Corporate Rights and Personhood

Personhood and the Legal Rights of Corporations

The legal rights of corporations are whatever the law says they are. This varies from country to country, but the central principle in countries influenced by the Anglo-American legal tradition is that corporations are persons for legal purposes. This legal fiction derives originally from common law, but has received constitutional recognition in numerous countries. The framers of the American Constitution intentionally avoided giving the federal government the right to charter corporations, but later court decisions have extended constitutional protections to corporations. The most important and most cited case is the Supreme Court decision in 1886 in Santa Clara County v. Southern Pacific Railroad Company. This ruling had the effect of recognizing corporations as persons and of extending constitutional protection to them. In many subsequent cases, lawyers have successfully argued that as persons corporations should receive equal protection under the Fourteenth Amendment. However, critics of corporate personhood have pointed out that recognition of corporations as persons was not actually an explicit ruling of the Supreme Court in the Santa Clara County case; reference to personhood appears only in the preamble. The decision itself concerned taxing fences along railroads.

If corporations are persons, then what rights they have is fairly clear; they have the same rights that people have. This is not entirely true, especially for political rights, such as the right to vote or run for office, but U.S. courts have upheld the same-rightsas-people principle in many other instances. Stoll has collected a list of court-recognized legal rights of corporations that includes due process, the right to a jury trial, the right to avoid double jeopardy, and several others. The right of corporations to freedom of speech is debatable, as will be discussed later.

The Moral Rights of Corporations

Ethical debate about the rights of corporations centers on whether corporations have any rights that the law and the rest of society ought to recognize. Such rights are variously known as corporate moral rights, inherent rights, or prelegal rights. The language of corporate moral rights resembles that of human rights; if the law contradicts human rights or corporate moral rights, we do not say the rights do not exist, we say they have been violated. Corporate moral rights and human rights tend to be dissimilar in most other respects but there is some overlap in their justifications.

Justifications for Corporate Moral Rights

There are at least five types of arguments for corporate moral rights. Which rights corporations ought to have varies by the justification used and, in fact, is not always clear. However, none of these justifications should be taken as justifying the same-rights-aspeople principle that is the basis of current law. The transfer argument might be interpreted as justifying something like that principle; the other arguments appear not to justify it. The status of various rights is discussed in the next section.

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