Corporations Now Have a Right To "Personal Privacy"

I Don't Believe in Imaginary Property writes "Thanks to a recent ruling (PDF) by the US Court of Appeals for the Third Circuit, corporations now have a right to 'personal privacy,' due to the application of a carelessly worded definition in the Freedom of Information Act. FOIA exempts disclosure of certain records, but only if it 'could reasonably be expected to constitute an unwarranted invasion of personal privacy.' But in its definitions, FOIA makes the mistake of broadly defining 'person' to include legal entities, like corporations. The FCC didn't think that 'personal privacy' could apply to a corporation, so they ignored AT&T's claim that releasing data from an investigation into how AT&T was overcharging certain customers would violate the corporation's privacy. The Third Circuit thought that the FCC's actions were contrary to what the law actually says. So now the FCC has to jump through more hoops to show that releasing data on their investigation into AT&T's overcharging is 'warranted' within the meaning of 5 USC 552(b)(7)(c) before it can release anything."

Comments

Why do corporations have to be people?

[danaris]

Seriously. Can anyone with a legal background explain what part of corporate daily business requires that corporations be legally considered equivalent to people?

If there's nothing truly fundamental that requires it, I think it might be time to start writing letters to our representatives and senators asking that corporate personhood be revoked, or at least replaced with something much more watered-down. It's really starting to go too far...

Dan Aris

Re:Why do corporations have to be people?

[TheRealMindChild]

While this "loophole" seems bad on the surface, maybe it isn't. If corporations are considered people, perhaps we can start locking them up/shutting them down when they are breaking the law... you know... just like everyone else.

Re:Why do corporations have to be people?

[Alien Being]

"I think it might be time to start writing letters to our representatives..."

The irony is that they won't listen to you unless you send corporate lobbyists with bags of money.

Re:Why do corporations have to be people?

[jeffasselin]

I concur. The whole corpocratic oligarchy mess stems from giving corporations rights which should be reserved for actual people. Giving "rights" to entities like corporations, but without them having the same restrictions and motivations as an actual human being (like reason, conscience, morality and guilt) is the source of the biggest issues facing us since the later 20th century: the corporations are now in control of our government, our institutions and our resources. They have all this power but no real responsibility behind it.

They care only about one thing: making the most profit for their shareholders as possible. They will do anything, including killing people and destroying the planet, to achieve this goal. They are the ultimate parasite.

Re:Why do corporations have to be people?

[Killer Orca]

While this "loophole" seems bad on the surface, maybe it isn't. If corporations are considered people, perhaps we can start locking them up/shutting them down when they are breaking the law... you know... just like everyone else.

I agree with you, but you and the mods are being a little too idealistic; that would never, ever happen.

Re:Why do corporations have to be people?

[sjames]

So you're saying corporations are the new nobility? (not that I'm disagreeing with you). In a country that forbids the very concept of a nobility? Perhaps we should look to French history for guidance in the proper handling of nobility!

Re:Why do corporations have to be people?

[schon]

Entering into contracts and owning, buying and selling services and property.

Why do they need to be the equivalent of people for that?

Why not codify the law to say that corporations or people can do those things, rather than saying that corporations are people?

Re:Why do corporations have to be people?

[rocker_wannabe]

Corporations are fined when they are caught breaking the law because, so far, that's all the courts can do. Please explain how anyone can "lockup" a corporation and I'll be the first support it. The whole idea of incorporating is to AVOID personal responsibility. If someone could hold the CEO, or anyone in the company, personally responsible for the actions of a corporation then the whole concept of a corporation becomes mostly useless.

Re:Why do corporations have to be people?

[Daimanta]

"Perhaps we should look to French history for guidance in the proper handling of nobility!"

With a massive reign of terror?

Re:Why do corporations have to be people?

[corbettw]

Not to mention to shield investors from losing everything they own if the corporation fails ("corporate veil"). Without that proviso, our entire economic system would collapse (which I'll grant some people wouldn't have a problem with because they don't understand what life would be like then).

Re:Why do corporations have to be people?

[melikamp]

All successful corps use reason. Many successful people have only trace amounts of conscience, morality and guilt.

Re:Why do corporations have to be people?

[Sporkinum]

Well....duh.

Re:Why do corporations have to be people?

[Dog-Cow]

You can "lock up" a corporation by disallowing it to do any business that results in a profit.

Not that it's necessarily a good idea.

I think the best thing to do would be to simply identify the people responsible for the actual illegal activities and kill them. Or whatever is appropriate as punishment.

The idea of a (limited liability) corporation started to protect the private assets of the corporation owners. And that's where it should have ended.

When a CEO authorizes expenditures for illegal activities, the CEO shouldn't be absolved. Instead he should be charged with theft (of corporate money) on top of the illegal activity he authorized. The idea that he should go free instead is so completely backwards that it tells you who really runs things in this country.

Re:Why do corporations have to be people?

[DM9290]

The entire economic system is already collapsing. Or haven't you noticed?

And why would shareholders lose everything they own if the corporation fails? That's an incredibly false dichotomy. Not every failing corporation fails so spectacularly that every investor will necessarily lose everything they own simply for holding a single share. But then again, people would be more willing to trust corporations if the investors were investing their LIVES into the endevour. Investors who absolutely wanted to insure that the corporation worked legally, economically and didn't harm anyone in a way to create a liability, because if would be their own heads the sword falls on if they do wrong. Just like people.

These laws shielding investors simply spread the hurt to everyone else in the economy. Its not like the hurt vanishes. Why should innocent bistanders have to pay for the mistakes of investors?

Investors would still be willing to invest in corporations managed by people who they truly trusted as moral and legal representatives of the power that their money gives them. Business leaders would then actually deserve the title for the first time in hundreds of years. Corporations would begin to behave like true members of the community who care about others. i would still invest in some way, just not as detached from the process or the consequences.

Money is power. And with power must come responsibility or the inevitable result is power that answers to nobody and cares about nobody. You can call that prosperity if want. But it sounds more like tyranny. And that is what every corporation wants to be: a tyrant.

Re:Why do corporations have to be people?

[Dog-Cow]

Corporations do not care one whit for the shareholders. This is a gross misconception I see repeated here often.

"Corporations", this is: the Board of Directors, only cares about increasing the wealth of the Board of Directors.

Most shareholders have little or no say in what the corporation does, thanks to the invention of non-voting stock.

Re:Why do corporations have to be people?

[Wrath0fb0b]

Seriously. Can anyone with a legal background explain what part of corporate daily business requires that corporations be legally considered equivalent to people?

Because if Corporations didn't have First Amendment rights, Richard Nixon could have shut down the New York Times for publishing the Pentagon Papers (http://en.wikipedia.org/wiki/New_York_Times_Co._v._United_States). Similarly, organizations like the ACLU, NOW, NARAL, NRL, NRA, ... (remember, most political advocacy organizations are incorporated) would be subject to restrictions on what they could say or publish in furtherance of their causes. The whole debate over the "7 deadly words" and FCC regulation of TV/radio would be a moot point if the corporations that hold those licenses had no legal right to any expression.

In the case of Dartmouth College v. Woodward (http://en.wikipedia.org/wiki/Dartmouth_College_v._Woodward) the legislature of NH decided that they have the right to unilaterally rewrite the charter of Dartmouth college and appoint their own trustees to manage it. Again, if the corporation had right to a binding contract, there would be no impediment to the fairly naked power grab attempted there. The power grab was even more blatant in Society for the Propagation of the Gospel in Foreign Parts v. Town of Pawlet (http://supreme.justia.com/us/29/480/), in which the Town basically tried to seize land from an unpopular missionary group on the grounds that corporations have no right to property. Again, if corporations have no right, their property could just be taken with no compensation.

IMO, the protection of the rights of corporations is little more than protection of the right of individuals when they want to accomplish something larger than they can do by themselves. If you and I wanted to start a nerdrage business on the internet (nevermind the lack of a serious way to make profits), we should be able to do so and retain the rights that we do as individuals. The fact that you and I are cooperating on the matter does not detract from the fact that we still have those rights.

I'm tempted to quote soylent green here -- Corporations are made of PEOPLE.

Re:Why do corporations have to be people?

[Rob the Bold]

Corporations are fined when they are caught breaking the law because, so far, that's all the courts can do. Please explain how anyone can "lockup" a corporation and I'll be the first support it. The whole idea of incorporating is to AVOID personal responsibility. If someone could hold the CEO, or anyone in the company, personally responsible for the actions of a corporation then the whole concept of a corporation becomes mostly useless.

Well exactly. We want to incarcerate the corporation, not the employees. Yes, corporations exist to avoid personal responsibility for the investors, and to some extent for other interested parties. That doesn't mean the corporation itself is not responsible for its actions.

So how do we incarcerate a criminal corp? Incarcerating a person means taking away their freedom of movement, their ability to hold an outside job, their ability to see friends and family at their convenience or do most voluntary activities. We'd have to find a corporate equivalent, like making the company do "prison work" at "prison pay". It could be prevented from all sorts of activities that a "free" corporation could do, like hiring, firing, making deals and purchases without court permission. Obviously these are just top-of-the-head suggestions, and the subject warrants more thought than this.

Now one could argue that this would cripple the corporation and also potentially harm the employees and shareholders, but that's the whole point. That's what happens when we lock up a person. He's not able to hold a job to support his family, potentially causing them financial distress. And his family is probably just as innocent as Joe punchclock. But we lock up natural persons even though it has an adverse effect on their family, community and friends, so one can hardly argue that corps couldn't be treated the same way. When a person commits a crime, we consider that worthy of punishment, even though punishing them may affect the innocent. It's the price of justice, I guess.

Re:Why do corporations have to be people?

[MickyTheIdiot]

You're missing a really big item on your list (no reason, conscience, morality, and guilt)... corporations don't have the restriction of *death.* When people amass huge amounts of power at the very least they are going to die someday and that power will dissipate. Corporations are essentially immortal. Remember that scene in the Highlander when he shows his girlfriend all those priceless artifacts? It's the same idea.

Corporations should not be treated like people because they don't operate under the same constraints as people. As a matter of fact the lack of accountability that the Limited Liability Corporation structure gives individuals is a great enabler of evil. People do things behind the shield of the corporate structure they would NEVER do otherwise. We need to go back to the founding father's concept of corporations and move away to what it morphed into during the 1800s big railway era.

Re:Why do corporations have to be people?

[Rob the Bold]

So you're saying corporations are the new nobility? (not that I'm disagreeing with you). In a country that forbids the very concept of a nobility? Perhaps we should look to French history for guidance in the proper handling of nobility!

That's rather a good way of thinking about it. All the rights of commoners, plus some, and none of the responsibilities. They have ear of the government -- their concerns weigh upon the state much more than the riff-raff. If a company is threatened, it claims how its employees would suffer were it sanctioned, just as a nobleman might cite his responsibilities to his peasants. And of course, most of the money.

Re:Why do corporations have to be people?

[interkin3tic]

With a massive reign of terror?

More specifically, terrorizing overpaid CEOs and executive boards with the guillotine.

Re:Why do corporations have to be people?

[MickyTheIdiot]

I'll bite on this one.... I think that you have a massively revisionist view of history, but even putting that aside go back and look at how much power corporations had before the 1800s. The founding fathers massively distrusted corporations due to their experience with the East India Company. The Boston Tea Party was as much a protest against the East India Company as it was the British Government (the East India Company was the proxy of the British Government in the colonies). They knew first hand the damage corporations could do and they believed the corporate charters should be handed out for limited periods of time with limited scope. We didn't have the immortal corporation in this country until the 19th century.

I don't necessarily advocate that we go back to the originally founding father's ideas about corporations, however I do think we need at the very least to think about revoking charters of corporations that are bad actors in society. I also think corporate person hood needs to removed from our society completely.

Re:Why do corporations have to be people?

[commodore64_love]

Here's a good place to start: AMENDMENT __: "The enumerated rights and privileges apply only to individuals." QED no more free speech, privacy, or other rights would apply to corporations. The individuals inside the corporation would still have rights, but not the corporation itself, which make it easier to regulate it, audit it, and restrain its power.

Re:Why do corporations have to be people?

[MickyTheIdiot]

you can't "lockup" a corporation, but there is the corporate death penalty.

When was the last time you heard someone say we should revoke a corporate charter? With the bad corporate actors we have out there why isn't there more talk of this?

Re:Why do corporations have to be people?

[rocker_wannabe]

Several people pointed out that you can "lock up" a corporation by dissolution/stopping if from doing business. This is unworkable for two reasons.

Firstly, if a corporation couldn't make a profit anymore then it would "un-incorporate" and possibly a new corporation with a different name and the same people would pop up. I have heard of this happening for smaller limited-liability corporations that specialized in government bid projects and were banned from bidding. They just started over with a new name. The government, local, state or federal, is so bureaucratically constrained that this seems to work most of the time.

Secondly, people are only starting to realize just how little power they have over corporations. I think the latest government bailouts prove that government is here to serve the corporations and they only make a show of punishing them to get reelected. Only the most egregious corporate wrongdoings have caused anyone to even go to jail.

My point was really to show how completely wrong it is to treat corporations as legal entities. The key to civilization working properly is to maintain personal responsibility. When a person's reputation is at stake they are more likely to do the right thing. Being able to hide behind people that have no real stake in the outcome of their decisions, other than being fired, has made our society what it is today.

Re:Why do corporations have to be people?

[cayenne8]

"We live under that right now. Corporations control every aspect of our lives and we're subordinate to them. Sometimes we can choose which corporations we want to be controlled by, but that's about it."

I think one problem here is, pretty much everyone when they hear 'corporation' thinks only about the super huge, worldwide conglomerates.

In reality, in the US, corporations are mostly small...remember the small businesses that employ most people in the US? For us, it is a great thing. In such a litigious society, a person needs some protection from all the sue happy people out there.

It is also about the only way to keep any of your hard earned dollars. There are a large number of people out there that incorporate for these reasons...many are like me, a single person corporation. But, doing this gives me protection from losing everything (direct liability, and ability to buy insurances), it gives me a way to write off the expenses of my business, etc. There are VERY good reasons if you are in business for yourself, that you should incorporate.

So, when reading and posting about the EVIL corporations, remember, that while big and powerful, they aren't the prevelant use of incorporation, most I'd dare say...are the Mom and Pops (and contractors like me) that serve and work with you directly in day to day life. And if you start tearing down the corporation to get at the big few, you will kill the small business, as that normal people with normal funds can't take that risk any longer.

Re:Why do corporations have to be people?

[sumdumass]

You couldn't be more right except that by defining limited liability, you need to be aware that a corporation will not limit the liabilities of the actors involved with the activity that the liability stems from. In other words, you form a corporation and you work for it. If you wreck the company truck and kill a person, you are personally liable outside the liability of the corporation. The extent of the liability will only be limited by the law and any legal proceedings following your participation in the act.

The main benefit of a corporation is that non-participating actors (silent owners, share holders and so on who do not participate in running the corporation) are not obligated to other people's actions independent of their own actions outside the value of the investment. This is a necessary component of our business infrastructure otherwise a 2 billion dollar judgment on a company worth 500 million would result in all the share holder being responsible for the difference. Now think about that, you have 200 shares of company X in your retirement account at the advice of some brokerage firm and your house and property is being sold to satisfy some judgment from an action you have absolutely no control or influence over.

Re:Why do corporations have to be people?

[divisionbyzero]

So basically people were lazy. Instead of explicitly enumerating the rights and responsibilities of corporations they said, "Uh, let's just treat them like people." Lame. Not surprising but still lame. We should just right an explicit list of corporate rights and responsibilities instead of relying on piecemeal case law.

Re:Why do corporations have to be people?

[Jaysyn]

That's fine. They just need to be held responsible when they break the law, in a similar fashion to natural people. If you are stupid rich & speed everywhere & just pay the tickets & thumb your nose at the law, eventually you are going to have your right to drive taken away completely regardless of how much money you have. Something similar needs to happen to corporations that constantly bend & break laws. Sometimes a fine can *never* be an appropriate punishment, especially in cases where the CEOs & Directors get paid regardless of what actually happens in the company.

Re:Why do corporations have to be people?

[sjames]

Most of those more innocuous uses of incorporation would not suffer in the least if the idea of 'personhood' were replaced with a very limited definition of the entity. They would suffer none from the institution of the "corporate death penalty" for acting against the public interest.

Alternatively, liability for individuals could be more appropriately limited so that incorporation becomes less necessary.

Another alternative would be to subject corporations to restrictions similar to those faced by individuals when in prison. For example by appointing DOJ monitors and requiring them to pare their expenses to bar minimum survival level and forcing them to operate as a non-profit. After serving their time they may operate for-profit again but will be overseen by a parole officer.

Re:Why do corporations have to be people?

[nomadic]

The founding fathers massively distrusted corporations due to their experience with the East India Company. The Boston Tea Party was as much a protest against the East India Company as it was the British Government (the East India Company was the proxy of the British Government in the colonies). They knew first hand the damage corporations could do and they believed the corporate charters should be handed out for limited periods of time with limited scope. We didn't have the immortal corporation in this country until the 19th century.

And there is no corporation today in the same relationship as the East India Company; even Halliburton, the closest analogy today, has nowhere near that level of power where they operate. But my overall point is this idea that we've moved from some egalitarian society to one where corporations control everything is just not true. Just like everything else in human history corporate dominance goes in cycles; it changes based on laws, the economy, demographics, and politics. If corporations had complete run of things half the laws wouldn't be on the books, including 95% of the Internal Revenue Code, ERISA, the Environmental Protection Act, and minimum wage laws. Slashdotters have to give up this simplistic, borderline-conspiracy-theory view of the world and start actually educating themselves. Corporations have too much power, I don't deny that. But they're not some unbeatable monolith crushing society.

Re:Why do corporations have to be people?

[Jaysyn]

Firstly, if a corporation couldn't make a profit anymore then it would "un-incorporate" and possibly a new corporation with a different name and the same people would pop up.

I don't see any reason we couldn't specifically disallow this from happening when a corporation is being punished. Make it so anyone director level or above *cannot* create or join a new corporation until their "sentence" is served. If they are on multiple company's boards they would have to either give up the position or become a silent director until the sentence is finished or commuted. Considering there are natural humans in jail right now for *life* for nothing other than possession of marijuana, I don't think this could be considered "too harsh".

Don't do the crime if you can't do the time & all that.

Re:Why do corporations have to be people?

[Rob the Bold]

Firstly, if a corporation couldn't make a profit anymore then it would "un-incorporate" and possibly a new corporation with a different name and the same people would pop up. I have heard of this happening for smaller limited-liability corporations that specialized in government bid projects and were banned from bidding. They just started over with a new name. The government, local, state or federal, is so bureaucratically constrained that this seems to work most of the time.

I've been thinking about this for a little while now. When I read the story in Wired about people disappearing and trying to start a new life (and the accompanying "find the author" contest), I got to wondering why a person who'd screwed up couldn't just "re-incorporate" themselves and move on. Apparently, it's because our identity is inextricably linked to our physical body, not just our name. If we go to jail, our body is kept there. If we try to evade out debts by changing our name, our creditors will try to track down our body and still try to collect their "pound of flesh" from it.

A corporation can get away with these things because it doesn't have a physical body. Its body is its capitalization. So "jailing" a company would mean restricting the movement of its capital, i.e. its accounts, assets, patent portfolio, land, plant, etc. Locking up a company would therefore look like "nationalizing" it. Shareholders could go right ahead and invest in a new company, but without their old capital.

This thought is a work in progress.

Re:Why do corporations have to be people?

[pluther]

If you wreck the company truck and kill a person, you are personally liable outside the liability of the corporation. The extent of the liability will only be limited by the law and any legal proceedings following your participation in the act.

Not entirely true.

While I've never killed anyone, I have managed to wreck company cars before, a couple of times.

The most recent was back in college, while delivering pizza for Round Table. I totaled their Yugo by rear-ending a one-ton pickup. Although the accident was my fault, since I was acting within the "scope of employment", I was not liable at all. Round Table paid 100% of the damages, the accident was put on their record and not on mine, raising their insurance rates and not mine. I was also not involved in the subsequent lawsuit, other than as a witness.

I was fired, of course, as is the general case when a delivery driver gets into any kind of accident, but that was completely company policy not legal liability.

Even though Round Table encourages their drivers to drive as fast as possible, even going so far as to keep maps of where police are likely to be, since such policies are unofficial, the owners and board of directors are also never responsible for the damages caused, only the company.

Re:Why do corporations have to be people?

[Mr. Slippery]

With a massive reign of terror?

This "nobility" has given us a military-industrial complex that has killed millions, a prison-industrial complex that has deprived millions of their freedom, a medical-industrial complex that leaves thousands to die because giving them the treatment they paid for isn't profitable enough, and an agriculture-industrial complex that produces poor quality food while destroying the land and the water.

I hope for a peaceful solution, but if a "reign of terror" is the only way to change that, I say, off with their heads already.

Hooray for lawyers and lobbiests!

[InlawBiker]

Nice work. Just so you know, when the revolution comes you'll be first against the wall.

Re:Hooray for lawyers and lobbiests!

[HogGeek]

"VOTE FOR SMARTER CONGRESSPEOPLE"

In order to vote for them, they need to actually run for the office...

Re:Hooray for lawyers and lobbiests!

[Kuroji]

And before that they actually have to exist.

Re:Hooray for lawyers and lobbiests!

[dbet]

VOTE FOR SMARTER CONGRESSPEOPLE.

Smart people are smart enough to avoid public service. Congress, jury duty, etc. Sad but true.

Re:Murdering a corporation

[tjstork]

At the rate this idiocy is going it won't be long until directors of failed corporations get charged with manslaughter or murder

The way corporations are run, maybe they should.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Interpreting laws by the wording?

[b4dc0d3r]

In theory, yes. The Legislative branch writes laws with no hints towards how they should be interpreted. The Executive branch arrests people or otherwise enforces those laws based on its own interpretation. The Judicial branch reviews and decides if the Executive's actions are correct based on the wording of the law.

In practice, Judicial branch depends on prior decisions and sometimes other hints, as well as their own intelligence, when deciding what a law means.

It makes sense that only lawyers should write legislation, because they would be familiar with the legalese (jargon which is relatively specific compared to its usage in ordinary contexts). In practice, any joker good at winning popularity contests can write a law, summarize it to their fellow lawmakers, and have it pass without much in the way of reviews.

That's how bad laws get passed. That and a whole lot of other ways.

The commerce clause has been the subject of a number of lawsuits, so there is a lot of prior case law which has to be considered. We basically painted ourselves into a corner at this point, and I believe it would take a major challenge to change anything, much more than an individual citizen with a legitimate complaint.

Re:All the Rights; None of the Responsibility

[Attila Dimedici]

So corporations get all the right of an individual, but with nothing but monetary penalties when they do something criminal like poison the ground water. The jerks responsible just close up shop and start a new corporation and rinse repeat.

No, this ruling does not go that far. This ruling does not say that corporations get the same "personal privacy" protection as individuals in all cases, only in the way that the government responds to FOIA requests. This is not a bad ruling, it is a good ruling on a badly written law. The results of this ruling are bad, but the law was clearly written to say this. It was probably not written this way on purpose, but I wouldn't bet on that. Considering that legislators often don't even read laws that they introduce, it is possible that some staffer introduced this wording for exactly this purpose.
However, I would expect that in this case the wording was introduced to serve some other purpose in the law (such as allowing corporations to file FOIA requests) without anybody noticing that it gave corporations unintended privacy protections.

Jury duty?

[danaris]

I consider myself reasonably smart, and I wouldn't mind serving on a jury.

Only problem is, from everything I've seen and heard, my intelligence, basic working knowledge of the legal system, inquisitive mind, and sense of justice would result in me getting removed in the first round of jury selection.

Dan Aris