Can you stand one more post on Hobby Lobby?
Over at Forbes Magazine, Rick Unger has challenged the basis of the decision–and the fiction that Scalia, et al, are “originalists”– by pointing to the Founders’ original conceptions of corporate identity.
After the nation’s founding, corporations were, as they are today, the result of charters granted by the state. However, unlike today, they were limited in how long they were permitted to exist (typically 20 or 30 years), only permitted to deal in one commodity, not permitted to own shares in other corporations, and their property holdings were expressly limited to what they needed to accomplish their specific, corporate business goals.
Put another way, every single investment bank on Wall Street, as we know it today, would have been illegal in the days of our founding.
And here is the big one —in the early days of the nation, most states had rules on the books making any political contribution by a corporation a criminal offence.
Indeed, so restrictive was the corporate entity, many of early America’s greatest entities were set up to avoid the corporate restrictions. Andrew Carnegie formed his steel operation as a limited partnership and John D. Rockefeller set up Standard Oil as a trust in order to avoid the restrictions placed on corporations. Yet, it is now apparently too much to ask that those holding strong religious views, such as the Green family who hold the stock of Hobby Lobby, do the same.
Of course, Scalia’s version of originalism has always been exceptionally malleable–one to be invoked or ignored depending upon the need to twist the matter at hand into ideological conformance with his preferred beliefs.
With respect to this “matter at hand,” however, I am increasingly of the opinion that Hobby Lobby will come back to bite the authoritarian derrieres of the male members of this court. As Tim Peacock recently wrote at Peacock Panache:
[S]everal law experts believe the Supreme Court may have dealt a devastating blow to the corporate veil. Alex Park at Mother Jones reported on the new gaping hole in the corporate veil today stating in part:
“Now, thanks to the Hobby Lobby case, it’s in question. By letting Hobby Lobby’s owners assert their personal religious rights over an entire corporation, the Supreme Court has poked a major hole in the veil. In other words, if a company is not truly separate from its owners, the owners could be made responsible for its debts and other burdens.
‘If religious shareholders can do it, why can’t creditors and government regulators pierce the corporate veil in the other direction?’ Burt Neuborne, a law professor at New York University, asked in an email. That’s a question raised by 44 other law professors, who filed a friends-of-the-court brief that implored the Court to reject Hobby Lobby’s argument and hold the veil in place.”
In the above-mentioned friend-of-the-court brief, those law professors stated in part:
“Allowing a corporation, through either shareholder vote or board resolution, to take on and assert the religious beliefs of its shareholders in order to avoid having to comply with a generally-applicable law with a secular purpose is fundamentally at odds with the entire concept of incorporation. Creating such an unprecedented and idiosyncratic tear in the corporate veil would also carry with it unintended consequences, many of which are not easily foreseen.”
If one Court can pierce the corporate veil in order to protect a (highly selective exercise of) religiosity, a different Court can pierce it to obtain justice for litigants who might otherwise go uncompensated.
That’s the problem with outcome oriented judicial reasoning.