Thursday, September 11, 2014
Don't worry - we aren't going to get into a discussion of abortion today. Nor are we going to ponder the nature of personhood through some excellent science fiction movies, like "Blade Runner" or "Her" (both of which I highly recommend - but only for mature audiences). No, today's topic is "corporate personhood". Can a corporation be considered, at least in some ways, a person? The recent Supreme Court decisions on Citizens United and Hobby Lobby, combined with the latest business news concerning Burger King all lead us to ponder this question.
A brief review to set the stage: In 2009, the Supreme Court decided in Citizens United that a part of the 2002 Bipartisan Campaign Reform Act (known most often as "McCain-Feingold") was unconstitutional. There was a group called Citizens United that sought to screen a movie that was critical of Hillary Clinton during the 2008 Democratic primaries. The BCRA forbade "electioneering communication" within 30 days of a primary and 60 days of a general election, and specifically forbade them being paid for by corporations or unions. In short, this restriction was found to be unconstitutional, though it left intact the vast majority of the BCRA. For more details, see here
Critics of the decision said that this conferred "personhood" on corporations, in terms of exercising First Amendment protections. They maintained that corporations are not people and should therefore not be afforded the constitutional rights and protections of a person. This theme was continued in the Hobby Lobby decision that we discussed here in a previous post. Again, the argument was that businesses are not people, and should not be treated as such, no matter the size of the company or how "closely held" (to use the Supreme Court's terms). Corporations are not people, went the argument once again.
Which leads us to today. In business news, Burger King is the latest corporation to announce a plan for an "inversion" merger, in which a company from the United States purchases or merges with a company from outside the U.S., then moves its corporate headquarters to that foreign country, presumably to take advantage of that country's more favorable tax climate. Critics of this maneuver accuse Burger King and others of lacking "economic patriotism" for trying to lower their tax liabilities by performing this type of merger.
Here's where the discussion gets interesting. Patriotism is an individual virtue, practiced by those who profess loyalty or fealty to their native land. Someone exercising patriotism may serve in the military, run for public office, perform service to his or her country in myriad ways. But it remains an individual behavior. Yet, the critics of Burger King (and others) maintain that the company exercise the individual virtue of patriotism, while in fact they are acting like a business - trying to improve their bottom line and shareholder value. (As an aside - Burger King strongly maintains that tax reasons are not the motivation for the nature of their merger with the Canadian company Tom Hortons, but it is certainly reasonable to think that taxes are at the very least a big side benefit to the merger.) So, here's the problem:
If companies are simply companies and cannot be assigned any attributes of individuals, then the critics of Burger King have no basis for their characterization of the company as somehow unpatriotic. And in that case, they critics of Citizens United and Hobby Lobby may have a good case for saying corporations are not people.
On the other hand, if the critics of Burger King are right and companies can - or even should - exercise individual virtues, then they can be considered, at least under certain conditions, people, and therefore have some measure of protections of an individual under the Constitution. In that case, Hobby Lobby and Citizens United were decided correctly.
So, are corporations simply businesses, or are they people acting corporately? Both? Neither? I'd love to hear your thoughts, my friends.
The famous ad line from Burger King comes to mind now - "Have It Your Way!" The question is: can you have it both ways?