Sotomayor Issues Challenge to a Century of Corporate Law

[youngbuck]

http://online.wsj.com/article/SB125314088285517643.html

WASHINGTON -- In her maiden Supreme Court appearance last week, Justice Sonia Sotomayor made a provocative comment that probed the foundations of corporate law.

During arguments in a campaign-finance case, the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled.

But Justice Sotomayor suggested the majority might have it all wrong -- and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have.

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."

After a confirmation process that revealed little of her legal philosophy, the remark offered an early hint of the direction Justice Sotomayor might want to take the court.

"Progressives who think that corporations already have an unduly large influence on policy in the United States have to feel reassured that this was one of [her] first questions," said Douglas Kendall, president of the liberal Constitutional Accountability Center.

"I don't want to draw too much from one comment," says Todd Gaziano, director of the Center for Legal and Judicial Studies at the conservative Heritage Foundation. But it "doesn't give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded."

For centuries, corporations have been considered beings apart from their human owners, yet sharing with them some attributes, such as the right to make contracts and own property. Originally, corporations were a relatively rare form of organization. The government granted charters to corporations, delineating their specific functions. Their powers were presumed limited to those their charter spelled out.

"A corporation is an artificial being, invisible, intangible," Chief Justice John Marshall wrote in an 1819 case. "It possesses only those properties which the charter of its creation confers upon it."

But as the Industrial Revolution took hold, corporations proliferated and views of their functions began to evolve.

In an 1886 tax dispute between the Southern Pacific Railroad and the state of California, the court reporter quoted Chief Justice Morrison Waite telling attorneys to skip arguments over whether the 14th Amendment's equal-protection clause applied to corporations, because "we are all of opinion that it does."

That seemingly off-hand comment reflected an "impulse to shield business activity from certain government regulation," says David Millon, a law professor at Washington and Lee University.

"A positive way to put it is that the economy is booming, American production is leading the world and the courts want to promote that," Mr. Millon says. Less charitably, "it's all about protecting corporate wealth" from taxes, regulations or other legislative initiatives.

Subsequent opinions expanded corporate rights. In 1928, the court struck down a Pennsylvania tax on transportation corporations because individual taxicab drivers were exempt. Corporations get "the same protection of equal laws that natural persons" have, Justice Pierce Butler wrote.

From the mid-20th century, though, the court has vacillated on how far corporate rights extend. In a 1973 case before a more liberal court, Justice William O. Douglas rejected the Butler opinion as "a relic" that overstepped "the narrow confines of judicial review" by second-guessing the legislature's decision to tax corporations differently than individuals.

Today, it's "just complete confusion" over which rights corporations can claim, says Prof. William Simon of Columbia Law School.

Even conservatives sometimes have been skeptical of corporate rights. Then-Associate Justice William Rehnquist dissented in 1979 from a decision voiding Massachusetts's restriction of corporate political spending on referendums. Since corporations receive special legal and tax benefits, "it might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere," he wrote.

On today's court, the direction Justice Sotomayor suggested is unlikely to prevail. During arguments, the court's conservative justices seem to view corporate political spending as beneficial to the democratic process. "Corporations have lots of knowledge about environment, transportation issues, and you are silencing them during the election," Justice Anthony Kennedy said during arguments last week.

But Justice Sotomayor may have found a like mind in Justice Ruth Bader Ginsburg. "A corporation, after all, is not endowed by its creator with inalienable rights," Justice Ginsburg said, evoking the Declaration of Independence.

How far Justice Sotomayor pursues the theme could become clearer when the campaign-finance decision is delivered, probably by year's end.

[BarryDonegan]

this rocks. corporate personhood is the MAIN reason we are in the mess we are in today. corporate personhood + federal reserve + income tax = slavery.

corporations are not private property. they are exceptional government created instruments, originally intended to allow elected officials to have a court rep that doesn't make them personally liable for legislative action.

however, i dont think she is doing this because she is a secret fan of rights of the individual. due to her opinion on Kino it is apparent she doesn't believe anyone should have rights, including corporations, except the government.

but, all in all, corporate person hood sucks and it used to be the position of the federalist society to get rid of it. conservatives should oppose corporate personhood

[angelatc]

I agree with her, but I don't like this "legislating from the bench" stuff. Judges aren't supposed to make law.

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."

[LittleLightShining]

Wow. Just wow

[sratiug]

Originally Posted by angelatc

I agree with her, but I don't like this "legislating from the bench" stuff. Judges aren't supposed to make law.

I don't remember the corporations are people too act passing congress.

[tangent4ronpaul]

This is a good thing if it pans out!

-t

[LittleLightShining]

I'm surprised more people haven't commented on this. It's a dead topic on my meetup, too.

[Pericles]

Originally Posted by LittleLightShining

I'm surprised more people haven't commented on this. It's a dead topic on my meetup, too.

See if anybody thinks corporations should have the right to vote. If they can make campaign contributions, why not vote? Might be that will get some of them to think what corporations may and may not do as part of the corporate charter from the state.....

[LittleLightShining]

Originally Posted by Pericles

See if anybody thinks corporations should have the right to vote. If they can make campaign contributions, why not vote? Might be that will get some of them to think what corporations may and may not do as part of the corporate charter from the state.....

I like the way you think.

I wonder if Sotomayor is one of these Libertarian Progressives Celente keeps talking about.

[CMoore]

I love it. And so soon, too. You never can tell how a Supreme Court justice is going to be. Remember John Paul Stevens was nominated by Gerald Ford. People put so much effort in getting the "right" people on the court. Actually I have always believed that the best thing to do is choose a well educated person who knows the law. It is impossible to tell how they are going to decide once they get on the Court. If we want to change things, we should concentrate on choosing the legislature, not the Court.

By the way, wherever a judge or group of judges makes a decision as to how a law applies or makes a decision as to how a law is interpreted, they are "making a law". This judge made law is the common law, so to say they should not do it does not make sense. If a court interprets a law in a way the legislature did not intend, then it is up the the legislature to pass a new act clarifying how they mean for a law to apply or amend the Constitution in the case of a finding that a law is unconstitutional.