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."
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"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."
But as the Industrial Revolution took hold, corporations proliferated and views of their functions began to evolve.
In an 1886 tax dispute between the Southern Pacific Railroad and the state of California, the court reporter quoted Chief Justice Morrison Waite telling attorneys to skip arguments over whether the 14th Amendment's equal-protection clause applied to corporations, because "we are all of opinion that it does."
That seemingly off-hand comment reflected an "impulse to shield business activity from certain government regulation," says David Millon, a law professor at Washington and Lee University.
"A positive way to put it is that the economy is booming, American production is leading the world and the courts want to promote that," Mr. Millon says. Less charitably, "it's all about protecting corporate wealth" from taxes, regulations or other legislative initiatives.
Subsequent opinions expanded corporate rights. In 1928, the court struck down a Pennsylvania tax on transportation corporations because individual taxicab drivers were exempt. Corporations get "the same protection of equal laws that natural persons" have, Justice Pierce Butler wrote.
From the mid-20th century, though, the court has vacillated on how far corporate rights extend. In a 1973 case before a more liberal court, Justice William O. Douglas rejected the Butler opinion as "a relic" that overstepped "the narrow confines of judicial review" by second-guessing the legislature's decision to tax corporations differently than individuals.
Today, it's "just complete confusion" over which rights corporations can claim, says Prof. William Simon of Columbia Law School....
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