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Wednesday, July 08, 2015

When Corporations are Good People: Part Two

I want to follow up on my previous post by putting forth one way to solve the puzzle I raised.  I’d love more thoughts on this.

 Again, the puzzle is that A) some people seem to think that corporations have neither religious beliefs nor First Amendment rights while also B) finding it good/desirable when companies support laudable political and/or social causes (e.g. “green” practices, a café that only sells fair trade coffee, a company contributing funds to or otherwise marching in an LGBT parade, a supply-chain code of conduct that holds suppliers to a standard far above what the law requires, etc.).

 These positions are inconsistent if entities that can aim to do good should have constitutional rights. But then that’s the question: why think doing good implies having rights? Two possibilities:

(1) Like any area where we see entities doing normative work, what’s really going on is that individuals are doing it. Individuals have constitutional rights and when they act, through the corporate form or otherwise, those rights remain.  

(2) When we create new entities (for-profit corporations, non-profit corporations, countries, cylons) and those entities are capable of having their own ends or purposes, they get rights. 

 Yet here’s one way I can imagine someone accepting A and B and version (1) above without running into a contradiction. (I haven’t yet thought through ways out for those who adopt (2).)

 Underlying Commitment: The individuals who make up (or own or control or whatever) the corporation have constitutional rights but the price of taking up the benefits of the corporate form includes giving up constitutional rights when acting as the corporation. So by all means promote the better treatment of animals while acting as the corporation today, but if the state passes a law prohibiting corporations from engaging in such speech, there’s no automatic First Amendment issue. (N.B. This view strikes me as not dissimilar from the PTO’s cancellation of trademarks in the Redskins football team – trademark registration is a benefit and if the government does not want to permit registration of disparaging ones, that is the government’s prerogative [at least that’s the argument]) 

Now those who take this position have to answer a variety of questions:

  • Do non-profit corporations also lack constitutional rights? If they do have rights, on what basis does the constitution extend to them but not for-profits?
  • Was New York Times v. Sullivan correctly decided? If so, is the idea that freedom of the Press requires all entities (be them individuals or corporations) that exist for Press purposes get constitutional protections so the fact that a news corporation gets them is neither because it’s a corporation nor because it’s a set of individuals exercising their own rights but because the Press Clause is the independent source? [Though this view may commit one to thinking Citizens United’s holding correct, though wrongly reasoned. See Michael McConnell’s essay in the Yale Law Journal, Reconsidering Citizens United as a Press Clause Case).
  • Could a state extend the benefits of incorporation to only those companies that agree to donate 1% of their earnings to a particular social cause? Others are free to create companies but they’ll have to create de facto corporations through a nexus of contracts. (perhaps a Walker v. Texas Division, Sons of Confederate Veterans, Inc./government speech theory?)
  • Should the government be able to condition public employment in the same way? Public assistance?

Thoughts welcome.

Posted by Heather Whitney on July 8, 2015 at 12:55 PM | Permalink

Comments

The first part of your reply was granted:

"The law of unconstitutional conditions might be somewhat confusing but it will apply here too to some extent."

So, the issue is the "piece" of the 1A applicable in this situation as shown in part by the excerpt I quoted. There is a difference between only giving articles of corporations, e.g., to Catholics as compared to requirements of serving customers or providing benefits to employees that clash with religious belief of those who hold a corporate charter.

"If the corporation has its own set of rights, independent of the owners, then the analysis is quite different."

"If" is confusing -- isn't this the nature of the corporate form? To set up an independent artificial entity?

"Could the government say that in exchange for the privilege of holding a drivers license you must give up your freedom of religion? Or in exchange for federal student loan money, you must waive your Fourth Amendment protections?"

I'm sorry. But, you are moving from the for profit business corporation [a corporate charter for a religious college or church would be a different issue] to the personal right to hold a drivers license, which is a quite different matter. Justified regulations there would be different than a for business corporation. Still, there are limited requirements to getting a drivers' license that might clash with a person's religion. If, e.g., you think only your priest has the right to test your driving skills, that won't do.

It seems like you are setting up some strawman as if people are saying that ANY sort of government privilege can require waiving constitutional right writ large. A person is not even being asked to "give up" all their religious rights HERE even.

The argument is that the independent for business corporate business is a separate entity from the human individual. The smaller argument is that at any rate the business does not have a right to inflict the third party burdens on the employees even if its owners have religious beliefs that compel it.

And, overall, the for profit business corporation could be more regulated, including for instance subject to a scope of search and seizure that is not unlimited but broader than is allowable for a person or a person's home.

Barry's comment might be more open-ended, but your "logical extreme" is something of a strawman as well. Barry isn't saying that, I'm pretty sure.

Posted by: Joe | Jul 12, 2015 1:03:17 PM

Joe,

I think there must be some limit to what the government can ask for in return for special benefits (such as liability protection of the corporate form). And I would argue that giving up a piece of the First Amendment's freedom of religion would be over the line.

Of course, this only works if the rights of the corporation are actually just the rights of the owners. If the corporation has its own set of rights, independent of the owners, then the analysis is quite different.

The bargain argument falls apart fairly quickly once we push it to its logical extreme. Could the government say that in exchange for the privilege of holding a drivers license you must give up your freedom of religion? Or in exchange for federal student loan money, you must waive your Fourth Amendment protections?

I don't think the Constitution would permit such an end-run around basic rights.

Posted by: Derek Tokaz | Jul 12, 2015 8:10:49 AM

"So then a sole proprietorship would not be subject to the same bargain? If Hobby Lobby weren't able to express a religious belief, would Solo Joe's Discount Shack be allowed to?"

Solo Joe's Discount Shack can be required once it goes into business as a public accommodation to serve all comers, even if it was against the owner's religion to serve unaccomodated women or to associate with "immoral" people such as the divorced or whatever. A church can be more discriminating about who enters the premises.

Corporations get special benefits from the government, such as immunity, so can be required to do things those that don't get the same benefits from the state in certain cases.

I don't know what "expresses a religious belief" means here. A corporation that sells Christian relics can "express" certain things, including commercials with religious overtones. But, yes, corporations are different than solo proprietors. As the dissent in Hobby Lobby noted:

"But even accepting, arguendo, the premise that unincorporated business enterprises may gain religious accommodations under the Free Exercise Clause, the Court's conclusion is unsound. In a sole proprietorship, the business and its owner are one and the same. By incorporating a business, however, an individual separates herself from the entity and escapes personal responsibility for the entity's obligations."

Posted by: Joe | Jul 12, 2015 2:10:52 AM

"the price of taking up the benefits of the corporate form includes giving up constitutional rights when acting as the corporation"

So then a sole proprietorship would not be subject to the same bargain? If Hobby Lobby weren't able to express a religious belief, would Solo Joe's Discount Shack be allowed to?

Posted by: Derek Tokaz | Jul 11, 2015 8:28:10 PM

"the price of taking up the benefits of the corporate form includes giving up constitutional rights when acting as the corporation"

The law of unconstitutional conditions might be somewhat confusing but it will apply here too to some extent. The issue is often that lack of rights to do something -- unincorporated businesses can be stopped from denying service to blacks, even though in your private life you can choose not to associate. Ditto denial of certain benefits to workers on religious grounds.

The phrasing seems a bit misleading. When I go into public, do I guess I "give up" certain rights that I have in the privacy of my own home. I still have some and incorporating cannot require me to vote for certain candidates. But, business, especially when the state provides you special benefits, does open up to more regulations, some touching on constitutional rights.

Posted by: Joe | Jul 10, 2015 9:28:07 AM

Barry,

I don't see how that follows. Under my theory, we don't need the corporation to be a person at all. Corporate personhood is just a convenient legal fiction, because it helps us to understand and talk about what the natural persons are doing.

Posted by: Derek Tokaz | Jul 10, 2015 8:16:24 AM

Derek: "No way this theory flies. There's that whole "Congress shall make no law abridging..." thing, plus the 14 Amendment applying it to the states. Pretty sure if a state's corporate law said you have to give up certain rights to use a corporate form, that would could as making a law abridging rights."

Note that your argument would ban the ownership and sale of corporations, under the 13th amendment.

'You' don't give up anything. A corporation is an artificial person, a creation of the laws, pure and simple. It's when a bunch of people decide that operating as a bunch of people is not enough, and need a legal third party.

Posted by: Barry | Jul 9, 2015 1:08:25 PM

What does NYT v. Sullivan have to do with this? I thought the issue there was whether the state may allow for a private cause of action for libel against a public official. I could be wrong though; we didn't cover the First Amendment in my con law class.

Posted by: Derek Tokaz | Jul 8, 2015 11:48:33 PM

This post raised a couple of questions/comments:

1) I don't think I've seen any serious advocacy for the position that corporations are entirely devoid of First Amendment rights. Could using that is the baseline position creating the conflict you describe be making it seem like more of a conundrum than it is? Alternatively, perhaps your next follow up could point to some of the commentary stating that corporations should be wholly without any First Amendment protection.

And a smaller point:

2) It seems the press clause rarely, if ever, confers rights because of the nature of the organization. Most everything about it seems to point the other way, that "press" organizations do not enjoy special protections by sheer virtue of their being press organizations. Rather, it's the nature of the activity that's protected. So it doesn't seem quite right to say a newspaper (or other media entity) has first amendment protections solely by virtue of the press clause that other organizations would lack. Those other organizations, insofar as they participated in the "press," would have the same protections, and the Washington Post when not acting in its press capacity would have protections coextensive than other organizations.

That is, if the hypothetical position (which I know you are not necessarily advancing) is that a corporation's right to, say, fund a pride parade is not protected by the first amendment, a newspaper is not going to have the right to do so by virtue of the press clause.

Anyway, those are my two cents. Will be interested to see how these posts evolve, although I think some added clarity would still help.

Posted by: Francis | Jul 8, 2015 7:21:07 PM

would count* as

Posted by: Derek Tokaz | Jul 8, 2015 2:22:28 PM

This all looks suspiciously like my comment from the previous post, but that aside...

"The individuals who make up (or own or control or whatever) the corporation have constitutional rights but the price of taking up the benefits of the corporate form includes giving up constitutional rights when acting as the corporation."

No way this theory flies. There's that whole "Congress shall make no law abridging..." thing, plus the 14 Amendment applying it to the states. Pretty sure if a state's corporate law said you have to give up certain rights to use a corporate form, that would could as making a law abridging rights.

Just imagine if a state said that in order to get the benefits of marriage you had to waive your right to 4th Amendment protections in regards to your marital activities, including any jointly owned property, the marital home, marital bed, and marital 'duties.' That dog ain't gonna hunt.

Posted by: Derek Tokaz | Jul 8, 2015 2:21:32 PM

"some people seem to think that corporations have neither religious beliefs nor First Amendment rights"

Who are these people? Surely not the dissenters in Citizens United, who joined other opinions that held they did have free speech rights. Who, e.g., doesn't think a business corporation lacks the right to advertise or make corporate statements and so forth?

Some do think "press" equals "media" but even there few doubt other corporations have some rights of freedom of expression. The main concern is scope particularly when we are talking about campaign finance. And, yes, I quite agree such entities have various free expression rights & this has positive results.

As to religious beliefs, critics of Hobby Lobby generally accept that the owners of Ben & Jerry's or something can have liberal religious beliefs or whatever in general and do various positive corporate actions as a result. The human corporate actors here have rights to do this & again, that's good.

The argument is that a for profit business corporation as an entity (unlike a religious institution like a college that can be incorporated) doesn't have a "religion" per se and particularly shouldn't have the right to exemptions as a result especially if they burden third parties. Again, a fine tuned argument here is best though some loosely use language that is broader.

The corporations as legal persons do not lack ANY rights here and surely not non-profits who in fact have more rights in various cases esp. when third parties are less involved (see, e.g., the concurring opinions in the Corporation of Presiding Bishop v. Amos). For instance, a for profit corporation that provides abortion services can have a right as a legal person to sue and defend the interests of their clients. Resting this on the corporation's own religious rights would be harder.

I welcome the discussion but am concerned with some of the framing.

Posted by: Joe | Jul 8, 2015 2:06:35 PM

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