Book Review: Corporations are People Too

By Eric Segall

I just finished reading a great new book by Professor Kent Greenfield of Boston College Law School called "Corporations are People Too (And They Should Act Like It)." For anyone interested in what constitutional rights corporations should possess, or in corporate rights and responsibilities generally, this book is a must read. Greenfield is one of the very few law professors in America with a serious background in both constitutional and corporate law, and his double expertise is reflected in almost every chapter of the book.

The essential thesis of the book is that the law does and should treat corporations as people, and the strong anti-Citizens United  movement arguing that corporations are not people is deeply misguided. At the beginning of the book (pp. 2-3), Greenfield points out that, first, for a very long time corporations have been deemed people under a myriad of legal regimes because corporations can sue, be sued, and "own and sell stuff" all "in their own names and legal capacity." Second, he points out that, of course, corporations "are made up of people. Corporations are collective bodies in which humans come together create goods and services to sell for a profit." Third, as an historical matter, corporations have been allowed by the courts to assert constitutional rights since the beginning of the 19th century.

After reading these opening pages, I was convinced that the twin ideas that corporations are not people, and/or that corporations shouldn't have constitutional rights, were absurd. As Greenfield points out, of course Exxon has a Fourth Amendment right to be secure in its property just as obviously as the New York Times has the first amendment right to publish any editorial it wants without government interference.

The rest of this fine book explores which constitutional rights corporations should be allowed to assert. Some issues are easy, such as the examples above. Others are much more difficult such as the issue at the core of Citizens United and its progeny: how much electoral interference or some might say participation by corporations can and should the government regulate. Those looking for pat answers and easy solutions need to look elsewhere. One of the great strengths of this book is its ability to distinguish easy and hard questions. Since the hard ones are, well hard, Greenfield discusses them with subtlety and gives the topics the deep attention they deserve.

What makes this book so significant and interesting is that the author presents the legal questions, such as how much forced disclosure can the government require of companies like cigarette manufacturers (152-52), or whether corporations like Hobby Lobby should be allowed to assert religious claims under state and federal RFRA's (95-100) against the backdrop of his corporate law expertise. For example, he believes the Court erred in Hobby Lobby for the following reasons:
[T]he fact that corporations are 'persons' should have led to the opposite conclusion [from the one the Court reached]. Corporations are separate from their shareholders. The central characteristic of the corporate form is a separateness from its investors and other stakeholders.... The personhood of the corporation meant that RFRA should not apply to a situation in which the corporation's claim is really a shareholder claim brought in the corporation's name. For Hobby Lobby to win, the Court had to assume both that the corporation was a 'person' under RFRA but was not a person -was not separate-under corporate law. Both cannot be true. (p.97).
Despite this argument, Greenfield points out that it is possible for corporations to have valid RFRA claims but only if such claims are brought on behalf of a company that can demonstrate in ways we would not require of humans that its religious character is "long-standing and consistent," and that this religious character limits the corporation's "activities in ways that imposed economic obligations or competitive disadvantages on it." (p.100). In other words, as a matter of corporate law, the religious claim must belong to the company, not the people who run or own the company. This conclusion seems counter-intuitive (how can a company exercise religion?), but Greenfield backs it up persuasively with his deep knowledge of corporate law.

The main chapters of the book address a variety of claims and rights asserted by corporations and provide interesting insight into how courts should review these claims and rights. This is one of those rare books that would help litigators and judges enormously because the constitutional and statutory analysis is always supported by corporate law realities that should, but usually don't, inform the analysis of such claims and rights.

The final two chapters contain an impassioned plea that the law change to allow corporate directors a much freer hand in taking into account diverse interests (such as employees and community-based concerns) than the current regime which requires a focus on shareholder value. I am no corporate law expert so all I can say about those chapters is they were were fascinating and seemed persuasive to me.

Greenfield's book repeatedly argues that both the law and our community should expect corporations to act more like people which would justify many of the rights he says they should be allowed to assert. For that to happen, corporate law and corporate culture need to change. To this constitutional law expert, and corporate law novice, that thesis seemed undoubtedly correct.