No, Corporations Aren't People, and It's a Good Thing, Too

A new book explains that denying corporate personhood has been the key to protecting the rights of shareholders

|The Volokh Conspiracy |

UCLA Law Professor Adam Winkler's We the Corporations: How American Businesses Won Their Civil Rights, which I reviewed for the Claremont Review of Books, turns on its head the conventional wisdom about how "corporate personhood" relates to the ability of corporations to assert constitutional rights. Winkler explains that when corporations have been treated like "people," courts have been willing to put significant restrictions on corporations' ability to assert constitutional rights, because corporate persons as creations of the state have fewer rights than do natural persons. However, starting in the 1930s, as a product of (ironically?) liberal Supreme Court justices who sought to ensure that newspaper corporations could assert First Amendment rights, judical decisions began to see corporations as representing the rights of their natural-person shareholders, rather than as separate corporate "people."

I learned a lot from this book, and was especially intrigued by its discussion of the influence of colonial charters on American constitutional development.

My review criticizes the book, on the other hand, for neglecting early religious freedom cases involving corporations, conflating free market arguments with pro-corporation ones, neglecting the importance of the incorporation doctrine in establishing corporate rights, wildly overstating the importance of the "Powell memo," failing to reckon with the partisan reasons Democrats and liberals support campaign finance reform, and more generally accepting dubious progressive shibboleths such as the "race to the bottom" as valid.

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  1. Corporations are groups of people, and people don’t lose their rights when they form groups.

    1. As I learned in BA, corporations vary from people in a number of important ways. Immortality for instance. Shielding their individuals from liability being another.

      The question is whether people have a right to speak in a new way, via corporate policies. I do not find a cognizable reason to deny them this additional communication channel (though making it a condition of allowing the corporate form is a neat idea).

      But I lay the real problem with Bukley v. Valeo.

      1. “though making it a condition of allowing the corporate form is a neat idea”

        Sounds good! Only newspapers that endorse Republican candidates can form corporations!

        1. You’ve never been able to condition viewpoint discrimination on government benefits.

          1. No, because that would violate the First Amendment!

            If corporations don’t have rights, we can certainly discriminate against them.

            1. Conditioning benefits on the use of a certain medium of communication doesn’t seem obviously unconstitutional to me. Doesn’t mean it isn’t.

              As I said, the main issue I have is with money being speech more than the corporate form bit.

              1. “Money is speech” only because if it weren’t, then the government could regulate any speech with any connection to money.

                Did you buy fuel to travel to where you spoke? Prison for you. Did someone else give you a ride for free? That has monetary value, so prison for both of you.

                That’s not consistent with free speech. Therefore money must be speech. Too bad for censors and totalitarians.

                1. I cannot understand what you are saying here. Are you saying that I have a 1st amendment right to buy fuel to travel to where I spoke? And that means money is speech?

                2. Money is not speech. It may be needed for many types of speech, but that’s not the same thing.

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      2. Encorporation, as en-bodying, as in a fictional person, is, as mentioned, to create a liability shield for investors. Suddenly all kinds of laws apply to the company directly and not just the owners or workers. It can be fined. It can go bankrupt, and recovery of losses stops when it runs out of money (and stuff to sell off) instead of continuing on into the pockets of the owners. (See the troubles the deep pockets backers of Lloyds of London got into 10 years ago after some space launch failures and tanker crashes. Some old moneyed Lords had to sell their ancestral estates to make good.)

        But this is a convenience. The SC spoke very clearly that The People take their speech rights with them wherever they go, and that includes deciding to take advantage of Congressionally-created groupings like corporations.

        The decision was deliberately called out as not relying on some hypothetical first amendment right of a fictional person. It is very real people speaking.

  2. Excellent review. Winkler does seem to be making a career out of saying “everyone’s right and everyone’s wrong” on difficult issues. And your characterization of Winkler being a bit loose with his interpretation of precedent and history is exactly what I found difficult to deal with in his other book that I’ve read, Gunfight. Most notably in that book was his dealing with gun laws in the American west, which were not gun control in the modern sense, but rather asking young men who were going to go drinking and whoring in the entertainment district to check their guns before going in. Then his historical research on the Black Panthers, which took everything that they said about themselves as a given and largely excludes information about their murdering and drug dealing.

    For $28, I’ll pass on buying it. Thanks for reading it so I don’t have too!

  3. No, Gaggles Aren’t Geese, and It’s a Good Thing, Too.

    or maybe

    No. Prides Aren’t Lions, and Its a Good Thing, Too.

    More broadly, a group of constituent components is not itself one of those components. Makes for fun word-play (and catchy headlines), but doesn’t really say anything of substance.

  4. Corporations pretty much have to have most of the rights of natural persons, because people don’t form corporations for fun. They form them because the government’s own tort system makes not forming them legally perilous.

    Forcing people to form organizations that deprived them of their natural rights in order to conduct business would come close to abolishing those rights in most settings.

    In particular, it’s basically impossible for a non-corporate publisher to survive, let alone compete with a corporate publisher. So 1st amendment rights would be the exception, not the rule, if the 1st amendment didn’t protect corporations.

    I suspect most of the complaints about Citizens United come from people who are aware of this, and untroubled by the result of what they advocate if it were ever implemented.

    1. A complete ban on political contributions by large public corporations would deprive absolutely no one of any right. It would not affect the rights of the shareholders one iota.

      1. Unless you also place a complete ban on political contributions by unions and all other collective entities, then yes it would deprive some people of a right. Specifically, it would deprive those who choose to participate in a corporate collective of a right enjoyed by those choose a different and politically-favored collective – the right to pool their resources to speak.

        The justification for Citizens United would be a lot weaker if unions had also been banned from collective speech. Though arguably, you’d still have to take away the speech rights of newspapers before you could truly say that corporations were no longer differentially treated.

        1. That and media corporations are also corporations. So, you’d have to ban any endorsements or free play offered to political candidates as well. Let’s keep in mind that Citizens United itself was an organization that wanted to show a movie, thus a media corporation itself.

          1. From my comment below:

            The NYT is free to put out the newspaper, and if Microsoft or Exxon want to publish news or opinion they ought to be free to do so as well.

            But writing checks is not speech. It is not expressing opinions to the public. It is writing checks, often for the purpose of technically legal bribery.

            Also, again, I’m fine with CU showing a movie.

        2. In fact, Citizens United wasn’t some random corporation which suddenly decided to get involved in politics for reasons unrelated to its core mission.

          Citizens United is an organization dedicated to restoring our government to citizens’ control. Through a combination of education, advocacy, and grass roots organization, Citizens United seeks to reassert the traditional American values of limited government, freedom of enterprise, strong families, and national sovereignty and security. Citizens United’s goal is to restore the founding fathers’ vision of a free nation, guided by the honesty, common sense, and good will of its citizens.

          Political speech, in the sense of speech about public issues being effective by politics, was what Citizens United, a non-profit, exists for. It’s a 501(c)4 non-profit. It exists for no other purpose than for people to get together and engage in this sort of speech.

          You might as well ban the ACLU, also a 501(c)4 corporation, from engaging in speech on public issues.

          It’s not any accident that all the rationales that have been invented to justify shutting up CU would also impact groups like the NRA and media outlets. The people complaining about CU WANT censorship of political speech.

          1. Uh, Brett, you’re undercutting the argument that corporations’ rights inherent from their constituent members by reifying the organization itself.

            The people complaining about CU WANT censorship of political speech.
            Only if you define campaign finance reform as censorship, which is begging the question.

            1. How would you define campaign finance reform as anything other than censorship? You are literally limiting the ability of individuals (or groups) to speak on political matters.

              One might argue that censoring political speech is good, but it’s still censorship.

            2. No, I’m pointing out that Citizens United was actually created by people as a vehicle for expressing political views. And yet the people who make the most noise about thinking that decision wrongly decided deny that their intention is to silence political speech.

              If it wasn’t, why would they complain about Citizens United, which was about nothing else?

              It clarifies their real motives.

              And, yes, campaign finance “reform” is censorship, if it seeks to prevent a person or a group of people from spending their money on their own speech.

              1. Supreme Court cases aren’t just about the parties, which I know you know.

                And wanting to prevent corporations from influencing elections isn’t the same as silencing political speech unless you actually do equate the corporation to the person. I don’t think it’s practicable, but corporations are a channel for speech, not just speech.

                I know it’s par for the course for you to explain what liberals are really doing, but once again what you suppose they want isn’t what anyone actually wants.

                1. Supreme court cases are at least about the parties.

                  Wanting to prevent corporations from influencing elections is exactly about silencing political speech. Literally, there ain’t nobody there except people, to silence, and corporations influence elections by means of speech.

                  The whole point of shutting the corporations up is to influence elections by subtraction. Make your side win by shutting up opposing voices.

                  That’s just an illegitimate way to try to win an argument, period, end of story.

                  1. Due to how precedents work, the parties are at best a small subset of most Supreme Court cases. Neat for a narrative, not great if you’re arguing that’s all advocates for/against a case care about.

                    The very fact that you are angry that communication via this form is being cut off says how different corporate influence is from just people.

                    There are principled reasons to get money out of politics. That you think the only reason is partisan advantage says a lot about where your principals come from.

          2. Brett,

            I’m not trying to shut up CU.

            Have you ready of my comments?

        3. No, Rossami, I don’t.

          Notice that I referred to “large public corporations.”

          I think Citizens United was rightly decided, but should have been much narrower. People should be able to organize themselves into a group to pool their resources.

          But the claim that Microsoft, for example, is some sort of voluntary association of that type is complete nonsense, no matter how often repeated. It’s a business organization, whose shareholders invest for financial reasons, not to let the management spend their money on political causes.

          Notice, by the way, that a ban on contributions by Microsoft would in no way prevent a group of its shareholders from forming just the sort of collective you describe.

          1. Theoretically, the New York Times is also a business, whose shareholders invest for financial reasons, not to let the management spend their money on political causes. And yet the NYT is spending money on political causes all the time. Endorsements, and in kind contributions of helpful news coverage to politicians they like, and damaging news coverage if they don’t like you.

            It’s irrelevant. The point of the 1st amendment is that government regulation of speech and publishing is so freaking dangerous that it’s supposed to just be off limits, PERIOD. “No” law.

            1. And giving money to a PAC is not speech or publishing.

              Yes, spending money is usually a necessary condition to publishing. It is not a sufficient condition.

              Oh. And the NYT shareholders, and its readers, know what they are signing up for in the way of political news and opinion and who is running things.

              Shareholders in companies making undisclosed contributions do not.

              1. “And giving money to a PAC is not speech or publishing.

                Yes, spending money is usually a necessary condition to publishing.”

                But if you ban spending money for the purpose of publishing, you are infringing on the right to publish.

            2. “…whose shareholders invest for financial reasons, not to let the management spend their money on political causes.”

              These are not necessarily separate. For example, a coal company is going to find it necessary to advocate for political causes that facilitate coal mining, and investors expect this. It’s not like management is just donating to their pet candidates.

              1. Advocacy is speech. Check writing isn’t. Writing checks to pay for advertising is fine. Writing them to candidates or PAC’s isn’t.

                If you want to speak, speak. Don’t bribe.

                And if you think management never just donates to their personal favorites you are being naive.

        4. Rossami, that misses a crucial distinction. Corporate voting is per-share, not per-person. There should be no place for per-share voting in democratic political process. Union voting is per-person, and thus in accord with democracy. If you want corporate speech established as a political right, find a way to govern it on the basis of per-person voting. Otherwise, corporate speech in politics ought to be banned.

  5. IANAL and I didn’t read the original book, but I will try to answer the question you posited at the end of the paper: “under what theory may the government regulate the participation of a non-media corporation in the political process, which would not allow it also to regulate the content of the Times?”

    I think a theory that considers the role and intent of an organization will work. I don’t know if I agree with this, so I’m playing devil’s advocate. Non-media corporations aren’t newspapers, the Times is. Why does that matter? Because influence isn’t something you control. There are individuals who have more influence than entire news organizations with just a microphone and a YouTube channel. If you’re trying to be a political actor, you will not be regulated. If you aren’t a political actor but try to be one for a day, that’s when regulation comes in. In an idealist sense, speech should be purely about content, but the fact is that how much you can spend increases your influence. You have to be seen somewhere other than 4am infomercials to reach out to people. I can appreciate the romantic appeal of separating resources and scarcity from speech.

    1. I think you get close.

      The government may not regulate published content, broadly defined, nor may it say what media may be used. The NYT is free to put out the newspaper, and if Microsoft or Exxon want to publish news or opinion they ought to be free to do so as well.

      But writing checks is not speech. It is not expressing opinions to the public. It is writing checks, often for the purpose of technically legal bribery.

      1. The gov’t’s position in Citizens United was that the government could literally ban corporations from publishing books.

        1. OK. I disagree with that position. What does it have to do with anything I have said?

      2. But writing checks is not speech.

        And corporations are not allowed to “write checks”: they cannot donate to political campaigns.
        What they can do is run ads advocating their position ? and that’s what the campaign-finance “reformers” are trying to stop.

        1. What they do is contribute to PAC’s, and don’t disclose those contributions. In fact, they fight like tigers, with help from the GOP, to avoid disclosure.

          1. And there would be a much greater case for disclosure if Brendan Eich was still employed, if people weren’t being deplatformed right and… right.

            It’s just too obvious at this point that the left’s newfound passion about disclosure is about obtaining targeting information for retaliation campaigns.

            1. Yet another nefarious plot by those Brett disagrees with.

              It really is impossible for you to imagine anyone doing so in good faith, isn’t it?

              1. I think his Brendan Eich example is pretty on point here, and anticipates your argument. We *know* there are people who would use disclosure in bad faith. Why empower them?

      3. That’s why I thought intent might work. I know it’s a loosey goosey standard, but it isn’t really possible to speak without writing a check. Time is money and the ability to spend all your time speaking is enabled by such. Personally I don’t buy the argument Democrats advance against campaign finance spending because even the worst and most expensive messages can be defeated by superior arguments.

        I also don’t buy it because Democrats outraise Republicans by a landslide now and the biggest spender usually wins, about 80% of the time. That’s why Democrats often talk about taxpayer subsidized elections to increase their coffers further while maintaining the facade of “fairness.”

      4. “But writing checks is not speech.”

        Writing checks is not abortion, either. But if the government bans writing checks to pay for abortions, they infringe on the right to an abortion just as surely as they infringe on the right of freedom of speech by banning writing checks to pay for speech.

        1. I agree. But lots of political check-writing is not for speech, and lots of it is not in the interests of the shareholders.

    2. Quite a few American newspapers started out as land promotion schemes, and not a few continued in that role for a long period. This is particularly common in the Far West where The Los Angeles Times and The San Francisco Chronicle were basically los leaders for their principles real estate speculation, and it is not uncommin for this sort of thing even today in exurban and rural markets.

      Determining intent is a torturous business and the idea of a special right for a subste of publishers is prettt suspect.

      1. Very fair point. I don’t think it would be a special right though. I was imagining a situation where so long as I declare that I am acting politically, my speech could not be regulated. Whereas if I were a corporation and I spent money writing a political book, I would have to state it as such to avoid prohibitions on spending. That way, we can have a clearer distinction between a “lobbyist” and an “industry group”, commentary and journalism, etc.

      2. The simple way to make the distinction is to use common sense and the Constitution. Both people at large, and the legal system, can recognize a press business when they see one. It assembles an audience, it publishes regularly, it doesn’t have more financial stake in some other activity than it does in publishing. Business of that sort have been explicitly protected by the Constitution, and others have not. That holds true regardless of the point of view or the content of the press corporation involved. That ought to be enough.

        But for nigglers who are mostly motivated by hostility to existing press establishments, it will never be enough. More formal distinctions would be possible. You could establish a press corporation, as a category. Its characteristics would be:

        1. It practices publishing predominantly, and not some other business.

        2. It derives it treasury from capital raised for the purpose of publishing, and not from other commercial activity, but only otherwise from profits realized by practice of the publishing business.

        3. It is independent of other corporations of other types, and does not own other corporations of other types.

        Other conditions might prove necessary, but you get the idea.

        Then, let would-be businesses choose the type of corporation they want, a commercial corporation, or a press corporation. Extend Constitutional protection to the latter, and not the former.

        1. “Business of that sort have been explicitly protected by the Constitution,”

          This is simply false. Exxon or Microsoft has just as much right to the freedom of the press as the NYT, that is, they have just as much right to publish their views.

  6. Seems like the legal academy in general could benefit from some staff reductions. Isn’t there enough professional academic nonsense being written in other fields?

  7. In an important way – and useful for prosecutors of corporate wrong doing – criminal and other laws pertaining to people apply to corporations (and others):

    “In determining the meaning of any Act of Congress, unless the context indicates otherwise?

    the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals;”
    1 USC ? 1
    And for NY Times & newspapers example, wouldn’t the 1st amendment text specific to “…freedom…of the press” add a layer to speech analysis?

    1. It has to be remembered, though, that “freedom of the press” in the 1st amendment isn’t a reference to the newspaper industry. It was a reference to the use of printing presses, the use of which is protected from government interference regardless of who is using them.

      The NY Times has no more 1st amendment protection than any random guy on the street printing up a flier. They’re just doing for (supposed) profit what everybody is entitled to do for any motive that strikes their fancy.

      1. What you say about freedom of the press, Brett, as not being in reference to the newspaper industry, is mistaken as a matter of history. You?and Eugene Volokh too?don’t know what you are talking about on that point. Maybe that is because you don’t know a notable body of history so obvious and so well documented that your oversight seems peculiar. Maybe it’s an intentional turning away from facts you wish were otherwise, because they inconvenience arguments you wish to make for ideological reasons. Either way, you should cut it out, because the only people who are going to agree with you are others who are similarly motivated, or similarly ignorant of the facts of history.

        1. In response to a comment here a few months ago, I quickly found in the digitized letters of Jefferson and Madison instances of the use of the term “The Press” to mean the industry as a whole, and not just printing presses.

        2. “What you say about freedom of the press, Brett, as not being in reference to the newspaper industry, is mistaken as a matter of history…”

          You’re suggesting that the government could, consistent with the principal of freedom of the press, ban the possession or use of printing presses by those outside of the newspaper industry?

          Talk about being mistaken as a matter of history. The entire concept comes from the English government’s attempts to control the use of printing presses.

  8. Hm. I’ll have to browse a copy next time I’m in a bookshop of unusual size, as I can’t fathom how that would follow. A colonial charter was a grant to a certain fellow at court to make a colony, and (only if the charter specifically provided), think up a few laws and enforce them. There was open warfare in the Bahamas around the time of the interregnum (ne Commonwealth) between groups claiming to hold from different charters. But in no case was the relationship voluntary and businesslike. Favor at court (e.g., Penn) got the rights, and if the subjects (vel non) on the other end complained, it ran to Privy Council, not Common Pleas or Parliament. Parliament was the great absent player in the colonial experience. (Leading to some interesting theories of history about Stuart loyalists over the water.) Caveat: not my area of expertise. Caveat to the caveat: yet still correct.

    1. Correction: Barbados, not the Bahamas.

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