Should Corporations Have First Amendment Rights?

• Jurisdiction: United States,Federal
• Citation: Vol. 30 No. 04
• Publication year: 2007

SEATTLE UNIVERSITY LAW REVIEWVolume 30, No. 4SUMMER 2007

Should Corporations Have First Amendment Rights?

Kent Greenfield* Daniel J. H. Greenwood(fn*) Erik S. Jaffe(fn*)

Dana Gold: Kent Greenfield is a professor at Boston College Law School, and a very good personal friend. He is a progressive corporate law scholar, and he has a new book coming out called The Failure of Corporate Law: Fundamental Flaws and Progressive Possibilities. (fn1) Kent will be moderating this session, and this will be a lively discussion between Professor Dan Greenwood of Utah at the University of Utah College of Law, who focuses also in the area of corporate law, and Erik Jaffe, who focuses his practice on First Amendment law.

Kent Greenfield: Thank you, Dana. Erik Jaffe and Dan Greenwood will each talk for about ten minutes, and then the three of us will converse for a few minutes before taking questions from the audience.

Daniel Greenwood: Thank you. Despite Professor Winkler's careful advice to us, the corporate personality isn't the core of the issue here. I'm going to make an argument that corporations are the wrong sort of thing to have speech rights; that is, I'm going to ignore the law, which, as Professor Winkler quite correctly points out, focuses on the rights of listeners rather than the rights of speakers, and instead argue that the speaker makes a difference. I'm happy to talk directly about listeners afterwards, but I'm not going to do it here. This is an issue that could be understood as part of the problem of the First Amendment and the constitutionalization of economics.(fn2)

I. The First Amendment and the Constitutionalization of Economic Regulation

Almost a century ago in Lochner(fn3) Justice Holmes proclaimed that the Constitution did not enact Mr. Herbert Spencer's Social Statics.(fn4) The Court, however, disagreed, finding basic principles of so-called "laissez-faire" economics in the contracts clause of the Constitution. After the Second World War, and for a brief moment defined by footnote four of Carolene Products,(fn5) the Court changed course, concluding that the backward-looking interpretive techniques of the judiciary were unlikely to find answers to the dynamic needs of a shifting economy. Instead, the courts would restrict themselves to structural issues: on the one hand, ensuring the integrity of the democratic process through redistricting, voting rights, and democratic debate; and on the other hand, giving special attention to rectifying the historical racial injustice imbedded in the American system.

But First Amendment doctrine regularly threatens to return the Court to Lochner. Indeed, not merely Lochner in the sense of imposing strained interpretations of ambiguous texts on an unwilling citizenry, or Lochner in the sense of limiting democracy in the name of the rule of the dead, but the specific Lochner-era judicial role of tilting the scales of government in favor of our most protected minority: organized wealth.

The dominant metaphor of the First Amendment is the free market of ideas that Professor Winkler has already mentioned to you. The free market of ideas constantly tempts the Court back to the old Lochner-era notion of freedom of contract because, as First Amendment theorists and the Court discuss it, the market of ideas bears little resemblance to our post-realist, highly self-conscious, legally constructed market.

In the real free market, property is a manipulable creation of state law and contract, and tort and regulatory rights stem from political processes, not from a "brooding omnipresence in the sky."(fn6) Legislators, consulting firms, and reserve bankers freely change the rules to create incentives that will act in a Hobbesian manner, "as hedges are set, not to stop travelers, but to keep them in the way"(fn7) towards collective attractive goals: full employment, cheap televisions, and the like.

The free market of ideas is not described this way. Instead, the free market of ideas borrows from the Lochner understanding of economic markets. As Owen Fiss puts it, "the [Fourteenth [A]mendment may not enact the Social Statics of Mr. Herbert Spencer, but maybe the [F]irst [AJmendment does."(fn8) Fiss's efforts notwithstanding, the rhetoric of the free market of ideas remains tied to an image of pre-legal markets regulated by supposedly neutral Court-enforced rules and accompanied by Spencer's guarantee that competition for survival will generate not merely survivors, but also truth and justice and the American way.

In this imaginary market, as in Lochner 's imaginary market, all is necessarily for the best in this best of all possible worlds, provided only that legislatures are barred from interfering on behalf of market losers. Those who win deserve to win. Any attempt to legislate different rules that might generate different winners is a violation of secularly-sacred rules of the game. In short, and particularly since markets operate by the ancient principle that to those who have much, much will be given, might makes right.(fn9)

Much as the old freedom of contract was a radical improvement over slavery or immutable status,(fn10) freedom of speech is a lot better than its pre-modern alternative: censorship. Still, it is one of those freedoms that is strangely more useful to the powerful than the powerless, that uses the rhetoric of equality to reinforce inequality in the name of liberation. Like freedom of contract, freedom of speech is a doctrine of selective government abstention, and the absence of government always empowers those who have the power to do as they please.

Again, like the freedom of contract, the ideology of freedom of speech conceals the underlying property rights that generate the results it justifies, claiming that they are pre-political in some sense, written into the nature of the world or at least the Constitution, and thereby transforming privilege into entitlement.

II. Corporations and Speech

My principal expertise is corporate law rather than speech law, and so for the rest of my limited time here I'm going to focus on one place where the rhetoric of the free market of ideas conceals an underlying power imbalance created by the law itself. My fundamental claim is that corporations should not have speech rights because they are illegitimate participants in political debate.(fn11) I'm happy to talk later about the other First Amendment, the one that creates a space for individual autonomy and conscience free from politics or collective judgment; but here I'm concerned principally with the First Amendment as an essential part of democratic self-rule.

To simplify matters, I'm going to set aside the principle doctrinal arguments. That is, first, what the corporations do is spend money, and money isn't speech at all; and second, that most corporate advertising and lobbying should be categorically excluded from the First Amendment as commercial speech. I think I can show that even if money were speech, and even if commercial speech were pure political speech, publicly traded business corporations should have no political speech rights.

As Professor Winkler correctly stated, current doctrine emphasizes the rights of listeners rather than the identity of corporate speakers. My argument is, in effect, that this emphasis misses the key point. But I will not deal with listeners directly. I am simply going to assume, rather than argue, that if corporate advertising were ineffective in influencing voters or legislators, normal market processes would eliminate it. I'm going to take it for granted that when corporations speak, it makes a difference in the actual results.

A. Corporations Are Not Citizens

The first step in my argument is obvious, but necessary nonetheless. Corporations are neither humans nor citizens. They are not values in themselves, but tools to human ends. Thus, they are not endowed by their creators, whomever those may be, with certain inalienable rights, and there is no reason that we should respect their claims to autonomy unless we also conclude that corporate autonomy is useful to real human beings.

An important issue lurks here that I am going to fudge for the moment. If corporations are tools rather than ends in themselves, one question is whose tools are they? We give varying answers to this question in varying contexts. Usually, we think of corporations as businesses whose social usefulness lies in the products or services they produce or the jobs they create. That suggests that they are tools for consumers or employees. Sometimes, however, and especially when corporations are insisting on rights against the citizenry or against a governmental body, the rhetoric switches and corporations are portrayed as tools of their investors or shareholders rather than their consumers. Whether corporations are tools for consumers, workers, or investors, however, they remain tools. The goal of government should be the happiness of people, not legal persons.

B. Corporations Do Not Speak For Their Participants

The reality of corporate law is that our corporations are largely autonomous as a formal, legal matter. That is, corporate leaders have more or less the same authority to spend corporate assets as, say, Mu'ammar Al'Qaddafi does with respect to Libya's assets. Here I agree with Professor Winkler, with this slight caveat: there are two somewhat...