The Volokh Conspiracy

George Will recently published a good Washington Post column on the ill-conceived People’s Rights Amendment, which Eugene Volokh and I blogged about here and here. Will points out several serious flaws in the proposal, and builds on some of the points we made:

Controversies can be wonderfully clarified when people follow the logic of illogical premises to perverse conclusions....

Joined by House Minority Leader Nancy Pelosi (D-Calif.), 26 other Democrats and one Republican, [Rep. James McGovern] proposes a constitutional amendment to radically contract First Amendment protections. His purpose is to vastly expand government’s power — i.e., the power of incumbent legislators — to write laws regulating, rationing or even proscribing speech in elections that determine the composition of the legislature and the rest of the government. McGovern’s proposal vindicates those who say that most campaign-finance “reforms” are incompatible with the First Amendment...

His “People’s Rights Amendment” declares that the Constitution protects only the rights of “natural persons,” not such persons organized in corporations...

McGovern stresses that his amendment decrees that “all corporate entities — for-profit and nonprofit alike” — have no constitutional rights. So Congress — and state legislatures and local governments — could regulate to the point of proscription political speech, or any other speech, by the Sierra Club, the National Rifle Association, NARAL Pro-Choice America or any of the other tens of thousands of nonprofit corporate advocacy groups, including political parties and campaign committees.

Newspapers, magazines, broadcasting entities, online journalism operations — and most religious institutions — are corporate entities. McGovern’s amendment would strip them of all constitutional rights. By doing so, the amendment would empower the government to do much more than proscribe speech. Ilya Somin of George Mason University Law School, writing for the Volokh Conspiracy blog, notes that government, unleashed by McGovern’s amendment, could regulate religious practices at most houses of

worship, conduct whatever searches it wants, reasonable or not, of corporate entities, and seize corporate-owned property for whatever it deems public uses — without paying compensation. Yes, McGovern’s scythe would mow down the Fourth and Fifth Amendments, as well as the First.

One can argue for the constitutionality of campaign finance regulations on several grounds. But doing so on the basis that people organized into corporate entities have no constitutional rights does indeed lead us down the dangerous path dramatically illustrated by the Peoples’ Rights Amendment.

The Occupy Wall Street movement is often seen as a left-wing counterpart to the Tea Party movement. Until recently, however, OWS has differed from the Tea Party in so far as it paid little attention to constitutional issues. By contrast, constitutional issues are a central focus of the Tea Party, which claims that the courts have departed from the original meaning and have allowed the federal government to seize too much power. As I explained in this article, the Tea Party fits the classic model of “popular constitutionalism” – a popular movement that makes constitutional issues a central focus of its agenda. Until now, such issues have been mostly peripheral for OWS.

Today, however, a group inspired by OWS is holding a series of “Occupy the Courts” protests, which do focus on constitutional issues, mostly attacking the Supreme Court’s campaign finance decisions:

The “Occupy” movement will turn its focus on the nation’s highest court Friday as organizers plan to gather around the Supreme Court building dressed like justices and singing songs of the Motown group, The Supremes.

The event is being held around the two-year anniversary of the Supreme Court decision in the case of Citizens United v. Federal Election Commission, which removed many limits to corporate spending in federal political campaigns, organizers say....

The one-day event dubbed “Occupy the Courts” is organized by the grassroots group called Move to Amend and was inspired by the Occupy Wall Street participants, organizers said.

“Move to Amend volunteers across the USA will lead the charge on the judiciary which created — and continues to expand — corporate personhood rights,” the Occupy the Courts website states.

There is some irony in the OWS protestors campaign against “corporate personhood.” OWS gets a great deal of financial and organizational support from labor unions and other left-wing organizations that are, legally speaking, organized as corporations. Labor unions were, in fact, among the biggest beneficiaries of the Supreme Court’s Citizens United decision, which the OWS protesters revile. Do the protesters believe that labor unions and left-wing nonprofits have First Amendment rights? Should the government have unconstrained authority to forbid unions and other corporate entities from spending money on OWS protests and other forms of political speech? If not, then the OWS protesters cannot categorically reject the idea that people organized as corporations have constitutional rights too.

Perhaps the real argument is that only profit-making corporations should be denied constitutional rights, while unions and nonprofits fall in a different category. But there is nothing in the text, structure, or history of the Constitution to support any such distinction. Freedom of speech applies just as readily to speakers motivated by economic self-interest as those with more altruistic motives. Moreover, economic self-interest is a big part of the motivation of labor unions too. One of the main purposes of unions is to increase the incomes of their members. OWS itself often appeals to economic self-interest. After all, one of their central demands is the redistribution of wealth from “the 1%” to “the 99%,” including OWS activists themselves.

Such contradictions are not unusual in popular constitutionalist movements. Many Tea Party supporters, for example, continue to back the federal War on Drugs, despite the fact that much of it is unconstitutional under a limited, originalist interpretation of congressional power.

Whether OWS addresses the contradiction in their position, and, more generally, tries to develop a coherent constitutional vision remains to be seen. It’s possible that OWS will, over time, make constitutional issues a major part of their agenda, thereby becoming a full-blown popular constitutional movement. It is also possible that they will quickly move back to focusing on other matters. If I had to guess, I would predict that constitutional concerns are unlikely to become a central focus of OWS. They have too many other issues that interest them more. However, the movement is still relatively new and could easily develop in unexpected directions.

UPDATE: Lest there be any doubt, Move to Amend, the OWS offshoot that organized the “Occupy the Courts” protests states on their website that their position is that “human beings, not corporations, are the persons entitled to constitutional rights.” They don’t just think that Citizens United was wrongly decided. They believe that corporate entities should not be able to claim any constitutional rights at all. That, of course, includes not only free speech rights for unions and nonprofit corporations, but also numerous other rights.

UPDATE #2: I should acknowledge an error: Contrary to what I previously thought, most unions are not organized as corporations, but have a separate legal status of their own. I very much regret the mistake and apologize for it.

At the same time, it is important to recognize that unions, like corporations were freed from restrictions on independent campaign-related speech by the Citizens United decision, and the Court’s reasoning in both cases was the same. Moreover, the “corporations aren’t people” argument for restricting corporate speech still applies to unions with equal force. Unions are no more “natural” persons than corporations are. Both are legal entities with special rights, obligations, and privileges defined by the government. In some ways, unions actually have more legal privileges than corporations do. For example, unlike business corporations, they are exempt from federal income taxation.

A CNN article by Jeffrey Toobin asserts, among other things, that

The political effect of, if not motivation for, the [Citizens United] decision was clear: Citizens United looks to be a big win for Republicans, who are the likely beneficiaries of the newly lubricated corporate largesse.

But is that really so? In California, one of the 26 states where independent expenditures for and against candidates have long been legal, a recent Fair Political Practices Commission report suggests that — among the top 10 independent spending committees, which together spent nearly half the total amount that was independently spent — unions probably outspent corporations by roughly 2 to 1 (click on the link for more details). [UPDATE: For greater precision, I added the material between the dashes, which I had originally omitted in this post, though I had included it in the post I linked to.]

Of course, perhaps things are different in other states (I haven’t seen any data from other states), and perhaps they will end up being differently in federal elections (no-one can know for sure until it happens). I’d love to see any more data on the subject, of course. I’d also love to see how lopsided union independent spending is in favor of the Democrats, and how lopsided corporate independent spending is in favor of the Republicans. If, for instance, unions spend overwhelmingly to elect Democrats while businesses split their spending more evenly (true for contributions by PACs to candidates, but I can’t say whether it would also be true for independent expenditures from unions’ and corporations’ general treasuries), then the net effect might favor Democrats even if corporations spend more total than unions do.

I asked Jeffrey Toobin whether he had more data on this, but he replied that his statement was an inference from two circumstances: (1) Corporations are generally much richer than unions. (2) Unions and union supporters have generally expressed upset at Citizens United, while business groups have generally expressed pleasure. And the inference seems plausible.

On the other hand, the inference is hardly dispositive. Corporations might be less inclined than unions to spend their wealth on independent expenditures, for instance, perhaps because corporations think that when they are identified as the funders, many listeners will be turned off from the message. And the overall tenor of unions and business groups’ statements may more reflect their political alliances than accurate predictions of the decision’s effect. It makes sense that those on the Left who are skeptical of the position of the liberals on the Court (and in the academy), and those on the Right who are skeptical of the position of the conservatives, would be more likely to stay quiet. And while this too is speculation on my part, it is supported by the one solid piece of evidence that I have: the California data.

So let me say again: I’d love to see whatever other data there might be in the 26 states that have long had a Citizens United-like regime in which corporations and unions were free to speak in favor of and against political candidates. Perhaps it will show that California was an anomaly, or perhaps it will yield results much like California’s. But it seems to me that before we hypothesize that Citizens United will clearly give more of an edge to Republicans, we ought to consider the data. And the data that I’ve seen so far actually points in the opposite direction.

UPDATE: When it comes to federal campaign contributions — not independent expenditures — corporate PACs outcontributions labor PACs by more than 4:1. But I’m not sure that data on money-limited contributions by PACs (PACs may only donate relatively small sums to each candidate under federal law) tell us much about unlimited independent expenditures by corporations and unions themselves; that’s why I’d like to see data, such as California’s, on actual independent expenditures from general corporate and union treasuries.

Still, if you do think that the results for independent expenditures post-Citizens United would mirror results for PAC contributions pre-Citizens United, then those would favor Democrats. Labor union PAC contributions favored Democrats by a 92%-8% margin and corporate PAC contributions favored Republicans only by a 51%-49% margin, so that the sum was a 57%-43% margin in favor of PAC contributions to Democrats.

FURTHER UPDATE: Commenter Blar points out that in 2004 and 2006, Republicans got substantially more corporate+union PAC money than Democrats. In 2002, the corporate+union PAC numbers were nearly evenly split.

One of the standard arguments put forward by critics of the Supreme Court’s decision protecting corporate political speech in Citizens United is that people aren’t entitled to constitutional rights when they use corporate resources because corporations are “state-created entities.” If the state can create an entity, it supposedly also has the power to define its rights any way it pleases. This is slightly different from the argument that people using corporate resources don’t deserve constitutional protection because corporations aren’t “real people.” But it has many of the same weaknesses, and some additional ones as well.

I. Media Corporations are “State-Created Entities” Too.

The first problem is that, like the “real people” argument, it applies to media corporations as well. On this view, the government would be free to censor the New York Times, Fox News, the Nation, National Review, and so on. Nearly every newspaper and political journal in the country is a corporation. If the Supreme Court accepted this view, it would have to overturn decisions like New York Times v. Sullivan and the Pentagon Papers case.

II. The Impact on Other Constitutional Rights.

A second issue is that this logic applies not only to corporate free speech rights, but to all other constitutional rights exercised through the use of corporate resources. If people using state-created entities don’t have free speech rights, they don’t have any other constitutional rights either. After all, the supposed power to define the rights of state-created entities isn’t limited to free speech rights. Thus, government would not be bound by the Fourth Amendment in searching corporate property (including employee offices). It could take corporate property for private use without paying compensation because the Fifth Amendment would no longer apply. It could forbid religious services on corporate property (including that owned by churches, most of which are after all nonprofit corporations). If the Free Speech Clause of the First Amendment doesn’t apply to corporate property, neither does the Free Exercise Clause. And so on.

III. Nearly Everyone and Everything is Probably a “State-Created Entity.”

Third, it’s important to consider what is meant by “state-created entity.” If the term refers only to institutions that literally would not exist absent state authorization, it does not accurately characterize many, perhaps most corporations. If the federal government passed a statute abolishing corporate status tomorrow, most actual corporations would still exist and still continue to engage in the same business or nonprofit activities. They just would do so under different and perhaps less efficient legal rules (maybe as LLCs, partnerships, or sole proprietorships). But they wouldn’t all just collapse or go away. There would still be a demand for most of the products produced by corporations.

If “state-created entity” doesn’t refer to the mere existence of organizations currently defined as corporations but to the particular bundle of legal rights currently attached to the corporate form, then it turns out that virtually all other organizations are state-created entities as well. Universities, schools, charities, churches, political parties, partnerships, sole proprietorships, and many other private organizations all have official definitions under state and federal law. And all have special government-created privileges and obligations that don’t apply to other types of organizations.

Even individual citizens might be considered “state-created” entities under this logic. After all, the status of “citizen” is a government-created legal entitlement that carries various rights and privileges, many of which the government could alter by legislation, just as it can with those of corporations (e.g. – the right to receive Social Security benefits, which the Supreme Court has ruled can be altered by legislation any time Congress wants). In that sense, “citizens” are no less “state-created” entities than corporations are.

So government could enact laws requiring citizens to limit their political speech in exactly the same ways in which corporate speech can be limited (or at least condition their continued status as citizens on obedience to the government’s censorship rules). It’s true, of course, that the physical person who has the legal status of “citizen” would still exist even if that status did not. But the physical property and other assets of the legal entities known as corporations would also continue to exist if corporate status were abolished. Indeed, as noted above, many of the entities themselves would also continue to exist under different legal forms. Perhaps you want to argue that native-born citizens aren’t “state-created” entities because the Constitution requires that they be granted citizenship at birth. If so, naturalized citizens are still “state-created” since Congress has the discretion to decide which if any foreigners will get citizenship rights.

By now, the main point should be clear. If you define “state-created entity” narrowly, then it won’t include most corporations. But if you define it broadly as any legally defined status that carries government-granted rights or privileges, then pretty much every important private organization is a state-created entity. Individual citizens may be “state-created entities” as well, and naturalized citizens certainly are. Going down this road would destroy constitutional rights for just about everyone. That may be why even the liberal justices most enthusiastic about campaign finance regulation have been unwilling to really bite this particular bullet. True, Justice Stevens’ dissent does note that “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it.” Yet even Stevens stops short of stating that this by itself proves that corporations don’t have free speech rights. I doubt that Stevens and the other liberal justices are willing to really follow that logic. For example, they’re not going to overrule New York Times v. Sullivan or conclude that the government has the power to search corporate property unconstrained by the Fourth Amendment. Yet that is where the “creature of law” argument inexorably leads. The better approach is the common sense conclusion that people are entitled to full constitutional rights whenever they use their privately owned resources to exercise them, whether those resources are legally assigned to “state-created entities” or not.

UPDATE: I should clarify that in this post, as before, I’m not arguing that corporations themselves are “persons” with constitutional rights. Rather, I’m asserting that their owners and employees are such persons and that that status enables them to use corporations to exercise their constitutional rights. Similarly, partnerships, universities, schools, and sole proprietorships aren’t people either. But people can use them to exercise their constitutional rights, and the government can’t forbid it on the sole ground that they are using assets assets assigned to “state-created entities.” This distinction was unfortunately obscured in the current post by my shorthand references to “corporations’” rights. I only used that terminology because it’s cumbersome to always write something like “people exercising their constitutional rights through corporations.”

In my last post, I explained why it’s a mistake to deny free speech rights to people organized as corporations on the grounds that corporations aren’t “real people.” It’s true, of course, that a corporation is not a person. But the people who own and operate it are. “Corporate speech” is really just speech by people using the corporate form.

The mistake here is one we see in other contexts. Critics often denigrate rights by conflating them with the means used to exercise them. For example, a standard rhetorical attack on property rights is the claim that property rights aren’t really “human rights.” Property has no rights, it is said. Its true of course that property as such is not entitled to any rights. However, property rights actually belong to the people who own the property, not the physical objects themselves. As the Supreme Court explained in its 1972 decision in Lynch v. Household Financial Corporation:

[T]he dichotomy between personal liberties and property rights is a false one. Property does not have rights. People have rights. The right to enjoy property without unlawful deprivation, no less than the right to speak or the right to travel, is in truth a “personal” right.... In fact, a fundamental interdependence exists between the personal right to liberty and the personal right in property.

When I criticize decisions like Kelo v. City of New London, the objection is not that government has violated the rights of land or buildings, but those of the people who own them.

This rhetorical tactic is most often used by liberals and leftists to criticize rights advocated by conservatives and libertarians. However, it’s important to understand that the same ploy can easily be turned on rights favored by the political left. Consider, for instance, the right to use contraceptives upheld by the Supreme Court in Griswold v. Connecticut. Contraceptives, after all, have no rights. They are inanimate physical objects, like any other property. Under the Connecticut law banning their use, women were still free to avoid pregnancy (e.g. – by abstaining from sex, or by using the rhythm method). They just couldn’t use this particular type of property to do it. It’s easy to see that any such critique of Griswold would be specious. After all, contraceptives are just a means that women use to exercise their rights to reproductive choice, albeit a particularly effective one.

The same point applies to corporate speech and property rights. When corporations “speak,” they are just a means that individuals use to exercise their rights of free speech – often a more effective means than the available alternatives. And just as the right protected in Griswold actually was a human right rather than a right belonging to the contraceptives, property rights are rights of human owners, not rights belonging to tracts of land or objects.

Abjuring this common rhetorical tactic doesn’t by itself resolve longstanding debates over the scope and content of human rights. You can still attack property rights or corporate free speech rights on other grounds. But it does help focus the discussion on real issues and reduce rhetorical distractions.

Justice Stevens’ dissent in Citizens United argues that corporations should have sharply reduced First Amendment rights, at least when it comes to speech about political candidates. The obvious response, which the majority makes at length, is that this would leave the government free to impose similar restraints on newspapers, magazines, broadcasters, and others, since nearly all of them are organized as corporations as well. (Congress has so far exempted most media corporations from these restrictions; but the argument that corporations have reduced First Amendment rights would suggest that these exemptions are just a matter of legislative grace, and that Congress could restrict media corporations if it wanted.)

Not so, argues the dissent (echoing the views of many commentators who support restrictions on corporate speech). “The press plays a unique role not only in the text, history, and structure of the First Amendment but also in facilitating public discourse” (p. 85). “The text and history [of the First Amendment] highlighted by our colleagues suggests why one type of corporation, those that are part of the press, might be able to claim special First Amendment status, and therefore why some kinds of ‘identity’-based distinctions might be permissible after all.” (P. 40 n.57.) More broadly, I’ve heard commentators argue, media corporations have nothing to fear from court decisions that treat the First Amendment as less protective of the rights of corporations, since media corporations have special protection under the Free Press Clause.

Yet why would that be so? If the Free Speech Clause doesn’t cover corporations (or doesn’t cover them as strongly), why should the Free Press Clause be read as strongly protecting corporations? Say the dissent is right that “there is not a scintilla of evidence to support the notion that anyone believed [the First Amendment] would preclude regulatory distinctions based on the corporate form” (pp. 34-35), and that this is relevant today (something I’m skeptical about, since there’s also no evidence to the contrary, and since the lack of any evidence may suggest that modern business corporations weren’t much contemplated by the Framers). This would simply suggest that the Free Press Clause of the First Amendment would allow restrictions on media corporations just as the Free Speech Clause of the First Amendment would allow restrictions on other corporations.

Nor is it enough to say that “the press” gets special protection under the First Amendment. The question still remains who qualifies as “the press” for full constitutional protection. If the argument is that the speech of corporations doesn’t fully qualify as part of “the freedom of speech,” because it comes from corporations, why should the use of the press by corporations fully qualify as part of “the freedom ... of the press”?

But beyond this, Justice Stevens simply seems to assume that “the press” refers to an industry — consider Justice Stevens’ reference to “one type of corporation, those that are part of the press” — rather than a technology. Why should we believe that this is so?

After all, the presses in the Framing era were used not just by professional newspaper publishers. They were used by book authors, by pamphleteers, and by leafleters, for whom public commentary was a sideline to their normal lines of business. They were used by politicians who wrote articles for newspapers. I know of no evidence that the “liberty of the press” was seen as excluding those speakers, and covering only professional newspapermen.

And I know of some evidence to the contrary.

Continue reading ‘Lessened Corporate First Amendment Rights and Media Corporations’ »

Others, such as senior Conspirator Eugene Volokh, are much better qualified than I am to comment on today’s important free speech decision striking down restrictions on campaign-related speech by corporations. I want to focus on the common claim that corporations aren’t entitled to free speech rights (and perhaps other constitutional rights) because they aren’t “real people.” That argument was reiterated in Justice John Paul Stevens’ dissenting opinion today:

Stevens hammers, more than once this morning from the bench on the principle that corporations “are not human beings” and “corporations have no consciences, no beliefs, no feelings, no thoughts, no desires.” He insists that “they are not themselves members of ‘We the People’ by whom and for whom our Constitution was established.”

It’s true, of course, that corporations “are not human beings.” But their owners (the stockholders) and employees are. Human beings organized as corporations shouldn’t have fewer constitutional rights than those organized as sole proprietors, partnerships, and so on. In this context, it’s important to emphasize that most media organizations and political activist groups also use the corporate form. As Eugene points out, most liberals accept the idea that organizational form is irrelevant when it comes to media corporations, which were exempt from the restrictions on other corporate speech struck down by the Court today. The Supreme Court (including its most liberal justices) has repeatedly recognized that media corporations have First Amendment rights just as broad as those extended to media owned by individuals. Yet the “corporations aren’t people” argument applies just as readily to media corporations as to others. After all, newspapers, radio stations, and TV stations “are not human beings” and they too “have no consciences, no beliefs, no feelings, no thoughts, no desires.” We readily reject this reasoning in the case of media corporations because we recognize that even though the corporations in question are not people, their owners and employees are. The same point applies to other corporations.

There are various other arguments for treating political speech by people organized as corporations differently from that by people using other organizational forms. I’m not going to try to address them all here. We can discuss them more productively if we first dispense with the weak but popular claim that corporations aren’t entitled to freedom of speech because they aren’t people.

UPDATE: I should mention that it’s irrelevant that the First Amendment specifically protects the freedom of “the press.” It does not specifically mention “press” entities organized as corporations. So if you believe that freedom of speech doesn’t apply to corporations because they “aren’t people,” the same point applies to freedom of the press. As co-blogger Eugene explains, “freedom of the press” is not a constitutional right for a particular group of people or organizations. Rather it is a right to engage in a certain class of activities (such as publishing newspapers and pamphlets), whether the person doing so is a professional member of the media or not.

BELATED UPDATE [February 24, 2012]: UPDATE #2: I should acknowledge an error: Contrary to what I previously thought, most unions are not organized as corporations, but have a separate legal status of their own. I very much regret the mistake and apologize for it. I am correcting this post long after the fact because I know it is still occasionally linked and cited by others.

At the same time, it is important to recognize that unions, like corporations were freed from restrictions on independent campaign-related speech by the Citizens United decision, and the Court’s reasoning in both cases was the same. Moreover, the “corporations aren’t people” argument for restricting corporate speech still applies to unions with equal force. Unions are no more “natural” persons than corporations are. Both are legal entities with special rights, obligations, and privileges defined by the government. In some ways, unions actually have more legal privileges than corporations do. For example, unlike business corporations, they are exempt from federal income taxation.

The blog has posted items from several commentators on this, including one from me.