Challenging Corporate Personhood

Do we really want to get big money out of politics? Most would say "yes," but how? Revoking the "personhood" status of corps could be one way to do it. It seems like whenever campaign finance rules are passed, a loophole or seven are found, and the situation ends up worse than before. We need to have the guts to stand up to these behemoths.

Multinational Monitor: What is corporate personhood?

Jan Edwards: It is corporations having rights in the constitution that are normally meant for human beings. Those rights include rights in the Bill of Rights, the Fourteenth Amendment, and civil rights laws.

MM: How did corporations gain these rights?

Edwards: The founding fathers of the United States were not interested in giving constitutional rights to corporations. In fact, they wanted to regulate corporations very tightly because they had had bad experiences with corporations during colonial times. The crown charter corporations like the East India Company and the Hudson Bay Company had been the rulers of America. So when the constitution was written, corporations were left out of the Constitution. Responsibility for corporate chartering was given to the states. State governance was closer to the people and would enable them to keep an eye on corporations.

In the eighteenth century, corporations had very few of the powers that we now associate with them. They did not have limited liability. They did not have an unlimited life span. They were chartered for a limited period of time, say 10 or 20 years, and for a specific public purpose, such as building a bridge. Often a charter would require that, after a certain amount of time, the bridge or road be turned over to the state or the town in which it was built. Corporations were viewed differently in early America. They were required to serve the public good.

But over time people forgot that corporations had been so powerful and that they needed to be strongly controlled. Also, corporations began to gain more power as the wealthy elite.

After the Civil War, Congress passed several constitutional amendments relating to slavery. The Thirteenth Amendment freed the slaves, the Fourteenth Amendment gave the newly freed male slaves equal protection and due process under law, and the Fifteenth Amendment gave voting rights to these same former black male slaves.

The Fourteenth Amendment used the word "person" in the body of the amendment. This caused some confusion about who "persons" were. Did women qualify? Or corporations? The Supreme Court responded by saying that the word "person" in the Fourteenth Amendment meant just black males.

That, however, wasn't the end of it. Corporations had a lot of money and a lot at stake, and they took case after case to court. In 1886, corporations gained a victory. Before the Supreme Court session to announce the decision in the case Santa Clara v. Southern Pacific Railroad, Chief Justice Waite said that the court wouldn't hear arguments on whether the Fourteenth Amendment clause on equal protection applied to corporations; they all believed that it did.

The case was decided on other grounds. But, the principle that corporations have Fourteenth Amendment rights was inserted by the Supreme Court reporter in a header in the published report of the case. A couple of years later, in the case Minneapolis & St. Louis Railroad v. Beckwith (1889), the Court cited the Santa Clara case as the precedent for corporations having due process and equal protection under the Fourteenth Amendment. With that, corporations became legal persons in the United States, and gained the ability to challenge in federal court regulatory actions at the state level.

Corporations had been looking for a way to control the process of state regulation and taxation. Now they were able to control it by having the federal government say you can't discriminate, when discrimination meant any rule that applied just to corporations, such as railroads. Of the Fourteenth Amendment cases brought before the Supreme Court between 1890 and 1910, 19 dealt with African Americans and 288 dealt with corporations. The corporations won more than 200 of these cases.

Federal regulatory agencies were also being created during this time. In 1893, corporations won a case called Noble v. Union River Logging, which gave them Fifth Amendment due process rights against the federal as well as state governments.

For the first 100 years or so of U.S. history, Supreme Court decisions regarding corporations were made under the artificial entity corporate theory. But from 1886 or 1889 on, the justices wrote their opinions in terms of personhood, and they considered corporations to be corporate persons.

MM: How does the history of "substantive due process" fit into the story?

Edwards: A 1905 case called Lochner v. New York established the doctrine of substantive due process. Lochner was about a New York state law limiting the hours that people could work in bakeries. Lochner said that the law violated "substantive due process" because it invalidated contracts the bakeries had with their workers. This case involved an individual, but the ruling was then extended to cover corporations. Lochner became shorthand for using the constitution to invalidate government regulation of the corporation. Until the mid-1930s, the court used this doctrine to invalidate, or to prevent states from enacting, economic regulations -- minimum wage, maximum hours and related issues -- usually under the due process clause of the Fourteenth Amendment.

In the thirties, the Court became a little bit more liberal and eventually overturned Lochner, shifting away from substantive due process.

MM: What is the lingering importance of corporate personhood?

Edwards: Corporate lawyers began to go through the Bill of Rights and claim more and more of these rights for corporations. The Fourth Amendment right against search and seizure, for example, is used to keep corporations like Enron from having to open up their books. Corporations' Fourth Amendment protections require OSHA [the Occupational Safety and Health Administration] to produce a warrant to check for safety regulations, which gives employers time to clean things up. It also requires the EPA to produce a warrant before checking for environmental infractions.

MM: What kind of First Amendment rights do corporations have?

Edwards: They have the right to spend unlimited amounts of money on overturning referenda, established by the Boston v. Belotti decision in 1976. Buckley v. Valeo, in 1977, said that political contributions, including financial contributions to candidates and parties, are equivalent to speech. This applies to both corporations and human persons.

Corporations have the right not to speak. This argument was used to overturn a law in Vermont requiring the labeling of bovine growth hormone, with the courts ruling that because the Food and Drug Administration has not required such labels on health grounds, corporations could not be required to label their products.

In many of the important cases establishing corporate personhood and corporate rights, the Supreme Court has not been unanimous. For example, Boston v. Belotti was a 5-4 decision, with Justices White, Brennan, Marshall and Rehnquist dissenting. Over the past 75 years, Justices Douglass, Brandeis and Black made some insightful dissents.

MM: Nike has recently been involved in a high-profile First Amendment case.

Edwards: In that case, a sweatshop activist accused Nike of lying about their use of sweatshop labor in a letter to the editor, and argued that this violated consumer protection laws barring false advertising. Nike's lawyers said that this was political speech, not advertising, and that in political speech, you can say whatever you want, true or not.

The California Supreme Court decided that this was not political speech. They did not decide that Nike did not have political speech rights, but that Nike was speaking because the company wanted to clear its name in order to sell more products.

This case is being appealed to the U.S. Supreme Court, and the Supreme Court is going to decide whether or not this particular speech of Nike is protected speech or not.

The ACLU [American Civil Liberties Union] is saying that Nike has a right to free speech. As I understand it, they feel that more speech is better and that they are protecting our right to hear as well as Nike's right to speak.

MM: In what other ways does corporate personhood affect concrete policy or government's ability to restrict corporate power?

Edwards: It's like a roadblock that needs to be removed before all sorts of other options to limit corporate power can be pursued. The fundamental issue is: Who makes the rules? Who governs the country? Do the corporations govern as people, or do the people govern? Are the corporations subservient to people or not? After corporate personhood is eliminated, we could begin to challenge many other sources of corporate power.

We could prohibit all political activity by corporations. We could stop all corporate political donations and corporate lobbying. We could inspect plants for environmental and health violations without a warrant or prior notice. We could revoke corporate charters by popular referendum. We could prohibit chain stores from doing business in our town, county or state, and the erection of cell towers. We could stop advertising for tobacco, guns and other dangerous products. We could levy differential taxes for corporations and restrict their size. We could require labeling for genetically modified foods.

This is just a short list of what we could do. We could go in a lot of places where we can't go now and don't even think to go because of constitutional restrictions. If you redefine who is a person, if you redefine what a corporation is in relation to We the People, then you open up a lot of avenues now blocked by this strange concept of a corporate half person entity that shapeshifts between public and private as suits it.

MM: What can people do about this?

Edwards: I'll tell you what our strategy is. We believe that a constitutional amendment is needed to clarify who is a person in the United States. All living, breathing human beings would be included, but no non-human beings.

I know a constitutional amendment is very difficult, but that is what we think is the proper way to change things -- in the constitution, not in the Supreme Court. At some point, the Supreme Court might hear a case and they could overturn corporate personhood. But we think that the question, "Should corporations have the rights of legal persons?" is a political question, a question for the people.

We're starting at the grassroots level. We're encouraging people to pass resolutions in their towns to create corporate personhood-free zones -- to build up strength at the grassroots level. Moving on from there, we hope to do a state-wide constitutional amendment, and once we get some of those we would go for the federal amendment. That sounds like a lot of work, but that is the proper way to do it, the democratic way.

Jan Edwards is a member of the Women's International League for Peace and Freedom "Challenge Corporate Power, Assert the People's Rights: Abolish Corporate Personhood" Leadership Team. She was the co-chair of the Redwood Coast Alliance for Democracy, which introduced the first ever successful resolution on corporate personhood to the Point Arena, California City Council in 2000. She also hosts a show on Mendocino Community Radio called "Corporations and Democracy."