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02 July 2014

LibLogic: Corporations Aren't People, But Trees Are!!!

Progressives have been whining about Citizens United, proclaiming that money should be stamped with pro-Occupy messages, holding vigils for the DISCLOSE Act (which is nothing more of a way to force companies to donate to Democrats if they want to do business with the Federal government) and demanding a Constitutional amendment proclaiming that corporations are not people for quite a while now.  (Does that include unions, which are corporations, too?)   Now, the decision in Hobby Lobby, which was really the result of their own actions more than two decades ago, has truly sent them over the edge.

Corporate personhood has been recognised in one form or another in English common law for centuries and corporations have been deemed persons under the law (what is called a ‘legal fiction’) since 1819. In Trustees of Dartmouth College v Woodward, 17 U.S. (4 Wheat.) 518 (1819), the Court first recognised corporate personhood in American jurisprudence. The case arose when the president of Dartmouth College was deposed by its trustees, leading to the New Hampshire legislature attempting to force the College to become a public institution and thereby place the ability to appoint trustees in the hands of the governor. The Supreme Court upheld the sanctity of the original charter (from King George III) of the College, which pre-dated the creation of the State. The decision settled the nature of public versus private charters and resulted in the rise of the American business corporation. This case, rightly, recognised the right of people to form corporations to contract for them.

Next, Santa Clara County v Southern Pacific Railroad Company, 118 U.S. 394 (1886) was a United States Supreme Court case dealing with taxation of railroad properties. The case is most notable for the obiter dictum statement that corporations are entitled to protection under the Fourteenth Amendment. At the California Constitutional Convention of 1878-79, the state legislature drew up a new constitution that denied railroads ‘the right to deduct the amount of their debts [i.e., 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.

The decision was unanimous.

And, while people claim that Justice Harlan did not actually mean to confer 14th Amendment rights upon corporations in Santa Clara, two years later, the Court quite clearly confirmed the doctrine in Pembina Consolidated Silver Mining Co. v Pennsylvania, 125 U.S. 181 (1888). In Pembina, the Court held that, pursuant to the Dictionary Act, enacted in 1871, which instructed courts to apply to all federal statute definitions of certain common words (including ‘person,’ which included corporations) and basic rules of grammatical construction (such as the rule that plural words include the singular) ‘unless context indicates otherwise.’ The Court held that:

‘Under the designation of ‘person’ there is no doubt that a private corporation is included [in the Fourteenth Amendment]. Such corporations are merely associations of individuals united for a special purpose…’

Since 1888, the doctrine recognising the putative, albeit legal fiction of corporate personhood, has been reaffirmed on multiple occasions by the Supreme Court.

Through the Doctrine of Incorporation via the Fourteenth Amendment, the Bill of Rights protects the citizenry from state and local governments, as well as the Federal government. Because of Pembina, corporations have the same rights, for the plus part, under the Bill of Rights that individuals possess.

Does it make any sense that a corporation a/k/a a person under the law would not have Fifth Amendment protection against the unconstitutional and uncompensated taking of its property? Does anyone want to argue that corporations lack Fourth Amendment protections?

Corporations, like unions, avail themselves of the First Amendment rights of assembly, association, and the right to petition their government for the redress of grievances. Does anyone want to argue that The New York Times, a corporation, doesn’t have freedom of the press rights under the First Amendment? If corporations, unions, and The New York Times have the protections conferred by the first, third, fourth, fifth, and sixth clauses of the First Amendment, but, somehow, someway lack the right clearly stated in the second clause of the First Amendment?

I understand that the Left, at least as far as they are willing to even acknowledge the primacy of the Constitution can best be called ‘Cafeteria Constitutionalists.’ None would ever argue that the First, Fourth, Fifth, Sixth, Seventh, and Eight Amendments of the Bill of Right are individual, not collective rights. However, when it comes to the Second Amendment, the Left finds the one amendment of the Bill of Rights that is not based upon individual rights. They are, of course, quite wrong when the words of the Founding Fathers are, once again, reiterated, but their tendency to pick and choose which rights are individual or collective is further revealed with respect to corporations.

Unions are a form of corporation; yet, no Leftist worth his Che shirt would ever argue that they lack First Amendment rights; however, these same champions of liberty would prohibit another association of free-born individuals, the corporation, from being entitled to the exact same rights that those, who screamed ‘This is what democracy looks like!’ in Madison, Wisconsin, claimed for themselves – correctly.

As to dismantling corporate personhood, I only have this to say:


Just remember that corporations can be one person (although LLC would be a better organisational structure).   A sub-chapter S corporation can be a mom-n-pop petrol station or a couple of guys that open a pub.  It can be a community group that raises money for charitable purposes, scholarships, or beautification and is a non-profit.

Mr and Mr Progressive (I'm gay friendly!), let's say that you and your friends are successful in amending the Constitution and revoking putative personhood for corporations, which has been in the law in the United States since 1819.  Great, you say!  Well, let's put your dream into practise and 'Play Law!'...

Let's assume that you and your partner, along with several friends from your days at Berkeley, decide to open a small, organic cafe and garden.  You all just know that it will be successful and you will be able to pay more in taxes and take whatever is left and 'pay it forward' because, I mean, really, do you seriously think that you need more than a 2 bedroom flat and a green-bus pass to be happy?  At some point, you've made enough money and, besides, it would be 'unfair' for you to have a big home and a private car when not everyone else does.

One day, even though you are all meticulous in keeping the premises safe, clean, and green, a pipe breaks and one of your favourite customers, the CEO of a upstart tech company, slips, falls and ruptures 3 disks in his back.  As a result, he was unable to work for months and his business failed. If that wasn't bad enough, his 76 year-old mum fell, too, and broke her hip, arm, and fractured her skull.  She did emerge from her coma, but she is still in the hospital and will need, not only months of care in a rehabilitative centre, but around-the-clock care for the rest of her life.

Not long after the accident, you and your co-owners sit down to discuss the matter with your attorney (unfortunately, you didn't hire me when I used to do corporate work.  I considered myself to be a preventative physician and not a surgeon) and a few disturbing things came to light:

*  Since corporations do not have personhood, the owners of the organic cafe and garden (yeah, that would be you...and you...and you...and you...and the rest of the Berkeley crew) will be named as defendants.

*  Since you are 'jointly and severally' liable, any judgement or settlement will not necessarily be divided equally.  In fact, it is possibly that Mr and Mr Progressive could be on the hook for the entire bill.

'But, we have insurance!!!!'

True, you do, but there may be a few problems:

* Your General Liability policy puts a $1 million limit per event.  You have two plaintiffs, each of whom will almost certainly top $1 million in damages, especially the mum.

*  Your policy also requires that you keep the premises in good working order and repair in a reasonable time period any known defects that could foreseeably cause injury or damage. 

* Two months before the pipe burst, there was a small leak.  Mr and Mr Progressive, you were out-of-town at your Relive Seattle WTO Riots Retreat, but your co-owner Ms Peace Freelove was on duty.  She called a plumber.  The plumber told her that the entire plumbing system needed to be replaced ASAP.  Because you two were out of town and the other owners wanted to wait until everyone was back before a decision was made on such a big-ticket expense, everyone agreed that Ms Freelove should just tell the plumber to patch the leak.  The intent was to discuss the matter as a group and then call the plumber in immediately to get the job done.

*  For whatever reason, the proper plumbing job was never done.  You had prior knowledge of the likelihood that the pipe or pipes would burst.  Any reasonable man could have foreseen that injury and damage would be the likely results.

*  For those reasons, your insurance company has determined that you were in breach of the terms and conditions of your policy, which specified your responsibilities.  As a result, it has denied your claim.
'But, but, but, that's not fair!  That's a big, bad meanie insurance corporation, er, company!'

So, you go to trial -- and, remember, you guys have always been dead-set against tort reform and love punitive damages.  Central casting couldn't have provided two better plaintiffs.  As for you and the rest of the defendants, central casting couldn't have done a better job either....if it were casting a 'Woodstock Forever!'  The experts were pitch-perfect.  The multi-racial, multi-gendered jury returned with a verdict, for your formerly favourite customer, of $5 million for expenses and lost wages, $3.5 million for pain & suffering and loss of enjoyment (he had a really hot 21 year-old girlfriend).  For his mum?  Whoa, baby!  $1.5 million for expenses and $2 million for pain & suffering; and $10 million in punitive damages...for a grand total of $22 million.

Yes, you'll ask for a JNOV, which will almost certainly be denied, and then appeal, but you'll either wind up settling for something or filing bankruptcy.  By the way, after the money tree was shaken, the only leaves that fell off had your names on them, Mr and Mr Progressive.  The rest of your friends were broke...joint and several...joint and several, my dear.

So, you run along and destroy corporate personhood.  The very idea may be enough of an enticement to lure me back from 'Galt-land.' Just to punish the bloody fvck out of you for your utter stupidity, I -- and other lawyers like me -- will sue your small business owner's arse and take your business, your home, your wife’s engagement ring, the kiddies’ college funds, their piggy banks, their Buzz Lightyear underwear, and rock their entire Barbie World to its foundations in a way that even a Japanese earthquake and tsunami couldn't do.

You don’t want corporate personhood? Great. We can go back to sole proprietorships and I’ll go back to work and be the biggest shyster of an ambulance chaser you’ve ever encountered…especially if you are a Progressive and were stupid enough to support this insanity.

Now, run along and put some ice on that...and stop hating on corporations. Many of them are small businesses.


'There’s a difference between the right to set up and operate a corporation under state statutes and rights given to a corporation by the US Constitution. Nothing I’m writing about would revoke the ability to set up and operate corporations. I’m generally writing about new rights given to a corporation under the US Constitution.'

jim56 on July 2, 2014 at 3:51 PM

Dartmouth is cited because it was the first case in which the Supreme Court recognised the putative personhood of corporations.

The idea that corporations just recently received constitutional rights is absurd on its face and on the law. As I indicated, the Supreme Court recognised that corporations had constitutional rights, on both the Federal level and in the states through the Fourteenth Amendment, in Santa Clara County and Pembina, along with a plethora of later cases.

Is it only a recent development that the government must obtain a warrant to search a corporation’s property? Did corporations not have Fourth Amendment rights prior to the Roberts Court?

Is is only recently that corporations were awarded protection under the Takings Clause of the Fifth Amendment? If they didn’t have them previously, why did we establish corporate taxes? If corporations lacked Fifth Amendment protections, the government could have just confiscated as much of the assets it wanted.

Did media corporations only recently acquire First Amendment rights?

Did corporations not have due process rights until recently?

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