Occupy Wall Street: Should Corporations be Considered People?

One of the rhetorical centerpieces behind Occupy Wall Street is the notion that big corporations should not be considered people. Of course the recent uproar over whether corporations are people comes from the Citizens United decision. Although we often hear about how this case opens the floodgates to corporate funds, it is safe to assume that very few people have actually read the opinion.

In this landmark 5-4 Supreme Court decision, the Court held that the First Amendment protects corporate and union funding of independent political broadcasts in elections. In doing so, the Supreme Court struck down portions of the McCain-Feingold Act that prohibited corporations and unions from broadcasting “electioneering communications” — any broadcast, cable, or satellite communication that mentions a candidate within 60 days of a general election or 30 days of a primary.

The First Amendment provides that “Congress shall make no law ... abridging the freedom of speech.” Now, without getting too much into the legal nitty-gritty, the basic premise of the majority opinion is that a restriction of the speech of corporations unconstitutionally favors one speaker over another. The majority opinion found that the “purpose and effect [of the law at issue] are to silence entities whose voices the government deems to be suspect.” They found that this is particularly troubling in the context of political speech because “[s]peech is an essential mechanism of democracy, for it is the means to hold officials accountable to the people.” In sum, “By taking the right to speak from some and giving it to others, the government deprives the disadvantaged person or class of the right to use speech to strive to establish worth, standing, and respect for the speaker’s voice. The government may not by these means deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration.”

In stark contrast to the majority opinion, Justice John Paul Stevens wrote a 90 page dissenting opinion, arguing that “[t]he conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court’s disposition of this case.” Stevens observed that, “[a]lthough they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office.” Moreover, Stevens added that, “Corporations have no consciences, no beliefs, no feelings, no thoughts, no desires. Corporations help structure and facilitate the activities of human beings, to be sure, and their 'personhood' often serves as a useful legal fiction. But they are not themselves members of 'We the People' by whom and for whom our Constitution was established.”

So the conflict is simple: Whereas the majority tried to craft a legal argument that corporate speech is still speech that may not be abridged under the First Amendment, the dissent relied on common sense and ordinary meaning (as well as legal argument) that corporate speech is less than speech by individuals.

Nowhere in the majority opinion, however, does the Supreme Court explicitly say that corporations are people. That’s what politicians are for. At the Iowa State Fair, Romney famously said, “Corporations are people, my friend.” Obviously this is a poor choice of words.  He clarified, “Of course they are…  Everything corporations earn ultimately goes to people. Where do you think it goes?” 

But even if the benefits of corporations goes to people, as opponents of taxes on dividends frequently point out, common sense argues against a finding that corporations are anything but entities or tools for people. In law we often create legal fictions — this being one of them. Such breaks from reality are not prima facie incorrect, but they do leave people, especially non-lawyers, scratching their heads. And now, for good reason, those head-scratchers are out in the streets and protesting outside my office building.

Photo Credit: Ken_Mayer

 


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Chris Kendall

I'm a lawyer at O'Melveny & Myers LLP. I graduated from Stanford University in 2007, having triple-majored in Art History, Classics, and Political Science. I graduated from University of Southern California Gould School of Law in 2010.

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