BOB GARFIELD: The Citizens United decision, followed a few years ago by the Hobby Lobby decision, giving business owners the right to flout federal law based on their religious beliefs, outraged many Americans. The rulings seem to unreasonably expand corporate rights. If you are among the outraged, though, you haven't been paying attention to the past three or four hundred years of court cases and American history.
Adam Winkler, professor of law at UCLA, is the author of We the Corporations: How American Business Won Their Civil Rights. He says that the principle of corporate rights has been litigated for-ever and predates our very founding. We think, for instance, that our national origin story is all about pilgrims escaping tyranny and religious persecution.
ADAM WINKLER: Pilgrims are sort of the perfect embodiment of American values and how we like to see them, but the first permanent English colony was in Jamestown and it was a corporate affair, run by the Virginia Company of London, and it was designed to make money, not to exercise religious liberty.
BOB GARFIELD: All right, the Republic was born, I've heard rumored, in 1776. Within 33 years, the Supreme Court was already considering which inalienable rights applied not just to individual citizens but associations of individual citizens, in other words, corporations. Please tell me.
ADAM WINKLER: Well, the first Supreme Court case on the rights of business corporations was decided in 1809. To put that in some perspective, the first Supreme Court cases on the rights of African Americans and the rights of women weren’t decided until 1857 and 1873, respectively. So a half-century earlier, corporations were in the Supreme Court seeking the protections of the Constitution.
Bank of the United States v. Deveaux, it really set the foundation for 200 years of Supreme Court cases expanding rights to corporations. The case involved the Bank of the United States, the most powerful corporation in America at the time, and it claimed the constitutional right to sue in federal court, even though the Constitution's text only provides that right to citizens.
BOB GARFIELD: Now, that case gets to something important that comes up even today. We often think of Citizens United and Hobby Lobby as being about corporate personhood.
ADAM WINKLER: While many people blame corporate personhood for Citizens United, in fact, corporate personhood is a very well established legal principle going back hundreds of years in business law. And it basically says that a corporation is its own independent entity in the eyes of the law and is wholly separate and distinct in its legal rights and duties from the people who form it or the members of the corporation. In cases expanding the rights of corporations, however, the Supreme Courts generally ignored that principle and said that corporations have the same rights as their members. And so, the courts generally treated the corporation not as its own individual person but as an association of people. And if corporations have the same rights as their members, well, it’s no surprise that corporations have nearly all the same rights as people.
BOB GARFIELD: Even if you think that Citizens United was uniquely, let's say, tortured in its conclusions, that is nothing [LAUGHS] compared to the abuse of the 14th Amendment, the one that gave rights to freed slaves. How in the world [LAUGHS] did that get into the legal conversation about corporations?
ADAM WINKLER: Well, in a remarkable series of test cases brought in the 1880s, the Southern Pacific Railroad Company, one of the most influential corporations in the West, brought a series of what its lawyers called “test cases,” more than 60 in all, seeking rights under the 14th Amendment for business corporations. And the Southern Pacific had an illustrious lawyer by the name of Roscoe Conkling, and Conkling went to the Supreme Court and argued that the 14th Amendment was written specifically to protect business corporations too. And Conkling would really know. He was the last surviving member of the drafting committee of the 14th Amendment.
Historians have gone back and look through Roscoe Conkling's argument and determined that he lied to the Supreme Court. One historian called it, quote, “a deliberate brazen forgery to win new rights for corporations.”
BOB GARFIELD: You know, American history is filled with wars that were built on lies. Was Conkling's argument the, the Gulf of Tonkin of corporate rights?
ADAM WINKLER: In many ways, it was. Conkling's argument marked a shift where the 14th Amendment became used primarily by businesses to strike down regulation.
And in the years to follow, the Supreme Court would go into one of its most business-friendly periods, known as the Lochner era among historians, between 1890 and 1937, where the Supreme Court broadly read the Constitution to protect businesses from all sorts of regulations, striking down maximum-hour laws, minimum- wage laws, zoning laws, federal child labor laws.
Meanwhile, the Supreme Court refused to read the 14th Amendment expansively to protect the rights of African Americans, the intended beneficiaries of that provision. And in the years to follow, the Supreme Court would hear about 28 cases on the 14th Amendment rights of African-Americans and 312 cases on the 14th Amendment rights of business corporations.
BOB GARFIELD: We in the media, I, I think it's fair to generalize, share a deep suspicion for the assigning of individual rights to entities whose ultimate legal responsibility isn’t to the society at large but to, to shareholders or members. But [LAUGHS] corporate rights have saved our bacon.
ADAM WINKLER: Some of the most important corporate rights cases over the course of American history involved expanding free-speech rights to newspaper corporations. A prominent illustration came out of the effort of Louisiana newspaper companies who fought back against Huey Long, the ironfisted demagogue and governor of Louisiana. And Long accused the newspapers of publishing fake news and stuck them with a tax on their advertising revenue. The newspapers challenged that tax in court as a violation of the freedom of the press. And in one of the earliest and most important freedom of the press cases by the Supreme Court, the Supreme Court sided with the newspapers. And, to this day, the freedom of the press receives its most vibrant protection in cases brought by business corporations like the New York Times or the Washington Post.
BOB GARFIELD: This isn’t the only province where these corporate rights principles create some strange bedfellows. I'm thinking of Ralph Nader, the icon of public interest law. At one point, he was a friend of Pharma [LAUGHS] and delivered a precedent that would inform Citizens United.
ADAM WINKLER: Counterintuitively, no one has done more to expand the speech rights of business corporations than Ralph Nader. In the 1970s, Ralph Nader was representing a group of consumers challenging a law that restricted the advertising of drug prices. Now, Nader’s goal was only to help consumers, but he won an important victory in the Supreme Court that established the rights of businesses to advertise their prices. Businesses would use those rights in later years to strike down laws restricting graphic labels on tobacco and other kinds of disclosure laws and advertising restrictions that were enacted in the name of consumers. The identity of the speaker was irrelevant. All that mattered was whether the speech was valuable to the listeners, like the consumers.
[CLIPS]:
JUSTICE: We hold that these consumers enjoy the same 1st Amendment protection that advertisers have to disseminate prescription drug price information, and thus, that the appellees, as recipients of the information, have standing to bring the suit.
ADAM WINKLER: The Supreme Court would use that very same theory in Citizens United to say it didn't matter that it was corporations spending money on election ads, only that those ads were valuable to the public.
JUSTICE KENNEDY: When the government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought. This is unlawful.
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ADAM WINKLER: We think of the courts as being governed by neutrality and objectivity but, in truth, the way the courts are structured is really beneficial to corporations. They can hire the best lawyers. they can bring the most lawsuits. They’ve got the resources to really exercise their influence in the Supreme Court. The fight against corporate rights can be won by “we the people” and we may have come close to having a Supreme Court that would overturn Citizens United. Had Merrick Garland successfully made it to the Supreme Court, it seems almost certain that there would have been five justices to vote to overturn Citizens United. But with the new justice appointed to the Supreme Court who seems largely inclined to favor corporations in their constitutional rights claims, it seems like changing the Supreme Court is a ways off.
BOB GARFIELD: There is another way of going about this, and that would be a constitutional amendment enshrining, once and for all, the last word on the difference between individual and corporate rights. And there are 19 states and a whole mess of municipalities that have gotten behind such an amendment, but you’re not necessarily rooting for them. Why?
ADAM WINKLER: Well, I totally sympathize with the frustration that people have and the desire to limit corporate influence in politics but a constitutional amendment that would declare that corporations are not people and have no rights under the Constitution would be way too broad. It would mean that business corporations like the New York Times and CNN wouldn’t have any protection against censorship. It would mean that corporations don't have a right of property that’s protected by the Constitution. It would mean that corporations could be charged with crimes without having a right of due process or a right to be innocent until proven guilty.
I think a hundred years ago the Supreme Court drew a line. It said corporations should have property rights and protections for their assets but not liberty rights, rights associated with personal conscience and political freedom. And today’s Supreme Court seems to have lost sight of that distinction, expanding the liberty rights of corporations ever more, including political speech in Citizens United and religious liberty in Hobby Lobby.
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BOB GARFIELD: Adam, thank you very much.
ADAM WINKLER: Thanks so much for having me.
BOB GARFIELD: Adam Winkler, professor of law at UCLA, is the author of We the Corporations: How American Businesses Won Their Civil Rights. Coming up, when the story is heartbreakingly obvious, and also not true. This is On the Media.
