The corporate personhood debate refers to the controversy (primarily in the United States) over the question of what subset of rights afforded under the law to natural persons should also be afforded to corporations as legal persons. The United States of America —commonly referred to as the In Jurisprudence, a natural person is a human being perceptible through the senses and subject to physical laws as opposed to an artificial legal or juristic person Note This Wikipedia entry deals with the legal concept legal person.
Opponents of "corporate personhood" believe that large corporations as juristic persons have enjoyed certain constitutional rights intended for natural humans as the result of a misinterpretation of an 1886 Supreme Court Case, Santa Clara County v. Southern Pacific Railroad. Santa Clara County v Southern Pacific Railroad Company, was a United States Supreme Court case dealing with taxation of railroad properties Opponents claim that certain rights of natural persons, such as the right to political and other non-commercial free speech, are now exercised by corporations to the detriment of the American democratic process as provided under the Constitution. Some opponents point to the recent discovery of correspondence  between then Supreme Court Chief Justice Morrison R. Waite, and court reporter J. C. Bancroft Davis as proof of a conspiracy among the railroad corporations to intentionally create a misrepresentation of that decision for the benefit of the railroads.
Proponents of corporate personhood believe that corporations, as representatives of their shareholders, were intended by the founders and framers to enjoy many, if not all, of the same rights as natural persons, for example, the right against self-incrimination, right to privacy and the right to lobby the government. Some proponents believe that these rights should continue to be extended to corporations regardless of any possible flawed interpretation of the Santa Clara Co. v. So. Pac. Railroad case.
Since the mid-1800s, corporate personhood has become increasingly controversial, as courts have extended other rights to the corporation beyond those necessary to ensure their liability for debts. Other commentators argue that corporate personhood is not a fiction anymore—it simply means that for some legal purposes, "person" has now a wider meaning than it has in non-legal uses. Some groups and individuals (including the Green Party and the Women's International League for Peace and Freedom) have objected to corporate personhood. One of the Political parties in the United States, and similar in mission to many of the worldwide Green Parties, the Greens have been active as a third party These opponents usually do not actually want to abolish the theory that allows corporations to be governed by the law, be subjected to taxes, sue and be sued, and otherwise be treated as a legal entity. Rather, their objections focus on constitutional protections.
In part as a matter of subsequent interpretations of the word "person" in the Fourteenth Amendment, U. The Fourteenth Amendment ( Amendment XIV) to the United States Constitution is one of the post- Civil War Reconstruction Amendments, first S. courts have extended certain constitutional protections to corporations. Opponents of corporate personhood don't necessarily want to eliminate legal entities, but do want to limit these rights to those provided by state constitutions through constitutional amendment.  Often, this is motivated by a desire to restrict the political speech and donations of corporations, interest groups, lobbyists, and political parties. An interest group (also advocacy group, lobby group, pressure group or special interest group) is an organized collection of people who seek Lobbying includes all attempts to influence Legislators and officials whether by other legislators constituents or organized groups A political party is a Political organization that seeks to attain and maintain political power within Government, usually by participating in electoral Social and political commentator Thom Hartmann is among those that share this view. Thom Hartmann (born May 7, 1951) is an American radio host, Author, and liberal Political commentator.  Because juristic persons have limited "free speech" rights, legislation meant to eliminate campaign contributions by juristic persons (notably, corporations and labor unions) has been repeatedly struck down by various courts. Those who believe juristic persons should have the protection of the U. S. Constitution point out that they are just organizations of people, and that these people shouldn't be deprived of their human rights when they join with others to act collectively.
The laws of the US and other nations hold that a legal entity (like a corporation or non-profit organization) may for certain, limited purposes be treated under the law as a person. This has many consequences. Because of the concept of corporate personhood, a corporation is allowed to own property and enter into contracts. It can also be sued, and held liable under both civil and criminal law. Among the most frequently discussed and controversial consequences of corporate personhood in the United States is the extension of a limited subset of the same constitutional rights. A constitutional right is a Right granted by a Government 's Constitution (on the national or sub-national level and cannot be legally denied by that government
Corporations as legal entities have always been able to perform commercial activities, similar to a person acting as a sole proprietor, such as entering into a contract or owning property. Commerce is a division of trade or production which deals with the exchange of goods and services from producer to final consumer A sole proprietorship, or simply proprietorship ( Benjamen Clark Therefore corporations have always had a 'legal personality' for the purposes of conducting business while shielding individual stockholders from personal liability (i. A mutual shareholder or stockholder is an Individual or company (including a Corporation) that legally owns one or more shares of e. , protecting personal assets which were not invested in the corporation).
The stronger concept of corporate personhood, in which (for example) First, Fifth, and Fourteenth Amendment rights have been asserted by corporations, is often traced to the 1886 U.S. Supreme Court case Santa Clara County v. Southern Pacific Railroad Company (118 U. The Supreme Court of the United States is the highest judicial body in the United States and leads the federal judiciary. Santa Clara County v Southern Pacific Railroad Company, was a United States Supreme Court case dealing with taxation of railroad properties S. 394). However, that particular Supreme Court decision did not address the matter of whether corporations were 'persons' with respect to the Fourteenth Amendment; in Chief Justice Waite's words, "we avoided meeting the question".
Also see creature of statute. A creature of statute is a legal entity such as a Corporation created by Statute.
The history of corporate law in the United States can be directly tied to the ebb and flow of the debate first enunciated between Alexander Hamilton and Thomas Jefferson over how centralized the government of the United States should be, how much power the member states should have over their own affairs, and how much say citizens and citizen organizations should have in public affairs. Thomas Jefferson (April 13 1743 – July 4 1826 was the third President of the United States (1801–1809 the principal author of the Declaration of Independence
While both Hamilton and Jefferson participated in the creation of the more centralized United States out of the original confederation by the Federalist Party, they had very different ideals as to what the new creation should be. A confederation is a group of empowered states or communities usually created by treaty but often later adopting a common constitution The Federalist Party (or Federal Party) was an American political party in the period 1792 to 1816 with remnants lasting into the 1820s Hamilton believed in a strong central government, which he believed necessary for an industrialized nation, while Jefferson believed in a de-centralized, more agrarian nation (see Jeffersonian democracy). Agrarianism is a social and Political philosophy which stresses the viewpoint that the cultivation of plants or Farming leads to a fuller and happier life Jeffersonian Democracy is the set of political goals that were named after Thomas Jefferson When Hamilton, as the first US Treasury Secretary, created a national bank for the new country (see First Bank of the United States), Jefferson was much against the idea. The First Bank of the United States was a Bank chartered by the United States Congress on February 25, 1791. Later, President Andrew Jackson did his best to undermine the Second Bank of the United States (see Jacksonian democracy) succeeding in eliminating that institution by refusing to renew its charter thereby eliminating a central bank in the United States. Andrew Jackson (March 15 1767 June 8 1845 was the seventh President of the United States (1829&ndash1837 The Second Bank of the United States was a bank chartered in 1816 five years after the expiration of the First Bank of the United States. Jacksonian Democracy refers to the political philosophy of United States President Andrew Jackson and his supporters The creation of a national banking system after the American Civil War and Reconstruction, a measure by Congress to provide some stability to the growing national economy, provided some though still insufficient amount of monetary stability to help economic growth until the Federal Reserve System was created in the early 1900s. Causes of the war See also Origins of the American Civil War, Timeline of events leading to the American Civil War The coexistence of a slave-owning South
The Federal Constitution of 1788 did not mention corporations, thereby leaving the chartering of corporations to the states, since the Constitution did not explicitly say otherwise. The Constitution of the United States of America is the supreme Law of the United States. In the late 1700s and early 1800s, corporations began to be chartered by the states. Corporations already existed in the new nation, but these were primarily educational corporations or institutions chartered by the British crown which continued to exist after the new nation was created from the Confederation. Due to experience as British Colonies and the accompanying corporate colonialism from British corporations chartered by the crown to do business in North America, new corporations were greeted with mixed feelings. British colonization of the Americas (including colonization under the Kingdom of England and Kingdom of Scotland before the 1707 Acts of Union created See Colony and Colonization for examples of colonialism which do not refer to Western colonialism Thomas Jefferson said, "I hope we shall crush in its birth the aristocracy of our moneyed corporations which dare already to challenge our government in a trial of strength, and bid defiance to the laws of our country. Thomas Jefferson (April 13 1743 – July 4 1826 was the third President of the United States (1801–1809 the principal author of the Declaration of Independence Aristocracy is a form of Government, where rule is established through an internal struggle over who has the most status and influence over society and internal relations "
As with banks, so with other corporations, especially perhaps colleges, the degree of permissible interference was controversial from the earliest days of the nation. In 1790, John Marshall, a private attorney and a veteran of the Continental Army, represented the board of the College of William and Mary, in litigation that required him to defend that corporation's right to reorganize itself and in the process remove professors, The Rev John Bracken v. John Marshall (September 24 1755 – July 6 1835 was an American statesman and jurist who shaped American constitutional law and made the Supreme Court a center of power The American Continental Army was an Army formed after the outbreak of the American Revolutionary War by the colonies that became the United States of America The College of William and Mary (officially The College of William and Mary in Virginia, also known as William & Mary or W&M) is a Public university The Visitors of Wm & Mary College (7 Va. 573; 1790 Supreme Court of Virginia). The Supreme Court of Virginia is the highest court in the US state of Virginia. The Supreme Court of Virginia ruled that the original crown charter provided the authority for the Visitors to make changes including the reorganization.
Thomas Jefferson claimed in his autobiography that he had a hand in the reorganization when he was elected a Visitor of William and Mary after being appointed the Governor of the Commonwealth in June of 1779. His main reason for the reorganization was to move the college from a curriculum rooted in theology to a curriculum rooted in science, fine arts, and languages. In formal education a curriculum (plural curricula) is the set of courses and their content offered at a School or University. Theology is the study of a god or the gods from a religious perspective Fine art is any Art form developed primarily for Aesthetics rather than Utility.
In 1818, the United States Supreme Court heard arguments in another such matter, Dartmouth College v. Woodward, 17 U. The Supreme Court of the United States is the highest judicial body in the United States and leads the federal judiciary. Trustees of Dartmouth College v Woodward, 17 US (4 Wheat 518 ( 1819) was a landmark United States Supreme Court case dealing with the application S. 518 (1819). Daniel Webster was the advocate for Dartmouth. Daniel Webster (January 18 1782 &ndash October 24 1852 was a leading American Statesman during the nation's Antebellum Period. Dartmouth College ( is a private, Coeducational University located in Hanover, New Hampshire, U He concluded his argument in the following emotional fashion, directly addressed to that same John Marshall, now chief justice. Webster equated the property rights of the donors and their trustees with the cause of literature and science, in short, with civilization itself.
- "Sir, you may destroy this little institution; it is weak; it is in your hands! I know it is one of the lesser lights in the literary horizon of our country. You may put it out. But if you do, you must carry through your work! You must extinguish, one after another, all those great lights of science which, for more than a century, have thrown their radiance over our land. It is, Sir, as I have said, a small college. And yet, there are those who love it. "
At this point, the Chief Justice is said to have become teary. The following year, he read from the bench the court's decision in that matter.
The key paragraph in the decision is as follows: "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. A charter is the grant of authority or rights stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law This opinion appears to us to be equally supported by reason, and by the former decisions of this Court. "
A public outcry ensued. State courts and legislatures, supported by many of their constituents, declared that state governments had an absolute right to amend or repeal a corporate charter. (Richard L Grossman and Frank T. Richard Lee Grossman (born 1943 is the former co-director of the Program on Corporations Law and Democracy ( POCLAD) Adams, Taking Care of Business, Citizenship and the Charter of Incorporation (Cambridge: Charter, Ink. , 1993), p. 11-12).
Seven years after the Dartmouth College opinion, the Supreme Court decided Society for the Propagation of the Gospel in Foreign Parts v. Town of Pawlet, (1823) in which an English corporation dedicated to missionary work, with land in the U. S. , sought to protect its rights to that land under colonial-era grants against an effort by the state of Vermont to revoke the grants. Vermont ( is a state in the New England region of the northeastern United States of America. Justice Joseph Story, writing for the court, explicitly extended the same protections to corporation-owned property as it would have to property owned by natural persons. Joseph Story ( September 18, 1779 &ndash September 10, 1845) was an American Lawyer and Jurist who served on And, seven years after that, Chief Justice Marshall stated that, "The great object of an incorporation is to bestow the character and properties of individuality on a collective and changing body of men. "
The notion of corporate personhood, then, has roots in the early history of the republic. Still, as the 19th century matured, manufacturing in the US, became more complex as the British Industrial Revolution generated new inventions and business processes which US industry copied. The Industrial Revolution was a period in the late 18th and early 19th centuries when major changes in agriculture manufacturing and transportation had a profound effect on the US industry was largely protected by tariffs from British and other foreign competition. For other uses of this word see Tariff (disambiguation. A tariff is a tax imposed on goods when they are moved across a political boundary The favored form for large businesses became the corporation because the corporation provided a mechanism to raise the large amounts of investment capital large business required especially for capital intensive yet risky projects such as railroads. And as these corporations came to dominate business life, they also began to dominate America's politicians, lawyers, courts and culture.
The Civil War accelerated the growth of manufacturing and the power of the men who owned the large corporations. Causes of the war See also Origins of the American Civil War, Timeline of events leading to the American Civil War The coexistence of a slave-owning South Businessmen such as Mark Hanna, sugar trust magnate Henry O. Havemeyer, banker J. P. Morgan, steel makers Charles M. Schwab and Andrew Carnegie, and railroad owners Cornelius Vanderbilt and Jay Gould created corporations that influenced legislation at the local, state, and federal levels as they built businesses that spanned multiple states and communities. Marcus Alonzo Hanna ( September 24, 1837 &ndash February 15, 1904) best known as Mark Hanna, was an American Industrialist Henry Osborne Havemeyer (1847 - 1907 was an American entrepreneur who founded the American Sugar Refining Company in 1891 John Pierpont Morgan ( April 17, 1837 &ndash March 31, 1913) was an American financier banker and art collector who For the founder and CEO of the Charles Schwab Corporation brokerage firm see Charles R Andrew Carnegie (properly kɑrˈneɪgi but commonly /ˈkɑrnɨgi/ or /kɑrˈnɛgi/ (25 November 1835 – 11 August 1919 was a Scottish -born American Industrialist Cornelius Vanderbilt ( May 27 1794 &ndash January 4 1877) also known by the Sobriquets The Commodore or Jason "Jay" Gould ( May 27, 1836 &ndash December 2, 1892) was an American Financier who became a leading American railroad Beginning in the 1870s, corporate lawyers became bolder about using the Webster/Marshall theory of corporations as persons, arguing that as such they were entitled to some of the legal protections against arbitrary state action accorded also to natural persons. In Jurisprudence, a natural person is a human being perceptible through the senses and subject to physical laws as opposed to an artificial legal or juristic person
It should be understood that the term 'artificial person' was in long use, prior to the Dartmouth College decision, and was in principle distinct from any contention that corporations have the rights of natural persons. In Jurisprudence, a natural person is a human being perceptible through the senses and subject to physical laws as opposed to an artificial legal or juristic person 'Artificial person' was used because there were certain resemblances, in law, between a natural person and corporations. Both could be parties in a lawsuit; both could be taxed; both could be constrained by law. In fact the corporations had been called artificial persons by courts in England as early as the 16th century because lawyers for the corporations had asserted they could not be convicted under the English laws of the time because the laws were worded "No person shall. England is a Country which is part of the United Kingdom. Its inhabitants account for more than 83% of the total UK population whilst its mainland . . . "
In the late 1800s, railroads were among the most politically powerful corporations in the country as the corporate officers had to work with federal and state legislatures in order to obtain land grants for rights of way and the legislatures in turn depended on the railroads to provide the low cost transportation needed to open up new territory. Railroads provided a means for most of the nation's farmers to transport agricultural products such as grain and livestock from rural areas into cities such as Chicago. Chicago (ʃɪˈkɑːgoʊ is the largest City by population in the state of Illinois and the American Midwest of the United States. Manufacturing corporations needed coal, iron ore, finished iron, or any other materials transported and consumer goods business such as Sears, Roebuck and Company used railroads to deliver goods to mail order catalog customers. Sears Roebuck and Company, commonly known as Sears, is an American mid-range chain of International Department stores founded by Richard Mail order is a term which describes the Buying of goods or services by Mail delivery
As railroads increased their size becoming business organizations that operated across multiple states, a number of conflicts between various states and the railroads began to surface. In four cases that reached the Supreme Court (94 U. S. 155, 94 U. S. 164, 94 U. S. 179, 94 U. S. 180 (1877)), railroads tried to argue that the 14th Amendment prevented states from regulating the maximum rates they could charge. These cases did not rely on just an interpretation of the 14th Amendment as most also tied in the Interstate Commerce clause as well. In each case the Court refused to render an opinion as to whether the 14th Amendment applied to corporations instead couching their decision on the Interstate Commerce clause.
Similarly, in 1877, in Munn v. Illinois (94 U. Munn v Illinois, 94 US 113 ( 1876) was a United States Supreme Court case dealing with corporate rates and agriculture S. 113 (1876)), the Supreme Court decided that the 14th Amendment did not prevent the State of Illinois from regulating charges for use of a business's grain elevators, ignoring the question of whether Munn & Scott was a person. The State of Illinois ( roughly ill-i-NOY is a state of the United States of America, the 21st to be admitted to the Union.
Was the 14th Amendment about corporations? One of the 1886 judges, Samuel F. Miller, had not thought so in 1872, only six years after the Amendment had become law, when the court was "called upon for the first time to give construction to these articles. Samuel Miller may refer to Samuel Miller (theologian (1769-1850 professor at Princeton Theological Seminary and author of The Ruling Elder " In the Slaughterhouse Cases (83 U. The Slaughter-House Cases, 83 US 36 ( 1873) were a series of cases decided by the Supreme Court of the United States. S. 36 (1872)), Miller delivered the majority opinion and discussed the Thirteenth Amendment and the Fifteenth Amendment as well as the Fourteenth as follows:
(Graham, Howard Jay, Everyman's Constitution, State Historical Society of Wisconsin, 1968. See also Graham, Howard Jay, "The Conspiracy Theory of the Fourteenth Amendment," The Yale Law Journal, Vol. 47: 341, 1938)
Later, in Northwestern Nat Life Ins. Co. v. Riggs (203 U. Northwestern National Life Insurance Co v Riggs,, was an important United States Supreme Court case dealing with Corporations conducting Business S. 243 (1906)), having accepted that corporations are a type of people, the court still ruled that the 14th Amendment was not a bar to many state laws that effectively limited a corporation's right to contract business as it pleases.
Two Supreme Court judges, Hugo Black and William O. Douglas, later rendered opinions attacking the doctrine of corporate personhood. Hugo LaFayette Black (February 27 1886&ndashSeptember 25 1971 was an American politician and jurist. William Orville Douglas ( October 16, 1898 – January 19, 1980) was a United States Supreme Court Associate Justice. Quoted here is the conclusion of Justice Black's opinion:
If the people of this nation wish to deprive the states of their sovereign rights to determine what is a fair and just tax upon corporations doing a purely local business within their own state boundaries, there is a way provided by the Constitution to accomplish this purpose. That way does not lie along the course of judicial amendment to that fundamental charter. An amendment having that purpose could be submitted by Congress as provided by the Constitution. I do not believe that the Fourteenth Amendment had that purpose, nor that the people believed it had that purpose, nor that it should be construed as having that purpose.
(Hugo Black, dissenting, Connecticut General Life Insurance Company v. Johnson (303 U. Hugo LaFayette Black (February 27 1886&ndashSeptember 25 1971 was an American politician and jurist. Connecticut General Life Insurance Company v Johnson, 303 US 77 (1938 is a case in which the United States Supreme Court dealt with corporate entities S. 77, 1938). )
Justice Black was not alone in his questioning of the legitimacy of corporate personhood. Justice Douglas, dissenting in Wheeling Steel Corp. v. Glander (337 U. Wheeling Steel Corp v Glander, 337 US 562 ( 1949) was a United States Supreme Court case S. 562, 1949), gave an opinion similar to, but shorter than, the one quoted above, to which Justice Black concurred. Year 1949 ( MCMXLIX) was a Common year starting on Saturday (link will display the full calendar of the Gregorian calendar. The extent to which the rights of personhood should attach to corporations has remained a subject of controversy. 
The understanding of corporate personhood in the United States may be changing as a result of developments in bankruptcy law and mass tort litigation. Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against In Law, a class action or a representative action is a form of Lawsuit where a large group of people collectively bring a claim to court
Near the end of the 20th century, several major corporations entered chapter 11 (i. Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the Bankruptcy laws of the United States e. , judicial protection from creditors, on the basis of their liability for harm done or allegedly done to actual or potential plaintiffs by asbestos). A creditor is a party (eg person organization company or government that has a claim to the services of a second party Asbestos is a group of Minerals with long thin fibrous Crystals The word "asbestos" (῾ἀσβεστος is derived from a Greek adjective Owens-Corning, an insulation manufacturer, was perhaps the most high-profile of these. Owens Corning Corporation ( is the world's largest manufacturer of Fiberglass and related products
Owens-Corning was, formally speaking, not one corporation but several, and it has maintained in the bankruptcy proceedings that the several corporations must be treated separately in any court-directed re-organization.
In 2003, a Supreme Court showdown over corporate free speech was narrowly avoided when the parties in Nike v. Kasky settled out of court over the question of whether Nike had a first amendment right to make false statements about its use of sweatshop labor. See WSJ -- Nike v. Kasky, the First Amendment... and USSC 02-575
In 2004, a federal district court ordered the substantive consolidation of the different corporations that operate under the Owens-Cornings name for purposes of re-organization. This is still a hotly disputed matter, and that order was overturned on appeal, but it may prove a landmark in the willingness of courts to pierce the corporate veil. The corporate law concept of piercing (lifting the corporate veil describes a legal decision where a shareholder or director of a Corporation is held liable for the
In 2008, Blackwater sued the City of San Diego to force the city to issue them a certificate of occupancy for its training facility in Otay Mesa before the plan went through the city's public review process. "U. S. District Judge Marilyn Huff ruled in Blackwater's favor. Blackwater is a person and has a right to due process under the law and would suffer significant damage due to not being able to start on its $400 million navy contract. "