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2.18.05
Politics and Economy:
Corporate Rights
More on This Story:
Overview

When residents of St. Thomas Township, Pennsylvania opposed a company's plans to build a quarry in their small town, they did a uniquely American thing: they elected a town supervisor who shared their view. The ensuing battle, like many around the nation that are pitting communities against corporations, raises a question at the heart of American democracy: can corporate rights trump the will of the people? NOW goes inside the controversy in St. Thomas Township by looking at how Frank Stearn, the newly elected official, steered clear of issues relating to the quarry and examines the legal status claimed by the corporation that stopped him in his tracks. "I mean, clearly, it does not speak well to most people's understanding of how democracy works," says Stearn.

Below is some historical background on the legal and political issues related to corporate rights, and links to provide additional information.



Some scholars trace the debate over the relative rights of corporations and individuals to the very founding of the nation. Thomas Hartmann in his critique, UNEQUAL PROTECTION: THE RISE OF CORPORATE DOMINANCE AND THE THEFT OF HUMAN RIGHTS, notes that in 1788, Thomas Jefferson called for a provision in the Bill of Rights protecting "freedom of commerce against monopolies" — but it was a provision which didn't make the final draft. And Hartmann quotes Jefferson from 1816: "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." However, there are just as many scholars who mine the early documents of the nation to bolster arguments that corporations were integral members of the nation, with protection under the law a natural outcome.

The court history of the debate over Constitutional protection is most often traced to a late 19th century case based on the 14th Amendment to the Constitution intially designed to protect the rights of newly freed slaves. The Equal Protection Clause of the 14th Amendment provides that "no state shall make or enforce any law which shall...deny to any person within its jurisdiction the equal protection of the laws." In the 1886 Supreme Court Case, Santa Clara County vs. Southern Pacific Railroad Co.,the railroad challenged the county's claim of unpaid taxes by arguing that it was being forced to pay an unfairly high amount and therefore had been deprived of equal protection as per the 14th Amendment. In its brief to the Court the railroad was effectively defining itself legally as a person and the Court seems to have accepted that corporations were "persons" under the 14th Amendment granting them certain constitutional rights, though the decision may not have said so in those exact words. Some critics of the Santa Clara decision suggest that language asserting the "personhood" of corporations is found only in the preface to the published opinion, written by a court reporter.

Regardless of the origins of the concept, case law has been consistently on the side of corporate protections under the equal protection clause. And case law has extended that protection to other parts of the Constitution and federal laws, including the Bill or Rights and Section 1983 of the US code which allows for civil action for deprivation of rights. For example, in 1978 the Supreme Court ruled in First National Bank of Boston v. Bellotti that corporations have a First Amendment "right" to influence ballot initiatives and other political campaigns.

Recent corporate rights cases include a 2004 case in which Wal-Mart, Inc. sued to have a ballot initiative presented to Inglewood, California voters to override the City Council's rejection of a Wal-Mart Supercenter. The ballot initiative lost. And in 2003's Nike vs. Kasky, the shoemaker contended that its First Amendment rights were violated by a suit contending that Nike's promotional statements fraudulently misled consumers about their overseas labor practices. The suit was settled after the U.S. Supreme Court declined to rule on the issue.  

In October, 2004 the California town of Arcata held a public hearing of the notion of corporate personhood and the ramifications of a nonbinding resolution opposing granting constitutional rights to corporations passed the previous May. While some townspeople applauded the ordinance, others pointed out that other entities like non-profit groups, churches and local family-owned corporations could also lose some rights.

Learn more about the history and debate from the links below:

Explore voices from both sides of the debate and make up your own mind and discuss your thoughts on the topic.

Additional sources: "Corporate citizenship," Jamin B. Raskin, LOS ANGELES TIMES, August 24, 2003; "Court Finds Cause of Action Under Section 1983 for Telecom Cases," TELECOMMUNICATION INDUSTRY LITIGATION REPORTER, December 1, 2004; "Nike: Just like you and me," David Lazarus, THE SAN FRANCISCO CHRONICLE, September 14, 2003; "Wal-Mart Loses a Battle, But Why Was It Allowed To Fight?" Jeff Milchen, LA PRENSA SAN DIEGO, April 16, 2004; "The Abuses of Corporate Personhood," Brian Lane, USA TODAY, "Corporate personhood is not an abstract theory," Meghan Vogel, THE TIMES-STANDARD, May 1, 2004.

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