Reference no: EM132192126

Review: How Corporate America Won Its Civil Rights

By Jonathan A. Knee

The sheer volume of existing scholarship on the history of civil rights in the United States poses a formidable challenge to any academic seeking to say something new or unexpected. Adam Winkler, a professor at the law school at the University of California Los Angeles, has nonetheless managed to produce a work that is both engrossing and surprising. Professor Winkler has identified a secret parallel universe of civil rights whose beneficiaries are not the “discrete and insular minorities” whose protection were once the focus of the Supreme Court’s jurisprudence.

From pre-Revolutionary times to now, “We the Corporations: How American Businesses Won Their Civil Rights” (Links to an external site.)Links to an external site. charts the strategies and philosophical battles that have now earned state-created corporate entities much the same civil rights as individual citizens. Professor Winkler argues that this has occurred because corporate rights “have largely been won in the courts, not in the streets, and have developed largely without much public scrutiny.”

Recent Supreme Court decisions in the Citizens United and Hobby Lobby cases have brought the apparent triumph of corporate rights to the forefront of the national consciousness. But the nature of the role of corporations in United States history is poorly appreciated, often undermining the quality of the resulting debate. We celebrate the persecuted Pilgrims’ landing at Plymouth Rock in 1620 every Thanksgiving, but years earlier “the Virginia Company of London founded England’s first permanent New World colony in Jamestown.” And few realize that key portions of the earliest state constitutions — including the recognition of individual rights — are lifted wholesale from the corporate charters of these early colonies.

That said, given the absence of any mention in the Constitution of corporations or, with the exception of the First Amendment’s reference to “the press,” businesses of any kind, the ability of these “artificial persons” to secure many of the same rights as real people is a little shocking. The corporate rights movement achieved this result by following many of the same tactics as the more familiar modern African-American civil rights movement, using test cases and civil disobedience. More broadly, the biggest differences between the corporate and individual civil rights movement is the relentlessness and rate of success of corporate litigants.

Nowhere is this more apparent than in the earliest cases dealing with the amendments to the Constitution ratified in the aftermath of the Civil War. Although the Supreme Court acknowledged that the “one pervading purpose” of these amendments was “the protection of the newly made freeman and citizen from the oppressions of those who had exercised unlimited dominion over him,” its jurisprudence reflected a starkly different perspective.

Of the more than 600 cases the Supreme Court heard dealing with 14th amendment’s guarantee of equal rights between 1868 and 1912, less than 5 percent involved African-Americans at all. When they did, as in the infamous Plessy v. Ferguson case upholding the principle of separate but equal, African-Americans almost always came up short. Corporations invoking the protections of the new constitutional provision, by contrast, “succeeded in striking down numerous laws regulating business, including minimum wage laws, zoning laws, and child labor laws.”

Even when individuals or public interest nonprofit organizations that have succeeded in establishing new rights at the highest court, for-profit corporations have managed to reap the bulk of the benefits. For instance, Ralph Nader’s big consumer victory in the Virginia Pharmacy case in 1976 would be used decades later as a precedent to justify Citizens United’s broad protection for corporate “political speech.” Mr. Nader’s litigation arm, Public Citizen, would ultimately disavow the entire line of cases it had spawned.

Another reason corporations have been so effective is their ability to afford the best lawyers. From Daniel Webster to Ted Olson, the most effective advocates have been enlisted by corporations to press their cases.

One of the most remarkable stories in the book relates to the fabled Supreme Court advocate Roscoe Conkling. He was the last surviving member of the Senate Committee that had drafted the civil war amendments and had recently been confirmed but declined to serve on the Supreme Court. No one had more credibility with the court. Arguing for new corporate rights on behalf of the Santa Fe Railroad, Mr. Conkling flashed his notebook from the Senate committee deliberations and claimed that the word “citizens” had been changed to “persons” precisely to protect corporations. Years later, scholars examined the notebooks and concluded that the claim was fabricated for the benefit of Mr. Conkling’s client.

Of the many fascinating surprises of “We the Corporations,” none is more consequential than its rejection of the conventional wisdom that treating corporations as legal “persons” has fueled the corporate rights movement. In fact, where courts have recognized corporations as “people,” it has usually been for narrow purposes such as the right to enforce contracts or other property rights. Professor Winkler convincingly demonstrates that the more expansive theories of corporate rights often rest on piercing the so-called corporate veil and allowing the corporation to effectively enforce the rights of its shareholders in its own name.

Ironically, the same corporatists who have embraced piercing the corporate veil for the purpose of securing new rights are the most vociferous in enforcing the veil to protect the corporation from any possible liabilities. As we await the Supreme Court’s decision in the critical case of whether a business can decline to serve a customer based on its distaste for same-sex marriages, all citizens would do well to pick up a copy of “We the Corporations” to understand the full implications of what it decides.

Jonathan A. Knee is professor of professional practice at Columbia Business School and a senior adviser at Evercore. His latest book is “Class Clowns: How the Smartest Investors Lost Billions in Education.

1. What, according to the book review, is the book, We Are the Corporations, about?

2. After reading this book review, are you interested in reading Adam Winkler's book or learning more about the legal jurisprudence of corporations in America? Why or why not?

3. Do you think that laws affecting corporations are better decided by the legislature or the courts?