Sotomayor: Overturn Corporate Personhood
It appears that Sonia Sotomayor will be an activist judge after all.
During arguments in a campaign-finance case, the court’s majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled. But Justice Sotomayor suggested the majority might have it all wrong — and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have. Judges “created corporations as persons, gave birth to corporations as persons,” she said. “There could be an argument made that that was the court’s error to start with…[imbuing] a creature of state law with human characteristics.”
“Progressives who think that corporations already have an unduly large influence on policy in the United States have to feel reassured that this was one of [her] first questions,” said Douglas Kendall, president of the liberal Constitutional Accountability Center. “I don’t want to draw too much from one comment,” says Todd Gaziano, director of the Center for Legal and Judicial Studies at the conservative Heritage Foundation. But it “doesn’t give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded.”
For centuries, corporations have been considered beings apart from their human owners, yet sharing with them some attributes, such as the right to make contracts and own property. Originally, corporations were a relatively rare form of organization. The government granted charters to corporations, delineating their specific functions. Their powers were presumed limited to those their charter spelled out. “A corporation is an artificial being, invisible, intangible,” Chief Justice John Marshall wrote in an 1819 case. “It possesses only those properties which the charter of its creation confers upon it.”
But as the Industrial Revolution took hold, corporations proliferated and views of their functions began to evolve. In an 1886 tax dispute between the Southern Pacific Railroad and the state of California, the court reporter quoted Chief Justice Morrison Waite telling attorneys to skip arguments over whether the 14th Amendment’s equal-protection clause applied to corporations, because “we are all of opinion that it does.”
Subsequent opinions expanded corporate rights. In 1928, the court struck down a Pennsylvania tax on transportation corporations because individual taxicab drivers were exempt. Corporations get “the same protection of equal laws that natural persons” have, Justice Pierce Butler wrote.
From the mid-20th century, though, the court has vacillated on how far corporate rights extend. In a 1973 case before a more liberal court, Justice William O. Douglas rejected the Butler opinion as “a relic” that overstepped “the narrow confines of judicial review” by second-guessing the legislature’s decision to tax corporations differently than individuals. Today, it’s “just complete confusion” over which rights corporations can claim, says Prof. William Simon of Columbia Law School.
Rather clearly, the Court will not have 5 votes to overturn nearly two centuries of precedent. By contrast, the conservatives on the Court may well have the votes to overturn decades of precedent in campaign finance law, finally deciding that the 1st Amendment fully applies to corporations and that money is speech.
Both of these directions are arguably activist; they’re certainly a violation of the stare decisis tradition. But corporate personhood is a bedrock principle of American corporate law; the only question is how far it extends. While being gradually limited in scope in recent years, the premise has never been seriously questioned by the Supreme Court. Campaign finance law, conversely, has always been a balancing test, with the Court both recognizing that donating to candidates and political advertising have qualities of speech and yet deferring to the public policy interest in reigning in the appearance of undue influence.