How did corporations get civil rights? That is Adam Winkler’s question. He says that the corporate rights movement began as early as 1809 with Alexander Hamilton’s Bank of the United States case. That was followed by an advancement of corporate rights in 1882 when a former senator named Roscoe Conkling argued that corporations should get the same protections under the U.S. Constitution as people received. Despite the winning argument being built on falsehoods, it stuck, and corporations have been winning rights that were meant for individuals who had been suffering without them ever since. How did this corporate rights movement happen? What has it meant for U.S. politics? Maria Armoudian talks to Adam Winkler.
Adam Winkler is a Professor of Law at UCLA Law School. He is an expert in constitutional law and is the author of We the Corporations: How American Businesses Won Their Civil Rights.
This interview has been edited for clarity and length
Maria Armoudian: Let’s start with Roscoe Conkling.
Adam Winkler: Roscoe Conkling was an illustrious lawyer… who in the 1880s led a remarkable series of test cases on behalf of the Southern Pacific Railroad seeking expansive new rights for business corporations under the Fourteenth Amendment. Conkling had been a leader in the Republican Party in Congress for decades and had even been nominated and confirmed to the Supreme Court himself, but turned down the seat after being confirmed, the last person ever to turn down a Supreme Court seat after winning a confirmation vote in the Senate. Part of the reason was he was making too much money working as a lawyer for the Southern Pacific Railroad. Conkling went to the Supreme Court and argued that the Fourteenth Amendment, which was adopted after the Civil War to protect the rights of the newly freed slaves, was also adopted to protect business corporations from discriminatory state taxes and regulations. And Conkling had unusual credibility in making this argument: not only is he a person who had been nominated to the Supreme Court himself, but he had been a drafter of the Fourteenth Amendment and it turns out that historians now know that Roscoe Conkling had lied to the Supreme Court about the history of the drafting of the Fourteenth Amendment.
MA: But the court believed it, so deceit won here, and you said that because of personal factors you think it is his relationships? What do you think that was?
AW: Strangely, the Supreme Court never ruled on Roscoe Conkling’s case directly. They held onto it for three years without ever issuing a final opinion. Then the case unexpectedly settled, which was odd because it was a test case designed to get a Supreme Court opinion. But another one of the Southern Pacific sixty test cases, long before the NAACP was filing for their test cases to combat segregation, the railroads were filing test cases to win Fourteenth Amendment rights for them. And another one of the Southern Pacific cases made it up to the Supreme Court a couple of years later, and the Supreme Court eventually said that corporations do have rights under the Fourteenth Amendment, and over the next few years would protect corporations far more than the Supreme Court would protect African Americans -the Amendment’s intended beneficiary.
MA: One of the things that was fascinating in your book was when you describe the process of gaining rights for corporations, contrasted to how people have had to get their rights. So, for people it took mass mobilisation, but this was not the case for corporations, it was a hidden movement and then it co-opted the rights and the cases that were used for people to get their rights. How would you describe this process?
AW: When we think about how women and racial minorities gained constitutional protections and gained equal rights, we have this idea of a civil rights movement. People march in the streets and they engage in public advocacy to win over the hearts and minds of “we the people” and to fulfil the promise of the constitution. But corporations don’t march in the streets and they don’t carry around signs demanding equal rights, but they have fought for two hundred years in the Supreme Court seeking landmark rulings extending fundamental constitutional protections to them. In some ways, the corporate rights movement… has been more successful for a longer time than the civil rights movement or the women’s rights movement. For instance, the first Supreme Court case on the rights of African Americans was decided in 1857; the first Supreme Court case on the rights of women under the constitution was decided in 1873. But the first Supreme Court case on the rights of corporations under the Constitution was decided in 1809 -a half-century earlier. And unlike women and minorities who lost most of their Supreme Court cases up until the 1950s and 60s, corporations have amassed a remarkable track record of winning an ever-increasing share of our fundamental rights.
MA: One of the things that I thought was fascinating that was a theme throughout your book was that political scientists… have looked at Supreme Court decisions and looked largely at ideology as one of the major factors -are they liberal, are they conservative – but you have busted that open and said that, despite whether they are liberal or conservative ideologically, there is another ideology that doesn’t really fit in this. How would you describe that?
AW: The truth is we think of justices in terms of liberal or conservative, but what unites justices over the course of American history is that the courts have largely been pro-business, whether the majority have been liberal or conservative. And the history of the constitutional rights of corporations is a story of odd bedfellows, where it sometimes was the liberal courts, like the New Deal and Warren courts of the mid-twentieth century that really invigorated the rights of corporations in a variety of different ways. And, oddly enough, it was Ralph Nader who won one of the landmark Supreme Court cases that really laid a foundation for Citizens United, which might seem the exact opposite of anything that Ralph Nader, the consumer rights advocate, would be seeking to achieve. And, surprisingly, it was sometimes conservative Supreme Courts, like the business-friendly Lochner court of the early twentieth century, that imposed new limits on the rights of corporations and refused to extend the corporations rights of political speech and rights of freedom of association of corporations who turned down customers for businesses, some of the same rights who corporations today seem to be getting from the Supreme Court.
MA: Let’s break some of this down. One is the idea that some of these pro-business courts, like the Lochner court, and another example that you gave in the book was the Roger Taney who was awful for civil rights, human rights… but had some qualms about corporations having rights, and then there was this piece about Ralph Nader and how that has… been turned on its head. Let’s start with the Lochner court, Roger Taney –how does this make sense if at all and what was it that they opposed?
AW: Between 1890 and 1937 is a period in the Supreme Court’s history that historians call the Lochner era. And the court was pretty business-friendly at the time, building on Roscoe Conkling and the Southern Pacific Railroad’s victory in winning Fourteenth Amendment rights for corporations. The Supreme Court read the constitution broadly to protect corporations from a variety of different kinds of business regulations. But the court back then did draw a line and a boundary on the rights of corporations. So corporations do have rights of property, they need to protect their property rights and their assets from being seized by the government, but at the same time corporations don’t have rights over liberty under the constitution, rights that you might describe as being associated with personal conscience or political freedom. And so back in the early twentieth century, one hundred years before Citizens United, the courts universally upheld restrictions on corporate spending in elections, saying that elections are not a place where corporations have rights, that’s a liberty right. And one hundred years before this year’s Masterpiece Cake Shop wedding case on whether a baker can refuse to sell a wedding cake to a same-sex couple, the Supreme Court ruled that corporations could not claim a constitutional right to refuse to do service with different kinds of customers. So some of the same issues we see today came up before the Supreme Court long ago.
MA: And then you mentioned Ralph Nader’s case getting flipped around [and] rather than [preventing] corporations from being able to trample on consumer rights [actually granting] corporations better rights. How did that happen?
AW: One of Ralph Nader’s most remarkable and lasting achievements was an amazing Supreme Court victory in the mid-1970s in a case called Virginia Pharmacy. And what Ralph Nader did on behalf of consumers was… get the Supreme Court to strike down laws that restricted the ability of pharmacists to advertise the price of prescription drugs. And Nader was not doing this to help the pharmacists, but to help the consumers who wanted to do a comparison shop but were not allowed to get access to the information that they would need. That case, however, adopted a very specific theory of the First Amendment, that because Ralph Nader was seeking to protect consumers the Supreme Court said that the rights of listeners were valuable in the First Amendment and, regardless of the identity of the speaker and the rights of the speaker, the consumers and the listeners of the information had rights that were protected by the First Amendment. That same theory would be used by the Supreme Court and Citizens United when they would say that the identity of the speaker was irrelevant and the fact that a corporation was spending money on elections was not a basis to limit it so long as the speech was valuable to the listeners.
MA: If we were to back up and go into American history in the early days and how this came about you have sort of challenged a narrative of what the founding of the United States was about. You brought in the idea that really it was a pilgrimage of a corporation initially in the Virginia Company. How would you describe this and what is the effect that you think it has had?
AW: We have this story that we tell school children about the pilgrims who go to Plymouth and they are the perfect embodiment of the American spirit: resistance against tyranny, seeking to exercise their fundamental rights of religious freedom and self-governance, a symbol of what America would become. But the first permanent English colony was in Jamestown, thirteen years before the pilgrims came. And Jamestown was a business affair. It was a money-making venture, a trading corporation, the Virginia Company of London which organised the expedition and established the colony, was a business corporation that sold stock in London, and many of the reforms that the Virginia Company undertook, such as the first representative assembly in the 1610s, was really not a progressive statement of principles of democracy, but was reform designed to encourage more people to move to the colony so that the company could make more money. So a profit-seeking corporation was as much a part of the founding of America than the pilgrims asserting their religious freedom and battling against tyranny.
MA: And then you said the constitution had roots in these companies?
AW: One of the most surprising things I found was that there were clear linkages between our constitution and the corporate charters of the early colonies. So many of the early colonies like Jamestown, like Virginia, were organised around a corporate charter. The corporate charter was given by the king, and the charter would establish as a written document what the officers of the company could do, what the rights of investors were, when the investors could vote, what were the limits of the office-holder’s power. And those documents became not just governing documents for the colonial corporations, but governing documents for the colonies themselves as sort of political documents. Over time, as the colonies grew and evolved into more traditional kinds of government, they retained this connection to these written documents that clearly specified the powers of office-holders and recognised things like individual rights and established things like the right to vote. So there are elements of our constitution that really stretch back into our corporate heritage.
MA: That said, some of the famous founders were quite worried about concentration of wealth and power: Jefferson, Madison, George Mason. But others were on the other side. Could you walk us through the debates at the time that related to corporations and corporate rights?
AW: There were significant debates right from the get-go. When the founders debated the Constitution they never considered whether corporations would have rights under the Constitution the way individuals do. It just never came up, it never was discussed. But the issue came up very quickly in the courts, in part out of a battle between Jefferson and Hamilton and their famous battle over the Bank of the United States. The Bank of the United States was established by Congress, but it was a private corporation with stockholders. And the Bank was the richest and most powerful corporation in America, with branches from Boston to New Orleans… The dispute between Jefferson and Hamilton is famous for giving rise to the two-party system, but it also gave rise to the first Supreme Court case on the rights of business corporations, because Jeffersonians tried to tax the Bank of the United States in Georgia and the Bank wanted to challenge that tax in a federal court. So they went to court and said, “We have a right under the Constitution to challenge Georgia’s law in federal court”, even though the provision of the Constitution that the corporation relied on was one that provided citizens with the right to sue citizens of other states in federal court. The corporation said it too was a citizen. The Supreme Court… didn’t say a corporation was a citizen per se, but it did agree that corporations were protected by this provision. So from the very earliest days the Supreme Court has been reading the constitution broadly to protect corporations and their rights.
MA: That developed down the line and it challenged my understanding of corporations. I had always thought that corporations had to have a public purpose to exist and that they would dissolve once that public purpose had been completed. Your book suggests that even in the early days there was this idea of longevity and that they could continue to exist beyond a normal person’s lifespan. How can we understand these two conflicting ideas about what corporations were supposed to be in society?
AW: It is true that from the get-go corporations were designed to last. Corporations were first founded in ancient Rome about three centuries before the birth of Christ. The first form of corporation that we recognised. It was sort of a response to the problem of partnerships. If you lose a partner the whole partnership [must] be reorganised and it messes with business relationships. So the corporation was designed to create an entity where people could pool their money and the entity would last over time, and it didn’t matter if the individual investors came or went, the company would go on. So that was part of the basic idea of the early Roman corporation. At the same time, the corporation was only generally allowed to be formed if it had a public purpose… that people could make money on it. The idea was to create an outsource away from government into the private marketplace, the ability to build things and institutions, and corporations are very good at doing that, and you have to have some private investment and encouragement to do that, but they always had to have a public purpose. That really changed in a Supreme Court case decided in 1819, argued by Daniel Webster… that said that corporations were fundamentally private entities and, like individuals, can make claims on the government for constitutional protection.
MA: Since you bought up Daniel Webster, let’s talk about some of the lawyers. You said the corporations… advantage was they [could] afford and therefore had the best lawyers in U.S. history. Tell us a bit more about Daniel Webster?
AW: That is right. The Supreme Court is a place where if you have the best lawyers you are more likely to win. Over the course of American history corporations have always had the financial wherewithal to hire the best, most creative lawyers in the entire country. If you think about civil rights organisations or women’s rights groups, they often were underfunded: they didn’t have the finances to continually bring lawsuits challenging every different kind of case through most of American history. The corporations did have those resources and they hired the best lawyers. Daniel Webster was considered one of the most influential advocates in the history of the Supreme Court. He argued more than 220 Supreme Court cases in the early 1800s when many of the provisions were first being interpreted. He was known as one of the greatest experts on the Constitution and most of his cases were brought on behalf of businesses and merchants and some of his cases were arguing for constitutional rights for corporations and for businesses. And all throughout American history we see great lawyers playing a starring role in the fight for corporate constitutional rights and Daniel Webster is just a perfect embodiment, who was, at the time, the highest-paid lawyer in the country…
MA: There were others that you mentioned, I think it was a guy named Binney? Who was he?
AW: Horace Binney was a young creative lawyer – a legendary lawyer who grew up right across the street from George Washington in Philadelphia back before the White House was built in Washington… so he grew up around power. He, in his twenties, became a precocious young lawyer who ended up representing the Bank of the United States in that first Supreme Court case on the rights of business corporations. He was only in his twenties, but he was such an illustrious member of the bar even at that early age. Binney would go on to live through the Civil War, in fact. There [are] photographs of him right after the Civil War as an old man having seen America from its very earliest days to its much later days. But Binney had a creative way of thinking about corporations. He didn’t think the corporations were people, he thought corporations were effectively irrelevant, and that the courts should look beyond the corporation and protect the rights of the people who associate together within the corporation. And, surprisingly, for all the controversy over corporate personhood, Binney’s basic idea, thinking about the corporation not as a person but as a pass-through, has been much more influential on the history of the connotational rights for corporations.
MA: Where would you put Theodore Olsen?
AW: Ted Olson is today the dean of the elite Supreme Court bar in Washington. One of the reasons why corporations today are so powerful is that there is a professionalised bar in Washington D.C. of big-firm lawyers and all they do is specialise in Supreme Court practise. Studies show that those cases, lawyers who write those briefs, are much more likely to get the Court to accept their cases, and they argue an inordinate number of cases before the Supreme Court. Those lawyers predominantly represent big business and corporations, not small fry people and outcasts and dissenters. So you have today the best Supreme Court lawyers in the country… arguing for corporations and for businesses on constitutional and other grounds. But it also shows the power of the corporations to use the courts to protect their interests.
MA: Did you see when you were writing this book that there had been a shift at a certain point that was significant? I ask this partly because of Charles Ebb’s book “The Rights Revolution” where he talks about the shift from the 60s, where the courts started to lean more towards individual rights. Was there a shift like this when it came to corporate rights or was it consistent over time?
AW: The story of corporate rights really is a thorn in the idea that rights talk is recent, because corporations have really been demanding rights and using the same language that we do in demanding rights of immunity from government regulation for a long, long time. That is why corporations seek constitutional rights, because they want to get immunities from taxes or regulations or other laws in the pursuit of profit. Of course, there are shifts. I trace a history that goes back to the first colony in Jamestown, all the way through Citizens United and Hobby Lobby. So obviously it is a time of remarkable change, both in the nature of corporations and the nature of our constitution. But what we have seen is that whenever the Constitution changed to grant broader protections, corporations were always right there. Either they took advantage of those new rights quickly, like in the Fourteenth Amendment context, or in some circumstances corporations themselves were at the forefront of constitutional change, pushing and innovating the law to protect their own rights in ways that would ultimately filter down to individuals and benefit individual rights too. So it is a complex story of push and pull of corporations and the constitution.
MA: Could you give us an example of some of those where it went the other way? We have been talking more about the co-opting of certain rights given to individuals then given to corporations, but now you are talking about the initiator or the first mover where then those got to translate into individual rights?
AW: I think corporations are movers in at least two ways in the history that I find. Number one, they devise and use innovative civil rights litigation strategies years before the movements for minorities and women do. Things like test cases and hiring all-star teams of lawyers, arguing for a living constitution that extends beyond the framer’s intent to embody new principles. These are the kinds of things corporations were doing a long time ago. Corporations are also innovators in a sense that, because they had the resources to challenge laws, they were often at the forefront of judicial cases that really breathed life into some of our constitutional rights. Take the freedom of the press under the First Amendment. Some of the earliest and most important cases were brought by newspaper corporations that were challenging restrictions on newspapers, and the Supreme Court, when it invigorated the freedom of the press recognised that newspaper corporations, had that same fundamental First Amendment right as individuals would have. Indeed, some of the landmark freedom of the press cases we still celebrate today are about business corporations. What is The Post, the very popular movie today, is a movie about a business corporation serving its First Amendment rights.
MA: I wonder about this idea of agency and structure which we argue about in social science. It sounds like in your book that it really is agency, these are people that are innovating and pushing to change the structure.
AW: It is always a complicated mix of agency and structure in that there is no one account that you should put all the emphasis on. Especially as the author of a trade press book I have tried to emphasise a lot of the agency aspects, because people love to hear the stories of the particular players. But these are larger structural pressures as well. When corporations are seeking constitutional rights, they need an individual person to make the decision to file that lawsuit, but it is because of larger structural reasons that corporations are pushing back, trying to assert their freedom so that they can pursue their profit. I do think that it is a structural story to, and one of the structures is that the institutions of the judiciary which we think of as being blind to the differences between litigants and as an equal playing field for any side in the dispute is really one in which institutionally it is structured to help and benefit wealthy clients, and corporations are the wealthiest clients around, and so they really have been able to take advantage of those institutions to enhance their power.
MA: I suppose part of that is also related to who ends up on the bench. And one key character in your book was Lewis Powell, who had been at the Chamber of Commerce before becoming a justice. How important is somebody like Lewis Powell or his brethren, people who ended up on the court in this construction of rights for corporations?
AW: If you want to talk about a field of politics and life force where agency really matters take a body like the Supreme Court, where the vote of one justice can really make a huge difference in American lives. And Justice Lewis Powell was one of those justices. Before he joined the Supreme Court, Powell wrote a memorandum on behalf of the Chamber of Commerce arguing that it was time for corporate America to stand up and fight back against the rise of Ralph Nader and consumer rights and the environmental movement, and his memo became famous as a strategic document in the rise of the business backlash in the 1970s and 1980s. But he got the chance as a justice to implement his vision in the memorandum. There was an important case involving the political speech rights of corporations out of Massachusetts, and thirty years before Citizens United Justice Lewis Powell wrote a closely divided 5-4 opinion for the Supreme Court saying that corporations did have political speech rights. And so that is an example of Justice Lewis Powell really having an influence and bringing his vision of the strong and powerful corporation with political speech rights into American lives.
MA: How is it that we have granted as a society, as an American society, all these rights to corporations, but have not really required the same kind of responsibilities? Does any of that make sense?
AW: It is true that we don’t have the kinds of social and political responsibilities that we have put on corporations that perhaps we should. And one of the things about corporate constitutional rights is that they often use them to shirk those broader responsibilities. Take an idea that businesses exist to serve the public enough to discriminate [based on] their relevant characteristics and create a second-class citizenship. It is one of the things that we really prize about businesses, that we are open to all and we have strong civil rights protections. But this year the Supreme Court is going to hear this Masterpiece Cake Shop case on whether a Colorado baker has the right to refuse to sell a wedding cake to a same-sex couple, and if the Supreme Court rules in favour of the baker it is quite possible we will see more and more corporations claiming exceptions from civil rights laws and claiming the ability to discriminate against LGBT people and violating that basic idea of free and open access, the kind of responsibility to serve all equally that corporations have traditionally been thought to have.
MA: That also extends to a case argued this year that dealt with whether corporations can be sued under certain statutes, and I am thinking of the alien tort statute at the moment. Some of the appellate courts have said you cannot even sue them under the ATS, so there is this very strange juxtaposition between… “we give them all these rights” but “no we can’t sue them”.
AW: I think that is right, and we are seeing in many ways corporations winning more and more rights and having fewer and fewer liabilities that they are responsible for. For much of human history corporations were not allowed to be charged with crimes, for instance. But that changed about one hundred years ago when there was a real push to say corporations are so powerful they can form the kind of nefarious intend that the criminal law requires and we should be able to target corporations when they engage in criminal activity and punish them. Even back then there was this idea that we need to hold corporations responsible, hold them liable. What corporations did then was simply claim the protections of the constitutions rights for criminal defendants, and we think about the constitution being about freedom of speech and freedom of religion, but it is also about the right to be free of unreasonable searches and seizures and the rights of due process and a right to counsel, and a series of rights about criminal defendants, and corporations claim those same rights.
MA: Let us fast forward to today. A lot of people on the rights front, and particularly around campaign finance issues and election integrity, have been talking about Citizens United. And there were two things about Citizens United that I thought were important. One was the lawyer you said used Brown v Board of Education as his inspiration, so I thought perhaps we should start there and then talk about what exactly that case did if it wasn’t really the turning point the others say it is?
AW: That is right. The lawyer who originally brought that case was a guy by the name of James Bopp, and he saw Citizens United as part of a long pattern and series of cases that he was bringing to try and chip away at federal campaign finance law, laws restricting money and politics because he thought that these laws were restricting freedom of speech. So he challenged law after law after law, and Citizens United was just the latest in a long line of cases bought by James Bopp challenging campaign finance laws. He was the one who said he was inspired by Brown versus Board of Education and that idea of bringing successive cases, chipping away at the dominant legal rule to change how the constitution is interpreted. Again, it doesn’t seem like it is an equivalent move to protect the rights of corporations and moneyed elites, but it was that same kind of rhetoric and the same framing by which he pursued that case. And Citizens United was an important and a ground-breaking case, holding that corporations have the same rights as individuals to spend their money on election ads. That is not equality by any stretch of the imagination. Very few individuals can afford the kinds of ads that corporations can easily afford every day filling up our television sets, so it is kind of a false equality. But I do think that Citizens United was the culmination of a two-hundred-year fight for rights for corporations and should be understood in the context of a larger historical battle.
MA: Let’s conclude with what all this really means for democratic politics, for U.S. society and where you think it is going?
AW: I think that what this does mean for politics and society is another recognition of the ways in which corporations have asserted power and continue to assert power in the American political system. We often think of corporations as being powerful in the elected branches, in legislatures, and among regulators, and spending money on campaign finance, and on lobbying. But corporations have also been remarkably powerful in the courts, using the constitution to fight back against regulation and if we want to understand the nature of corporate power, we have to understand the way they use the courts and the way they use the constitution to solidify and to magnify their power. And where are we going? I think we are in a period of growing rights for corporations: from political speech in Citizens United, religious liberty in Hobby Lobby, maybe we will have this Masterpiece Cake Shop case come out in favour of the baker opening the door for more discrimination by businesses. I think we are at a time of real growth in the world of corporate rights and we are going to see how it is going to affect society in the years to come.
This interview originally aired on the Scholars’ Circle. To access our archive of episodes and download this interview, click here.
Disclaimer: The ideas expressed in this discussion reflect the views of the guest and not necessarily the views of The Big Q.
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