The Birth of Corporate Personhood, Part II: Citizens United and Hobby Lobby

By Bryce Watchell (PO ’21)

Last week’s post outlined the origin of corporate personhood, dating all the way back to the early 19th century, when Dartmouth College sought Constitutional protections afforded to individuals up until that point. Then, following Society for Propagation of Gospel v. Town of Pawlet and Santa Clara County v. Southern Pacific Railroad Company, the grounds for corporate personhood became well established and widely accepted. However, modern day cases of cooperate rights, like Burwell v. Hobby Lobby Stores and Citizens United v. Federal Elections Committee, have been protested vehemently. Why is this the case?

The purpose of “corporate personhood” as a legal concept is often misunderstood. The idea originates from the critical work “Commentaries on the Law of England” by William Blackstone. The fundamental principle of corporate personhood is that the individuals who comprise a corporation have an identity independent of the corporation they are involved with. In tort cases, this makes sense—if you slip and fall in a McDonalds, you should sue the company, not the employee who just mopped as part of his or her job. However, the widespread critics to the modern-day expansions of corporate personhood argue that the cases confer rights beyond the scope of this original intention.

For instance, the Hobby Lobby case involved billionaire store owner David Green and his extended family—devout Christians who sought a religious exception from the Affordable Care Act’s provision that companies provide contraceptives to employees. Though the Greens own 100% of Hobby Lobby, it’s far from a family affair: today the chain employs 28,000 employees and generates $4.3 billion annually. The question before the court in 2012 was whether the free exercise clause of the first amendment could be adopted by an entire corporation as a means of rejecting the ACA’s birth control requirement.

The court ruled that, indeed, Hobby Lobby could get an exemption. The 5-4 majority opinion readstated, “protecting the free-exercise rights of corporations like Hobby Lobby… protects the religious liberty of the humans who own and control those companies.”

Critics of the ruling, like UCLA Law professor Adam Winkler, believe it diverges from the basic concept of corporate personhood. As he wrote, “The owners claim that their personal religious beliefs would be offended if they have to provide certain forms of birth control coverage to employees. Yet Hobby Lobby’s owners aren’t required by the law to do anything. The legal duty falls on Hobby Lobby, the company, not its owners. If Hobby Lobby fails to provide the required insurance, the company, not the owners, is responsible.” Nonetheless, the ruling was a major victory for religious-rights groups and advocates for expanded corporate personhood, like the Greens.

In the Citizens United case, objections to the court’s ruling expanding corporate rights are even fiercer.  In 2010, the court ruled that Citizens United, a registered 501(c)(4) conservative nonprofit, could indeed spend money on and distribute Hillary:The Movie (a conservative documentary criticizing Hillary Clinton) just prior to the 2008 Democratic primaries. The expansive ruling undermined components of the McCain-Feingold Act and established that corporations could spend an unlimited amount of money in exercising their first amendment rights to free speech—with some provisions.

Bipartisan criticism of the ruling proliferated. As former President Barak Obama said, “imagine the power this will give special interests over politicians.” At face value, it does seem as though Citizens United provides special interests and lobbying groups an immense amount of power, perhaps at the expense of a more transparent, democratic election process. Some analysis shows that in the 2016 Presidential election the ruling very well may have had an impact. As has been seen time and time again, the ruling also provided great material for late-night comedians poking fun at the seemingly-ludicrous idea of a corporation’s right to free speech.

Corporate personhood has come a long way in it is development—from extending the contract clause of the Constitution to reinterpreting the first amendment to include for-profit chain companies.  Despite—or perhaps due to—the current legal status of corporations, there is no doubt going to be consistent uproar in subsequent high-profile cases of the courts affording companies with individual rights. Those who oppose this legal precedent can take comfort in the fact that it developed over several centuries of law and could very well fade through a change in the composition of the justices. For the foreseeable future, however, corporate personhood seems to be a permanent fixture of the American legal system.

 

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