The Derivative Nature of Corporate Constitutional Rights

Abstract

This Article engages the two hundred year history of corporate constitutional rights jurisprudence to show that the Supreme Court has long accorded rights to corporations based on the rationale that corporations represent associations of people from whom such rights are derived. The Article draws on the history of business corporations in America to argue that the Court’s characterization of corporations as associations made sense throughout most of the nineteenth century. By the late nineteenth century, however, when the Court was deciding several key cases involving corporate rights, this associational view was already becoming a poor fit for some corporations. The Court’s failure to account for the wide spectrum of organizations labeled “corporations” became increasingly problematic with the rise of modern business corporations that could no longer be fairly characterized as an identifiable group of people acting in association. Nonetheless, the Court continued to apply the associational rationale from early case law and expand corporate rights into the realm of speech and political spending without careful analysis of when the associational approach would be appropriate.

We set forth a theoretical framework that we believe is consistent with the underlying logic of the Court’s jurisprudence, based on the concepts of derivative and instrumental rights. Specifically, we argue that the Court, to date, has not granted constitutional rights to corporations in their own right. Instead, it has granted rights to corporations either derivatively, when necessary to protect the rights of natural persons assumed to be represented by the corporation, or instrumentally, when necessary to protect the rights of parties outside the corporation. Further, we consider the implications that this framework, with a more nuanced view of the spectrum of corporations in existence, would have if applied to recent corporate rights cases, such as Citizens United. We believe this framework provides a principled path forward for the difficult line drawing between corporations that needs to be done.

Keywords: corporate rights, corporate constitutional rights, corporate theory, corporate personhood, derivative rights, business associations, Dartmouth College, Santa Clara, Citizens United, Hobby Lobby

JEL Classification: K22, L20