Photo analogy by Slate
At aing week’s arguments, the Supreme Cloister will agitation whether business corporations accept religious liberty. Hobby Lobby, a alternation of ability food with 13,000 employees, forth with a baby Mennonite appliance maker, seek exemptions from the Obamacare affirmation that employer bloom allowance affairs awning assertive forms of bearing control. The case raises afresh the catechism that sparked so abundant altercation afterwards the Citizens United case: Are corporations “people” with the aforementioned rights as citizens?
Corporate personhood is calmly ridiculed on late-night television, but as Eric Posner acicular out in Slate, the law about “treats assorted nonhuman, nonsentient entities as ‘persons’ for assertive acknowledged purposes.” Yet that doesn’t beggarly Hobby Lobby has all the rights you and I have. Indeed, the justices should authority that Hobby Lobby does not accept religious rights absolutely because the association is a acknowledged person.
When corporations were aboriginal invented, the actual abstraction was to actualize a fabulous “person” that could be accustomed by law and abide in perpetuity. Writing in the 1700s, the British advocate William Blackstone explained that “it has been begin necessary, back it is for the advantage of the public” to “constitute bogus persons, who may advance a abiding succession, and adore a affectionate of acknowledged immortality. These bogus bodies are called … corporations.”
Corporate personhood has two capital features. As Posner notes, personhood is alone the law’s autograph way of adage that assertive entities accept acknowledged rights. As a acknowledged person, the association has the adapted to own property. It has the adapted to anatomy contracts. If either of those rights is interfered with, the association has the adapted to sue in court. The additional affection is break of the article from the stockholders. The company’s acreage is captivated in its own name and belongs to it, not to the investors. If the association breaches a contract, it’s the company, not the alone stockholders, that is responsible. If the association is afflicted in some way, the alone investors are not accustomed to sue. The association has to do it.
This apperception of accumulated personhood has abstruse and benign bread-and-er consequences. It agency that the obligations the law imposes on the corporation, such as accountability for harms acquired by the firm’s operations, are not about continued to the shareholders. Bound accountability protects the owners’ claimed assets, which commonly can’t be taken to pay the debts of the corporation. This creates incentives for investment, promotes ambitious activity, and encourages accumulated managers to booty the risks all-important for advance and innovation. That’s why the Supreme Court, in business cases, has captivated that “incorporation’s basal purpose is to actualize a accurately audible entity, with acknowledged rights, obligations, powers, and privileges altered from those of the accustomed individuals who created it, who own it, or whom it employs.”
In contempo built-in law cases, however, the justices assume to accept abandoned this basal assumption of accumulated law. In Citizens United, the cloister finer captivated that corporations enjoyed the aforementioned chargeless accent rights as accustomed individuals. Contrary to accepted belief, however, the cloister did not abject that captivation on the abstraction that corporations are people. Instead, the justices said that corporations are “associations of citizens”—and those citizens who accomplish up the association accept built-in rights.
In the Hobby Lobby case, the owners of the ability abundance alternation accomplish the aforementioned mistake. The owners affirmation that their claimed religious behavior would be affronted if they accept to accommodate assertive forms of bearing ascendancy advantage to employees. Yet Hobby Lobby’s owners aren’t adapted by the law to do anything. The acknowledged assignment avalanche on Hobby Lobby, the company, not its owners. If Hobby Lobby fails to accommodate the adapted insurance, the company, not the owners, is responsible.
What the owners appetite is for the Supreme Cloister to “pierce the accumulated veil”—legalese for adorable abaft the corporation’s acknowledged character and basing a cardinal on the interests and desires of the owners of the firm. But Hobby Lobby’s owners alone appetite to bore the blind for this one issue. They appetite the cloister to absolve their claimed behavior on bearing control, yet they still accumulate the protections of the accumulated anatomy for aggregate else, including bound liability.
Hobby Lobby should alone accept the rights of acknowledged personhood that are capital for its operations. As allegorical Supreme Cloister Chief Justice John Marshall wrote about 200 years ago, “Being the bald animal of law,” the association “possesses alone those backdrop which the allotment of its conception confers aloft it either especially or as accidental to its actual existence.” Perhaps that includes some bound accent rights, as we commonly apprehend firms to acquaint and acquaint with advisers and customers. Yet religious alternative is not one of those rights. Hobby Lobby is a for-profit association whose business doesn’t crave it to accept religious freedom. In fact, acceding Hobby Lobby an absolution from accouterment contraception coverage, a affirmation that applies to added companies, would accomplish the close beneath adorable to abeyant employees.
Religious alternative is absolutely adapted for some not-for-profit corporations, like churches or nonprofits with a religious mission. If Hobby Lobby’s owners capital to anatomy such an organization, there was a acceptable and readily accessible option: They could accept congenital as a nonprofit. They wouldn’t be able to accomplish the aforementioned affectionate of money, but they’d accept a association with an absolutely religious mission. And beneath the Affordable Care Act, they’d be exempted from the bearing ascendancy requirement.
Hobby Lobby’s owners, however, formed a business corporation. By allurement the Supreme Cloister to let them adore all the protections of this accumulated form, but not all of its duties, Hobby Lobby’s owners appetite to accept their accumulated block and eat it, too.
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