Corporations Are Not People
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1972: Powell Gets His Chance

In January 1972, the US Senate confirmed President Nixon’s nomination of Lewis Powell to the Supreme Court. In a private farewell dinner, The Philip Morris CEO hosted a celebration of Powell’s achievement and the corporation provided him with a judicial robe to wear during his service on the Court.Transcript, Philip Morris-Lewis Powell, December 1972, http://tobaccodocuments.org/pm/2010030023-0048.html.

President Nixon filled two Supreme Court vacancies that month, the other going to William Rehnquist, a conservative Republican lawyer from Phoenix, Arizona. Rehnquist had never been shy about his conservative views, which were well known and, to some, controversial. At the same time, neither Congress nor most Americans knew of Powell’s corporatist views. In his Senate confirmation hearing, no one asked about his recent proposal to the US Chamber of Commerce recommending the use of an “activist-minded Supreme Court” to impose those views on the nation. No one asked because Powell, and the Chamber kept Powell’s memo secret; neither disclosed the memo during his background check or confirmation proceedings.Powell’s memorandum to the Chamber came to public attention only after Powell was on the Court. A nationally syndicated columnist disclosed the existence of the Powell memo late in 1972 and questioned whether Powell could be an impartial judge in cases involving large corporations. The Chamber executive who had requested Powell’s memorandum, Eugene Snydor, privately told Powell, “I regret exceedingly” the “slip up” of a Chamber staff person that resulted in the “unauthorized disclosure of your now famous memo.” Correspondence, October 3, 1972, Papers of Lewis Powell, Washington & Lee University Law School.

Once on the Court, these two Nixon appointees followed very different paths. Justice Powell would go on to write the Court’s unprecedented decisions creating a new concept of “corporate speech” in the First Amendment. Using this new theory, the Court struck down law after law in which the states and Congress sought to balance corporate power with the public interest. With increasing assertiveness after Powell retired in 1987, the Supreme Court has used the new corporate rights theory to invalidate laws concerning food, the environment, public health and drugs, financial and insurance reform, and more.See First National Bank of Boston v. Bellotti, 435 US 765 (1978); FEC v. Wisconsin Right to Life, 551 US 449 (2007); Thompson v. Western States Medical Center, 535 US 357 (2002) (federal restriction on drug advertising invalidated); Lorillard v. Reilly, 533 US 525 (2001) (tobacco advertising law invalidated); Greater New Orleans Broadcasting Association v. United States, 527 US 173 (1999) (federal advertising of gambling and casinos struck down); 44 LiquorMart v. Rhode Island, 517 US 484 (1996) (alcohol price advertising invalidated); Rubin v. Coors Brewing Co., 514 US 476 (1995) (restriction on promotion of alcohol level invalidated); City of Cincinnati v. Discovery Network, 507 US 410 (1993) (city street restriction on news racks for advertising held unconstitutional); Pacific Gas & Electric Co. v. Public Utilities Commission of California, 475 US 1 (1986) (law requiring utilities to make bill envelopes, which are property of rate payers, available to other points of view than corporate interests corporation struck down); Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 US 557 (1980) (advertising limit on promotion of energy consumption invalidated); Bellsouth Telecomm. v. Farris, 542 F.3d 499 (6th Cir. 2008) (states may not limit corporations from misinforming customers that shareholders charge law was a “tax”); Allstate Insurance Co. v. Abbott, 495 F.3d 151 (5th Cir. 2007) (law regarding advertising of auto body shops tied to auto insurers invalidated); This That & the Other Gift & Tobacco v. Cobb County, Georgia, 439 F.3d 1275 (11th Cir. 2006) (ban on advertisements of sexual devices invalidated); Passions Video v. Nixon, 458 F.3d 887 (8th Cir. 2006) (restriction on advertisements of sexually explicit businesses invalidated); Bad Frog Brewery v. New York State Liquor Authority, 134 F.3d 87 (2d Cir. 1998); International Dairy Foods Association v. Amestoy, 92 F.3d 67 (2d Cir. 1996) (Vermont GMO label law invalidated); New York State Association of Realtors v. Shaffer, 27 F.3d 834 (2d Cir. 1994) (invalidating “nonsolicitation” zones for real estate brokers); Sambo’s Restaurants v. City of Ann Arbor, 663 F.2d 686 (6th Cir. 1981) (corporation violation of agreement with city to not use prejudicial name protected by First Amendment); John Donnelly & Sons v. Campbell, 639 F.2d 6 (1st Cir. 1980) (invalidating billboard pollution law); Washington Legal Foundation v. Friedman, 13 F. Supp. 2d 51 (D.D.C. 1998) (invalidating off-label marketing law); and Equifax Services v. Cohen, 420 A.2d. 189 (Me. 1980) (Maine credit reporting statute violates First Amendment).

Powell helped shape a new majority, but several justices resisted the new model of “corporate rights.” The most vigorous resistance came from the conservative Justice William Rehnquist. He grounded his dissents in the fundamental proposition that our Bill of Rights sets out the rights of human beings, and corporations are not people. For years, Rehnquist maintained this principled conservative argument, warning over and over again that corporate rights have no place in our republican form of government.See First National Bank of Boston v. Bellotti, 435 US 765, 826 and n. 6 (1978) (Rehnquist, dissenting) (“The free flow of information is in no way diminished by the Commonwealth’s decision to permit the operation of business corporations with limited rights of political expression. All natural persons, who owe their existence to a higher sovereign than the Commonwealth, remain as free as before to engage in political activity. … The Fourteenth Amendment does not require a State to endow a business corporation with the power of political speech.”); Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 US 557 (1980) (Rehnquist, dissenting) (“I disagree with the Court’s conclusion that the speech of a state-created monopoly, which is the subject of a comprehensive regulatory scheme, is entitled to protection under the First Amendment.”); and Pacific Gas & Electric Co. v. Public Utilities Commission of California, 475 US 1, 26, 24 (1986) (Rehnquist, dissenting) (“Nor do I believe that negative free speech rights, applicable to individuals and perhaps the print media, should be extended to corporations generally. … PG&E is not an individual or a newspaper publisher; it is a regulated utility. The insistence on treating identically for constitutional purposes entities that are demonstrably different is as great a jurisprudential sin as treating differently those entities which are the same.”). See also Virginia Board of Pharmacy v. Virginia Citizens Consumer Council, 425 US 748, 784 (1976) (Rehnquist, dissenting) (“The Court speaks of the importance in a ‘predominantly free enterprise economy’ of intelligent and well-informed decisions as to allocation of resources. … While there is again much to be said for the Court’s observation as a matter of desirable public policy, there is certainly nothing in the United States Constitution which requires the Virginia Legislature to hew to the teachings of Adam Smith in its legislative decisions regulating the pharmacy profession.”).

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