The Difficulties of Reconciling Citizens United with Corporate Law History

The following post is based on a recent article earlier issued as a working paper of the Harvard Law School Program on Corporate Governance, by Leo Strine, Chief Justice of the Delaware Supreme Court and a Senior Fellow of the Program, and Nicholas Walter, associate in the litigation department at Wachtell, Lipton, Rosen & Katz. The article, Originalist or Original: The Difficulties of Reconciling Citizens United with Corporate Law History, is available here. Related research from the authors includes Conservative Collision Course?: The Tension between Conservative Corporate Law Theory and Citizens United, discussed on the Forum here. Research from the Program on Corporate Governance about corporate political spending includes Shining Light on Corporate Political Spending by Lucian Bebchuk and Robert Jackson, discussed on the Forum here, Corporate Political Speech: Who Decides? by Lucian Bebchuk and Robert Jackson, available here. and Conservative Collision Course?: The Tension between Conservative Corporate Law Theory and Citizens United by Leo Strine and Nicholas Walter, discussed on the Forum here.

Citizens United has been the subject of a great deal of commentary, but one important aspect of the decision that has not been explored in detail is the historical basis for Justice Scalia’s claims in his concurring opinion that the majority holding is consistent with originalism. In this article, we engage in a deep inquiry into the historical understanding of the rights of the business corporation as of 1791 and 1868—two periods relevant to an originalist analysis of the First Amendment. Based on the historical record, Citizens United is far more original than originalist, and if the decision is to be justified, it has to be on jurisprudential grounds originalists traditionally disclaim as illegitimate. The article is available on SSRN at

Citizens United v. FEC struck down McCain-Feingold’s restraints on electoral expenditures by corporations. In his concurring opinion, Justice Scalia argued that the decision could be justified through the originalist approach to constitutional interpretation. In particular, Justice Scalia asserted that there was “no evidence” that, at the time of the Founding, corporations were not subject to government regulation of their ability to spend money to advocate the election or defeat of political candidates.

This article tests Justice Scalia’s assertion against the historical understanding of the role of corporations as of two relevant periods. In the first period, when the First Amendment was ratified in 1791, we find that business corporations were understood to have the exact opposite relationship to society as Lockean-Jeffersonian human beings. Whereas human beings were endowed with inalienable rights that society could not take away, corporations had only such rights as society chose to give them, as illustrated by Chief Justice Marshall’s iconic decision in Trustees of Dartmouth College v. Woodward. In 1791, corporations had to be specially charted by legislatures and were bound by the ultra vires doctrine to pursue only the ends for which they were chartered. Based on this history, we see no basis to contend that business corporations were thought to possess the same speech rights as human beings and that society could not restrict their ability to participate in the political process, much less through limited restrictions such as McCain-Feingold’s requirement that corporations raise voluntary contributions through PACs from which to make political expenditures

We also examine the period when the Fourteenth Amendment was ratified in 1868 to see if the understanding that corporations were fundamentally different from human beings had changed. Although by that time the movement toward general chartering of corporations had emerged, the historical understanding of the corporation’s relationship to society remained the same, and corporations were still subject to the ultra vires doctrine and other tight restrictions on their scope of operations. Though the law had recognized that corporations’ property rights had to be respected for them to function as intended, corporations were not accorded the liberty rights, such as speech, of individuals. And stockholders used the ultra vires doctrine to restrict corporate political and charitable spending. Likewise, as soon as corporations began to involve themselves in the political process, legislative regulation of the conduct emerged with no concern about whether those restrictions were inhibited by the First Amendment. As a result, we find no basis to conclude that the adoption of the Fourteenth Amendment represented a decision to accord corporations free speech rights akin to those of human persons, much less that it restricted Congress from enacting the kind of means limitations in McCain-Feingold that Citizens United struck down. And, of course, until the 1920’s, First Amendment law itself was largely undeveloped and it would not be until the 1970’s that the Supreme Court first examined the First Amendment implications of campaign finance laws.

Given the complexity involved in applying a constitution to new disputes in a constantly changing society, it does not surprise us that current constitutional cases cannot be rationalized solely by current-day Justices based on the publicly understood meaning of the Constitution as of 1789 and 1868. Rather, Citizens United is best explained by the reality that generations of intervening interpretations, when rendered in the context of real disputes arising in a changing society, have an effect on the meaning of the Constitution and how it applies in future cases. In other words, whether one finds favor with the holding in Citizens United or not, the outcome in the case is not one that can easily be rationalized by applying the originalist method of interpretation. To the contrary, the strong weight of the historical evidence supports the constitutional validity of Congress’s right to regulate the corporation’s involvement in the political process through the means set forth in McCain-Feingold. As such, the decision in Citizens United to overturn a bipartisan statute appears to us more original than originalist.

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