Sunday, February 05, 2012

A Zen Buddhist’s View Of The Illusion Of Corporate Personhood - 2

I previously posted Section A of Part 2 of my planned essay. Here, Section C of Part 2, is another piece of the puzzle of corporate personhood.

2. A Brief History of the Stranger Than Fiction Doctrine of Corporate Personhood

C. The Strange Case of Santa Clara County v. Southern Pacific R.R. Co. 

In the annals of history, both legal and lay, the case of Santa Clara County v. Southern Pacific R.R. Co. (1886), 118 U.S. 394, has been credited with legally establishing the court created doctrine of corporate personhood.  And because of this, Justice John Marshall Harlan, the author of the opinion has been called the father of the doctrine of corporate personhood.  The truth is stranger.  The Santa Clara case was about whether fences on the side of the tracks should be taxed by the state government or by the local counties, and thus asked the narrow legal question:  Was the assessment of the railroad companies= fences that were taxed by the state as part of the Arailway@ legal, or should the fences have been taxed by local government separately as Aother property@ improvements?  

The railroad corporations argued the state assessment was invalid because the fences were not part of the Arailway@ but were Aother property@ improvements taxable only by localities. As an alternative argument the railroads argued that the assessment was invalid because the railroad companies had not received equal protection under the 14th Amendment since other corporations and natural persons received the Aother property@ status for local taxation. This question of “equal protection” of course is the question that was the lynch pin in the theory of corporate personhood and was the holy grail that the railroads and other corporations had been reaching for by bringing a multitude of cases to the Supreme Court.

The Federal Court of Appeal ruled on the equal protection issue in favor of the railroad and found that the railroad did indeed have the equal protection of the 14th Amendment, and so that court never addressed the state law issues. 

When the Santa Clara case was decided by the Supreme Court Justice John Marshall Harlan wrote the opinion of the court.  This opinion by Justice Harlan is the only legally binding result and authority of the Santa Clara case.  But whatever judicial sins Justice Harlan may have had, Acreating@ the legal fiction of corporate personhood in his opinion in the Santa Clara case was definitely not one of them.  Justice Harlan=s opinion upheld the ruling of the trial court in favor of the railroad, but not for the 14th Amendment reason the railroad wanted. 

Harlan found that the appellate circuit court had ruled in backwards order, because the case should have been decided on the state law basis, not on Athe grave questions of constitutional law upon which the case was determined below.@  Justice Harlan concluded, AAs the judgment can be sustained upon this ground [of state law] it is not necessary to consider any other questions raised by the pleadings and the facts found by the court.@  Thus the corporate personhood question was never even ruled upon by the Santa Clara case. In fact, the Santa Clara case specifically overruled the lower appellate court’s attempt to insert the 14th Amendment into the case.

So how is it that this case is uniquely misunderstood in the history of law and the development of the doctrine of corporate personhood?  Simply, it was the later deliberate misrepresentation of the law by Supreme Court Justice Stephan J. Field. In the Santa Clara case, the summary minutes of the case history prepared by the court clerk states in its introduction:

AOne of the points made and discussed at length in the brief of counsel for defendants in error was that >Corporations are persons within the meaning of the Fourteenth Amendment to the Constitution of the United States.= Before argument MR. CHIEF JUSTICE WAITE said: The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations.  We are all of opinion that it does.@ 

However, the statement of Chief Justice Waite had absolutely no force of law as it was merely the expression of his own personal opinion before arguments even began, and was not only not incorporated into Justice Harlan’s written opinion on the case, the written opinion explicitly rejected the meaning of this comment as being part of the decision on the case.  Prior to this case there had been no Supreme Court decision that ever stated that corporations are persons within the meaning of the 14th Amendment, and Justice Harlan’s opinion in this case specifically stated again that the Supreme Court was not making that ruling.

Thus, the doctrine of corporate personhood was not promulgated within the authoritative opinion of court hearing the Santa Clara case, but was stated only in the unauthoritative dicta (side comment) of the Chief Justice from the bench that was said even before the oral arguments had begun.  Therefore the Santa Clara case has absolutely no precedent value on the issue of corporate personhood.  There was in fact no legal reason for the court clerk to have inserted the comment into the summary of the case other than as an interesting note of history. At the time before recordings, the minutes of the comments at the hearing were the only official record of the proceedings and were attached to the opinions even though the minutes were not part of the opinions. The general and commonly acknowledged rule is that there are many comments made by Justices during oral argument, and it is beyond dispute that none of those comments have any authority or precedent and are only of value in trying to divine the reasoning behind the individual justice’s later opinion.

The Real Father of Corporate Personhood

Afterwards, even though the clerk had merely inserted some of the bench comments into the summary of the case, not the opinion of the case, the Santa Clara case became known as the original source of judicial authority on the doctrine of corporate personhood due to the intentional misrepresentation by Justice Stephen J. Field, who is the real “father of corporate personhood.”  How can it be said that Field’s misrepresentation was intentional?  As it turns out, Justice Field of the Supreme Court  was sitting on the 9th Circuit Court of Appeals at the time of the Santa Clara case and he was the author of the appellate decision that found that corporations were persons.  In those days the Justices of the Supreme Court also served on the appellate circuit courts when not in session in Washington. Thus it was his own opinion that had been overruled by the Supreme Court in the Santa Clara case.  So there is no conceivable way that he did not know that the Santa Clara case had overruled his own appellate opinion and in doing so had specifically refused to rule on the question of corporate personhood as he had hoped it would.

Who was Justice Stephan Johnson Field?  He was a lawyer from New York who went to California in the 1848 Gold Rush.  Within three days of arriving in Marysville California, he was elected Alcade (mayor) and instituted the whipping post as a substitute for the expense of incarcerating prisoners.  He was then elected to the State Assembly in 1850 but lost reelection. He was then elected to the California Supreme Court in 1857.  While a Justice on that court, he carried two pistols in a specially made coat so that he could fire his weapons through the coat’s pockets.  From the California Supreme Court President Lincoln appointed Field to the US Supreme Court in 1863. 

Field’s career on the Supreme Court shows that he never met a corporation that he didn’t like.  As soon as the 14th Amendment was adopted, Field began looking for ways to bring corporations into its penumbra.   It was obvious to any observer that the 14th Amendment was originally intended to guarantee equal protection of the laws to free slaves who were now recognized to be citizens of the United States.  However, the railroads and other big corporations immediately perceived that, if the 14th Amendment could be made to apply to corporations that were already recognized as “artificial persons” as “persons under the 14th Amendment,” then this would be the mechanism for the legalization of their supremacy over natural persons in the realm of politics.   Field was central to the Supreme Court’s expansion of the 14th Amendment protections for everyone, and especially including corporations, everyone that is except the originally intended recipients of the 14th Amendment, the freed slaves and other previously subjugated minorities such as the Chinese.

Two years after the Santa Clara case, in Pembina Consolidated Silver Mining and Milling Company v. Pennsylvania (1988) 125 U.S. 181, Justice Field wrote in the majority opinion that corporations are not Acitizens@ within the meaning of the Privileges and Immunities Clause.  He had to say so because a previous case had already stated this explicitly, and the Court was not about to overturn this precedent.  Field explained Athe term citizens, as used in the clause, applies only to natural persons, members of the body politic owing allegiance to the State, not to artificial persons created by the legislature, and possessing only such attributes as the legislature has prescribed.@  This is of course, if reason and logic prevailed, the same reasoning that should lead to the same conclusion regarding the question of whether a corporation is a “person” under the 14th Amendment’s definition of persons as “persons born or naturalized in the United States.”

However, in the Pembina case, Field incredibly came to the opposite conclusion as to the term “person” in the 14th Amendment’s next sentence and was able to do so because no other case had ruled on this question.  In a gratuitous and superfluous statement of dicta, having nothing to do with the outcome of the Pembina case, Field wrote, AUnder the designation of person there is no doubt that a private corporation is included.  Such corporations are merely associations of individuals united for a special purpose, and permitted to do business under a particular name, and have a succession of members without dissolution.@  Field provided no legal rationale whatsoever why corporations are not “citizens” since they possess only such attributes as the legislature prescribes, but are “persons” while possessing only the very same attributes.  In other words, Field was doing away with the previously vital distinction between “natural” and “artificial” in the legal fiction of a corporation’s personhood.

For the first time in a Supreme Court decision, Field was stating this new doctrine without referring at all to the Santa Clara case or to any other specific previous case to support his statement, a statement that was not even necessary and had no specific application to the case at hand.  This is the earliest case that actually states in the body of its opinion that private corporations are included as persons under the 14th Amendment.   And of course, that holding was not even necessary because his opinion in even this case concluded that the 14th Amendment didn=t apply to the case, even when corporations are considered as persons.  But in order give corporate personhood a foothold into case law, Field inserted the doctrine without otherwise explaining any legal basis for it.

Then finally in Minneapolis & St. Louis R. Co. v. Beckwith (1889) 129 U.S. 26, issued only a year after Pembina and three years after Santa Clara, there came a case about three hogs that had been killed by a train.  Under the Iowa statute, after a hearing a justice of the peace awarded damages in favor of the farmer. The railroad then ignored the order and under the same statute the award was doubled for failure to pay.  The railroad challenged the statute saying they were denied equal protection under the 14th Amendment because the statute only applied to railroad corporations and the double award provision was not in other statutes that applied to other types of corporations.  The railroad was claiming that they deserved equal protection because not all corporations were being treated equally under the law. 

In a legally fascinating sleight of hand, Field was able to turn this case into the watershed that the corporations were seeking. The court majority, with Field writing the opinion, found first that the 14th Amendment applied to corporations, but that the state law in this case had not violated the 14th Amendment because the state’s police power in enacting the law had a reasonable basis to make the law apply only to railroads and the 14th Amendment required only that like persons were treated alike, that is, that all railroad corporations be treated alike, not that all corporations be treated alike.

Then to support his unprecedented position with precedent, Field wrote: ACorporations are persons within the meaning of the clauses in the Fourteenth Amendment to the Constitution concerning the deprivation of property, and concerning the equal protection of the laws.  Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394, and Pembina Mining Co v. Pennsylvania, 125 U.S. 181, followed.@  Of course, Field knew that Santa Clara did not make that holding and that his own opinion in Pembina didn=t even mention Santa Clara, much less follow it as precedent.  He knew as well that the reference in Pembina to corporate personhood was judicial dicta inserted by himself having no application to the ruling itself.

So it was Justice Field who singlehandedly inserted the doctrine of corporate personhood into Supreme Court opinions and exploited his false citation to Santa Clara as the source of the earliest precedent for the doctrine of corporate personhood to create a false history of corporate personhood.  Subsequently, people, including the Supreme Court in later decsions, have taken Field's false citation to the Santa Clara case as proof that the Santa Clara case is the first case that established corporate personhood as a precedent.

To date, no Supreme Court case has ever directly considered and provided the legal rationale to support the argument on the original issue of whether and why corporations are included as persons under the 14th Amendment when the 14th amendment only defines persons as “persons born or naturalized in the United States,”  For example, if taken at its face value, under the naked conclusion of Minneapolis & St. Louis R. Co. v. Beckwith, since corporations are persons under the 14th Amendment, corporations should be able to be elected to congress under Section 3 of the 14th Amendment that refers to persons elected to Congress.

Saturday, February 04, 2012

A Zen Buddhist’s View Of The Illusion Of Corporate Personhood - 1

I'm working on an essay about the illusion of corporate personhood as viewed by the perspective of this zen student. My grand design (or delusion of grandure) is to have sections dealing with:

1. How Buddha Dharma Views The Illusion of Personality.

2. A Brief History of the Stranger Than Fiction Doctrine of Corporate Personhood
A. The Heart of the American Revolution Was a Revolt Against Corporate Political Power.
B. The Corporate Trial of Strength by the Banks and Railroads
C. The Strange Case of Santa Clara County v. Southern Pacific R.R. Co. (1886)
D. The Development of the Doctrine of Corporate Personhood

3. The Modern Political Power of Corporations is the American Brand of Fascism

4.  A Path to Pierce the Illusion of Corporate Personhood
A.  What Would a Real 21st Century Tea Party Revolt Against Corporate Property and Profits Look Like?
B. What is a Buddhist to Do?

This first installment is not actually what I've conceived of as the first section.  This is the first draft of the first section of Part 2. Though based on the arising inspiration, the whole thing may be rearranged when all the parts are completed.

2. A Brief History of the Stranger Than Fiction Doctrine of Corporate Personhood

A. The Heart of the American Revolution Was a Revolt Against Corporate Political Power.

            Because it is a perfect example of how the more things change the more they stay the same, let’s begin our story of corporate political influence with the founding of our nation.  Few people realize that the birth of the United States of America was in large part a reaction to the power of corporations at the initial stages of the development of Corporate Personhood (CP).  

            In the middle of the 18th century there was no more powerful corporation than the East India Company of England (EIC) with its great wealth from trade specializing in cotton, silk, dyes, saltpeter, salt, tea, and opium.  Its power was so vast that it ruled over its trade territories as an autonomous pseudo-government, printing money, enforcing its laws, and claiming land in its own name.  But like the corporations of today it was not immune to the depressions of economic fortunes, and at the beginning of the 1770s it faced bankruptcy due to changes in financial conditions.  The EIC went to Parliament, and not unlike today, it’s leaders claimed that it was a corporation too big to fail and successfully sought a governmental bail out.  The bail out bill was known as the Regulating Act of 1773. 

            As a concession for bailing out the corporation, Parliament exacted acknowledgement from the EIC that any act of sovereignty that was made by the operators of the EIC as subjects of the Crown was in fact for the benefit of the sovereignty of the Crown and not in EIC’s own right.  Thus Parliament exerted its ultimate political control over the EIC, but in so doing it admitted, both in the Act and de facto, the “right” of the EIC to have influence over Parliament through the political process.  As part of the 1773 Act’s bail out program, the EIC was given both greater autonomy in its business enterprises in the American Colonies and tax relief in the form of rebates and exemptions from tea import duties that the much smaller Colonial traders were still forced to pay. 

            As the result of their bail out and tax favoritism, the EIC was able to undersell its Colonial entrepreneurial competitors to drive many of them out of business.  The response to this exercise of raw transnational corporate power was the revolt that has became known as the Boston Tea Party where the patriotic rioters destroyed the private property of the corporation by throwing the bales of tea into the salt water and ruining them.  This illegal destruction of corporation property was among the first acts of open defiance leading up to our nation’s Declaration of Independence. 

            Of course today, destroying the property of the powerful transnational corporations is still considered illegal by the political powers that be, yet no one can deny that such destruction of corporate property has a hallowed place in the shrine of American history.  It seems that today’s Tea Party adherents have completely forgotten the lesson of the original Tea Party as they fawn over the rich and powerful in the corporations who control their agenda, such as today’s Tea Party’s love of corporate controlled health care.  If it were not for the powerful corporations’ control of Colonial economics and the Colonists’ revolt against those transnational corporations, the USA might never have been born.

            It was this experience with the scope of political power of the large corporations that informed the founding fathers’ view of corporations and explains why the word “corporation” does not appear in the U.S. Constitution or Bill of Rights. The compatriots of the original Tea Party knew that corporations need to be limited in their political power and influence.  Thus, with the founding of our nation the American laws protected people from corporations in ways that other nations did not.  For example, only natural humans were considered to be the “people” who had the protection of the First Amendment for their free speech.  Only natural humans had the protection of the Fourth Amendment right to privacy.  Only natural people had the Fifth Amendment protection against double jeopardy and the right to silence if accused of a crime.  Only natural people could be shareholders and Corporations were not allowed to be shareholders of other corporations. Corporations could not give money to politicians or try to influence elections on the rationale that they had no business doing so because they could not vote. Corporations were only chartered for specific purposes with at least a colorable claim that the purpose was “for the public good” and they were typically established for a specific term of years related to that purpose.  The requirement of a single purpose that was for the benefit of the public (such as building a bridge, operating a toll road, running a university, etc.) was far different from today’s view that the only purpose of a corporation is to make profits for its owners.

            In fact the threat of the power of corporations was so well known to the founding fathers such as Sam Adams who participated in the original Boston Tea Party, that Thomas Jefferson and James Madison apparently proposed a so-called  “11th Amendment” that would have placed corporations into the Constitution for the purpose of a Federal restriction on their power in the manner of the other restrictions on the power of the Federal Government and making most of the above restrictions on corporations part of the Constitution. The story goes that their proposed Amendment was rejected by Congress with the help of the argument that it was not necessary to put it into the Constitution because the states already had those regulatory restrictions in place in their state laws.   

            I have not found original source material for this story of a Jefferson-Madison Amendment aimed at corporations, however, whether or not the legend of their proposal is true, it is undeniable that both Jefferson and Madison expressed clear reservations about corporations.  Jefferson said in 1816, “I hope that we shall crush ... in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country. I sincerely believe that banking establishments are more dangerous than standing armies.”  And by the end of his life, Madison’s views on corporations were equally plain as stated in a letter dated March 10, 1827, “Incorporated Companies with proper limitations and guards, may in particular cases, be useful; but they are at best a necessary evil only.”   There can be no doubt that both of these founding fathers were advocates for strong limitations and safeguards against the political power of corporations.

Comments invited.