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What's Missing from This New York Times Editorial?

Here's an excerpt, though read the whole thing:

The question at the heart of one of the biggest Supreme Court cases this year is simple: What constitutional rights should corporations have? To us, as well as many legal scholars, former justices and, indeed, drafters of the Constitution, the answer is that their rights should be quite limited -- far less than those of people....

The Constitution mentions the rights of the people frequently but does not cite corporations. Indeed, many of the founders were skeptical of corporate influence.

John Marshall, the nation's greatest chief justice, saw a corporation as "an artificial being, invisible, intangible," he wrote in 1819. "Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence."

That does not mean that corporations should have no rights. It is in society's interest that they are allowed to speak about their products and policies and that they are able to go to court when another company steals their patents. It makes sense that they can be sued, as a person would be, when they pollute or violate labor laws.

The law also gives corporations special legal status: limited liability, special rules for the accumulation of assets and the ability to live forever. These rules put corporations in a privileged position in producing profits and aggregating wealth. Their influence would be overwhelming with the full array of rights that people have.

One of the main areas where corporations' rights have long been limited is politics.... The founders of this nation knew just what they were doing when they drew a line between legally created economic entities and living, breathing human beings. The court should stick to that line.

I discussed the substantive matter below, but for now let me ask a different question: Where would the arguments in the New York Times editorial leave the New York Times itself? Shouldn't New York Times v. Sullivan (the landmark libel case) and New York Times v. United States (the Pentagon Papers case), for instance, have come out the opposite way under the Times' analysis? The corporation that owns the Times, like all corporations, has "limited liability, special rules for the accumulation of assets and the ability to live forever [in theory]." It is "in a privileged position in producing profits and aggregating wealth." It surely has tremendous "influence." It tries to participate in "politics," in its editorials and also, inevitably (whether intentionally or not) in its news coverage and choices of what to cover. It is a "legally created economic entit[y]."

Now maybe the Times is implicitly suggesting that it's excluded from the analysis because of the proviso that it "is in society's interest that they are allowed to speak about their products and policies." But the ads in New York Times v. Sullivan and the publication of the Pentagon Papers wasn't speech about its products and policies. The speech was its product, in the sense that it was produced by the Times in part -- not clear whether this was so in the ad in Sullivan but perhaps one might say so -- and it was something that the Times sold.

But a political ad put out by a business corporation is also produced by the corporation; and though it isn't something that the corporation sells, why should that affect the corporation's rights? I agree that speech that one sells shouldn't be less constitutionally protected because it's sold rather than given away for free; but surely speech that a corporation gives away for free likewise shouldn't be less constitutionally protected than speech that is some other corporation's "product." Perhaps the Times is hinting at a distinction by quoting the "incidental to its very existence" language from Chief Justice Marshall, but it's hardly "incidental to [a newspaper's] very existence" for the newspaper to be able to publish political editorials, or endorse candidates. A newspaper certainly could exist without that power.

Of course, one could say that the Free Press Clause protects newspapers but not other companies. But the Times editorial doesn't say that; and it's not clear why we should read the Free Press Clause as privileging a particular form of business, as opposed to a particular medium -- the press, which could be used both by its owners to publish newspapers (with political editorials in them), and by other people and companies to publish leaflets, books, political statements in others' newspapers, or (with technological changes) political Web sites, made-for-TV opinionated political documentaries, and the like.

But in any event, my point here isn't so much the substantive point -- it's that a business corporation is publishing a political message arguing that business corporations shouldn't have the constitutional right to publish political messages, without even (1) mentioning that its argument would apply to itself, and (2) explaining why, despite that, the argument should not apply to itself. (It's clear, after all, from its past statements and arguments in court that the Times does take the view that it indeed should continue to have constitutional rights.)

Related Posts (on one page):

  1. What's Missing from This New York Times Editorial?
  2. Constitutional Rights and Corporations:
Melancton Smith:

The law also gives corporations special legal status: limited liability


Isn't the limited liability granted to the owners of the corporation, not the corporation itself?
9.22.2009 1:07pm
FWB (mail):
Rights are endowed by the Creator. Privileges and immunities come from the state.

Tiocfaidh ar la!
9.22.2009 1:10pm
einhverfr (mail) (www):

Isn't the limited liability granted to the owners of the corporation, not the corporation itself?


Yeah, I caught that one too.
9.22.2009 1:11pm
Brian Garst (www):
I don't see how it matters in this instance what rights we conjure corporations have. "Congress shall make no law..." ought to actually mean Congress shall make no law.
9.22.2009 1:14pm
Allan (mail):
Just because there is no constitutional right accorded to a corporation does not mean that the corporation will lose all rights.

For example, there is no constitutional right to attorney-client privilege, yet it is there.

If there is a need for a corporation to have rights (and there certainly is), Congress (or state legislatures) can create them.
9.22.2009 1:19pm
Eugene Volokh (www):
Allan: So New York Times Co. v. Sullivan and New York Times Co. v. U.S. were in your view both mistaken, right? The New York Times has no constitutional rights; Congress and the Alabama legislature didn't create such rights; end of story, yes?
9.22.2009 1:26pm
Connecticut Lawyer (mail):
Allan,

If the legislature can create a right, then it's not a Constitutional right. Constitutional rights can't be taken away by legislative whim.

Answer this: Do you think that corporations are protected by the Fifth Amendment? Can the government seize corporate property without due process and without paying just compensation? If the answer to that depends on whether the coporation statute gives the corporation "rights," then the answer is that the government could, indeed, whenever it wanted, just by passing legislation, search corporate property without a warrant, seize corporate property without due process and condemn corporate property without paying any compensation. If that's how you think the Constitution ought to be interpreted, then say so. Don't beat around the bush.
9.22.2009 1:27pm
yankee (mail):
It seems to me that there are two major problems with the argument of this post:

1) A newspaper editorial is a very brief piece of writing. It cannot possibly be expected to rebut every criticism and counterargument, even all the major ones. Space is effectively even more limited because it is aimed at a nonspecialist audience and much of the editorial must be spent introducing the issue.

2) The thesis of the editorial is that corporations' rights "should be quite limited — far less than those of people." Nothing in the editorial says (or even suggests) that this claim does not apply to the Times itself. Does the Times's editorial board think the Times should have the right to run election ads thinly veiled as movie ads? Probably not.

The Times could have provided an elaboration of why the right to publish news and editorialize about it should be among the limited rights corporations should possess, but this would have taken a good chunk of the (limited) space available.
9.22.2009 1:44pm
Powdered Wig:
Prof. Volokh:

Would those two libel cases necessarily have come out differently under a theory of associational standing? Is there some reason --- in a world where the newspaper didn't think it had corporate political rights as the lawsuit was going on --- that the same First Amendment argument couldn't have been structured so that the newspaper (as an interested employer) funded the legal defense of its employees or an association of those reporters? [Is there some reason associational standing couldn't work for most of the non-economic rights that people think corporations should have? If not, it seems like fixing associational standing is a better approach than creating a new class of constitutional citizens.]

I've always found the "What about the New York Times!" argument to be somewhat overclaimed. it surely deserves a little more thought. Non-corporate entities manage to assert the rights of their members without needing personhood to do so.

But you're right that the NY Times missed a great chance to debunk that argument, or at least explain why it's position is consistent.
9.22.2009 1:45pm
TGGP (mail) (www):
Robin Hanson had a great post on this subject a little while back:
Alternate Free Speech Histories
9.22.2009 1:47pm
subpatre (mail):
The Constitution mentions the rights of the people frequently but does not cite corporations.” -- NYT editorial

It seems to be the Times’ logic that corporations have no First Amendment rights —only privileges derived from corporate law— and speech by the press corporate media may be limited or proscribed at will by federal or states’ laws.

At the Founding, there was no corporate press as we know it; all ‘press’ could be attributed to a few people at most, most often a single individual, for liability of libel, fraud, or other concerns. An argument can be supported that “. . . the press . . .” in our Bill of Rights has no direct relationship to corporations like the NY Times; except for slow encroachment on the original meaning over the decades by an activist judiciary !
9.22.2009 1:48pm
wfjag:

I discussed the substantive matter below, but for now let me ask a different question: Where would the arguments in the New York Times editorial leave the New York Times itself? Shouldn't New York Times v. Sullivan (the landmark libel case) and New York Times v. United States (the Pentagon Papers case), for instance, have come out the opposite way under the Times' analysis?

Yes. However, those cases were decided at a time when the NYT could be regarded as a professional organization dedicated to accurately reporting the facts and providing thoughtful analysis. According to the article Mixed Media by Jeff Bercovici (Mar 30 2009) online in Portfolio.com.:


One of his ["Pinch" Sulzberger ‘s] pet expressions is "W.S.L.," an abbreviation meaning "We Suck Less." Sulzberger deploys it "as a reminder to those in the know that, for all its travails and failings, his newspaper remains, after all, The New York Times."


Given this philosophy by the publisher, why would you expect the NYT to provide an intelligent analysis or otherwise act as a professional news organization?
9.22.2009 1:52pm
Bama 1L:
Nothing on corporations' Second Amendment rights?
9.22.2009 1:53pm
ShelbyC:
I'm not sure I understand any of this. As legally ficticious entities, corporations can niether speak, nor react to the threat of punishment by refraining from speech. But since corporations are made up of people, Congress can cause the people making up corporations to refrain from engaging in speech by threating to punish those people by nominally punishing the corporation. But when it does so, it is clearly passing a law infringing on the freedom of speech.
9.22.2009 1:56pm
Daniel San:
Brian Garst: "Congress shall make no law"

This is a good place to start, but then we must define terms, like "freedom of speech." Once we decide what the right to freedom of speech is, we should agree that Congress shall not abridge it. But if the definition of "freedom of speech" does not encompass (take your pick: corporate speech, pornography, Nazis in Skokie, libel, flag burning, nude dancing, commercial speech, child pornography, slander, demonstrations at funerals, demonstrations at abortion clinics, advocacy of terrorism) then Congress may make a law abridging it, even if "no law" really means NO LAW.

Notice also that a great deal of limitation on speech (lawsuits, administrative agency action, police powers) does not spring from laws made by Congress. When HHS instructs Humana to stop criticizing the health care plan, Congress has made no law abridging anything.
9.22.2009 1:58pm
PatHMV (mail) (www):
From a textual standpoint, isn't it relevant that, while many of the other rights in the Bill of Rights are specifically secured to "the people," the First Amendment says that Congress shall pass no law abridging the freedom of speech, or of the press? Given that language, does it matter whether a corporation is a "person" from the standpoint of 4th Amendment or 5th Amendment law? If Congress passes a law which is intended to and has the effect of limiting speech, based on the content of the speech or the identity of the speaker, isn't that a law abridging freedom of speech, regardless of the "personhood" status of corporations?
9.22.2009 1:59pm
Lior:
Surely the "Press" of the First Amendment is the physical machine -- the oldest reference in the OED for "the press" in the sense of "Journalists, newspaper reporters collectively" is from 1868. Claiming that the "Freedom of the Press" is somehow special to news reporters turns the idea on its head.
9.22.2009 1:59pm
LarryA (mail) (www):
Reminds me of the time I heard a Hollywood star speaking on the subject of CEO salary limits. She said the highest salary in a corporation should be no higher than 250% of the lowest.

Someone asked her if she was going to implement that policy on her next movie.

Turns out that Hollywood Stars Are Different. They Earn What They Are Payed.

Who knew?
9.22.2009 2:01pm
ShelbyC:
Whoops. I just saw that my last comment is a rather ham-handed review of points EV covered in his previous post. Oh well.
9.22.2009 2:03pm
Bored Lawyer:
Professor, it seems you have forgotten that famous line in Animal Farm -- everyone is equal, but some are more equal than others. That is the Times motto -- free speech for me, but not for thee.

You ought to write a reply letter to the Times. Not that it would be published, but still.
9.22.2009 2:03pm
ShelbyC:

Notice also that a great deal of limitation on speech (lawsuits, administrative agency action, police powers) does not spring from laws made by Congress. When HHS instructs Humana to stop criticizing the health care plan, Congress has made no law abridging anything.


When HHS instructs Humana to stop criticizing the health care plan, the enabling statute for HHS now infringes on the freedom of speech.
9.22.2009 2:07pm
NoPublic:
Part of the difference to me at least is the following.

If I invest in the NYT I expect it to perform a number of different sorts of speech in the course of doing business. This is the raison d'être of the entity. And I have a historical database of what that speech might be.

If I invest in FredMart I expect it to sell Freds. And make money. I don't necessarily expect it to support candidates from a particular party with money or speech. And they may or may not have disclosed what that speech is prior to my investment.

Should there be regs requiring that all political viewpoints to be held and espoused by the corporation must be outlined in the prospectus and annual reports? Explicitly?
9.22.2009 2:09pm
Melancton Smith:
It seems to me that you could argue that corporations only have those rights that flow through them from their human owners. Seizing a corporation's property is a seizure from the owners of the corporation.

So the rights that protect a corporation are those rights that protect the owners' interest in the corporation.

There I go again, trying to apply common sense to the law!
9.22.2009 2:09pm
Kazinski:
Yankee:
Does the Times's editorial board think the Times should have the right to run election ads thinly veiled as movie ads? Probably not.

If a corporation (The Times or say Walmart) has the right to make its wishes known via some sort of publication be it an ad or an editorial, then what does it matter if it's thinly veiled or not?

I'm sure the Times will say it has special privileges, because it owns its own press then it's editorial is privileged whereas since Walmart has to pay a third party to place its opinion it makes it an un-protected ad.

I say all corporations should have the same rights, and if corporations don't have free speech rights then freedom of the press only applies to sole proprietorships or partnerships unprotected by the corporate veil.
9.22.2009 2:15pm
Thief (mail) (www):
1. Human beings have constitutional rights, including free speech, freedom of association, and freedom to petition the government for a redress of grievances. Is this a) legally correct, and a b) good thing?

2. A corporation is nothing more than a group of human beings that have agreed to pool their property and contract rights for a common purpose (usually, but not always, to get rich), operating under a common contract which states that if something goes wrong with the common purpose they will not all be thrown into poverty. Is this a) legally correct, and b) a good thing?

3. These common contracts (corporate and LLC charters) are conferred by states as a matter of right - anybody who can get together a group of people to serve as officers and directors, fills out the right forms, pays the right fees, and promises not to use a charter for any illegal purpose, can form a corporation. Is this a) legally correct, and b) a good thing?

If the answers to questions 1a-3b are "Yes," then why do corporations not get constitutional rights?
9.22.2009 2:21pm
Rich B. (mail):
The relevant distinction should be clear to anyone with a solid background in Corporate Law:

Corporations are subject to shareholder lawsuits if they take a course of action that harms their interests as shareholders. Shareholders win these lawsuits if the corporations cannot show a rationale for the action that benefits the company. (In practice, of course, "Showing itself to be a good civic and community member" can usually trump otherwise useless expenditures.)

Now, what if an insurance company took out an ad saying, "Regulate Insurance Companies A Lot! It will hurt our profitability, but will be good for America!" What if this is because the insurance company executives really believed it, and felt that it would have more political weight coming from an insurance company? What if a shareholder brought a lawsuit and the corporation admitted that it wouldn't help the corporation at all, but that it was the right thing to do? The Shareholder should -- fairly obviously -- win the lawsuit.

Given this background Corporations Law, it is clear that Corporations do not -- at present -- have "Free Speech" as they are not free to speak against their own interests, the same way a millionaire can take out an ad saying "Tax Us Millionaires!"

So, the relevant distinction seems obvious -- on any topic where a Corporation could be successfully sued for taking a position against its own interest, it should be subject to regulation against taking a position in its own interest.
9.22.2009 2:22pm
David Welker (www):
Eugene,

I think you have gone off on a tangent here. Especially since, as you admit, the New York Times, as a part of the press, can easily be distinguished from other corporations.

Why in the world should the authors of the editorial go into this tangential point rather than use their limited time and space to make the points they want to emphasize?
9.22.2009 2:22pm
Bored Lawyer:

Part of the difference to me at least is the following.

If I invest in the NYT I expect it to perform a number of different sorts of speech in the course of doing business. This is the raison d'être of the entity. And I have a historical database of what that speech might be.

If I invest in FredMart I expect it to sell Freds. And make money. I don't necessarily expect it to support candidates from a particular party with money or speech. And they may or may not have disclosed what that speech is prior to my investment.

Should there be regs requiring that all political viewpoints to be held and espoused by the corporation must be outlined in the prospectus and annual reports? Explicitly


This argument is made from the perspective of protecting shareholders, not regulating political speech. The aim of the statutes at issue is the latter, not the former. Even if the corproation made full disclosure and even if every last shareholder personally approved the corporation's political activities, they would still be proscribed by statute.

At one time, corporate charters permitted a corproation to only engage in certain specified actitivities. If the officers went oustide that mandate, they could be sued for allowing the corporation to act ultra vires.

Today, however, most corporate charters have a clause permitting the corporation to do engage in any activity permitted by law, or some similar language. So that theory has, for most corporations (especially public ones) to be of no practical effect.

Given the high level of govt. regulation we have today, I would expect that it would be in the interests of many corporations (and hence their shareholders) to engage in lobbying an political activities. The decision to do that is subject to the business judgment rule If you don't like it, you can sell your stocks and inveet them elsewhere.
9.22.2009 2:23pm
Lior:
NoPublic: as the owner of FredsMart you are in charge of its operations, and can decide what FredsMart will do. If Freds look better with Disney characters on them, then FredsMart's business would improve by opposing the polices of the Senator from Disney. If FredsMart would be better off by the government regulating the competition out of business, then you may want to support the local candidate who promises to do that. Since these political outcomes would be good for FredsMart, I don't see why you shouldn't be able to use FredsMart's money to convince others that what's good for FredsMart is good for them.
9.22.2009 2:24pm
Allan (mail):

Allan: So New York Times Co. v. Sullivan and New York Times Co. v. U.S. were in your view both mistaken, right? The New York Times has no constitutional rights; Congress and the Alabama legislature didn't create such rights; end of story, yes?


Yes. I do believe that the cases are wrong. The individual writers are protected under the constitution, but the publishing company is not. Would that not have been the intent of the framers? If Congress wanted to protect publishers, it could (and IMHO, should).

As to Connecticut Yankee: Yes, but again, Congress and legislatures should put those rights into law. Were they not there, who would do business in those states?

Again, the constitution was not written with corporations in mind, it was written with individuals in mind. I think it ridiculous that anyone suggest that Congress intended to protect corporations as individuals. However, I have less revulsion when thinking about the fifth amendment of the constitution applies to corporations as opposed to the first amendment. Corporations were set up for monetary purposes of the shareholders.

I also believe that the remainder of the fourth and fifth amendments should not apply to corporations. I am a on the fence about the application of the third amendment to corporations, but it would certainly be an interesting case.

If shareholders want to engage in "speech," they can spend their own money individually, or joing a group (PAC?) and do it together.
9.22.2009 2:25pm
Bored Lawyer:

So, the relevant distinction seems obvious -- on any topic where a Corporation could be successfully sued for taking a position against its own interest, it should be subject to regulation against taking a position in its own interest.


Sorry, I don't see how the conclusion follows from the premise.

Furthermore, the principal you espouse has nothing to do with speech per se. A corporation can be sued for taking non-speech acts which are against its interest -- corporate waste. It is just as much corporate waste to throw a basket of $100 bills out the window as it is to publish an advertisement advocating legislation that would hurt the company. I don't since how such an incidental regulation of speech runs afoul of the First Amendment.

Not to mention that, as noted here, a corporation is an agglomeration of interests of the shareholders. Even if a corporation is held to have free speech rights, that does not yet determine who at the corporation decides how those rights are to be exercised -- the shareholders, the board, the officers, etc. THAT, I would think, is subject to the usual rules of corporate governance, which is not a First Amendment issue at all.
9.22.2009 2:29pm
Uh_Clem (mail):
"For every complex problem there is an answer that is clear, simple, and wrong." ~ H.L. Mencken

Corporate Personhood is one such answer. Granted, it makes application of the constitution much simpler by treating corporations as if they are individuals, effectively side-stepping the need to distinguish between the two.

But is such a sweeping simplification supported by the constitution? I don't think so. Certainly it's not supported by precedent. Corporate rights are currently a subset of individual rights - which isn't to say that their rights are non-existant, just that they stop short of those enjoyed by actual flesh-and-blood people.

Where do we draw the line? Ah, there's the rub - but the courts have been able to strike a balance before and I trust that they will do so this time without resorting to a sweeping "corporate personhood" decision. (whether I like where they've drawn it is another matter altogether).

Agree that the Times has not offered a consistent rationale in their short editorial why some corporations (e.g. the Times) enjoy certain rights that other corporations do not.
9.22.2009 2:30pm
David Welker (www):

Perhaps the Times is hinting at a distinction by quoting the "incidental to its very existence" language from Chief Justice Marshall, but it's hardly "incidental to [a newspaper's] very existence" for the newspaper to be able to publish political editorials, or endorse candidates. A newspaper certainly could exist without that power.


What does it mean for a newspaper to "exist" without editorials? You certainly could have a publication that does not have editorials, but would it still be a newspaper?

Opinion pieces in newspapers have existed from the founding to the present day. I think it would fair to say that opinions are a fundamental feature of modern newspapers.

There would be much less need to protect the press in the First Amendment if all the press did was report objective information. I would argue that it was precisely because the press was a source of strong political opinion, and that political opinion was thought valuable and worth protecting, that the press is mentioned specifically in the First Amendment.

A traditional function of the press has always been to express controversial political opinions. This is definitely NOT a traditional function of corporations.
9.22.2009 2:30pm
John T. (mail):
So, the relevant distinction seems obvious -- on any topic where a Corporation could be successfully sued for taking a position against its own interest, it should be subject to regulation against taking a position in its own interest.


Why? Haven't you just shown that shareholder lawsuits are sufficient to prevent that? Why have regulation barring certain speech when there's another, less restrictive remedy available, that avoids any issues of prior restraint?

I think you have gone off on a tangent here. Especially since, as you admit, the New York Times, as a part of the press, can easily be distinguished from other corporations.


Can it be distinguished from a non-profit, Citizens United, expressly organized to advocate on an issue? If people form a non-profit (or for-profit, like the New York Times Company) explicitly to advocate and act as a media organization, is that okay? Citizens United is partisan, but so obviously is the New York Times. (And if you don't believe that, substitute Fox News and ask yourself if you want the government to be in the job of acting as censors to judge "balance.")
9.22.2009 2:30pm
John T. (mail):
Opinion pieces in newspapers have existed from the founding to the present day. I think it would fair to say that opinions are a fundamental feature of modern newspapers.


But many newspapers exist that as a matter of policy don't endorse candidates. So newspapers can obviously exist without endorsing candidates. And some newspapers, such as USA Today, provide editorial space for an Opposing View for any unsigned editorial. Do you think, David Welker, that the government could mandate "equal time" for newspapers?
9.22.2009 2:32pm
dave h:
In other news, McDonald's does not think that laws outlawing Burger King and Wendy's are unconstitutional.
9.22.2009 2:33pm
John T. (mail):
The individual writers are protected under the constitution, but the publishing company is not. Would that not have been the intent of the framers? If Congress wanted to protect publishers, it could (and IMHO, should).


Very well. I think that that would clearly chill free speech. Of course, there would still be room for the odd newspaper owned entirely by a mega-wealthy Rupert Murdoch, but other newspapers could not operate if the government could censor them in the name of regulating the corporation.

If I invest in FredMart I expect it to sell Freds. And make money. I don't necessarily expect it to support candidates from a particular party with money or speech. And they may or may not have disclosed what that speech is prior to my investment.


NoPublic: But surely you expect a company you invest in to make arguments in favor of its products, and speak against regulation that will hurt it? One would even expect a company to want to disseminate truthful information about independently rigorously tested off-label uses for pharmaceuticals, but that's illegal too, despite how many lives it costs. (Even if doctors know about it and prescribe them.)
9.22.2009 2:36pm
Monte Meals (mail):
Easy solution:

Just re-incorporate all businesses as newspapers (many already have intra-company newsletters already) who just happen to make cars/steel/widgets/etc on the side.

Problem solved. (Either that or declare McCain-Finegold unconstitutional.)
9.22.2009 2:37pm
DCP:


Isn't the limited liability granted to the owners of the corporation, not the corporation itself?


In theory yes. But the owners of corporations are frequently other corporations - parent/subsidiary, etc...
9.22.2009 2:46pm
krs:
Isn't freedom of "the press" separately protected under the First Amendment, regardless of whether corporations do or do not have freedom of "speech"?
9.22.2009 2:52pm
egd:
Rich B. (mail):

Given this background Corporations Law, it is clear that Corporations do not -- at present -- have "Free Speech" as they are not free to speak against their own interests, the same way a millionaire can take out an ad saying "Tax Us Millionaires!"

So, the relevant distinction seems obvious -- on any topic where a Corporation could be successfully sued for taking a position against its own interest, it should be subject to regulation against taking a position in its own interest.

Sorry Rich B., but your analysis is clearly wrong to anyone with a solid background in Constitutional Law.

Your analysis fails because in such a lawsuit, there is no state actor.

Now you might respond that Shelley v. Kraemer means Courts provide the required state action in enforcing these agreements, but that's taking the issue further than the Supreme Court intended. If any action by a court to enforce a private agreement constitutes state action, then no private agreements are allowed which violate the Constitution. And the courts have never even hinted that such was an intended result of Shelley v. Kraemer.
9.22.2009 2:52pm
krs:
...and now I'm looking more closely at the penultimate paragraph of the post. I'm not sure why the editorial should be expected to mention this.
9.22.2009 2:53pm
ShelbyC:
Can someone please explain what is meant by the suggestion that corporations enjoy "limited" rights? Is the suggestion that the First Amendment deprives congress of the power to place some restrictions on the speech of corporations, but not others? Who decides, and what is the criteria for deciding? What, from the text or structure of the constitution, suggests that corporations have some rights but not others?
9.22.2009 2:59pm
q:

So, the relevant distinction seems obvious -- on any topic where a Corporation could be successfully sued for taking a position against its own interest, it should be subject to regulation against taking a position in its own interest.

Rich B.'s analysis is wrong for one simple reason: the reason why the corporation is limited in what it says is because of agency law. The corporation (specifically the board of directors) is legally required to act in the interests of its shareholders; in other words, the corporation must say A if the shareholders will it.

Rich B.'s analysis is akin to saying it should be constitutional for Congress to forbid my lawyer to say anything in his capacity as my representative. Which is outright silly. We only forbid my lawyer to speak against my interests in order to protect the principal-agent relationship.
9.22.2009 3:05pm
Allan (mail):
This is an important question. A couple of points:

1. If the Supreme Court decided tomorrow that coroporations were not persons entitled to constitutional protection I would almost guarantee that every state in the union and Congress would write laws protecting corporations. So why not just codify the rights and, if they are being abused, allow the legislative and executive branches take care of it?

2. If corporations are persons, what are their nationalities? Would US companies be allowed to contribute to campaigns, but non-US companies not be allowed to do so? If those non-US companies are owned 100% by US citizens, are there implications? What of US companies owned 100% by non-US citizens? Do foreign companies have the same rights as non-US citizens or US citizens?

3. If a foreign company acts in a terrorist manner, can we send it to Getmo? If so, how would we do it?
9.22.2009 3:09pm
J. Aldridge:
The question at the heart of one of the biggest Supreme Court cases this year is simple: What constitutional rights should corporations have?

I'll argue what John Bingham argued: Their rights are limited to what the state law provides for where they are charted, and if the framers intended for them to sue, or be sued in federal courts, they would had said so.

End of a very easy case.
9.22.2009 3:12pm
q:

3. If a foreign company acts in a terrorist manner, can we send it to Getmo? If so, how would we do it?

Why would you want to send a corporation to Gitmo? In any case, the government could certainly send individuals belonging to the corporation to Gitmo. Or subpoena for important documents. Or seize corporate assets. Corporations acting badly are not a new thing and the government has many tools to deal with them, including criminal liability. Sure, you can't throw them in jail, but you can fine them, or destroy them.
9.22.2009 3:14pm
John T. (mail):
Isn't freedom of "the press" separately protected under the First Amendment, regardless of whether corporations do or do not have freedom of "speech"?


But can you argue that "the press" applies to corporations, but not "speech?" Or that some corporations that own presses have freedom, but not others (including, among the latter, non-profits formed for the purposes of transmitting a viewpoint)?
9.22.2009 3:14pm
wm13:
Regarding Prof. Volokh's point that a newspaper could certainly exist without editorials, note that many newspapers (e.g., the Yale Daily News) are published by non-profit tax-exempt organizations, and are forbidden by the tax law to endorse candidates. Yet no one claims that such publications are not newspapers (the New York Times has quite a few Yale Daily News alumni on its payroll).

Additionally, note that Congress has, in fact, forbidden certain speech by the Yale Daily News, and has forbidden the individual editors from using the assets of the Yale Daily News to express certain viewpoints, and the courts certainly don't consider that a First Amendment violation. So the First Amendment absolutist commentators who quote the "no law" language are not reflecting current jurisprudence.

The conventional answer would be that tax-exemption is a gift to which Congress can attach restrictions, but the Times seems to suggest that corporate status generally is a gift to which the legislature can attach restrictions. So the Times, by its own logic, could be forbidden from expressing certain types of opinions.
9.22.2009 4:03pm
Bob from Ohio (mail):
I think John Marshall and William Reinquist were right, corporations are limited to those rights granted by the state at the time of incorporation. They have no political rights under the Constitution.

There were corporate entities in 1789. Can anyone point to a single Framer who thought these entities had the same rights as people?
9.22.2009 4:10pm
tickknob (mail):

Isn't the limited liability granted to the owners of the corporation, not the corporation itself?



In theory yes. But the owners of corporations are frequently other corporations - parent/subsidiary, etc...

Is it really the case that a parent company's libility for a subsidiary is limited if the subsidiary is incorporated?
9.22.2009 4:16pm
Rich B. (mail):
EDG


Sorry Rich B., but your analysis is clearly wrong to anyone with a solid background in Constitutional Law.

Your analysis fails because in such a lawsuit, there is no state actor.


Q


Rich B.'s analysis is wrong for one simple reason: the reason why the corporation is limited in what it says is because of agency law.


You are both missing the point. of course the limits on corporate speech are not based on Constitutional law. Of course it is agency law that allows lawsuits against corporations.

The point is: CORPORATIONS DO NOT HAVE FREE SPEECH. Not due to Constitutional analysis or court precedent. But based on fact. It is inherent in what they are. The First Amendment prohibits abridging "the freedom of speech." But Corporations do not have Freedom of Speech, any more than myna birds or computers do.

If you do not have freedom of speech -- if you cannot think about all aspects of both sides of an issue and then speak out for the one you favor -- then a law prohibiting you from saying something is not abridging your Freedom of Speech. It is abridging something else -- your ability to state the one position you are legally permitted to state, maybe. But it's not free speech.
9.22.2009 4:26pm
D. Williams (mail):
I am a bit mystified as to how supporting the treatment of corporations as equivalent to natural persons under the law is a "conservative" idea. As the Marshall quote indicates, this was not the original intent of the Founders—far from it. For example, here is Madison on the topic:

"Incorporated Companies, with proper limitations and guards, may in particular cases, be useful, but they are at best a necessary evil only. Monopolies and perpetuities are objects of just abhorrence. The former are unjust to the existing, the latter usurpations on the rights of future generations. Is it not strange that the Law which will not permit an individual to bequeath his property to the descendants of his own loins for more than a short and strictly defined term, should authorize an associated few, to entail perpetual and indefeasable appropriations; and that, not only to objects visible and tangible, but to particular opinions, consisting, sometimes, of the most metaphysical niceties; as is the case with Ecclesiastical Corporations."

James Madison to James K. Paulding, 10 Mar. 1827
DLC: Rives Collection, Madison Papers

And Alexander Hamilton—the only Founder I know who didn't froth at the mouth at the thought of corporations—specifically outlined the reason why corporations were not the legal equivalent of a person, and therefore were not dangerous. Hamilton's defense of corporations was that they were not like English corporations, chartered under the authority of the Crown, and not easily subject to regulation by parliament, as they had by extension a portion of the rights and privileges of the monarch, delegated by the monarch to the legal entity chartered under his name. But this was NOT the case of a corporation in the United States, Hamilton argued:


"A strange fallacy seems to have crept into the manner of thinking and reasoning upon this subject. Imagination appears to have been unusually busy concerning it. An incorporation seems to have been regarded as some great, independent, substantive thing—as a political end of peculiar magnitude and moment; whereas it is truly to be considered as a quality, capacity, or means to an end. Thus a mercantile company is formed with a certain capital for the purpose of carrying on a particular branch of business. Here the business to be prosecuted is the end; the association in order to form the requisite capital is the primary mean. Suppose than an incorporation were added to this; it would only be to add a new quality to that association; to give it an artificial capacity by which it would be enabled to prosecute the business with more safety and convenience."

Founders Documents: Hamilton on National Bank

Hmm. But perhaps the "conservative" majority would like to overturn the law against perpetuities? Marbury v. Madison? What's next?
9.22.2009 5:23pm
PQuincy1:
Allan asks: "Can the government seize corporate property without due process and without paying just compensation? If the answer to that depends on whether the coporation statute gives the corporation "rights," then the answer is that the government could, indeed, whenever it wanted, just by passing legislation,..."

It strikes me that this question uses the word "just" in an illegitimate way: passing legislation is not a mere formality, or a minor step, after all: it represents the political decision of duly elected legislators who operate according to complex and difficult rules requiring approval of majorities of both houses and the President's assent.

It is correct that certain rights, by the Constitution (together with Marbury) are removed from this process entirely -- among them, relevantly to this discussion, the "freedom of the press."

It seems to me that Prof V's argument about corporations is not that different from the editorial's -- in that they both agree that the award of personal rights to corporations is not, and should not be, automatic -- and that they differ on the prudential questions about which rights corporations should enjoy.

I would also suggest that the explicit guarantee of the 'freedom of the press' -- which is not a natural or personal right, necessarily -- is sufficient to justify NYT vs. Sullivan without adducing the question of individual vs. corporate rights, say to free speech. (I haven't read the actual Sullivan decision in years, and don't recall the actual line of argument, though).
9.22.2009 5:35pm
PQuincy1:
Correction: I misattributed Connecticut Lawyer's statement to Allan. Apologies to both.
9.22.2009 5:36pm
PQuincy1:
subpatre says: "An argument can be supported that “. . . the press . . .” in our Bill of Rights has no direct relationship to corporations like the NY Times..."

Yet the First Amendment does not protect the "freedom of printers" or "of authors", it uses the impersonal abstract expression "the press". This suggests that your proposed hypothetical argument would be mistaken. Remember: corporate entities in the law are far older than our constitution, going back to the 12th century. The Framers knew about them and about their limited privileges, (or translated into post-Enlightenment talk, their limited enjoyment of rights). Yet they chose the abstract collective "the press" which could well include both corporate and individual entities, rather than specifying one or the other or both.
9.22.2009 5:41pm
David Schwartz (mail):
In response to the "only limited space" argument: The corporate right to free speech is one that the Times has used and enjoyed extensively. Not just that, but they've fought to establish and cement it, and their very existence depends in large part on that right.

For them to argue for a significant restriction and curtailment of those same rights, and not even address the fact that they're one of the largest beneficiaries of that right is simply inexcusable. Space cannot possibly be that short.

If Bill Gates wants to argue that other corporations should be heavily regulated to ensure they don't form monopolies, he should at least either argue that his company should be as well or that he is somehow different. To do neither makes it look like he is arguing that others must play by different rules than he does.
9.22.2009 5:55pm
PQuincy1:
Lior maintains: "the oldest reference in the OED for "the press" in the sense of "Journalists, newspaper reporters collectively" is from 1868."

This claim appears to be misstated, and much earlier and relevant usages of "the press" exist:

The use of the word for "A place of business centred on the printing press, in which all the stages and processes of printing books, journals, etc., are carried out; an establishment (including its staff, offices, and equipment) that produces books; a printing or publishing house." dates to 1579. A nice exemplary citation from the late 18th century reads: "An elegant and splendid edition of ‘Archimedes’, from the Clarendon Press." -- giving an organization as a "Press."

This definition alone would suffice to bring the NYT under the "freedom of the press."

Additionally, the use of "press" for "Newspapers, journals, and periodical literature collectively." dates, per the OED to 1661, with the lovely and relevant citation: "And carefully muzled the mouth of the press, Least the truth should peep through their jugling dress." (A. Brome).
9.22.2009 5:56pm
PQuincy1:
Allan (really, this time), writes: "If Congress wanted to protect publishers, it could (and IMHO, should)."

True, but the Constitution already does so, under any plausible reading of "freedom of the press." The freedom of speech of a corporation qua fictional person seems largely irrelevant, here, because the a corporation that publishes - that is, a press (see OED definitions above) - is already explicitly awarded constitutional protection. The legislature can articulate and extend such protection, say by ALSO giving the NYT and other corporations the same freedom of speech that individuals enjoy, but no legislature can take away the 'freedom of the press', which (as noted above) clearly extends not just to individuals operating presses, but also the entire organization.
9.22.2009 6:03pm
q:

The point is: CORPORATIONS DO NOT HAVE FREE SPEECH. Not due to Constitutional analysis or court precedent. But based on fact. It is inherent in what they are. The First Amendment prohibits abridging "the freedom of speech." But Corporations do not have Freedom of Speech, any more than myna birds or computers do.

Actually, you've missed the point. If corporations do not have free speech because shareholders can sue them for breaching their fiduciary duties, then no agents have free speech in their representative capacity. This is trivially true, of course, but to extend that to mean corporations and agents do not have any constitutionally-protected right to speak is absurd. Do you think it would be constitutional for Congress to legislate that criminal defense counsel are forbidden to speak against a prosecutor's case, because they cannot speak detrimentally against their client?

Moreover, neither individuals or the press have complete freedom of speech either (see libel/slander, fighting words, etc.), does that mean they have no freedom of speech at all? Of course not. Individuals do not have complete religious freedom, does that mean Congress can legislate against all religious practice? Doubtful. In other words, your reasoning is extremely faulty.
9.22.2009 6:17pm
klw (mail):
The Times doesnt knows that european law recognized rights to corporation
9.22.2009 9:36pm
evisu jeans (mail) (www):
Nice work guys!
this is just Amazing!
Thanks
9.22.2009 10:17pm
Fat Man (mail):
Shouldn't we all be thrilled that the NYTimes has painted itself into this corner.

When your enemy is destroying himself, do nothing.
9.23.2009 1:12am
Random Commenter:
All this discussion will become moot when the Times becomes a taxpayer-supported NGO under some upcoming bailout legislation.
9.23.2009 1:58am
Real American (mail):
some people just don't like what corporations say and thus want to empower government to shut them up...pretty much the same people who want to empower government to shut up regular citizens and take our property and our guns and our religious freedoms...

In any event, the NY Times probably doesn't see itself as a corporations b/c corporations are, in the Times' definition, all evil and poison the environment and the NY Times certainly doesn't think that about itself.
9.23.2009 8:25pm

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