Thursday, December 03, 2009

Citizens United, Corporate Personhood and the Constitution: CAC Releases Discussion Draft of New Report in Advance of Major Supreme Court Ruling

David Gans

As we await the Supreme Court’s decision in Citizens United v. Federal Election Commission, expected any day now, Constitutional Accountability Center (CAC) has continued to build on the scholarly research discussed in our brief filed with the Court: whether corporations have the same rights as individuals, particularly when it comes to influencing electoral politics in this country.

The result of this work is this discussion draft, tentatively titled “A Capitalist Joker”: Corporations, Corporate Personhood, and the Constitution, which we intend to release more formally in January as the latest installment in our Text & History Narrative Series. The text of our Constitution never mentions corporations and, as our narrative explains, this was deliberate: the framers wrote and the American people ratified the original Constitution, the Bill of Rights, and the three Civil War amendments -- the Thirteenth, Fourteenth, and Fifteenth -- to secure the inalienable rights of “We the People” -- living human beings. Governments create corporations and give them special privileges to fuel economic growth, but with these special privileges come greater government oversight. Indeed, in the early 20th Century, the American people added the Sixteenth and Seventeenth Amendments to the Constitution, at least in part, to ensure greater governmental control over corporations and less corporate influence over our democracy.

The narrative traces the Supreme Court’s treatment of corporations from the Founding era Court under John Marshall, through the Lochner era, the New Deal, and up through the Roberts Court today. The narrative shows that while corporations have long enjoyed some protections under certain constitutional provisions, they have only been granted equal constitutional rights once – in a series of opinions in the infamous Lochner era. Today, those opinions have been repudiated by liberals and conservatives alike and have been dismissed by the Supreme Court as a “relic of a bygone era.”

Citizens United and its supporters are portraying their case as a fight over the meaning of the First Amendment, but this obscures the far more fundamental question that underlies their claim. In arguing that there is no difference between corporate speech and the political speech of We the People, Citizens United seeks a radical constitutional result -- one that the framers of the Constitution and the successive generations of Americans who have amended the Constitution and fought for laws that limit the undue influence of corporate power would find both foreign and subversive.

Given the Court’s forthcoming decision in Citizens United, we are posting the narrative as a discussion draft now on a number of legal blogs, with the hope of better informing the discussion of the case. We enthusiastically welcome your thoughts – criticisms, oversights, suggestions, and more – in the comments section below.

David H. Gans is Director of the Human Rights, Civil Rights, and Citizenship Program at the Constitutional Accountability Center (CAC). He is lead author of the discussion draft posted above, and co-author of the brief CAC filed, along with the League of Women Voters, in Citizens United v. Federal Election Commission.

This article is cross-posted at Text & History.


You might want to include a link to this discussion draft here, as well as at the CAC.

It seems to me that the fundamental problem with your approach to this topic is the refusal to distinguish between for profit corporations, capitalism, and ideological corporations like Citizens United, which exist solely for the purpose of advancing the viewpoints of, yes, people.

I think there's also a bit of trouble here in failing to recognize that extending privileges and protections to corporations is equivalent to denying them to people who don't incorporate... People do not incorporate for yucks, they do so because the LAW makes getting together to accomplish large tasks infeasible or perilous if you do not incorporate.

How can a government which is forcing people to incorporate use that incorporation as an excuse to deprive them of their rights?

The bottom line, I think, is that if you press the line that for profit and ideological corporations must be treated the same, you're going to get for profit corporations with rights, instead of achieving the apparent goal of depriving ideological corporations of rights.

There's no reason to risk that if the point of the exercise isn't, in fact, to silence the ideological corporations. Thus, why pretend it's about the for profit ones?

I've never understood how it is that recognizing First Amendment rights for corporations substantively changes the legal landscape. Can't the speaking employees of the corporation achieve the same legal result, on the corporation's behalf, by asserting their own individual speech rights?

Here's a suggestion for the next constitutional convention:

"We the People of the United States (including without limitation corporations - both for profit and non profit, LLPs, LLCs and other legally established - from time to time - entities), in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this new Constitution for the United States of America."

I haven't read the article as yet but hope to do so shortly. Perhaps it will reveal the public meaning/understanding of "people" at the time of the framers/ratifiers.

One note. Brett refers to "ideological corporations" rather than to non profits, although the former may be included in the latter. The fact that a corporation is classified as a non profit does not mean that it cannot make a profit, although there may be limitations on what it can do with profits. But many non profits, ideological and otherwise, often provide what may be considered tax-subsidized profits in the form of salaries to their officers. This note is NOT aimed at Citizens United, whose cause as set forth in the post I would tend support.

My point here is that the draft addresses itself entirely to for profit corporations, did not so far as I noticed even acknowledge that there's any other sort of corporation. (Granted, I did some skimming.) Seems a strange approach to take if you're discussing a case where the corporation in question ISN'T for profit.

Now, there's a sorta reason for this: They were discussing the status of corporations in early America, to look at this from a somewhat originalist approach. And early America had no non-profits. Had relatively few corporations at all, in fact: "Corporations" then were government chartered monopolies, NOT the dominant form of organization to accomplish things. So it would be fair to say that there are, today, very few corporations on the founding era model. Almost all modern corporations look very little like founding era corporations, and non-profits look scarcely at all like them.

Why was this? I say, because at the time our laws didn't FORCE people to form corporations if they wanted to get together to accomplish something. If "Citizens United" had existed at the founding, they wouldn't have been a corporation!

Let me say that again: IF CITIZENS UNITED HAD EXISTED IN THE FOUNDING ERA, IT WOULD NOT HAVE BEEN A CORPORATION! So in the founding era the whole question of whether Citizens United had constitutional rights would never have arisen. There would have been no corporation involved to make the question relevant. That Citizens United could publish whatever they damned well pleased would have been a no-brainer.

The draft would make a lot more sense from an originalist standpoint if they were arguing that, for instance, port authorities couldn't engage in politics. That's the closest analog to a founding era corporation today.

But, of course, it's not port authorities they want to silence.

Governments create corporations and give them special privileges to fuel economic growth, but with these special privileges come greater government oversight.

Corporations are not just in place "to fuel economic growth." The Dartmouth College Case (1819) involved a "eleemosynary institution" which the Court held was "made not indeed to make a profit for the donors or their posterity, but for something, in their opinion, of inestimable value," namely education. Other corporations are provided for such purposes, including to promote certain causes.

They have only been granted equal constitutional rights once – in a series of opinions in the infamous Lochner era.

They were not granted "equal" constitutional rights even then. Henkel v. Hale (1906), for example, compares the more LIMITED rights of a "creature of the State" and people or citizens with "rights are such as existed by the law of the land long antecedent to the organization of the State."

Corporations then, before then, and after then, had limited constitutional rights. Corporations did not have privileges and immunities of citizens. They also did not have all the 'liberty' rights of persons.

To the extent they received some rights, it was not limited to the Lochner Era: "But a corporation is a 'person' within the meaning of the equal protection and due process of law clauses," Grosjean v. American Press Co. (1936) (unanimous).

Corporations do have "some" rights. This is sound because they have important functions, promoting certain constitutionally valuable ends, e.g., "NAACP Legal Defense and Educational Fund, Inc." The importance of protecting corporations too was shown in a Lochner Era case -- Berea College v. Kentucky, which upheld a law that required incorporated education institutions to be segregated.

So, I see a strawman here. Corporate speech need not be "no different" to be protected and corporations have been treated differently AND given certain protections -- not just as profit making institutions -- for some time.

BTW, the article notes the common argument that Santa Clara County (1886) suddenly changed things.

But, the SC acted like corporations had rights on the level of persons before then as well, e.g., CHICAGO, B. & Q. R. CO. v. STATE OF IOWA, 94 U.S. 155 (1876): "This company, in the transactions of its business, has the same rights, and is subject to the same control, as private individuals under the same circumstances."

The reason for the remark in the 1886 headnote is that corporations were already assumed to be "persons" for certain purposes, including in respect to certain rights. It was not an "invention" by that very case. The corporate friendly justices were already on the Court for years by that point.

What suddenly changed in 1886?

Brett, any right wing argument you can muster up for unlimited corporate campaign spending (and I'm sure you're nailing the talking points) is dwarfed by the implications of one fact: Exxonmobil net profit in 2008 was $45 billion.

Combined spending for the 2008 presidential and congressional elections approached $1.5 billion.

I cannot conceive of any reason the many Exxonmobils of the world would show any restraint in influencing elections in the wake of a broad corporate free-speech ruling in Citizens United. The corporate duty to maximize shareholder profit would practically command overwhelming support for candidates advocating a predictable spectrum of corporate friendly measures, and defeat of candidates in favor of alternatives.

The mobilization of a mere fraction of Exxonmobil's net profit would render irrelevant any non-corporate source of campaign expenditures. And Exxonmobil is only one company. Any attempt to regulate corporate political expenditures (following a Conservative Citizens outcome) will fail due primarily to the newly found First Amendment right and secondarily to corporations' ability to outmaneuver any initial legal speed bumps and then to install friendly legislators.

You think the Founding Fathers intended that we live in a country ruled by entrenched mega-corporations? You think the development of Constitutional Law to date supports the idea of government by corpocracy? Regardless of your favored theory of constitutional interpretation you have to have lost your grip on reality to think our social compact permits this, or to think it is beneficial public policy (either on its face or after deep consideration).

What does John McCain think of a Conservative outcome in Citizens?

After the [oral] arguments [of Sept. 9, 2009], McCain and Feingold both blasted justices [at a joint press conference on the steps of the Supreme Court] for being dangerously out of touch.

"The questioning shows a real disconnect, a strong disconnect between the justices and political reality," McCain said at the press conference. ... The justices showed an "extreme naïveté of the influence of corporate money and soft money."

Corporations have a huge (legislatively created) advantage over individuals in amassing funds – We The People have given corporations that and other advantages in a careful balancing of our societal interests, of which economic prosperity is one part. One part. To suddenly allow corporations to also dominate the political money scene - when their interest is not societal betterment but solely profit maximization – would have a catastrophic long term impact on the people of our nation.

In fact, a Conservative outcome in Citizens would be the death knell of American democracy. It would be the vehicle by which the rump of today's disgraced and disavowed Republican Party catapults back to national prominence without one whit of ideological moderation. It would be nothing short of a slow motion coup.

Convince me that any of the above is exaggerated, that this case is not the most profound and underappreciated (outside the legal community) threat to American democracy ever to come before the Supreme Court - a Court that seems likely to render a 5-4, broad Conservative ideological decision.

I hope the case will be decided on narrow grounds, or 5-4 against the corporate speech right. But at this point, that would require a surprisingly clear sighted and courageous vote by an otherwise Conservative Justice. Kennedy, whatever his ideology, seems entrenched in his previous corporate-speech friendly minority opinion.

As we are discussing the legal fiction of the corporation as a legal person, one thing we should keep in mind is corporate liability. If we were to adopt the position of claiming that corporations are not persons and therefore are not guaranteed the rights to free speech, will this affect white collar corporate liability. Corporations are under a great deal of constraints as a result of the legal fiction of the corporate person. In thinking about whether corporations should be considered persons under the law, we shouldn't think about it as an all or nothing, as "good" or "bad", but rather we should analyze it by reference to the purpose for creating the legal fiction. For instance, the Court has not extended 5th Amendment rights to corporations but has extended criminal liability and constitutional rights and privileges. Hence, in analyzing First Amendment rights and Citizens United, we should think about whether free speech serves the purposes of advancing the legal fiction. And NOT as a bad thing because obviously corporations are not persons and NOT as a good thing because corporations should have the full protection of civil liberties given their status as persons.

"Exxonmobil net profit in 2008 was $45 billion."

But I'm not defending Exxon. This case isn't about Exxon, it's about Citizens United. You want to make it about Exxon, because Exxon isn't nearly as sympathetic a plaintiff as Citizens United, but it's still Citizens United you're trying to silence.

Defend THAT, or start making a principled distinction between wildly different sorts of corporations. I'd advise you to do the latter: Insist that all corporations must be treated the same, and the current Court is much more likely to give Exxon constitutional rights, than take them away from Citizens United.

Honestly, I can't see any reason for taking that risk, unless the whole point of this IS to silence Citizens United, not Exxon.

OOPS! I spoke too soon with this in my 7:19 AM comment:

"This note is NOT aimed at Citizens United, whose cause as set forth in the post I would tend support."

I now say pierce that corporate veil of Citizens United with a dagger through its heartlessness.

The members of this organization heartlessly thought they were entitled to produce and display a movie about a candidate for public office?

I agree with Brett, that the members of this organization heartlessly thought it. This amendment is truly not going to benefit the actually deserving people.
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I think what's really going to decide the case was the DSG's honesty in telling the Court that the theory the FEC were operating on would justify going so far as banning a book version of Citizens United's movie from public libraries.

I mean, you knew that book banning was somewhere on the trajectory of campaign 'reform', but to have them boldly defend it before the Supreme court was a bit of a stunner.

"But I'm not defending Exxon. This case isn't about Exxon, it's about Citizens United. You want to make it about Exxon, because Exxon isn't nearly as sympathetic a plaintiff as Citizens United, but it's still Citizens United you're trying to silence."

Um, no. It's not really about Citizens United, except that they happen to be the plaintiff in the court below. And nobody was suggesting that Brett was "defending" Exxon. That's sophistry on Brett's part.

What Brett studiously ignores, as he disingenuously attempts to recast the argument as whether or not ExxonMobil is a sympathetic actor (and whether that should matter), is the numbers: $1.5 billion spent on the 2008 election cycle (a bit less, but we'll go with that number), and XOM's 2008 net profits of $45 billion. Net.

In other words, XOM could spend just 3.33% of its PROFITS for one year and equal the total spending by all actors in the 2008 campaign.

And that's just a single corporation.

Per the Congressional Research Service, total net profits for the integrated oil companies (one part of the oil sector that includes XOM, Royal Dutch Shell, BP, CHevron, ConocoPhillips, Marathon, Amerada Hess, Occidental, and Murphy) totaled $128 billion. Total spending on the 2008 election, then, represented 1.17% of one portion of one sector of the economy. (Congressional Research Service, Oil Industry Profit Review 2007,

A 4th grader could do the math. It is now trivially easy for for-profit business corporations, acting alone or in concert, to completely dominate the political landscape, using a tiny fraction of their net profits, thus effectively silencing other voices through its sheer ability to overwhelm and smother those competing voices. They could simply buy up all the available ad time, for example; alternatively, supply and demand suggests that pricing of air time would be driven so high that actors with smaller budgets (unions, for example) would be unable to compete.

If I am standing on a corner on a soapbox with a handful of pamphlets, and you plop next to me with a sound truck carrying a 10,000-watt sound system, and crank up the volume, you have silenced me just as effectively as putting a muzzle over my mouth.

This, apparently, is just fine with Brett.

Eukonidor's comment referring to sound trucks is more than an analogy. In fact, the logic of the famous "Sound Truck Cases" decided by the US Supreme Court should have been the controlling logic of Citizens Mutual:

336 U.S. 77 (1949)
No. 9.
Supreme Court of United States.
Submitted October 11, 1948.
Decided January 31, 1949.

“When ordinances undertake censorship of speech or religious practices before permitting their exercise, the Constitution forbids their enforcement. 3 …(Yet) to prevent … nuisances (is) well within the municipality's power to control. The police power of a state extends beyond health, morals and safety, and comprehends the duty, within constitutional limitations, to protect the well-being and tranquility of a community. 4 A state or city may prohibit acts or things reasonably thought to bring evil or harm to its people. In this case, …this… ordinance … applied to … SOUND AMPLFICATION. [83]

Yes, both sound trucks and money should be viewed as impermissible forms of SPEECH AMPLIFICATION. They both use POWER to amplify speech, increasing its range, and causing a nuisance to authentic public debate. MONEY IS NOT SPEECH! (And to say the "money is property" just dumbly states the obvious with no philosophical import.) MONEY IS POWER ---plain and simple. And POWER has no content --any more that a microphone has content when no one is speaking into it. But when speech content is spoken into a mike with a power amplifier, the range of that content often becomes impermissibly intrusive. The Kovacs case says that this kind of power amplification refers to the manner of speech, which can AND MUST be regulated. Money also has no content, but is a form of power that amplifies speech intrusively. That it's a public nuisance is obvious when people remark with chagrin "Money Talks". Rather than rectifying this public lament, the Supreme Court stupidly enshrines it in immutable law. They should all go back to law school if can't think a little deeper about the true nature of money and it's dangerous potential to drown out the people's ability to fairly debate important issues of our time ---most important among them being the dangerous and wrongheaded concept of "money-speech" that undercuts effective debate of all issues!


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