Sotomayor Issues Challenge to a Century of Corporate Law

[Ragnar Danneskjold]

By JESS BRAVIN (http://online.wsj.com/search/search_center.html?KEYWORDS=JESS+BRAVIN&ARTICLESEARCHQUERY_PARSER=bylineAND)

WASHINGTON -- In her maiden Supreme Court appearance last week, Justice Sonia Sotomayor made a provocative comment that probed the foundations of corporate law.
During arguments in a campaign-finance case, the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled.
http://s.wsj.net/public/resources/images/HC-GN785_Sotoma_BV_20090603152455.gif Sonia Sotomayor



But Justice Sotomayor suggested the majority might have it all wrong -- and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have.
Judges "created corporations as persons, gave birth to corporations as persons," she said. "There could be an argument made that that was the court's error to start with...[imbuing] a creature of state law with human characteristics."
After a confirmation process that revealed little of her legal philosophy, the remark offered an early hint of the direction Justice Sotomayor might want to take the court.
"Progressives who think that corporations already have an unduly large influence on policy in the United States have to feel reassured that this was one of [her] first questions," said Douglas Kendall, president of the liberal Constitutional Accountability Center.
"I don't want to draw too much from one comment," says Todd Gaziano, director of the Center for Legal and Judicial Studies at the conservative Heritage Foundation. But it "doesn't give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded."

[...]

Excerpt. More here:
http://online.wsj.com/article/SB125314088285517643.html

[Ragnar Danneskjold]

Oh... my. I guess I had hoped that Mrs Sotomayor had some basic understanding of the law. This is very troubling.

A corporation is a legal entity created by the law, not by judges. It is a "person" under the law with all the rights and responsibilities of any "person". It pays taxes and therefore cannot face taxes without representation-- or indeed, the right to free speech and to redress grievances before Congress.

If this simple concept is lost on Justice Sotomayor... it's not a good sign.

[JackieB]

I think you might be overreacting, RD. We really need a case to come before the Supreme Court to understand this better. To suggest that she doesn't have a basic understanding of the law is rather silly.

Although Congress creates the laws that define corporations, there certainly may have been a case(s) where hte Supreme Court conferred more "human-like" qualities upon them then they had before. That creates "precedent" and then this becomes de facto law until a case comes along to change that understanding. If I have this wrong, please point out my error.

There is no doubt that some corporations/industries have broad influence over the legislative process. If this gets to the point where it can overwhelm the will of the majority of citizens and unduly influence voting behavior on the part of Representatives and Senators, then it's potentially an issue for the Supreme Court to consider.

Corporations cannot vote. Is that a violation of their Constitutional rights?

It's a bit more complicated than you appear to be suggesting.

[mare]

I'm not ready to hang my head in despair.

Her statement doesn't sound like anything more than the kinds of questions the judges ask each other during debate as they research the law and the history of previous decisions. Even the article points out the various directions that the Court's opinions have taken over time on this.

[twofingers]

Actually I tend to agree with her. corporations were given those "rights" as a way to enable them to better control the government and protect them from an individual suing for illicit activities or the rolling over of the personal rights. and to allow them to "buy" politicians. a corporation does not have the same "inalienable rights" that you and I have, it is controlled by the limits of the law and in this case the granting of these rights has removed those limits and made them equal to yo or I, in fact more than equal.
I would also mention that it is a double edged sword - it will also remove those rights from the Non-profits - like acorn or the aclu, whom are constantly trampling our rights.

[Ragnar Danneskjold]

My problem is twofold: She says yet again that judges make law. They just simply do not. The legislative branch makes law and the judicial branch applies and interprets it. This is a very important distinction. It gets at her fundamental understanding of her role.

It's also troubling that she can so flippantly consider that something so central to the basis of our free market economy-- the legal construct of the corporate entity, without which so much of modern business would be impossible-- that it was a mistake to allow them to exist.

No, it's not the end of the world. But we didn't learn much about her in the hearings, either. This is merely a first peek behind the curtain and I'm not liking what I'm seeing.

...and thank God that Roberts, Alito and Scalia are still there.

[mare]

She says yet again that judges make law.

I'm being a little thick on this one. I read that she is challenging the historical interpretation of the law.

What am I missing?

[JackieB]

I'm being a little thick on this one. I read that she is challenging the historical interpretation of the law.

What am I missing?

You aren't missing anything. If you open the link and read the article, you will see that she's referring to 19th Century court cases whose outcomes first allowed corporations to exercise rights that wouldn't have been specifically spelled out in
in statutory law. If the understanding of the law that Congress originally enacted was precise, the Supreme Court never would have received the case. They only get cases when there is a legitimate question about what the law really means. I'm pretty sure that Ragnar knows how this works.

Slightly different subject, but one that I find humorous about how citizens interpret the decisions of the Supreme Court. At least for ultra-conservatives, any just who rules in their favor is simply interpreting the law. Any judge who rules opposite to their preference is an activist judge who is legislating from the bench. This position seems to be independent of the facts of the case. Kind of funny how that works.

[mare]

You aren't missing anything. If you open the link and read the article, you will see that she's referring to 19th Century court cases whose outcomes first allowed corporations to exercise rights that wouldn't have been specifically spelled out in
in statutory law. If the understanding of the law that Congress originally enacted was precise, the Supreme Court never would have received the case. They only get cases when there is a legitimate question about what the law really means. I'm pretty sure that Ragnar knows how this works.

Slightly different subject, but one that I find humorous about how citizens interpret the decisions of the Supreme Court. At least for ultra-conservatives, any just who rules in their favor is simply interpreting the law. Any judge who rules opposite to their preference is an activist judge who is legislating from the bench. This position seems to be independent of the facts of the case. Kind of funny how that works.

Glad I understood the article. To your second point: In my experience that goes both ways.

People are such funny animals! And I mean that affectionately and to include myself.

[JackieB]

To your second point: In my experience that goes both ways.

Yes, I couldn't agree more. I'll be the first to admit that it all looks pretty even to me in terms of making mountains out of molehills, pointing steadfastly at other's faults while not seeing the exact same ones in ourselves, etc.

However, the "activist judge who is legislating from the bench" phrase definitely seems like it comes from the right. I think the left just calls it by some other name. :)

[mare]

Yes, I couldn't agree more. I'll be the first to admit that it all looks pretty even to me in terms of making mountains out of molehills, pointing steadfastly at other's faults while not seeing the exact same ones in ourselves, etc.

However, the "activist judge who is legislating from the bench" phrase definitely seems like it comes from the right. I think the left just calls it by some other name. :)

True on all counts.

[Ragnar Danneskjold]

With years of courts occupied by leftist judges, you hear complaints about "judicial activitism" coming mainly from the right because they're the only ones who care. The left tends to support judges making law because it gets them where they want to go faster. Roe v. Wade, for example.

[mare]

With years of courts occupied by leftist judges, you hear complaints about "judicial activitism" coming mainly from the right because they're the only ones who care. The left tends to support judges making law because it gets them where they want to go faster. Roe v. Wade, for example.

I agree with that, too. lol

[JackieB]

With years of courts occupied by leftist judges, you hear complaints about "judicial activitism" coming mainly from the right because they're the only ones who care. The left tends to support judges making law because it gets them where they want to go faster. Roe v. Wade, for example.

Absurd. I'm surprised you agree with this statement, Mare. I think that was kind of what we were just talking about.

I could say "The Republicans and other conservatives are the only ones who even care about the Constitution anymore." and a large group of citizens would solemnly agree with me and then start ranting. Then, I could turn around and say "The Democrats and liberals are the only ones who even care about the Constitution anymore." and another large group of citizens would solemnly agree with me and then start ranting.

RD could provide many examples that prove his point, and Rachel Maddow could provide just as many example that prove her point.

Statements such as RD just made aren't too helpful to the debate, in my opinion. The fact is that both sides care deeply about the Constitution and want to see it upheld. They just vehemently disagree about what that means. But that's not at all the same thing as suggesting that a group just doesn't care and that a decision such as Roe v. Wade provides a good example.

I'm becoming more apolitical as time goes one. I know that if I check out of the debate then I probably just need to keep my mouth shut and accept what I get, but I'm growing weary of this nonsense - from both sides.

[mare]

Absurd. I'm surprised you agree with this statement, Mare. I think that was kind of what we were just talking about.


It must be the weather. I can see the argument both ways today.

I think I need to go fix some fence. That makes more sense than politics today. :)

[Ragnar Danneskjold]

Sorry Jackie. I know you very much want to believe that both sides are capable of intellectual honesty. It just doesn't happen to be the case. To think that Rachel Maddow is capable of it-- now that's absurd. The entire leftist platform is a threat to the Constitution.

[WashingtonBay]

Well, I don't think it's about intellectual honesty RD. It's about ideology. If you go back to your original statement:

With years of courts occupied by leftist judges, you hear complaints about "judicial activitism" coming mainly from the right because they're the only ones who care. The left tends to support judges making law because it gets them where they want to go faster.

I can agree with that, not because of "intellectual honesty" but because of the very basic definitions of con·ser·va·tive (http://www.thefreedictionary.com/conservative) versus lib·er·al (http://www.thefreedictionary.com/liberal). Liberals are open to change and new interpretations, conservatives tend to resist change and new interpretations. Thus, the liberals who are intellectually honest will think it is good and healthy to look at things anew and feel much less 'bound' by the traditions and limitations of past thinking than conservatives will. True conservatives will resist the temptation to try to imagine what the law probably would have been, if the founders had only considered this particular situation, while liberals believe we must live in the now, and interpret and adapt the law and our thinking as we go. It's ideology, not honesty. This approach is true whether looking at the law or the bible or how we should feel about Christopher Columbus in a history book.

There are, by the way, plenty of "conservatives" on FR who would be every bit as 'activist' on the court as liberals would, just in favor of issues they want to see go their way... Don't make me give examples. :coffee:

[Arrow]

Sorry Jackie. I know you very much want to believe that both sides are capable of intellectual honesty. It just doesn't happen to be the case. To think that Rachel Maddow is capable of it-- now that's absurd. The entire leftist platform is a threat to the Constitution.

You are entirely entitled to this opinion--but can't you see why anyone who disagrees with you might not be all that interested in discussing politics with you? If you think that all of those on the left are incapable of intellectual honesty, then there's not much point in discussing anything, is there? Your mind's made up. You can go ahead and keep posting and those who agree with you will be happy to interact with you--but why should anyone else? Perhaps that's how you like it.

[Ragnar Danneskjold]

I don't hold opinions that I believe to be false. Do you? If something I believe is proven to be false, I change my opinion.

[JackieB]

Liberals are open to change and new interpretations, conservatives tend to resist change and new interpretations. Thus, the liberals who are intellectually honest will think it is good and healthy to look at things anew and feel much less 'bound' by the traditions and limitations of past thinking than conservatives will. True conservatives will resist the temptation to try to imagine what the law probably would have been, if the founders had only considered this particular situation, while liberals believe we must live in the now, and interpret and adapt the law and our thinking as we go.

That's a very good point, WB. I hadn't quite thought of it this way before. That is a really insightful look into what often compels thoughtful citizens to approach issues from completely different perspectives and ideology. I can't say that either side has a stronger argument, though.

[WashingtonBay]

That's a very good point, WB. I hadn't quite thought of it this way before. That is a really insightful look into what often compels thoughtful citizens to approach issues from completely different perspectives and ideology. I can't say that either side has a stronger argument, though.

I tend to think in the long run we need both, to hope for the right combination of stability and flexibility. :)

[JackieB]

Sorry Jackie. I know you very much want to believe that both sides are capable of intellectual honesty. It just doesn't happen to be the case.

That's what's hard for me. I know you're convinced of accuracy of your statement. But to me, it is utterly ridiculous. To suggest that only one side is approaching this argument with intellectual honesty and the other side is delusional, or whatever, is absurd.

My opinion is that many on both sides are making very strong arguments, but we just approach the situation from very different philosophies.

Oh, well. To each his/her own, I guess.

[mare]

I tend to think we need both, to hope for the right combination of stability and flexibility. :)

Me too! Vive la difference!

[JackieB]

I tend to think we need both, to hope for the right combination of stability and flexibility. :)

I do, too. I agree that we don't need to be questioning the Constitution more than necessary, and we definitely shouldn't amend it unless it's a huge issue along the lines of giving women the right to vote or similar. But the fact is that the founders could never have envisioned issues such a Terri Shiavo (all of the life support) or cyber-terrorism. So I just think that the Supreme Court needs to be a bit more progressive not in what the founders meant when they wrote the Constitution, but how those words can best be applied today.

[Ragnar Danneskjold]

The difference is that I thinks new things should be considered, argued and decided by the legislative process, not the judicial. Then there needs to be a boundary that the court establishes that says "thou shalt not go beyond here". And it needs to stay that way. Otherwise the Constitution may as well not exist. Changing the meaning of the Constitution can happen, via the amendment process (judicial again) but it should not happen by a decision of the court. If the court makes it mean whatever they want, then it is no longer useful.

[Arrow]

From today's NYT:

September 22, 2009
Editorial
The Rights of Corporations

The question at the heart of one of the biggest Supreme Court cases this year is simple: What constitutional rights should corporations have? To us, as well as many legal scholars, former justices and, indeed, drafters of the Constitution, the answer is that their rights should be quite limited — far less than those of people.

This Supreme Court, the John Roberts court, seems to be having trouble with that. It has been on a campaign to increase corporations’ legal rights — based on the conviction of some conservative justices that businesses are, at least legally, not much different than people.

Now the court is considering what should be a fairly narrow campaign finance case, involving whether Citizens United, a nonprofit corporation, had the right to air a slashing movie about Hillary Rodham Clinton during the Democratic primary season. There is a real danger that the case will expand corporations’ rights in ways that would undermine the election system.

The legal doctrine underlying this debate is known as “corporate personhood.”

The courts have long treated corporations as persons in limited ways for some legal purposes. They may own property and have limited rights to free speech. They can sue and be sued. They have the right to enter into contracts and advertise their products. But corporations cannot and should not be allowed to vote, run for office or bear arms. Since 1907, Congress has banned them from contributing to federal political campaigns — a ban the Supreme Court has repeatedly upheld.

In an exchange this month with Chief Justice Roberts, the solicitor general, Elena Kagan, argued against expanding that narrowly defined personhood. “Few of us are only our economic interests,” she said. “We have beliefs. We have convictions.” Corporations, “engage the political process in an entirely different way, and this is what makes them so much more damaging,” she said.

Chief Justice Roberts disagreed: “A large corporation, just like an individual, has many diverse interests.” Justice Antonin Scalia said most corporations are “indistinguishable from the individual who owns them.”

The Constitution mentions the rights of the people frequently but does not cite corporations. Indeed, many of the founders were skeptical of corporate influence.

John Marshall, the nation’s greatest chief justice, saw a corporation as “an artificial being, invisible, intangible,” he wrote in 1819. “Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence.”

That does not mean that corporations should have no rights. It is in society’s interest that they are allowed to speak about their products and policies and that they are able to go to court when another company steals their patents. It makes sense that they can be sued, as a person would be, when they pollute or violate labor laws.

The law also gives corporations special legal status: limited liability, special rules for the accumulation of assets and the ability to live forever. These rules put corporations in a privileged position in producing profits and aggregating wealth. Their influence would be overwhelming with the full array of rights that people have.

One of the main areas where corporations’ rights have long been limited is politics. Polls suggest that Americans are worried about the influence that corporations already have with elected officials. The drive to give corporations more rights is coming from the court’s conservative bloc — a curious position given their often-proclaimed devotion to the text of the Constitution.

The founders of this nation knew just what they were doing when they drew a line between legally created economic entities and living, breathing human beings. The court should stick to that line.

[Ragnar Danneskjold]

Corporations should be able to exert influence on government, just like anyone else or any other group of people that has interests at stake. If they cannot then they should not be taxed.

[twofingers]

corporations have always had the ability to influence governments. - east India tradeing co, Hudson bay trading co, the rail roads, Edison power, Ma bell, ADM, Microsoft. - the difference is that a corporation is an entity made up of individuals, not an individual in itself. those who make up the corporation have their rights- their god given, a business is man made. You as an individual may pursue your happiness under the protection of the constitution. a business may function with in the law while not violating your rights. it has no rights of its own, but is protected within the constraints of the individual rights of those whom make it up. :2cents:

[HoustonFarrier]

So I just think that the Supreme Court needs to be a bit more progressive not in what the founders meant when they wrote the Constitution, but how those words can best be applied today.

I disagree. Nowhere in the Constitution does it say that, or provide for that. The Constitution is what it is, and should be interpeted as written. If there is a shortfall, it is up to the legislative body to change the Constitution, as defined in Article V. If we are to allow Supreme court justices to "change" via interpretation the Constitution, then that precident then leads ANY judge to "interpet" any law as he/she see fit....dangerous waters for sure.

Steve

[JackieB]

The Constitution is what it is, and should be interpeted as written.

Oh I agree that the Constitution should be interpreted as written. That's why I said "not in what the Founders meant when they wrote the Constitution". I'm saying don't try to change what the Founders intended.

The only reason that I know of for a case ever to get to the Supreme Court is because there is a legal question regarding whether or not lower courts understood and applied the law correctly. It's not a matter of changing what was written, but understanding it.

So I'm guessing you don't see a need for the Judicial Branch at all? Or at least not the Supreme Court? If there is a question, send it to the House and Senate?

[Ragnar Danneskjold]

[...] the difference is that a corporation is an entity made up of individuals, not an individual in itself. those who make up the corporation have their rights- their god given, a business is man made. [...]:2cents:

I think I know what you mean, and I don't want to beat a dead horse any more that I have to... but I think it is important to observe that a "Corporation" *is* a "person". That's what really matters about the creation of this special entity. It isn't "just a collection of people"-- that's a Partnership. It's a very different sort of legal entity. The idea of a legal "person" in the form of a corporate identity... that outlives all of it's owners, and takes upon itself the legal responsibility for it's own actions-- shielding the owners from direct liability-- is a terrifically important construct.

Very few would invest (that is, become owners...) in a large organization like Boeing, or Microsoft, or Ford... if it meant that every lawsuit filed against the company suddenly put their home and their life savings at risk. That sort of thing would be a trial lawyer's dream come true... and would dry up investment capital worldwide. The "personhood" of the Corporation as a distinct legal entity unto itself is absolutely vital to the progress of business, and has been a key part of the widening broad improvement in the standard of living of billions of people worldwide.

Who do you all think owns all those shares in Boeing, Procter and Gamble, Ford, Caterpillar... yes even AIG and Citibank. Those shares are, for the largest part held by institutions. "Institutions" means mostly that they're held by thousands of various mutual funds. Mutual funds and Index funds that are owned by all of us in our 401K's, our insurance policies, our own portfolios. They're owned by Grandma and Grandpa, schoolteachers, accountants, architects, construction workers, ditch diggers... everybody.

Without the corporation we'd all still be stuck with trying to pry whatever wealth we could from our little patch of land, by the leave of the Lord of the land, with little hope of ever changing our stake in that land for us or our children. It's the participation in corporate ownership that marks a distinct moment in history when for the first time (Beginning with the very first Corporation ever allowed: The East India Trading Company) we escaped our dependency on the local Nobles. It marked freedom from serfdom.

It mattered. It's not just a creation by the wealthy for the wealthy. Far from it... it is participation in wealth creation by the masses... and it WORKS.

another .02
:2cents: