plessy v. Ferguson that separate but unequal is ok. It worked with Jim Crow and it works with Corporations. This shows amazing societal evolution, before it was used to just keep down blacks and protect whites, now it is used to keep down women and protect corporations. This is Progress, two steps forward one step back.

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  44. michael reynolds says:

    This is the why I so despise ideology. We have here otherwise intelligent people – Mataconis and Joyner – defending a clearly idiotic position because they are prepared to ignore real world effects in favor of abstract principal. Ideology makes people stupid.

    If your ideology requires a stupid outcome, if it results in harming individuals and sacrificing them on the altar of your favorite abstraction for no compelling reason other than conformity with your ideology, then your ideology is wrong. If your ideology results in “corporations are people, my friend,” then you are either profiting personally or have not thought through your position.

    Was there a compelling real world need for Citizens United? No. Was there a real world need to deprive women (and men) of birth control? No. There were only abstract, ideological needs. And of course a secondary need to give one group of partisans advantage over another.

    These are both ideological decisions, partisan political decisions that ignored reality. The first degraded the free speech rights of actual human citizens, and the second deprived women of the free exercise of their own will by taking decisions from them and handing those decisions to their employers.

    These were stupid, reckless decisions and they will lead to more and more trouble.

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  45. gVOR08 says:

    Without getting into legalities, or exactly whose, or what’s, rights are relevant; some of the discussion on this topic is ridiculous.

    Corporations are able to “speak”. They publish newspapers, they publish ads. Hence protection of their right to speak has meaning, even though in the case of ads it may be severely restricted.

    Corporations can own property. The titles or leases to the stores are presumably held by Hobby Lobby Stores, Inc. So protection of the corporation’s property rights has meaning.

    As they can own buildings and files and records: privacy rights, and protections against improper search and seizure have meaning.

    Corporations can own intellectual property, although as far as I am aware, none can be listed on a patent as an Inventor. So intellectual property rights have meaning.

    A corporation can even in some cases have an opinion independent of its owners. WAPO may well have extant editorial board opinions with which Jeff Bezos disagrees.

    But a corporation is not self aware, cannot have a thought, and cannot possibly have religious beliefs. To speak of the religious rights of a corporation is a non sequitur.

    So to argue that the New York Times Company has free speech rights, therefore Hobby Lobby Stores, Inc. has religious rights, is simply silly. It’s like saying my cat can’t be forced to testify against himself.

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  46. Stonetools says:

    Under Alito’s cackhanded analysis, every aspect of Hobby Lobby’s business is done by a corporation separate from the owners-except for one, which is a personal act of the owner and an expression of the owner’s religious belief. Ponder that for a minute and then explain how that makes any sense.
    Alito wanted Hobby Lobby to win , and then pulled some specious legal reasoning out of his butt to justify the result. It’s a bad decision. How did we know it’s bad? Because he doesn’t want the reasoning applied to anything but contraception. Unfortunately it’s already clear that his attempt to limit it won’t work.
    History will look back on the decision as the work of a dumbass ideologue. I hope the Democrats jam it right up the Republican’s behind this election cycle.

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  47. Stonetools says:

    @michael reynolds:

    Note that under this decision, the court says that the government should pick up the tab and provide contraceptive coverage to Hobby Libby employees. How in the name of Hayek does libertarian Doug justify that result?
    Now single payer would make this entire issue moot. But of course Doug and other conservatives fiercely oppose this Big Gumint solution.
    It must be confusing to be a consistent conservative. Presumably you have to take doublethink pills for it to make sense.

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  48. JKB says:

    @Stonetools:

    Actually, the court presumed the government had a compelling interesting in providing female contraception. They also found that the government had already provided accommodation to other groups, namely specifically religious organizations. Therefore, the government by its own actions had demonstrated that forcing a closely held corporation to act against the religious beliefs of the owners (a small, religiously homogeneous group) was not the least intrusive means to accomplish their interest. In addition, the government could provide the contraception benefits directly out of general tax revenue rather than directly force, by government bureaucrat edict, not legislation, to go against their demonstrated religious beliefs.

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  49. michael reynolds says:

    @gVOR08:

    It’s like saying my cat can’t be forced to testify against himself.

    So you’re saying your cat can be made to self-incriminate?

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  50. C. Clavin says:

    Total BS, Doug.
    These decisions allow corporations to pick and choose when it’s beneficial to be an individual and when it’s beneficial to be a corporation.
    Are the owners of HL suddenly going to be individually responsible for something the corporation does wrong.
    Never…and you know it.
    This post is the definition of intellectual dishonesty.

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  51. Stonetools says:

    @JKB:

    the government could provide the contraception benefits directly out of general tax revenue rather than directly force, by government bureaucrat edict, not legislation, to go against their demonstrated religious beliefs.

    Let me make it easy for you. Single payer is where the government pays for health insurance out of tax revenue. The Supreme Courts remedy is exactly the same.
    Now let’s do a thought experiment. Had Obama suggested a universal Health insurance program based on paying benefits out of taxes would you have embraced it? Of course not. You would have talked about “big gumint tyranny” and the evils of “soshulized medicine”. Yet in order to accommodate (I would say indulge) the unscientific religious beliefs of some businessman , single payer is the preferred solution! Go figure.

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  52. Barry says:

    Doug: “Citizens United And Hobby Lobby Are About Individual Rights, Not ‘Corporate Rights’”

    Absolutely wrong. The stockholders are asking for an exemption from the labor laws for their corporation, which please note, was quite deliberately organized as a for-profit, public stock corporation. They could have organized it as a non-profit or partnership, but didn’t, for obvious reasons.

    Ilya Somin: “It’s true, of course, that corporations “are not human beings.” But their owners (the stockholders) and employees are. Human beings organized as corporations shouldn’t have fewer constitutional rights than those organized as sole proprietors, partnerships, and so on. ”

    He’s bullsh*tting heavily. Corporations have fewer rights, in exchange for privileges. Just try to sue the stockholders of Hobby Lobby for actions of that corporation, and see how fast they use every legal separation of stock ownership from liability that the law allows.

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  53. Barry says:

    @michael reynolds: “The original Supreme Court decision was stupid,…”

    It wasn’t stupid, it was a quite deliberately BS opinion, Scalian Calvinball done to achieve a desired outcome.

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  54. Barry says:

    @Stonetools: “I can’t wait to see what Doug does when these so called corporate persons start asking for and getting religious exemptions from discrimination laws and start firing gays and further screwing women on religious grounds.”

    I think that the majority of the supporters of this decision want that. Others assume that it will be limited to a narrow set (i.e., contraception, which is the obvious target). Others are useful fools.

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  55. Barry says:

    @James Joyner: “It’s still a mom and pop business, even though they have lots of locations, because it’s still owned by a tiny number of people. ”

    Bull. It’s a *corporation*, with stock. At present, the stock is held by a small number of individuals, but that can change with a simple sale.

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  56. Franklin says:

    @grumpy realist: Now THAT is a logical conclusion I hadn’t heard of yet. Excellent point!

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  57. Franklin says:

    @PD Shaw: Aside from being some sort of appeal to authority, I don’t even understand the quote without some serious context. If Holmes is arguing that a corporation is some natural construction with natural rights, I think he might need a remedial course in history.

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  58. JKB says:

    @Stonetools:

    The fact that it would be politically difficult does not negate that it is a less, perhaps the least, intrusive means to accomplish the government’s presumed compelling interest.

    In addition, at no time did Obama, et al, put forth a plan to do birth control by single payer. Although, it might have been included in their plan for single payer, e.g., the VA, for all healthcare where many are left to die/suffer waiting for an appointment. Oh and if you don’t like the VA example, look at Indian Health Service.

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  59. Ebenezer_Arvigenius says:

    Now the interesting question is: Is anyone here actually trying to understand this or are you just trying to satisfy your urge to disagree.

    If the former I’m more than ready to try and explain further. If the latter I would rather not make the effort since I’m sick at the moment and could use my time for sleeping ;-).

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  60. rudderpedals says:

    @JKB: The VA and Indian Health Service are examples of socialized health care. Medicare is the single payer example you’re looking for.

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  61. Just Another Ex-Republican says:

    @Ebenezer_Arvigenius

    Now the interesting question is: Is anyone here actually trying to understand this or are you just trying to satisfy your urge to disagree.:

    Great. So anyone who disagrees with you simply doesn’t try to understand. What arrogant BS. To quote just one of multiple responses to you:

    @mantis

    The stance that a corporation should have all of the rights, but far fewer liabilities and responsibilities than people may be popular among owners of such entities, but it’s wrong. A corporation, though a “person” in some legal respects, cannot vote, or marry, or run for office, as we humans can. You are, quite simply, wrong. :

    Ever consider it’s maybe you who doesn’t understand, or are you just trying to satisfy your urge to disagree? Do you find me dismissing everything you’ve said in that manner a helpful addition to the conversation?

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  62. pylon says:

    As a practicing lawyer, i first note that lot of others have said the same thing I am about to, but FWIW:

    1. Corporations are not people. That have been given some rights of persons, most importanty the rights to contract with others and own property.

    2. The whole basis for corporations is to limit the liability of shareholders (the same can be said for limited partnerships). It is not to simply associate for a common cause, otherwide you can just have general partneships and you dion’t need corporations.

    3. Along with limited liability, comes limited rights. A shareholder cannot personally sue for wrongs done to his corporation, even if he owns 100% of the shares and financially siffers as a ersult of the wrong.

    4. The rights a corporation gets don’t include individual rights. No voting rights, etc. This should include religious rights. The most offensive part of this ruling is that SCOTUS has simply ignored centuries of corporate law.

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  63. Ebenezer_Arvigenius says:

    @Just Another Ex-Republican:

    You will note that Mantis statement is not a question but a statement of fact: “it’s wrong”.

    It’s not an inquiry into the legal questions Doug raised but a simple statement of belief. Or, rather, despite the wording an “ought” statement not an “is” statement.

    I’m perfectly happy to discuss the legal background with anybody who is open for it. But if you just want to state that you understand the legal principle but hate it, I won’t waste my time with useless discussions. You’re free to hate whatever you want.

    As for grumpy and michael: that we can discuss but I will only spend time doing it if they are still reading. This post has dropped way down on the frontpage after all.

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  64. Eric Florack says:

    I await evidence of any corporation not run by individuals.

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  65. C. Clavin says:

    @Eric Florack:
    I await evidence of corporate officers spending personal time in jail for the actions of their corporation.
    In 1999, a Texas jury imposed a $296 million verdict on a Koch pipeline unit — the largest compensatory damages judgment in a wrongful death case against a corporation in U.S. history. The jury found that the company’s negligence had led to a butane pipeline rupture that fueled an explosion that killed two teenagers.
    So why aren’t the Koch’s in jail for negligent homicide? Because their corporation shields them from any personal liability.
    This wrongly decided case allows the Koch’s to now pick and choose when they are individuals and when they are a corporation.
    It’s total BS…and for anyone to not admit that is intellectually dishonest.

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  66. DrDaveT says:

    @Barry:

    Scalian Calvinball

    What an awesome name for a band.

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  67. Just Another Ex-Republican says:

    @Ebenezer_Arvigenius:

    First, “wrong” can have many meanings, from legal to moral.

    Second, if you don’t like mantis, look at pylon’s statement right above yours. You want to just keep hiding behind the idea that anyone who doesn’t agree with you simply doesn’t understand, which is BS. This court (and not just with this decision) have been *expanding* corporate rights for the last couple years. You’re the one who doesn’t seem to understand that.

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  68. Just Another Ex-Republican says:

    To make my statement more clear and accurate, they’ve been expanding what individuals acting as corporate officers can do. Personally I want to see someone sue Hobby Lobby’s owners personally for violating their religious rights because the company uniform policy prohibits wearing a hijab:) As has been pointed out many many times, your head will spin at how fast the corporate shield suddenly protects the owners from personal liability. But suddenly this decision allows the owners to get an exemption from public policy based on their individual belief, the fact that they are then inflicting that belief on all their employees (regardless of what the employees think or what) be damned. It’s a two way street (or at least it used to be).

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  69. Eric Florack says:

    Ah yes, the Koch brothers, every liberals mantra contains at least a dozen lines about them.
    well, answer me this, bright boy, since you clearly have thought this through…. You compain corporations are immoral, yet you insist the individuals in those corporations left the basis for their moral beliefs… their religion, behind when they put on a business suit. I suppose you dont see the huge disconnect there?

    as for corporate people seeing jail time, interesting you should bring that up. a private email group Im involved with is discussing this case. http://www.nbcphiladelphia.com/news/local/Roofing-Company-President-Sentenced-to-Jail-for-Insurance-Fraud-262247801.html

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  70. Grewgills says:

    @Eric Florack:

    well, answer me this, bright boy, since you clearly have thought this through…. You compain corporations are immoral, yet you insist the individuals in those corporations left the basis for their moral beliefs… their religion, behind when they put on a business suit. I suppose you dont see the huge disconnect there?

    That rather more hurts your point than helps it.

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  71. Ebenezer_Arvigenius says:

    Ok then, let’s take it from the top:

    We have to distinguish between corporate personhood rights and rights of the people owing a corporation. They are close but not necessarily the same. This matters here.

    Historically, there was no distinction between the company and the owner. This is the way most small businesses are run. After a while it became apparent that this was holding back economic development. People were unwilling to expand business too much because their control over what happened weakened and the potential losses from that weakened control became too great.

    As a result, we created a way to limit these liabilities: incorporation. Now what has to be recognized here is that this is so far just a limitation of liability. There is, strictly speaking, no corporate person yet.

    This leads to certain problems. Once you have a person that can enter contracts etc. both as a “shielded” person and as a “private” person, it becomes difficult for others to see what risks they run in contracting. We solved this problem by making the shielded part a separate legal entity – the corporation.

    Note however, that this is just a matter of practicality. This is neither meant to limit the rights of the person shielded, nor give special rights to the corporation.

    Now making the corporation its own entity and limiting liability creates special problems that are not present when dealing with unshielded, natural persons. As a result there are a number of obligations imposed on corporations (capital requirements, disclosure etc.) that are not present in private individuals.

    Now what should be noted is that these obligations are mostly compensating for the additional problems of having a fictional entity in the process. Additional rules exist for the most part only in those categories: rules covering the “shielding” part on the one hand and rules covering entity problems on the other. There is no such thing as “if you want to incorporate you have to take some disadvantages”. Rather we have rules that cover specific problems of the incorporation.

    Now religious freedom is neither a question of shielding nor of incorporation. There is no reason why someone who runs a one-person non-incorporated business should be treated differently from someone running the same business as LL.C. religion-wise.

    This is also why this is strictly speaking not a question of corporate personhood (rules governing the legal fiction) but one of personal religious freedom of the owner. So in this regard the judgement is either correct or at least within the scope of proper jurispudence. One could, of course, have solved the problems arising from this (freeriding etc.) by deciding differently on corporate personhood, but that’s a bit like using a wrench to pound in a nail. The real problems lie elsewhere:

    Firstly, as Ginsberg pointed out correctly, the RFRA was not supposed to cover that much ground. You can’t have a law that basically treats religion as a get out of jail free card.

    Secondly (and in my opinion more importantly) the judges accepted transactions thrice removed as legitimate grounds for religious opposition. If you paying an insurance provider for abstract coverage and that insurance provider providing a checking account that can potentially used to pay certain contraceptions with at a third-party store is a religious burden there is basically nothing, including paying taxes, that couldn’t be classified as such. If this holds we are in deep shit. And howling at the moon about corporate persons getting unfair rights (no, the owners are just not being denied rights due to incorporation) is spending important energy on the wrong fight imho.

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  72. Rick DeMent says:

    @Ebenezer_Arvigenius:

    what i still don’t understand is the precise mechanism under which the people that run Hobby Lobby feel that their religious beliefs are under any burden. They would not be taking the birth control and I know of no biblical admonishment that says that complying with a governmental mandate that the incidentally runs counter to a very poorly defined sin (abortion is mentioned nowhere in the bible and interpretations that suggest it is akin to murder are pretty thin). And it is well known that Hobby Lobby not only paid for insurance with birth control before the scary Muslim came up with his heath care plan and they still, to this day, invest in companies that produce the drug. There was not one shred of evidence offered that tested the notion that complying with a government mandate in order to receive a favorable tax subsidy violates any doctrine of Judeo-Christian Faith. This is nothing more then a gift.

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  73. wr says:

    @C. Clavin: “So why aren’t the Koch’s in jail for negligent homicide? ”

    Because they’re rich.

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  74. pylon says:

    @Eric Florack: The company rpesident wasn’t going to jail because he owned shares in a closely held company. No shareholder can be jailed because they own some or all of the stock in the company.

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  75. pylon says:

    @Rick DeMent: Catholics, as an example, don’t take their religious prohibitions and tenets just from the Bible. They are handed them from the Vatican, which has said abortion is a sin. Interestingly, however, the Vatican also is against the death penalty (despite there being plenty in the bible about executions) but I don’t recall Hobby Lobby claiming any religious exemption for tax dollars (or its employees payroll taxes) going to executions.

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  76. Ebenezer_Arvigenius says:

    @Rick DeMent: Exactly.

    Admittedly that was not a failure of the supreme court if my understanding of U.S. law is correct. As a Court of Appeal, the SC does not hear witnesses or consider new evidence. So this was already botched at the trial court stage.

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  77. Just Another Ex-Republican says:
  78. DrDaveT says:

    @Ebenezer_Arvigenius: Thanks for the summary, EA, but there’s a point I still don’t get.

    Now religious freedom is neither a question of shielding nor of incorporation. There is no reason why someone who runs a one-person non-incorporated business should be treated differently from someone running the same business as LL.C. religion-wise.

    Doesn’t that run both ways? Why should the employees of a non-closely-held corporation have rights that employees of a closely-held corporation do not, if those rights are unrelated to either shielding or incorporation? Or, in your terms, why should a closely-held corporation and a non-closely-held corporation be treated differently, since how closely held the ownership is doesn’t affect either the shielding or the incorporation? Does it really make sense to say that I can reasonably impute the religious beliefs of a 51%-ownership bloc to the fictional entity (ignoring the other 49%’s views), but not those of a 49%-ownership bloc?

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  79. Ebenezer_Arvigenius says:

    Or, in your terms, why should a closely-held corporation and a non-closely-held corporation be treated differently, since how closely held the ownership is doesn’t affect either the shielding or the incorporation?

    I hope I understand the question correctly.

    Shielding and incorporation determine whether or not the owner of the company should be subject to extra rules due to incorporation. So this answers the question “what happens to the rights of the owner?”

    This obviously becomes more complicated if we have multiple owners, and especially if those owners disagree. But that is no question specific to incorporation. It would occur also with, for example, a non-incorporated partnership.

    I can only give you my opinion, since that was not part of the ruling. As far as I’m concerned the central question is, whether the association between the company and the person is so close that the actions of the company are effectively those of the person owning it, regardless of the exact legal form of ownership. Essentially it’s the difference between entrepreneur and investor.

    In a non-closely held cooperation, share owners are just beneficiaries. They receive money but it’s not them who are in fact acting if the company does something. As a result, their freedom is not impacted if the “acting” of the company is influenced by statute, only their income. The freedom of the single owner of 100% of the shares of a publicly traded company on the other hand would be.

    But admittedly it is a judgement call how far you are willing to stretch the “it’s effectively me” argument. How exactly the courts will determine and differentiate between the cases remains to be seen.

    Why should the employees of a non-closely-held corporation have rights that employees of a closely-held corporation do not, if those rights are unrelated to either shielding or incorporation?

    That’s a different question. The simple answer here would be: because they are not coerced by the state but only by their employer. Both the RFRA and the constitution only protect against government intrusions, not employer malfeasance. As such the corporation receives protection against the state while they will not receive religious protection against their employer.

    In addition the court ruled that they will get the same coverage, the question is only who will provide it – government or employer. As such it’s even in question if they effectively have fewer rights (although I’m not overly optimistic on that front).

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  80. Grewgills says:

    @Ebenezer_Arvigenius:

    In addition the court ruled that they will get the same coverage, the question is only who will provide it – government or employer. As such it’s even in question if they effectively have fewer rights (although I’m not overly optimistic on that front).

    No, they argued that the government could provide the coverage as one alternative. That, of course, ignores that there is no way on earth any bill attempting to fund this lack of coverage will ever get through this congress or any likely congress in the near future.

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  81. Ebenezer_Arvigenius says:

    @Grewgills: I stand corrected. I only skimmed the parts not pertaining to this discussion.

    That leaves the interesting question: is the “least harmful measure” standard judged upon real alternatives (coverage from elsewhere) or is it enough that there is a theoretical alternative (Congress could make a law). Hmmmm.

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  82. Loup-Bouc says:

    Concerning the non-wisdom of various anti-corporate-personhood constitution-amendments introduced or proposed several times during the 2011-2014 period (each time with a few variations), see
    http://readersupportednews.org/pm-section/78-78/24423-how-not-to-overturn-citizens-united

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