Posted on 5-6-2003
Nike
v. Kasky: Corporations Are Not Persons
By Jennifer Van Bergen, t r u t h o u t | Perspective, Wednesday
04 June 2003
The case of Nike v. Kasky, currently before the Supreme Court,
involves a fundamental question about corporations that unfortunately
has not been raised by either the parties in the case or the
media.
Marc Kasky is suing Nike, Inc. under California laws
regulating unfair competition and false advertising. Kasky claims
that when an internal audit was leaked to the press that revealed
illegal employment practices in Nike's factories in China, Vietnam,
and Indonesia, Nike responded by issuing to the press numerous
statements it knew to be false.
The issue before the Supreme Court is whether Nike can
be held liable for its misrepresentations under false advertising
laws or whether its various public documents and letters to
the press and others are constitutionally protected free speech.
Not addressed in the arguments before the Court, but
underlying them nonetheless is an invisible beast: the idea
that corporations are people.
This is a notion that the National Lawyers Guild (NLG)
opposes. The Mission Statement of the NLG Committee on Corporations,
the Constitution & Human Rights states, in part: "We
oppose recognition of the personhood of corporations under the
Fourteenth Amendment. Protections of the Bill of Rights are
given to people out of a concern for human dignity, liberty
or equality. Corporate claims to such protections should be
rejected."
ReclaimDemocracy.org mirrors this sentiment: "The
notion that corporations - entities unmentioned in our Constitution
- should enjoy protections created for living human beings is
a concept deserving burial deep in the same dark closet as the
legal precedents of slavery and 'separate but equal.'"
The National Voting Rights Institute and ReclaimDemocracy.org,
which jointly filed an amicus brief for Kasky, state: "The
claim that corporations possess a right to intentionally deceive
the public has no basis in the U.S. Constitution. Incorporation
is a privilege granted by the people's representatives in state
governments, and corporations must remain subordinate to our
democratic institutions. The discredited judicial creations
of "corporate personhood" and corporate "political
rights" should be unequivocally rejected by the Court."
The Dangers of Corporate Personhood
Nike argues that its statements should be protected
under the First Amendment. This implies that Nike can be viewed
as a person.
The notion of "corporate personhood" was adopted
by the Supreme Court under very dubious circumstances, when
a court reporter used the term in a head note he created for
an 1886 Court decision that actually declined to address the
issue. (The case was Santa Clara County v. Southern Pacific
Railroad Co., 118 U.S. 394.)
In a later 1889 case, Minneapolis & St. Louis Railway
Company (129 U.S. 26), Justice Field cited Santa Clara as holding
that corporations are persons, and that inaccurate notion of
Santa Clara's holding remains today. Nonetheless, other Supreme
Court decisions support the opposite view. The Court stated
in a 1990 decision, Austin v. Michigan Chamber of Commerce,
that because corporations have "state-conferred . . . structures,"
and "[s]tate law grants [them] special advantages,"
their political speech can be regulated by the state. In other
words, they do not have the constitutional right to free speech.
These "special advantages" include the ability
to amass "large treasuries" and "immense aggregations
of wealth." What is wrong with immense aggregations of
wealth? Isn't that the American way: rags to riches? The problem
is that in the corporate world those who hold the wealth (stockholders)
do little to create it, while those who actually do the work,
the employees of these corporations, get less and less for their
labors. (Recall Enron.)
In her book, The Divine Right of Capital, Marjorie Kelly
asks: "Why have the rich gotten richer while employee income
has stagnated? Because that's the way the corporation is designed."
Kelly asserts that stockholders today reserve for themselves
(and deny to employees) the same privilege claimed by the French
aristocracy before the French Revolution: rights to endless
streams of income detached from productive contributions.
Equally as important, if not more so, is the fact, according
to Kelly, that "[c]orporate capitalism embraces a predemocratic
concept of liberty reserved for property holders, which thrives
by restricting the liberty of employees and the community."
If we take Kelly's statement as accurate, it should be
clear that granting corporations personhood subverts and endangers
democracy. In the early American republic, corporations existed
only by special state grant to promote the public good. Corporations
today are no longer subject to such restrictions. They now function
like a secular aristocracy that rules over a slave class. In
light of the immense wealth and power held by corporations,
granting them equivalent rights as individuals is irrational
and dangerous.
The consequences of corporate personhood are not trivial.
Jerry Mander writes in his book In the Absence of the Sacred:
"Not being human, not having feelings, corporations do
not have morals or altruistic goals." A nonhuman entity
that cannot possess morals is certainly not fit to be granted
equal standing with a person. Indeed, granting amoral entities
so-called equal rights with persons, which because of corporations'
great wealth and power become greater rights, is so irrational
it ought to be considered a kind of insanity.
Finally is the effect of corporations' growth imperative
on our world. This effect, according to Mander, is "now
clearly visible, as the world's few remaining pristine places
are sacrificed to corporate production." Granting personhood
to a mechanism for destruction of our environment cannot be
sound policy if the human race is to survive and thrive.
Allowing an entity to usurp individual civil rights and
harm the environment is bad enough. But corporate personhood
does yet more.
Activist William Meyers writes that corporate personhood
"changes the relationship between people and corporations,
between corporations and the government, and even between the
government and the people. The effects of these changes in relationships
range from loss of liberty and income for citizens to the destruction
and poisoning of the earth and the corruption of the U.S. government."
Meyers concludes: "Corporate personhood allows the
wealthiest citizens to use corporations to control the government
and use it as an intermediary to impose their will upon the
people."
Thus, corporate personhood is not just a kind of "free
radical" unleashed into an otherwise organized, healthy
system. It is something that actively destroys that healthy
system. In other words, corporate personhood corrupts and destroys
democratic government.
Commercial Speech versus Free Speech: The False Distinction
The argument between Nike and Kasky boils down to whether
Nike was engaging in commercial speech or constitutionally protected
"free speech" (implying corporate personhood) when
it responded to attacks with misrepresentations about its business
practices. The Supreme Court, therefore, will decide only whether
Nike's responses (including a production pamphlet, postings
on Nike's web site, a press release, a letter to the editor
of the New York Times, and several other documents) are "commercial
speech" or "free speech." If Nike's representations
are considered commercial speech, Nike will be subject to California's
false advertising law.
If the Supreme Court decides Nike has a right to free
speech, like a human being, Nike will not be subject to that
law. Since it appears that Kasky can show that Nike lied in
its statements to the public, the question then remains whether
Nike has a constitutionally protected right to lie.
The Northern California American Civil Liberties Union
has filed an amicus brief in support of Nike's right to free
speech. Although the NLG and ACLU share many views respecting
civil rights, this is one area on which the two differ. The
ACLU believes that Nike's speech should be protected like a
persons'. The Northern California ACLU states that "the
purpose of our brief was to assure that the question of the
truthfulness of Nike's assertions was judged by the same set
of rules that would apply were someone to question the truthfulness
of the assertions of its critics." The ACLU believes that
the statements from Nike "are not comparable to ordinary
advertisements" that would fall under commercial speech
regulations.
Indeed, according to Linda Greenhouse, Kasky himself
"conceded that if Nike's statements were deemed not to
be commercial speech, the First Amendment would require dismissal
of his lawsuit."
The NLG believes that this distinction is false and evades
the underlying question of corporate personhood. It is this
question that the Supreme Court should be answering. The NLG
agrees with the statement of Professor Robert C. Post of the
University of California at Berkeley quoted in Greenhouse's
article that "[s]tate control of corporate speech is fully
at the heart of [this case]." However, as long as the notion
of corporate personhood is not clearly raised and finally discredited,
the question of state control is not likely to be fairly addressed
and the Court's decision will fall short of a democratic solution.
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