Sotomayor Says Corporations Aren't Legal Persons

[R.A. Hettinga]

"Hmm, hmm, hmm.
  First day on the new job.
  Hmm, hmm, hmm.
  Let's pull on... oh, say, *that* string, there, and see just what  
falls off!
  Hmm, hmm, hmm."

Interesting times have now officially arrived, folks.

On the other hand, if statists insist on killing the very Code that  
lays their golden eggs, one, um, hopes, more code can be written to  
change, er, fix, the problems they create, and for the better this time.

Herr Doktor Lessig may in fact end up, well, hoping, that Declan  
actually *did* have it right after all...


Certainly financial cryptography, in theory at least, allows the  
ability to anonymously vote shares of a given business entity in such  
a fashion as to control its digital signature, spilt its cash profits,  
and so on.

As if it were a person.

Maybe Turing *is* laughing somewhere...

Hmm, hmm, hmm...


Cheers,
RAH
-------

<http://online.wsj.com/article/SB125314088285517643.html#printMode>

The Wall Street Journal		
LAW JOURNAL
SEPTEMBER 17, 2009
Sotomayor Issues Challenge to a Century of Corporate Law

By JESS BRAVIN
WASHINGTON -- In her maiden Supreme Court appearance last week,  
Justice Sonia Sotomayor made a provocative comment that probed the  
foundations of corporate law.

During arguments in a campaign-finance case, the court's majority  
conservatives seemed persuaded that corporations have broad First  
Amendment rights and that recent precedents upholding limits on  
corporate political spending should be overruled.

But Justice Sotomayor suggested the majority might have it all wrong  
-- and that instead the court should reconsider the 19th century  
rulings that first afforded corporations the same rights flesh-and- 
blood people have.

Judges "created corporations as persons, gave birth to corporations as  
persons," she said. "There could be an argument made that that was the  
court's error to start with...[imbuing] a creature of state law with  
human characteristics."

After a confirmation process that revealed little of her legal  
philosophy, the remark offered an early hint of the direction Justice  
Sotomayor might want to take the court.

"Progressives who think that corporations already have an unduly large  
influence on policy in the United States have to feel reassured that  
this was one of [her] first questions," said Douglas Kendall,  
president of the liberal Constitutional Accountability Center.

"I don't want to draw too much from one comment," says Todd Gaziano,  
director of the Center for Legal and Judicial Studies at the  
conservative Heritage Foundation. But it "doesn't give me a lot of  
confidence that she respects the corporate form and the type of rights  
that it should be afforded."

For centuries, corporations have been considered beings apart from  
their human owners, yet sharing with them some attributes, such as the  
right to make contracts and own property. Originally, corporations  
were a relatively rare form of organization. The government granted  
charters to corporations, delineating their specific functions. Their  
powers were presumed limited to those their charter spelled out.

"A corporation is an artificial being, invisible, intangible," Chief  
Justice John Marshall wrote in an 1819 case. "It possesses only those  
properties which the charter of its creation confers upon it."

But as the Industrial Revolution took hold, corporations proliferated  
and views of their functions began to evolve.

In an 1886 tax dispute between the Southern Pacific Railroad and the  
state of California, the court reporter quoted Chief Justice Morrison  
Waite telling attorneys to skip arguments over whether the 14th  
Amendment's equal-protection clause applied to corporations, because  
"we are all of opinion that it does."

That seemingly off-hand comment reflected an "impulse to shield  
business activity from certain government regulation," says David  
Millon, a law professor at Washington and Lee University.

"A positive way to put it is that the economy is booming, American  
production is leading the world and the courts want to promote that,"  
Mr. Millon says. Less charitably, "it's all about protecting corporate  
wealth" from taxes, regulations or other legislative initiatives.

Subsequent opinions expanded corporate rights. In 1928, the court  
struck down a Pennsylvania tax on transportation corporations because  
individual taxicab drivers were exempt. Corporations get "the same  
protection of equal laws that natural persons" have, Justice Pierce  
Butler wrote.

 From the mid-20th century, though, the court has vacillated on how  
far corporate rights extend. In a 1973 case before a more liberal  
court, Justice William O. Douglas rejected the Butler opinion as "a  
relic" that overstepped "the narrow confines of judicial review" by  
second-guessing the legislature's decision to tax corporations  
differently than individuals.

Today, it's "just complete confusion" over which rights corporations  
can claim, says Prof. William Simon of Columbia Law School.

Even conservatives sometimes have been skeptical of corporate rights.  
Then-Associate Justice William Rehnquist dissented in 1979 from a  
decision voiding Massachusetts's restriction of corporate political  
spending on referendums. Since corporations receive special legal and  
tax benefits, "it might reasonably be concluded that those properties,  
so beneficial in the economic sphere, pose special dangers in the  
political sphere," he wrote.

On today's court, the direction Justice Sotomayor suggested is  
unlikely to prevail. During arguments, the court's conservative  
justices seem to view corporate political spending as beneficial to  
the democratic process. "Corporations have lots of knowledge about  
environment, transportation issues, and you are silencing them during  
the election," Justice Anthony Kennedy said during arguments last week.

But Justice Sotomayor may have found a like mind in Justice Ruth Bader  
Ginsburg. "A corporation, after all, is not endowed by its creator  
with inalienable rights," Justice Ginsburg said, evoking the  
Declaration of Independence.

How far Justice Sotomayor pursues the theme could become clearer when  
the campaign-finance decision is delivered, probably by year's end.