The legal person (corporation) and civil rights

“Before the Gilded Age, individuals had looted society. But the most characteristic economic institution of the Gilded Age no longer was the individual. Instead it was a collection of individuals together called the corporation.”(!)

In 1886, the Santa Clara County v. Southern Pacific Railroad case led the Supreme Court to rule that the corporation had the identity of  a person under the 14th Amendment to the Constitution, which is the due process amendment. In 1887, British and Australian law followed with similar process. 

The corporation allows a group of individuals to act as a single person. The corporation gives this group a different legal identity than they would each, individually have as citizens of the state. The four areas of limited ability to act as individual humans were: lawsuits, property, ownership, and contracts.

A controversial new ability that was awarded by the Supreme court in 2010 is the ability of legal persons, or corporations to contribute, in some cases, unlimited money to support or to challenge a political campaign. This is related to the civil right of freedom of speech, but is spotty in terms of which artificial or legal personalities may do so. The same campaign contribution restrictions were not lifted from natural individuals or certain types of organizations, and there are questions as to whether the Supreme court has appointed itself to write law, rather than interpret the law.

This is all based in the concept of “legal personality” which considers organizations, rather than individual citizens, (referred to as “natural persons”) and deals at the basic level with such issues as owning property, incurring debt, and liability.

Because of the idea of corporations having no accountability for wrongdoing, other rights are considered. The legal person (as opposed to the natural person) generally cannot marry, vote, or hold public office. In some cases certain public or other positions cannot be held. The legal person can sue and be sued in relation to contract enforcement. The legal or artificial person has a right to due process, especially in getting due process before any property taking.

The European Convention on Human Rights, which has 47 signatures or participants, grants legal persons “fundamental human rights”.

In the People’ Republic of China, the legal person has civil rights, civil obligations and can engage in civil activity, but with an understanding of the differences between civil and common law in that system. 

In terms of criminal activity, the corporation is considered to be capable of committing civil and criminal crimes that can have vast impact. Where there are laws that define the activities and conduct as crimes, these laws mostly involve antitrust, health and safety, labor violations, shareholders issues and environmental damage.

The real individual has to deal with laws that are far more intrusive and restrictive of individual freedoms, while the impact of their crimes is usually far more limited than a massive environmental disaster, for example. Another difference between most corporate and real person crimes is that the corporate crimes can be convoluted and impossible for the average jury member to comprehend, or for the average law enforcement agency to investigate. It is easy to understand (or to make assumptions about) the facts that are presented in a robbery, traffic, or drug case.

Thus the civil rights of the legal person as compared to the natural person in relation to crime are quite different.

In terms of civil rights in relation to crime, the real individual has a far harder time because presumptions about character are different than the presumptions about the character of corporate leaders and board members, who are members of the social and political elite, and who are assumed to be of higher character.

However, it might be that currently, the public would be less likely to assume a more flawless character when sitting on a jury in a corporate criminal case. As a result, the real person’s right to a fair trial is vastly different to that of the corporation’s rights to a fair trial.

Real persons execute and obtain their civil rights through the vote, the right to hold office, their purchasing power, by starting grassroots movements, through their ability to contact their representatives, their free speech and right to protest, and their labor agreements.

Legal persons, or corporations, execute and obtain their civil rights through money, direct influence, indirectly influencing and even starting and funding social and grassroots movements, and in some cases by actually writing and executing the law under contracts or commissions that constitute private/government enterprises.

The bottom line is that the corporation exists to maximize its profit, with an increasing trend toward maximizing its benefits and powers as artificial entities that have the rights of living persons. The rights of the corporations are aimed toward minimizing costs and maximizing income and profit.

Reference cited:

1. Stanley Schultz and William Tischler, “Businessmen and ‘That Creature’ The Corporation’, American History 102, Lecture 05, 1999.