Sotomayor Issues Challenge to a Century of Corporate Law

By JESS BRAVIN
Wall Street Journal
Sept. 17, 2009

WASHINGTON -- In her maiden Supreme Court appearance last week, Justice Sonia Sotomayor made a provocative comment that probed the foundations of corporate law.

During arguments in a campaign-finance case, the court's majority conservatives seemed persuaded that corporations have broad First Amendment rights and that recent precedents upholding limits on corporate political spending should be overruled.

But Justice Sotomayor suggested the majority might have it all wrong -- and that instead the court should reconsider the 19th century rulings that first afforded corporations the same rights flesh-and-blood people have.

Judges "created corporations as persons, gave birth to corporations as persons," she said. "There could be an argument made that that was the court's error to start with...[imbuing] a creature of state law with human characteristics."

After a confirmation process that revealed little of her legal philosophy, the remark offered an early hint of the direction Justice Sotomayor might want to take the court.

"Progressives who think that corporations already have an unduly large influence on policy in the United States have to feel reassured that this was one of [her] first questions," said Douglas Kendall, president of the liberal Constitutional Accountability Center.

"I don't want to draw too much from one comment," says Todd Gaziano, director of the Center for Legal and Judicial Studies at the conservative Heritage Foundation. But it "doesn't give me a lot of confidence that she respects the corporate form and the type of rights that it should be afforded."

For centuries, corporations have been considered beings apart from their human owners, yet sharing with them some attributes, such as the right to make contracts and own property. Originally, corporations were a relatively rare form of organization. The government granted charters to corporations, delineating their specific functions. Their powers were presumed limited to those their charter spelled out.

"A corporation is an artificial being, invisible, intangible," Chief Justice John Marshall wrote in an 1819 case. "It possesses only those properties which the charter of its creation confers upon it." Continue reading here.