“We never said corporations are people; we said they are voices, speakers, speech-makers, a class of persons. That’s different.”

Jeff Clements

Corporations Are Not People

January 23, 2012

My friend Kent Greenfield and I unwittingly found ourselves to have dueling op-eds this weekend. Here’s mine from the Boston Globe, with Congressman Jim McGovern, the lead sponsor of the People’s Rights Amendment. And here’s Greenfield’s piece from the Washington Post, with a skeptical view of any Constitutional amendment to reverse Citizens United.

And, here now is my take, respectfully, on why Greenfield is wrong.

First, Greenfield mischaracterizes the Constitutional amendments that are at issue, linking to language that no one has introduced in Congress, to my knowledge. He labels those who are working for the Amendment solution as “anti-corporate activists,” despite the fact that most of us are not anti-corporate (1000 business leaders have called for a Constitutional Amendment, as have legal scholars, lawyers, Attorneys General, and millions of other Americans who might not appreciate Greenfield’s assignment of labels.)

Second, and more significantly, Greenfield’s analysis and argument are way off-target.

Greenfield argues that the Court in Citizens United got “the result” wrong but at least the Court asked “the right question.”  No, the Court got the result wrong because the Court  asked the wrong question.

The actual question before the Court in Citizens United should have been the question posed by a challenge to the corporate regulation component of the Bipartisan Campaign Reform Act, known as McCain-Feingold: can Congress can make different election spending rules for human beings than for corporations? Specifically, during certain very narrow windows before a federal election (45 or 60 days, depending on the election) can Congress prohibit corporations from spending corporate general treasury funds to defeat or elect candidates?

The result in Citizens United is a firm “no,” but the Court only got there by a ham-fisted changing of that question into a series of preposterous metaphorical softball questions: Can Congress “ban” speech? Can Congress disfavor some “speakers” or “voices”? Can government censor unpopular ideas? Well, those questions have pretty easy answers but that they had nothing to do with the issue before the Court.

At least they had nothing to do with the issue before the Court without at least the logical threshold question: what exactly is a corporation? Does an even-handed rule about the use of corporate funds in elections impact any human speech rights?

When the majority of the people enact a law that limits the use of a corporate entity for partisan politics, and people are free to spend their own money, associate in any way with others, form any kind of other group or entity that is not regulated in the same way, are we even talking about speech case? Or are we talking about a corporate regulation?

Nowhere in Citizens United is the state-created entity called a corporation defined or discussed. Instead, we are asked to swallow the metaphor soup, to pretend we’re really talking about speakers, voices and a class of persons. Most Americans say, “no thank you,” and it is not because they have, as Greenfield suggests, a “fundamental misunderstanding of constitutional law.”

Greenfield says that Citizens United is based on “reasoning that the political speech of corporations was as important to the marketplace of ideas as the voices of human citizens.”

Perhaps but that assumes the “marketplace” inherently has human voices and corporate voices that stand on equal footing. This ignores the critical threshold question, or at least assumes an answer to that question that not only is counter-intuitive, but that has been rejected by the vast majority of Americans and the framers of the Constitution since the beginning of the Republic.  A corporation is a tool, not a voice; “ . . . political speech of corporations?” What does that even mean? Is there such a thing? If so, who decides?

In fact, corporations don’t speak, people do. In my view, there is no such thing as “political speech by corporations.” There are people who use corporations and corporate money, and, if we let them, use them to advance the interest of the corporation regardless of the interest of the country.

The more subtle question is about power. Who decides the rules about how people use corporate entities created by state law? Since the people through our state laws permit corporations to exist in the first place, and decide on the rules for using the corporation, to assume such as thing as corporate political speech is getting a little ahead of oneself. There might be such a thing, if the people enact corporate laws to facilitate it. But that decision  generally is not a Constitutional question. (Of course, that is not the case if those laws favor some views but not others, a circumstance completely absent from the federal and state corporate election rules).

Corporations are created by law; they are a privilege from the government, and whether they have any place in politics is for the democratically elected branches of government, not for the Court, to say.

Greenfield says “these efforts squander the energy of thousands of Americans on a potential remedy founded on a fundamental misunderstanding of constitutional law. Citizens United did not hold corporations to be persons. . . .”

This strains plausibility.

First, if Citizens United does not treat corporations as persons, Montana and other states that are fighting defiantly to limit the application of Citizens United to their state corporate spending laws would have nothing to fear. After all, the First Amendment doesn’t even apply to the states, except to the extent that it is incorporated into the 14th Amendment protection of the due process and equal protection rights of persons.

No one thinks the states have nothing to fear. In fact, Citizens United rolled over the law of two dozen states.  Montana is the only one left standing, at least until the Supreme Court decides the appeal of corporate speech advocates from the Montana Supreme Court decision in Western Tradition Partnership.

Second, and more fundamentally, Greenfield should re-read Justice Kennedy’s opinion in Citizens United. The “personification” of corporate entities pervades the case. Try to find one place where Justice Kennedy describes what a corporation is, and why Congress might have made different rules for corporations and human beings. It’s not there. It’s not there because Justice Kennedy is doing the old metaphorical trick in corporate speech cases of assuming away the hard issue to make the result sound easy and right.

Justice Kennedy says that the law can’t discriminate among different “speakers,” or raise burdens on speaking by a “disadvantaged class of person.” The weak corporate regulation contained in the invalidated campaign finance law is magically transformed into a “ban on speech”.  A ban on speech? If the Court is not tacitly assuming equivalency in this case between people and corporations, how does a narrow corporate spending regulation become a “ban on speech?”

But the Court never said corporations are people!

Really? Maybe that is technically correct in the most narrow sense. Those exact words do not appear in the opinion in that exact order. Yet, the meaning of Citizens United, and the precedents on which it rests are unmistakable.

First, look at the result when “corporate speakers” win cases such as Citizens United:  A corporation asserts a right on its own behalf, as a corporation, and succeeds in overturning a democratically enacted law, with no one to benefit except the corporation (and those who receive financial reward based on corporate performance that presumably is improved with the regulation or law out of the way).

Try a thought experiment. Exxon v. FEC, rather than Citizens United v. FEC. The result in Citizens United is the same as if the plaintiff had been Exxon, Goldman Sachs, or any global corporation, rather than a Virginia non-profit corporation, the members of which wanted to use for-profit corporate money to fund political advertising. This result – – unlimited corporate rights to spend money in elections – – belies the notion that the Court did not simply equate corporations with people, and corporate money with speech.  Instead, the Court focused on a corporate person- – a speaker, a voice, a source of speech – – whose rights were supposedly violated.

No matter how the Court couches it, First Amendment rights or any other rights that are demanded and received by a corporate entity results in recognition– implicit, if nothing else – – of a corporate Constitutional person, unless the Court explains how the corporate entity is standing in for the rights of real people.

The Court hasn’t been willing to do this much, and certainly did not do so in Citizens United. Instead, Justice Kennedy followed the pattern back to Bellotti and Central Hudson of obscuring the “corporation as person” point by emphasizing other metaphors- “speakers,” “the source of speech” “voices,” or as Justice Kennedy said in CU, “a disadvantaged person or class.” That sounds like personhood to me. Even the word “speech” is a human act.

A related technique for the Court to avoid saying “corporate personhood” out loud is the to talk about the “listeners” and the old “marketplace of ideas.” Those interests and metaphors are certainly relevant. Yet, in every other area of civil rights litigation we insist on identifying both the exact Constitutional injury and exactly who has the claimed right before permitting the Court’s interpretation of the right to trump the democratic branches of government. Not so with corporate speech cases.

What if we had asked the real question in Citizens United – “does a restriction on corporate spending on electioneering for or against a candidate within 60 days of an election infringe the speech rights of the human members of a Virginia non-profit corporation that wish to use corporate general treasury funds and to solicit corporate general treasury funds of for-profit corporations to make political advertisements for and against candidates?” No “voices” or “speakers” but real people.

Maybe the outcome on the facts of Citizens United might have been the same had that been the framework, though I doubt it. In any case, that is a very different analysis with very different implications than what the Court did in assuming that the “person” claiming Constitutional injury is a corporation.

If the Court had approached the challenge to the corporate regulation component of the Bipartisan Campaign Reform Act by focusing on the human beings behind the corporation in Citizens United, and reached the same conclusions, we would still be wondering and debating whether that result meant the human shareholders, executives, or employees of Exxon or Goldman Sachs also suffer any infringement on speech rights if Exxon or Goldman Sachs corporate treasury money could not be used to swing election outcomes.

No one wonders that now because Citizens United clearly answered the question. No one doubts that Citizens United, as intended by the majority, ruled that corporations as corporations have a Constitutional right to spend corporate money on elections. That sure seems like a “corporations are people, too” approach, dressed up with slightly different metaphors.

If just for a moment, the question in those corporate speech cases was re-phrased to reflect what we usually require in Bill of Rights cases – – Constitutional injury to a human being– the outcomes seem dubious, to say the least. For example, “does a corporate or economic regulation (election spending; cigarette advertising; utility corporation rule; FDA off-label marketing rule) violate the speech rights of any human being for which the corporate plaintiff could possibly be a stand-in  – CEO, shareholder, employee?” If we looked at it from that perspective, rather than acting as if Philip Morris, Pfizer, Central Hudson, were Constitutional persons, the vast majority of the corporate/commercial speech cases would seem to present far less serious (maybe no serious) First Amendment questions, because the regulations are not speech restrictions at all, at least not a restriction on any real people.

Take Bellotti, which struck down a state law prohibiting corporate spending in citizen referenda.  Executives, shareholders, employees could spend all the money they wanted (within the same rules applicable to all people) on the citizens referenda. The “restriction” was a corporate regulation that might or might not have impacted share value, depending on whether you believed corporate management’s argument for the corporation that graduated income taxes would make it harder to recruit high-quality executives. The law did not prevent a single person from advocating whatever they wanted to advocate. At most, it prevented executives or shareholders from using corporate money to amplify their points, but no point of view was off limits to the “listeners”.  No “voices” were silenced. No speech was banned.

Same for Lorillard v. Reilly: The law struck down by the Court in that case would have kept cigarette ads 1000′ feet from schools. If any human being actually wanted to advocate smoking to school children, nothing (except morality) prevented that person from standing outside the school gate with a “I love smoking” or “Smoking is cool!” sign. The corporation had an economic/health regulation that impacted its business model and perhaps had some unknown effect on share price but no speech was silenced. No human being was any less free to express a point of view.

I think the same analysis applies to other corporate rights. “Excessive” punitive damages cases under the 14th Amendment, for example: The $2M punitive damages judgment in BMW v. Gore had some impact on human beings, presumably. A penny here or there on each share of the BMW corporation. Perhaps a slight dent in the executive bonus pool at the company.

But what human being actually suffered any injury that merited Constitutional review? By creating a corporate person with a due process right to be free of “excessive” punitive damages, the Court creates a magical aggregation of ridiculous claims –  – a shareholder or executive claim to have been deprived of property without due process when the arguably excessive state jury judgment knocked a penny off the share price- – into a winning claim.

The magic only works if we pretend that corporations are just like a human being under the Bill of Rights.

Greenfield says “The Constitution protects the rights of various groups and institutions — whether Planned Parenthood, Bob Jones University or the AFL-CIO — though they are not “natural persons.” Humans gather themselves in groups, for public and private ends, and sometimes it makes constitutional sense to protect the group as distinct from its constituent humans.”

Actually, no, the Constitution does not protect “the rights of various groups and institutions.” The Constitution protects the rights of people, including the right of assembly, speech, privacy and more, whether as individuals or when people “gather themselves in groups.”

Sometimes the burdens of taking advantage of government policy tools, such the trade-offs that come with using the privilege of incorporation, may not be worth it.  That’s fine. If we don’t like the set of rules that come with using corporate entities, we can change the law that governs them as soon as we can summon a majority that agrees with us. Or we can “gather” into un-incorporated associations. That “group” is “protected” because the Constitution protects the human right of free association, not because the group has a group right.

As I read the Constitution,  nowhere does it say that we have the right when we form ourselves into groups to take the state law benefits of incorporation without the rules that come with it. People who gather themselves into Planned Parenthood, Bob Jones University or the AFL-CIO have rights but those rights are human rights, not rights of the “institutions”.  They have rights, and they have choices. As anyone who has ever started a business or a non-profit knows, one of the first choices is to decide what entity, or array of entities, is most advantageous to the project?

Until Citizens United, there was no reason to think that it made sense to use a corporate entity, and to solicit for-profit corporate money, if the group wanted to engage in electioneering and partisan campaigning to elect or defeat candidates. After all, the law had sought to keep corporate money out of elections for a century. But there were plenty of other entity-choices to make if that was the group’s idea.

Bottom line: As soon as you start calling corporations “speakers,” “voices” or “disadvantaged classes of persons,” rather than use the word “corporations,” you begin to pull a fast one on the American people. If the democratically- elected majority who chose to create corporations for certain uses wanted them be “speakers” or “voices,” they would have written the law that way, and would not have enacted BCRA. Instead, they chose to enact corporate laws to facilitate many enterprises, while retaining the responsibility to ensure that the tools are not misused.

That choice ought to be respected.

Constitutional Amendment