The Surprising and Complicated History of the ‘Corporations Are People’ Doctrine

Granting legal personhood to corporations isn’t a novel, conservative plot crafted by the Roberts Court. The idea stretches back to the Gilded Age — and owes more to a lowly court reporter than any Supreme Court justice.

The U.S. Supreme Court is shown after members of the court issued major rulings on cell phone privacy and copyright law June 25, 2014 in Washington, DC. 
National Journal
Dustin Volz
July 1, 2014, 4:51 p.m.

It’s be­come a fa­mil­i­ar leit­mot­if.

By a razor-thin 5-4 ma­jor­ity cleaved across par­tis­an lines, the Su­preme Court re­leases an opin­ion that ap­pears to fa­vor the rights of cor­por­a­tions — and, typ­ic­ally, their mega-rich own­ers — over those of or­din­ary cit­izens.

Hys­teria and hand-wringing among the Left promptly en­sues. Rinse, ar­gue, re­peat.

Steered by Chief Justice John Roberts, the Court’s con­ser­vat­ive ma­jor­ity has for years been us­ing the “cor­por­a­tions are people” line — which wit­nessed a renais­sance in pop­u­lar lex­icon thanks to Mitt Rom­ney — to jus­ti­fy a wide ar­ray of rul­ings that, lib­er­als say, are in­creas­ingly dis­en­fran­chising every­day cit­izens.

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But the concept of what law­yers call “cor­por­ate per­son­hood” began long be­fore the Roberts Court. The doc­trine, in fact, is al­most 200 years old in the U.S. and, if you be­lieve its crit­ics, the Roberts Court has grossly mis­in­ter­preted it.

As with most leg­al think­ing, cor­por­ate per­son­hood has evolved con­sid­er­ably over time. An 1819 de­cision, Trust­ees of Dart­mouth Col­lege v. Wood­ward, first got the ball rolling by hold­ing that cor­por­a­tions have the right to enter in­to con­tract agree­ments with the same pro­tec­tions as in­di­vidu­al people.

But the Dart­mouth case had more to do with cor­por­ate rights than per­son­hood. It wasn’t un­til 1886, in a little-known case, that the Su­preme Court said cor­por­a­tions were gran­ted some of the same pro­tec­tions un­der the 14th Amend­ment (which fam­ously gave us the much-lit­ig­ated due pro­cess clause) af­forded to “all per­sons born or nat­ur­al­ized in the United States.” The case was Santa Clara County v. South­ern Pa­cific Rail­road, which found rail­road ty­coons, who were at the zenith of their power dur­ing the Gil­ded Age, fit­fully protest­ing taxes levied by Cali­for­nia.

But the Su­preme Court didn’t ac­tu­ally say much of any­thing in Santa Clara that’s re­membered today. In­stead, a court re­port­er by the name of Ban­croft Dav­is — who pre­vi­ously served as pres­id­ent of a rail­road com­pany — wrote the fol­low­ing in a head­note sum­mar­iz­ing the Court’s opin­ion:

One of the points made and dis­cussed at length in the brief of coun­sel for de­fend­ants in er­ror was that “Cor­por­a­tions are per­sons with­in the mean­ing of the Four­teenth Amend­ment to the Con­sti­tu­tion of the United States.” Be­fore ar­gu­ment Mr. Chief Justice Waite said: The court does not wish to hear ar­gu­ment on the ques­tion wheth­er the pro­vi­sion in the Four­teenth Amend­ment to the Con­sti­tu­tion, which for­bids a State to deny to any per­son with­in its jur­is­dic­tion the equal pro­tec­tion of the laws, ap­plies to these cor­por­a­tions. We are all of opin­ion that it does.

Dav­is’s head­note is im­port­ant for two reas­ons. First, it was not a tran­script but an in­ter­pret­a­tion of how the Court felt (though Dav­is did later cor­res­pond with Waite to veri­fy the ac­cur­acy of his sum­mary, which some leg­al schol­ars ar­gue was far less nu­anced than the rul­ing it­self). And secondly, in the de­cision, as Dav­id Korten notes in his book, The Post-Cor­por­ate World: Life After Cap­it­al­ism, Waite cre­ated the concept of cor­por­ate per­son­hood without ar­gu­ment or pre­ced­ent.

In­deed, just two years later, Justice Steph­en John­son Field de­livered an opin­ion stat­ing, “Un­der the des­ig­na­tion of ‘per­son’ there is no doubt that a private cor­por­a­tion is in­cluded.”

“Thus it was that a two-sen­tence as­ser­tion by a single judge el­ev­ated cor­por­a­tions to the status of per­sons un­der the law, pre­pared the way for the rise of glob­al cor­por­ate rule, and thereby changed the course of his­tory,” Korten writes.

And as Thomas Stor­ck noted in 2012, shortly after the Oc­cupy Wall Street move­ment briefly pushed for a reex­am­in­a­tion of cor­por­ate per­son­hood, the Su­preme Court stated some 20 years after Santa Clara that head­notes lacked any leg­al au­thor­ity. But that cla­ri­fic­a­tion was after Santa Clara had been cited and “ac­quired the status of a pre­ced­ent.”

Neither of these cases is cited in the this week’s ma­jor­ity opin­ion in Hobby Lobby, which weakened the Obama­care con­tra­cep­tion man­date and marks the latest in­stall­ment of the Roberts Court’s treat­ment of cor­por­a­tions as people. For the first time, leg­al ob­serv­ers noted, busi­nesses were deemed to pos­sess re­li­gious free­dom.

But lib­er­al Justice Ruth Bader Gins­burg, in her 35-page dis­sent, ar­gued that Roberts and his four con­ser­vat­ive broth­ers are mis­re­mem­ber­ing his­tory and con­tinu­ing a pat­tern of mis­ap­ply­ing a pre­ced­ent set by a court re­port­er that even­tu­ally be­came stand­ard jur­is­pru­dence. Earli­er Courts, Gins­burg ar­gued, nev­er in­ten­ded for cor­por­a­tions to be ser­i­ously con­sidered on equal meas­ure against, well, real people.

“As Chief Justice John Mar­shall ob­served nearly two cen­tur­ies ago, a cor­por­a­tion is ‘an ar­ti­fi­cial be­ing, in­vis­ible, in­tan­gible, and ex­ist­ing only in con­tem­pla­tion of law,’ ” Gins­burg writes, cit­ing Dart­mouth. “Cor­por­a­tions, Justice [John Paul] Stevens more re­cently re­minded [in Cit­izens United], ‘have no con­sciences, no be­liefs, no feel­ings, no thoughts, no de­sires.’ “

Gins­burg la­cer­ated the ma­jor­ity for ven­tur­ing “in­to a mine­field” with its Hobby Lobby opin­ion. But it’s a mine­field that was set — per­haps un­in­ten­tion­ally — a long time ago.

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