Share with your friends










Submit
Court Rules Corporations Have No Mind or Soul - ThinkstockPhotos-121211814-c.jpg

Court rules corporations have no mind or soul

It’s like those science-fiction movies where some huge monolithic entity has humanity under its collective alien “thumb.” Then one day, some individual makes a small defiant gesture that stirs a welling in the soul; and humanity arises and reasserts itself once again.

Only in this case, the setting is the courtroom; it’s humans versus corporations; and I’m probably overstating the whole thing.

“Your Honor, my witness has no soul…”

For a while, it seemed, at least legally speaking, being a corporation trumped being a human person. The Citizens United Supreme Court decision allowed corporations to buy elect—I mean, make unlimited political campaign donations. The Hobby Lobby decision permitted “closely held” stock corporations to act in accordance with their religious preferences. Large corporations already benefit from an array of tax breaks and loopholes that often allow them to pay little or no taxes. And of course, you can’t send a corporation to prison. It’s good to be a corporation.

So it’s refreshing when “the people” finally put their foot down and declare that, judicially, there’s something that a corporation can’t do and is only reserved for actual human persons.

Namely, testify as an expert witness.

That issue came up during a 2013 take-private transaction in which the value of Dole Food Co. Inc., which was being sold to the company’s founder and CEO, David Murdock, was disputed by shareholders and institutional investors. Defense lawyers called an expert witness, the investment bank Stifel, Nicolaus & Co. Inc.

The plaintiffs’ lawyers objected to the notion that a corporation could be an expert witness.

Vice Chancellor J. Travis Laster of Delaware Chancery Court sided with the plaintiffs, ruling that a corporation can only act through human agents. In what has instantly become one of my favorite legal opinions—not least of which is for its superb literary quality, Travis wrote, “Lacking a voice, a corporation cannot testify. Lacking ears, it cannot hear. Lacking a mind, it cannot have personal knowledge or a memory to be refreshed. Lacking a conscience, it cannot take an oath or provide an affirmation. And because of its incorporeal nature, it cannot even meet Delaware’s statutory requirement that a person taking an oath do so ‘with the uplifted hand.'”

Shakespeare’s poetic predictions

This brought to mind Shakespeare, who, as often is the case, said it first. In The Merchant of Venice, Shylock is widely reviled for, like some corporations, belonging to a class widely regarded as exploiting his fellow man. That Shakespeare was comparing mankind to corporations that would exist in the far-flung future is readily apparent in this chart, in which Shylock contrasts the two:

ShylockBig Corporation
If you prick us, do we not bleed?YesNo
If you tickle us, do we not laugh?YesNo
If you poison us, do we not die?YesNo
If you wrong us, shall we not revenge?YesYes

 

It’s clear from the comparison above that Shylock is clearly more empathy-worthy than a big corporation is.

Corporations are sensitive, too

Shylock might’ve added, “If you expose us to second-hand smoke, do we not contract emphysema?” That would yield yet another “Yes” for Shylock and another “No” in the Big Corp column.

Which may explain why four major tobacco companies are still—still!—embroiled in legal battles over the cigarette business.

A couple weeks back, the U.S. Court of Appeals for the D.C. Circuit heard arguments stemming from a 2006 decision by U.S. District Judge Gladys Kessler that U.S. tobacco companies were liable for defrauding the public about the dangers and addictiveness of smoking, and ordered them to pay for “corrective” advertising.

The mandated preamble to the advertising bullet points enumerating smoking’s ill effects states, “A Federal Court has ruled that Altria, R.J. Reynolds Tobacco, Lorillard, and Philip Morris USA deliberately deceived the American public about the health effects of smoking, and has ordered those companies to make this statement. Here is the truth.”

In the appeal, tobacco company lawyers argued that the preamble violates the companies’ First Amendment rights and was designed to “humiliate” them.

So apparently, tobacco corporations are now sensitive entities capable of feeling shame.

No lungs, no problem

But as Vice Chancellor Laster might have expressed it regarding Big Tobacco: “Lacking lungs, they cannot know what it’s like to have them intentionally desiccated by multinational corporations solely intent on maximizing profits.”

Or, as Laster did note, in a footnote to the decision barring them from testifying as expert witnesses, “As earlier generations framed it, a corporation has no soul.”

RELATED POSTS

Comments are closed.