13. Corporate Personhood Challenged

by Project Censored
Published: Updated:


COMMONDREAMS, January 1, 2003 &
IMPACT PRESS, Feb/Mar, 2003
Title: “Now Corporations Claim the Right to ‘Lie’”
Author: Thom Hartmann

WILD MATTERS, February 2003
Title: “Americans Revolt in Pennsylvania: New Battle Lines Are Drawn”
Author: Thom Hartmann

Title: “How a Clerical Error Made Corporations ‘People’”
Author: Jim Hightower

Faculty Evaluators: Mary Gomes Ph.D. , Ken Marcus Ph.D.
Student Researchers: Chris Salvano, Sherry Grant, Melissa Jones

Partial Mainstream Coverage: The New York Times, The LA Times, USA Today, Fortune Magazine, The Ottawa Citizen.

Since the founding of our country, a debate has raged over the nature of corporations and whether they should be entitled to the same right to legal “personhood” as actual people. This idea of corporate personhood has recently come under scrutiny.

It was back in 1886 that a Supreme Court decision (Santa Clara County v. Southern Pacific Railroad Company) ostensibly led to corporate personhood and free speech rights, thereby guaranteeing protections under the 1st and 14th amendments. However, according to Thom Hartmann, the relatively mundane court case never actually granted these personhood rights to corporations. In fact, Chief Justice Morrison Waite wrote, “We avoided meeting the Constitutional question in the decision.” Yet, when writing up the case summary -that has no legal status-the Court reporter, a former railroad president named J.C. Bancroft Davis, declared: “The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a state to deny any person within its jurisdiction the equal protection of the laws.” But the Court had made no such legal determination. It was the clerk’s opinion and misrepresentation of the case in the headnote upon which current claims of corporate personhood and free speech entitlements now rests.

In 1978, however, the Supreme Court further entrenched the idea of corporate personhood by deciding that corporations were entitled to the free speech right to give money to political causes – linking free speech with financial clout. Interestingly, in a dissent to the decision, Chief Justice William Rehnquist pointed out the flawed 1886 precedent and criticized its interpretation over the years saying, “This Court decided at an early date, with neither argument nor discussion, that a business corporation is a ‘person’ entitled to the protection of the Equal Protection Clause of the Fourteenth Amendment.”

But more recently, in December 2002, Porter Township, Pennsylvania unanimously passed an ordinance denying corporate claims to personhood. The Township is the first and only local government in the United States to deny these civil and constitutional rights to corporations. Porter Township and neighboring Rush Township have laws that govern the local dumping of Pittsburgh-generated sludge by charging the dumping companies a “tipping fee.” In 2000, Synagro Corporation, one of the largest dumping companies in the nation, sued Rush Township, claiming that as a corporate citizen, the Township violated Synagro’s 14th amendment rights. In response, Porter Township, passed its precedent-setting ordinance claiming that the dumping company, or any corporation within its jurisdiction, may not wield personhood and free speech privileges.

A more high-profile challenge to corporate personhood involves a lawsuit against Nike and its claims on third-world labor practices. In 1998, Nike CEO Phil Knight wrote a New York Times op-ed piece responding to criticisms of Nike’s Asian labor practices. As was widely reported in the mainstream press in mid-April of this year, San Francisco consumer advocate Marc Kasky filed a lawsuit against Nike believing the company misled the public about its labor practices. Nike, however, claims that the First Amendment protects Nike’s statements, making it irrelevant whether the statements are true or false.

In May 2002, the California Supreme Court ruled against Nike saying its statements were commercial speech, and can therefore be regulated by the Federal Trade Commission. This ruling, writes Justice Joyce L. Kennard, “means only that when a business enterprise, to promote and defend its sales and profits, makes factual representations about its own product or its own operations, it must speak truthfully.”

On April 26, 2003, the Ottawa Citizen provided some pro-Nike coverage of the current case against Nike saying, “The case began some years ago when anti-globalizers accused Nike of exploiting workers at its factories abroad. The Nike-bashing was unrelenting, and the company fought back.” Hartmann’s article also notes The New York Times’ editorial support for Nike saying, “In a real democracy, even the people you disagree with get to have their say.” That’s true says Hartmann, but Nike is not a person-it’s a corporation.

By the release of Censored 2004, the Nike case will probably be a settled issue. It is likely that Porter Township’s ordinance will be challenged in higher courts in the near future. However, Hartmann’s research and writings show that the legality on which corporate claims to personhood and free speech rights rests is dubious.

UPDATE BY JIM HIGHTOWER: Anyone seeking to preserve America’s fragile democracy must first understand the scope and magnitude of the powers aligned against it. We live in an age in which corporations have been enthroned and corruption in high places has enabled power and wealth to be aggregated into an increasingly smaller number of hands. As citizens concerned with the future of human rights in a democratic republic, it’s vital that we now speak up and spread the word about “Corporate Personhood,” which lies at the heart of the challenge facing us today.

On April 23, 2003, the U.S. Supreme Court heard oral arguments in Nike v. Kasky, the Nike Corporation’s appeal of an April 2002 California Supreme Court ruling. In Kasky v. Nike, the California court rejected claims by Nike’s lawyers that the First Amendment immunized Nike from being sued under state consumer protection laws (for allegedly misrepresenting facts in a public relations campaign). The U.S. Supreme Court (where the case is Nike Inc, et al. v. Marc Kasky since Nike is the party appealing) likely will issue a ruling by late June on the Constitutional issue of whether Nike can claim exemption from the California law under the First Amendment. The Court will not consider the merits of the original lawsuit, in which Mr. Kasky sued Nike for deceptive practices.

The story in the Hightower Lowdown received no additional coverage by mainstream media sources. However, the Nike v. Kasky case has generated a substantial amount of interest, although the opinions are predictable. As of May 25, 2003, four of the five largest U.S. newspapers had editorialized on behalf of the Nike Corporation. Though all five had received submissions from nationally published writers, none had published dissenting commentaries. The Rocky Mountain News (#27-Denver) was alone among the top-50 papers in allowing space for a dissent to their pro-Nike editorial. The Sacramento Bee (ranked #31) thus far is the only paper to critique Nike’s “free speech” claims in an editorial (while arguing that the Supreme Court should dismiss Kasky’s suit on other grounds).

For more information go to:

ReclaimDemocracy.org (P.O. Box 532, Boulder, CO 80306; 303-402-0105;
Program on Corporations Law and Democracy (P.O. Box 246, South Yarmouth, MA
02664; 508-398-1145; http://www.poclad.org)
Alliance for Democracy (760 Main Street, Waltham, MA 02451; 781-894-1179;