Majority AND dissent unleash blistering critique of infamous SCOTUS decision, 'offensive' concept of 'corporate personhood'...

Ernest A. Canning Byon 1/5/2012, 4:37pm PT

Guest blogged by Ernest A. Canning

This week, the Montana Supreme Court stood up to the U.S. Supreme Court's Citizens United decision, rejecting the much-criticized 2010 federal decision by declaring that, in their state at least, a century-old prohibition on corporate money in local politics will be allowed to stand.

By way of a 5-2 decision in Western Tradition Partnership, Inc. vs. Attorney General of Montana [PDF], the state's high court upheld the constitutionality of the long-standing Corrupt Practices Act of 1912, which prevents direct contributions by corporations to candidates or political committees. The law does not, however, prohibit voluntary individual contributions to separate segregated funds created by shareholders, employees or members of a corporation.

The state law also mandates disclosure of who pays for political communications, while the 2010 Citizens United ruling allows for unlimited secret money to flood into campaigns, for use either for or against any particular candidate.

The majority opinion in the Montana case, written by Chief Justice Mike McGrath, sought to distinguish their state law from Citizens United vs. Federal Election Commission [PDF] by pointing to factors in the state --- its dependence upon agriculture and extractive resource development, as well as its sparse population and history of low campaign expenditures --- which, he claimed, make the state "especially vulnerable to...corporate control to the detriment of democracy".

Even one of the dissenters in the MT decision, Justice James C. Nelson, while making clear that he believes the SCOTUS decision likely takes legal precedent over their own state law, offered a blistering critique to the very underpinnings of Citizens United --- a case we previously predicted "will live in infamy" --- by taking direct aim at the absurd concept of "corporate personhood" in his dissenting opinion...

'Corporations are not persons. Human beings are persons.'

Citizens United is predicated upon the assumption that corporations are "persons" within the meaning of the Fourteenth Amendment and, as such, enjoy the same First Amendment right to free speech as actual human beings. In his dissenting opinion, Justice Nelson unleashed a scathing, no-holds-barred broadside against that long-held federal assumption:

While I recognize that this doctrine is firmly entrenched in the law…I find the entire concept offensive. Corporations are artificial creatures of law. As such, they should enjoy only those powers --- not constitutional rights, but legislatively-conferred powers --- that are concomitant with their legitimate function, that being limited-liability investment vehicles for business. Corporations are not persons. Human beings are persons, and it is an affront to the inviolable dignity of our species that courts have created a legal fiction which forces people --- human beings --- to share fundamental, natural rights with soulless creations of government. Worse still, while corporations and human beings share many of the same rights under the law, they clearly are not bound equally to the same codes of good conduct, decency, and morality, and they are not held equally accountable for their sins. Indeed, it is truly ironic that the death penalty and hell are reserved only to natural persons.

While Nelson appropriately described corporate "personhood" as "entrenched," the concept did not arise from a carefully reasoned judicial opinion.

During oral arguments in Santa Clara County vs. Southern Pacific Railroad Co. (1886), Chief Justice Morrison Waite suggested that the Court did not wish to hear arguments as to whether corporations were "persons" within the meaning of the 14th Amendment, because "we are all of the opinion that it does."

When the case was decided, none of the Justices offered a written opinion on whether corporations were, indeed, "persons." Instead, the Supreme Court's reporter, J.C. Bancroft Davis, a former president of the Newburgh and New York Railway Co., simply added the conclusion that they were in a headnote to the published opinion.

Although it is basic legal doctrine that it is the body of a decision and not a headnote which establishes the law in any particular case, the Santa Clara County case has since been relied upon as having established the concept of corporate personhood.

In the U.S. Supreme Court's Wheeling Steel Corp. vs. Glander (1949), Justice Hugo Black signed onto a dissenting opinion by Justice William O. Douglas, which tore into the "cryptic" rationale employed by the Court in its 1886 assumption that the Fourteenth Amendment applied to corporations, which assumption, Douglas and Black opined, was not supported by either history or logic.

Both Douglas, in Wheeling Steel, and Black, in Connecticut General Life Ins. Co. vs. Johnson (1938), turned to the actual language of the Fourteenth Amendment:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Douglas concluded: "'Persons' in the first sentence plainly include only human beings, for corporations are not 'born or naturalized.'" He also opined: "Corporations are not 'citizens' within the meaning of the first clause of the second sentence."

The hard-right and the modern day Federalist Society-connected radicals-in-robes who represents them on the bench, rail against judicial activism and claim to be strict constructionists. Yet, they make no effort to either avoid judicial activism or engage in strict constructionism when it comes to the flawed concept of "corporate personhood."

Upon the removal of corporate personhood, the Citizens United concept of corporate First Amendment rights collapses like a wet taco, as the Justices in Montana underscored in both assenting and dissenting opinions....

Citizens United 'smoke and mirrors' masks reality of corporate corruption

In his dissenting opinion, MT's Justice Nelson described the effort by the Republican majority in Citizens United to limit the government's interest only to quid pro quo corruption, as little more than "smoke and mirrors."

"In the real world of politics," Nelson observed, "the 'quid pro quo' of both direct contributions to candidates and independent expenditures on their behalf is loyalty. And, in practical effect, experience teaches that money corrupts, and enough of it corrupts absolutely."

(It is a form of purchased loyalty, we would add, that can be seen in the ethical lapses of Justice Clarence Thomas which have been so extensive that one may wish to characterize them as a judicial crime spree.)

Justice Nelson's observations are borne out by Chief Justice McGrath's description of the sordid reality that led to the 1912 adoption of MT's Corrupt Practices Act. This included a battle between F. Agustus Heinze and the Anaconda Co., then controlled by Standard Oil, during which "a Butte judge admitted that Anaconda representatives offered him $250,000 cash to sign an affidavit that Heinze had bribed him."

Chief Justice McGrath adds:

In response to the legal conflicts with Heinze, in 1903 Anaconda/Standard closed down all its industrial and mining operations (but not the many newspapers it controlled), throwing 4/5 of the labor force of Montana out of work...Its price for sending its employees back to work was that that the Governor call a special session of the Legislature to enact a measure that would allow Anaconda to avoid having to litigate in front of Butte judges. The Governor and the Legislature capitulated and the statute survives.

It was this "naked corporate manipulation," the Chief Justice added, that led to the 1906 amendment of the MT Constitution to allow for direct ballot initiatives, primary elections, the direct election of U.S. Senators, as well as the adoption of 1912 Corrupt Practices Act. This continues to be, the Chief Justice asserted, a compelling interest in Montana today.*

"The notion that corporations are disadvantaged in the political realm is unbelievable," Justice Nelson adds in his scathing critque of Citizens United offered in his dissent. "The truth is that corporations wield inordinate power in Congress and in the state legislatures. It is hard to tell where government ends and corporate America begins."

Citizens United destructive of the First Amendment

As we previously noted in "Citizens United: A Case Which Will Live in Infamy", the First Amendment does not merely protect the right to speak freely. It reads, in pertinent part: "Congress shall make no law…abridging the freedom of speech, or of the press…"

The distinction the framers made between "freedom of speech" and freedom "of the press" flows from the vital democracy-sustaining function played by an informed public. In short, the First Amendment was intended to insure that the U.S. would be democratically governed by a knowledgeable electorate.

James Madison astutely observed:

Knowledge will forever govern ignorance; and a people who mean to be their own governors must arm themselves with the power which knowledge gives.

Thus, we urged in our early 2010 article, the expansion of corporate "free speech" succeeds in undermining the core purpose of a "free press" --- to ensure the public's right to know.

Justice Nelson makes a similar point in his dissent in Western Tradition Partnership, Inc., focusing not only on the fallacy that "speech equals money," but the deceptions of unchecked, corporate propaganda (aka political ads).

Voters generally do not have the desire, much less the time, sophistication, or ability, to sift through hours upon hours of attack ads, political mumbo jumbo, and sound bites in order to winnow truth (of which there often seems to be very little) from fiction and half-truths (of which there unfortunately seems to be an endless supply). The Supreme Court believes the solution for false or misleading speech is more speech. Yet, an endless barrage of accusations and counteraccusations providing more fodder than fact only serves to overwhelm, confuse, and disenchant voters.

Must we give deference to a corrupt Supreme Court decision?

Both the Montana Supreme Court majority, as well as the dissenters, stake out principled positions.

Justice Nelson's dissent, which he describes as "distasteful," derives from his good faith belief that he must apply Citizens United given that the U.S. Supreme Court, under the Supremacy Clause of the U.S. Constitution, can offer the final word on the interpretation of the First Amendment.

Chief Justice McGrath's position is that Citizens United still permits a state to impose "rationally-tailored statutory restrictions" on corporate campaign expenditures to fulfill a state's "compelling interest" to prevent corruption of its political processes.

Both the majority and the dissent point to direct election of the Montana judiciary. Chief Justice McGrath quoted from Caperton vs. A.T. Massey Coal Co. (2009):

Courts, in our system, elaborate principles of law in the course of resolving disputes. The power and the prerogative of a court to perform this function rests, in the end, upon the respect accorded to its judgments. The citizen’s respect for judgments depends in turn upon the issuing court’s absolute probity.

Caperton entailed an alleged fraudulent cancellation of a coal contract by A.T. Massey Coal Co. While the suit was pending, then Massey CEO Don Blankenship donated $3 million to the campaign of Charleston attorney Brent Benjamin, who was seeking to unseat WV Supreme Court Justice Warren McGraw. Benjamin, who was elected with Massey's generous support, then declined to recuse himself from the case in which Massey had a vital stake.

A majority of the U.S. Supreme Court concluded that the appearance of a conflict was so "extreme" as to deprive the plaintiff its 14th Amendment right to due process.

But if that is so, what are we to make of the critical fifth vote furnished in Citizens United by Justice Clarence Thomas considering that Citizens United had donated some $100,000 in political ads designed to insure Thomas' confirmation by the U.S. Senate back in 1991; that Thomas knowingly falsified his Judicial Financial Disclosure Forms by failing to disclose that Ginni Thomas received nearly $700,000 from the right wing Heritage Foundation, or that wealthy right wing benefactors gave $500,000 in start up monies to Liberty Central, a 501(c)(4) tax-exempt advocacy group that Ginni Thomas incorporated just after Citizen's United was argued before the Court, but prior to the Court's announced decision, raising the specter of "judicial insider trading"? Is that not the same, or worse, appearance of a conflict of interest, at a minimum, as the court found in their own Caperton decision?

Indeed, how is the U.S. public expected to respect the decision by the Republican-majority's Citizens United decision limiting the government's interest to blatant quid pro quo corruption when two members of that majority --- Thomas and Justice Antonin Scalia --- routinely curry favor from billionaires, not only attending plutocratic functions like the Koch brothers seminars but displaying a remarkable lack of judicial probity when the two were feted recently at a dinner sponsored by the very law firm that will argue against the challenge to President Obama's healthcare law --- and all on the very same day that the Court met behind closed doors to consider that divisive issue?

While Justice Nelson is correct in relying upon the Supremacy Clause, he is incorrect in his belief that the U.S. Supreme Court is the final arbiter. The final say in our constitutional system ultimately rests with the people and the power to amend the constitution.

As we previously noted, it took a bloody civil war and the 13th amendment to rectify Dred Scott vs. Sanford, where the Court, in service of wealthy Southern landowner/masters, ruled that African-American slaves and their descendants were mere chattel who had no right to make the human decision to escape to freedom.

It may take a constitutional amendment to rectify the equally abominable Citizens United decision, made on behalf of oligarchic billionaires, to extend to artificial, inter-generational constructs known as "corporations" the rights that the framers of the Constitution had intended only to apply to living, breathing people who make up the actual citizenry of this nation. To that end, a growing number of city councils across the nation, including Los Angeles, Oakland, Albany, New York and Boulder have now passed resolutions calling for an end to "corporate personhood."

Rectify it we must if the basic tenets of constitutional democracy and the rule of law are ever to be restored. The Montana Supreme Court's courageous ruling reminds us all of that ever-increasing imperative.

UPDATE 01/06/12: American Tradition Partnership (formerly Western Tradition Partnership) (WTP) announced that it will appeal the MT Supreme Court decision to the U.S. Supreme Court.

Worthy of note is that WTP is a Colorado corporation. In the body of its decision, the Montana Supreme Court revealed that while WTP is registered to do business in MT, its "business" is simply "a conduit for funds for persons and entities including corporations who want to spend money anonymously to influence Montana elections."

If we consider this on the national level, what we have, under Citizens United, is the prospect for foreign corporations and perhaps foreign governments operating through those corporations, seeking to influence the outcome of U.S. elections, flooding our airwaves with paid-for political advertisements to the detriment of the live, breathing human beings who make up the citizenry of our nation.

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Ernest A. Canning has been an active member of the California state bar since 1977. Mr. Canning has received both undergraduate and graduate degrees in political science as well as a juris doctor. He is also a Vietnam vet (4th Infantry, Central Highlands 1968). Follow him on Twitter: @Cann4ing.



