Wednesday, April 29, 2009

Corporations Today: Roscoe, Where Are You!?


So, why should we care about an 1886 Supreme Court decision today? Well, of course, we know now that there was no actual constitutional decision, but nevertheless, a decision was presumed from the headnotes, and barring any statute, the common law rule of stare decisis (let the decision stand) provided precedent for later decisions. [The photo is Justice Rufus Peckham from Lochner...]

This corporate personhood concept is a Gilded Age fiction, a term of art, if you will. This fiction was necessary for the continuation and triumph of capitalism as a logical development of the post Civil War/Reconstruction period. Extending rights of natural persons to artificial persons (corporations) encapsulates the opinion of Schneirov in the article that we read where he defines the Gilded Age as an era of social and economic instability.

This whole idea of the rights of corporations and those rights as protected under the Fourteenth Amendment is an abomination and bastardization of an amendment that had the obvious intention of protecting the rights of freed slaves. This is not my opinion, but the opinion of the Supreme Court in the Slaughterhouse Cases. True, this was a 5-4 opinion, but Justice Miller narrowly defined the Fourteenth Amendment to apply mainly to the protection of former slaves and could not be more broadly applied as Justice Field had intended (and would later succeed).

Eloquent jurists over the years have debased and twisted the Amendment for the causes of their times. It appears to me that the Fourteenth Amendment is a natural development of remedying the wrongs of slavery. The Thirteenth Amendment abrogated slavery, and the Fifteenth Amendment gave former slaves the right to vote. What other meaning could the Fourteenth Amendment have other than to secure the rights of constitutional protections to former slaves?

Okay, we learned in Lochner v. New York (1905) that a company's right to contract was protected under the Fourteenth Amendment, because a company (in this case, a bakery) was entitled to "due process" as guaranteed by the Amendment to "any person." It was determined from Santa Clara that a business enterprise is a person where the Fourteenth Amendment provides: "...nor shall any State deprive any person of life, liberty, or property, without due process of law." Lochner had the "right to free contract," and this right was implied by the "due process" clause. Well, I have to agree with Schneirov on this that this would be an example of social and economic instability. Interestingly, in his dissent opinion, Oliver Wendell Holmes said that the decision was "decided upon an economic theory which a large part of the country does not entertain." I wonder if Holmes is referring to a "regionalism" here, which is how some scholars define the Gilded Age - as opposed to Schierov's categorization of the Gilded Age as a phenomenon of capitalism. I do not know, but I think I prefer the latter. Attached is a photo of Justice Peckham, who delivered the 5-4 opinion of the Court.

In the decades after Santa Clara and Lochner, there were numerous cases where businesses succeeded in striking down laws that regulated the marketplace, and this includes anti-discrimination laws. All this was done under the "privileges and immunities" that were protected by "due process" under the Fourteenth Amendment. In later years, the Court invalidated many of FDR's new deal laws and regulations as violations of the Amendment. When FDR threatened the sanctum of the Supreme Court with "court packing," it was only then that the Court held back in its abrogation of "economic laws."

Modernly, there appears to be a shift in judicial philosophy regarding the 14th Amendment as it had developed from Santa Clara as a basis to apply protections to corporations and other nonpersons. I think the first legal formalization of the Santa Clara corporate personhood concept was in Lochner. Were those Gilded Age developments caused by the mechanics and oratory of Roscoe Conkling? I do not know.

Coming full circle from Santa Clara in a modern corporate tax case, Connecticut General Life Ins. Co. v. Johnson, 303 U.S. 77 (1938), Justice Hugo Black in his dissenting opinion said it best: "Neither the history nor the language of the Fourteenth Amendment justifies the belief that corporations are included within its protection … No word in all this amendment gave any hint that its adoption would deprive the states of their long-recognized power to regulate corporations."

Today, the significance of Santa Clara, et al, is only historical. Modernly, the courts generally presume that laws are in compliance with the Fourteenth Amendment. Moreover, the Gilded Age sentiment of interpreting corporate hegenomy, Social Darwinism, and capitalism as protected rights under the Fourteenth Amendment are out of fashion. You certainly do not hear today of a corporation seeking protection under the "due process" clause; bankruptcy, maybe, but not "due process." Where is Roscoe Conkling today when corporations really need him?

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