Religious Liberties for Corporations?

Hobby Lobby, the Affordable Care Act, and the Constitution

D. Gans, I. Shapiro, Kenneth A. Loparo

• Publisher: Palgrave Pivot
• Year: 2014
• ISBN:
  9781137479709
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

An expanded version of a series of debates between the authors, this book examines the nature of corporate rights, especially with respect to religious liberty, in the context of the controversial Hobby Lobby case from the Supreme Court's 2013-14 term.

1

What Rights Do Corporations Have?

Abstract: This chapter examines the idea of corporate personhood and the rights that flow from it. Gans argues that the Constitution never mentions corporations and doesn’t give corporations the same rights as individuals. He asserts that the Founders understood that there were fundamental differences between individuals and corporations, which received special privileges that individuals didn’t. While corporations have some rights, he argues that the Constitution cannot be applied wholesale to them. Shapiro agrees that corporations—or other groups of people, regardless of legal form—don’t have the same rights as humans. He gives several examples of corporate rights, however, and concludes that they’re a subset of the rights of natural persons. The disagreement here is over the scope of those rights and how to apply them.

Keywords: Citizens United; constitutional text and history; corporate personhood; corporate rights; Founding Fathers; human beings; legal fiction

Gans, David H., and Ilya Shapiro. Religious Liberties for Corporations?: Hobby Lobby, the Affordable Care Act, and the Constitution. New York: Palgrave Macmillan, 2014. DOI: 10.1057/9781137479709.0004.

Jeffrey Rosen: We have a hard question to talk about today.¹ Indeed, the Hobby Lobby case has raised a couple of really difficult questions. First and most broadly: “Do corporations have the same religious freedom rights under the First Amendment as individuals do?” And, secondarily: “Does the mandate in the Affordable Care Act that requires for- profit corporations to provide contraceptive coverage—although it makes an exception for some religious institutions—violate both the First Amendment and also the Religious Freedom Restoration Act, which is a law Congress passed that provides many of the same protections as the First Amendment?” It sounds a bit technical but it’s extremely important. It ties into the broader question that is transfixing the country over whether corporations have the same First Amendment rights in general as individuals do. The Supreme Court put that question front and center in Citizens United v. FEC, in which a five-justice majority said that corporations and natural persons do have the same free speech rights when it comes to campaign finance reform.² The question before the Court in the Hobby Lobby case is whether the rights of corporations and individuals are the same for the purposes of the free exercise of religion portion of the First Amendment, as well as the free speech part. So that’s the broad question. We are just going to learn together because, like all hard constitutional questions, there are no easy answers to this one and our two panelists are going to illuminate us on this hard question.

Before we discuss the issues specific to the Hobby Lobby case, let’s start with foundational principles about the Constitution and corporations. David, what, in your view, does the Constitution’s text and history tell us about the rights of corporations?

David H. Gans: The Constitution does not give corporations the same protection of rights and liberties as it gives to individuals.³ As its opening words reflect, the Constitution was written for the benefit of “We the People of the United States.” It never specifically mentions corporations or accords them any explicit legal protections. Shortly after ratification, the Framers added the Bill of Rights to the Constitution to protect the fundamental rights of the citizens of the new nation, reflecting the promise of the Declaration of Independence that all Americans “are endowed by their Creator with certain unalienable rights, [and] that among these are life, liberty, and the pursuit of happiness.”⁴ Again, the Framers of the Bill of Rights made no explicit mention of corporations.

The failure to mention corporations in the Constitution was purposeful. While the Constitution “declare[d] the great rights of mankind”⁵ in the Bill of Rights, the one attempt to make a specific provision in the Constitution for corporations—a proposal to give Congress an enumerated power to charter corporations—was defeated. In voting down the proposed incorporation power, the Framers voiced worries that giving the federal government the power to create corporations, and conferring on them special privileges denied to the rest of the citizenry, would lead to excessive corporate power. Far from viewing corporations simply as a part of “We the People,” the Framers worried about the vast powers that corporations might wield if a charter power were added to the Constitution.⁶

Indeed, at the Founding, corporations stood on an entirely different footing than living persons. A corporation, in the words of Chief Justice John Marshall, “is an artificial being, invisible, intangible, and existing only in the contemplation of the law. Being the creature of the law, it possesses only those properties which the charter of creation confers upon it, either expressly, or as incidental to its very existence. These are such as are supposed best calculated to effect the object for which it was created.”⁷ As early as the First Congress, James Madison summed up the founding-era vision of corporations: “[A] charter of incorporation . . . creates an artificial person not existing in law. It confers important civil rights and attributes, which could not otherwise be claimed.”⁸ In short, corporations, unlike the individual citizens that made up the nation, did not have fundamental and inalienable rights by virtue of their inherent dignity.

Far from considering corporations as persons deserving equal treatment with individuals, from the Founding on, corporations have been treated as uniquely powerful artificial entities—created and given special privileges to fuel economic growth—that necessarily must be subject to substantial government regulation in service of the public good. Fears that corporations would use their special privileges to overwhelm and undercut the rights of living Americans are as old as the Republic itself, and have been voiced throughout American history by some of our greatest statesmen, including James Madison, Thomas Jefferson, Andrew Jackson, Abraham Lincoln, Theodore Roosevelt, Franklin Delano Roosevelt, and others.⁹

Debates about the rights of business corporations—which are never mentioned in our Constitution, yet play an ever-expanding role in American society—have raged since the Framing era. The Supreme Court’s answer to this question has long been a nuanced one: corporations can sue and be sued in federal court and they can assert certain constitutional rights, chiefly related to their right to enter into contracts, own and possess property, and manage their affairs, but they have never been accorded all the rights that individuals possess.¹⁰

Many of the constitutional rights possessed by business corporations are grounded in matters of property and commerce, reflecting the Supreme Court’s view that “[c]orporations are a necessary feature of modern business activity” and that “[i]n organizing itself as a collective body, it waives no constitutional immunities appropriate to such body. Its property cannot be taken without compensation. It can only be proceeded against by due process of law, and is protected, under the 14^th Amendment, against unlawful discrimination.”¹¹ Business corporations enjoy other constitutional rights, but these rights do not vindicate a corporation’s own claim to what is essentially human autonomy or dignity. For example, corporations enjoy rights under the Free Speech Clause, not because they enjoy personal dignity or freedom of conscience like people do, but because of the fundamental role that speech plays in our democracy. As the Court explained in Citizens United, business corporations have a constitutional right to speak because speech paid for by corporations helps to inform the general public and provide a robust debate for individual listeners.¹²

Because corporations do not possess the same dignity and conscience as individuals, some constitutional guarantees—even ones whose wording protects all “persons”—do not apply to business corporations. For example, the Fifth Amendment’s Self-Incrimination Clause, which provides that no person shall be “compelled in any criminal case to be a witness against himself” does not protect business corporations because the Fifth Amendment right “is an explicit right of a natural person, protecting the realm of human thought and expression.”¹³ In the Fifth Amendment context, “there is a clear distinction . . . between an individual and a corporation . . . . While an individual may lawfully refuse to answer incriminating questions . . . , it does not follow that a corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of such privileges.”¹⁴ Thus, since the Founding, corporations have been treated differently than individuals when it comes to certain fundamental, personal rights, and the Constitution’s guarantees cannot be applied wholesale to corporations.

Ilya Shapiro: Of course, it’s true that a corporation is not a real person and that some constitutional rights—such as the protection for sexual privacy or prohibition on slavery—make no sense as applied to corporations. Even though a corporation isn’t a living, breathing, blood-pumping human being, however, the individuals who make up those corporations—officers, directors, employees, shareholders—are. It would be a mistake to deny constitutional rights to those individuals on the grounds that the corporation itself isn’t a real person. The rhetorical tactic of conflating a right with the means used to exercise it is just that—a tactic that misses the larger point: the people who own and operate the corporation are natural, rights-bearing individuals. Simply because a group of individuals decide to join together and exercise those rights in conc...

Table of contents

• Cover
• Title
• Introduction by Jeffrey Rosen
• 1  What Rights Do Corporations Have?
• 2  Corporate Personhood and Religious Liberty
• 3  The Broader Implications of Hobby Lobby: Is There a Slippery Slope?
• 4  The Ruling: What Does It All Mean?
• Conclusion
• Bibliography
• Index