The Green Papers Commentary
 

YES, IT IS PERSONAL! ;-)
Notes on the status of Corporations
as legal Persons in the USA

Sunday, October 23, 2011

by Richard E. Berg-Andersson
TheGreenPapers.com Staff

Back on 17 September 2011 (interestingly, the 224th Anniversary of the official adoption of the original text of the United States Constitution by the Convention in Philadelphia), a group of protestors began gathering, and staying overnight, in a public space (though it is privately owned) located in the Financial District of lower Manhattan, New York City known as Zuccotti Park. The movement made most public by these protestors- among whose originally stated grievances has been 'Economic Inequality' and 'Corporate Greed'- has come to be known by the sobriquet 'Occupy Wall Street' (which was used as a "hash tag" in social media to help organize the original "occupation"); while it took the better part of a week, the mainstream media began taking more and more note of the movement and- seemingly in lockstep with such media coverage (whether positive or negative about the protest itself)- the 'Occupy Wall Street' "phenomenon" (for lack of a better term right now, at a point in time where it is still but a little over a month after its initial appearance, literally, on the streets of New York) has swept across much of the country (certainly making its mark in many urban centers of the United States) as well as around the globe.

There is certainly no little humor among the many signs carried by participants in the movement. One that, in particular, happened to catch my eye (and gave me quite a chuckle, truth be told) while I was watching coverage of events in and around Zuccotti Park on the local television news (just a reminder: I live in Northern New Jersey and the local TV news here comes out of New York City) was one which read 'I refuse to believe that corporations are people until Texas executes one'... besides seeing this as being a clear "shot" at Governor Rick Perry (R-Texas), one of the current contenders for the 2012 Republican Presidential Nomination (the contest for which is, obviously, one of the ongoing subjects covered by this very website), I was also forced to think about the wording on the sign itself:

I refuse to believe that corporations are people...

Well... corporations are- assuredly- not "people" (though, of course, people own them and direct their activities, for good or for ill)... but they are legally Persons... and, rather obviously, many in the 'Occupy Wall Street' movement in particular- as well as many others who are, politically, left of center to Left in general, although not directly associated with the movement itself- appear to be strongly opposed to just such a premise which itself has recently come to be seen as controversial.

The time will soon likely come when I will have to write about the potential effect (or not) of 'Occupy Wall Street' on the Democratic Party as it moves closer and closer to its own National Convention next year (just as I will also likely soon have to deal with the potential effect [or not] of the so-called [and slightly older] 'Tea Party' movement- elements of which are also, albeit for at least somewhat different reasons [and, in many cases, proposing different solutions to perceived problems], not all that enamored with the workings of the American Financial System- on the Republican Party soon to begin seriously choosing its own candidate to [or so it, right now, appears-- absent a serious contest for the next Democratic Presidential Nomination] challenge President Barack Obama come the Presidential Election in November 2012).

Here, though, I thought I might try my own hand at explaining just why those business enterprises we call corporations are, indeed, considered to be "persons" under the Law here in the United States of America, along with at least some of the legal and constitutional ramifications of just such a premise.

The Origins of the Controversy

It all goes back to a case that came before the U.S. Supreme Court, one known as Santa Clara County v. Southern Pacific Railroad (118 U.S. 394 [1886]):

The facts of the Santa Clara case are themselves generally long forgotten but, in brief, California had adopted a new Constitution in 1879 (its second and the one still, as of this typing, in general force in that State [albeit "as (subsequently) amended", of course!]) which- as originally ratified- included the following in Section 4 of its Article XIII (which dealt with Revenue and Taxation):

A mortgage, deed of trust, contract, or other obligation by which a debt is secured, shall, for the purposes of assessment and taxation, be deemed and treated as an interest in the property affected thereby. Except as to railroad and other quasi public corporations, in case of debt so secured, the value of the property affected by such mortgage, deed of trust, contract or obligation, less the value of such security, shall be assessed and taxed to the owner of the property, and the value of such security shall be assessed and taxed to the owner thereof, in the county, city or district in which the property affected thereby is situate.

Simply put: a "railroad or other quasi public corporation" (the latter term seems to principally have applied to the Civil Divisions [Counties and/or Municipalities] within the State) would, in California, not- unlike individuals- be allowed to deduct its debts in relation to its own overall assessment for tax purposes.

The relevant provision of the United States Constitution, however, is the latter portion of Section 1 of the document's 14th Amendment: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. This- in order to here put the preceding provision into its proper context- immediately following the emphatic, affirmative declaration (this being the first part of the Amendment's Section 1) that [a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

In an earlier case- Missouri v. Lewis (101 U.S. 22 [1880]) - the U.S. Supreme Court had already ruled that the clause of the 14th Amendment re: States being so prohibited from denying "equal protection of the laws" to "any person within its jurisdiction" meant, at its core, that no person or persons shall be denied the same protection of the laws which is enjoyed by other persons or other classes [of persons] in the same place under like circumstances.

The fundamental dispute in the Santa Clara case stemmed from railroads in the State refusing to pay any taxes based on an assessment (one, as I've said, not allowing railroads to deduct debts) as allowed by the original Section 4 of Article XIII of the California Constitution (though, it should be noted, they were willing to pay State and local taxes minus deducting their debts, like anyone else in California at the time could), at first claiming that this provision of the California Constitution conflicted with Federal law (a statute passed by Congress in 1866 [14 Stat. 292] dealing with land grants to railroads then engaged in building transcontinental rail lines [the famous "Golden Spike" at Promontory Point, Utah was still a few years in the future when this Federal statute was adopted]- among other things- gave railroads so granted lands an immunity from certain types of taxation by State and local governments as an incentive to capitalize and recapitalize investments in such transcontinental railroads [forget not, gentle reader, that such railroads were, at the time, considered most important to what we today would call "National Security" (the push- by the Federal Government- on private railroad corporations to build such lines first began as the Civil War was still being fought and the already admitted States of California and Oregon [both pro-Union "Free States"] were not yet contiguous to the other States of the American Union)]) and then, as legal cases- brought by the State of California and some of its Counties in order to collect what they claimed were back, unpaid taxes legally assessed- made their way through, first, the State courts and, then, the Federal courts, the railroads also took the position that they were being denied the equal protection of the laws of California in violation of the very text of Section 1 of the 14th Amendment of the Federal Constitution (in that- although corporations, yet still "persons" under the Law- they were being taxed by California and its Civil Divisions differently from real persons: that is, individuals).

As regarded this latter notion, Chief Justice Morrison R. Waite took the quite unusual step of issuing a statement by the Court during Oral Argument in the Santa Clara case (in other words: before the Court had even begun to deliberate upon the case, let alone decide it and issue a formal Opinion of the Court reflecting the legal reasoning behind such a decision) in which he declaimed: The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment 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.

Those who would fairly come to be described- over the course of American Political History since- as "Liberal Progressives" have been, more or less, fuming about this statement ever since and- whenever the issue of what is known- a legal Term of Art here- as the "Legal Personality" of Corporations (or, more simply, "Corporate Personhood") rears its (to such Liberal Progressives, ugliest) head in legal- where not also constitutional- controversies (as it surely has regarding a recent Supreme Court decision affirmatively declaring that corporations have the same Freedom of Speech that an individual might have [as a result of which legally limiting contributions to political campaigns by corporations has now become constitutionally problematic in the United States of America] or when the very concept of Corporate Personhood is cited as just plain unacceptable by many of those within the even more recent 'Occupy Wall Street' movement)- anathematic becomes the notion that just such a thing could now even survive into the 21st Century after having been so promulgated by a conservative Supreme Court of the so-called "Gilded Age" in American History (one with 8 of the 9 Justices at the time being good late 19th Century Republicans [the lone Democrat was Justice Stephen Field, although he had been appointed to the Nation's High Court by, arguably, the generally most highly regarded Republican U.S. President- Abraham Lincoln; and, to be most fair, the first Justice John Marshall Harlan (although a Republican) came to see his judicial role as emulating, at least somewhat, his independent immediate predecessor- Justice David Davis: indeed, Harlan would come to be known as 'the Great Commoner' (and be most remembered for his scathing Dissenting Opinions in, among other cases, Plessy v. Ferguson [which provided that "separate" public accommodations for Black and White persons could, nonetheless, yet be considered "equal", a position from which Harlan strongly demurred], as well as Pollock v. Farmer's Loan & Trust [in which the Supreme Court- excepting Harlan himself, obviously- declared any Federal Income Tax to be unconstitutional, necessitating the eventual adoption of the 16th Amendment to the U.S. Constitution to override this Supreme Court decision])]).

The singular irony in this is that, had it not been for an alert court reporter who included Waite's pronouncement in the head notes to the Opinion of the Court in Santa Clara itself, the statement (and, perhaps, the case itself) might not have even been generally known to History to begin with as the decision in the case (the aformentioned 'Great Commoner' Harlan actually penned the Opinion of the Court in Santa Clara [the decision in which was also unanimous I might here add]) was per se altogether uncontroversial: it merely turned on the fact that fences along the railway right-of-way put up by others had been wrongly included in Santa Clara County's assessment of the Southern Pacific and, thus, the final ruling in the case was that the railroad did not, indeed, have to pay taxes on what was not, in fact, its own property! (It would be in the case of California v. Pacific Railroad Co. [127 U.S. 1 (1888)]- another unanimous decision of the Court, by the way- that California's State and local taxes on interstate railroads would be declared unconstitutional, although not because a railroad's "corporate personhood" was here being violated but, rather, because such taxation would conflict with Congress' own plenary and constitutional power over Interstate Commerce [the Court ruled that Congress would have to give its specific consent to the several States in order for such taxation to be permitted]; Section 4 of Article XIII of the California Constitution, as quoted above, would eventually be repealed in any event [the current Section 4 of the aforementioned Article (one allowing the State, by law, to exempt property from local taxation under certain extraordinary circumstances) was adopted, as an Amendment, much later on and, therefore, has no direct, lineal, connection to the original Section 4 of that Article being discussed herein]).

The Controversy per se

There is- as part of what can only be described as mythos within the realm of the more liberal, as it were, interpretation of the history of American Jurisprudence- that a Corporation is only a "person" under Law (that is: holds Legal Personality no less than an individual) because a United States Supreme Court of more conservative political and constitutional bent in the late 19th Century made it so by judicial fiat. This mythos gains, and maintains, its power among much of the left of center to Left because it implies two things that many of those of such political bent here in America find most comforting:

1. That there was actually a time in American History when corporations were not legal "person"s (thus, there must have been something of a "golden age"- even under the U.S. Constitution itself- in which such business enterprises could not claim many, if not most, of the prerogatives they might claim for themselves today: a "golden age" that might, once again, become the Law of the Land as it surely once was, if only the political power of Corporations was, somehow, broken in favor of power to the People); and

2. That, because the Legal Personality of the business corporation in the United States was- so it is said by those accepting 1. above- the result of mere judicial grant, said grant might well, someday, be reversed by a United States Supreme Court made up of a majority of Justices more amenable to such a more "liberal"/"progressive" jurisprudential position (much in the way that the "separate, but equal" allowed by Plessy v. Ferguson in 1896 was overturned by that Brown v. Board of Education in 1954 and 1955 which mandated racial integration of public schools throughout the Nation [albeit but "with all deliberate speed"!]).

However, this jurisprudential mythos itself derives from what can only be described as an abject misreading of the results (one hesitates to use the word "decision" here, precisely because the whole thing turns on a pronouncement of the Chief Justice that was not, in and of itself, part and parcel of the decision on the case per se) of Santa Clara County v. Southern Pacific Railroad!

Yet read carefully Waite's own words as I have quoted them earlier in this piece: most notably, that "we are all of the opinion" (emphasis, obviously, my own here), indicating that the Court was unanimous in its so having read Section 1 of the 14th Amendment so as to require corporations to be treated as "persons" thereunder. Therefore, rather than being a mere obiter dictum (Latin for "said in passing"; freely translated: "oh, by the way" [;-)]- a statement by a jurist not necessarily germane to the reasoning behind his decision in the case), as it has tended to be treated by the statement's detractors, Chief Justice Waite's statement clearly reflected something that all 9 Justices had already mutually agreed upon before they even first appeared on the bench as Oral Argument in the Santa Clara case itself got underway.

In truth, Waite was merely stating that which was already accepted- as it still is to this very day!- within the greater American Legal System: contrary to the Liberal Progressive view that Waite (or, for that matter, the Court as a whole)- back in January 1886- had, in any way, "granted" Legal Personality to corporations, the very wording used by Waite suggests that Corporate Personhood had long been a given (hence Waite's not bothering to include any legal reasoning to back up his contention that corporations are, indeed, "persons" under Law-- but no such reasoning is there given precisely because none was at all, at the time, even necessary!) and all that was being done here was the exercising of basic Legal Hermeneutics ("rules" of Statutory Construction) to come to the obvious conclusion that- where the 14th Amendment specifically states that any person within its jurisdiction is constitutionally entitled to equal protection of the laws of a State of the American Union- "any person" means the same as "all persons": meaning, in turn, all legal persons (artificial as well as actual)- including, yes, corporations!

Rather than making new law, then, Chief Justice Waite was merely applying- again, on behalf of the entire Supreme Court of 1886- that which was, in fact, very old!

The very (old) concept of Corporate Personhood

[A]s all personal rights die with the person; and, as the necessary forms of investing a series of individuals, one after another, with the same identical rights, would be very inconvenient, if not impracticable; it has been found necessary, when it is for the advantage of the public to have any particular rights kept on foot and continued, to constitute artificial persons, who may maintain a perpetual succession, and enjoy a kind of legal immortality.

These artificial persons are called bodies politic, bodies corporate (corpora corporata), or corporations: of which there is a great variety subsisting for the advancement of religion, of learning, and of commerce; in order to preserve entire and forever those rights and immunities, which, if they were granted only to those individuals of which the body corporate is composed, would upon their death be utterly lost and extinct.--

Sir WILLIAM BLACKSTONE: Commentaries on the Laws of England [1768] (Book I, 467)

As one historian of English (so-called "Common") Law [Harold Potter (yes, 'Harry Potter' fans, it's his real name!) in An Historical Introduction to ENGLISH LAW and its Institutions) has- more than six decades ago now- so well put it: "The history of Personality, and particularly of Corporate Personality, is complex and confused"; yet, at the same time, the above quote from Blackstone's Commentaries (as his work is known for short) should, alone, show that the mere existence of Corporate Personhood under Law well preceded Chief Justice Waite's pronouncement as regarded the Santa Clara case and, considering that Blackstone's seminal work so strongly influenced the legal language known throughout the English colonies-becoming-American States during the late 18th Century, it should be no wonder that the notion of corporations-as-legal "persons" should be so unremarkable come the late 19th Century.

But the concept, in fact, long preceded the age of Blackstone himself! That is: "complex and confused" though it might be, Corporate Personhood does have a History-- and a fairly long one at that!

Before examining such historical aspects of the concept (which will come up later in this piece where I consider the legal relationship between corporations and government), however, one should well consider the very purposes of the concept: such purposes should be fairly obvious from Blackstone's own description of the corporation-as-legal "person" quoted above; yet allow me to here provide a hypothetical illustration:

Jane Doe is a widow, married but once and never re-married, in her 70s with only one son, in his 40s, named John: she owns a parcel of land and has all the rights and privileges (as well as responsibilities and obligations) that accrue to private ownership of what is known as Real Property. One day, she dies: upon her death, all her rights and privileges, responsibilities and obligations, die with her (including those accruing from her ownership of this piece of real estate). Fortunately for her son John, she- well before her passing- drew up a Last Will and Testament, one that is uncontested and in which her son inherits the land she once owned.

Note well the language within the preceding paragraph: Jane Doe "once owned" the land; she cannot be said to own it after her death (though something known as the Estate of Jane Doe holds legal possession of it until her will has been probated) Why? Because Jane Doe's 'Legal Personality' ended upon her death: put another way, once Jane Doe died, she ceased to be a legal "person". In addition, none of her own Legal Personality passes along to her only son (for John Doe has already long had his own Legal Personality: after all, he was also a legal "person" for some four decades while his mother was still alive!); note also that John Doe's Legal Personality has no direct connection even to his mother's land until- in sequence- she has passed away, left the land to him in her will and he has, thereby, legally inherited it (that is: once the Probate Court or equivalent in the relevant jurisdiction has been satisfied that the will is, indeed, genuine).

Further: let us say that John Doe's (mis)use of the land- but only after he has taken legal possession of it- adversely impacts upon a neighbor's use and enjoyment of his own property. The neighbor may, as a result, well have legal recourse against John; however, he certainly does not have any such legal recourse against John's late mother! Why? Because both her rights and responsibilities- as regards the land- ceased upon her death (if John has no money with which to pay damages the neighbor has won in an ensuing civil suit against John and Jane also happened to have left a large amount of money to, say, the local library system in her will, the neighbor cannot demand that the library turn over at least some of that money to the neighbor in satisfaction of the legal judgment the neighbor has won against John for it is John who is responsible for such misuse of land occurring after his mother had already died).

A corporation, however, maintains its Legal Personality even after the death of its founders or even subsequent directors until the corporation itself is legally liquidated in some form or fashion. If Jane Doe & Company owns land and Jane, as its Chairman of the Board, orders her son, John Doe, in his capacity as its Chief Executive Officer to do something (which he then has carried out by employees of the corporation) with it which thereafter causes adverse impact on others who might then, as a result, have legal recourse against the corporation and Jane Doe happens to die before the legal action is even filed in the courts by the plaintiffs, the corporation is still legally liable... precisely because the Legal Personality of Jane Doe & Co. outlives its own namesake!

As with an actual person (an individual human being), it is not so much about Rights and Privileges, when it comes to artificial legal persons such as corporations, as it is much more about concomitant Responsibility and Obligation in the exercise of said Rights and Privileges (after all: just as the guy who doesn't drive home drunk with his small children in the car is not all that newsworthy, little attention is paid to the oil company that doesn't spill oil as a result of an accident on an offshore oil-drilling rig!).

Indeed, it is much about the two essential divisions of what we Americans call Civil Law, in which a person (individual or corporation) might have a legal claim against another (as opposed to Criminal Law in which it is the society as a whole that has such a legal claim against another person [including a corporation!]): Contract and Tort (each essential because it can be well argued that all other branches of Civil Law- Property, Domestic Relations, Commercial Transactions, etc.- contain elements of one or the other, if not both).

A Tort is, simply defined, a violation of an involuntary obligation imposed by the ordinary norms of civil society: more specifically, an involuntary obligation upon a person to not unnecessarily harm another. It is, for example, expected that you won't, while walking down the street in your neighborhood, pick up a rock and, on a momentary whim, thereafter hurl it through a plate glass window located in the front wall of your neighbor's house. If you happen to do so, you have committed a "tort" and your neighbor can then sue you in court for monetary damages which is intended to mitigate the cost of his having to repair or replace his own front window through no fault of his own (such a lawsuit a 'live' legal case or controversy assuming you don't "'fess up" and fairly pay your neighbor before this matter ever reaches the courts, of course). Note that there exists no specific agreement with your neighbor that you would never do such a thing: for instance, you've never signed a legal document stating that you promise- whether forever or over a renewable term of years- to never ever throw a rock through his window. Instead, over time, Anglo-American Law (the English so-called 'Common Law' inherited from England by America as it might [or, for that matter, might not] have been altered by statute or other rule/regulation) has come to the conclusion that, should you throw a rock through your neighbor's window (besides any separate criminal liability you might, as a result, also incur- in which the State will prosecute you on behalf of the community for violation of a specific statute defining such action as a crime), you are civilly liable to reimburse your neighbor for the result of your own uncivil behavior and, if you don't do so on your own, the courts might then- upon application to the courts (that is: the filing of a lawsuit against you) by your neighbor (but your neighbor is required to be proactive, and within a relatively short period of time [re: that good ol' Statute of Limitations]- have to take all due legal cognizance of this incident in order that this dispute be fairly adjudicated.

Contract, on the other hand, involves voluntary obligations between two or more- yes- persons: it necessitates an offer by one or more persons to one or more others, an acceptance (one that is voluntary, consensual, in nature) by said other person[s] and an exchange of something of value (the accepter, effectively, hands the thing of value to the offeree) to specifically indicate said offer has been accepted: once these three elements- Offer, Acceptance and Exchange- have been exercised, a valid and legal contract has been entered into.

When I went to the local supermarket the other day to buy English Muffins, what was being offered in the way of same on the shelves in the supermarket's Bread aisle were several brands of English Muffins of various and sundry types: I chose (accepted) a package of 6 corn-based English Muffins costing US$4.19 and brought them up to the cash register along the Express (10 items or less!-- I had but one item in tow) lane. When it was my turn to do so, the cashier scanned the package of English Muffins: I then handed 4 one-dollar bills and two quarters to the cashier and she gave me one cent back in [ex?]change (New Jersey sales tax is 7 percent [which- re: $4.19- is 30 cents], so the total came to US$4.49). After this, I was allowed to take my package of English Muffins home with me (without fear of being either sued [civilly] or prosecuted [criminally] for theft)... all in all, the simplest of contracts had been consummated!

But note well, gentle reader, with whom (what person) my short-lived contract, in this instance, actually was: a chain supermarket; in other words: a corporation, not another individual human being such as myself. Here we come to the principal reason corporations are, in fact, legal persons...

only a person can enter into a valid contract (likewise: only a person can commit a tort).

Put most clearly (where not also most bluntly): corporations are persons so they can be sued in court (or even brought before the bar of criminal Justice) for breach of their responsibilities and obligations, whether voluntary or involuntary, no less than a real person- an actual human being... if this were not so, then why would one, say, even bother hiring a moving company to move, among other things, one's late great-grandmother's precious china cabinet to a new residence? If the china cabinet is damaged or destroyed during the move (any liability of the moving company, however, defined by the contract with it one happens to sign, though [always read that proverbial "fine print" before signing!]), one might well have a legal case against the moving company for all due recompense... but only if the moving company is no less a person than one's own self!

To here again quote from that same Harold Potter I had quoted from earlier: "Let it be realized that the rights and obligations [of corporations] are treated as if they were enforceable by an ordinary human being against an ordinary human being".

Nonetheless...

even those Liberal Progressives who have not been attempting to tear down the very notion of Corporate Personhood pretty much ever since Chief Justice Waite issued his pronunciamento re: the Santa Clara case have had their own issues with corporations gaining the same Equal Protection of the Laws as individuals by virtue of the relevant clause in the 14th Amendment to the United States Constitution. Such as these tend to pick up on an argument contraposed to that of Waite's statement on the subject and enunciated most forcefully by Justice Hugo Black- one of FDR's many appointees to the Nation's Highest Court- that [t]he history of the [14th A]mendment proves that the people were told that its purpose was to protect weak and helpless human beings and were not told that it was intended to remove corporations in any fashion from the control of state governments (this in a Dissenting Opinion re: Connecticut General Life Insurance Co. v. Johnson [303 U.S. 77 (1938)] (Black's own statement, by the way, immediately following a rather back-handed assessment that the Santa Clara case had decided for the first time that the word 'person' in the amendment did in some instances include corporations... "in some instances"??!!... but we'll come back to this soon enough in this, admittedly, rather long piece).

Black's words above have been cited, ever since, as an alternative- that is: Liberal Progressive- jurisprudential view to that expressed in Waite's pronouncement more than a half century earlier... yet, the very problem with Black's words is that they are altogether inaccurate: for, to start with, Waite never contended- in his statement-that corporations were, somehow, exempt from governmental oversight, even oversight by State government!

All Waite (again, speaking on behalf of a unanimous Supreme Court at the time) noted, in his pronouncement, was that whatever governmental restrictions might be placed on corporations by State law could not be inherently different from those placed on ordinary individuals-- that is: if corporations were, indeed, "persons" within the meaning of the 14th Amendment and, thereby, entitled to Equal Protection under same (and Waite was certainly stating that corporations were just that: "persons" within the meaning of the 14th Amendment [and I'll come back to this shortly, too]).

Let's begin by examining Black's contention that Waite's statement intended to remove corporations in any fashion from the control of state governments:

The history of governmental oversight over corporations is only a bit less "complex and confused" than the history of Corporate Personhood itself and legal historians, to this day, still argue over whether the corporation (as a concept: a collective business entity created by private persons which thereby becomes, on its own, a "person" apart from its own owners) preceded formal incorporation- by the Crown- of same or not. Nevertheless, by the late Medieval into early Modern period of English history, the Crown had already taken it upon itself to legally incorporate such business entities (for even an artificial person needed some official record of its "birth" [or, perhaps, its "baptism"? ;-)] no less than an actual human being might so need) and, as part of said process, issue a charter spelling out- as specifically as might be practicable- the rights and privileges, as well as the responsibilities and obligations, of the corporation so formed: such a charter including how the corporation would be governed, who would direct it, how were the inevitable vacancies in its directorate to be filled, etc.

Sound familiar? Looks much like what would be found within a written Constitution of government, doesn't it? (that is: excepting that governments have Powers, not Rights and Privileges; and Duties, not Responsibilities and Obligations)... and this is not at all an accident!...

for, indeed, there was no distinction made- in English 'Common' Law at this time- between corporations formed for business purposes and corporations set up for local governance (that which we today would call a 'Municipal Corporation', governed by a city [or equivalent: borough, town, village] charter): in the 15th and 16th centuries, the Crown would charter a Borough (that which we here in America today would generically call a 'city'- if large enough- or 'village' [whether or not that might be its actual official designation under Law]) no differently than it would a corporation run by, say, a group of tea salesmen. Further, the Crown- throughout the period leading up to American Independence- generally operated under a working theory that "what the King might grant, the King may yet take away": in fact, it was the Crown (by the 18th Century, no longer meaning the King [or Queen] acting alone [an Absolute Monarchy] but, rather, "King-in-Parliament" [a Constitutional Monarchy])- having granted such corporate charters creating the several American colonies (eventually becoming- in most cases, as it turned out- Royal Provinces under a Crown-[rather than a popularly-elected or proprietor-]appointed Governor) and operating under this very theory- that produced those inevitable tensions between colony overseas and Home Government which would provide one of the principal causes of the American Revolution itself!

Once independent, the States (each a successor- directly or indirectly- to a Crown-chartered colony [thus, the very concept of a State of the American Union has its historical origin in corporate charters!]) inherited King-in-Parliament's power to incorporate business entities (on the theory that each State, in and of itself, had taken upon itself the very powers of the British Parliament [as I have often opined on this website: it is the State legislature- not Congress- that, at least domestically, most mirrors Parliament (here following turn of the last century legal historian Hannis Taylor)]), authority they maintained even under the United States Constitution. Meanwhile, fear of corporate power is as old as the American Republic-- the chief difference between then and now being that, in the immediate wake of the American Revolution, corporations (so being chartered by government) were seen as, effectively, a veritable arm of government (keep in mind that the tea back then-so recently thrown overboard during the Boston Tea Party that gives its name to the so-called "tea party" movement today belonged to the British East India Company but was being protected by the British Crown [for it was King-in-Parliament that (over?)reacted by closing the port of Boston and restricting local governance in Massachusetts])... by contrast: whereas those who most feared corporations in the early Federal Period tended to see corporations as the mere tools of potentially "tyrannical" (as the late Patriot cause had used that term) government, those who most fear corporations today tend to see government as being under the thumb of the corporations...

in other words: while those who nowadays most fear the power of corporations see an insidious- where not also nefarious- Imperium in imperio (a "State within a state") able to, thereby, function outside of real governmental limitation (echoes of which are clearly seen in, for instance, Justice Black's claim that Chief Justice Waite's pronouncement effectively remove[s] corporations... from the control of state governments), during the early history of the United States of America the corporation was the more viewed (by those who most feared corporate influence) as an instrument of the Imperium itself. The very political division of the nascent American Nation into "cosmopolitan" (the roots of what would become the Federalist Party of John Adams and Alexander Hamilton) and "localist" (that which would become the "old" Republican Party of Thomas Jefferson and James Madison)- as postulated by the historian Jackson Turner Main- has a clear connection to this fear: Thomas Jefferson loathed the corporation; Alexander Hamilton, by contrast, embraced it!

But corporations- if, indeed, so evil as those who most fear them have opined- were (and are), in terms of economic growth over a vast continent, far more often than not, the proverbial "necessary evil": for it would be telegraph companies (eventually unified into a 'Western Union') and telephone companies (which, by the time of my own childhood, had become "the Telephone Company"!) that would- among many other such examples in many other industries- bring the wonders of more and more fantastic modern technology to the general American public. Today, if an industrious/entrepreneurial engineer wishes to make an improved version of a smart phone in his/her garage or apartment, that might be all well and good-- but he/she had better incorporate (unless he/she wishes to license this to an already existing corporation) and begin to develop a business of scale if said engineer also wishes to produce and promote such an improved device to as many people as might be necessary to generate a profit in return (I am here assuming, of course, that the engineer in question would very much like to, if possible, be paid!)...

the town or village blacksmith might well have been able to make and maintain wheels for the buggies and carriages of his 19th century neighbors... but it would take a corporation to produce thousands upon thousands of rubber tires for the many motor vehicles (let alone the motor vehicles themselves) of the 20th, on into the 21st, centuries!

Nonetheless, such corporations as came to exist in the United States were always chartered by State government and, in addition and as a result, were ever subject to governmental oversight and, if necessary, regulation: where a corporation here in America has been able to engage in all undue excess, it has largely been due to the State of the American Union so failing (whether by mistake or design) to so regulate (leaving the Federal Government to have to step in where such failure to regulate might have an adverse impact upon Interstate Commerce [under a power which was granted to Congress in Article I, Section 8 of the Federal Constitution]-- for example: it was the Feds who were left to break up the monopoly created by the first John Davison Rockefeller and known as 'Standard Oil'; likewise, it would be Feds who would- later- break up 'the Telephone Company': the original AT&T cartel-- that is, "Ma Bell" herself!)

Point here, though: besides Chief Justice Waite's pronouncement, back in 1886 re: the Santa Clara case, not granting Corporate Personhood but, rather, taking all due judicial notice of Legal Personality corporations had already long had under Anglo-American Law, Waite's statement- despite Justice Black's later opinion of it- did not a thing as regarded unmooring business corporations- in their very capacity as "persons" under Law- from state governmental oversight and/or regulation. Where States so failed to oversee or regulate (and, in addition, the Feds did the same insofar as Interstate Commerce- or even International Relations- might have been a concern), it was (and, indeed, still is) a political failure and not at all a constitutional one!

Corporations and Equal Protection

Now, allow me to here return to the first portion of Justice Black's altogether broad statement, where he claims that [t]he history of the [14th A]mendment proves that the people were told that its purpose was to protect weak and helpless human beings.

To truly understand the 14th Amendment in general, let alone its Equal Protection Clause in particular, one has to go back to the darkest days of the Antebellum Period in American History as those proverbial "storm clouds" which would soon produce the American Civil War were gathering apace:

It was an era during which- in the (in?)famous case, before the U.S. Supreme Court, of Dred Scott v. Sandford [19 Howard (60 U.S.) 393 (1857)]- the Chief Justice of the United States himself- one Roger B. Taney (pronounced 'TAW-ny')- could write the following as the Opinion of the Court:

The question is simply this: Can a negro, whose ancestors were imported into this country, and sold as slaves, become a member of the political community formed and brought into existence by the Constitution of the United States, and as such become entitled to all the rights, privileges and immunities, guarantied by that instrument to the citizen?... [t]he words "People of the United States" and "citizens" are synonymous terms, and mean the same thing. They both describe the political body who, according to our republican institutions, form the sovereignty, and who hold the power and conduct the Government through their representatives... Dred Scott is not citizen... within the meaning of the Constitution of the United States because no State can, by any act or law of its own, passed since the adoption of the Constitution, introduce a new member into the political community created by the Constitution of the United States. It cannot make him a member of this community by making him a member of its own. And for the same reason it cannot introduce any person, or description of persons, who were not intended to be embraced in this new political family, which the Constitution brought into existence, but were intended to be excluded from it [thus, Dred Scott- a slave of a master in Missouri brought into a State (Illinois) in which slavery is illegal- did not simply, by virtue of the fact that, in Illinois, African-Americans could not be so enslaved, thereby himself have become freed from slavery although subsequently having been brought back to Missouri by his master]

While the Dred Scott decision itself was, at the time, quite controversial (it certainly fueled the determination of those seeking to abolish slavery throughout the United States [as the decision also made it clear that this would not so easily be achieved on a State-by-State basis), it, sadly, reflected a rather broad spectrum of contemporaneous American Constitutional Theory on both the State and Federal level. In the same year in which Dred Scott was decided, Oregon- back then a Territory seeking Statehood- had adopted the following provisions in its proposed State Constitution:

No free negro or mulatto, not residing in this State at the time of the adoption of this Constitution, shall come, reside or be within this State or hold any real estate, or make any contracts, or maintain any suit therein [opening clause: original Article I, Section 36: Oregon Constitution (1857)];

No negro, Chinaman or mulatto shall have the right of suffrage [original Article II, Section 6: Oregon Constitution (1857)]

[NOTE: Both of these provisions were formally excised from the Oregon Constitution in the 1920s: the first was specifically repealed by vote of the People at the General Election in November, 1926; the second was voided (on grounds of it having been mooted by subsequent Amendment to the Federal Constitution plus its repeal being well within the spirit of that which the People themselves had already so recently expressed at the ballot) in July, 1927. It is interesting to note that his victory in the Oregon Democratic Presidential Primary in late May 2008, arguably, did much to "seal the deal" as regards Barack Obama winning the Democratic Presidential Nomination and, ultimately the Presidency himself; yet, Obama himself- a "mulatto", as it would have been at the time defined- would, a century and a half earlier, not have been legally permitted to vote, own land or bring a legal case in court in that very State!]

Like the Dred Scott decision itself, the above-quoted provisions in Oregon's Constitution caused no little controversy at the time, but those who were most vehemently opposed (where not also deeply offended) by them seemed a political minority. Their inclusion in that State's frame of government might have somewhat delayed, but did not at all prevent, Oregon's Admission as a State to the Union (in February 1859): indeed, a Congressman from Georgia- one Alexander Hamilton Stephens (who would himself, soon enough, become Vice-President of something called 'the Confederate States of America')- pointed out, during debate on the floor of the U.S. House of Representatives, that even the "Free Stater" 'Topeka' Constitution of the then-still proposed State of Kansas contained a provision not all that unlike Oregon's Article II, Section 6!

[Indeed: while Section 6 of the 'Topeka' Constitution's Article I stated, emphatically, that [t]here shall be no slavery in this State, nor involuntary servitude, unless for punishment of crime, the same document's Article II, Section 2 restricted the vote to [e]very white male person, and every civilized male Indian who has adopted the habits of the white man, of the age of twenty-one years and upwards, who shall at the time of offering to vote a citizen of the United States... note well that last clause in light of Dred Scott declaring that a "negro" descended from slaves could never be a U.S. Citizen... even in the original political vision for "Free Soil" Kansas, and on so many levels, African-Americans needed not apply!]

It was to specifically address these issues in the aftermath of the American Civil War that the so-called "Civil War Amendments" were first adopted: these being the 13th (which outlawed both slavery and involuntary servitude [except as a punishment upon criminal conviction]), the 14th (which is the very subject of much of this piece, both above and below this parenthetical statement) and the 15th (which outlawed restrictions on voting based on race, color, or previous condition of servitude).

We have to be most careful, in our own day, to well understand that these Amendments were not adopted in a spirit of the fullest Racial Tolerance but, rather, were- far more- practical responses to the following two premises which appear to have gained the unspoken consent of a majority of the (predominantly White) population of the Union States lately victorious in the Civil War in the immediate aftermath of that conflict:

1. that the recently assassinated President Abraham Lincoln had, in the end, been right when he had stated- as a Republican candidate for the U.S. Senate from Illinois back in 1858- that "[a] house divided against itself cannot stand... this government cannot endure, permanently half slave and half free... the house... will cease to be divided. It will become all one thing or all the other" and that the one thing "the house" should be was all Free by Law;

2. that the only practical thing to do once African-American slaves had so gained their freedom was to then legally make them citizens equal to all other citizens (thereby specifically, as well as completely, undoing the practical effects of the Dred Scott decision [in which Dred Scott himself had been denied such equal citizenship]).

But this did not mean that most White persons, even in the anti-slavery North now able to so impose its constitutional will upon an ever-reluctant (where also, if the formation of the original Ku Klux Klan [among other similar organizations] be any fair indication, still-rather truculent) South, thought that Blacks were socioculturally equal; thus, the adoption of these "Civil War Amendments" to the Federal Constitution did not necessarily mean that White Northerners so suddenly came to think that Black kids should necessarily attend the same schools- or even colleges and universities- as their own children (indeed, racial segregation [de facto, where not de jure] in public schools attended many a School District in the North well into the 20th Century [even here in my own State of New Jersey])... even his own use of the words "weak" and "helpless" to describe those Justice Hugo Black- writing nearly three-quarters of a century after the Civil War ended- so honestly, and earnestly, thought were the main beneficiaries of the protections offered by the 14th Amendment may well be fraught with coarser meaning when one considers that, before he was elevated to the Nation's Highest Court, Black himself had twice been elected a United States Senator from the then-still well-racially segregated State of Alabama!

In any event, at the very time the "Civil War Amendments" themselves were each first proposed, Race was very much a political minefield (even as Slavery itself was finally- and most fully- abolished): there were more than a few members of each house of Congress who, while supportive of the effort to treat Blacks as legally equal to Whites, did not at all wish to be seen as pushing for social equality between the races (indeed, the very reason there needed to even be a Civil Rights Movement during those years which, more or less, happened to- by coincidence- be the same as those of my own childhood, itself a good century [give or take] after the Civil War was that said social equality had not been at all well addressed by the generation that had lived through, and immediately after, that conflict!). Thus, the language within the "Civil War Amendments" is carefully crafted to achieve the intended results without, as we would say today, so overtly "playing the race card".

As a result, Justice Black's complaint that the people were told that [the 14th Amendment's] purpose was to protect weak and helpless human beings is, in the end, wholly irrelevant: for it is interesting to note that, nowhere in the three "Civil War Amendment"s do the words "negro" or "colored" or "person of African descent" or the like appear; indeed, those very "weak and helpless human beings", onerous burdens on whom these Amendments were intended to lift from same, are nowhere specifically granted such relief! (The closest one sees- within these Amendments- to specific relief for African-Americans [especially those who were- after the Civil War- now former slaves] is the almost passing reference to "race" and "color" in the 15th Amendment, one which clearly cannot avoid doing so if equal voting rights with White males is to be conferred, constitutionally, on Black males [but note that "race" might also include, among others, Asian-Americans; and "color" could also refer to one with relatively darker skin originally from, say, the Indian Subcontinent or even peoples from Southern Europe once upon a time politely described as "swarthy"-- the terms used in the Amendment are, therefore, not- in and of themselves- specific to African-Americans!]).

In the main, the mere intentions (whatever these might fairly be considered to be) of a law- even where said law might be contained in a Constitution- do not at all trump the most basic premise of Legal Hermeneutics ("rules"- as they were- of Statutory Construction and Interpretation) that, first and foremost, a law really means what it actually says.

I have, in my Commentaries for this website, already often used what I (somewhat tongue-in-cheek) refer to as "the 'STOP' sign Test" to examine and illustrate how one goes about considering various and sundry aspects of a statute adopted by a legislative body, rule or regulation put forth by a governmental agency or even a provision in a Constitution (whether State or Federal-- or even in the Constitution of a country other than the United States of America!). For the 'STOP sign' laws in the many political jurisdictions in America are fairly straightforward: when one is operating a motor vehicle and comes to a 'STOP sign' (nowadays, defined as an octagonally-shaped sign with a red background bordered in white with the letter S T O P in white across its middle), one must bring one's motor vehicle to "a full and complete stop" before proceeding into, and through, the intersection so regulated (presumably, after having already made sure one can do so safely after having come to just such a full and complete stop!)

A so-called "rolling stop" (what we, in my own State, often jokingly refer to as a "Jersey stop": in which one taps the brake just long enough to cause the red tail-lights to come on without really stopping but, instead, continuing to go forward slowly) doesn't fulfill the requirements of the law and- even in the wee hours of the morn, with no other cars around- should a police officer observe you doing just such a thing, he can pull you over for "running a STOP sign"-- any subsequent protestations to him or her on your part notwithstanding!

Simply put: Full and complete stop means "full and complete stop"... nothing more but, assuredly, nothing less!

Likewise, the requirement in the 14th Amendment that a State not deny to any person within its jurisdiction the equal protection of the laws prohibits such denial, on a State's behalf, to any person- thus, all persons are so equally protected-- therefore, even a corporation as a legal "person" is so protected!

Yes, the provision that opens the 14th Amendment was primarily intended to grant citizenship to African-Americans (or, for that matter, any other ethnic or racial class or group outside of those considered 'White' at the time the Amendment was adopted)- and did so in clear and direct repeal of what Chief Justice Taney had earlier written in the Opinion of the Court in Dred Scott (no State can, on its own, enlarge the Nation's citizenship base, Mr. Taney?-- well, the Nation itself can and, in the 14th Amendment, in fact, does!) but the clause in question specifically refers to [a]ll persons born or naturalized in the United States, and subject to the jurisdiction thereof as citizens of the United States and of the State wherein they reside and not to African-Americans specifically (African-Americans, thereby, have legally been citizens of the United States and of the State wherein they reside since the 14th Amendment was ratified precisely because they have been, since, within the class of "All persons" no less than anyone else so "born or naturalized in the United States"!)

By the same token: a State is specifically enjoined, elsewhere in the 14th Amendment, from deny[ing] to any person within its jurisdiction the equal protection of the laws; note that the Amendment does not read "No African-American can be denied that Equal Protection of State Law hitherto only enjoyed by White people" even though such language would have accomplished the very thing that- or so Justice Black (and, following on Black's complaint, many Liberal Progressives in general) declaims- was the actual (the implication, within Black's own words, is that it might even have been the sole, not merely the principal) purpose of the Equal Protection Clause as it is actually worded.

Again, the very language of the Amendment's Equal Protection Clause extends its umbrella over corporations as legal persons for it does not at all exempt such legal persons as corporations are from its own provisions-- and this is all Chief Justice Waite was stating in his pronouncement re: the Santa Clara case.

Might what Waite proclaimed well have been seen as the proverbial Unintended Consequence, even an Unforeseen Circumstance, by the original drafters of the 14th Amendment's Equal Protection Clause? Perhaps... but Waite's application of longstanding Corporate Personhood to that clause is not, in and of itself, the least bit unreasonable as a legal/constitutional position!

In the end...

the issue fueling such as the 'Occupy Wall Street' movement is not the validity- or lack thereof- of Corporate Personhood per se...

rather, it is the abject abandonment of Responsibilities and Obligations by many of those who otherwise claim Rights and Privileges under such Corporate Personhood!

Doubtless, that which the 'Occupy Wall Street' movement most strongly, and strenuously, decries as "Corporate Greed" is, indeed, a nagging problem within the American Financial System that has been lumped into one amorphous mass under the convenient rubric "Wall Street". As a friend of mine (one with a background in the study of Economics) pointed out to me quite recently: "It used to be that one- far more often than not- invested in a company so long as it turned a profit; now people are selling their stock in a company because the profit over a given quarter or two was a mere 8 per cent instead of the 10 per cent they not only expected, but even- in their own minds- might have actually deserved!"

Now, that's Greed!

And, if the above, as seen by my friend, is rather widespread, the adverse effect on the Economy (not just here in America, but around the world, as anywhere from 1/5 to 1/4 of the world's wealth is American!) is altogether obvious (tens, if not hundreds, if not even thousands, lose their jobs-- or, at least, lose their hitherto enjoyed employment benefits, where not also have their wages and salaries reduced-- because a relative handful of stock traders each only made, say, US$800,000 instead of the US$1 million they were, somehow, led to expect aforehand!)

But this problem is not well solved by gutting the Financial System through denying Corporate Personhood!

The problem is solved best by holding the corporate "person" to the same standards as those we expect from the individual human being-- that is: the expectation that, in a civil society, a person (individual or corporate) will not unnecessarily harm another person (whether individual or corporate)...

again, corporations- like individuals- can be brought before the courts for committing Torts or breaching Contracts precisely because they are, legally, persons. (If they were not, the person so wronged would have to sue each director of the corporation- perhaps even each and every stockholder- individually; think of the time and expense for the poor shrimp-boater along the Gulf of Mexico if it were not BP itself, as a corporation, that was potentially liable for any damages caused by the oil spill last year but, rather, not only the directors of the company, but its shareholders [more to the point: think of all the billable hours for the attorney(s) the shrimp-boater would then have to hire!]: it would virtually be a modern American version of the underlying story behind Charles Dickens' Bleak House!)

And, if Law itself be currently inadequate to the task of so bringing them before the courts to answer for such actions, then new laws (so long as these be constitutional, mind you!) may well have to be adopted (and/or laws currently allowing them to so "get away with it" might then have to be repealed)...

and, if the lawmakers currently in office show little- or even no- interest in doing even this, then-- well--

just win the next election, damnit!!!

 


Commentary Home