Tuesday, January 26, 2010

The Supreme Court and Corporations

As an attorney, I probably read fewer cases than I did in law school. At least, fewer when it comes to decisions of consequence. There are a couple of reasons for this: first, I read cases for work so reading cases for pleasure ain't fun; and, second, Supreme Court decisions are ridiculously long. So, let me first say that I haven't bothered to read the opinion of the Supreme Court with regard to corporate political spending but I am bothered by it.

Corporations are not natural born anything - they're the creation of lawyers and legislatures around the world. As economic actors, corporations give investors the ability to experiment with new ideas without putting too much of their personal wealth at stake. That's a good thing. But, corporations exist only so much as Congress lets them exist. If Congress passed a law, and the President signed this law, that eliminated all corporations tomorrow, all corporations would cease to exist because their underlying foundation - legal recognition - would cease to exist. Corporations would become essentially partnerships with each shareholder becoming a proportionate shareholder. The protections from company debt would be eliminated, and the partners would put their own fortunes on the line (as opposed to their share prices).

So, if a corporation is created by legislative action, can be eliminated by legislative action, then Congress should have the right to regulate the activities of these entities, including their "right" to free speech. Justice Rehnquist used to say that in the law, you have to take the bitter with the sweet, and here, the bitter is the inability of corporations to spend on campaigns directly, followed by the sweetness of existence. This is in contrast with actual people, who's creation cannot be so determined by legislative action.

So, what can be done? Simple, Congress can redo the legislation prohibiting corporate donations to campaigns, and then add a provision stripping the Supreme Court of jurisdiction to review the law's constitutionality. Since the Constitution grants Congress the power to decide what the Supreme Court's jurisdiction is (except for those provisions expressly provided for in Article III), Congress can tell the Court that its decision is wrong and tell them to go take a long walk off of a short pier.

Of course, Congress is almost completely owned by corporate interests, so this solution is unlikely. Typical.


  1. What our fair President said about the decision in the SOTU was false. Alito was right in shaking his head. Obama, a Harvard Law School grad, either did not understand what the narrow ruling meant, or he was lying.

    Also, when he called out the SCOTUS in that speech...it was rude. Dirty pool.

  2. I absolutely disagree. Presidents and members of Congress have discussed decisions of the U.S. Supreme Court for decades. Hell, the modern conservative movement was propelled by the decisions of the Warren and Burger Courts. Obama was well within his rights to criticize them.

    While the ruling itself did not touch upon foreign corporations, it opens the door for lower Courts to do so.

    Alito, meanwhile, was wrong to react in any way. As a Justice, he is supposed to be impartial, particularly in partisan events. Showing his displeasure at the State of the Union (instead of swallowing his pride) indicates a potential bias against the President, and that's a bad thing.

  3. I have no problem with Obama discussing the decision. I talk about Kelo as if it is a spawn from hell all the time. What I had a problem with was the setting. That is neither the time, nor the place. It is like inviting your dad to an award banquet and while you are there, you dress him down for not playing catch with you enough. Bad form.

    As far as Alito goes, I don't disagree with you. I give him some leeway though since there were people saying things that were lies and this fake populust movement was cheering in his face. At some point you just have to shake your head.