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People's Rights Amendment is a very bad idea
A group of House Democrats has introduced a remarkably misnamed “People’s Rights Amendment” that, if adopted, would undercut the rights of Americans and transform our society beyond recognition, and deliver an unprecedented body blow to the American economy. This ill-considered proposal would limit application of constitutional rights to “natural persons,” eliminating such rights for all corporate entities. It reveals a stunning disrespect for the established constitutional architecture that has served this country well for over 200 years.
Corporations are, of course, the bugbear of the left wing and a target of the Occupy Wall Street crowd. Poor economic performance is blamed on corporate greed — rather than the business cycle and deleterious impacts of ever more onerous federal regulations — and tax incentives offered to companies as inducements to investment are “corporate welfare.”
The truth is that corporations, large and small, are the foundation of our economy and the building blocks of our society. Before the law recognized, around 400 years ago, business corporations as entities with rights separate and apart from their owners or managers, anyone going into business risked everything. A failure could mean personal ruin, with creditors seizing not merely “business” property but anything the entrepreneur owned, and even imprisonment for debt.
The corporation changed all of that. It permits entrepreneurs and their investors to take risks, and to create new wealth, without risking everything. If a company fails, shareholders — a group that today includes much of the population through retirement funds and similar investment vehicles — might well lose, but only the value of their stock. The corporate legal form offers similar benefits to charities, churches, schools, universities and other “nonprofits.”
If Congress or the state legislatures determined to penalize companies for real or imagined infractions, they could do so without trial or any other form of due process of law. There would be no bar to imposing ex post facto laws or bills of attainder on corporate entities. The real losers, of course, would be shareholders, employees and the American people as a whole. Under the “People’s Rights Amendment,” the United States would sport the worst legal climates for any kind of investment. Even the possibility that such an amendment could pass would increase the perceived investment risk for companies and individuals who might be interested in investing their money into the American economy.
Of course, some would say that giving legislators unfettered power over the engines of America’s wealth and prosperity is no bad thing. But, the framers of our Constitution, and founders of our Republic, disagreed. They were determined to limit governmental abuses by constraining governmental power, and considered certain rights so important that they could not be left to the democratic process.
Although courts have never applied constitutionally guaranteed rights identically among individuals and corporations — corporations, for example, do not enjoy the same rights against self-incrimination — creating categorical exceptions for corporate entities would destroy these fundamental limits just as effectively as eliminating such rights for individuals.
The ability to deprive corporate entities of due process, or to take their property without just compensation, would empower the government as much or more than depriving individuals of those rights. The government would have little need to limit individual speech or religious practice if it can legislate corporate behavior without restraint, as modern media and religious groups operate in the corporate form. Similarly, excessive limits on the political activities of corporately organized groups — such as labor unions and political parties — would render their membership impotent without, technically, trenching on individual rights.
Indeed, with individuals unable to aggregate effectively their voices through any number of corporate entities, whether for profit or charity, the relationship between the government and the people would fundamentally change. The government would become a true unfettered Leviathan rendering individual Americans powerless.
The “People’s Rights Amendment” is a radical proposal that would make America less free and far poorer. It is an idea whose time has not and should never come.
Rivkin and Casey are partners in the Washington, D.C. office of Baker Hostetler specializing in constitutional law, and served at the Department of Justice during the Ronald Reagan and George H.W. Bush administration.
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