WCCL Symposium Blog—2022

(600-1200 Words)
Constitutional Transformations:
Reconsidering the Rights and Responsibilities of The Corporate Person

Corporations increasingly enjoy more rights but face fewer consequences for abusing
rights. Recent rulings by the Supreme Court of the United States have provided greater rights
protections to private corporate actors while placing significant restraints on access to remedy for
alleged victims of human rights violations involving corporations. Judicial interpretations
concerning what a corporation is have empowered businesses to exercises rights to expression
and association; while judicial interpretations concerning where a corporation operates have
enabled business enterprises to avoid legal liability.

Despite a growing consensus for a more robust understanding of corporate purpose and
efforts to advance a stakeholder form of capitalism which would take account of the impact
businesses have on society for good or ill, the Court’s tendency to favor business litigants
remains problematic especially when corporate profit motives may be at variance with the public
good. Constitutional courts are making decisions in the context of a globalized economy
characterized by different types of business enterprises with operations and relations across
nations which further complicates analysis.

In Nestle USA, Inc. v. Doe (2021), the US Supreme Court rejected a suit against large
manufacturers, purchasers, processors, and retailers of coca beans filed by kidnapped African
children enslaved and forced to work on cocoa plantations in the Ivory Coast, holding that the
children failed to demonstrate that the relevant corporate conduct connected to the abuses
occurred in the US, even though the corporations named in the suit were based in the US. The
children alleged that the companies involved made “major operational decisions in the US” to
purchase from and provide financial and technical support to farmers that used forced child
labor, despite being aware of slave labor problems in the Ivory Coast. Nestle went so far as to
seek categorial immunity from liability by virtue of being a corporate person, arguing that
international law does not recognize a universal norm of corporate liability: “[C]rimes against
international law are committed by men, not by abstract entities, and only by punishing
individuals who commit such crimes can the provisions of international law be enforced.”1 The
Court rejected claims that the companies were liable under the Alien Tort Statute (ATS) for
aiding and abetting slavery declining to reach abuses outside of use borders as an impermissible
“extraterritorial application” of the law. Central to the Court’s reasoning was an understanding
of where the corporation’s conduct occurred. General corporate activity including decision
making in a domestic context is not enough to connect a cause of action to the impact of a
corporation’s impacts abroad.

In Citizens United v. Federal Election Commission (2010), the Court provided

corporations with a First Amendment right to make independent contributions to political
candidates overruling Austin v. Michigan Chamber of Commerce (1990), an earlier precedent
that relied on an anti-distortion rationale to regulate corporate influence in political speech. The
Austin Court understood that “the unique legal and economic characteristics of corporations
necessitate some regulation of their political expenditures to avoid corruption or the appearance
1
Petition for a Writ of Certiorari, Nestle v. John Doe, 27(quoting Jesner v Arab Bank (2018))
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of corruption” and allowed the imposition of speech restrictions. Finding Austin’s anti-distortion
rationale “an aberration,” the Court concluded a speaker’s corporate identity was not sufficient
reason to limit political speech. Political speech does not lose protection simply because its
source is a corporation. Central to the Court’s reasoning was an understanding of the corporate
identity as an “associations of citizens.” In Americans for Prosperity Foundation v. Bonita
(2021), the Court reaffirmed its commitment to a freedom of association approach to the
corporate identity. The Court held a state statute requiring organizations to disclose donor
information for potential fraud investigations was an unconstitutional violation of association
rights and subjected the statute to the strictest scrutiny.

In Burwell v. Hobby Lobby, the Court again protected First Amendment rights for
corporations when it held that the Religious Freedom Restoration Act (RFRA) allowed business
enterprises to claim religious exemptions. The company successfully asserted a religious
freedom right to not provide contraception coverage to its employees relying on the Court’s
rationale that when rights, whether constitutional or statutory, are extended to corporations the
purpose is to protect the rights of the people associated with the corporation. The Court ruled
corporations to be “persons” protected under RFRA and reasoned that protecting the free
exercise right of corporations protects the religious liberty of the people who own and control
companies. The Court did not appear to give consideration the rights of people employed by the
company or the possibility that people of different faiths could be owners with differing ideas
about how and when to exercise articles of faith. The Court again sided with corporate
employers when in Cedar Point Nursery v. Hassid, it struck down a state regulation that would
have provided labor union organizers periodic access to farm property.

Empirical legal research conducted by Lee Epstein, William Landes, and Richard Posner
has established that corporations often prevailed in litigation before US courts and in shaping the
direction of the law.2 Corporate legal scholar Elizabeth Pollman has pointed out the Court’s pro-
business bias as based in an approach that fails to capture the reality of modern business.3
Professor Carliss Chatman has called for a statutory scheme of corporate law that would
recognize the reality that companies exist in a web of affiliated entities with different identities
that can be exploited.4

If anything, the scale, and scope of private commercial power globally lends credence to
earlier concerns about the distorting and out-sized influence of business on democratic processes
as well-founded worries. Dissenting from the decision in Citizen’s United, Justice Stephens
captures the concern as follows: “the distinction between corporate and human speakers is
significant. Although they make enormous contributions to our society, corporations are not
actually members of it…The financial resources, legal structure, and instrumental orientation of
corporations raise legitimate concerns…” Constitutional courts should be more concerned with
the concentrated power of the private sector and protecting the public space for effective policy
making and adjudication. Courts could consider applying a less stringent standard of review for
regulations in the public interest that are tailored to the type of entities and issues involved. A
new approach is urgently needed.
2
Lee Epstein, William M. Landes & Richard A. Posner, How Business Fares in the Supreme Court, 97 MINN. L.
REV. 1431 (2013)
3
Elizabeth Pollman, The Supreme Court and the Pro-Business Paradox, 135 HARV. L. REV. 220 (2021)
4
Carliss N. Chatman, Corporate Family Matters, 12 U.C. IRVINE L. REV. 1 (2021).
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About the Author:

Erika George (@ProfErikaGeorge) is the Samuel D. Thurman Professor of Law at the S.J
Quinney College of Law, University of Utah. She is the author of Incorporating Rights:
Strategies to Advance Corporate Accountability (Oxford University Press, 2021)

References:

Nestlé USA, Inc. v. Doe I, Oyez, https://www.oyez.org/cases/2020/19-416 (last visited Nov 23,
2022)

Citizens United v. Federal Election Commission, Oyez, https://www.oyez.org/cases/2008/08-205

(last visited Nov 24, 2022).

Austin v. Michigan Chamber of Commerce, Oyez, https://www.oyez.org/cases/1989/88-1569

(last visited Nov 24, 2022).

Burwell v. Hobby Lobby Stores, Oyez, https://www.oyez.org/cases/2013/13-354 (last visited

Nov 24, 2022).

Americans for Prosperity v. Bonta, Oyez, https://www.oyez.org/cases/2020/19-251 (last visited

Nov 24, 2022).

Cedar Point Nursery v. Hassid, Oyez, https://www.oyez.org/cases/2020/20-107 (last visited

Nov 24, 2022).