Supreme Court Case Could Expand Corporate Personhood

Constitutional Law Professor: Plaintiffs Want Supreme Court To Change “Basic Principle Of Corporate Law.” On March 25 the Supreme Court will hear consolidated arguments in Sebelius v. Hobby Lobby and Conestoga Wood Specialties Corp. v. Sebelius, in which the owners of the for-profit businesses Hobby Lobby and Conestoga claim they should be allowed to deny their employees health insurance coverage for certain types of birth control based on the owners' personal religious beliefs. As UCLA constitutional law professor Adam Winkler explained at Slate, if the Supreme Court rules in favor of the corporations, it would expand the legal conception of corporate personhood and undermine current constitutional law, conflating the rights of the individual owners with the rights of the corporation:

[T]he Supreme Court, in business cases, has held that “incorporation's basic purpose is to create a legally distinct entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs.”

In recent constitutional law cases, however, the justices seem to have forgotten this basic principle of corporate law. In Citizens United, the court effectively held that corporations enjoyed the same free speech rights as ordinary individuals. 

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In the Hobby Lobby case, the owners of the craft store chain make the same mistake. The owners claim that their personal religious beliefs would be offended if they have to provide certain forms of birth control coverage to employees. Yet Hobby Lobby's owners aren't required by the law to do anything. The legal duty falls on Hobby Lobby, the company, not its owners. If Hobby Lobby fails to provide the required insurance, the company, not the owners, is responsible.

What the owners want is for the Supreme Court to “pierce the corporate veil”--legealese for looking behind the corporation's legal identity and basing a ruling on the interests and desires of the owners of the firm. But Hobby Lobby's owners only want to pierce the veil for this one issue. They want the court to vindicate their personal beliefs on birth control, yet they still keep the protections of the corporate form for everything else, including limited liability.

Hobby Lobby should only have the rights of legal personhood that are essential for its operations. As legendary Supreme Court Chief Justice John Marshall wrote nearly 200 years ago, “Being the mere creature of law,” the corporation “possesses only those properties which the charter of its creation confers upon it either expressly or as incidental to its very existence.” Perhaps that includes some limited speech rights, as we ordinarily expect firms to advertise and communicate with employees and customers. Yet religious liberty is not one of those rights. Hobby Lobby is a for-profit corporation whose business doesn't require it to have religious freedom. [SCOTUSblog, accessed 3/24/14; Slate, 3/17/14, emphasis added]

Major Print Outlets Downplayed Cases' Impact On Corporate Personhood

Major Print Outlets Did Not Focus On Corporate Personhood In Framing Of Hobby Lobby, Conestoga Cases. A Media Matters analysis tracked coverage of the Hobby Lobby and Conestoga cases in USA Today, The Washington Post, The Wall Street Journal, The New York Times, and The Los Angeles Times between August 30, 2012 (shortly before Hobby Lobby filed their lawsuit) and March 21, 2014. Of 24 relevant articles covering the cases, only three mentioned the issue of corporate personhood in the headline or first sentence:

Coverage Focused On Access To Contraception, Religious Liberty Concerns. Major papers typically mentioned the impact the Hobby Lobby and Conestoga cases would have on women's access to contraception in the headlines and first sentences of their stories, but fewer acknowledged the cases' implications for questions about corporate personhood. The papers often mentioned the corporate personhood issue later in their articles.

Expanding Corporate Personhood Is Highly Unpopular

Nearly 4 In 5 Americans Support Limiting Corporations' Personhood. Following the 2010 ruling in the Citizens United Supreme Court case, in which the court expanded the concept of corporate personhood by finding that corporations had the same political speech rights as ordinary individuals, a Hart Research Associates poll found that nearly four in five Americans supported overturning the decision:

This survey measures American attitudes toward the January 2010 Supreme Court ruling in the Citizens United case that said corporations have the same rights as individuals and that limiting corporate spending on elections would be a violation of corporations' freedom of speech. It shows that the American public instinctively feels this ruling is a step too far and destabilizing for our democratic system. Nearly four in five (79%) Americans support passage of an amendment to overturn the decision and make clear that corporations do not have the same rights as people, thus giving Congress the authority to limit the amount of money corporations can spend on elections. [Hart Research Associates, January 2011, emphasis original]

Washington Post/ABC News Poll: 80 Percent Of Americans Opposed Citizens United. A February 2010 ABC News/Washington Post poll found that 80 percent of Americans opposed the Citizens United ruling, “including 65 percent who 'strongly' oppose it, an unusually high intensity of sentiment. Seventy-two percent, moreover, support the idea of a legislative workaround to try to reinstate the limits the court lifted.” [ABC News, 2/17/2010]

METHODOLOGY:

We used Nexis and Factiva to search The Los Angeles Times, The New York Times, The Wall Street Journal, The Washington Post, and USA Today for (“hobby lobby” or “conestoga”), in articles published after August 30, 2012. (Hobby Lobby first sued the federal government over the Affordable Care Act's contraceptive coverage requirement in September 2012.)

We coded whether the headline, first sentence, and/or body of each article included a reference to contraception and/or corporate personhood. Phrases such as birth control, contraception, contraceptive(s), Plan B, corporate personhood, corporate being, corporations are people, and corporate rights were all included.

We excluded opinion pieces and editorials, articles which only appeared online, and articles which mentioned Hobby Lobby or Conestoga but which were not about their Supreme Court cases.