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In my humble opinion, everyone is wrong in this article - Sotomayor, Butler, Marshall. A corporation should not be considered a person in and of itself. A cor

In my humble opinion, everyone is wrong in this article - Sotomayor, Butler, Marshall. A corporation should not be considered a person in and of itself. A corporation is a contractual agreement between people over the ownership of property. This was the original understanding of a corporation, until the courts started creating this weird, and wrong, personhood doctrine. A corporation should not have rights - a corporation is a contract - the idea of a contract having rights is non-nonsensical. But Sotomayor is also wrong. The people running the corporation, and the people owning the property do have rights. Just as Arthur Sulzberger has first amendment right to hire people to speak for him, shareholders of a corporation have a first amendment right to hire people to speak for them. The government has no right to restrict the freedom of speech of employees or shareholders of a corporation.

asdfqwersdf 17y ago
The idea that a corporation should be reduced to a contractual agreement strikes me as problematic. Since corporations necessarily have contracts with other entities and a contract as an entity can't be a party to another contract, then your corporation would have to somehow specify a process for employees to hold contracts in proxy. Also, a corporation that's just a contract between individuals can't provide any protection from lawsuits by people who aren't employees or shareholders. Certainly there's a place for the kind of construct you're talking about, but it seems to be fundamentally incompatible with anything remotely similar to the way business is structured today.
- misuba 17y ago
  Corporations as they're structured today may not be contract-like, but they certainly aren't person-like either. I hope a high court or two finds the cojones to admit this and stop trying to do legal code by analogy.
- bokonist 17y ago
  Since corporations necessarily have contracts with other entities and a contract as an entity can't be a party to another contract, then your corporation would have to somehow specify a process for employees to hold contracts in proxy. That's exactly what a corporate charter is. It's the shareholders delegating the management and contracts associated with a piece of property to a process determined by the corporate charter. Also, a corporation that's just a contract between individuals can't provide any protection from lawsuits by people who aren't employees or shareholders. The contract can protect from lawsuits by creditors. When a creditor loans to a limited liability company, the creditor knows that he only has recourse to the funds pledged to the corporation. He can not claw back into the shareholders personal funds. Again, it's a matter of voluntary contracts. If the creditor wants that right, he can explicitly demand that the shareholders pledge their own assets as part of the terms of the contract. ( in fact, that's exactly what banks do when lending to very small businesses). But an LLC designation should not protect from criminal liability. Shareholders should be held to the normal standards of criminal culpability for the actions of the management. A shareholder who knowingly profits from the management committing criminal acts should be held to the same level of guilt as anyone who knowingly profits from criminal acts.
anigbrowl 17y ago
Sotomayor has not suggested such rights don't exist - how you drew that conclusion, I cannot understand - and the WSJ's summary of proceedings seems misleading to me. The transcript is at http://www.supremecourtus.gov/oral_arguments/argument_transcripts/08-205[Reargued].pdf http://www.supremecourtus.gov/oral_arguments/argument_transc... and I urge people to read it. The relevant portion is as follows: JUSTICE SOTOMAYOR: Going back to the question of stare decisis, the one thing that is very interesting about this area of law for the last 100 years is the active involvement of both State and Federal legislatures in trying to find that balance between the interest of protecting in their views how the electoral process should proceed and the interests of the First Amendment. And so my question to you is, once we say they can't, except on the basis of a compelling government interest narrowly tailored, are we cutting off or would we be cutting off that future democratic process? Because what you are suggesting is that the courts who created corporations as persons, gave birth to corporations as persons, and there could be an argument made that that was the Court's error to start with, not Austin or McConnell, but the fact that the Court imbued a creature of State law with human characteristics. But we can go back to the very basics that way, but wouldn't we be doing some more harm than good by a broad ruling in a case that doesn't involve more business corporations and actually doesn't even involve the traditional nonprofit organization? It involves an advocacy corporation that has a very particular interest. In other words, she is asking the attorney for Citizen's united if he is aware that the basis of his argument for invalidating Austin McConnell (in which a court ruled that Congress had the right to balance electoral and first amendment considerations) would create the basis for a challenge to corporate personhood itself, by making the right of corporate speech pendant on past court decisions which assumed the validity of corporate personhood without ever having formally established it. Your point about employees and shareholders enjoying free speech qua individuals makes ethical sense, but have you considered that treating the corporation as proxy for the rights of its human owners or agents would conflict with the idea of corporate severability, the legal framework which protects shareholders from direct legal liability for wrongdoing carried out on behalf of a corporation by its officers? sorry for the long-windedness :-/
- bokonist 17y ago
  I haven't read the full Sotomayor transcript, but this overall quote exists in the context of a debate about whether corporations are allowed political free speech, and I have some strong guesses about which side Sotomayor is on. Your point about employees and shareholders enjoying free speech qua individuals makes ethical sense, but have you considered that treating the corporation as proxy for the rights of its human owners or agents would conflict with the idea of corporate severability, the legal framework which protects shareholders from direct legal liability for wrongdoing carried out on behalf of a corporation by its officers? Corporate severability is bogus. Shareholders should be held to the same level of criminal liability as anyone else who knowingly profits from criminal acts. In practice, this would be rare, as shareholders in public companies would not knowingly profit from criminal actions, because if the actions were publicly known, they would be immediately stopped.
alain94040 17y ago
a corporation is a contract You are not completely correct here, because the corporation itself can enter into contracts with other people (and corporations). I know the distinction first-hand because when we invented the license behind FairSoftware (http://softwarebillofrights.org/license.html http://softwarebillofrights.org/license.html), we had the exact same problem: we are building virtual corporations by using a licensing contract among participants. It's great, but it doesn't create an independent "person". As you said, it's just a contract between people. Regular corporations are given special treatment by allowing them in turn to do special things. So they are more than a contract.

asdfqwersdf 17y ago

The idea that a corporation should be reduced to a contractual agreement strikes me as problematic. Since corporations necessarily have contracts with other entities and a contract as an entity can't be a party to another contract, then your corporation would have to somehow specify a process for employees to hold contracts in proxy. Also, a corporation that's just a contract between individuals can't provide any protection from lawsuits by people who aren't employees or shareholders. Certainly there's a place for the kind of construct you're talking about, but it seems to be fundamentally incompatible with anything remotely similar to the way business is structured today.

misuba 17y ago
Corporations as they're structured today may not be contract-like, but they certainly aren't person-like either. I hope a high court or two finds the cojones to admit this and stop trying to do legal code by analogy.
bokonist 17y ago
Since corporations necessarily have contracts with other entities and a contract as an entity can't be a party to another contract, then your corporation would have to somehow specify a process for employees to hold contracts in proxy. That's exactly what a corporate charter is. It's the shareholders delegating the management and contracts associated with a piece of property to a process determined by the corporate charter. Also, a corporation that's just a contract between individuals can't provide any protection from lawsuits by people who aren't employees or shareholders. The contract can protect from lawsuits by creditors. When a creditor loans to a limited liability company, the creditor knows that he only has recourse to the funds pledged to the corporation. He can not claw back into the shareholders personal funds. Again, it's a matter of voluntary contracts. If the creditor wants that right, he can explicitly demand that the shareholders pledge their own assets as part of the terms of the contract. ( in fact, that's exactly what banks do when lending to very small businesses). But an LLC designation should not protect from criminal liability. Shareholders should be held to the normal standards of criminal culpability for the actions of the management. A shareholder who knowingly profits from the management committing criminal acts should be held to the same level of guilt as anyone who knowingly profits from criminal acts.

anigbrowl 17y ago

Sotomayor has not suggested such rights don't exist - how you drew that conclusion, I cannot understand - and the WSJ's summary of proceedings seems misleading to me. The transcript is at http://www.supremecourtus.gov/oral_arguments/argument_transcripts/08-205[Reargued].pdf http://www.supremecourtus.gov/oral_arguments/argument_transc... and I urge people to read it. The relevant portion is as follows: JUSTICE SOTOMAYOR: Going back to the question of stare decisis, the one thing that is very interesting about this area of law for the last 100 years is the active involvement of both State and Federal legislatures in trying to find that balance between the interest of protecting in their views how the electoral process should proceed and the interests of the First Amendment. And so my question to you is, once we say they can't, except on the basis of a compelling government interest narrowly tailored, are we cutting off or would we be cutting off that future democratic process? Because what you are suggesting is that the courts who created corporations as persons, gave birth to corporations as persons, and there could be an argument made that that was the Court's error to start with, not Austin or McConnell, but the fact that the Court imbued a creature of State law with human characteristics. But we can go back to the very basics that way, but wouldn't we be doing some more harm than good by a broad ruling in a case that doesn't involve more business corporations and actually doesn't even involve the traditional nonprofit organization? It involves an advocacy corporation that has a very particular interest. In other words, she is asking the attorney for Citizen's united if he is aware that the basis of his argument for invalidating Austin McConnell (in which a court ruled that Congress had the right to balance electoral and first amendment considerations) would create the basis for a challenge to corporate personhood itself, by making the right of corporate speech pendant on past court decisions which assumed the validity of corporate personhood without ever having formally established it. Your point about employees and shareholders enjoying free speech qua individuals makes ethical sense, but have you considered that treating the corporation as proxy for the rights of its human owners or agents would conflict with the idea of corporate severability, the legal framework which protects shareholders from direct legal liability for wrongdoing carried out on behalf of a corporation by its officers? sorry for the long-windedness :-/

bokonist 17y ago
I haven't read the full Sotomayor transcript, but this overall quote exists in the context of a debate about whether corporations are allowed political free speech, and I have some strong guesses about which side Sotomayor is on. Your point about employees and shareholders enjoying free speech qua individuals makes ethical sense, but have you considered that treating the corporation as proxy for the rights of its human owners or agents would conflict with the idea of corporate severability, the legal framework which protects shareholders from direct legal liability for wrongdoing carried out on behalf of a corporation by its officers? Corporate severability is bogus. Shareholders should be held to the same level of criminal liability as anyone else who knowingly profits from criminal acts. In practice, this would be rare, as shareholders in public companies would not knowingly profit from criminal actions, because if the actions were publicly known, they would be immediately stopped.

alain94040 17y ago

a corporation is a contract You are not completely correct here, because the corporation itself can enter into contracts with other people (and corporations). I know the distinction first-hand because when we invented the license behind FairSoftware (http://softwarebillofrights.org/license.html http://softwarebillofrights.org/license.html), we had the exact same problem: we are building virtual corporations by using a licensing contract among participants. It's great, but it doesn't create an independent "person". As you said, it's just a contract between people. Regular corporations are given special treatment by allowing them in turn to do special things. So they are more than a contract.