Corporate personhood
The examples and perspective in this deal primarily with the United States and do not represent a worldwide view of the subject. (April 2023) |
Corporate personhood or juridical personality is the legal notion that a
Granting non-human entities personhood is a Western concept applied to corporations.
Early history
Ancient Indian society used legal personhood for political, social, and economic purposes. As early as 800 BC, legal personhood was granted to guild-like
In the Middle Ages, juridical persons were chartered either as corporations or as foundations in order to facilitate collective perpetual ownership of assets beyond the founders' lifespans, and to avoid their fragmentation and disintegration resulting from personal property inheritance laws. Later on, incorporation was advocated as an efficient and secure mode of economic development: advantages over existing partnership structures included the corporation's continuing existence if a member died; the ability to act without unanimity; and limited liability.[1] The word "corporation" itself derives from the Latin corpus ("body"), and juridical personhood is often assumed in medieval writings; by the Renaissance period, European jurists routinely held that churches and universities chartered by the government could gain property, enter into contracts, sue, and be sued, independent of its members. The government (or the Pope) granted religious organizations "the power of perpetual succession": church property would not revert to the local lord, nor be taxed, upon the death of church members. Some town charters explicitly granted medieval towns the right of self-governance. Commercial endeavors were not among the entities incorporated in the medieval era, and even risky trading companies were originally run as common-law partnerships rather than corporations; the incorporation of the East India Company monopoly in 1600 broke new ground, and by the end of the century, commercial ventures frequently sought incorporation in Europe and the American continent [clarification needed]. By the 19th century, the direction of British and American corporate law had diverged; British law of this period (such as the Joint Stock Companies Act 1856) appeared to focus more on corporations that more closely resembled traditional joint ventures, while American law was driven by the need to manage a more diverse corporate landscape.[3]
Country specific laws
India
Under Indian law the corporate, managing bodies, etc. and several other non-human entitles have been given the status of the "
In the United States
In a U.S. historical context, the phrase "corporate personhood" refers to the ongoing legal debate over the extent to which rights traditionally associated with natural persons should also be afforded to
U.S. courts have extended certain constitutional protections to corporations under various rationales. An early perspective, variously known as 'contractual', 'associate', or 'aggregate' theory, holds that owners of property have certain constitutional protections, even when the property is held via a corporation rather than directly under the owner's own name. Corporate attorney John Norton Pomeroy argued in the 1880s that "Statutes violating their prohibitions in dealing with corporations must necessarily infringe upon the rights of natural persons. In applying and enforcing these constitutional guaranties, corporations cannot be separated from the natural persons who compose them."
Similarly, proponents might argue a juridical person can be a device for exercising shareholders' rights to free speech. Under this perspective, such constitutional rights might also extend to other associations of people, even where the association does not take on the formal legal form of a corporation. A second perspective, known as the 'real entity' or 'natural entity' view, shifts the presumption of corporate regulation against the states.
The dominant view from the 1920s to the 1980s, championed by philosopher John Dewey, asserted that such perspectives are often overgeneralizations, and that the decision to grant corporate rights in a given sphere should be governed by the consequences of doing so[citation needed]. The 1980s saw an explosion of economic analyses, with a corporation often viewed as a nexus of contracts and as an economic agent appointed to act on behalf of its shareholders.
Some rulings combine multiple perspectives; the majority opinion in Citizens United argued both from an 'association' perspective ("if the antidistortion rationale were to be accepted... it would permit Government to ban political speech simply because the speaker is an association that has taken on the corporate form") and from a 'natural entity' perspective ("the worth of speech 'does not depend upon the identity of its source, whether corporation, association, union, or individual'").[3]
Treating
Generally, corporations are not able to claim constitutional protections that would not otherwise be available to persons acting as a group. For example, the Supreme Court has not recognized a Fifth Amendment right against self-incrimination for a corporation, since the right can be exercised only on an individual basis. In United States v. Sourapas and Crest Beverage Company, "[a]ppellants [suggested] the use of the word 'taxpayer' several times in the regulations requires the fifth-amendment self-incrimination warning be given to a corporation." The Court did not agree.[7] Likewise, corporations and organizations do not have privacy rights under the Privacy Act of 1974, since the statute refers to any "individual," which it defines as "a citizen of the United States or an alien lawfully admitted for permanent residence."[8]
Since the Supreme Court's ruling in
Individual shareholders cannot generally sue over the deprivation of a corporation's rights; only the board of directors has the standing to assert a corporation's constitutional rights in court.[3]
Historical background in the United States
During the colonial era, British corporations were chartered by the crown to do business in North America. This practice continued in the early United States. They were often granted monopolies as part of the chartering process. For example, the controversial Bank Bill of 1791 chartered a 20-year corporate monopoly for the First Bank of the United States. 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, under general laws allowing for incorporation at the initiative of citizens, rather than through specific acts of the legislature.
The degree of permissible government interference in corporate affairs was controversial from the earliest days of the nation. In 1790,
As the 19th century matured, manufacturing in the U.S. became more complex as the Industrial Revolution 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.
Following the reasoning of the Dartmouth College case and other precedents (see
Case law in the United States
In 1818, the
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 the land under colonial-era grants against an effort by the state of Vermont to revoke the grants. Justice Joseph Story, 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: "The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men."[13]
In the 1886 case
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
Legislation in the United States
Federal statutes that refer to "persons" generally include both natural and juridical ones, unless a different definition is given. This general rule of interpretation is specified in Title 1, section 1 of the U.S. Code,[18] known as the Dictionary Act, 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 may enter contracts,[19] sue and be sued,[20] and be held liable under both civil and criminal law.[citation needed] Because the corporation is legally considered the "person", individual shareholders are not legally responsible for the corporation's debts and damages.[21] 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. [citation needed]
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 rights.
Corporations as juridical persons have always been able to perform commercial activities, similar to a person acting as a sole proprietor, such as entering into a contract or owning property. Therefore, corporations have always had a "juridical personality" for the purposes of conducting business while shielding individual shareholders from personal liability (i.e. protecting personal assets which were not invested in the corporation).
Corporate political spending
A central point of debate in recent years has been what role corporate money plays and should play in democratic politics. This is part of the larger debate on campaign finance reform and the role which money may play in politics.
In the United States, legal milestones in this debate include:
- Tillman Act of 1907, banned corporate political contributions to national campaigns.
- Federal Election Campaign Act of 1971, campaign financing legislation.
- 1974 Amendments to Federal Election Campaign Act provided for first comprehensive system of regulation, including limitations on the size of contributions and expenditures and prohibitions on certain entities from contributing or spending, disclosure, creation of the Federal Election Commission as a regulatory agency, and government funding of presidential campaigns.
- Buckley v. Valeo, 424 U.S. 1 (1976) upheld limits on campaign contributions, but held that spending money to influence elections is protected speech by the First Amendment.[24]
- First National Bank of Boston v. Bellotti (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 (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: "[c]orporate wealth can unfairly influence elections."
- Bipartisan Campaign Reform Act of 2002 (McCain–Feingold), banned corporate funding of issue advocacy adswhich mentioned candidates close to an election.
- McConnell v. Federal Election Commission(2003), substantially upheld McCain–Feingold.
- Federal Election Commission v. Wisconsin Right to Life, Inc.(2007) weakened McCain–Feingold, but upheld core of McConnell.
- Citizens United v. Federal Election Commission, 558 U.S. 844 (2010): the Supreme Court of the United States held that corporate funding of independent broadcasts of films about political subjects when there is an upcoming election cannot be limited under the First Amendment, overruling Austin (1990) and partly overruling McConnell (2003).[25]
- summary reversal of a decision by the Montana Supreme Courtholding that Citizens United did not preclude a Montana state law prohibiting corporate spending in elections.
The corporate personhood aspect of the campaign finance debate turns on Buckley v. Valeo (1976) and
See also
- Anti-corporate activism
- Corporate behaviour
- Corporate governance
- History of central banking in the United States
- Electoral reform in the United States
- History of rail transport
- Industrial Revolution
- Juridical person
- Legal fiction § Corporate personhood
- Nonprofit:
- Outline of corporate finance
- Persona designata
- The Corporation (film)
- University
- Supreme Court cases
- Text of Dartmouth College v. Woodward, 17 U.S. 518 (1819) is available from: Findlaw
- Text of Slaughter-House Cases, 83 U.S. 36 (1872) is available from: Findlaw
- Text of Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886) is available from: Findlaw Justia
- Text of Chicago, B&Q Railroad v. State of Iowa, 94 U.S. 155 (1876) is available from: Findlaw
- Text of Peik v. Chicago & Northwestern Railway, 94 U.S. 164 (1876) is available from: Findlaw
- Text of Chicago, Milwaukee, & St. Paul Railroad v. Ackley, 94 U.S. 179 (1876) is available from: Findlaw
- Text of Wheeling Steel Corp. v. Glander, 337 U.S. 562 (1949) is available from: Findlaw
- Text of Yick Wo v. Hopkins, 118 U.S. 356 (1886) is available from: Findlaw
References
- ^ a b "When Did Companies Become People? Excavating The Legal Evolution". NPR. July 28, 2014.
- . Retrieved April 23, 2022.
- ^ a b c Blair, Margaret (January 1, 2013). "Corporate Personhood and the Corporate Persona". University of Illinois Law Review. 2013: 785.
- ^ "Birds to holy rivers: A list of everything India considers 'legal persons'", Quartz, September 2019.
- theatlantic.com
- ^ "Burwell v. Hobby Lobby Stores, Inc". Google Scholar. Retrieved January 26, 2018.
- ^ "United States of America, Plaintiff-appellant, v. S. Steve Sourapas and Crest Beverage Company, Defendants-appellees". Cases.justia.com. Retrieved January 19, 2011.
- US Department of Justice. January 15, 2020. Retrieved December 4, 2020.
Corporations and organizations also do not have any Privacy Act rights.
- ^ "Resolutions in Support". Movetoamend.org.
- ^ Citizens United v. Federal Election Commission Opinion of the Court (2010)
- ^ Citizens United v. Federal Election Commission Concurrence & Dissent In Part (John Paul Stevens) (2010)
- ^ "Does "We the People" Include Corporations?". www.americanbar.org. Retrieved October 7, 2022.
- ^ Providence Bank v. Billings, 29 U.S. 514 (1830).
- ISBN 978-0-415-94342-0.
- ^ Hartman, Thom (2002). Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights. New York: St. Martin's Press.
- ^ 118 U.S. 394 (1886) – Official court Syllabus in the United States Reports
- ^ Pembina Consolidated Silver Mining Co. v. Pennsylvania, 125 U.S. 394 (1886).
- ^ "United States Code: Title 1,1. Words denoting number, gender, and so forth | LII / Legal Information Institute". .law.cornell.edu. April 7, 2010. Retrieved January 19, 2011.
- ^ Torres-Spelliscy, Ciara (October 11, 2017). "Does "We the People" Include Corporations?". American Bar Association. Retrieved March 28, 2024.
- ^ School, Purdue Global Law (January 6, 2023). "Corporate Personhood: What It Means and How It Has Evolved". Purdue Global Law School. Retrieved March 28, 2024.
- ^ Winkler, Adam (February 26, 2022). "Corporate Person-hood and Constitutional Rights for Corporations". New England Law Review. Retrieved March 28, 2024.
- ^ Ralph Nader and Robert Weissman. Letter to the Editor: Ralph Nader on Scalia's "originalism". Harvard Law Record, Published: Thursday, November 13, 2008, Updated: Tuesday, September 29, 2009.
- ^ United States Supreme Court (April 6, 1978). "FIRST NATIONAL BANK OF BOSTON v. BELLOTTI". Findlaw. Retrieved September 4, 2020.
- ^ "Buckley v. Valeo, 424 U.S. 1 (1976)". Justia Law. Retrieved July 20, 2018.
- ^ "Citizens United v. Federal Election Comm'n, 558 U.S. 310 (2010)". Justia Law. Retrieved July 20, 2018.
- ^ "Buckley v. Valeo". Find Law. Retrieved December 6, 2019.
- ^ "Citizens United v. Federal Election Commission". Find Law. Retrieved December 6, 2019.
Further reading
- Friedrichs, David O. (2009). "Corporate Personhood and Corporate Decision Making". Trusted Criminals: White Collar Crime in Contemporary Society. Cengage Learning. ISBN 978-0-495-60082-4.
- Gore, Al (2007). The Assault on Reason, New York: The Penguin Press. ISBN 978-1-59420-122-6
- Hamilton, W. H. (1938). "The Path of Due Process of Law". Ethics. 48 (3): 269–96. S2CID 143498111.
- Hartmann, Thom (2010). Unequal Protection: How Corporations Became ""People"" – and How You Can Fight Back. Berrett-Koehler Publishers. ISBN 978-1-60509-559-2.
- 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.
- Laufer, William S. (2008). "Recognizing Pershonhood". Corporate Bodies and Guilty Minds: The Failure of Corporate Criminal Liability. University of Chicago Press. ISBN 978-0-226-47041-2.
- Magnuson, Joel (2008). Mindful economics: how the U.S. economy works, why it matters, and how it could be different. Seven Stories Press. pp. 71–73. ISBN 978-1-58322-847-0.
- McCurdy, C. W. (1975). "Justice Field and the Jurisprudence of Government-Business Relations: Some Parameters of Laissez-Faire Constitutionalism, 1863–1897". The Journal of American History. 61 (4): 970–1005. JSTOR 1890641.
- McLaughlin, A. C. (1940). "The Court, the Corporation, and Conkling". The American Historical Review. 46 (1): 45–63. JSTOR 1839788.
- Mendelson, W. (1970). "Hugo Black and Judicial Discretion". Political Science Quarterly. 85 (1): 17–39. JSTOR 2147556.
- Phillips, Peter; et al., eds. (2004). "Corporate Personhood Challenged". Censored 2005: The Top 25 Censored Stories. Seven Stories Press. ISBN 978-1-58322-655-1.
- Ritz, Dean (2007). "Can Corporate Personhood Be Socially Responsible?". In May, Steve Kent; et al. (eds.). The debate over corporate social responsibility. Oxford University Press. ISBN 978-0-19-517882-1.
- Russell, J. F. S. (1955). "The Railroads in the "Conspiracy Theory" of the Fourteenth Amendment". The Mississippi Valley Historical Review. 41 (4): 601–622. JSTOR 1889179. — See also Jack Beatty, Age of Bettayal (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.
- Wiist, William H. (2010). "Introduction – Corporate Personhood Ushers in the Gilded Age". The bottom line or public health: tactics corporations use to influence health and health policy and what we can do to counter them. Oxford University Press. ISBN 978-0-19-537563-3.
- Torres-Spelliscy, Ciara (2013). "Taking Opt-In Rights Seriously: What Knox v. SEIU Could Mean for Post-Citizens United Shareholder Rights". Montana Law Review. 74 (1): 101. SSRN 2225851.