Corporations and personhood: The Supreme Court’s misguided approach

“Corporations are people, my friend.”  We’ve heard that refrain repeatedly over the past few weeks as the public digests the Supreme Court’s decision in Hobby Lobby, which held that a closely held for-profit corporation can have religious beliefs.  This follows from the Court’s groundbreaking decision in 2010 in Citizens United v. FEC that held that corporations have a First Amendment free speech right to spend money on political campaigns.

This anthropomorphization of corporations goes beyond the First Amendment, however, to other areas of the Court’s recent jurisprudence, including in two significant personal jurisdiction cases from the past few years.

{mosads}The technical doctrine of personal jurisdiction – opaque to most non-lawyers but familiar to any first-year law student – involves where a plaintiff may sue a defendant.  In essence, it is unfair to sue someone in a state in which they have no contacts or connections.  It is therefore necessary to determine where a defendant is “from” to know where a plaintiff can sue.

Of course, corporations are not necessarily “from” anywhere.  They are state-created entities that do business in various locations.  But in determining how to tell if a defendant corporation has enough contacts in a state to make it fair to sue that corporation, the Supreme Court has personified a corporation’s attributes.  Citizens United and Hobby Lobby do not stand in isolation in this respect.

In a 2011 case, Goodyear Dunlop Tires v. Brown, the Court explained that “for an individual, the paradigm forum for the exercise of general jurisdiction is the individual’s domicile; for a corporation is an equivalent place, one in which the corporation is fairly regarding as at home.”  That is, a plaintiff can sue a defendant corporation where it is “essentially at home.” 

The Court followed up that formulation this term in Daimler AG v. Baumen, holding that the corporation’s place of incorporation and principal place of business are the “paradigm” places where an individual is “at home.”  In another context, the Court has said that a corporation is “from” the place of its “nerve center,” which is where the officers and directors control the corporation.

Of course, it makes little sense for a corporation to be “at home” somewhere unless the corporation itself is taking on person-like qualities.  Corporations, as artificial entities, do not “live” anywhere and do not really have a “home.”  Indeed, the Court treats the citizenship of a partnership – such as an LLC – as including the homes of the individuals who make up the partnership, irrespective of where the partnership itself is located. 

So the Court is misguided when it attributes constitutional rights, or designates person-like “homes,” for corporate entities.  Because of the Court’s view of the corporate form as having individualistic qualities, it treats corporations like people – not just for the First Amendment, but also for more technical civil procedure rules. 

Corporations, however, are not people.  They cannot vote, hold office, or have personal feelings.  Only the individuals who run the corporation can engage in these activities.  Although the corporate personhood fiction is necessary in some instances to ensure corporations can function in our society, it takes the analogy too far to attribute human-like qualities to corporations in everything they do.

Hobby Lobby is therefore not a one-off decision on this point.  We must evaluate the dangerous doctrinal moves in both Citizens United and Hobby Lobby as part of this broader shift in the Court’s overall conception of corporate personhood.

Douglas is the Robert G. Lawson & William H. Fortune Associate Professor of Law at the University of Kentucky College of Law, specializing in Election Law and Civil Procedure.