THE BLOG
03/28/2014 03:17 pm ET Updated May 28, 2014

Corporations Are Not Persons -- Never Were and Never Can Be

Here's a newsflash for the Roberts Court: Corporations are not persons.

Confusing a corporation as a person is an inexcusable legal error that, as discussed below, undermines representative democracy and subverts the genuine freedoms of speech and religious exercise that our founding generation provided for us in the Constitution. It is so erroneous that it has spawned a boom-let of independent candidacies for Congress from California, including my own.

Corporations are a means to organize and encourage economic activity. The act of incorporation gives rise to the legal fiction of an artificial person. While the justices of the Supreme Court may be more accustomed to reading on the nonfiction side of the library, it would be helpful if they recall that fiction is synonymous with contrived or made up; in other words -- a proposition lacking truth or reality. In the case of the corporation, the legal fiction that gives rise to the corporate artificial person has the discrete and limited purpose of reducing the exposure of investors to personal liability. As is well known, that liability is most often the extent of the equity in the firm. In other words, absent some flaw in the incorporating documentation or practices disregarding the corporate form after its adoption, the assets of individual owners (shareholders), managers or directors are safeguarded.

Contrary to the Court's decision in Citizens United, corporations have only highly limited free speech rights; the company's advertising or commercial speech merely ensures that a truthful statement of advertisement is not limited or censored by the government absent a substantial reason and the lack of an alternative means to accomplish its substantial purpose. Thus, for example, a law may require that electric utilities avoid promoting the usage of electricity if that contradicts the state's conservation or environmental public policy.

But that's it. To try and push the Constitutional protection of the corporation beyond these sensible limits may seem harmless, but it is not. Like a legal Frankenstein unleashed, the conferral of personal rights upon the artificial person of a corporation undermines the rights themselves. Moreover, mistakenly conferring First Amendment political speech rights on a corporation aggravates the wealth disparities that renders the average person in America is no longer a national incorporator. Unless one's income falls within the top 1 percent, it is increasingly difficult to believe that those of more modest means are within the first three precious words of our Constitution: "we the people."

The top 1 percent money pouring out of corporate artificial persons into the pockets of individuals willing to accept public office as a form of corporate largesse which becomes a virtual lifetime sinecure given the gerrymandering devices that keep incumbents in their privileged positions -- a preserve that is secured with the padlock of gerrymandered districts. A House of Representatives with its two-year term intended to be the people's house is today the well-healed domain of rich uncles who stay not for two years or even four or six, but for 30 plus. Today, the chances for representative democracy correlate less with patriotism and admiration for the rule of law than with the avarice that sustains seven-figure bonuses skimmed from profits earned on the backs of middle income workers who find themselves unable to pay medical bills, the tuitions of their children or mortgage payments for a modest shelter.

The persons that founded the United States of America put their lives and fortunes at risk to do so. The corporate figures that dominate American politics today put the lives of all of us in the bottom 99 percent at risk for the benefit of their fortunes. As Robert Reich has demonstrated, the present generation that inhabits the middle class -- citizens that Aristotle in his Politics described as indispensable to the well-being of democracy -- have had stagnant incomes since 1980s, face rising costs, and enjoy a quality of life in economic terms that is significantly below that of their parents. The top 1 percent by taking 86.5 percent of the gross domestic product for itself over the last dozen years is each day living off their less well-off fellow countrymen.

No one begrudges the financial success attributable to invention or intellectual property that deserves reward for its ingenuity, or in its quality manufacture and efficient distribution. America is not afraid of hard work and relies with confidence upon the objectivity of the marketplace to weigh the value of goods and services. But the free market is not provided for in the Constitution of the United States; our economic philosophy and choices are wholly within the discretion of the American people. And while for now, one can be reasonably confident that there would be strong sentiment to retain the free market that retention depends upon the structuring of the market in ways that are fair, transparent and inviting to all regardless of gender, race or other irrelevant personal characteristic. It also depends upon a broad and vibrant middle class that has sufficient resources to sustain the dream of leaving a better life for our children than we received from our parents.

A tax structure that is not skewed to favor the top ! percent is a beginning, but the quality of our lives cannot be measured in dollars and cents; it is measured in the health of our minds and bodies, the well-being of our families, the strength of our children's education, the opportunity to pursue a calling of service and to work for, and when necessary. even to die for something much larger than ourselves is certainly something far more valuable than all the monies accumulated by the irresponsible CEOs who has helped themselves so generously to the disregard of their fellow citizen.

We are a rule of law, and I am confident that the Congress of the United States has the capacity, if it is newly populated with representatives from diverse backgrounds and talents, to restructure the tax code. But to facilitate this, it is important for the Chief Justice and the Supreme Court of the United States to correct previous error and not compound it.

The Court is responsible for the placement of the price upon public office that is beyond the reach of real -- that is, flesh and blood persons -- whose fathers, and in some cases sons, have died on faraway battlefields to maintain the first principles of our Republic stated in the Declaration of Independence: that life liberty and the pursuit of happiness are unalienable rights belonging to each of us derived not from any government or moneyed source, but from our individual understanding of the transcendent.

To not aggravate the consequences of misbegotten corporate personhood, the Court can affirm the modest aggregate limits placed on candidate and party contributions that are under review this term. In rejecting the pending challenge of those limits, the Court can begin to lay the groundwork for the correction of its greater intellectual error: the false analogy between money and speech.

Money is not speech.

Money is a megaphone by which speech is more widely disseminated. When the Supreme Court of the United States recognizes the common sense of that proposition, it will be short work to end unworkable and unnecessary distinctions it has likewise created and manipulated over three decades between public limitations on campaign contributions and campaign spending. Both can and should be limited; indeed, given the present imbalance in wealth and income in this blessed land, it would be wise to legislate a publicly financed political system with the resources raised by an increase in the estate tax upon the top 1 percent.

Having reminded itself that a corporation is an abstraction invented for the usefulness of man and not intended to make man a useful tool of itself, the Supreme Court can avoid putting in danger even greater individual liberties -- such as the sensitive freedom of religion.

For-profit private corporations have never been held, nor should they be held, to be entitled to assert the free exercise of religion which is quintessentially an individual right under our Constitution. The confusion exhibited by the Supreme Court in its questioning of the Hobby lobby Corporation, a for-profit hobby kit maker, more than illustrates the overstated nature of attempting to articulate a corporate free exercise right.

To be precise, at issue in the pending Hobby lobby case is the claimed application of the Religious Freedom Restoration Act (RFRA). For the reasons outlined herein, including fundamentally that corporations are not persons, the Supreme Court should soundly reject the notion that RFRA has any application to Hobby lobby. It doesn't. In legal terms, when Congress passed RFRA, corporations were not within the "zone of interest" protected by the statute. While it is true that the court has preserved the application of RFRA at the federal level, while invalidating it is applied to the states, application at the federal level still must be in an appropriate case. Since it is impossible to state with any certainty whose beliefs within a corporation would count for application of RFRA, it is equally impossible to know or even make sense of an inquiry that asks whether religious practice or belief has been substantially burdened. If there is no religious practice or belief of a real person adversely affected, the corporation has no standing, and the sooner the Supreme Court rids itself of this case by returning to the clarity of first principles of justiciability, the sooner it can be get back to work on cases that are properly before it.

The Chief Justice in earlier cases has adequately extended and protected the freedom of churches, synagogues, mosques and other places of worship and yes, religious corporations to hire and fire its own "ministers." But for-profit corporations lack ministers and RFRA was not expected or intended to expand the protection of free exercise of religion to an artificial, for-profit corporation, for the simple reason that it is organized with an objective that does not fall within the expected scope of a religious community. The Court need say nothing more on this, and indeed it should not, for to speculate on whether there is some category of not-for-profit religious corporation that might also be said to be outside the scope of the Constitution's protection is a case that has not been brought, and thus far, has been easily handled by the administrative decisions of, for example, prison officials who have rejected with far more economy of words than either this essay or Supreme Court opinion, ridiculous claims of inmates that the Constitution protects their supply of drugs or exempts them from the work detail. It may not satisfy all the curiosities of the mind, but for once, the Supreme Court might just simply say: Some absurdities need not be tolerated or even contemplated.

This is not to say that the owners of Hobby lobby or any other pious person who undertakes for-profit business activities cannot, if they so desire, make it clear in his policy statements and his other activities in the community that as a religious person he disagrees with aspects of public health policy or anything else. But the ability of all of us as taxpayers or citizens to dissent with respect to a public policy with which we disagree as a matter of faith does not thereby elevate our disagreement to the status of a constitutional right... That would be over reading the constitutional protection in a way that would actually weaken it, since it would confer upon nonreligious societies -- for-profit business corporations -- unlimited capacity to denominate something as religious and exempt it from the general laws. This is not what is protected by the First Amendment and the Court should merely say so.

After that is it declares that a corporation is not a person in the sense of the Constitution -- never was; never can be.

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