10 Supreme Court Rulings—Before Hobby Lobby—That Turned Corporations Into People
Last week's Hobby Lobby ruling charted new legal territory by granting corporations the same religious rights as real people. The rationale behind the decision—that expanding constitutional rights to businesses is necessary to "protect the rights of people associated with the corporation"—is far from novel. A line of Supreme Court rulings stretching back 200 years has blurred the distinction between flesh-and-blood citizens and the businesses they own, laying the groundwork for Hobby Lobby and the equally contentious Citizens United ruling. Here's a timeline of the corporation's human evolution:
1809 (Bank of the United States v. Deveaux): In the early days of the republic, when state and federal courts were still working out their jurisdictions, the Bank of the United States—a precursor to the US Treasury—sued a Georgia tax collector named Peter Deveaux for property he had seized when the bank failed to pay state taxes. Deveaux argued that, because corporations weren't people, they couldn't sue in federal court. Chief Justice John Marshall agreed. This meant businesses could only sue or be sued in federal court if all the shareholders, and at least one member of the opposing party, lived in the same state. According to Burt Neuborne, a corporate law professor at New York University, Wall Street banks hated this decision because it restricted suits to state courts where judges were partial to the banks' local clients—typically Midwestern farmers.
1844 (Louisville, Cincinnati, and Charleston Railroad v. Letson): It soon became apparent that Marshall's decision in Bank of the United States was unworkable because it put corporations outside the reach of the federal courts. Thirty-five years later, after hearing the Louisville, Cincinnati, and Charleston Railroad case, the Supreme Court shifted course, ruling that corporations were "citizens" of the states where they incorporated. Still, it was difficult for a corporation to sue or be sued in federal court unless all its shareholders lived in the same state.