Corporate Personhood and Environmental Destruction

My wife, Lauren, recently needed to write an essay for a job application. She chose a topic close to her policy geek husband’s heart: corporate personhood. I was so delighted I asked her permission to post it here.

Recently sighted on a T-shirt at a political rally: “A person who is considered to be property is a slave – Property that is considered to be a person is a corporation.” Did you know that corporations are “persons” with constitutional rights? And that they use these rights to evade and even overturn laws designed to protect our environment?

Although our Constitution does not even mention corporations, the idea that corporations have constitutional rights has its origin in a dubious 1886 ruling by the Supreme Court. Corporations are established through charters that define their rights and responsibilities. The charters are granted by the states, which recognize that the limited liability of a corporation encourages innovation and economic growth. Until corporations gained constitutional rights that the states could not abridge, if a corporation violated its charter, or caused harm to the community through its activities, its charter could be, and frequently was, revoked. Now, a state that creates a corporation has little effective control of its creation because it is imbued with indestructible rights.

The power of the state and federal governments to regulate corporations began its decline in 1886, when the Supreme Court heard the case of Santa Clara County v. Southern Pacific Railroad Co. Although the Court said it did “not wish to hear argument” on constitutional issues, the court reporter wrote that corporations were “persons” under the 14th Amendment in the case summary (which has no legal force). In an 1889 case, the Supreme Court inaccurately cited Santa Clara as holding that corporations are persons with rights to “equal protection” under the 14th Amendment. Since then, corporations have gained additional rights under the First, Fourth, Fifth, Sixth, and Seventh Amendments. The result is that constitutional rights intended to protect human beings from potential oppression now also belong to corporations.

How exactly does corporate personhood contribute to environmental destruction? By asserting their status as “persons,” corporations have been able to influence legislators, mislead consumers, and overturn or evade laws designed to protect the environment. At the same time, they can avoid much civil and criminal accountability for their actions. Their limited liability means that if they are sued for irresponsible or injurious practices, they can be held liable only for the amount of their assets, even if that amount is insufficient to cover the entirety of the damage. And even when restitution is made, it is the investors who bear the cost. The civil rights of corporations hinder attempts to regulate or investigate them. For instance, in investigations of criminal activities, members of the board are almost never held accountable because they can hide behind the “corporate veil.”

As legal “persons,” corporations have argued successfully that regulating their advertisements or restricting their political donations infringes their “human right” to free speech under the First Amendment. Accordingly, corporations can now spend money to influence the outcome of elections and employ lobbyists to influence, or even write, legislation. Their civil rights allow them to call themselves “environmentally responsible,” even while indulging in practices that are destructive to the environment.

Under the Fourth Amendment, which is intended to protect human beings from unreasonable searches and seizures, warrants are now required of government investigators and regulators who want to make regulatory inspections or investigate wrongdoing by a corporation. Hiding behind this right, a corporation can hold off government regulators, suppress evidence in court, or even buy itself sufficient time to destroy records and cover up violations.

The Fifth Amendment protects human beings from deprivation of life, liberty, or property without due process, and provides that private property cannot be taken for public use without “just compensation.” Corporations have used this Amendment to successfully challenge government laws that protect the environment by claiming that such laws allow “taking” of their property rights. They have demanded and received compensation for intangible assets, such as lost potential profits, far in excess of actual property values. Such an attempt by corporations to hobble government land use and environmental regulation is afoot now in Arizona, in the form of Proposition 207, the so-called “Private Property Rights Protection Act,” on the ballot this November.

Corporations now wield immense power with limited accountability. Ironically, many years after the 1886 ruling, Supreme Court Justices Hugo Black and William Douglas demonstrated that neither the history nor the language of the 14th Amendment was meant to protect corporations. In 1938, Black stated, "I do not believe that the word ‘person’ in the Fourteenth Amendment includes corporations," and in 1949, Douglas concluded that there was “no history, logic, or reason given to support that view.” But by that time, the 1886 and 1889 cases had already lodged deeply within our legal system, which now grants an artificial entity, the corporation, the legal rights of a person without providing that these persons have the same social responsibilities as human beings. The struggle to bring corporations back under democratic control by ending the constitutional rights of corporations is a critical issue for those who seek to protect our environment.

References

      Ralph Nader and Carl J. Mayer. “Corporations are not persons.” The New York Times, April 9, 1988.

      Jan Edwards and Alis Valencia. “Corporate personhood and the ‘right’ to harm the environment.” Women’s International League for Peace and Freedom.

      George Monbiot. “Corporations behave as if they are more human than we are.” The Guardian of London, October 5, 2000.