Excessive Fines Clause Applies to Corporations

So the Colorado Supreme Court held today.


From Colo. Dep't of Labor v. Dami Hospitality, LLC:

[Constitutional g]uarantees that are "purely personal" or "limited to the protection of individuals" will not apply to corporations. The established personal guarantees include the Fifth Amendment privilege against self-incrimination and the right to privacy.

On the other hand, when a guarantee is against certain government overreach, and is a "constitutional immunit[y] appropriate to [a corporate] body," this constitutional limitation on government power can apply to protect a corporation just as it may protect a natural person.  Thus, corporations have been recognized to have First Amendment rights to free speech and Fourteenth Amendment rights to due process and equal protection of the law. Similarly, corporations are protected from unreasonable searches and seizures, cannot have their property taken without just compensation, and cannot be tried twice for the same offense.

With these cases as guideposts, in considering whether the Excessive Fines Clause applies to corporations we must evaluate both the purpose of the clause and the appropriateness of applying it to corporations.

The Eighth Amendment provides that "[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." On its face, the text of the Excessive Fines Clause does not suggest that its protections are limited to natural persons. The clause is a directive to the government not to impose excessive fines. It does not include any limitation on who merits protection from the imposition of excessive fines….

[T]here is justification to conclude that the purpose of the Excessive Fines Clause supports its application to protect corporations even if the other clauses in the Eighth Amendment do not…. The bail clause is necessarily limited to natural persons because corporations cannot be jailed, and therefore cannot be subject to bail. Similarly, cruel and unusual punishment cannot be imposed upon a corporation. In short, these two guarantees are not "appropriate to [a corporate] body." By contrast, "[t]he payment of monetary penalties … is something that a corporation can do as an entity." Moreover, the government regularly imposes a wide array of monetary penalties, both civil and criminal, on corporations for the purposes of punishing corporate misconduct and regulatory violations. And when the government imposes these punitive sanctions, we hold that it must do so in compliance with the Excessive Fines Clause….

Our own David Kopel filed an amicus brief in the case on this very question, on behalf of the Cato Institute and the Independence Institute; the court's analysis agrees with that brief. The court opinion also deals with other matters, such as how to decide whether a fine (and in particular a per-day fine) is excessive.

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  1. The question on remand is whether a $500 fine is excessive. It probably isn’t. The Colorado Supreme Court’s essential relevant holding is that if one $500 fine isn’t excessive, then 1,698 of them isn’t going to be excessive either.

    1. To Dami Hospitality, this isn’t “another matter.” This is the essential issue. And this case isn’t a victory. It’s a complete defeat.

    2. Similar to the rule on the right to trial by jury, where the judiciary just invented out of empty air a clause limiting the right to trial by jury to cases where the penalty at stake is more than a year in prison… and then said it was more than a year in prison per count, so that if you’re charged with 100 counts of whatever, you can be denied a jury trial and sent to prison for life, so long as you serve less than a year for each count.

      The judiciary are not reliably our friends when it comes to defending constitutional rights.

  2. IANAL and one thing that all these sorts of questions bring up in my mind is that they seem to stem from different viewpoints of the Constitution: are they limitations and restrictions on the government, or are they protections for people (and possibly corporation in some circumstances)?

    To me, it was clear from the beginning that the Constitution was meant as defining a limited government, and had two ways of defining those limits. First were the various Articles, saying what government could do; second were the Bill of Rights, defining what the government could not do.

    Memory says that one of the objections to an explicit Bill of Rights was that it could be warped and twisted into being a complete list of privileges and immunities, rather than just examples, and that is why the 9th and 10th amendments exist. I have a lot of sympathy for this argument, and it is partly from cases like this — treating the Bill of Rights as protections, ie immunities, instead of limitations on government. If you treat it as immunities, then asking who it applies to is a reasonable, or at least plausible, next step — does it apply to everybody, or only citizens? How about foreigners? How about businesses and other organizations?

    Whereas if you treat the Bill of Rights as just more examples of limitations on government, then the question of who is protected vanishes.

    Consider “Your property cannot be taken by the government” vs “The government cannot take property”. It’s the first interpretation which has expended the government so much and trampled on the 9th and 10 Amendments.

    1. “To me, it was clear from the beginning that the Constitution was meant as defining a limited government. . . . ”

      Not sure where you get that reading and actually I see the exact opposite.

      “We the People of the United States, 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 Constitution. . . ,” kind of leaves the purpose of the government open-ended and not limited.

      And yes, the BoR purposes to restrict or limit the government in specific situations but those restrictions are not absolute.

      1. It was far more powerful than the Articles of Confederation, but it was still limited by the language which said “here is what this government can do” and “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” That very clearly says “powers not delegated”, and has just as clearly become pointless. Mooted is the legal jargon, I believe.

      2. Not sure where you get that reading and actually I see the exact opposite.

        Only Congress holds legislative authority. Congress’ legislative authority is limited to those specific powers set forth in Article 1, Section 8. No sections limit the legislative authority of the Executive or Judiciary because those branches do not have legislative authority.

        If Congress’ legislative authority is limited, then some other entity must hold the remaining (unlimited or general) authority. The 10th amendment makes it clear that this authority is reserved to the states.

  3. Thus, corporations have been recognized to have First Amendment rights to free speech

    The Citizens United decision went out of its way to explain this wasn’t some artificial “body” having free speech rights, but rather it was the right of The People, who take their rights with them wherever they go, including choosing to join a congressionally-created organization like a corporation, and that Congress may not strip those rights as a cost of entry.

    1. Rather like the amendment at question here, the 1st amendment says nothing about WHOSE freedom of speech can’t be abridged, but only says Congress can’t abridge speech. So, even apart from that perfectly valid reasoning you cite, freedom of speech abridging is just generally something Congress isn’t allowed to do.

      1. I don’t agree. It says that Congress cannot abridge the “freedom of speech” not that Congress cannot abridge “speech.” That means it is only invalid if a person or entity has that “freedom”. If they don’t have that freedom, then Congress can’t abridge it. So there needs to be a determination on who has it. (I do, however, agree that corporations have it)

  4. The argument is that corporations are not people and therefore do not have rights.

    If that logic is correct, then the government can seize your property without due process, without just compensation,etc. – even though the corporation is owed by a person.

  5. how are other jurisdictions handling this issue? is this just the first post-Timbs case?

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