An Everything But Merger Act?

I have been riveted by yesterday’s re-argument of Citizens United v. Federal Election Commission before the United States Supreme Court. I mean who hasn’t? At stake, as they say in media newspeak, is the entire state of campaign finance law (the astute reader will note the choice of words in this sentence and smile.) The Quantum Pontiff is not a lawyer, but he is the son of a lawyer, and greatly admires the ability of supreme court justices to herd the truth in directions more palatable to their preexisting exquisite judicial tastes (why is everyone staring at Justice Scalia?) So I would like to present to the court, if I may, some unintended consequences of their ruling in this case which they perhaps have not yet considered and which may sway the bench in its final, unbiased, empathetic, states-right based decision.

Citizens United v. Federal Election Commission is an odd case. Its origin is in the 2008 primary election when a conservative nonprofit organization, Citizens United, wanted to run ads for a movie critiquing Hillary Clinton, who was then a presidential candidate in the Democratic party primary elections. Citizens United also wanted to show the movie on a video-on-demand channel. In January of 2008 the District Court for the District of Columbia (hey that’s not even a state!) ruled against Citizens United citing violations of the McCain-Feingold Act. In particular the court ruled that the ad was an “electioneering communication” and thus subject to financial and disclosure regulations of the McCain-Feingold campaign finance law. This meant that Citizens United would have to disclose its financial backers in its ads for the movie. In addition,the court ruled that it would have to pay for the costs of airing the movie on video on demand and be prohibited from paying for this using corporate treasury funds. These were two things Citizens United did not (or could not) do.
Enter the Supreme Court (stage right.) The Supreme court heard the case in March of 2009 and was expected to rule early this summer. Instead, the Supreme Court ordered a re-argument of the case under a much broader context of whether the court should reconsider its past rulings on the ban of corporate money in elections. This re-argument is what happened yesterday. Interestingly the government backed down significantly from its earlier arguments that the video on demand was electioneering communication (and the even more outrageous claims made in March about McCain-Feingold applying to books.) Sensing an opening (and five votes) the lawyers for Citizens United pushed their case further into whether the ban on corporate funding was constitutional.
Okay, so that’s the outlines of the case. And of course there are broad political lines drawn all over this case. In particular the more conservative portion of the court is more inclined to favor overturning the banning of corporate money in elections while the more liberal portion of the court is inclined to keep the ban in place. In thinking through this case the other day, however, I was struck, much, I’m sure as Godel was upon getting his U.S. citizenship, with a major flaw in the logic of the conservatives side of the case. Or if not a flaw in logic, a consistency that I’m guessing would send Justice Scalia’s butt running for the exit.
A major basis for the argument that corporations should be allowed to spend money on election ads is extremely simple. Let’s get it from those involved in this case. (Mr. Olson is representing the Citizen United side)

JUSTICE GINSBURG: Mr. Olson, are you taking the position that there is no difference in the First Amendment rights of an individual? A corporation, after all, is not endowed by its creator with inalienable rights. So is there any distinction that Congress could draw between corporations and natural human beings for purposes of campaign finance?
MR. OLSON: What the Court has said in the First Amendment context, New York Times v. Sullivan, Rose Jean v. Associated Press, and over and over again, is that corporations are persons entitled to protection under the First Amendment.

(this is followed by a very crafty Ginsburg trying to challenge this idea based upon foreign ownership of corporations…a trick right out of mad dog Scalia’s playbook.) Corporations have free speech rights protected by the first amendment, and thus they should not be banned from election communications (there are about a trillion subtle points involving the words “compelling government interest” and “narrow tailoring” here, but let’s just run with it.)
In thinking about this last night, it occurred to me, as Justice Ginsburg alludes to above, that the extension of the rights of individuals to corporations leads down a slippery slope. I for one would ask the following question. Supposing that we grant the rights of individuals to corporations, free speech, protection from unreasonable search and seizure, protection from quartering of troops, etc. Well then I have a question. Why are we allowing the merger of Inbev Inc. and Anheuser-Busch Companies, Inc?
I mean certainly Inbev and Anehuser-Busch are male (beer is male.) But if these are individuals, then well I do not understand why this merger is different in any manner, than, well, a marriage between two men. Indeed looking over recent major mergers I can only conclude that there is rampant male on male corporate marriages occurring everywhere! (Sorry Zappos and Amazon, you don’t qualify.) So I would ask, Justice Scalia, how you can square your clear support against gay marriage with the millions of mergers between two individuals corporations of the same sex? One day your repelling campaign finance laws, and the next, well, the homosexual agenda will have been triumphant!
[The Quantum Pontiff is, as stated earlier, not a lawyer, nor a homophobe, nor, sadly, a Supreme Court justice. He greatly amuses himself, however, by watching readers read his long flimshaw blog posts. Thank you for your time.]

15 Replies to “An Everything But Merger Act?”

  1. It’s not that corporations have free speech rights in and of themselves. It’s that corporations are made of people, and people have free speech rights. The very same amendment that protects free speech also explicitly protects the right of people to assemble themselves into groups for political purposes.

  2. I thought it was soylent green that was made of people. But still mergers seem to be vast male on male, female on female, and male on female unions which make a mockery of the institution of marriage.

  3. The plain language of the constitution is pretty clear: “Congress shall make no law… abridging the freedom of speech”, with the ellipsis representing various other rights not to be abridged. It doesn’t say speech for just individuals acting alone, or individuals not spending money to promote their speech, or only if the speech is morally responsible, or anything else.
    The board of directors of Giantbusiness, Inc. may not be the most sympathetic people in the world, but the constitution is quite clear. As Americans, they have the freedom of speech. If they want to use the resources of their company in a way that’s agreeable to the ownership, nothing in the first amendment even hints at their being excluded from exercising their rights.
    And that’s the problem with Scott and D.C.’s argument about other rights (like voting) that corporations don’t exercise: a corporation is just a convenient legal way of organizing individuals into a group for the purposes of business tax and liability law. Far from leading down the slope to voting corporations, this campaign finance law is more akin to forbidding the board members from voting at all. If I can put a political sign on my property, why can’t owners of a business use that property to further their own free speech?

  4. Well, for one, the corporation may exert its speech without the consent of the individual shareholders. If your wife doesn’t want you to put up that sign on the front porch, is that a restriction of freedom of speech?

  5. The final call about speech on a piece of property is made by the owner. If a majority of the the shareholders (ie, owners) object, that’s that. If your wife objects to your yard sign, it’s not a free speech question. The constitution says congress shall make no law. Your wife can do whatever she wants. 😉
    The “fire in a theater” thing is an unrelated kettle of fish, but in any case it doesn’t introduce an inconsistency here. A corporation presumably couldn’t put an ad on a movie screen saying “Holy crap there’s a fire, run!” any more than in individual could.
    D.C. – in my way of thinking, an activist is a judge who makes things up that isn’t in the constitution at all. Sadly none of the current nine are immune, though some are better than others. See Gonzales v. Raich for a bipartisan instance.
    And finally, in my opinion the 14th amendment applies to the people who comprise the corporation. That’s all. Their business status neither enhances or diminishes those rights. This is my opinion, not a principle written into law, but it tends to be consistent with what the courts have actually held.
    I’m not arguing that a corporation is a magical entity deserving special status. I’m arguing that it’s simply a piece of property with owners, and as such can be used by those owners to further their free speech rights enshrined in the constitution. Think about a specific example: ScienceBlogs, LLC is a corporation. Are the political opinions of its writers any less deserving of protection because of that fact? Would they be any less deserving if those opinions were expressed on TV rather than online?

  6. The problem is that a corporation is not a moral agent.
    When a defense attorney argues a case he my argue a position that he personally does not believe in. He is acting as a limited legal agent acting in the narrow legal interests of his client. As long as he obeys the ethical constraints of his profession he has no moral responsibility for his argument. The client is the moral agent.
    The officers of a corporation are in much the same position. They may take positions and do things that they personally would not do. They are only acting in the narrow financial interests of the corporation.
    The difference is that with a corporation there is no underlying moral agent to which moral responsibility is ultimately discharged. The officers do not have to be morally responsible. The stockholders do not know and may not even be allowed to know what is done in their narrow financial interests. There is no moral agent at all. You are granting human rights to an automation.

  7. @#1: Yes, but the “individuals” employed by or invested in a corporation did not “assemble themselves into groups for political purposes”. They came together for an economic purpose, not a political one. The latter sounds like a PAC (which AFAIK is legally okay). In fact, it is likely that the Corporation might advocate political speech that is both unknown to and actually in opposition to the individual citizens who are employed by or invested in the Corporation. Does the Corporation have a right to political speech without asking what the “individuals” of the Corporation actually want their Corporation to say?
    Per the slippery slope. Corporations are legal and economic entities that at times (such as in signing contracts) can act as an individual. But, if a Corporation has a First Amendment right to free speech, what about the other “individual rights” in the Constitution? Does a Corporation have a right to vote? If so, how many times? Does a Corporation have an individual right to bear arms? If not, then where does one draw the line between a Corporation and an Individual?
    And BTW, aren’t these right wing judges/justices supposed to be Strict Constructionists? Isn’t their stated purposed to apply the “plain language” of the Constitution? Where in the Constitution do they find any “plain language” justifying Corporate Rights? Sounds like an “activist judge” to me, “legislating from the bench”.

  8. regarding ‘activist judges’, I find you can pretty reliably find out what a republican/conservative wants to do by reading up on what they complain most vociferously about.
    I am probably artificially limiting this thesis a bit, but really, find a loud complaining republican from, let’s say the last 20 years. what was their signature complaint. then check to see if they have been guilty of any criminal acts or ethical transgressions. I suspect the odds of the two being similar if not actually identical are pretty good.
    so it is with ‘activist judges’ and ‘legislating from the bench’

  9. Matt, that’s a good line of argument for anyone who wants to reason from the Constitution’s core principles. In other words, a judicial activist. It’s the exact thing that a “strict constructionist” rants about most loudly.
    Related question: does the 14th Amendment apply to corporations?

  10. Matt,
    “If I can put a political sign on my property, why can’t owners of a business use that property to further their own free speech?”
    The owners of a business can. The problem with a corporation is that the stockholders may have no idea what the officers of the corporation are doing in their name. They may not even have any right to know. In the modern world of mutual funds they may not even know they own stock in the corporation.
    Even the officers of the corporation may not agree with the position their lobbyists are arguing for but feel duty bound to support it anyway because they are payed to further the interests of the corporation. This is exactly like a defense attorney who may personally believe that a child molester should be taken out back and shot is nevertheless ethically bound to argue for their release.
    The difference is that a defense lawyer is acting in the narrow legal interests of a client who is the moral agent. The owner of a private business is fully authorized to act as the moral agent for the business. But in a publicly traded corporation there is no moral agent. You are granting human rights to an automation.

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