Morrison Waite, Chief Justice of the Supreme Court at the time of the “corporate personhood” ruling.
One decision that has been rather unpopular over the past twenty years from the Supreme Court was Citizens United v. FEC (2010). Justice John Paul Stevens, who was in dissent, went as far as to call it one of the three worst decisions during his time on the bench. Numerous people have thought that this decision established that corporations are people. The truth is that Citizens United didn’t do this at all, and the concept has existed for much longer than that. What Citizens United did was it eliminated any spending limitations on corporations and unions on the grounds that such entities constituted a group of individuals, thus resulting in an avalanche of campaign spending from these entities using Political Action Committees. There are still limits to how much can be contributed to candidates per election, but this means that these committees can expand their reach of candidates they fund.
Background
The concept of corporations as people has a history that dates back to English common law in William Blackstone’s Commentaries on the Laws of England, in which Blackstone holds that corporations exist as “artificial persons” under the law “for the advantage of the public” (Holloway). This applies to for-profit and non-profit entities. The first corporation chartered in the history of the American colonies was none other than Harvard University. However, the legal foundation through the Supreme Court for corporate personhood came with the rise of the corporation.
In Dartmouth College v. Woodward (1819), the Supreme Court ruled 5-1 that the Contracts Clause of the U.S. Constitution applied to private corporations. The Contracts Clause prohibits state governments from abrogating private contracts but allows prohibiting contracts violating public policy (example in present-day: you contract someone to be a slave). This began the growth of the corporation in the United States as well as the free enterprise system (Newmyer).
In 1873, the Supreme Court rejected on a 5-4 vote a 14th Amendment defense applying to business in The Slaughter-House Cases, holding that the 14th Amendment did not protect the defendants against interference by state law. Justice Samuel F. Miller ruled that the 14th Amendment didn’t restrict state police powers, substantially limiting the Privileges and Immunities Clause. Justice Stephen J. Field condemned the decision as rendering the 14th a “vain and idle enactment” (Constitutional Law Reporter).
Gradually in the United States, states were doing away with limited terms for corporations to attract more business, allowing corporations to theoretically exist in perpetuity as long as they file for renewal and if the market supports their existence, growing the power of corporations in the United States further.
1886: An Inadvertent (?) Watershed Decision
The decision in which corporate personhood became a concept did not even have the matter of corporate personhood as its central issue. In Santa Clara County v. Southern Pacific Railroad Co., the Supreme Court ruled that the state had wrongfully assessed taxes to the railroad, and in this decision the court reporter added a headnote, quoting Chief Justice Morrison Waite stating, “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 any person within its jurisdiction the equal protection of the laws applies to these corporations. We are all of opinion that it does” (Syllabus in United States Reports). Interestingly, the court reporter was Bancroft Davis, a man who was at one time the president of Newburgh and New York Railway. This fact has caused a good deal of controversy given Davis’s past involvement in an industry that was directly impacted by this decision. However, Davis’s account is bolstered by a written exchange between him and Waite on May 26, 1886, to clarify his words. This read,
“Dear Chief Justice,
I have a memorandum in the California Cases Santa Clara County v. Southern Pacific &c As follows. In opening the Court stated that it did not wish to hear argument on the question whether the Fourteenth Amendment applies to such corporations as are parties in these suits. All the Judges were of the opinion that it does” (Beatty, 172).
Waite affirmed his account,
“I think your mem. in the California Railroad Tax cases expresses with sufficient accuracy what was said before the argument began. I leave it with you to determine whether anything need be said about it in the report inasmuch as we avoided meeting the constitutional question in the decision” (Beatty, 172).
Although this was a note in a court decision, it became the first basis for corporate personhood. Author Jack Beatty (2007) found numerous questions about this occurrence, “Why did the chief justice issue his dictum? Why did he leave it up to Davis to include it in the headnotes? After Waite told him that the Court ‘avoided’ the issue of corporate personhood, why did Davis include it? Why, indeed, does he begin his headnote with it? The opinion made plain that the Court did not decide the corporate personality issue and the subsidiary equal protection issue” (173). However, in 1888, a more solid ruling was in Pembina Consolidated Silver Mining Co. v. Pennsylvania, in which the court explicitly found that corporations were protected by the Fourteenth Amendment as “legal persons”. However, legal personhood has limits for corporations. For instance, in Braswell v. United States (1988), the court ruled 5-4 that corporations have no 5th Amendment privilege against self-incrimination.
References
According to the official court Syllabus in the United States Reports, Santa Clara County v. Southern Pacific Railroad Company 118 U.S. 394, 396 (1886).
Beatty, J. (2007). Age of betrayal: the triumph of money in America, 1865-1900. New York, NY: Alfred A. Knopf.
Braswell v. United States. Oyez.
Retrieved from
https://www.oyez.org/cases/1987/87-3
Former Justice Stevens on the 3 worst Supreme Court decisions of his tenure. (2019, May 15). PBS News Hour.
References
Holloway, C. (2015, Fall). Are Corporations People? National Affairs, 57.
Retrieved from
https://www.nationalaffairs.com/publications/detail/are-corporations-people
Newmyer, R.K. (2001). John Marshall and the heroic age of the Supreme Court. Baton Rouge, LA: Louisiana State Press.
Pembina Consolidated Silver Mining Co. v. Pennsylvania, 125 U.S. 181 (1888). Justia.
Retrieved from
https://supreme.justia.com/cases/federal/us/125/181/
The Fourteenth Amendment and the Slaughterhouse Cases. (2015, July 14). Constitutional Law Reporter.
Retrieved from
Mad Politics: The Bizarre, Fascinating, and Unknown of American Political History 