Special Report

A Slippery Slope Toward Freedom

Justice Alito is right: corporations are people.

By 7.2.14

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The groundbreaking decision Monday in Burwell v. Hobby Lobby Stores, in which the Supreme Court ruled 5-4 that Obamacare’s contraception mandate violates the religious freedom of two closely held corporations, will be dissected heavily for days, and studied for weeks, years, and decades.

For consistent civil libertarians, one of the most remarkable — and favorable — aspects of the majority opinion by Justice Samuel Alito is its no-holds-barred defense of corporations asserting rights of “persons.” As my Competitive Enterprise Institute colleague Hans Bader explains, this case dealt with statutory rights under the Religious Freedom Restoration Act, and did not directly involve constitutional liberties. Alito, however, implied strongly that corporations — even if set up for profit — should enjoy all such “personal” rights.

In the passage quoted below, Alito dispensed with much of the foolishness of the contemporary “corporate personhood” debate. The law treats corporations as people, he explained, because corporations are, in fact, extensions of people. From page 18 of the decision:

[I]t is important to keep in mind that the purpose of this fiction [of corporate personhood] is to provide protection for human beings. A corporation is simply a form of organization used by human beings to achieve desired ends. An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another. When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people.

For example, extending Fourth Amendment protection to corporations protects the privacy interests of employees and others associated with the company. Protecting corporations from government seizure of their property without just compensation protects all those who have a stake in the corporations’ financial well-being. And protecting the free-exercise rights of corporations like Hobby Lobby, Conestoga, and Mardel protects the religious liberty of the humans who own and control those companies.

One could add to that example of the First Amendment’s protection the free speech of a corporation incorporated as a newspaper to publish investigative journalism. Or pending cases involving whether the Fourth Amendment protects incorporated communication providers from being forced routinely to give the government access to random conversations of customers without a warrant.

As the Alito decision points out in regard to these rights, it shouldn’t matter if the corporation is organized as for-profit or non-profit. A number of left-of-center print and online publications — including the New Republic, the Nation, Huffington Post, Salon, and Daily Kos — do not operate as non-profits. Their free-speech rights should be no less than that of TAS, which is published by the non-profit American Spectator Foundation.

In cases involving free exercise of religion, there will be questions, as both majority and dissent point out, of discerning the religious beliefs of publicly traded corporations with shareholders. “The Court’s expansive notion of corporate personhood… invites for-profit entities to seek religion-based exemptions from regulations they deem offensive to their faith,” wrote Justice Ruth Bader Ginsburg in her blistering dissent that the Leftie blogosphere is cheering.

Indeed the decision does invite more corporations — and the people behind them — to assert their freedoms. That’s one more reason to cheer it. There’s nothing wrong with a “slippery slope” that slides in the direction of liberty.

It will indeed be difficult sometimes for courts to divine the views of a corporation with multiple shareholders (Alito suggested that courts could look at “certificates of incorporation” to help determine this). But that is no reason to quash an easy call for these closely-held corporations’ exercise of their religious freedom.

In a free society, our worry shouldn’t be that adjudicating liberty “burdens” the courts or any other branch of government. Rather, the worry should be about what my colleague Wayne Crews refers to as the “Ten Thousand Commandments” of government regulations burdening the liberties of the people.

And to Alito’s clear-cut message that these liberties aren’t lost when individual persons form a corporation, even atheist civil libertarians can sincerely utter a big Amen.

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About the Author
John Berlau is Senior Fellow for Finance and Access to Capital at the Competitive Enterprise Institute and blogs at OpenMarket.org.