Monday, June 17, 2013

VII. Is a corporation a person?

(This post is the seventh in the series on corporations--see links below for previous posts. If you like this or other posts, share it with your friends.)

A corporation is a legal person but not a human one.

Unfortunately, the criticisms of Citizens United that attack the idea that a corporation is a human person miss the point and thereby divert attention away from the real need for campaign finance reform. (See my earlier post, The Misguided People’s Rights Amendment.)

A corporation has never been considered to be the same as a human person. There is a difference between a legal person and a human person. Corporations in U.S. law are legal persons, not human ones. This difference is important and negates the attempts to mock Citizens United as affirming that corporations are the same as people.

An example of the distinction between a human person and a legal person was made evident in the U.S. Supreme Court case of Federal Communications Commission et al. v. AT&T Inc., 562 U.S. ____, 131S. Ct. 1177 (2011).

This case began with an investigation of AT&T by the Federal Communications Commission. The FCC sought certain documents from AT&T under the Freedom of Information Act. The Freedom of Information Act states that the Act does not require the disclosure of certain specified kinds of documents. Among those documents that are excluded from the Act’s disclosure requirement are "records or information compiled for law enforcement purposes" that "could reasonably be expected to constitute an unwarranted invasion of personal privacy" -- §552(b)(7)(C).

AT&T argued that, as a corporate person, it had personal privacy rights. Thus, AT&T claimed that it, as a corporation, did not have to disclose records that invaded its personal privacy. The U.S. Court of Appeals for the Third Circuit agreed with AT&T. The U.S. Supreme Court disagreed and held for the FCC.

The Supreme Court’s opinion was unanimous except for the absence of Justice Kagan who did not participate. Justice Roberts, writing for the Court, stated, “’Personal’ ordinarily refers to individuals. We do not usually speak of personal characteristics, personal effects, personal correspondence, personal influence, or personal tragedy as referring to corporations or other artificial entities” (my emphasis). Thus, the Court held that corporations do not have “personal privacy” for the purposes of the personal privacy exemption in the Freedom of Information Act.

Note particularly that the Court referred to corporations as “artificial entities.” The Court thus has clearly established that there is a difference between human persons and corporate persons.

As we know, Citizens United did not make use of this distinction. Why? Later in this series I will post an examination of that case. In any event, Citizens United handled difficult legal issues that cannot be easily dismissed by incorrectly mocking the Court for saying that a corporation is a human person. The Court is quite aware that a corporation is a legal person, not a human one.

Thus, those jumping on the simplistic bandwagon of “corporations are not people” are shooting themselves in the foot by not addressing the more difficult constitutional issues that Citizens United present. These are difficult issues that require careful thought, not slogans.


Links to previous posts this series:

                II. Corporations: Their Early Beginnings (2/18/12)

                III. Corporations--an Example of Extreme but Conditional Power (7/3/12)

     IV: The First American Corporations--pre-1776 (12/31/12)
V: The Transformation of the American Corporation (2/24/13)