Hobby Lobby Case Affirms 'Corporate Personhood'

Tuesday, 01 Jul 2014 11:20 AM

By John Berlau Moneynews

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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 a no-holds-barred defense of corporations asserting rights of "persons." Though this case dealt with statutory rights under the Religious Freedom Restoration Act, and did not directly involve constitutional liberties, Alito 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.

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. But that is no reason to quash an easy call for these closely held corporations' exercise of their religious freedom.

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

John Berlau is director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute. He is the author of the book “Eco-Freaks.” Read more reports from John Berlau — Click Here Now.

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