Corporate Personhood Rights in the Wake of 303 Creative
Posted on Nov 21, 2023Ali Mothner
Corporations have long enjoyed certain measures of personhood, including Constitutional protections under the First Amendment.[1] Corporate rights have grown in scope considerably over the last two decades, as the Supreme Court found corporations have an unqualified right to political speech in Citizens United v. FEC[2] and acknowledged corporate religious expression in Burwell v. Hobby Lobby Stores.[3] This year, the Court ruled in 303 Creative v. Elenis that states cannot compel business owners to create expressive designs that contradict their beliefs, as this violates their First Amendment speech rights.[4] This holding both expands corporate speech rights under the First Amendment and furthers the concept of corporate religious expression, with seemingly boundless implications for corporate rights.
Establishing the Modern Doctrine of Corporate Personhood
Corporations were first treated as persons for the purposes of contract and property law, enabling them to enforce their contracts and own property.[5] In the mid-nineteenth century, Chief Justice Waite declared corporations to be persons under the Equal Protection Clause of the Fourteenth Amendment, granting them their first Constitutional protections.[6] Corporations were not granted First Amendment speech rights until almost a century later, and those rights were qualified on account of the corporate form.[7] The Court upheld limitations on the political speech of corporations due to the advantages afforded to the corporate structure, which differentiates corporate speech from that of individuals.[8] These benefits include “favorable treatment of the accumulation and distribution of assets,” which enable corporations to have undue influence in the political process.[9] In Austin, the Court found this anti-distortion concern to be a compelling government interest sufficient to justify incursion on corporate political speech rights.[10]
In 2010, the Supreme Court overruled Austin, holding that a corporation’s First Amendment right to political speech could not be circumscribed due to its corporate identity.[11] The Court was unpersuaded that the Austin anti-distortion rationale presented a compelling state interest, stating that only true quid-pro-quo corruption would be sufficient to burden corporate First Amendment rights.[12] This holding transformed the landscape of corporate political spending,[13] and significantly broadened the First Amendment speech rights of corporations in the political context.
A few years later, the Supreme Court further expanded the scope of corporate personhood rights in Hobby Lobby. In this case, the Court held that the Religious Freedom Restoration Act (RFRA) protects the religious exercise of closely held corporations.[14] This landmark decision added religious protection to the doctrine of corporate personhood, even in the for-profit realm. The holding itself was narrow; the majority specifically noted that such protections only extended to closely held corporations like Hobby Lobby, where a single family controls the business.[15] However, the case’s significance for corporate religious rights was broad, as Justice Ginsburg discussed in her dissent: “The Court’s determination that RFRA extends to for-profit corporations is bound to have untoward effects. Although the Court attempts to cabin its language to closely held corporations, its logic extends to corporations of any size, public or private.”[16]
Expansion of Corporate Personhood under 303 Creative
Justice Ginsburg also warned that corporations could seek religious exceptions from generally applicable regulations under the reasoning of Hobby Lobby,[17] and her premonition proved true. Last year, the Supreme Court heard from Lorie Smith, a website designer who alleged that the Colorado Anti-Discrimination Act (CADA) violated her First Amendment rights of speech and religious exercise by compelling her to create websites contrary to her religious beliefs.[18] The Supreme Court ruled in Smith’s favor regarding her speech rights,[19] finding that Smith’s wedding websites serve as speech and expression covered by the First Amendment, and CADA cannot compel Smith to engage in speech which contradicts her sincerely held beliefs.[20]
There has been much discourse on the implications of 303 Creative, including support from those seeking religious freedoms,[21] questions as to the enforceability of anti-discrimination laws going forward,[22] and sincere concerns for the LGBTQ+ community and other marginalized groups in the United States.[23] The ruling leaves open many questions, such as what counts as expressive speech, and how to assess the sincerity of a business owner’s beliefs.[24] In this vein, it is relevant to note that the state of Colorado stipulated to the sincerity of Smith’s beliefs, as well as the fact that she herself would work on each website ordered through the company.[25] However, the emphasis on Smith’s beliefs as an extension of the corporation serves as expansion of corporate rights.
In its opinion, the majority paid little attention to the business nature of Smith’s work, simply noting that “speakers [do not] shed their First Amendment protections by employing the corporate form to disseminate their speech.”[26] In her dissent, however, Justice Sotomayor underscored the corporate identity of the plaintiff, stating that “[t]oday, the Court, for the first time in its history, grants a business open to the public a constitutional right to refuse to serve members of a protected class.”[27] Sotomayor further argued that the majority allowed businesses to define the expressive quality of their products, which can enable companies to bypass public accommodation laws altogether.[28] And importantly, the majority found that while the government has a compelling interest in eliminating discrimination, this purpose does not justify burdening the corporate First Amendment right to speech.[29] As such, this ruling furthers the corporate personhood interest, even when it comes at the expense of the real persons in the communities these businesses serve.[30]
This holding follows the heels of Citizens United and Hobby Lobby to find vastly broad First Amendment and personhood rights for corporations. 303 Creative further expands the unqualified speech rights of corporations, as declared in Citizens United, but also espouses the theory behind Hobby Lobby: that corporations can engage in religious exercise. Though the 303 Creative holding was cabined to speech rights, its basis lay in Smith’s (and thereby the business’) religious beliefs.[31] While both Hobby Lobby and 303 Creative specifically discussed small companies, where the sincerity of the beliefs espoused by the corporations could be validated, scholars and the dissenting Justices themselves highlighted that the reasoning of these cases could be extended to any corporation, regardless of size. Further, the unclear definition of expressive speech in 303 Creative may enable a much broader range of companies to invoke these First Amendment rights.[32] 303 Creative has broken new barriers in the realm of corporate personhood, augmenting the similarly unprecedented holdings in Citizens United and Hobby Lobby, and furthering the construct that corporate Constitutional rights cannot be limited, even where the rights of living persons may be implicated.[33]
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[1] First Nat. Bank of Boston v. Bellotti, 435 U.S. 765, 779–80 (1978).
[2] 558 U.S. 310, 342–43 (2010).
[3] 573 U.S. 682, 712–14 (2014). Note this holding found a right to religious expression for closely held corporations under the Religious Freedom Restoration Act, rather than the First Amendment.
[4] 303 Creative LLC v. Elenis, 600 U.S. 570, 588 (2023).
[5] Ciara Torres-Spelliscy, The History of Corporate Personhood, Brennan Center for Justice (Apr. 8, 2014), https://www.brennancenter.org/our-work/analysis-opinion/history-corporate-personhood.
[6] Santa Clara Cnty. v. S. Pac. R. Co., 118 U.S. 394, 394 (1886) (“The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does”).
[7] Coates provides a comprehensive historical overview on the evolution of corporate speech rights, finding that the current doctrine is a marked departure from the regulation of corporate speech prior to the late twentieth century. John C. Coates IV, Corporate Speech & the First Amendment: History, Data, and Implications, 30 Const. Comment. 223, 240–41 (2015).
[8] ” Austin v. Michigan Chamber of Commerce, 494 US. 652, 657–59 (1990), rev’d on other grounds by Citizens United, 558 U.S. at 310. Note that political expenditures are considered speech. “Certainly the use of funds to support a political candidate is ‘speech’; independent campaign expenditures constitute ‘political expression ‘at the core of our electoral process and of the First Amendment freedoms.’’” Austin v. Michigan Chamber of Commerce, 494 US. 652, 657 (1990), rev’d on other grounds by Citizens United v. FEC, 558 U.S. 310, 343 (2010).
[9] Austin, 494 U.S. at 659 (citing FEC v. Mass. Citizens for Life, Inc., 479 U.S. 238, 257 (1986)).
[10] Austin, 494 U.S. at 659.
[11] Citizens United, 558 U.S. at 342–43.
[12] Id. at 362–365; see also Anne Tucker, Flawed Assumptions: A Corporate Law Analysis of Free Speech and Corporate Personhood in Citizens United, 61 Case W. Res. L. Rev. 497, 501 (2010).
[13] In the ten years following Citizens United, corporations have spent over half a billion dollars in political contributions, with much of it undisclosed. Taylor Lincoln, Ten Years After Citizens United, Public Citizen (Jan. 15, 2020), https://www.citizen.org/article/ten-years-after-citizens-united/.
[14] Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 691 (2014).
[15] Id. at 717.
[16] Id. at 756–57 (Ginsburg, J., dissenting).
[17] Id. at 757 (Ginsburg, J., dissenting).
[18] See 303 Creative LLC v. Elenis, 600 U.S. 570, 580 (2023); Brief for Petitioners at 9, 303 Creative v. Elenis, 600 U.S. 570 (2023) (No. 21-476) (filed Dec. 22, 2021).
[19] Smith dropped the argument regarding First Amendment religious exercise rights before oral argument at the Supreme Court. See Brief for Petitioners at 3, 303 Creative v. Elenis, 600 U.S. 570 (2023) (No. 21-476) (filed Sept. 12, 2022).
[20] 303 Creative, 600 U.S. at 588.
[21] Pastor Paula White-Cain & Matias Perttula, Expert Insight: 303 Creative v. Elenis, America First Policy Inst. (Sept. 29, 2023), https://americafirstpolicy.com/latest/expert-insight-303-creative-llc-v-elenis.
[22] Valerie C. Brannon, 303 Creative v. Elenis: Supreme Court Recognizes Free Speech Exception to Nondiscrimination Law, Cong. Res. Serv. (July 6, 2023), https://crsreports.congress.gov/product/pdf/LSB/LSB11000 (“[T]he majority opinion could be read as taking an unqualified approach to these compelled speech claims: nondiscrimination laws simply cannot be applied to compel speech, regardless of how strong the government’s interest might be or how well-tailored the law is to that interest”).
[23] Solcyre Burga, The Implications of Supreme Court’s 303 Creative Decision are Already Being Felt, Time (July 16, 2023), https://time.com/6295024/303-creative-supreme-court-future-implications/; Kate Sosin, The 19th Explains: The Supreme Court’s Decision in the LGBTQ+ 303 Creative Case, 19th News (June 30, 2023), https://19thnews.org/2023/06/303-creative-elenis-supreme-court-decision-lgbtq-rights/.
[24] Kevin Goldberg, 303 Creative LLC v. Elenis: A First Amendment Analysis, Freedom Forum, https://www.freedomforum.org/303-creative-llc-v-elenis/ (last visited Nov. 6, 2023).
[25] 303 Creative LLC v. Elenis, 600 U.S. 570, 582–83 (2023).
[26] Id. at 594.
[27] Id. at 603 (Sotomayor, J., dissenting).
[28] Id. at 633 (Sotomayor, J., dissenting) (“To allow a business open to the public to define the expressive quality of its goods or services to exclude a protected group would nullify public accommodations laws. It would mean that a large retail store could sell ‘passport photos for white people’”).
[29] Id. at 591–92.
[30] Id. at 636–37 (Sotomayor, J., dissenting) (“By issuing this new license to discriminate in a case brought by a company that seeks to deny same-sex couples the full and equal enjoyment of its services, the immediate, symbolic effect of the decision is to mark gays and lesbians for second-class status”).
[31] Id. at 579–80.
[32] “Others expressed concern that the decision could open the door to business owners finding new ways to discriminate because the court did not define what business activities would constitute expression.” Kevin Goldberg, 303 Creative LLC v. Elenis: A First Amendment Analysis, Freedom Forum, https://www.freedomforum.org/303-creative-llc-v-elenis/ (last visited Nov. 6, 2023).
[33] “[T]he corporate takeover of the First Amendment represents a pure redistribution of power over law with no efficiency gain…That power is taken from ordinary individuals with identities and interests as voters, owners and employees, and transferred to corporate bureaucrats pursuing narrowly framed goals with other people’s money.” John C. Coates IV, Corporate Speech & the First Amendment: History, Data, and Implications, 30 Const. Comment. 223, 265 (2015).