The 'Rights' of Corporations: First Speech, Now Faith?

Lord Coke famously observed that a corporation does not have a soul.  The Supreme Court is not so sure.

On November 26 the Court granted review in two cases challenging the requirement of the Affordable Care Act that certain employer-provided insurance must cover contraceptives (Sebelius v. Hobby Lobby Stores, Inc., No. 13-354, and Conestoga Wood Specialties Store v. Sebelius, No. 13-356.  The cases have been consolidated for argument). The owners of the corporations sued, saying the mandate burdens their religious beliefs.

One of the cases, Conestoga Wood, presents a constitutional question: “Whether the religious owners of a family business, or their closely-held, for-profit corporation, have free exercise rights that are violated by the application of the contraceptive-coverage mandate of the ACA.”

Even a decade ago the answer obviously would have been no, as the shareholders have no mandate, only the corporation does.  But Citizens United, one of the greatest mistakes in the jurisprudence of the Court, complicates things.

Lord Coke’s observation was not a criticism.  It exculpated corporations as, absent souls, they were incapable of having the mens rea necessary to be convicted of a crime.  By the nineteenth century that view had been rejected.  Chief Justice Marshall wrote in Dartmouth College v. Woodward (1819), “A corporation 
is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those 
properties which the charter of creation confers upon it, either expressly, or as incidental to its very existence.” Under this view corporations are what we make them.

We generally have afforded rights to corporations to facilitate the purposes for which we allowed the corporation to be formed.  It makes sense to afford all corporations procedural due process rights, as those protect both property interests and the integrity of the justice system.  And we have been sensitive to the religious underpinnings of non-profit, incorporated faith communities, according them the rights for which they were formed.

But for-profit corporations have been different.  We have afforded them rights necessary to engage in commerce but have strictly separated their rights and the rights of their shareholders.  As late as 1988 the Supreme Court ruled that the sole shareholder of a corporation had no fifth amendment right to resist a subpoena to the corporation for corporate documents that personally incriminated him:  “Any claim of Fifth Amendment privilege asserted by the agent would be tantamount to a claim of privilege by the corporation-which of course possesses no such privilege.” Braswell v. United States, 487 U.S. 99, 110, 108 S. Ct. 2284, 2291, 101 L. Ed. 2d 98 (1988).

Citizens United changed that.  Saying that a corporation is just an association of its shareholders – and ignoring the state subsidies of limited liability and eternal life that corporations enjoy – the Court afforded for-profit corporations the right to compete in the marketplace of ideas with natural persons, who go without the state-granted benefits.  Corporate managers get to play politics with state-subsidized money, ostensibly on behalf of shareholders to whom they have no real accountability.   The political power they have been granted is self-reinforcing:  commercial interests wield their disproportionate power to elect persons who will grant them greater disproportionate power.

Citizens United hands state-subsidized, disproportionate power to corporations that have no souls, minds, or hearts, inverting Constitutional values. The Constitution creates a polity, not an economy.  The Constitution’s primary purpose is to allow us to live together.  Commerce, which the Constitution grants power to regulate, is intended to be the servant of the polity, and not vice versa.

If Citzens United is right, and for constitutional purposes a for-profit corporation is just an association of its shareholders, Conestoga Wood does have a soul.  This would mean that just as for-profit corporations get to use their state-subsidized status to advance political beliefs, they get to use state subsidies to advance their religious beliefs.  The Framers envisioned that situation, and precluded it with the Establishment Clause.

The Court should use Conestoga Wood to reverse the mistake it made in Citizens United.   It won’t, because it does not believe Citizens United to be a mistake.  But rightly understood, the Constitution does not permit the state subsidization of political speech sanctioned in Citizens United or of religious speech for which sanction is sought in Conestoga Wood.