Corporate personhood
Encyclopedia
Corporate personhood is the status conferred upon corporations under the law, which allows corporations to have rights and responsibilities similar to those of a natural person
Natural person
Variously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...

. There is a question about which subset of rights that are afforded to natural person
Natural person
Variously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...

s should also be afforded to corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...

s as legal persons.

The Supreme Court of the United States ( Dartmouth College v. Woodward
Dartmouth College v. Woodward
Trustees of Dartmouth College v. Woodward, 17 U.S. 518 , was a landmark United States Supreme Court case dealing with the application of the Contract Clause of the United States Constitution to private corporations...

 , 1819), recognized corporations as having the same rights as natural persons to contract and to enforce contracts. In Santa Clara County v. Southern Pacific Railroad
Santa Clara County v. Southern Pacific Railroad
Santa Clara County v. Southern Pacific Railroad Company, was a United States Supreme Court case dealing with taxation of railroad properties...

, 118 U.S. 394 (1886), an insertion into the decision's headnotes by the clerk, J.C. Bancroft Davis, led many to believe the Supreme Court had recognized corporations as persons for the purposes of the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...

.

The notion of corporations as persons

As a matter of interpretation of the word "person" in the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...

, U.S. courts have extended certain constitutional protections to corporations. Opponents of corporate personhood seek to amend the U.S. Constitution to limit these rights to those provided by state law and state constitutions.

Others argue that corporations should have the protection of the U.S. Constitution, pointing out that they are organizations of people, and that these people should not be deprived of their human rights when they act collectively. In this view, treating corporations as "persons" is a convenient legal fiction
Legal fiction
A legal fiction is a fact assumed or created by courts which is then used in order to apply a legal rule which was not necessarily designed to be used in that way...

 that allows corporations to sue and to be sued, that provides a single entity for easier taxation and regulation, that simplifies complex transactions that would otherwise involve, in the case of large corporations, thousands of people, and that protects the rights of the shareholders as well as the right of association.

Some have argued in court that corporations should be allowed to refuse to hand over incriminating documents under the Fifth Amendment
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...

. In one case, "[a]ppellants [suggested] that the use of the word "taxpayer" several times in the regulations requires that the fifth-amendment self-incrimination warning be given to a corporation." However, the court did not agree in that 1975 case.

The Green Party
Green Party (United States)
The Green Party of the United States is a nationally recognized political party which officially formed in 1991. It is a voluntary association of state green parties. Prior to national formation, many state affiliates had already formed and were recognized by other state parties...

, the Women's International League for Peace and Freedom
Women's International League for Peace and Freedom
The Women's International League for Peace and Freedom was established in the United States in January 1915 as the Woman's Peace Party...

,, Democracy Unlimited, and former Vice-President Al Gore
Al Gore
Albert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....

 have objected to the idea of corporate personhood, focusing on constitutional protections–such as the right to contribute to political campaigns–that are granted to corporations. Gore argues that the 1886 Southern Pacific decision entrenched the 'monopolies in commerce' that Thomas Jefferson
Thomas Jefferson
Thomas Jefferson was the principal author of the United States Declaration of Independence and the Statute of Virginia for Religious Freedom , the third President of the United States and founder of the University of Virginia...

 had wanted to prohibit.

After the Supreme Court's ruling in Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission
Citizens United v. Federal Election Commission, , was a landmark decision by the United States Supreme Court holding that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions...

 in 2010, a coalition group was formed called Move to Amend to call for a US Constitutional amendment to abolish Corporate Personhood.

Historical background

The Federal Constitution
United States Constitution
The Constitution of the United States is the supreme law of the United States of America. It is the framework for the organization of the United States government and for the relationship of the federal government with the states, citizens, and all people within the United States.The first three...

 of 1788 did not mention corporations. Thus, although the Federal government has from time to time chartered corporations, the general chartering of corporations has been left to the states. In the late 18th and early 19th centuries, corporations began to be chartered in greater numbers by the states. Corporations had long existed in the new nation, but these were primarily educational corporations or institutions chartered by the British crown which continued to exist after the new nation was created from the Confederation. Due to experience as British Colonies
British colonization of the Americas
British colonization of the Americas began in 1607 in Jamestown, Virginia and reached its peak when colonies had been established throughout the Americas...

 and the accompanying corporate colonialism from British corporations chartered by the crown to do business in North America, most directly exercised through government grants of monopoly
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

 as part of the chartering process, new corporations were greeted with mixed feelings.

The degree of permissible government interference in corporate affairs was controversial from the earliest days of the nation. In 1790, John Marshall
John Marshall
John Marshall was the Chief Justice of the United States whose court opinions helped lay the basis for American constitutional law and made the Supreme Court of the United States a coequal branch of government along with the legislative and executive branches...

, a private attorney and a veteran of the Continental Army
Continental Army
The Continental Army was formed after the outbreak of the American Revolutionary War by the colonies that became the United States of America. Established by a resolution of the Continental Congress on June 14, 1775, it was created to coordinate the military efforts of the Thirteen Colonies in...

, represented the board of the College of William and Mary
College of William and Mary
The College of William & Mary in Virginia is a public research university located in Williamsburg, Virginia, United States...

, in litigation that required him to defend that corporation's right to reorganize itself and in the process remove professors, The Rev John Bracken v. The Visitors of Wm & Mary College (7 Va. 573; 1790 Supreme Court of Virginia
Supreme Court of Virginia
The Supreme Court of Virginia is the highest court in the Commonwealth of Virginia. It primarily hears appeals from the trial-level city and county Circuit Courts, as well as the criminal law, family law and administrative law cases that go through the Court of Appeals of Virginia. It is one of...

). The Supreme Court of Virginia ruled that the original crown charter provided the authority for the Visitors to make changes including the reorganization.

Thomas Jefferson claimed in his autobiography that he had a hand in the reorganization when he was elected a Visitor of William and Mary after being appointed the Governor of the Commonwealth in June of 1779. His main reason for the reorganization was to move the college from a curriculum
Curriculum
See also Syllabus.In formal education, a curriculum is the set of courses, and their content, offered at a school or university. As an idea, curriculum stems from the Latin word for race course, referring to the course of deeds and experiences through which children grow to become mature adults...

 rooted in theology
Theology
Theology is the systematic and rational study of religion and its influences and of the nature of religious truths, or the learned profession acquired by completing specialized training in religious studies, usually at a university or school of divinity or seminary.-Definition:Augustine of Hippo...

 to a curriculum rooted in science, fine arts, and languages.

The notion of corporate personhood, then, has roots in the early history of the republic. Still, as the 19th century matured, manufacturing in the U.S. became more complex as the Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 generated new inventions and business processes. The favored form for large businesses became the corporation because the corporation provided a mechanism to raise the large amounts of investment capital large business required, especially for capital intensive yet risky projects such as railroads.

The Civil War
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...

 accelerated the growth of manufacturing and the power of the men who owned the large corporations. Businessmen such as Mark Hanna
Mark Hanna
Marcus Alonzo "Mark" Hanna was a United States Senator from Ohio and the friend and political manager of President William McKinley...

, sugar trust magnate Henry O. Havemeyer
Henry O. Havemeyer
Henry Osborne Havemeyer was an American entrepreneur who founded the American Sugar Refining Company in 1891. He was chosen vice president and afterward its president.- Background :...

, banker J. P. Morgan
J. P. Morgan
John Pierpont Morgan was an American financier, banker and art collector who dominated corporate finance and industrial consolidation during his time. In 1892 Morgan arranged the merger of Edison General Electric and Thomson-Houston Electric Company to form General Electric...

, steel makers Charles M. Schwab
Charles M. Schwab
Charles Michael Schwab was an American steel magnate. Under his leadership, Bethlehem Steel became the second largest steel maker in the United States, and one of the most important heavy manufacturers in the world....

 and Andrew Carnegie
Andrew Carnegie
Andrew Carnegie was a Scottish-American industrialist, businessman, and entrepreneur who led the enormous expansion of the American steel industry in the late 19th century...

, and railroad owners Cornelius Vanderbilt
Cornelius Vanderbilt
Cornelius Vanderbilt , also known by the sobriquet Commodore, was an American entrepreneur who built his wealth in shipping and railroads. He was also the patriarch of the Vanderbilt family and one of the richest Americans in history...

 and Jay Gould
Jay Gould
Jason "Jay" Gould was a leading American railroad developer and speculator. He has long been vilified as an archetypal robber baron, whose successes made him the ninth richest American in history. Condé Nast Portfolio ranked Gould as the 8th worst American CEO of all time...

 created corporations that influenced legislation at the local, state, and federal levels as they built businesses that spanned multiple states and communities. Beginning in the 1870s, corporate lawyers became bolder about using the Webster/Marshall theory of corporations as persons, arguing that as such they were entitled to some of the legal protections against arbitrary state action accorded also to natural person
Natural person
Variously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...

s.

In the late 19th century, railroads were among the most politically powerful corporations in the country as the corporate officers had to work with federal and state legislatures in order to obtain land grants for rights of way and the legislatures in turn depended on the railroads to provide the low cost transportation needed to open up new territory. Railroads provided a means for most of the nation's farmers to transport agricultural products such as grain and livestock from rural areas into cities such as Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...

. Manufacturing corporations needed coal, iron ore, finished iron, or any other materials transported and consumer goods business such as Sears, Roebuck and Company
Sears, Roebuck and Company
Sears, officially named Sears, Roebuck and Co., is an American chain of department stores which was founded by Richard Warren Sears and Alvah Curtis Roebuck in the late 19th century...

 used railroads to deliver goods to mail order
Mail order
Mail order is a term which describes the buying of goods or services by mail delivery. The buyer places an order for the desired products with the merchant through some remote method such as through a telephone call or web site. Then, the products are delivered to the customer...

 catalog customers.

As railroads increased their size, a number of conflicts between various states and the railroads began to surface. In four cases that reached the Supreme Court (94 U.S. 155, 94 U.S. 164, 94 U.S. 179, 94 U.S. 180 (1877)), railroads tried to argue that the Fourteenth Amendment prevented states from regulating the maximum rates they could charge. These cases did not rely on just an interpretation of the Fourteenth Amendment as most also tied in the Interstate Commerce clause as well. In each case the Court refused to render an opinion as to whether the Fourteenth Amendment applied to corporations, instead couching their decision on the Interstate Commerce clause.

Case law

In 1818, the United States Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...

 heard the case Dartmouth College v. Woodward
Dartmouth College v. Woodward
Trustees of Dartmouth College v. Woodward, 17 U.S. 518 , was a landmark United States Supreme Court case dealing with the application of the Contract Clause of the United States Constitution to private corporations...

, 17 U.S. 518 (1819), making the following statement in their decision: "The opinion of the Court, after mature deliberation, is that this corporate charter
Charter
A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified...

 is a contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...

, the obligation of which cannot be impaired without violating the Constitution of the United States. This opinion appears to us to be equally supported by reason, and by the former decisions of this Court." A public outcry ensued. State courts and legislatures, supported by many of their constituents, declared that state governments had an absolute right to amend or repeal a corporate charter.

Seven years after the Dartmouth College opinion, the Supreme Court decided Society for the Propagation of the Gospel in Foreign Parts v. Town of Pawlet, (1823) in which an English corporation dedicated to missionary work, with land in the U.S., sought to protect its rights to that land under colonial-era grants against an effort by the state of Vermont
Vermont
Vermont is a state in the New England region of the northeastern United States of America. The state ranks 43rd in land area, , and 45th in total area. Its population according to the 2010 census, 630,337, is the second smallest in the country, larger only than Wyoming. It is the only New England...

 to revoke the grants. Justice Joseph Story
Joseph Story
Joseph Story was an American lawyer and jurist who served on the Supreme Court of the United States from 1811 to 1845. He is most remembered today for his opinions in Martin v. Hunter's Lessee and The Amistad, along with his magisterial Commentaries on the Constitution of the United States, first...

, writing for the court, explicitly extended the same protections to corporate-owned property as it would have to property owned by natural persons. Seven years later, Chief Justice Marshall stated that, "The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men."

It should be understood that the term 'artificial person
Legal personality
Legal personality is the characteristic of a non-human entity regarded by law to have the status of a person....

' was in long use, prior to the Dartmouth College decision, and was in principle distinct from any contention that corporations have the rights of natural person
Natural person
Variously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...

s. 'Artificial person' was used because there were certain resemblances, in law, between a natural person and corporations. Both could be parties in a lawsuit; both could be taxed; both could be constrained by law. In fact the corporations had been called artificial persons by courts in England as early as the 16th century because lawyers for the corporations had asserted they could not be convicted under the English laws of the time because the laws were worded "No person shall...".

Similarly, in 1877, in Munn v. Illinois
Munn v. Illinois
Munn v. Illinois, 94 U.S. 113 , was a United States Supreme Court case dealing with corporate rates and agriculture. The Munn case allowed states to regulate certain businesses within their borders, including railroads, and is commonly regarded as a milestone in the growth of federal government...

(94 U.S. 113 (1876)), the Supreme Court decided that the Fourteenth Amendment (because Munn asserted his due process right to property was being violated) did not prevent the State of Illinois from regulating charges for use of a business' grain elevators. Instead, the decision focused on the question of whether or not a private company could be regulated in the public interest. The court's decision was that it could, if the private company could be seen as a utility operating in the public interest.

In the 1886 case Santa Clara v. Southern Pacific, the Supreme Court ruled that the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...

 equal protection clause guarantees constitutional protections to corporations in addition to natural persons.

The primary purpose of the 14th Amendment was to protect freed slaves. One of the 1886 judges, Samuel F. Miller, had considered the purpose of the Amendment in 1872, only six years after the Amendment had become law, when the court was "called upon for the first time to give construction to these articles." In the Slaughterhouse Cases
Slaughterhouse Cases
The Slaughter-House Cases, were the first United States Supreme Court interpretation of the relatively new Fourteenth Amendment to the Constitution...

(83 U.S. 36 (1872)), Miller delivered the majority opinion and discussed the Thirteenth Amendment
Thirteenth Amendment to the United States Constitution
The Thirteenth Amendment to the United States Constitution officially abolished and continues to prohibit slavery and involuntary servitude, except as punishment for a crime. It was passed by the Senate on April 8, 1864, passed by the House on January 31, 1865, and adopted on December 6, 1865. On...

 and the Fifteenth Amendment
Fifteenth Amendment to the United States Constitution
The Fifteenth Amendment to the United States Constitution prohibits each government in the United States from denying a citizen the right to vote based on that citizen's "race, color, or previous condition of servitude"...

 as well as the Fourteenth as follows:

The most cursory glance at these articles discloses a unity of purpose, when taken in connection with the history of the times, which cannot fail to have an important bearing on any question of doubt concerning their true meaning. Nor can such doubts, when any reasonably exist, be safely and rationally solved without a reference to that history, for in it is found the occasion and the necessity for recurring again to the great source of power in this country, the people of the States, for additional guarantees of human rights, additional powers to the Federal government; additional restraints upon those of the States. Fortunately, that history is fresh within the memory of us all, and its leading features, as they bear upon the matter before us, free from doubt. We repeat, then, in the light of this recapitulation of events, almost too recent to be called history, but which are familiar to us all, and on the most casual examination of the language of these amendments, no one can fail to be impressed with the one pervading purpose found in them all, lying at the foundation of each, and without which none of them would have been even suggested; we mean the freedom of the slave race, the security and firm establishment of that freedom, and the protection of the newly made freeman and citizen from the oppressions of those who had formerly exercised unlimited dominion over him.


Careful research has shown that John A. Bingham, the member of Congress who is known to have been chiefly responsible for the language of Section One when it was drafted by the Joint Committee in 1866, had, during the previous decade and as early as 1856-1859, employed not one but all three of the same clauses and concepts he later used in Section One. More important still, Bingham employed these guarantees specifically and in a context which suggested that free Negroes and mulatto
Mulatto
Mulatto denotes a person with one white parent and one black parent, or more broadly, a person of mixed black and white ancestry. Contemporary usage of the term varies greatly, and the broader sense of the term makes its application rather subjective, as not all people of mixed white and black...

es unquestionably were the persons to which he then referred.

But whatever the reasons for their adaptation, laws often benefit those other than the original intended beneficiary. Thus, whites as well as African-Americans are clearly protected by the Fourteenth Amendment, and groups organized specifically for business purposes, including corporations, may also benefit from its protections, just as any other group of persons.

The 14th Amendment does not insulate corporations from all government regulation, any more than it relieves individuals from all regulatory obligations. Thus, for example, in Northwestern Nat Life Ins. Co. v. Riggs (203 U.S. 243 (1906)), the Court accepted that corporations are for legal purposes "persons," but still ruled that the Fourteenth Amendment was not a bar to many state laws that effectively limited a corporation's right to contract business as it pleased. However, this was not because corporations were not protected under the Fourteenth Amendment - rather, the Court's ruling was that the Fourteenth Amendment did not prohibit the type of regulation at issue, whether of a corporation or of sole proprietorship or partnership.

Similarly, two Supreme Court judges, Hugo Black
Hugo Black
Hugo Lafayette Black was an American politician and jurist. A member of the Democratic Party, Black represented Alabama in the United States Senate from 1927 to 1937, and served as an Associate Justice of the Supreme Court of the United States from 1937 to 1971. Black was nominated to the Supreme...

 and William O. Douglas
William O. Douglas
William Orville Douglas was an Associate Justice of the United States Supreme Court. With a term lasting 36 years and 209 days, he is the longest-serving justice in the history of the Supreme Court...

, later rendered opinions attacking the doctrine of corporate personhood. Quoted here is the conclusion of Justice Black's opinion:

If the people of this nation wish to deprive the states of their sovereign rights to determine what is a fair and just tax upon corporations doing a purely local business within their own state boundaries, there is a way provided by the Constitution to accomplish this purpose. That way does not lie along the course of judicial amendment to that fundamental charter. An amendment having that purpose could be submitted by Congress as provided by the Constitution. I do not believe that the Fourteenth Amendment had that purpose, nor that the people believed it had that purpose, nor that it should be construed as having that purpose.


(Hugo Black
Hugo Black
Hugo Lafayette Black was an American politician and jurist. A member of the Democratic Party, Black represented Alabama in the United States Senate from 1927 to 1937, and served as an Associate Justice of the Supreme Court of the United States from 1937 to 1971. Black was nominated to the Supreme...

, dissenting, Connecticut General Life Insurance Company v. Johnson
Connecticut General Life Insurance Company v. Johnson
Connecticut General Life Insurance Company v. Johnson, 303 U.S. 77 is a case in which the United States Supreme Court dealt with corporate entities. The case involved whether the state of California could levy a tax, on a company licensed to do business in that state, for transactions that...

(303 U.S. 77, 1938).)

Justice Black was not alone in his questioning of the legitimacy of corporate personhood. Justice Douglas, dissenting in Wheeling Steel Corp. v. Glander
Wheeling Steel Corp. v. Glander
Wheeling Steel Corp. v. Glander, 337 U.S. 562 was a United States Supreme Court case....

(337 U.S. 562, 1949), gave an opinion similar to, but shorter than, the one quoted above, to which Justice Black concurred. The extent to which the rights of personhood should attach to corporations has remained a subject of controversy.

By the time of those opinions, political contributions to candidates in federal races by corporations had been prohibited since the Tillman Act of 1907
Tillman Act of 1907
The Tillman Act of 1907 was the first legislation in the United States prohibiting monetary contribution to national political campaigns by corporations....

, even though individual contributions remained unlimited.

Yet both Justice Black and Justice Douglas dissented from the Supreme Court's 1957 decision in United States v. United Auto Workers, 352 U.S. 567 (1957), in which the Court, on procedural grounds, overruled a lower court decision upholding the prohibition on corporate and union political expenditures:

We deal here with a problem that is fundamental to the electoral process and to the operation of our democratic society. It is whether a union can express its views on the issues of an election and on the merits of the candidates, unrestrained and unfettered by the Congress. The principle at stake is not peculiar to unions. It is applicable as well to associations of manufacturers, retail and wholesale trade groups, consumers' leagues, farmers' unions, religious groups, and every other association representing a segment of American life and taking an active part in our political campaigns and discussions. It is as important an issue as has come before the Court, for it reaches the very vitals of our system of government.

Under our Constitution, it is We The People who are sovereign. The people have the final say. The legislators are their spokesmen. The people determine through their votes the destiny of the nation. It is therefore important -- vitally important -- that all channels of communication be open to them during every election, that no point of view be restrained or barred, and that the people have access to the views of every group in the community.

Legislation

The laws of the United States hold that a legal entity (like a corporation or non-profit organization) shall be treated under the law as a person except when otherwise noted. This rule of construction is specified in 1 U.S.C. §1 (United States Code), which states:


In determining the meaning of any Act of Congress, 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;


This federal statute has many consequences. For example, a corporation is allowed to own property and enter contracts. It can also sue and be sued and held liable under both civil and criminal law. As well, because the corporation is legally considered the "person," individual shareholders are not legally responsible for the corporation's debts and damages beyond their investment in the corporation. Similarly, individual employees, managers, and directors are liable for their own malfeasance or lawbreaking while acting on behalf of the corporation, but are not generally liable for the corporation's actions. Among the most frequently discussed and controversial consequences of corporate personhood in the United States is the extension of a limited subset of the same constitutional right
Constitutional right
An inalienable right is a freedom granted by a Nature or the Creator's endowment by birth , and may not be legally denied by that government.-United States:...

s.

Corporations as legal entities
Legal personality
Legal personality is the characteristic of a non-human entity regarded by law to have the status of a person....

 have always been able to perform commercial
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

 activities, similar to a person acting as a sole proprietor
Sole proprietorship
A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits and has unlimited responsibility for...

, such as entering into a contract or owning property. Therefore corporations have always had a 'legal personality' for the purposes of conducting business while shielding individual stockholders from personal liability (i.e., protecting personal assets which were not invested in the corporation).

The stronger concept of corporate personhood, in which (for example) First, Fifth, and Fourteenth Amendment rights have been asserted by corporations, is often traced to the 1886 U.S. Supreme Court case Santa Clara County v. Southern Pacific Railroad
Santa Clara County v. Southern Pacific Railroad
Santa Clara County v. Southern Pacific Railroad Company, was a United States Supreme Court case dealing with taxation of railroad properties...

(118 U.S. 394). In that case, before oral argument
Oral argument
Oral arguments are spoken presentations to a judge or appellate court by a lawyer of the legal reasons why they should prevail. Oral argument at the appellate level accompanies written briefs, which also advance the argument of each party in the legal dispute...

 took place, writing a summary of the decision in a headnote to the Court's opinion, court reporter Bancroft Davis
Bancroft Davis
John Chandler Bancroft Davis , commonly known as Bancroft Davis, was an American lawyer, judge, diplomat, and president of Newburgh and New York Railway Company.-Early life:...

  stated:

"The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...

 to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

Thus, at the outset, the Waite Court assumed that corporations were entitled to protection under the Fourteenth Amendment. However, the court did not specifically address the matter of whether corporations could be considered 'persons' with respect to the Fourteenth Amendment as the decision made such a finding unnecessary (being based on less expansive law).

Liberal/progressive author and radio/TV talk show host Thom Hartmann has argued that the court was reluctant to establish precedent in that decision. Chief Justice Waite wrote in private correspondence that, "we avoided meeting the [Constitutional] question." Hartmann claims that correspondence between Waite and Bancroft Davis (available in the Library of Congress) demonstrates that Waite did not intend to create a legal precedent. The question of whether corporations were persons within the meaning of the Fourteenth Amendment had been argued in the lower courts and briefed for the Supreme Court, but in this interpretation, the Waite Court did not explicitly decide upon this issue. In numerous cases since, however, the Court has reiterated that corporations are protected in many activities by the equal protection clause of the Constitution. The extent of the protection is what continues to be at issue. Generally speaking, corporations may invoke rights that groups of individual may invoke, such as the right to petition, to speech, to enter into contracts and to hold property, to sue and to be sued. However, they may not exercise rights that are exclusive to individuals and cannot be exercised by other associations of individuals, including the right to vote and the right against self incrimination.

Ralph Nader
Ralph Nader
Ralph Nader is an American political activist, as well as an author, lecturer, and attorney. Areas of particular concern to Nader include consumer protection, humanitarianism, environmentalism, and democratic government....

 and others have argued that a strict originalist philosophy, such as that of Justice Antonin Scalia
Antonin Scalia
Antonin Gregory Scalia is an American jurist who serves as an Associate Justice of the Supreme Court of the United States. As the longest-serving justice on the Court, Scalia is the Senior Associate Justice...

, should reject the doctrine of corporate personhood under the Fourteenth Amendment. Indeed, Chief Justice William Rehnquist
William Rehnquist
William Hubbs Rehnquist was an American lawyer, jurist, and political figure who served as an Associate Justice on the Supreme Court of the United States and later as the 16th Chief Justice of the United States...

 repeatedly criticized the Court's invention of corporate constitutional "rights," most famously in his dissenting opinion in the 1978 case First National Bank of Boston v. Bellotti
First National Bank of Boston v. Bellotti
First National Bank of Boston v. Bellotti, 435 U.S. 765 , was a case in which the United States Supreme Court ruled 5-4 that corporations had a First Amendment right to make contributions in order to attempt to influence political processes...

. Nonetheless, these justices' rulings have continued to affirm the assumption of corporate personhood, as the Waite court did, and Justice Rehnquist himself eventually endorsed overruling "Austin," dissenting in "McConnell v. FEC."

Corporate political spending

A central point of debate in recent years is what role corporate money plays and should play in democratic politics. This is part of the larger debate on campaign finance reform
Campaign finance reform
Campaign finance reform is the common term for the political effort in the United States to change the involvement of money in politics, primarily in political campaigns....

 and the role that money may play in politics.

In the United States, legal milestones in this debate include:
  • Tillman Act of 1907
    Tillman Act of 1907
    The Tillman Act of 1907 was the first legislation in the United States prohibiting monetary contribution to national political campaigns by corporations....

    , banned corporate political contributions to national campaigns.
  • Federal Election Campaign Act
    Federal Election Campaign Act
    The Federal Election Campaign Act of 1971 is a United States federal law which increased disclosure of contributions for federal campaigns. It was amended in 1974 to place legal limits on the campaign contributions...

     of 1971, landmark campaign financing legislation.
  • Buckley v. Valeo
    Buckley v. Valeo
    Buckley v. Valeo, 424 U.S. 1 , was a case in which the Supreme Court of the United States upheld a federal law which set limits on campaign contributions, but ruled that spending money to influence elections is a form of constitutionally protected free speech, and struck down portions of the law...

    (1976) upheld limits on campaign contributions, but held that spending money to influence elections is protected speech as in the first amendment.
  • First National Bank of Boston v. Bellotti
    First National Bank of Boston v. Bellotti
    First National Bank of Boston v. Bellotti, 435 U.S. 765 , was a case in which the United States Supreme Court ruled 5-4 that corporations had a First Amendment right to make contributions in order to attempt to influence political processes...

    (1978) upheld the rights of corporations to spend money in non-candidate elections (i.e. ballot initiatives and referendums).
  • Austin v. Michigan Chamber of Commerce
    Austin v. Michigan Chamber of Commerce
    Austin v. Michigan Chamber of Commerce, 494 U.S. 652 , was a case in which the Supreme Court of the United States held that the Michigan Campaign Finance Act, which prohibited corporations from using treasury money to support or oppose candidates in elections, did not violate the First and...

    (1990) upheld the right of the state of Michigan to prohibit corporations from using money from their corporate treasuries to support or oppose candidates in elections, noting that "[c]orporate wealth can unfairly influence elections."
  • Bipartisan Campaign Reform Act of 2002 (McCain–Feingold), banned corporate funding of issue advocacy ads
    Issue advocacy ads
    Issue Advocacy Ads are types of advertisements used in political campaigns. These advertisements originate from the power of soft money, which is used to fund numerous campaign efforts. Soft money can pay for different campaign expenses, get out the vote drives, or can be transferred to local and...

     that mentioned candidates close to an election.
  • McConnell v. Federal Election Commission
    McConnell v. Federal Election Commission
    McConnell v. Federal Election Commission, 540 U.S. 93 , is a case in which the United States Supreme Court upheld the constitutionality of most of the Bipartisan Campaign Reform Act of 2002 , often referred to as the McCain–Feingold Act....

    (2003), substantially upheld McCain–Feingold.
  • Federal Election Commission v. Wisconsin Right to Life, Inc.
    Federal Election Commission v. Wisconsin Right to Life, Inc.
    Federal Election Commission v. Wisconsin Right to Life, Inc., 551 U.S. 449 , was a case in which the Supreme Court of the United States held that issue ads may not be banned from the months preceding a primary or general election.-Background:...

    (2007) weakened McCain–Feingold, but upheld core of McConnell.
  • Citizens United v. Federal Election Commission
    Citizens United v. Federal Election Commission
    Citizens United v. Federal Election Commission, , was a landmark decision by the United States Supreme Court holding that the First Amendment prohibits government from censoring political broadcasts in candidate elections when those broadcasts are funded by corporations or unions...

    (2010) the Supreme Court of the United States held that corporate funding of independent political broadcasts in candidate elections cannot be limited under the First Amendment
    First Amendment to the United States Constitution
    The First Amendment to the United States Constitution is part of the Bill of Rights. The amendment prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering...

    , overruling Austin (1990) and partly overruling McConnell (2003).


The corporate personhood aspect of the campaign finance debate turns on Buckley v. Valeo (1976) and Citizens United (2010): Buckley ruled that political spending is protected by the First Amendment
First Amendment to the United States Constitution
The First Amendment to the United States Constitution is part of the Bill of Rights. The amendment prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering...

 right to free speech, while Citizens United ruled that corporate political spending is protected, holding that corporations have a First Amendment right to free speech.

See also

  • Corporate personality
  • Corporate behaviour
    Corporate behaviour
    Corporate behaviour is the behaviour of an organisation when considered as a single body.The behaviour of an organisation is influenced by the arrangements for its ownership and control...

  • Corporate governance
    Corporate governance
    Corporate governance is a number of processes, customs, policies, laws, and institutions which have impact on the way a company is controlled...

  • History of central banking in the United States
    History of central banking in the United States
    This article is about the history of central banking in the United States, from the 1790s to the present.-Bank of North America:Some Founding Fathers were strongly opposed to the formation of a central banking system; the fact that England tried to place the colonies under the monetary control of...

  • History of rail transport
    History of rail transport
    The history of rail transport dates back nearly 500 years and includes systems with man or horse power and rails of wood or stone. Modern rail transport systems first appeared in England in the 1820s...

  • Industrial Revolution
    Industrial Revolution
    The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

  • Juristic person
  • Persona designata
    Persona designata
    The persona designata doctrine is a doctrine in law, particularly in Canadian and Australian constitutional law which states that, although it is generally impermissible for a federal judge to exercise non-judicial power, it is permissible for a judge to do so if the power has been conferred on the...

  • Anti-corporate activism
    Anti-corporate activism
    Anti-corporate activists believe that the influence of large business corporations poses a threat to the public good and democratic authority...



Supreme Court cases

Further reading

  • Gore, Al (2007). The Assault on Reason, New York: The Penguin Press. ISBN 978-1-59420-122-6
  • Horwitz, Morton J., THE TRANSFORMATION OF AMERICAN LAW: 1870-1960 (Oxford, 1992), especially Chapter 3, usefully places the notion within the context of competing strains of jurisprudence. See also Jack Beatty, AGE OF BETRAYAL (Knopf, 2007). The `conspiracy theory' here has not to do with the Waite-Davis correspondence regarding the reporter headnotes, but with a disingenuous attempt to claim congressional intent in the original framing of the 14th Amendment that it include establishing corporate personality as constitutionally protected.


External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK