How can a corporation be legally considered a person?

September 19, 2003

Dear Cecil:

A recent article on the Straight Dope Web site says that in a famous 1886 case the U.S. Supreme Court ruled that corporations are "persons" having the same rights as human beings based on the 14th Amendment, which was intended to protect the rights of former slaves. Not to nitpick, but the Supreme Court made no such decision. If you look at the case in question, Santa Clara County v. Southern Pacific Railroad Company, you see that the court itself never rules on personhood. A court reporter by the name of J.C. Bancroft Davis (a former railroad president) snuck that "ruling" into the books.

We've dealt with some weird topics in this column--quantum mechanics, penile lengthening, Circus Peanuts. But for my money the personhood of corporations proves there's nothing so strange as the law.

Most people have a general idea what corporations are. Some may even know that, for most of U.S. history, corporations have been considered "artificial persons." The concept isn't as nutty as it sounds. From a legal standpoint, corporations can do many of the same things that natural persons do--buy and sell property, hire and fire, sue and be sued, and so on.

What most people don't know is that after the above-mentioned 1886 decision, artificial persons were held to have exactly the same legal rights as we natural folk. (Not to mention the clear advantages corporations enjoy: they can be in several places at once, for instance, and at least in theory they're immortal.) Up until the New Deal, many laws regulating corporations were struck down under the "equal protection" clause of the 14th Amendment--in fact, that clause was invoked far more often on behalf of corporations than former slaves. Although the doctrine of personhood has been weakened since, even now lawyers argue that an attempt to sue a corporation for lying is an unconstitutional infringement on its First Amendment right to free speech. (This year, for example, we saw Nike v. Kasky.)

You're thinking: By what tortured reasoning did the Supreme Court decide that corporations were protected by the 14th Amendment, which everyone knows was enacted to protect the rights of real people? Answer: Apparently it didn't decide. As revealed by our friend bex--and detailed by Thom Hartmann in Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights (2002)--the whole thing began as a courtroom comment by a judge, which was elevated to the status of legal precedent by an overreaching court reporter.

Here's what happened. Santa Clara County in California was trying to levy a property tax against the Southern Pacific Railroad. The railroad gave numerous reasons why it shouldn't have to pay, one of which rested on the 14th Amendment's equal protection clause: the railroad was being held to a different standard than human taxpayers.

When the case reached the Supreme Court, Chief Justice Morrison Waite supposedly prefaced the proceedings by saying, "The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution which forbids a state to deny to any person within its jurisdiction the equal protection of the laws applies to these corporations. We are all of the opinion that it does." In its published opinion, however, the court ducked the personhood issue, deciding the case on other grounds.

Then the court reporter, J.C. Bancroft Davis, stepped in. Although the title makes him sound like a mere clerk, the court reporter is an important official who digests dense rulings and summarizes key findings in published "headnotes." (Davis had already had a long career in public service, and at one point was president of the board of directors for the Newburgh & New York Railroad Company.) In a letter, Davis asked Waite whether he could include the latter's courtroom comment--which would ordinarily never see print--in the headnotes. Waite gave an ambivalent response that Davis took as a yes. Eureka, instant landmark ruling.

Does this flaky procedure mean all later cases relying on Santa Clara are null and void? Nope--in the world of the law, a precedent is a precedent, even if it's a stupid one. However, Hartmann's book has caused a stir in legal circles, and some hope the Supreme Court will take another look at corporate personhood. A few naifs think a reversal will spell the end of global corporate tyranny. Ain't gonna happen--fact is, the courts have been chipping away at corporate personhood for years, and you don't exactly see our capitalist overlords suffering from it. But it'd be nice to have a clear-cut ruling, say, that limiting campaign contributions by big businesses doesn't mean you're restricting their First Amendment rights.

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