Corporate Constitutional Rights

Ron Fein is the legal director for Free Speech for People.  He recently wrote an opinion column decrying the argument that corporations have First Amendment rights.  But the column is simplistic and conclusory. Few argue that corporations should have all the constitutional rights of individuals just as few argue they should have no rights at all.

If you prefer a system in which corporations have no rights, then you shut down the economy.  With no rights, corporations could not enforce contracts, and governments could take their property without compensation.  I doubt Mr. Fein believes that is a good idea, and even if he does, he neglects to say so.  Doing otherwise would be poor salesmanship.

If we are to accord corporations some rights and not others, we ought to have a basis other than using the term “corporation” as an epithet and moving on.  Deciding what First-Amendment protections corporations should have is complex. In addressing that complexity, the first step is to separate two rights Mr. Fein lumps together: freedom of speech and freedom of religion.

Corporate freedom of speech is different from corporate freedom of religion. Government has long intertwined itself into the workings of the economy.  The intertwining accelerated at times, such as under Woodrow Wilson and Franklin Roosevelt, and slowed at others.  It always continued, however, and we are in a new period of acceleration under the current administration.  All participants in the economy naturally want some say in how the government affects them.

In assessing corporate participation in public debate, consider what corporations are. Corporations are formed by people to advance their economic interests. Limited liability is an advantage even when the corporation has only one shareholder, but limited liability also makes it possible for many people to pool their money to support an enterprise.  When people pool their money to act collectively, why should they not be able to speak collectively when government threatens their collective interests?

Take hydraulic fracturing as an example. Many want to regulate it more heavily, and maybe doing so is appropriate. But heavy regulation uninformed by how the business works might shut down or unnecessarily impair an activity with important benefits to society as a whole.  Oil companies are the mechanism by which those who have invested in the oil business pursue their economic interests.  Silencing oil companies in the hydraulic-fracturing debate would hobble one side.

The same principle applies throughout the economy.  Individual shareholders often lack the means and, depending on the size of their investment, the incentive to participate in a public debate.  Those who do participate are decried as the evil rich.  The Koch brothers are an example, though the same standard seems not to apply to George Soros.  Prohibiting corporations from participating in public debate is akin to imposing an arms embargo on rebels resisting a tyrant.  It makes a given outcome significantly more likely.  Society as a whole, as opposed to partisans within it, has no basis to silence one side of a debate.

Freedom of religion is a separate topic.  It is hard to see a genuine religious concern of a publicly traded company.  Those are the corporations many want you to think of when they decry corporate religious freedom.  But most corporations are small and closely held.  Some argue that, merely because Tom the electrician operates on a corporate basis, he must forfeit all religious concerns in conducting his business.  Really?  Why should that be so? That is at least a topic for genuine debate.

Mr. Fein specifically mentions Hobby Lobby and Conestoga Wood Specialties.  These are larger than the electrician example, but I generally understand them to be family-held companies.  I do not want to defend the merits of their specific claims, about which I know little.  Unlike Mr. Fein, however, I believe courts should assess the claims instead of rejecting them merely because a corporation is involved.  How that assessment should come out, I do not know.

It’s hard not to believe that many who agree with Mr. Fein would take a contrary position if the issue arose in the context of corporations opposing military action.  Then we might hear how brave and transgressive it is to assert religious principles.  The same principles ought to apply in that case as in the Affordable Care Act.

The U.S. Court of Appeals for the Fourth Circuit recently upheld a corporate assertion of what one might consider a personal right.  Carnell Construction Corporation, an African-American-owned enterprise, accused the Danville Redevelopment and Housing Authority of racial discrimination in administering a contract. I do not know whether Carnell was discriminated against, but I see no problem with it being able to litigate whether it was.  And if, as the Fourth Circuit stated, Carnell can have an imputed racial identity, why should all corporations necessarily be barred from asserting an imputed religious identity?

Too often in public discussion, the word “corporation” is used as an epithet.  That is destructive to reasoned discourse.  Corporations are no more or less evil than the people behind them.  We would all be better off if public debate focused on substance and not name-calling.

Ron Fein is the legal director for Free Speech for People.  He recently wrote an opinion column decrying the argument that corporations have First Amendment rights.  But the column is simplistic and conclusory. Few argue that corporations should have all the constitutional rights of individuals just as few argue they should have no rights at all.

If you prefer a system in which corporations have no rights, then you shut down the economy.  With no rights, corporations could not enforce contracts, and governments could take their property without compensation.  I doubt Mr. Fein believes that is a good idea, and even if he does, he neglects to say so.  Doing otherwise would be poor salesmanship.

If we are to accord corporations some rights and not others, we ought to have a basis other than using the term “corporation” as an epithet and moving on.  Deciding what First-Amendment protections corporations should have is complex. In addressing that complexity, the first step is to separate two rights Mr. Fein lumps together: freedom of speech and freedom of religion.

Corporate freedom of speech is different from corporate freedom of religion. Government has long intertwined itself into the workings of the economy.  The intertwining accelerated at times, such as under Woodrow Wilson and Franklin Roosevelt, and slowed at others.  It always continued, however, and we are in a new period of acceleration under the current administration.  All participants in the economy naturally want some say in how the government affects them.

In assessing corporate participation in public debate, consider what corporations are. Corporations are formed by people to advance their economic interests. Limited liability is an advantage even when the corporation has only one shareholder, but limited liability also makes it possible for many people to pool their money to support an enterprise.  When people pool their money to act collectively, why should they not be able to speak collectively when government threatens their collective interests?

Take hydraulic fracturing as an example. Many want to regulate it more heavily, and maybe doing so is appropriate. But heavy regulation uninformed by how the business works might shut down or unnecessarily impair an activity with important benefits to society as a whole.  Oil companies are the mechanism by which those who have invested in the oil business pursue their economic interests.  Silencing oil companies in the hydraulic-fracturing debate would hobble one side.

The same principle applies throughout the economy.  Individual shareholders often lack the means and, depending on the size of their investment, the incentive to participate in a public debate.  Those who do participate are decried as the evil rich.  The Koch brothers are an example, though the same standard seems not to apply to George Soros.  Prohibiting corporations from participating in public debate is akin to imposing an arms embargo on rebels resisting a tyrant.  It makes a given outcome significantly more likely.  Society as a whole, as opposed to partisans within it, has no basis to silence one side of a debate.

Freedom of religion is a separate topic.  It is hard to see a genuine religious concern of a publicly traded company.  Those are the corporations many want you to think of when they decry corporate religious freedom.  But most corporations are small and closely held.  Some argue that, merely because Tom the electrician operates on a corporate basis, he must forfeit all religious concerns in conducting his business.  Really?  Why should that be so? That is at least a topic for genuine debate.

Mr. Fein specifically mentions Hobby Lobby and Conestoga Wood Specialties.  These are larger than the electrician example, but I generally understand them to be family-held companies.  I do not want to defend the merits of their specific claims, about which I know little.  Unlike Mr. Fein, however, I believe courts should assess the claims instead of rejecting them merely because a corporation is involved.  How that assessment should come out, I do not know.

It’s hard not to believe that many who agree with Mr. Fein would take a contrary position if the issue arose in the context of corporations opposing military action.  Then we might hear how brave and transgressive it is to assert religious principles.  The same principles ought to apply in that case as in the Affordable Care Act.

The U.S. Court of Appeals for the Fourth Circuit recently upheld a corporate assertion of what one might consider a personal right.  Carnell Construction Corporation, an African-American-owned enterprise, accused the Danville Redevelopment and Housing Authority of racial discrimination in administering a contract. I do not know whether Carnell was discriminated against, but I see no problem with it being able to litigate whether it was.  And if, as the Fourth Circuit stated, Carnell can have an imputed racial identity, why should all corporations necessarily be barred from asserting an imputed religious identity?

Too often in public discussion, the word “corporation” is used as an epithet.  That is destructive to reasoned discourse.  Corporations are no more or less evil than the people behind them.  We would all be better off if public debate focused on substance and not name-calling.