Against Absolutist Speaker-Agnosticism

Contrary to its popular understanding, the Citizens United decision does not hold that corporations are people, and therefore have constitutional rights.

Rather, the case states that the First Amendment does not permit the government to regulate speech based on the identity of the speaker. In other words, it holds that the First Amendment is a restriction on how the government may regulate speech per se. If speech would be constitutionally protected when spoken by one speaker, Citizens United holds, it must be constitutionally protected when spoken by any speaker. (As this anti-Citizens United site puts it, if your toaster could talk, it would have First Amendment rights, too.)

That doesn’t sound so bad. After all, as the opinion rightly notes, often speaker-based speech regulations are just content-based speech regulations in disguise. Or they may be used to target disadvantaged groups. Also, as defenders of Citizens United often point out, a speaker-agnostic analysis doesn’t just protect commercial corporations but also unions, nonprofits, media organizations, and so on.

But as Justice Stevens in dissent argued, this line of reasoning can have unintended consequences. He observed that this analysis could prevent the government from taking action against something like the Tokyo Rose broadcasts. More realistically, I don’t see how you can square a speaker-agnostic jurisdprudences with the obvious need for the US to prevent, for instance, foreign governments from trying to influence US elections.

There’s got to be a better way!

Fortunately, there is. We should hold that only actual living, breathing human beings enjoy constitutional rights of any kind, and that while speaker-based rules may be impermissible (or highly disfavored) when applied to living breathing human beings, rules that distinguish between human beings and corporate entities should be fine.

But wait, you say. What about media organizations and unions and nonprofits?

Well, I don’t think it’s that controversial that groups of people should enjoy the same rights that those people themselves enjoy–it’s not that the groups themselves “have rights,” it’s that the people making up those groups are choosing to excercise their individual rights collectively, through a group. A newspaper, for instance, enjoys free speech rights that ultimately derive from its owners and its individual journalists. A union enjoys free speech rights derivative from its members. And so on.

But wait, you say. How is that any different than what Citizens United held?

Corporations (and other kinds of business organizations) aren’t just companies owned by shareholders. They are legally-defined entities that serve a specific purpose: They allow people to invest their money, but to limit their liability. When a company goes out of business, or is legally liable for something, the investors might lose their investment–but that’s it. If I open a lemonade stand and it goes into a billion dollars of debt then I, personally, am liable for that debt. But if I set it up as a corporation, provided I follow proper corporate law (e.g. operated the lemonade stand as a distinct legal entitity and do not mix up my own funds and affairs with it) then the lemonade stand just goes out of business and I walk away. This is true even if I am the sole shareholder and my own (honest) fuck-ups resulted in the massive debt.

Also, the very purpose of much corporate law is to prevent corporations from being instantly responsive to the desires of their owners. 51% of the shareholders (or a group of people who own 51% of the shares) of a corporation don’t have the power to just tell it what to do, since corporate law requires that corproations protect the financial interests of minority shareholders.

For instance: a 51% vote of the shareholders of a children’s cereal corporation would not be enough to require it to stop advertising sugar cereal to children, since doing so would harm the corporation’s financial interests and open it up to lawsuits from minority shareholders. However, a 51% vote of the shareholders of a children’s cereal corporation would be enough to require it to start advertising to children, if doing so was in the financial interest of the corporation, and therefore, in the financial interest of its shareholders. The fact that some of the shareholders might morally disagreee with this action is irrelevant–in our system, they’re just supposed to sell their stock and invest in companies they like better.

Just to be very clear about this: Under our legal system, a minority of shareholders in a company can force the company to do things that the majority of shareholders find morally repugnant. This is not a flaw in the system–it’s how it’s supposed to work. Corporations are set up to (lawfully) make money, not engage in do-gooding.

(I should note, however, that much corporate law is also intended to give wide latitude to the management of a corporation (the CEO and other top-level employees) to do what they want without being second-guessed by shareholders at every turn. However I do not think that corporate legal systems such as that of Delaware that are set up specifically to insulate employees (management) from their “bosses” (shareholders) change my analysis much. As a practical matter it means that many corporations do engage in various acts of do-gooding speech that is not directly connected to the bottom line. However it would be odd to claim that the employees of a corporation have a First Amendment right to use other peoples’ money to further their various social views, however tempting this may seem. But this is not the same as claiming that such activities should be prevented or regulated.)

To cut through this mess, it would be better if corporate entities and groups of people enjoyed the same rights as the people who make up those groups–but only insofar as the groups are actually capable of responding to the desires of the actual human beings whose rights they are derivatively excercising. Because corporations are limited-purpose legal entities, and because one important purpose of modern corporate law is to prevent majority shareholders from imposing their will on the company, corporations are legally incapable of derivatively excercising the rights of actual human beings.

Some caveats:

  • Just because the First Amendment shouldn’t necessarily apply to the “speech” of a given entity doesn’t mean that there shouldn’t be statutory or other legal protections for such speech. And the default rule for all speech is that it is legal, regardless of the constitutionality of potential regulations of that speech.

  • The Citizens United case itself would probably have come out the same way regardless. As it should have–it was classic political speech that reflected the opinions of real life human beings. I have issues with that case’s reasoning, not its result.

  • This does not mean that, for example, the advertising of a privately-held tobacco company cannot be regulated, but the advertising of a publicly-held tobacco company can. But it does mean that in general private companies that have no fiduciary responsibilities to minority shareholders should have greater First Amendment protections–again, not because the companies themselves have these rights, but because the living human beings standing behind them do. But other kinds of restrictions on speech that may be necessary to achieve important government interests such as public health may be ok anyway.

  • Some corporate entities (many nonprofits, in fact) are just free-floating entities that have no owners or members. They work, more or less, as trusts. However all trusts and nonprofits are ultimately set up by somebody, and they have employees, board members, and so on. So the answer as to whose rights a given corporate entity might be derivatively excercising (its owners, members, or founders) might vary case by case. This might also matter in the case of, for example, a benefit corporation.

  • I am not proposing that only companies that do not have liability protections for investors should have First Amendment rights. I’ve seen such proposals, and disagree with them–liability protections for investors are generally good idea and should not be discouraged.

  • What about the speech rights of foreign governments in the United States? Are they (at least the democratically-elected ones) just derivatively excercising the free speech rights of their citizens? Maybe: but while I think that the First Amendment does apply to foreign nationals within the United States, there is no reason to think it applies to foreign nationals while they are outside the United States–and therefore, in the case of foreign governments within the United States, there would be no First Amendment rights for them to derivatively excercise. Or perhaps we could just abandon speaker-agnosticism in such matters.