Sotomayor’s important statement about corporations
Image from upi.com
Last week, Justice Sonia Sotomayor made a “provocative comment” that probed the foundations of corporate law. The case, Citizens United v. Federal Election Commission, involves whether federal campaign finance laws apply to a critical film about Hillary Clinton intended to be shown in theaters and on-demand to cable subscribers.
The court’s majority conservatives agreed that corporations have broad First Amendment rights and that “recent precedents upholding limits on corporate political spending should be overruled.” However, Sotomayor disagreed, and said the court should reconsider the 19th century rulings that first afforded corporations the same rights as real, live people.
Judges “created corporations as persons, gave birth to corporations as persons,” she said. “There could be an argument made that that was the court’s error to start with…[imbuing] a creature of state law with human characteristics.”
Corporations have been claiming personhood in order to protect their profits from undue strain under regulations or fair taxation ever since Santa Clara County v. Southern Pacific Railroad Company in 1886, a United States Supreme Court case dealing with taxation of railroad properties.
At the California Constitutional Convention of 1878, the state legislature drew up a new constitution that denied railroads the right to deduct the amount of their debts (mortgages) from the taxable value of their property, a right which was given to individuals. Southern Pacific Railroad Company refused to pay taxes under these new changes. The taxpaying railroads challenged this law, based on a conflicting federal statute of 1866 which gave them privileges inconsistent with state taxation. Basically, Big Railroad, one of the largest corporations in the United States at the time, didn’t want to pay their fair share of taxes, so the corporation claimed personhood.
The case is most notable for the statement that corporations are entitled to protection under the Fourteenth Amendment. As Justice William O. Douglas wrote in 1949, “the Santa Clara case becomes one of the most momentous of all our decisions…Corporations were now armed with constitutional prerogatives.”
Of course, corporations are not people. They don’t vote. They don’t breathe the polluted air some of their industries help to create. They have no children to drink the poisoned water they pump from their factories. Now that citizens see the toll deregulation has taken (tainted environment, outsourced jobs, and widening class divide, including a desperate underclass ruled by a tiny coterie of fat cat CEOs and bailed out financial institutions,) Sotomayor’s statement doesn’t seem as controversial as it may have a decade ago.
As tame as her remarks may have been, she still managed to scare the crap out of Todd Gaziano, director of the Center for Legal and Judicial Studies at the (surprise) conservative Heritage Foundation. ”[I]t “doesn’t give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded.”
Corporate form, in this case, means corporate personhood. It means protecting corporations from accountability and fair taxation. Corporate form, in Gaziano’s world, means “business as usual.”
One can’t predict the remainder of Sotomayor’s judgments from this one statement, but if this is the beginning of a trend, Justice Sotomayor should be applauded for her bold, fresh thinking. Now, more than ever, the United States needs a Justice who understands that corporations have been getting a free ride, and it’s time they pay their fair share.
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It is nice to hear an iota of populist-leaning dissent from a Chief Justice of the Supreme court. But is that all we get? She didn’t even provide any context at all as to why she believes it was the court’s error to give corporations person-hood.
I would agree with you that the context is that…
but Sotomayor’s one squeak of relatively unexplained dissent was met by the predictable, ’sensibly centrist’ bullshit,
what kind of vacuous statement is that? Whether or not they have knowledge of the environment is irrelevant. Their primary goal is maximization of profit, and they fight any approach that detracts from that singular focus; be it the environment, middle class wages, middle class health benefits, etc.
It will be just as disillusioning if all we get is a single voice in the Supreme Court momentarily opposing the tightening of the stranglehold of Corporate tentacles on our government and citizens that is then ignored to the benefit of that ‘fat cat coterie’.
I’m watching this case closely; it’s a little disturbing that it isn’t getting larger coverage.
This sounds like conservative activism to me since the ban on political speech was upheld in 2003. What has changed since 2003 to compel the court to reconsider, what blow to our country’s corporations power and influence has occurred? If Kennedy is wavering things are not looking good for the average citizen.
Justice Sotomayor has this exactly right. It was the judicial creation of “corporation with characteristics and rights of people” that gives rise to much of the corruption in the political system as we know it. Sadly, she is, for now, going to be in the minority on this point of view while the majority use the Citizens United case to destroy what few gains have been accomplished in limiting corporate finance in politics over the past 100 years.
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Great story, Allison.
There’s even more to it though. The estimable Jack Beatty of Atlantic, in his excellent book Age of Betrayal chronicles the scandal of Santa Clara v Southern Pacific (pages 171-91).
As he shows in detail, SCOTUS never even entertained arguments as to the personhood of corporations – a rogue court reporter interpreted comments by a Justice and enshrined his (mis)interpretation in the legal refernece book that has been cited as precedent ever since.
Amazing but true.
Read Age of Betrayal Vintage Press
Good point, though saying this was a “misinterpretation” may be overgenerous. Some argue that the discovery of correspondence between then Supreme Court Chief Justice Morrison R. Waite, and court reporter J.C. Bancroft Davis proves there was a conspiracy among the railroad corporations to intentionally create a misrepresentation of that decision for the benefit of the railroads. The reporter, Bancroft Davis, had previously served as president of Newburgh and New York Railway Co.
In response to another comment. See in context »[...] Kilkenny is right to note that it may be premature to hope for any radical changes in corporate law based on one comment, but [...]