Unequal Protection may prove to be the most significant book in the history of corporate personhood, a doctrine which dates to 1886. For 116 years, corporate personhood has been scrutinized and criticized, but never seriously threatened. Now Thom Hartmann has discovered a fatal legal flaw in its origin: corporate personhood is doomed.
What is “corporate personhood?” Suppose, to keep Wal-Mart at bay, your county commissioners enact an ordinance prohibiting Wal-Mart from doing business in your county. The subsequent (and immediate) lawsuit would be a slam-dunk for Wal-Mart’s lawyers, because this corporation enjoys—just as you and I do as living, breathing citizens—the Constitutional rights of “due process” and “equal protection.” Wal-Mart Stores, Inc. is a person, not in fact, not in flesh, not in any tangible form, but in law.
To their everlasting glory, this is not what the Founding Fathers intended, as Mr. Hartmann explains in rich and engaging detail. And for 100 years after the Constitution was ratified, various governmental entities led corporations around on leashes, like obedient puppies, canceling their charters promptly if they compromised the public good in any way. The leashes broke in 1886, the puppies got away, and the public good was increasingly compromised—until it was finally displaced altogether.
Today, the First Amendment protects the right of corporations-as-persons to finance political campaigns and to employ lobbyists, who then specify and redeem the incurred obligations. Democracy has been transformed into a crypto-plutocracy, and public policy is no longer crafted to serve the American people at large. It is shaped instead to maintain, protect, enhance or create opportunities for corporate profit.
One recent example took place after Mr. Hartmann’s book was written. Senators Patty Murray from Washington and Ted Stevens from Alaska inserted a last-minute provision in this year’s defense appropriation bill. It directed the Air Force to lease, for ten years, one hundred Boeing 767 airplanes, built and configured as passenger liners, to serve as aerial refueling tankers. Including the costs of removing the seats and installing the tanks, and then reversing the process ten years from now, the program will cost $17 billion. The Air Force never asked for these planes, and they weren’t in President Bush’s budget for the Defense Department. Political contributions from the Boeing company totaled $640,000 in the 2000 election cycle, including $20,230 for Senator Murray and $31,100 for Senator Stevens.
The chairman of the CSX Corporation, Mr. John Snow, has been nominated by President Bush to be the new Secretary of the Treasury. Mr. Snow’s company, another legal person, exercised its Constitutional rights by contributing $5.9 million to various campaigns—three-quarters of it to Republicans—over seven election cycles. It was a wise investment. In 3 of the last 4 years, averaging $250 million in annual profits, CSX paid no federal income taxes at all. Instead, it received $164 million in tax rebates—money paid to the company by the Treasury Department.
No, this is not what the Founding Fathers intended democracy to be. Thomas Jefferson and James Madison, as Mr. Hartmann details, were seriously anxious about “moneyed corporations” and their potential interference in public affairs. The Bill of Rights these two men drafted contained the ten Constitutional amendments that survive, and two more that did not: one was to control corporate expansion and dominance. (The other was to prohibit a standing army.)
As the 19th century wore on American corporations entered lawsuit after lawsuit to achieve a strategic objective: corporate personhood. With that, they could break the leashes of social control and regulation. They could sue county commissioners. Or lease their unsold airliners to the Air Force. Or collect millions in tax rebates.
In his spellbinding Chapter 6—“The Deciding Moment”—Mr. Hartmann tells how corporate personhood was achieved.
Orthodoxy has it the Supreme Court decided in 1886, in a case called Santa Clara County v. the Southern Pacific Railroad, that corporations were indeed legal persons. I express that view myself, in a recent book. So do many others. So do many law schools. We are all wrong.
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Mr. Hartmann undertook instead a conscientious search. He finally found the contemporary casebook, published in 1886, blew the dust away, and read Santa Clara County in the original, so to speak. Nowhere in the formal, written decision of the Court did he find corporate personhood mentioned. Not a word. The Supreme Court did NOT establish corporate personhood in Santa Clara County.
In the casebook “headnote,” however, Mr. Hartmann read this statement: “The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment…which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.” Here, anyway, corporate personhood was “provided”— in the headnote, instead of the formal written decision of the Supreme Court. But that’s not good enough.
What is a “headnote?” It is the summary description of a court decision, written into the casebook by the court reporter. It is similar to an editor’s “abstract” in a scientific journal. Because they are not products of the court itself, however, headnotes carry no legal weight; they can establish no precedent in law. Corporate personhood, Mr. Hartmann discovered, is simply and unequivocally illegitimate.
The court reporter for Santa Clara County was Mr. John Chandler Bancroft Davis, a graduate of Harvard Law School.
Mr. Hartman has in his personal library 12 books by Davis, mostly original editions. They display Davis’s close alliance with the railroad industry, and they support persuasively Mr. Hartmann’s argument that Davis injected the personhood statement deliberately, to achieve by deceit what corporations had so far failed to achieve in litigation.
If Davis knew his headnote was legally sterile, though, we can only speculate about his tactics. Perhaps he thought judges in the future would read his headnote as if it could serve as legal precedent, and would thereafter invoke corporate personhood in rendering court decisions. That would be grossly irregular, and it would place corporate personhood in stupendous legal jeopardy if it ever came to light. But something of that sort must have happened, because corporate personhood over time spread throughout the world of commerce—and politics.
Mr. Hartmann doesn’t fill in this blank, but his daylighting of the irregularity will be the eventual undoing of corporate personhood. Its alleged source in Santa Clara County is a myth, a lie, a fraud. Corporate personhood simply cannot now survive, after Mr. Hartmann’s book, a rigorous and sustained legal attack.
Sustained it will have to be, for years or decades or even longer: corporations will fight the attack bitterly, but we now know corporate personhood has utterly no basis in law.