Should McDonald's & Monsanto Have the Same Rights as People? A Debate on Corporate Personhood

March 13, 2015
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Guests

Ron Fein

legal director at Free Speech for People.

Kent Greenfield

professor of law and Dean’s Research Scholar at Boston College Law School. He recently wrote an article for The Washington Monthly called "Let Us Now Praise Corporate Persons."

Image Credit: Reuters

Five years ago, the U.S. Supreme Court handed down its Citizens United v. FEC decision striking down the prohibition on corporate expenditures in federal elections. In a 5-to-4 decision, the Supreme Court ruled that corporations are people, with the same right to influence politics as voters. Meanwhile, many corporations including McDonald’s, Monsanto and Peabody Energy have cited the principle of corporate constitutional rights in recent efforts to fight back against new laws. McDonald’s and other franchises are suing the city of Seattle over its new $15-an-hour minimum wage law, arguing it violates its corporate personhood rights. They are basing their case on the 14th Amendment, a constitutional provision written to protect newly freed slaves after the Civil War and ensure equal rights for all people. Monsanto is challenging Vermont’s recently passed GMO-labeling law under the First Amendment, claiming that it forces them to "speak" against their will. We host a debate on the movement to draft a constitutional amendment to overturn the doctrine of corporate constitutional rights with two guests: Ron Fein, legal director at Free Speech for People, and Kent Greenfield, professor of law and Dean’s Research Scholar at Boston College Law School.


TRANSCRIPT

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: Five years ago, the Supreme Court handed down its Citizens United decision striking down the prohibition on corporate expenditures in federal elections. The court’s 5-4 decision opened the floodgates for corporate and undisclosed dark money to pour into the election process. According to the Center for Responsive Politics, the number of donors giving more than $1 million to outside groups during elections has grown from two in 2006 to 84 in the 2014 congressional elections. The right-wing Koch Brothers have pledged to use their network of conservative advocacy groups to spend a staggering $900 million in advance of the 2016 presidential election.

AMY GOODMAN: In the Citizens United case, the Supreme Court ruled corporations are people, with the same right to influence politics as voters. Meanwhile, many corporations, including McDonald’s, Monsanto and Peabody Energy, have cited the principle of corporate constitutional rights in recent efforts to fight back against new laws. McDonald’s and other franchises are now suing the city of Seattle over its new $15-an-hour minimum wage law, arguing it violates its corporate personhood rights. On Tuesday, the International Franchise Association told a federal judge that the law unfairly discriminates against franchise owners by treating them differently than local small business proprietors. They’re basing their case on the 14th Amendment, a constitutional provision written to protect newly freed slaves after the Civil War and ensure equal rights for all people. Monsanto is challenging Vermont’s recently passed GMO-labeling law under the First Amendment, claiming it forces them to speak against their will.

Today we host a debate. Joining us from Watertown, Massachusetts, is Ron Fein, legal director of the organization Free Speech for People, which backs a constitutional amendment to overturn the doctrine of corporate constitutional rights. And in Boston we’re joined by Kent Greenfield. He’s a professor of law and Dean’s Research Scholar at Boston College Law School. He recently wrote a piece for The Washington Monthly called "Let Us Now Praise Corporate Persons."

We welcome you both to Democracy Now! Ron Fein, let’s begin with you. Explain what is meant by "corporate personhood."

RON FEIN: Well, thank you, Amy and Juan, and thanks also to Professor Greenfield, who I do have great respect for as an expert in state corporations law. But we’re talking now about the Constitution.

The idea of a corporate personhood is a doctrine that comes out originally of state law, and it enables a corporation to have some of the legal rights of people when we deem that it is appropriate for them to do so. So, for example, a corporation can own property, sell property, sue and be sued. And that’s all good. But when we’re talking about the Constitution, that metaphor of the corporation as a person becomes extremely dangerous, because it leads to fuzzy thinking. And that’s why we see things like the Equal Protection Clause cases, where corporations are claiming that regulations about the minimum wage that treat certain types of corporations differently from others are a form of discrimination that we should be concerned about. And similarly, under the First Amendment, we see also corporations using the metaphor of personhood to refuse to speak, as if they were a dissenting religious minority, when what’s being asked of them is to disclose information about what’s in the products that they sell.

So when you take that metaphor of corporate personhood from its origins in state law and you transpose it onto the Constitution, it becomes extremely dangerous. And that’s why we’ve seen a sustained and renewed assault on laws, ranging from minimum wage to genetically engineered food disclosure, to disclosure of products coming from war-torn regions of Central Africa, to a St. Louis, Missouri, ballot initiative that seeks only to end public tax breaks for fossil fuel producers and is also being challenged as violating the Equal Protection Clause.

JUAN GONZÁLEZ: Well, Kent Greenfield, could you lay out why you believe that expansion of corporate personhood would actually bring more accountability by corporations?

KENT GREENFIELD: Sure, Juan. And again, thank you for inviting me on. And again I will say hello to Ron Fein, whose work I respect quite a bit.

So, I think—first of all, I should say that I think the examples that you raised so far in this segment about the Seattle minimum wage and some of the forced disclosure laws, I think the corporations should lose in those cases. My point is that corporate personhood is often misunderstood. And Ron is correct that, for the most part, corporate personhood is simply just another way of saying that corporations ought to be separate legal entities—and that’s a wonderful thing. It bolsters the ability, the legal ability, to hold corporations accountable. Think about the BP oil spill from several years ago, 2010. If the corporation itself was not a legal entity, it would be hard to hold anybody accountable. It would be hard to hold—the individuals involved certainly don’t have deep enough pockets to pay back the horrible damage that was caused there.

I think where Ron and I would disagree is that whether corporations should be able to assert—ever assert—any constitutional rights. And I think that some constitutional rights some of the time are appropriate for corporations to assert. And the easiest example is, of course, media corporations. The New York Times, a media conglomerate, certainly ought to have First Amendment rights. That’s an easy case. I think the harder cases are what to do about election spending and the like. And in those cases, I think, as Amy suggested at the beginning of the segment, I think the torrent of money going—independent money going into politics these days is a danger to democracy. But I think the money—the danger is money, whether it comes from corporations or individuals. And most of the money that we’re seeing, actually, in politics these days is coming from rich individuals, not corporations.

AMY GOODMAN: So, what you’re really debating is whether a constitutional amendment should be put forward. But before we talk about that, I wanted to ask Kent Greenfield, on this issue, for example, of the suit that was heard this week, explain what’s happening. Why is McDonald’s, the other corporations, Comfort Inn, Holiday Inn—why are they suing Seattle over Seattle’s minimum wage hike to $15 an hour? Explain what it’s all about.

KENT GREENFIELD: Actually, I don’t—actually, I don’t know. I’ve heard about that case, but maybe Ron Fein knows more about it.

AMY GOODMAN: Ron Fein, if you know?

RON FEIN: Yes. Thank you. I’d be happy to explain. We filed a friend-of-the-court brief in that case. The claim that is being brought by the International Franchise Association against Seattle’s new $15-an-hour living wage law is that the schedule for implementation treats franchise businesses unfairly because it phases them in at a different schedule than local small businesses, so they have to comply with the law at a different time. And the reason for that was the Seattle City Council studied the issue, and they determined that, for example, a McDonald’s restaurant with 50 employees is not really comparable to a small independent restaurant with 50 employees, because it gets the benefits of coordinated marketing and advertising and product development and bulk purchase agreements that an independent restaurant doesn’t get. That’s the basis for their claim.

Now, they’ve challenged the Seattle living wage law under a whole kitchen sink of theories. One of them is the Equal Protection Clause. And that clause is part of the 14th Amendment, which was designed to protect the rights of the freed slaves after the Civil War. And it is good that the Equal Protection Clause has expanded in recent years to protect additional categories of people, like gay and lesbian Americans, as we’ve seen in the marriage equality movement, but it was never intended to protect corporations. And, in fact, our research has shown that the authors of the 14th Amendment in the 1860s, as Reconstruction was occurring in the South, were particularly concerned about whether the newly freed slaves were able to earn fair living wages. And the United States government took action, leading up to the 14th Amendment, to ensure that there were fair living wages available for the freed slaves as they continued working in the South.

So, the corporate claims under the Equal Protection Clause came from after the Civil War, when the Supreme Court determined, with no evidence or interpretation whatsoever, that when the Equal Protection Clause says that a state cannot deny the equal protection of the laws to any persons within its jurisdiction, that persons includes corporations. And the Supreme Court then used this as a tool throughout the Gilded Age, in the late 19th century and early 20th century, to strike down minimum wage laws, child labor laws and a host of other laws. And that continued until the New Deal, when, finally, FDR, with the public at his back, stood up to the Supreme Court, and the Supreme Court backed down. And that led to the postwar era of the 1940s, ’50s and ’60s, when corporations were not asserting any constitutional claims, by and large, and yet we had the greatest shared economic prosperity of this country in generations.

AMY GOODMAN: So McDonald’s is comparing itself to freed slaves.

RON FEIN: In essence.

AMY GOODMAN: And then, just the Vermont case, Monsanto challenging Vermont’s recently passed GMO-labeling law under the First Amendment, claiming it forces them to speak against their will?

RON FEIN: Yes. This is a line of cases known as "compelled speech." And it starts with the 1940s, where the Supreme Court held that Jehovah’s Witnesses shouldn’t be forced to recite the Pledge of Allegiance against their will, because it violates their human dignity. In recent years, the courts have begun extending that same principle to corporations. But corporations are artificial entities created by state laws. They’re not endowed by their creator with inalienable rights; they’re endowed by state laws with specific rights provided in their charters.

But the courts have now been granting the right to avoid disclosure of product ingredients to corporations. And so, when Monsanto and other grocery food manufacturers are challenging Vermont’s law, saying that they do not wish to reveal whether their products contain genetically engineered ingredients or not, they’re actually standing on some recent Supreme Court First Amendment precedent that’s in their favor. And unfortunately, as our legal adviser, John Coates of Harvard Law School, has shown, in recent years there’s been a corporate takeover of the First Amendment, where an increasing percentage of the courts’ First Amendment dockets are occupied now by corporate claims of this type.

AMY GOODMAN: Well, Ron Fein and Kent Greenfield, we have break. We’re going to come back to our discussion and focus on the constitutional amendment movement, how that would affect corporations and regular everyday people. This is Democracy Now! We’ll be back in a minute.

[break]

AMY GOODMAN: Our guests are Ron Fein, Free Speech for People’s legal director, and Kent Greenfield, professor of law and Dean’s Research Scholar at Boston College Law School. Juan?

JUAN GONZÁLEZ: I’d like to ask Kent Greenfield, on the issue of the criminal justice system, a person commits a crime, they go to jail. A corporation commits a crime, it gets a fine. Or, I mean, a corporation can’t be jailed. Could you talk about, in terms of criminal justice—you blow up—a factory blows up, and you kill several of the workers. Or a mine, there’s a mine accident, and your negligence results in the deaths of several of your workers. Nobody goes to jail, in terms of a corporation.

KENT GREENFIELD: Right, it’s just the nature of the entity. Sometimes responsible individuals within the corporation are held accountable. And let me speak to the Seattle cases and the Vermont cases that Ron Fein had talked about before, too. I think the corporations ought to lose both of those cases. I think where we differ is that I don’t think that it’s impossible to imagine a situation where corporations ought to be able to raise some kind of constitutional right. So, for example, if corporations do not have a right to be free of compelled speech, one can imagine all kinds of bad laws being passed forcing corporations to say things—you know, fly an American flag when they don’t want to, or post a photograph of the president as you enter a workplace. But I think—so, I think where we differ, and even on the criminal justice thing, I think what we need to take into account is that some constitutional rights make sense to apply to corporations, and some do not. The right to be—to have due process in the criminal justice system, if corporations don’t have that right, then their ability to make money, to create wealth of the rest of us, will be endangered. Nobody would invest in them. And we’ll remember that constitutional rights are simply another way of saying that government power should be constrained. And if no corporation can assert the right to free speech or even equal protection in any situation, then the government can really act willy-nilly toward those corporate entities, and that would be a bad thing.

AMY GOODMAN: Ron Fein, can you explain the constitutional amendment movement? What constitutional amendment is being proposed?

RON FEIN: Yes, thank you. There are two constitutional amendments that we at FreeSpeechForPeople.org and other allies in the field are promoting. One is called the Democracy for All Amendment, and that would overturn the Supreme Court’s campaign finance decisions. So that would enable local, state and federal government to set limits on spending money and raising money to influence elections. The other constitutional amendment that we’re promoting is called the People’s Rights Amendment, and that would clarify that the rights in the Constitution are rights of natural persons, not corporations.

Now, that doesn’t mean that there will never be a case where a corporation can come into court asserting the rights that belong to natural persons. The problem is, the way the Supreme Court has it set up right now is that corporations are always assumed to be asserting rights that ultimately belong to actual people. A corporation can just waltz into court assuming it has a constitutional right, and it might win or lose on the details, but no one questions whether it has the right. What our amendment would do is it would force the courts to do a two-step analysis. The first step would be to say, "Who are the actual people who are being affected by this law, and do they have a constitutional right at issue here?" The second step would be to say, "Do those people have a constitutional right to use the corporate tool to exercise that right?" And so, what that would mean is that we would have to look behind the corporate form to say, "Are there actual people here whose rights are actually being violated?" And that would change the entire discourse that we’ve been having.

And in terms of the question about corporate crime, I think that there are two things that need to happen. One, we need to have continued individual responsibility. White-collar criminals should be prosecuted more than they have been. But also, it is in fact true that a corporation can get the death penalty. Every state of the union has some provision for revoking corporate charters. And these powers belong usually to the attorney general of the state. They’re not often used nowadays. But at FreeSpeechForPeople.org, we are very shortly going to have on our website a model corporate charter revocation law that would provide that when a corporation has committed repeated multiple felonies within a short period of time, then its corporate charter can and should be revoked.

KENT GREENFIELD: So, one thing that I would say with regard to the People’s Rights Amendment is that the two-step analysis that Ron Fein is suggesting would not change the outcome in Citizens United itself. The court did not—in that case, did not say that Citizens United, the corporate entity, had rights that were violated. What it said was that Citizens United was an association of citizens, and in constraining that organization’s ability to publish its—to release its movie, it was violating the rights of its members. And so, the People’s Rights Amendment would not change the effect—the outcome in Citizens United itself, which is bizarre to think that all this effort is being put forth to pass an amendment that wouldn’t change the outcome.

JUAN GONZÁLEZ: And, Kent Greenfield, could you talk about the Hobby Lobby case and how that affects the discussion, the debate on the issue of corporate personhood?

KENT GREENFIELD: Right, so Hobby Lobby was this case that came down last year, where a group of evangelical Christian shareholders own a privately held arts and crafts retailer in the Midwest—many of your listeners and watchers will know it—and they were asserting religious freedom rights to be free of Obamacare’s requirement that they provide their employees with contraceptive services within their healthcare plan. And there was a group of corporate law professors, sort of left-of-center corporate law professors—and I was one of them—who wrote an amicus brief to the court that said, really, the answer to this question depends on corporate personhood, because if you see the corporate entity as a separate entity, as a corporate person in and of itself, then it cannot borrow the religious freedom interests of the shareholders. And what the problem in that case, when the Supreme Court held in favor of the corporation, was that it neglected and ignored corporate personhood rather than furthered it.

AMY GOODMAN: So, Ron Fein, where do these constitutional amendments stand right now?

RON FEIN: Well, when we began the constitutional amendment campaigns the day of the Citizens United decision, a lot of people thought that they would never go anywhere. But, in fact, we have got 16 states and over 630 cities and towns across 38 states that have passed resolutions, either by ballot initiative or by votes of the legislature, endorsing the constitutional amendment movement. And we had a Senate vote on the floor of the Senate this past fall, which got a majority of Senate votes, although it didn’t reach the necessary two-thirds threshold. But constitutional amendments take a long time. These are not processes that happen quickly, because the Constitution itself provides for a process to make sure that constitutional amendments are deliberate. So right now we’re in the phase of building grassroots support and educating people about the need to restore and repair our Constitution to the vision that the founders had. And for that, I thank you for the opportunity to appear on this program.

AMY GOODMAN: How do corporate rights compare to—or corporate personhood, how does it relate to human rights?

RON FEIN: What you see, ironically, is that most often an assertion of corporate rights, as part of this new corporate civil rights movement, acts directly against human rights. So, again, to review just some of the cases, in the living wage challenges, which we’re seeing not only in Seattle, but also in Los Angeles, when the corporation is asserting an Equal Protection Clause right to not pay the living wage on the same schedule that they would be required to by the law, that goes against the human rights of the workers to receive that living wage on which they can feed their families. When Monsanto and other grocery manufacturers are asserting a First Amendment right not to reveal what products they are selling that contain genetically engineered ingredients, that violates the rights of Vermont consumers who want to know that information. And when you see the National Association of Manufacturers challenging a federal law that requires them to disclose whether their products contain minerals that come from the Democratic Republic of Congo, because, again, they don’t want to speak about it, that has a direct impact on the lives of people who live in Africa who are being harmed by the ongoing conflict and by the minerals trade that fuels the militias. So, when you see a corporation asserting a constitutional right, whether it be in the case of Hobby Lobby, with the shareholders asserting a right that acts to the detriment of their employees, or in any of these other cases we’ve discussed, it’s usually to the detriment of people.

JUAN GONZÁLEZ: What about that, Kent Greenfield, the inverse relationship between human rights and corporate rights?

KENT GREENFIELD: Right. I agree that corporate accountability is a problem, that corporate power is a problem, that there’s often a tension between human rights and corporate rights. And I’ve been—I’ve spent my career trying to craft solutions to that problem within corporate governance. And I think that’s where progressive efforts should be aimed, not toward constitutional right—constitutional amendments, which in the end would do little to address the real problems. I think the real problems come from the fact that corporations are managed and structured to further the interests of the managerial and financial elite. And how to make corporations more accountable, more attuned to issues of human rights and the like, is to make corporations themselves more democratic, to make the corporate governance, to make boards of directors attuned to interests of all stakeholders, to interests of society. I think I would put employees on the boards of directors of companies. And this is something that works in Europe. We know that it works there, Germany, where half of the board of directors of every major company—Siemens, VW, what have you—are populated by worker representatives. The economy is doing well. These companies are doing well. And they are seen as much more pluralistic and much more attentive to the needs of all their stakeholders. And we here in the United States have this blind spot when it comes to corporations. We think that they are in service of shareholders. And Ron Fein and others, with whom I’ve worked for a long time, all recognize that the core problem here is corporate power. We simply disagree about how to address it. I think to go at the—to the heart of how corporations are managed is the real remedy.

AMY GOODMAN: Well, I want to thank you both for being with us. It’s a conversation we will continue to have. Kent Greenfield, professor of law and Dean’s Research Scholar at Boston College Law School, we’ll link to your piece in The Washington Monthly, "Let Us Now Praise Corporate Persons." And Ron Fein, legal director at Free Speech for People. This is Democracy Now! When we come back, Data and Goliath: The Hidden Battles to Collect Your Data and Control Your World. Stay with us.

[break]

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman, with Juan González. We’re broadcasting on over 1,300 public radio and television stations around the country and around the world. And on this day, if you want to look back at our coverage of the 50th anniversary of the Bloody Sunday protests in Selma, Alabama, you can go to our website at democracynow.org.


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