Corporations, Persons, and Human Dignity

The U.S. Supreme Court is once again diving into the waters of corporate personhood.

See this story, by Adam Liptak, for the NYT: Supreme Court Takes Cases on Rights of Corporations.

The Supreme Court added 14 cases to its docket on Tuesday, including three concerning the rights of corporations in unusual settings….

The story notes that two of the cases have to do with the use of the ‘state secrete privilege’ — the legal mechanism that allows the government not to submit evidence that would jeopardize national security. Both are cases to which both a corporation and the federal government are parties, and there is question about whether the state secret privilege can be used in ways that either hurt, or benefit, the corporation.

The other case is about privacy:

The privacy case, Federal Communications Commission v. AT&T Inc., No. 09-1279, will consider whether a provision of the Freedom of Information Act concerning “personal privacy” applies to corporations.

AT&T seeks to block the release of documents it provided to the F.C.C., which conducted an investigation into claims of overcharges by the company in a program to provide equipment and services to schools. The documents were sought under the freedom of information law by a trade association representing some of AT&T’s competitors.

AT&T relied on an exemption to the law for law enforcement records that could “constitute an unwarranted invasion of personal privacy.”

Personal privacy?

Yes, you read that right. In a previous ruling:

The United States Court of Appeals for the Third Circuit, in Philadelphia, ruled for the company, relying in part on a definition of “person” in the law that included corporations.

“Corporations, like human beings, face public embarrassment, harassment and stigma” because of their involvement in law enforcement investigations, Judge Michael A. Chagares wrote for a unanimous three-judge panel.

I’ve blogged before about why it is (sometimes) essential to think of corporations as persons, at least for legal purposes. But (as I’ve also argued) personhood is a complex notion, and deciding to think about corporations as persons doesn’t immediately imply attributing to them every characteristic of human persons.

Now, I don’t know precisely what Judge Chagares (quoted above) meant when he refers to the possibility of corporations facing “embarrassment, harassment and stigma.” But what he ought to have meant, I think, is that corporations (created by humans for human purposes) can suffer attacks on their reputation that can have a serious negative impact on the legitimate interests of their human creators. Roughly: if you (let’s say) unfairly impugn the behaviour or intentions of a corporation (or a non-profit for that matter) you wrongly harm the interests of the people who rely on it. What Judge Chagares needn’t have meant is that corporations possess the kind of dignity, or intrinsic worth, that we attribute to human persons, and that is the basis not just of the instrumental rights of legal personhood, but of human rights.

6 comments so far

  1. Julian Friedland on

    Hi Chris,

    I’d very much like to know what human rights, if any, you would deny to corporations.

    And if you agree with the Citizens United ruling. It was a 5-4 decision, and I tend to side with the minority on this one.

    I accept of course that corporations should have bank accounts and thus be taxed, but I think there is real danger in giving them unlimited spending rights for political speech. I am also against unlimited spending for individuals especially when so much wealth is concentrated in so few hands as it is in the U.S.

    I would thus welcome a constitutional amendment or weaker legislation restricting the definition of corporate personhood to only preserve rights that are essential to the basic functioning of business. And your example in this post would thus not qualify.

    I would add that one right corporations have that humans do not is that they cannot be put to death, largely because that might unfairly harm numerous and potentially innocent stakeholders. They can be broken up, but that is far from being something we might reasonably call “capital punishment.” So on Contractarian grounds, I think it is appropriate that this substantial additional protection should come at the price of having to bear greater transparency, for example in such cases as this.

    Best,
    Julian

  2. Chris MacDonald on

    Julian:

    You ask about “human rights” — I’m not really talking about those, per se, at least not in the sense talked about at the UN. But as far as those go, there are several “standard” human rights that wouldn’t make much sense for corporations, including the right to marry, the right to rest & leisure, the right to hold office… etc.

    I tend to agree with the Citizens United decision, though not without reservations. My main reasons are in this blog post:
    https://businessethicsblog.com/2010/02/02/free-speech-means-ends-and-citizens-united/

    I think it’s pretty difficult to say what is “essential to the basic functioning of business.” But I think it’s pretty likely that maintaining one’s reputation against character assassination has to be on the list. My investment as a shareholder is in jeopardy if the company I invest in has no protection against libel and slander.

    As for your final point: I think the appropriate quid pro quo is fair game for debate. I think corporations can sometimes be broken up without injustice, even if there is some harm to innocent stakeholders, but we need a theory of what justice in such situations looks like. At any rate, I don’t think we should consider them immune to that kind of punishment. I think I would look for other grounds on which to base transparency obligations — probably grounds rooted in the social function of corporations and markets.

    Regards,
    Chris.

  3. Julian Friedland on

    Right. It is precisely on the social function grounds that U.S. corporations are never fined out of business (BTW do you know if they can be in other developed countries?). That would be true corporate capital punishment. So I take my argument for transparency to be in line with this reasoning.

    In any case, I don’t agree at all with you on Citizens United.

    I think there are excellent reasons for limiting political speech for individuals (you don’t deny this) and even more for corporations. Protecting the interests of shareholders should not raise to this level, for shareholders are essentially (in most cases) taking on risk for personal profit. Whereas individuals have all sorts of wider and fundamental interests, concerns, and obligations when they voice political positions as democratic citizens. But this could change given, say, the advent of social enterprises such as the benefit corporation. Still, they are not citizens per se and so their rights to political speech in my view should be minimal. But then again, I believe that all rights to political speech should be limited, so the difference here between corporate rights and individual rights is rather moot in my opinion.

    So I of course agree with Kagan on the AT&T privacy case, which as I understand she will be recusing from, so in that case it will be interesting to hear the decisions. I fear it will be a split decision and simply uphold the previous ruling in favor of the company. My view is that just because you have a right as a shareholder against character assassination of the company, does not mean you have a right to hide information to protect yourself from the mere possibility of libel. Protections against libel already exist. And the social function of corporations and markets require transparency enough to keep companies from hiding their own shameful activities.

    If they expect character assassination, that is a good reason not to engage in shameful activities to begin with. Shareholders, if those are the persons you are concerned about, can always simply reinvest their money elsewhere. If this were not the case, there would perhaps be a stronger right of privacy here. Individuals however, cannot simply move their souls into a new body.

    Julian

  4. Chris MacDonald on

    Good question re being fined out of existence. I don’t know whether or how often that happens.

    I haven’t argued for any particular level of privacy rights — I’m only suggesting why the idea of such rights for corporations isn’t crazy. So I think I agree with you that the right to protect against character assassination doesn’t immediately imply a right to hide (all) information.

    As for this: “If they expect character assassination, that is a good reason not to engage in shameful activities to begin with”… well, that sounds roughly like those arguments that if you’re worried about your civil liberties, you shouldn’t do things what will get you arrested to begin with. It begs the question, assuming that all character assassination is rooted in truth. And while, yes, in principle shareholders can move their money, they’ll typically only do so after suffering a loss.

    Chris.

  5. julian Friedland on

    Truie enough. That’s why I added that there are already rights against libel. Shareholders themselves are protected best by transparency. So it’s ironic to claim that they would defend remaining ignorant of misdeeds. For if they begin to incur losses as a result, the most informed will get out with fewer losses.

  6. […] when they are the subjects of university-based research. Corporations may have, of necessity, certain legal rights, but not the same list (and not as extensive a list) as the list of rights enjoyed by human […]


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