Corporations are People, Too

Don’t miss Adam Seagrave’s response, “Goodnight, Vienna: What’s Wrong with Saying That Corporations Are People.”

A few weeks ago, the Supreme Court granted certiorari in Little Sisters of the Poor v. Burwell. The Little Sisters, an order of Catholic nuns, seek relief from mandates issued by the Obama administration that require them to provide health insurance that includes artificial contraception. The Little Sisters contend that the mandates require them to provide coverage contrary to their religious beliefs, in violation of their rights under the First Amendment and the Religious Freedom Restoration Act.

Practically everybody knows that America’s hard left fervently believes the Little Sisters deserve to lose this case. What is less well-known, and what is even more unsettling, is that the principles of America’s hard left suggest that the Little Sisters should not even have a right to bring the case—indeed, that the Little Sisters should have no legal rights at all. The Little Sisters of the Poor, after all, are a corporation. The populist left has been very clear and loud in its insistence over the last several years that “corporations are not people!”—a claim they have used to denounce Supreme Court rulings recognizing and protecting the rights of certain corporations.

To hear the left tell it, corporate personhood—the idea that corporations are legal persons with legal and constitutional rights—is a pernicious fiction foisted on the country by the radical conservatives of the Roberts Court. As I argue at greater length in a piece published in National Affairs, this presentation of the issue is quite wrong and carries dangerous consequences.

The Historical Roots of Corporate Personhood

The idea that corporations are to be understood as legal persons is not an invention of contemporary conservatives. It has deep roots in American law and the tradition of English law in which American law is rooted.

That tradition of English law was captured most comprehensively—and communicated to the American founders most forcefully—by William Blackstone’s Commentaries on the Laws of England. In that great work, Blackstone actually placed his chapter “Of Corporations” in Book I, entitled “The Rights of Persons.” Corporations, Blackstone explained, are “artificial persons,” created by law “for the advantage of the public,” and in particular for “the advancement of religion, of learning, and of commerce.” Corporations, Blackstone thus suggested, were created as artificial persons and accorded certain rights precisely in order to ease cooperation among individuals with a view to socially useful ends.

This understanding of the corporation as a legal person was later affirmed by the great statesmen and jurists of the founding generation. In his Opinion on the Constitutionality of a National Bank, Alexander Hamilton, the nation’s first Secretary of the Treasury, proclaimed that to “erect a corporation is to substitute a legal or artificial to a natural person”—in other words, to create a “legal or artificial person.” Similarly, in Dartmouth College v. Woodward, John Marshall—the “Great Chief Justice”—characterized a corporation as “an artificial being, invisible, intangible, and existing only in contemplation of law.” The Court’s opinion in the Dartmouth College case, moreover, affirmed the idea that corporations, as artificial persons, have rights that government is bound to respect.

Legal Definitions and the Spirit of Association

Because of this longstanding tradition of understanding, it is not unusual for the word “person,” when used in a legal context, to apply to corporations. Congress acknowledged this principle explicitly in the so-called Dictionary Act of 1871, which laid down rules for construing federal laws. It is reaffirmed in Title 1 of the United States Code, which notes that “unless the context indicates otherwise” the “words ‘person’ and ‘whoever’ include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.”

The Constitution, moreover, is a legal text, written and ratified by men steeped in this legal tradition according to which a corporation is a kind of legal person. Accordingly, the view that some constitutional rights bestow protections on corporations as well as individuals is by no means a conservative manipulation of law, as the opponents of corporate personhood seem to be suggesting. To be sure, a given reference to persons and their rights under the Constitution may or may not be intended to refer to corporations. It depends—as the language of Title I of the US Code suggests—on the context. Nevertheless, one cannot dismiss out of hand the idea that some constitutional rights are intended to apply to corporations as well as individuals. Yet this is exactly what the left is now attempting with its flat claim that “corporations are not people.”

This approach is not only wrong but reckless. It represents a radical effort to uproot a legal tradition that has been essential to the development of our civilization. Beyond any doubt, American society would not have developed as it has without the aid of corporations. Such institutions, as Blackstone notes, are created for “the advantage of the public,” and especially for religious, educational, and commercial purposes.

When we think of corporations, we ordinarily think first of commerce. It is certainly worth remembering that the building of America into a great, prosperous, and powerful commercial nation was done, to a significant extent, through the operations of for-profit corporations. Nevertheless, as Blackstone reminds us, and as is still true today, corporations have also been essential to the organization of important charitable endeavors. Most American churches and colleges have been and are organized as corporations.

Alexis de Tocqueville praised America for its spirit of association, its ability to bring citizens together to cooperate for the common good without always calling on the government. He thought this spirit was essential to maintaining America as both a democratic and a free country. The spirit of association he so admired, however, depended then, as it depends now, on the ability of citizens to form corporations as convenient vehicles of cooperation.

Would all the good work that has been done in America through corporations have been accomplished without them? It is impossible to say. Their impact on our society is incalculable, and so would be the consequences of jettisoning—in a fit of liberal pique—the legal tradition that allows them to exist and operate.

What Would Happen if We Abolished Corporate Personhood?

It is possible, however, to illustrate some of the most obviously strange and dangerous consequences that would follow if we were to indulge the left’s insistence that “corporations are not people.”

The Fifth Amendment to the Constitution provides that “no person shall be . . . deprived of . . . property without due process of law; nor shall private property be taken for public use, without just compensation.” Does anyone really think that the American founders, who were ardent advocates of the right to property, intended this passage to protect only the property rights of individuals, or natural persons, and not of corporations, or artificial persons? Is it plausible that the framers of the Fifth Amendment intended that natural persons would make their property subject to arbitrary and uncompensated seizure by the government if they chose to place it in a corporation?

Leaving aside the question of what framers intended, does anyone today want to live in a country in which the government can take property from corporations without due process of law and without just compensation? If some liberals are tempted to answer “yes,” they would do well to recall that such a power could be exercised not only on the for-profit corporations they despise but also the non-profit corporations they admire.

The Fourteenth Amendment, which was passed in the wake of the Civil War to protect the rights of the newly freed slaves, provides that “no state shall . . . deny to any person within its jurisdiction the equal protection of the laws.” Would it make sense to say that this language is only intended to protect the rights of individuals—leaving states free to enact laws discriminating against corporations owned by, say, African-Americans? Probably everyone would rush to disclaim any such interpretation. Yet such an interpretation would be required by the left’s newfound axiom that “corporations are not people.”

Of course, what has really raised the ire of the left is not the idea that corporations have property and equal protection rights, but that they have rights to freedom of speech and religion. The real sources of the contemporary denial of corporate personhood are the Supreme Court’s rulings in Citizens United v. F.E.C. (2010), in which it held that the political speech of corporations is protected by the First Amendment, and Burwell v. Hobby Lobby (2014), in which it held that corporations can have a right to the free exercise of religion. Despite the vehemence of the left’s denunciations of these rulings, they are eminently defensible as straightforward readings of the relevant constitutional and legal provisions.

Corporate Freedom of Speech and Religion

The First Amendment does not use the word “person” when protecting freedom of speech. It simply states that “Congress shall make no law . . . abridging the freedom of speech.” The Amendment’s omission of any reference to persons, natural or artificial, far from lending credibility to the left’s complaints, actually supports the Court’s conclusion that the Constitution protects the speech rights of corporations. The provision seeks to protect “freedom of speech,” without any reference to who is speaking, whether one person or many, and, if many, how they are organized. The most obvious reading of the amendment, therefore, would protect the speech of both individuals and corporations.

Again, absurd consequences would result from any attempt to deny this freedom to corporations. After all, the New York Times—a favorite organ of liberal opinion—is not only a corporation but a for-profit corporation. Would anyone, on the left or the right, seriously contend that the Times has no constitutional right to freedom of speech and of the press?

Inquiry yields similar results in regard to religious freedom. Once more, the First Amendment does not use the word “person” when it provides for freedom of religion. It simply states that “Congress shall make no law . . . prohibiting the free exercise [of religion].” As in the case of freedom of speech, the most straightforward reading of this language would hold that the freedom is protected no matter who is exercising it, whether a natural or an artificial person. Indeed, it would be strange if the right did not extend to corporations, since, as Blackstone observed of England, and as was also true of early America, religious organizations were often established as corporations.

By contrast, the Religious Freedom Restoration Act does use the word “person.” It provides that “Government shall not substantially burden a person’s exercise of religion” except where it can show a compelling governmental interest being advanced by the least restrictive means. The only sensible reading of this language would require that the law’s protections extend to both natural and legal persons. The alternative would be to hold that the Religious Freedom Restoration Act affords no protection to churches, the vast majority of which, again, are organized as corporations.

None of this is to say that every legal or constitutional reference to “persons” is intended to embrace corporations, that corporations have exactly the same rights as individuals, or that corporations in many cases cannot be subject to more stringent government regulations than natural persons. Nothing in America’s legal traditions requires such an extreme and doctrinaire pro-corporation position.

Likewise, no real public need requires the contemporary left’s extreme and doctrinaire anti-corporation position. On the contrary, that position is hostile to the traditional legal culture of American liberty, which advances the common good by protecting the rights of both individuals and formally organized groups of people. What kind of liberty would we have left if we were free only to act as individuals and not to form associations with those who share our interests and opinions?