The Conscience of Corporations and the Right Not to Speak.

AuthorLee, William E.

INTRODUCTION

The right to refrain from speaking is part of a broader concept the Supreme Court describes as "individual freedom of mind." (1) But do corporations have protection from compelled speech under the freedom of mind concept? It is bizarre to ascribe human characteristics to corporations, yet the Court has held that newspaper publishing corporations are protected by the freedom of mind concept from state-imposed requirements that interfere with their ability "to decide what to print or omit." (2) In reaching this conclusion, the Court ignored the corporate identity of the publishing company and instead emphasized the burden on editors. (3) Later cases rejecting a First Amendment distinction between press and non-press corporations, such as Citizens United v. FEC, (4) raise the question whether the Court should also ignore the corporate form of non-press entities and instead assess a law's burden on management, employees, and shareholders. Stated differently, do non-press corporations have standing to assert that compelled speech violates the "freedom of mind" of the humans affiliated with the corporation?

Although the first principle of corporate law is that for-profit corporations have a legal identity separate from their shareholders, management and employees, (5) in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, (6) the bakery downplayed its corporate identity when challenging the commission's decision that refusing to design a custom wedding cake for a same-sex couple violated the state's antidiscrimination law. (7) Masterpiece emphasized the law's burden on the First Amendment rights of Jack Phillips, a co-owner and cake designer who was described as "a cake artist." (8) Compelling Phillips to create a cake for a same-sex wedding forces him to "speak" in violation of his sincerely held religious beliefs. (9) Conversely, Colorado downplayed Phillips's artistry by asserting the commercial conduct of the bakery Phillips owned with his wife was at issue; "a business's decision of whom not to serve is not 'speech.'" (10)

During the oral argument of Masterpiece Cakeshop, only Justice Sotomayor probed the link between Phillips's beliefs and the corporation's actions. Noting that "the seller of the cakes is not Mr. Phillips, it's Masterpiece Corporation," and that corporations are separate entities from their shareholders, Justice Sotomayor asked "who controls the expression here, the corporation or its shareholders?" (11) Masterpiece's attorney Kristen Waggoner emphasized that in the context of a closely held corporation, Phillips and Masterpiece Cakeshop were in effect the same as both are "speaking when they're creating" cakes. (12) Justice Sotomayor interrupted, again asking "But who makes a decision for the corporation?" (13) Waggoner responded that the shareholders in a small, family-held corporation would decide. (14) "And that's exactly what's at stake in this case. Mr. Phillips owns Masterpiece Cakeshops [sic]. He designs most of the wedding cakes himself ...." (15) In other words, forcing Masterpiece Cakeshop to create and sell a wedding cake that expresses a message in support of a same-sex marriage "violates Mr. Phillips's religious convictions." (16)

The case presented novel and difficult questions about the definition of speech (17) and whether a closely held corporation's decisions, animated by a co-owner's personal beliefs, may be exempt from generally applicable laws. (18) The Court side stepped these questions and instead found that the commission showed clear hostility to Phillips's sincere religious beliefs in violation of the Free Exercise Clause. (19) The Court's acknowledgement of the beliefs of a shareholder in Masterpiece Cakeshop mimics Burwell v. Hobby Lobby Stores, Inc. (20) where the Court held the religious beliefs of the shareholders of three closely held corporations justified exempting those corporations from a mandate to provide contraceptives to employees. (21)

The issues raised in Masterpiece Cakeshop were not unique to that business; other businesses have also raised conscience-based objections to the enforcement of state antidiscrimination laws and the Court has avoided the substantive questions in those cases as well. (22) Thus, the conflict between conscience and antidiscrimination laws remains unresolved. For example, in the aftermath of the Masterpiece Cakeshop decision, Phillips and his bakery settled with Colorado regarding a transgender woman's claim of discrimination, (23) but the woman initiated a lawsuit on her behalf because of Phillips's refusal to design a cake that reflected her transgender status. (24) Justice Kennedy's assurance in Obergefell v. Hodges (25) that "those who adhere to religious doctrines, may continue to advocate with utmost, sincere conviction" their opposition to same-sex marriage, and presumably other contentious social changes, (26) is unfulfilled, unless advocacy is defined as having little or nothing to do with the operation of a business.

Conscience arguments were also presented in two other October 2017 Term cases, Janus v. American Federation of State, County, and Municipal Employees (27) and National Institute of Family and Life Advocates v. Becerra (NIFLA). (28) Janus involved an individual who was forced to contribute to a public sector union whose positions on public policy he opposed. (29) The Court found compulsory union dues to be unconstitutional because "individuals are coerced into betraying their convictions." (30) Justice Alito, writing for the Janus majority, stated that "[compelling individuals to mouth support for views they find objectionable" violates the "cardinal" command against government-mandated orthodoxy first set out in West Virginia State Board of Education v. Barnette. (31)

In NIFLA, the Court struck down a California law requiring clinics that primarily serve pregnant women to provide certain notices, such as the availability elsewhere of state-funded abortions. (32) The petitioners in NIFLA, nonprofit corporations operating pro-life pregnancy clinics as a form of advocacy, (33) asserted that the state-mandated disclosure violated their consciences, (34) a novel argument Justice Thomas's opinion for the Court ignored. (35) Justice Kennedy, though, in a concurring opinion joined by Chief Justice Roberts and Justices Alito and Gorsuch, conflated the nonprofit corporations with the individuals who work or volunteer at the clinics. (36) Justice Kennedy wrote that the law requires pro-life centers "to promote the State's own preferred message advertising abortions." (37) "This compels individuals to contradict their most deeply held beliefs." (38) Justice Kennedy added, "Governments must not be allowed to force persons to express a message contrary to their deepest convictions." (39)

That Justice Kennedy's concurring opinion in NIFLA would use nearly identical language as that in Justice Alito's Janus opinion is conspicuous because the NIFLA petitioners were corporations. The Court has held that nonprofit advocacy corporations have standing to assert the rights of their members, (40) but Justice Kennedy did not cite any precedent regarding the nexus between nonprofit corporations and their members. And because the Court in Hobby Lobby dismissed the distinction between nonprofit and closely held for-profit corporations, (41) a significant question raised by Justice Kennedy's NIFLA concurring opinion is whether a for-profit corporation, which lacks a conscience, may assert harm to the consciences of its shareholders.

The Janus and NIFLA majority opinions show two quite distinct tracks for assessing compelled speech claims. Janus is grounded in harm to freedom of conscience; NIFLA emphasizes the risks of content regulation. The latter analytical option, utilized by the Court in some earlier non-press corporate speech cases, (42) downplays corporate identity and employs traditional content-based analysis such as assessment of tailoring. As shown later in this Article, NIFLA's overriding theme is that the government harms the marketplace of ideas when it compels speech. Stated differently, government efforts to promote a well-informed public do not justify interfering with speaker autonomy.

Before NIFLA, the conflict between a well-informed public and compelled non-press corporate speech was addressed in Pacific Gas & Electric Co. v. Public Service Commission (PG&E). (43) Justice Powell's papers, along with the papers of Justices Blackmun, Brennan, Marshall, and Byron White, reveal he had to finesse references to the Court's compelled speech precedents to omit references to conscience in his PG&E opinion. The analytical track utilized by Justice Thomas in NIFLA has its genesis in PG&E. This Article puts NIFLA in context by exploring the dialogue within the Court as it was creating the compelled speech doctrine for non-press corporations in PG&E. (44)

Part I of this Article provides a summary of the Court's struggles with non-press corporate speech cases and presents the thesis that "forward thinking" government efforts to fine tune the flow of information by compelling corporate speech should be rejected, not on the basis of conscience, but because these efforts promote government-defined orthodoxy. Part II takes a close look at the right to receive expression in First National Bank of Boston v. Bellotti. (45) Justice Powell's papers reveal that framing the case in terms of the rights of listeners presented a less complicated path to a majority than if his opinion had addressed the nature of corporations. Part III explains why Justice Powell eliminated conscience from his PG&E opinion and created a methodology for compelled speech cases involving non-press corporations that does not require veil piercing or derivative rights analysis. Part IV contrasts Justice Thomas's NIFLA opinion with Justice Kennedy's concurring opinion. Although Justice Kennedy's veil piercing is...

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