Corporations: People Or Legal Entities Under Federal Law?

The concept of corporate personhood is a highly controversial legal principle that grants corporations certain legal rights and protections that are typically reserved for individual citizens. This idea has been developed through a series of Supreme Court rulings over the past 200 years, with the 14th Amendment being a key constitutional provision in this context. The amendment, which was designed to protect the civil rights of all Americans, has been interpreted by the Supreme Court to include corporations as 'persons', thereby granting them rights such as the ability to enter into contracts, own property, and assert constitutional protections like freedom of speech and freedom of religion. This interpretation has been criticised and sparked calls for reform, with some arguing that it grants corporations too much power and allows them to influence political processes in ways that were not originally intended.

Corporate personhood

The 14th Amendment to the U.S. Constitution, ratified in 1868, is often cited as a key factor in establishing corporate personhood. While the amendment was originally intended to grant full citizenship rights to formerly enslaved people, it also expanded civil rights protections for all Americans. The Supreme Court has interpreted the amendment's Due Process Clause to protect corporations from infringement by states and the federal government, effectively granting them some of the same rights as natural persons.

One notable example of this interpretation is the 1886 case Santa Clara County v. Southern Pacific Railroad Company, where Chief Justice Morrison Waite stated that the 14th Amendment's protections apply to corporations. This case set a precedent for subsequent decisions, such as the 1978 Bellotti decision, which granted corporations the right to spend unlimited funds on ballot initiatives under the First Amendment.

The concept of corporate personhood has been controversial and has sparked debates and calls for reform. Critics argue that granting corporations the same rights as individuals can lead to issues such as the influence of corporate funding in politics, as seen in the 2010 Citizens United v. Federal Election Commission case. There have been proposals for a constitutional amendment to abolish corporate personhood and limit corporate influence in certain areas.

Corporations' right to free speech

The concept of corporate personhood has been a topic of debate in the United States, with some arguing that corporations should be granted certain legal rights and protections akin to those of natural persons. This includes the right to free speech, which is protected under the First Amendment of the U.S. Constitution. The First Amendment states that "Congress shall make no law...abridging the freedom of speech." This right to free speech is generally understood to protect private speech from government restrictions, but it does not extend to speech restrictions imposed by private entities.

The Supreme Court has interpreted the First Amendment's free speech clause in relation to corporate or commercial speech. In the 1942 case of Valentine v. Chrestensen, the Court ruled that commercial speech was not protected by the First Amendment. However, this stance changed with the 1975 case of Bigelow v. Virginia, where the Court found that advertising did merit constitutional protection, although to a lesser degree than social or political discourse.

The issue of corporate political speech has been particularly contentious. The Federal Election Campaign Act of 1971 and its 1974 Amendments introduced regulations on campaign financing, including limitations on contributions and expenditures, disclosure requirements, and the creation of the Federal Election Commission as a regulatory agency. The Supreme Court has addressed the intersection of corporate speech and campaign financing in several notable cases. In Buckley v. Valeo (1976), the Court upheld the limits on campaign contributions but held that spending money to influence elections is protected speech under the First Amendment. This was further reinforced in First National Bank of Boston v. Bellotti (1978), where the Court upheld the right of corporations to spend money in non-candidate elections, such as ballot initiatives and referendums.

One of the most controversial cases involving corporate personhood and free speech rights is Citizens United v. Federal Election Commission (2010). In this case, the Supreme Court upheld the rights of corporations to make unlimited political expenditures under the First Amendment, sparking calls for a Constitutional amendment to abolish corporate personhood. The majority opinion in Citizens United argued from both an 'association' perspective, suggesting that political speech rights do not depend on the identity of the speaker, and a 'natural entity' perspective, asserting that the worth of speech is not determined by the source.

While the debate surrounding corporate personhood and the extension of constitutional rights to corporations continues, it is clear that the courts have recognized the rights of corporations to engage in certain forms of speech, including advertising and political expression. However, it is important to note that the degree of permissible government interference in corporate affairs has been a subject of controversy throughout the history of the nation.

Corporations' right to freedom of religion

The concept of corporate personhood has been a topic of debate in the United States, with some arguing that corporations should be granted certain legal rights and protections akin to those of human beings. This includes the question of whether corporations have the right to freedom of religion under federal law.

In the United States, the First Amendment guarantees the freedom of religion, which is a fundamental right that protects the religious beliefs and practices of individuals and organizations. The interpretation of this right and its extension to corporations has been a subject of legal debate and has been tested in several court cases.

One notable case is Burwell v. Hobby Lobby Stores, where the Supreme Court ruled that certain corporations could challenge laws that they believed violated their religious beliefs. This case involved a closely-held corporation, owned and controlled by a few members of the same family, who managed the business in accordance with their religious views. The court's decision was based on an interpretation of the word "person" in the Religious Freedom Restoration Act, concluding that Congress intended to include corporations as "persons" under the Act's protection.

However, it is important to note that the Hobby Lobby case was confined to the specific circumstances of closely-held corporations, where the religious beliefs of the corporation's owners were protected. The court did not declare that corporations independently hold religious beliefs or possess a religious soul. The impact of this decision has been widely discussed, with some arguing that it could extend beyond healthcare benefits to other areas such as hiring and firing practices.

Another case that tested the boundaries of corporate religious freedom is Citizens United v. Federal Election Commission. In this case, the Supreme Court upheld the rights of corporations to make unlimited political expenditures under the First Amendment, sparking calls for a constitutional amendment to abolish corporate personhood.

While the extension of religious freedom to corporations remains controversial, there are examples of for-profit corporations with religious convictions and duties. These corporations argue that they deserve the same religious freedom protections as their non-profit, NGO, and congregational counterparts. However, critics question how a business can hold religious beliefs and express them in a for-profit context, especially when it comes to imposing those beliefs on employees or using them to guide money-making entities.

Corporations' right to spend unlimited funds on ballot initiatives

In the United States, corporations are considered "people" under federal law. This means that they are granted certain rights and protections under the Constitution, including the right to free speech under the First Amendment. This classification as "people" has allowed corporations to spend unlimited funds on ballot initiatives and political campaigns.

The concept of corporate personhood has a long history in the United States, dating back to the colonial era when British corporations were chartered by the crown to do business in North America. However, the idea of corporate personhood became more firmly established in the late 18th and early 19th centuries, as states began to charter corporations in greater numbers.

The rights of corporations were further expanded in the landmark Supreme Court case, Citizens United v. Federal Election Commission in 2010. The Court ruled that corporate funding of political broadcasts and expenditures could not be limited under the First Amendment, striking down century-old campaign finance restrictions. This decision enabled corporations and other outside groups to spend unlimited money on elections and ballot initiatives.

The Citizens United decision has had far-reaching implications for the political landscape in the United States. It has led to the creation of "super PACs," which are political action committees that can accept unlimited contributions from both individual donors and corporations. These super PACs have become integral to major campaigns, working in tandem with candidates and parties. The decision has also resulted in a significant increase in political spending by outside groups, including corporations, empowering the wealthiest donors and expanding the influence of special interest groups.

While the Citizens United decision has been praised by some as a victory for free speech and political participation, it has also faced strong criticism. Many have argued that it has led to a fusion of private wealth and political power, creating opportunities for corporate "influence-buying" corruption. There have been calls for a Constitutional amendment to abolish corporate personhood and limit corporate spending in politics.

Corporations' right to sue or be sued

In the United States, corporations are considered "people" under federal law. This concept, known as corporate personhood, grants corporations certain legal rights and protections akin to those of human beings. Among these rights is the ability to sue and be sued in court.

The right of corporations to sue or be sued is a well-established principle in US law. This right was affirmed in the landmark case of Trustees of Dartmouth College v. Woodward in 1819, where the US Supreme Court held that a corporate charter constituted a contract, entitling corporations to some constitutional protections. As artificial persons, corporations can enter into contracts, own property, and initiate legal action in their own name.

However, it is important to distinguish between the capacity to sue and the standing to sue. Capacity refers to the right of a corporation to bring a lawsuit, while standing relates to the requirement that a plaintiff has suffered a redressable injury. A corporation may lose its capacity to sue by failing to comply with state laws, resulting in legal disability. On the other hand, standing to sue is a jurisdictional defect, and the issue of standing can be raised at any point in the legal proceedings.

When suing a corporation, it is crucial to identify the correct legal name and structure of the entity. Incorporated companies typically have designations such as "Inc." or "LLC" as part of their name. The specific jurisdiction where a corporation can be sued is also important. A corporation can be sued in its home state or where it maintains a principal place of business. Additionally, it can be sued in states where it has minimum contacts, as established by the Supreme Court's interpretation of the Fourteenth Amendment's Due Process Clause.

The right of corporations to sue or be sued has been a subject of debate, with calls for reform or constitutional amendments to abolish corporate personhood. Despite this, the current legal framework in the United States recognises corporations as artificial persons with the associated rights and responsibilities, including the ability to initiate and defend against legal action.

Frequently asked questions