the fiction of the corporation as a â€person†is one of the most damaging concessions to corporate hegemony that american jurisprudence had ever made.

it permits first amendment â€free speech†to be applied to advertising,

no matter how much against the public interest that advertising may be

and

it permits

â€free speech†to be applied to corporate lobbying of congressmen, aka bribery,

and â€free speech†to be applied to corporate efforts to mislead the public

thru pseudo-citizen, â€public interest†organizations,

aka â€astrorturf†organizations,

such as those created by the american tobacco companies.

nothing will improve american democracy more, and more rapidly,

than severely limiting corporate involvement in american politics,

including, i would add, the involvement of individuals who has lucked upon â€earned†or inherited corporate wealth.

Reminds me of Sesame Street. â€Which of these things is not like the other?â€

(A) and (B) have some urgency to them – â€necessary to preventâ€.

(C) is of such different character that I wonder about its genesis. â€You must out your source because they have revealed a secretâ€, not â€this is a dire emergencyâ€.

It is somewhat amusing that the legislative branch is willing to insist that journalists must disclose who has revealed a secret while the executive branch insists it has an all-encompassing right to insist that corporations not reveal that they have revealed secrets normally protected by law.

â€Trade secrets†could include technical descriptions of Teh Program, could it not? Run a story on it and expect to have to testify against your sources. Those sources would tend to dry up right quick, would they not?

Hmmm.

Bmaz – bang on, corporate law needs statutory reform that goes against the common law doctrines that have made corporations essentially unanswerable for their actions. The recent documentary The Corporation had the thesis that the law on corporate bodies has essentially required that corporations act in a sociopathic manner, without regard to the consequences its actions has on others, and in fact that its board of directors, as its â€directing mindâ€, is mandated by law not to have a â€conscienceâ€, is not even answerable to the shareholders, but only to act in the best interest of the corporation, which is invariably defined as maximizing profit.

I have heard this conversation before and read Hartmann and others, seen â€The Corporationâ€â€” I assume that this is fairly widespread knowledge by now (that â€corporate personhood†is a legal fiction enshrined in precedent perhaps them to be sociopaths unlike most air-breathers).

What, Bmaz, is corporate reform? Who and how would it be undertaken? As I understand it, every state has laws of incorporation more-or-less accepting the notions ruled hunky-dory by Federal authorities. I want very much to have this reform (no, I’d rather eliminate every last vestige of a money-making enterprise being equal to an air-breather unless or until they pay taxes just like one and die like one too)—but how do you unravel something this monsterous?

Ted Olsen wrote an op-ed in favor of the shield bill

Ted Olsen is a tool of the right, and this means the right sees no harm in this bill, and perhaps benefit.

If Ted Olsen orders vanilla, I’m taking the chocolate.

bmaz et al., I agree entirely. Corporate person-hood is the reason endlessly held up for why we can’t have effective campaign finance laws, because it wouldn’t be fair to dis-enfranchise the free speech rights of our well-heeled corporate-persons.

Unfortunately, not only are we NOT fixing all that is wrong with corporate law, we are exporting these problems via our â€free-trade†agreements, which default to lowest common denominators in terms of environmental restrictions on the corporate entity, workplace safety, wages, and benefits, etc. The world doesn’t need free trade, it needs fair trade. But it seems unlikely that we will get it, since our elected officials represent their campaign donors (corporations and their lobbyists) rather than the voting public (formerly known as constituents).

With Congress no longer representing the public interest, how likely are we to get real campaign finance reform, health care reform, or more open government. After all, we can’t have the public find out about how the DOD or any of the spy agencies spend their money, which companies are funded via our taxes, or precisely how certain companies aid and abet unconstitutional government conduct.

It is no longer possible for citizens to give their informed consent to our elected representatives, because far too much information is withheld from us. We need both corporate and government transparency, but I doubt we will see anything of the sort any time soon.

Phred – Have missed you. My World Series dreams are already down the crapper; yours perilously close. My condolences (Badgers too). Go Pack!

sojouner – So true. The only shareholders feeling the pain are the shareholders of the country, i.e. the common citizens and taxpayers. They are reaping all the pain, and very little of the benefit these days.

There have been statutory attempts to protect minority shareholders from oppression by the majority, and there are class action provisions, and (in theory)the SEC to protect the investors in public corporations, but corporations remain largely shielded from effective criminal law jurisdiction, given that they cannot be imprisoned, only fined or perhaps wound up, but like Enron, this only ends up punishing the employees, pensioners and creditors, the vast majority of which are often blameless. As well, shareholders are often prevented from exercising control because a minority can control the voting shares, which elect the Board of the Directors, which is where the action really takes place. A minority shareholder is often a mute, powerless, and unsecured creditor in corporate malfeasance cases. On a constructive note, we should remember that progressive causes can use corporate vehicles as well, and the concepts of the trust, limited liability and perpetual existence can be harnessed for good purposes too, as well as the need to encourage entrepreneurship and risk taking.

Sojourner – if a corporation is bankrupt, certain of its debts can sometimes be attached to the corporate directors, usually for unpaid source deductions and taxes, but generally these do not happen in big businesses, which provide director’s liability coverage – it is much more of a risk for the small businessman who get’s caught up in a cash crunch and is the company’s sole director.

As Bmaz notes, corporate risk is spread throughout the population while the cards of corporate ownership are held rather close to the chest. This is clearly a recipe for the relatively small club of owners to raid the public treasury without providing any public goods in return. And that is just as clearly what has been happening for quite some time. If the problem lies in ownership, then why not redefine who owns a corporation? It seems kind of ridiculous to claim that investment is the sole asset of a corporation, yet if the investors are declared to be the sole owners, then that is exactly what is being asserted. As soon as some of that investment is used to hire employees, the people who will actually carry out the mission of the corporation, then those employees become corporate assets. And as no â€person†(corporate or otherwise) owns another person, governance of those assets immediately fall upon the employees themselves. They should be considered as having ownership in the corporation and therefore entitled to participate in corporate governance.

A fundamental problem arises out of the failure to understand how deeply employees are involved in the success of the organization they work for. When shareholders alone delegate a board of directors to oversee the operation of the company, the interests of those employees are left out. Because the facile picture of employees as economic agents with no loyalty is so common, the employees are not given a role to play in the governance of the company. Yet they have an enormous stake in the success of the company; not so much to create dividends for the stockholders, but to make their lives worthwhile by participating in a venture that impacts society. The very ties that build employee loyalty toward the organization, the social structure that they fit into, are also the keys to recognizing that the interests of the employees are aligned with the interests of the stockholders. For the success of the organization is what guarantees continuing returns on the investment made by the stockholders. In addition, the employees are intimately knowledgeable about the workings of the company in a way that remote stockholders can never be. If they were given a significant role in the governance of the company, we would see much less of the current trend whereby the senior management of a large corporation raids it for their own personal gain, under the trusteeship of an unresponsive corporate board.

As useful as market analyses have been toward our understanding of economics, it is long past time to recognize that humans are much more complex than mere selfish agents of rational expectation. We are social beings by nature, and with the vast interdependence of modern society, we are also social beings by necessity. We need to understand ourselves better so that we can make our institutions work better. Money is solely a token for resources; it cannot be exchanged for social interaction, yet that social interaction is as basic a human need as food and shelter.

ROTL – I think it is going to take subtle shifts in all of the above. I don’t think alteration of the liability veil is the sole answer, nor do think accountancy and taxation alone is it either. It is going to take all those, and probably more. Inertia will not allow wholesale change in any one aspect anyway; that is why I think there needs to be a well thought out package of tweaks that effect a subtle shift toward the good.

Phred, I fully agree! The usury laws have been effectively negated through contractual items or legislatively revised for corporate wants, putting many people at the hands of some very unscrupulous entities.

I worked in the oil and gas exploration industry back in the 80s. What is going on now is something of a repeat from that time. There was too much money chasing around looking for an investment, and there were LOTS of oil and gas operators who were more than willing to use it. If you have never read it, a guy named Mark Singer wrote a fascinating book entitled â€Funny Money†about the rise and fall of Penn Square bank. Talk about loose lending practices and greed! The result was that several major banks folded or had to be taken over because of the lending practices of one small institution. Remarkably, the situation is virtually identical today but with different players.

qwerty – I can’t speak as to the Davis story; but even if true, that is certainly not the entirety of the genesis of corporate personage. There was a little case known as SANTA CLARA COUNTY v. SOUTHERN PAC. R. CO., 118 U.S. 394 (1886) that put the stamp on the concept.

Sojourner – It appears to still be on the books, but my quick search didn’t find any prosecutions under it. That is not to say that there are not any, I just didn’t see any; although, I would not be shocked if there were none, it is a bit oblique for a criminal prosecution.

so let’s pass a constitutional amendment that limits corporate entities to less than full personage

we could also declare that corporations are eligible for direct taxation by the federal government on separate schedule

and while we’re at it, we should ban all corporate political donations too

67 seats in the Senate folks, that’s what we need

and after that, we impeach scalia, roberts, thomas, and alito …

bmaz, thanks for bringing â€SANTA CLARA COUNTY v. SOUTHERN PAC. R. CO., 118 U.S. 394 (1886)†into this conversation.

Coincidentally, some kind soul made me aware for the first time of that case over at FDL yesterday, and I was finally able to identify a name to place the original blame on for the ascension of the Corporatist control over our nation.

I was gob-smacked to read:

In 1886, . . . in the case of Santa Clara County v. Southern Pacific Railroad Company, the U.S. Supreme Court decided that a private corporation is a person and entitled to the legal rights and protections the Constitutions affords to any person. Because the Constitution makes no mention of corporations, it is a fairly clear case of the Court’s taking it upon itself to rewrite the Constitution. Far more remarkable, however, is that the doctrine of corporate personhood, which subsequently became a cornerstone of corporate law, was introduced into this 1886 decision without argument. According to the official case record, Supreme Court Justice Morrison Remick Waite simply pronounced before the beginning of arguement in the case of Santa Clara County v. Southern Pacific Railroad Company that

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 opinion that it does.

The court reporter duly entered into the summary record of the Court’s findings that

The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteen Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.

Thus it was that a two-sentence assertion by a single judge elevated corporations to the status of persons under the law, prepared the way for the rise of global corporate rule, and thereby changed the course of history.

The above quote was from http://www.ratical.org/corpora…..R1886.html

bmaz, given that, is there any way that precedent can be dismantled by the courts (or are they painted into a corner by their own precedent)? Will it require new legislation on the part of Congress and if so, will it have to be in the form of a Constitutional amendment, or will garden variety legislation do the trick?

bmaz has the facts exactly right about the Santa Clara case (Google it), but left out the most important thing, and that is that the pre-argument comment about the 14th Amendment was what we lawyers call â€dictum,†or â€mere dictum,†meaning that although it was said, it was NOT THE BASIS for the ruling of the Court. The Court opinion itself said that the ruling was based on its interpretation of the Santa Clara tax law in dispute, and not on any 14th Amendment argument.

The importance of this is that dictum HAS NO LEGITIMATE VALUE AS PRECEDENT! Yet this is the seminal case that has been mindlessly cited ever since for the supposed applicability of the Fourteenth Amendment to the concept of corporate personhood.

It seems obvious to me that the best and most direct and most legitimate way to attack the corporate personhood concept is to bring a case that directly presents the question of whether the 14th applies in that context. No rational legal analysis could ever argue that it does. To preserve the concept, a court could only say that â€it is now enshrined in our traditions by long practice,†which would be a truly bizarre rationale for validating the constitutional standing of the most powerful entities among us. Bringing a case like that is our best hope.

Jane Harman’s 1/5/06 HuffPo blogpost on the 1947 National Security Act:

http://www.huffingtonpost.com/…..13334.html

Bmaz, there have been no specific cases I am aware of, but I have done only limited research. What I found was that the case was never cited for the 14th Amendment at all until one case in 1919 or 1920, when it was cited for the language of the headnote without further examination. You could easily check any other cites in Shepherd’s, if you have access to one.

I have to disagree about the utility of a direct attack. The assumption that the Court would have changed the rule if it disagreed with it does not necessarily hold true, they would have had to have had a case that presented the question squarely. It is a basic principle of jurisprudence that a court will not decide a case on Constitutional grounds unless absolutely necessary. That is why the Santa Clara Court found another basis for its decision. But a direct presentation would force a detailed articulation of why or why not, which would have to begin with a reference to the intent of the 14th Amndment itself, and that intent clearly could not encompass corporation, since they were not a disadvantaged class. On a question of such moment, no Court with any integrity could say that it was wrong to grant personhood, with all the power that comes with that in the corporate context, essentially making corporations into supercitizens more powerful than any others, and then simply leave the whole thing in place with a simple, â€Never mind, too much trouble to make a change.†It would undermine respect for all legal jurisprudence to do so.

bmaz, agree with two points; (a) your point that laws, accounting practices, etc would need to be altered in coordination, and also (b) that incremental shifts are probably more (sane, workable, adaptive) than tectonic shifts.

Fascinating that this legal interpretation originated in the 1880s, as many things trace to that period. But the phenomenal changes in culture, communications, technologies, and finance in the 120 years since then suggest that the older interpretation no longer fits current circumstances, and needs to be adapted.

It’s interesting to see this discussion; I’ve recently heard this theme emerging from a couple business contacts, and also several accountants. Seems to be a more frequent topic of serious, thoughtful conversation these days; that in and of itself is worth noting.

FWIW, several of those accountants are/were moderate Repubs… pre-Bush. Now, they’re politically homeless. (But I remember when they were just horrified at watching the Arthur Anderson mess. Perhaps this is more post-Enron fallout?)

i’m no lawyer but (heard that before?) –

i can easily understand that a court might agree to the fiction of a corporation being a person for the convenience of the court – though i don’t know if that was the import of the 1886 decision or not.

i cannot accept that,

the corporation deserves any sort of additional benefit, having been artificially labeled a â€personâ€.

the original concession to being a â€personâ€,

at least as i, in my ignorance, posit it,

would have been simply, and exclusively for the convenience of the court.

but what may have happened in succeeding years is that this word â€personâ€,

which should have been meant in a limited and clearly idiosyncratic way,

has in fact been taken literally by courts and, therefore,

corporations have been granted the same rights as individual citizens.

for christ’s sake.

under no circumstances was the first amendment ever conceived of as applying to corporations.

the first amendment was intended to protect outspoken citizens,

concerned with the conduct of their government,

who disagreed with the crown.

it was conceived based on the personal experience and the historical knowledge of folks like franklin, jefferson, washington, monroe, madison, hamilton, et al.

it was designed to protect individuals who disagreed with the crown,

against the depredations of their liberties by the crown.

(you know, like protecting folks wearing anti-bush t-shirts to a bush event from being arrested)

if a judge wants to be an originalist, or a literalist, or any other of the numerous purblind right-wing cliques of legal scholars who claim to know the â€proper†interpretation of the u.s. constitution,

then he/she damn well out to agree that corporations were never intended to be protected under the first amendment.

but then,

i have not made a place in the equation

for corporate money.

by the way,

speaking of money and scholarship, did you know there is an entire â€centerâ€, affiliated with the univ of virginia in charlottesville,

whose chartered purpose is to pursue and protect the corporate interest in the first amendment?

sweet.

Mad Dogs, sorry I missed your earlier exchange with Mary, I bet it made good reading Thanks for mentioning it.

bmaz, Toby and all, thanks for the further discussion. Toby, like you, the notion of the corporate supercitizen is something that I simply find indefensible. Yet, correct me if I am wrong, but I thought a Supreme Court review of campaign finance reform did in fact address this question. I thought they found that limiting contributions to campaigns was a restriction of the free speech of wealthy individuals and corporations that was unacceptable since corporate entities are recognized as citizens. It’s been a long time (wasn’t this a case back in the ’80s?) and my memory is not very good, but that was my understanding of the problem at the time. But, as I said, I may be remembering things poorly.

re: Santa Clara v. SP Railroad…
Has no one read Hartmann’s evidence, freshly disclosed in 2002, that the ONLY reference to corporations-as-persons is the HEADNOTES composed and invented by the court reporter; there is NO reference in any of the judges opinions as officially transcribed by that court reporter.

After all the foregoing discussion, is it not prudent to look at Hartmann’s work? Just go here

thomhartmann[dot]com/theft[dot]shtml

and read his Chapter 6; then gum it to death.
Rather Alice In Wonderland to pass sentence before the verdict.

To Phred: the case you refer to upheld corporate free speech under the First Amendment because the Court ASSUMED that the 14 Amendment applied to extend personhood to corporations. To my knowledge, there was no direct inquiry into whether that was a proper application of the 14th Amendement. I don’t think there ever has been since the Santa Clara case.

To Bmaz: Brother, you misunderstand me. The only reason I did not include a snarky comment about the poor chances of getting the current Court to act with integrity is because I preferred to stress the obligation that exists for them to do so. But you are absolutely right that the ideals of jurisprudential behavior have been totally flushed down the toilet in recent years. I studied Constitutional law for the first time in 1981, at the start of the Rehnquist era. Almost nothing of what I was taught about the First, Fourth, Fifth, and Sixth Amendments remains good law, and I have raged and agonized over each tortured opinion that has crumbled what used to be a sturdy edifice of protection for individual liberty. The â€totality of the circumstances†style of â€analysis†enshrined by Rehnquist is just an all-purpose excuse to get the result you want without having to offer any specific articulated justification. Nobody is more cynical about the Court’s integrity than I am, friend, but every once in a while, it is still a good idea to refer back to first principles, and that is what I did in my comments. Societal behavior should be made to conform to the Constitution, and judges should always observe the basics of logic and intellectual honesty and the clear language and intent of the Constitution in deciding cases and writing opinions.

And if they did in a case that clearly presented the isssue of corporate personhood under the 14th Amendment, I believe they would have to rule that the 14th does not apply to corporations.

Bmaz, I never thought you were going after me. We are obviously on the same side. I just thought I had not made myself clear about my lack of faith in the integrity of the Court. I have little such faith, same as you, but I still think it would be worth putting them to the test.

Phred and Toby – I would think there are a million different ways to raise the argument; the key is pleading it with this intent from the get go, and properly protecting the argument throughout the rest of the case and on appeal (because such an argument will be bounced early at the trial level; got to keep it perfected after that). For instance, kind of hokey in a way, but it could be raised in something as simple as a challenge to standing as a proper party on certain claims, actions, etc. Taxation issues, liability veils, jeebus with the right fact scenario, it could be a whole host of places.

Toby, I can see one impediment from a practical standpoint. I don’t know about others, but I didn’t try any civil case in Federal court that I did not absolutely have to (mostly 1983 actions with federal agency affiliated defendants) because the docket is so freaking slow. In my jurisdiction, at least as of 2000 or so when I walked away from most trial work, you could wait up to a year for a written order on a Rule 12(b)(6) motion before the defendant had even filed their answer, and it only slowed down from there. Although you certainly could approach this issue from a state forum, i would think that if you really cared about it, you would want to proceed through Federal jurisdiction. I always wanted to pursue issues of conscience and principle; but I always wanted more to wrap things up and collect my fees. Overhead is a bitch.

Jeepers Phred, you have raised a fascinating thought and I bet you don’t even know it! Much of ACLU’s litigation is filed in their name as opposed to the aggrieved individuals at the root of the matter. If the concept of corporate personage (and it’s lesser included corollary of organizational personage because benevolent organizations are, in fact, usually non-profit corps) is scuttled, will that deleteriously affect the ACLU’s standing to bring their litigation? If so, they may indeed have little interest.

It would be a project of Herculean proportions. Only a public interest group of major standing would have the resources and the institutional continuity to see it through. The conflict of interest in having the work done by even a non-profit corporation might indeed make them very reluctant. But of course, their risk would be nothing compared to that of the for-profits corps. Maybe the best method would be to have a citizens action commitee fund a private legal team for the specific purpose, but those lawyers would have to make it their life’s work, because the forces arrayed on the other side would be very daunting. Having said all that, I think the legal validity of such an action is clear, and it truly would transform much of what we complain about in the economic, political, and even the judicial systems. If we stay on the path we are on, corporations we rule the known universe, and the rest of us will all be reduced to insect status. Of that I am certain.

Wonderful spirit on this thread; what a pleasure to read!
But I think the worries about non-profits being whomped by changes to the 14th Amendment should not be an obstacle to more thinking about this topic.

The two organizations are quite different in critical respects.
member != shareholder.
(Sorry: != is just shorthand for ’is not equal to’)

A member contributes, but does not ’own’ a portion of any non-profit organization.
In contrast, a shareholder ’has [limited] ownership’ in a corporation; corporate guidelines stipulate the nature and extent of the ’ownership’ that shares represent. But shares are freely sold, traded, gifted… transferred within ’the stock market’.

However, this form or ’transfer’ doesn’t happen with non-profit memberships.
For instance, I don’t ’transfer’ my membership in the local Art Musuem to a friend or sibling; I either purchase a membership on their behalf, which then needs to be updated (by them or by me). But at no point do I ’own’ any portion of the musuem, the expertise of the curators, or the collection(s).

I realize that an art museum is not synonymous with the ACLU; just thinking through what properties of organizations make them ’corporations’, and ownership would seem to be a critical property.
Membership != ownership.
Owning shares == limited ownership (which results in marginal responsibility and no accountability)

So it seems that the two types of organizations are fundamentally different — and it’s a function of ownership. Therefore, how could a reinterp of the 14th Amendment screw up non-profits — or NON-ownership organizations? Babies don’t always get tossed out with bathwater.

They would lose the Bill of Rights protections extended throught the 14th Amendment, which would leave them very vulnerable to politically motivated investigations.

Toby — would there be a way to carve out a protection for non-profits? All we are really trying to achieve here is to curtail the supercitizen status of for-profit corporations, aren’t we? As ROTL notes, there should be some way to distinguish between protecting non-profit endeavors and preventing corporations from obliterating our system of government.

bmaz — I would chip in, question is how much would it cost to â€do rightâ€? Perhaps we could start some sort of Constitution Defense Fund. Everyone of all political stripes who gives a damn about our Constitutional form of government would be welcome to chip in…

Phred-I don’t know how you could carve out an exception for non-profits, but really, how badly do they need it? The one prosecuting this action we are discussing might be subject to retaliatory prosecution, but not the others. A business has no legitimate need to hide behind the Bill of Rights if they are following the rules of law and common decency.

Bmaz-You’re getting to a level of complexity that’s way above me, but I would submit that the corporations fully were subject to actions at law before the Santa Clara case, so I would asssume that they could just go back to the old rules.

Toby — IANAL so I have no idea about how badly I would need to carve out protections for non-profits. However, if bmaz is correct and organizations such as ACLU would lose their legal standing to bring cases before a court, that seems to me to be a real problem. From my spectators point of view, non-profits frequently bring cases that end up before the Supreme Court that serve the interests of the public in a way that individuals would be hard pressed to do. So if we can contest the notion that corporations can enjoy supercitizen status and yet preserve the ability for non-profits to represent the public interest in a court of law, then it appears we need to make sure that the former doesn’t undermine the latter.

I think the big picture is that if the corps can be deprived of personhood, they will still survive on the same basis they did pre-Santa Clara. And the Court would have to come up with extensive new rules, but will always leave a path for legitimate do-gooders to bring cases before the Court. First things first.

Bmaz, you’re right, but in any case, doing it right would be a huge, uphill fight. Still, I wish someone would try it. I was thinking, maybe the best and cleanest approach would be a declaratory judgment action.

In federal court,, unlike in most state courts where only an actual controversy can be adjudicated, there is an action called an action for declaratory judgment. You can look it up online in the Federal Rules of Civil Procedure. Basically, you come before the court and declare that you have a need to know what the law actually is on a given issue. The judge is then supposed to declare what the law is with respect to that issue. So, as here, and this is theoretical since I haven’t practiced law for a long time, a plaintiff could allege that his life is adversely affected by the unfair and oppressive practices of corporations, made possible by the enhanced and undeserved protection from various legal enforcement mechanisms that is afforded them by their claim of personhood under the 14th Amendment, which allows them to use various Bill of Rights Amendments to conduct activities outside of their general purpose and to resist appropriate investigations into their activities.

Perhaps other lawyers here can comment, but it seems to me that this would be the simplest and also the most sweeping way to tackle the issue we have been discussing.

For a good historical overview of this issue, see The Hijacking of The Fourteenth Amendment, by Doug Hammerstrom

Phred, it’s just a short article, one of many available on this topic if you Google â€corporate personhood, 14th Amendment, Bill of Rights.â€