Our (corporate) bodies, ourselves
How corporations won their civil rights
“Corporations are people, my friend.” Mitt Romney’s declaration at the 2011 Iowa State Fair became a source of mirth and some ridicule.
But the truth is a bit complicated. “Pull up a chair,” Adam Winkler seems to say. “I have a story to tell.” It’s a tale that begins in Ancient Rome, continues through ‘olde England,’ crosses over to Jamestown and the Colonies, and ambles on down through the annals of American common law.
Mr. Winkler, who teaches law at UCLA, has taken upon himself an ambitious project. The corporation was first conceived as a cooperative enterprise that could allow Romans to pool resources to advance both the common good and personal wealth.
The great English jurist Blackstone built on this foundation, conceiving the corporation as a legal person separate and apart from those who shared in its ownership. In the Virginia Colony, consigned to hunger and slaughter in its earliest beginnings, the corporation was the device employed to fund and sustain exploration and settlement of the new continent.
Both in the Colonies and in the newly independent United States, the corporation allowed shareholders to pool wealth and realize economies of scale that even the wealthiest individuals could not advance on their own.
But, this being America, litigation followed. What to make of this corporate form? John Marshall had some ideas. The third, and greatest, chief justice of the United States, Mr. Marshall pioneered principles not only of our constitutional law, but of our political economy as well.
Against what can fairly be characterized as massive Jeffersonian opposition, Mr. Marshall’s corporate jurisprudence in cases like McCulloch, Deveaux and Dartmouth College championed the Hamiltonian financial structure that would sustain the broad enterprise of nation-building as settlement of the American continent continued apace.
The Dartmouth College case deserves special mention. In his hours-long argument before the justices (it was, after all, a pre-Instagram, pre-CNN age), the great advocate Daniel Webster famously intoned, “It is a small college, sir, but there are those who love it.”
The case involved an attempt by the State of New Hampshire to grab control of the institution, founded in part to advance the education of Native Americans (”the merciless Indian Savages” of Jefferson’s Declaration, but never mind ...).
Webster’s panegyric convinced Mr. Marshall and his colleagues (or helped Mr. Marshall convince his colleagues over the sherry he always maintained for this purpose in ample supply) that the Dartmouth corporation deserved protections and rights against the grasp of the state, under the contracts clause of the United States Constitution. (”No State shall ... pass any ... Law impairing the Obligation of Contracts .... ”).
But what, exactly, were the rights of corporations? They weren’t human beings. They were, as Blackstone and others had noted, legal fictions, entities formed to facilitate commerce, development and cooperation at scale for profit.
So, did they have rights? There’s the rub. You see, we can all get our arms around the concepts of a human being’s rights. We haven’t always respected and delivered them; but we know they exist. But does a corporation have rights ? The short answer: Yes. The longer answer: Well, that’s what Mr. Winkler’s book probes. It’s an extended narrative. But it’s a very interesting one.
Long story short, the U.S. Supreme Court had little trouble developing an understanding that corporations enjoyed property rights. This principle, articulated in cases decided between our independence and the early 20th-century, built on venerable ideas about communal wealth-building and respect for contractual arrangements.
But what of liberty rights? That was a longer time in coming. Initially, the Supreme Court affirmed that corporations do not enjoy rights we associate with human beings, such as rights of free speech, of equal protection, of due process of law, of protection from warrantless searches and seizures. But gradually, beginning with the New Deal, the Court has extended most of these rights to corporations.
In the 1936 Grosjean case, the Supreme Court held that the First Amendment right of freedom of the press extends to newspaper corporations. Rights of free speech, free association, commercial speech and other liberties followed.
In its 2010 landmark 5-4 decision in Citizens United, the Court overturned two of its own precedents to hold that corporations have a First Amendment right to spend money directly to influence candidate elections. Outrage ensued, the Occupy Wall Street movement developed, and, of course, those who tuned in to President Obama’s State of the Union address were treated to Justice Samuel Alito’s famous “not true” head-shake.
More recently, in 2014, the Supreme Court decided Hobby Lobby, a case in which the justices held that corporations themselves (and not just their officers and shareholders) enjoy freedom of religion. The implications are still unfolding.
Readers will be prompted to think about the meaning of civil rights. The Supreme Court has extended these guarantees not just to the people, who are are referenced in our Constitution, but to corporations, which are not. The road to this jurisprudence has been long and convoluted. Professor Winkler has performed yeoman service in illuminating it.