Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Last year, in the Citizens United ruling, the high court struck down certain campaign finance laws and ruled that corporations have free speech rights. This year, the Court will consider a case that asks: Do corporations have privacy rights? From the WSJ's law blog:
In its Citizens United opinion from last year, the Supreme Court shot down certain campaign-finance limits. In so doing, the court essentially ruled that U.S. corporations have First Amendment free-speech rights.
Might the court take another step toward imbuing corporations with all the rights guaranteed U.S. citizens?
It now has the vehicle to do so if it wants to: The high court agreed to hear a case involving AT&T to consider whether a corporation can challenge the release of government documents as an infringement of the company’s privacy rights. Click here for the Bloomberg story; here for the AP story.
The AT&T case revisits the question of whether corporations have the same rights as you and me, a question which the Supreme Court answered affirmatively with respect to free speech in the Citizens United case.
The punch line is this: How could we possibly run a society in which corporations did not have some rights of speech and of property?
In the case of property, consider what would happen: A and B are partners who decide to incorporate. Without the benefit of limited liability, no one could take the property of both by claiming that since it was held by a partnership, it should be treated as the property of neither.
So now what difference does it make that the new corporation has limited liability? I can't see why it should make any difference at all for the level of constitutional protection. But there are real social advantages to incorporation with limited liability. The chief of these is that it permits the aggregation of large sums of capital from individuals who would otherwise be reluctant to join a venture controlled by others, knowing that their entire personal fortunes could be made to answer for the misdeeds of the active partners.
If that corporate form is better than the partnership form (say because of a business expansion), why tax the transfer with a loss of property rights against any third person, including the government? So it is not possible to think that looting the corporation is limited only to the extent that the government takes a briefcase owned by one of its employees. The constitutional rights have to remain constant against this transfer for the system to work at all.
The same is true of speech. The great vice of the Justice Thurgood Marshall decision in Austin v. Michigan Chamber of Commerce (1990)--which limited corporate speech and was overturned by the Citizens ruling--was that it made that bad move in connection with speech rights. Partners have them, but shareholders do not. The proper analysis ignores incorporation and treats the corporation on a par with other organizations and individuals for speech rights.
But what about voting, one might add? Well clearly that is reserved to citizens. Yet the aliens who cannot vote can also speak, for there is no reason, jingoism aside, why their speech is less protected than anyone else's.
And for corporate papers, the logic above applies. Of course they are protected in the name of all the shareholders in the venture. Clearly the corporation is not obliged to speak, for reasons too painful to state. So at that point, the testimonial privileges, be they large or small, inhere in the officers of the organization.
One sorry note in this affair is that too often prosecutors seek to make deals with corporations to abandon their employees on pain of an indictment that leads to a loss of license which leads to a business collapse. The abuse of the corporate form can run in both directions. State prosecutors should in most cases be curbed from using these ventures.
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Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
I agree with Richard. Corporations are just like you and me, at least as far as much of the Constitution is concerned. The Supreme Court first started treating corporations as "persons" under the due process clause of the Fourteenth Amendment--where the rights of most Americans come from--in the late 19th century. This is one of those dreaded "legal fictions" (I've always thought that would always be a great title for a book or movie). There are lots of fictions like this in the law--in fact, we spend most of the first year of law school trying to memorize them. A lot of them don't seem to make sense at first (of course, a corporation is not a person), but often there are valid policies behind them.
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Giving corporations similar rights to people is one of the Supreme Court's most important contributions to our nation's successful economic growth. Think of where the United States was in the 19th Century. We were a quickly growing country, with a lot of natural resources undeveloped and infrastructure like railroads and telephones and roads to build (sound like China?). We needed capital, much of which came from abroad. The United States would have been unable to attract investment unless investors, both at home and abroad, were confident that the government would not just expropriate or steal their capital. Giving corporations due process rights (along with the protection against takings of property and the enforcement of contracts), which meant that they could challenge their mistreatment by the states in court, would give everyone more confidence to invest in America.
Edited on Sep 30, 2010 at 5:15amRe: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
One more thing: Of course, now the Obama administration and Congress have launched an effort to re-regulate the economy that is eroding those guarantees. The administration has meddled with the rights of bondholders in the bailouts, is creating massive uncertainty by attempting to nationalize health care and raise taxes, and is intervening in an unprecedented way in the financial markets. It is no wonder that the economy is not responding to the massive stimulus and the drop in interest rates--people and companies are unwilling to risk their capital when they are no longer confident that the government will not try to expropriate their investments.
May '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Mr. Yoo: You're needed on the thread "Should We Let Obama Assassinate American Citizens?" It's an emergency.
Sep '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
I can understand the necessity for this, but, it still irks me when companies and unions take profits and dues and use them for express political purposes. It aggregates power that is hard to counter on an individual level and encourages the sort of crony-capitalism that is wreaking so much of the havoc we are living though now. It's been an insolvable irritant to me because I so strongly believe in the free-market over any other system, but, cannot figure out a way around this dilemma.
Edited to add this link, which is exactly the type of thing that drives me nuts. The fungibility of money means that GM is using my money (sorry for reducing that to this so fot abused phrase) to make political donations.
Edited on Sep 30, 2010 at 5:39amRe: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
I'd love to know more about the implications of giving corporations privacy rights. For instance, will that make it more difficult for the government to regulate them effectively? How will granting corporations privacy rights effect the relationship between journalists and the corporations? Will it be at odds with calls for "more corporate transparency," especially in light of the financial crisis which was, in part, caused by the opacity of certain trades, deals, and financial instruments?
May '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
I think that "personhood" status is a bad word for a sound concept. It truly is odd how opponents of corporations argue that individuals have rights while they remain as individuals but have some rights revoked as soon as they assemble in corporate forms. I sense a non-sequitor. How does such a conclusion follow? Some argue that government recognition of limited liability rights (which are essential to the corporate form) is a type of narrow, profit-oriented privilege, and that therefore the government reserves the authority to deny certain rights to corporations, e.g. the right to free political expression around election time. The problem with this argument is that it begins with a false premise. It's certainly not true that limited liability rights are a type of privilege granted by the government. Rather, such rights follow logically from the rights to liberty and private property. A person should gain or lose in strict accordance with the nature of their effort. Why should someone be forced to abandon a fortune for the legal errors of an enterprise it only invested 10k in? Limited liability is truly a logical derivative of justice.
Sep '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
If a corporation employs me and it has a right to free speech, as I think it does, then does it also have a right to restrict my speech as an employee? If my speech were to in effect steal some property of the corporation such as if I were to divulge inside information about the corporation then clearly I think it does have that right however if I disagreed with a public position the corporation took on some subject then I think not however I do not know if my speech in that case is protected from the corp. taking action against me.
Edited on Sep 30, 2010 at 6:16amMay '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
As an additional note I think the collectivist "limited liability as a government privilege" argument enables them to "justify" discriminatorily harmful decisions against corporate entities. As long as the government grants them this alleged limited liability privilege, then the government can subject these entities to special anti-trust laws, corporate income taxes, and an array of other obstructive and discriminatory rules and regulations.
May '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Ward, It depends upon what exactly you're stealing. If you are hired by a corporation and your employment is contingent upon a set of contractual agreements, one of which being non-disclosure with regard to R&D, product information, or trading knowledge and you breach this agreement - well. However, if no such agreement exists, then "stealing information" becomes inevitably more vague. If it's copyrighted information, then the corporation may take legal action. But what information qualifies for copyright protection? Contemporary copyright law is a mess of contradictions and asinine drivel. Otherwise, you should be able to talk smack about your employers.
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Ward: The issue of how a corporation restricts the speech of its employees goes to the heart of the relationship of private parties to each other. First off the corporate form does not matter. What matters is the private employer/employee relationship. At stake is the question of whether rights that are good against the federal government can be waived against ordinary persons. It would be a frightening world if they could not. A firm has trade secrets that it must share with its employees. It would be catastrophic if they could not require the employees to keep the secrets in confidence. The firm has a real question of public image. There has to be an ability to keep ordinary employees from denouncing the products that they sell. There are of course complex limits in these cases, concerning the publication of information needed to deal with firm misconduct. And here the recommended course is to first go to public authorities with enforcement powers to let them know of the situation in confidence before going public with statements and charges that could prove inaccurate on the one hand and hard to take back on the other.
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Also, this set of difficulties is not confined to private firms, whether in corporate or partnership form. It also applies to the government, as it has been long established that it can fire or discipline employees that air internal differences on policy or who denounce their superior officers. Whether government employees can enter into public debate on some issues related to their jobs is a very ticklish question. But the balancing act here again depends on the need to deal with conflicts of interest in the workplace on the one hand, and to preserve some measure of individual autonomy outside the job. No easy solutions to this last set of questions.
Edited on Sep 30, 2010 at 7:17amAug '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
I have a friend who is very excited about the "Move To Amend" organization.
But I wonder if they can be this deaf to irony? Is this all a scam?
This organization, devoted to removing the power of money from corporations to influence our democracy, is a 501(c)3 corporation accepting donations to allow them to spend money to influence our democracy.
They rail on about undue influence from corporations rather than individuals, and then have this on their website:
If your organization, business, union, faith community, or local governmental organization would like to sign on as a supporter of this effort, please let us know.
I guess they can't get beyond an us/them view of the world: your free associations of individuals to pool ownership and influence bad, our free associations of individuals to pool ownership and influence good.
May '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
What's most disturbing about government employees being fordidden from public speech on politics is that an ever-growing proportion of citizens work for government. In some parts of Europe, like Scotland, the majority of citizens are government employees. What then?
Even now, when one adds to the number of government employees the number of corporate employees who are forbidden to blog or participate in other forms of public speech concerning controversial issues outside of work, too many Americans are muzzled. Trade secrets is one thing. Political speech is another. Businesses should have no legal protection from shame by association, though I admit that determining when an employee is and is not acting as a representative of his or her employer can be difficult.
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
I get to the same place as Richard, but by a different road. Our constitutional rights are negative rights that prohibit government action against us. They just don't apply to private persons or corporations. The Constitution says "Congress shall make no law . . . abridging the freedom of speech," and that "no State shall make or enforce any law which abridges the privileges or immunities of citizens of the United States . . . nor shall any State deprive any person of life, liberty, or property, without due process of law." The government cannot discriminate on the basis of race or sex, but surely a private person can if he or she wants to. A corporation does not have to respect the free speech rights of its employees because they have no free speech rights against the corporation, only the government.
May '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Agreed. But citizenship is continuous. People are citizens at any given moment, regardless of where they are or what they are doing. Does an employer's right to restrict employees' speech apply continuously and to all forms of speech?
The relationship between employer and employee is a contract of utility. One does not apply for a job as one applies for citizenship. The former is an application to do something, whereas the latter is an application to be something.
But perhaps such a distinction should be recognized socially, rather than legally.
Edited on Sep 30, 2010 at 9:48amAug '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
If I may take a contrary point of view, I've always thought that organizations, including corporations, should only lobby or take public positions on issues that relate to their stated purpose. This is because individuals, who do have free speech rights, participate in organizations in order to support their stated purpose, and for the leaders of an organization to use it as a mouthpiece for thier unrelated personal views actually violates the free speech rights of the other participants.
For a corporation, the most obvious victim is the investor, who may awaken one day to discover that the company he owns stock in has endorsed something he finds objectionable. But at least an investor can sell his stock easily enough. But what about an employee? If I choose to work for a corporation, it can be assumed I endorse its stated business goals, but I haven't endorsed the political views of the board of directors on unrelated issues. For them to use the corporation to speak on such issues forces me to choose between tacitly supporting their position or quitting my job.
(cont'd)
Aug '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
(cont'd)
This standard would, for instance, allow businesses to lobby for or against laws pertaining to their business, but not unrelated issues like abortion, gay rights, the war in Afghanistan, etc. The same standard would apply to unions, or even voluntary organizations like AARP. The only organizations who genuinely have the right to speak on a hot-button political issue is one formed expressly for that purpose, such as a PAC, because the only people who participate in the group are those who support its goals. And if those goals change in a way that someone finds objectionable, there is no sacrifice to leaving the organization.
Aug '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Paul DeRocco: (cont'd)
This standard would, for instance, allow businesses to lobby for or against laws pertaining to their business, but not unrelated issues like abortion, gay rights, the war in Afghanistan, etc. · Oct 1 at 1:40am
This is an interesting idea, but I don't see how it can work, because I don't see how you can clearly make these distinctions.
Target got into trouble by supporting a pro-business organization that endorsed what it felt was the pro-business candidate. But candidates are seldom single issue, and many were upset by what they saw as insufficient support for gay marriage by the candidate. Was Target lobbying against gay marriage? Not in their minds, I think. How would your proposed standard judge Target?
Aug '10
Re: Do Corporations Like Citizens United and AT&T Have the Same Rights as Us?
Mark Woodworth
Paul DeRocco: (cont'd)
This standard would, for instance, allow businesses to lobby for or against laws pertaining to their business, but not unrelated issues like abortion, gay rights, the war in Afghanistan, etc. · Oct 1 at 1:40am
This is an interesting idea, but I don't see how it can work, because I don't see how you can clearly make these distinctions.
Target got into trouble by supporting a pro-business organization that endorsed what it felt was the pro-business candidate. But candidates are seldom single issue, and many were upset by what they saw as insufficient support for gay marriage by the candidate. Was Target lobbying against gay marriage? Not in their minds, I think. How would your proposed standard judge Target? · Oct 1 at 9:05am
I'm not proposing a legal standard, only a moral one. The legitimacy of any organization taking a position on an issue is inversely proportional to the distance of that issue from the organization's stated purpose. I'll leave it to the SCOTUS to add flesh to those bones, even though it leaves us on tenterhooks wondering what they'll come up with.