Saturday, January 23, 2010

legal fiction

"If it is not necessary to decide more, it is necessary not to decide more." - Chief Justice John Roberts, a long time ago, via Ruth Marcus

Because it actually is a little-understood concept, we need to discuss the idea of a corporation as a person. (Difficult is the word I initially used, but it's really not that hard to grasp). The first thing that you learn in a business law class are the three basic forms of organization - a sole proprietorship (a pimp, for example) where you have all of the liability, debts and profits; a partnership (an escort service, for example) where you share all the liability, debts and profits; and a corporation (a whorehouse, for example) where for all practical purposes you don't even actually exist.

How many times have you heard about a Donald Trump enterprise going bankrupt? And yet, there he stands, proud and tall, canonized on the Church of Television with willing submissives queuing up in the wings. This is because The Donald knows how to incorporate. It's easy, and depending on which state you incorporate in, it only costs a few hundred dollars. And as opposed to the sole proprietorship or partnership, when a Trump hotel or casino or whorehouse goes bankrupt, The Donald is unphased because The Donald is untouched. In other words, The Trump Plaza Hotel contains no actual Trump.

This is meant as an introduction as to why a corporation is legally a person. You need someone to sue (and in turn, someone who can sue you).

Let's say that you were putting up a satellite dish on a penthouse at the Plaza Hotel in 1994 and you leaned against a balcony rail after you completed your hard labor and the rail broke and you plunged to the street and shattered your spine. Well, you sure as shit couldn't sue The Donald. Legally, he doesn't even exist in this scenario. But you could sue the Plaza Hotel, take all it's assets, and make The Donald, who includes it amongst his holdings, very sad (not really, but this is just an example). Let's say, for purposes of this example, that The Donald has one hundred million billion dollars but the corporation he controls which in turn controls the Plaza Hotel only has a net worth of a dollar ninety-nine. Well, a dollar ninety-nine is about as much as you're going to get, minus legal expenses.

So much for our example. The corporations that we are interested in are much bigger than The Donald's, albeit not nearly as parody worthy. Bank of America, Exxon Mobil, UnitedHealth Group, they all strive towards one goal - maximizing profits. This is not a good thing or a bad thing, it's an amoral thing. Unless you are a shareholder, or are demonstrably damaged by the corporation, it's not about you. If you must interact with UnitedHealth Group, you don't ever really interact with CEO Stephen Hemsley, you interact with the entity know as UnitedHealth Group. Stephen is just a well-paid representative of the corporate person, and he has limited liability regarding any actions that the corporate person may take, even if he's the one that makes it dance.

Corporate personhood falls into the category of 'legal fiction', which are facts created and defined by courts. In the 1886 Supreme Court case 'Santa Clara County v. Southern Pacific Railroad', the court reporter's summary included the following:

"The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

Here is a fascinating little tidbit - the court itself never addressed the issue of fourteenth amendment protection in their ruling.

So here we are in 2010 with the Roberts Supreme Court activist ruling that limiting a corporation's political spending is a violation of it's protected free speech, an issue that no one had asked them to rule on. And what an utterly bizarre decision, although it shouldn't be surprising coming from a court even more radical than the one that selected our 43rd president,

This is clearly insane, the legal fiction made flesh. In reality, a corporation is not a person, it has no opinions or beliefs beyond the directives of it's officers, and those directives most frequently are to optimize the bottom line. Bereft of restrictions, they will only seek to serve themselves at the expense of all those who refuse to serve them.

To repeat myself, this is not a good thing or a bad thing, it's an amoral thing, just like cancer. But to allow corporations unfettered access to the control of the government reveals a deep cynicism towards the institution formerly known as democracy. The Supreme Court has sold us all out, and in corporate America, they have limited liability.


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  2. Are corporations really persons?

    Do corporations think?

    Do corporations grieve when a loved one dies as a result of a lack of adequate health care?

    If a corporation ever committed an unspeakable crime against the American people, could IT be sent to federal prison? (Note the operative word here: "It")

    Has a corporation ever given its life for its country?

    Has a corporation ever been killed in an accident as the result of a design flaw in the automobile it was driving?

    Has a corporation ever written a novel that inspired millions?

    Has a corporation ever risked its life by climbing a ladder to save a child from a burning house?

    Has a corporation ever won an Oscar? Or an Emmy? Or the Nobel Peace Prize? Or the Pulitzer Prize in Biography?

    Has a corporation ever been shot and killed by someone who was using an illegal and unregistered gun?

    Has a corporation ever paused to reflect upon the simple beauty of an autumn sunset or a brilliant winter moon rising on the horizon?

    If a tree falls in the forest, does it make a noise if there are no corporations there to hear it?

    Should corporations kiss on the first date?

    Our lives - yours and mine - have more worth than any corporation. To say that the Supreme Court made a awful decision on Thursday is an understatement. Not only is it an obscene ruling - it's an insult to our humanity.

    Tom Degan
    Goshen, NY

  3. This comment has been removed by the author.

  4. The Senate voted on the nomination ..... with Roberts winning confirmation by a 78-22 vote. All 55 Republicans voted to confirm Roberts; 22 Democrats, including Senate Judiciary Committee ranking member Patrick Leahy of Vermont, also voted to confirm Roberts, as did the one independent (Jim Jeffords). 22 Democrats, including Senate Minority Leader Harry Reid of Nevada, voted in opposition.

    Say grazi to 22 DINOs who confirmed John Roberti. And let's not forget that Demos could have filibustered ALL of the GOP judicial puppets, but chose not to (actually, Kerry attempted a f-b on Alito and was shot down)-- even Harry Reid, supposed centrist opposed Alito, unlike, say, Leahy.

    In Reagan's era, the entire senate,GOP and Dem confirmed Scalia.

  5. Thanks for the insight.

    So that's what they're up to.

    Corporations worth nothing, giving billions to pols.



    but the corporation he controls which in turn controls the Plaza Hotel only has a net worth of a dollar ninety-nine.

  6. At this point, I refuse to read.

    I refuse.

  7. Here that? It's the clanging of the republic's death knell.

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