Business as Usual: Hobby Lobby and the Purpose of Corporate Rights

53 Pages Posted: 7 Sep 2021 Last revised: 27 Jan 2022

See all articles by Dalia Tsuk Mitchell

Dalia Tsuk Mitchell

George Washington University Law School

Date Written: September 1, 2020

Abstract

This article explores the interdependence of the discourse of corporate rights and the law of corporate purpose. I argue that the history of corporate rights reflects changing reactions of the U.S. Supreme Court to social, political, and cultural concerns, each reaction offering a different purpose for corporations in our modern society. At the turn of the twentieth century, in response to fears about the advance of socialism, the Court used liberal assumptions to justify protecting the publicly held corporation’s property rights as derived from the rights of individual shareholders. In so doing, the Court helped turn the corporation, with its collective ownership, into the epitome of capitalism. In the 1940s, as fears about the potential impact of European totalitarianism on American democracy mounted, the Court drew on theories of pluralism, which focused on corporate power, to impose constitutional limitations on private entities and organizations. The corporation became the guardian of American democracy. Beginning in the 1970s, amidst concerns about the potential threat that large corporations posed to economic and political markets, the Court relied on the managerialist view that corporate managers were best suited to attend to the affairs of their corporations to rationalize the extension of First Amendment rights to corporations. Even when the Court acknowledged corporate management’s responsibility to the shareholders, it dismissed concerns about management’s usage of shareholder funds to promote corporate goals with which the shareholders might not agree. Questions about corporate rights and corporate purpose became questions of business judgment, and corporate managers became the mediators of American society’s social and cultural goals.

Keywords: corporations, corporate rights, corporate purpose, pluralism, liberalism, managerialism, Santa Clara County v. Southern Pacific Railroad Co., Marsh v. Alabama, Bell v. Maryland, First National Bank of Boston v. Bellotti, Burwell v. Hobby Lobby Stores, First Amendment

Suggested Citation

Tsuk Mitchell, Dalia, Business as Usual: Hobby Lobby and the Purpose of Corporate Rights (September 1, 2020). Columbia Business Law Review, Vol. 2021, No. 1, 2021, GWU Legal Studies Research Paper No. 2022-04, GWU Law School Public Law Research Paper No. 2022-04, Available at SSRN: https://ssrn.com/abstract=3917564

Dalia Tsuk Mitchell (Contact Author)

George Washington University Law School ( email )

2000 H Street, N.W.
Washington, DC 20052
United States

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