Corporate Personhood

Corporate personhood is the legal notion that a corporation, separate from its associated owners, managers, or employees, has legal rights and responsibilities enjoyed by natural persons. This is an ongoing legal debate in the United States.

A chronology of U.S. court decisions that define corporate personhood (with an explanation of citations):

 
• Trustees of Dartmouth College v. Woodward – 17 U.S. 518 (1819) Beginning with this opinion the Supreme Court has continuously recognized corporations as having the same rights as natural persons to contract and to enforce contracts. "The opinion of the Court, after mature deliberation, is that this corporate charter is a contract, the obligation of which cannot be impaired without violating the Constitution of the United States. This opinion appears to us to be equally supported by reason, and by the former decisions of this Court."
 
• Society for Propagation of Gospel v. Town of Pawlet - 29 U.S. 480 (1830), in which an English corporation dedicated to missionary work sought to protect its rights to land in the U.S. under colonial grants against an effort by the state of Vermont to revoke the grants. Justice Joseph Story, writing for the Supreme Court, explicitly extended the same protections to corporate-owned property as it would have to property owned by natural persons. Seven years later, Chief Justice Marshall stated: "The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men."
 
• Santa Clara County v. Southern Pacific – 118 U.S. 394 (1886). Chief Justice Waite of the Supreme Court orally directed the lawyers that the Fourteenth Amendment equal protection clause guarantees constitutional protections to corporations in addition to natural persons, and the oral argument should focus on other issues in the case. "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 his dissent in the 1938 case of Connecticut General Life Insurance Company v. Johnson, Justice Hugo Black wrote "in 1886, this Court in the case of Santa Clara County v. Southern Pacific Railroad, decided for the first time that the word 'person' in the amendment did in some instances include corporations... The history of the amendment proves that the people were told that its purpose was to protect weak and helpless human beings and were not told that it was intended to remove corporations in any fashion from the control of state governments... The language of the amendment itself does not support the theory that it was passed for the benefit of corporations."
  
  Justice William O. Douglas wrote in 1949, "the Santa Clara case becomes one of the most momentous of all our decisions... Corporations were now armed with constitutional prerogatives."
 
• Pembina Consolidated Silver Mining Co. v. Pennsylvania – 125 U.S. 181 (1888) The Supreme Court affirmed Santa Clara decision: "Under the designation of 'person' there is no doubt that a private corporation is included [in the Fourteenth Amendment]. Such corporations are merely associations of individuals united for a special purpose and permitted to do business under a particular name and have a succession of members without dissolution." This doctrine has been reaffirmed by the Court many times since.
 
• Northwestern National Life Insurance Co. v. Riggs - 203 U.S. 243 (1906) The Supreme Court accepted that corporations are for legal purposes "persons", but still ruled that the Fourteenth Amendment was not a bar to many state laws which effectively limited a corporation's right to contract business, because the Fourteenth Amendment did not prohibit the type of regulation at issue. The 14th Amendment does not insulate corporations from all government regulation, any more than it relieves individuals from all regulatory obligations.
 
• United States v. Sourapas and Crest Beverage Company - U.S. Court of Appeals for the Ninth Circuit (1975) Corporations cannot claim constitutional protections not available to persons acting as a group. For example, the Supreme Court has not recognized a Fifth Amendment right against self-incrimination for a corporation, since the right can be exercised only on an individual basis.
 

• Kasky v. Nike, Inc. (2003). Kasky filed a lawsuit in California regarding newspaper advertisements and several letters Nike distributed in response to criticisms of labor conditions in its factories. Kasky claimed that the company made representations that constituted false advertising. Nike responded that the false advertising laws did not cover the company's expression of its views on a public issue, and that these were entitled to First Amendment protection. The local court agreed with Nike's lawyers, but the California Supreme Court overturned this ruling, claiming that the corporation's communications were commercial speech and therefore subject to false advertising laws.
  
  The United States Supreme Court agreed to review the case (Nike v. Kasky) but sent the case back to trial court without issuing a substantive ruling on the constitutional issues. The parties subsequently settled out of court before any finding on the accuracy of Nike's statements, leaving the California Supreme Court's denial of Nike's immunity claim as precedent. The case drew a great deal of attention from groups concerned with civil liberties, as well as anti-sweatshop activists.
 
• Citizens United v. Federal Election Commission - 558 U.S. 310 (2010) The Supreme Court upheld the right of corporations to make political expenditures under the First Amendment. The free speech clause of the First Amendment prohibits the government from restricting independent expenditures for communications by nonprofit corporations, for-profit corporations, labor unions, and other associations.
  
  In the case the conservative non-profit organization Citizens United sought to air a film critical of Hillary Clinton and to advertise the film during television broadcasts shortly before the 2008 Democratic primary election. Federal law prohibited any corporation or labor union from making an "electioneering communication" within 30 days of a primary or 60 days of an election, or making any expenditure advocating the election or defeat of a candidate at any time. The court found that these provisions of the law conflicted with the U.S. Constitution.
  
  However, the court upheld requirements for public disclosure by sponsors of advertisements. The case did not affect the federal ban on direct contributions from corporations or unions to candidate campaigns or political parties.
  
  The decision was highly controversial when announced and remains a subject of much discussion. There have been several calls for a Constitutional amendment to abolish corporate personhood. The Citizens United majority opinion makes no reference to corporate personhood or the Fourteenth Amendment.
 

• Burwell v. Hobby Lobby Stores, Inc. (2014). The Court asserted that freedom of religion exempted Hobby Lobby from aspects of the Affordable Care Act.
  
  This landmark decision holds closely held for-profit corporations exempt from a regulation its owners religiously object to, under the Religious Freedom Restoration Act (RFRA). It is the first time that the court has recognized a for-profit corporation's claim of religious belief, but it is limited to closely held corporations. The decision does not address whether such corporations are protected by the free-exercise of religion clause of the First Amendment.
  

History of U.S. Corporations

During the colonial era British corporations were chartered by the crown to do business in North America. This practice continued in the early United States, and corporations were often granted monopolies as part of the chartering process. For example, the controversial Bank Bill of 1791 chartered a 20-year corporate monopoly for the First Bank of the United States.

Although the Federal government has from time to time chartered corporations, the general chartering of corporations has been left to the states. During the 19th century manufacturing in the U.S. became more complex as the Industrial Revolution generated new inventions and business processes. Large businesses favored incorporation because selling shares provided the large amounts of capital required, especially for projects such as railroads.

Following the reasoning of the Dartmouth College case and other precedents, corporations could exercise the rights of their shareholders and these shareholders were entitled to some of the legal protections against arbitrary state action. In Santa Clara County v. Southern Pacific Railroad (1886) the Supreme Court held that the Fourteenth Amendment applied to corporations. The primary purpose of the 14th Amendment was to protect freed slaves, but the Amendment applies to all Americans.

The basis for allowing corporations such protection under the Constitution is that they are organizations of people, and the people should not be deprived of their constitutional rights when they act collectively. Treating corporations as having legal rights allows corporations to sue and to be sued, provides a single entity for easier taxation and regulation, simplifies complex transactions that could otherwise involve thousands of people, and protects the individual rights of the shareholders as well as the right of association.

The laws of the United States hold that a legal entity (like a corporation or non-profit organization) shall be treated under the law as a person except when otherwise noted. This rule of construction is specified in 1 U.S.C. §1 (United States Code),[13] which states:

In determining the meaning of any Act of Congress, unless the context indicates otherwise — the words "person" and "whoever" include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals;

Under this federal statute a corporation can own property and enter contracts, sue and be sued, and held liable under both civil and criminal law. Because the corporation is legally considered the "person", individual shareholders are not legally responsible for the corporation's debts and damages beyond their investment in the corporation. Individual employees, managers, and directors are liable for their own crimes while acting on behalf of the corporation, but are not generally liable for the corporation's actions.

Source is Wikipedia unless noted otherwise.