by Adam Winkler
Black’s solid support for the NAACP and his membership in the Klan were, paradoxically, driven by the same realization: he understood how deeply entrenched racism was in places like Alabama. Like John Patterson, Black was a native Alabaman, and like the reactionary state attorney general, Black recognized early on that success in Alabama electoral politics meant support for racial segregation. Seeking to expand his base in one of his early election campaigns, he joined the Klan. Later in life, he recognized that, because of that same deep-seated racism in the South, racial justice would never come without an unrelenting push by the Supreme Court.
As much as Black championed civil rights, he was an equally vigorous opponent of corporate rights. Even more so than Chief Justice Roger Taney a century earlier, Black argued forcefully against constitutional protections for corporations. As a young trial lawyer, Black steadfastly refused to represent corporate clients, bragging that he was not “a railroad, power company, or a corporation lawyer.” When Black was in the Senate, he often railed against moneyed corporations in the southern populist vein of Jefferson and Jackson. Once he became a justice, he quickly staked out his populist position against corporate constitutional rights.13
In 1938, just four months after Black was sworn in, the Supreme Court decided a case called Connecticut General Life Insurance Company v. Johnson, which, like the NAACP case, involved state restrictions on foreign corporations. California had required out-of-state insurance companies that did business in California to pay taxes even on insurance contracts formed outside the state. A life insurance company from Connecticut challenged the law—another in the seemingly endless corporate lawsuits against such restrictions that stretched back a century to the Taney court. By the 1930s, the Supreme Court had largely sided with the foreign corporations. Following this later trend, the Supreme Court in Connecticut General Life Insurance struck down the California law. Black, however, dissented. Even though none of the parties had raised the issue, Black argued that Justice Stephen Field had been wrong about the scope of corporate rights under the Fourteenth Amendment. In Black’s view, the amendment afforded corporations no rights whatsoever.14
A CHAMPION OF CIVIL RIGHTS, JUSTICE HUGO BLACK WAS OUTSPOKEN IN HIS OPPOSITION TO CORPORATE RIGHTS.
Challenging a half-century of precedent recognizing corporations to have at least property rights under the Fourteenth Amendment, Black rested his case on the original meaning of the Fourteenth Amendment. No one who voted to ratify the Fourteenth Amendment knew they were “granting new and revolutionary rights to corporations,” Black insisted. Mocking Roscoe Conkling’s “secret history” of the drafting of the Fourteenth Amendment, Black criticized the court’s 1886 ruling in Santa Clara County v. Southern Pacific, which, Black said, “decided for the first time that the word ‘person’ in the amendment did, in some instances, include corporations.” Black’s reliance on Santa Clara was not only incorrect, but stunningly so given that he was arguing for that very case to be overturned. Regardless, in Black’s view, the Fourteenth Amendment was designed “to protect weak and helpless human beings,” not “to remove corporations in any fashion from the control of state governments.” People had constitutional rights; corporations did not.
It was a bold stance to take for someone only four months on the job. Not only had Black breached the court’s protocol by reaching out to decide an issue neither briefed nor argued by the parties, but he dared propose a novel and sweeping reinterpretation of the Fourteenth Amendment. His views, however, never gained the support of a majority of the court.
In one 1946 case, however, the Supreme Court momentarily embraced another of Black’s idiosyncratic views about corporations—and nearly brought about a constitutional revolution. Ever since the Founding, the Constitution has been understood to be mainly a limitation on government, not a limitation on private actors. The Fourteenth Amendment, for example, says “No State shall” deny equal protection and due process. Someone can only claim to have his or her individual rights violated when the government has burdened those rights. This is known as the “state action” requirement. By comparison, if a private person prevents someone from speaking or practicing her religion, the Constitution offers no protection or remedy. (There is one exception: the Thirteenth Amendment, which directly prohibits private individuals from holding another person in servitude.) The fact that the state action requirement is as old as the Constitution itself was no reason, in Black’s mind, to keep it. He thought corporations should be required to respect and enforce individual rights too.
The 1946 case, fittingly, came out of Alabama. Grace Marsh, a Jehovah’s Witness, had been arrested for distributing religious literature in the tiny town of Chickasaw, located on Mobile Bay, just off the Gulf of Mexico. Chickasaw looked like any of a hundred other small towns that dotted the South. Houses crowded around a short business block, which had a barbershop, drugstore, post office, and a grocery—a southern variant of a Saturday Evening Post tableau. The businesses were easily accessible from a four-lane public highway, which brought in supplies for Chickasaw’s primary employer, the Gulf Shipbuilding Corporation. During World War II, the company and the town had prospered due to contracts with the Navy. Chickasaw’s most distinguishing feature was one a visitor like Marsh might not even notice: it was a company town, wholly owned and operated by the Gulf Shipbuilding Corporation.15
On Christmas Eve in 1943, Grace Marsh visited Chickasaw’s business block to hand out copies of Watchtower, the official magazine of the Jehovah’s Witnesses. A sheriff’s deputy, who was paid by Gulf Shipbuilding to police the devoutly Christian town, demanded she stop, citing company policy prohibiting the distribution of literature on the streets. Marsh refused and was convicted for criminal trespass onto the company’s private property. Marsh challenged her conviction as a violation of her rights of free speech and freedom of religion.
THE MAIN BUSINESS STREET OF CHICKASAW, ALABAMA, 1953.
When Marsh’s case made it to the Supreme Court in the winter of 1945–1946, only a decade had passed since Grosjean, but the court had been busy expanding the scope of First Amendment protections. Many of the cases involved Jehovah’s Witnesses, another group of persecuted outsiders. A common tenet of faith among Jehovah’s Witnesses was the obligation to proselytize in person, but that often ran afoul of laws prohibiting such activity, some of which were enacted precisely to stop the Jehovah’s Witnesses. In a series of important decisions, the court, in the early days of its historic embrace of vibrant free speech protection, struck down laws prohibiting the distribution of literature on the streets; laws banning people from going door-to-door; and restrictions on the solicitation of charitable contributions. By guaranteeing the right of Jehovah’s Witnesses to engage in political and religious advocacy in public places, the court was living up to the promise of Justice Harlan Fiske Stone’s footnote in Carolene Products by protecting minorities from government persecution.16
Grace Marsh’s case, however, was different. Although she too was being punished for proselytizing, the government was not the one silencing her. Gulf Shipbuilding, a private company, was. Because of the state action doctrine, she had no case; private companies were not obligated to respect individual rights. So when Justice Black wrote a majority opinion for the Supreme Court ruling in her favor in January of 1946, the outcome was unexpected, to say the very least. Although Black recognized that private property owners usually have the right to exclude whomever they want from their property, the “more an owner, for his advantage, opens up his property for use by the public in general,” the more the owner has to respect the constitutional rights of the public. Here, Chickasaw’s business block was “accessible to and freely used by the public in general.” Because Chickasaw was a town—even if it was really a company town—it could not silence religious minorities.17
Marsh v. Alabama fundamentally flipped the constitutional status of corporations. Ever since Daniel Webster’s Dartmouth College case, corporations were deemed
to be private entities, which like ordinary people could assert individual rights against the government. In Marsh, Black reimagined Gulf Shipbuilding to be akin to the government instead and bound to respect the constitutional rights of others. In a dissenting opinion, Black’s friend and fellow New Dealer Justice Stanley Reed gently chided him for his “novel Constitutional doctrine.” While the doctrine was new, Black’s view harkened back in some ways to early America. In the colonial era, corporations like the Massachusetts Bay Company also served as governments.
Black’s belief that some corporations should be treated like governments under the Constitution was not solely a product of his eccentricities. Other mid-century thinkers came to similar conclusions in light of the pervasive influence of large corporations on people’s lives. The same year as Marsh v. Alabama, a management consultant named Peter Drucker wrote Concept of the Corporation, a pioneering study of the management structure of General Motors, the world’s largest corporation. Drucker likened GM to the US government, but noted that corporations do more than governments to set “the standard for the way of life and the mode of living of our citizens.” Drucker was not a critic of the corporation; he admired the efficiency of the large corporation and the contribution business made to social welfare. Still, he admitted that the modern corporation was, quite unlike government officials, “responsible to no one.”18
The trend to view the corporation as a de facto government continued to gain high-profile adherents in the 1950s. Adolph Berle Jr., the economist who coined the terminology of the “separation of ownership and control,” built on Black and Drucker in 1952: “Some of these corporations are units which can be thought of only in somewhat the way we have heretofore thought of nations.” With “sufficient economic power” to burden “the constitutional rights of an individual to a material degree,” corporations ought to be “subject to constitutional limitations . . . as is the state itself.” Berle fearlessly predicted that, in light of Marsh v. Alabama, the day would soon come when corporations would be bound to respect individual rights as a matter of course. Their private property would become public space.19
An astute observer of the modern corporation, Berle was not, however, a particularly talented prognosticator of constitutional law. Despite growing awareness of the power and influence of the large corporation, Black’s decision in Marsh never caught on. Never again would the court rule that the Constitution required large corporations as such to respect individual rights. Instead, the court returned to saying that corporations were, like individuals, themselves protected by the Constitution. Marsh was never overturned, but neither did it become an important precedent. Instead, it continues to live to this day in a state of constitutional purgatory, essentially a dead letter but still on the books. Now the case, when remembered at all, is dismissed as a sui generis response “to the special history and circumstances of the Southern company town”; as those towns faded from the economic scene in the decades that followed, so did Black’s unusual approach to corporations and the Constitution.20
The fate of Marsh was strikingly different from that of Santa Clara County v. Southern Pacific Railroad. Even though the court explicitly refused to decide whether corporations were protected by the Fourteenth Amendment in Santa Clara, that decision would be frequently cited for establishing that rule.
One reason the seed planted by Black in Marsh never again bore fruit was pragmatic. Not all corporations had power comparable to that of the government. The large corporation gained most of the media and scholarly attention, but the vast majority of corporations were small businesses. From the corner drugstore to the local Chinese restaurant, the twentieth century saw small business owners increasingly organize their businesses as corporations, lured by the promise of limited liability. Yet these corporations did not have power and influence similar to the government’s. As even Berle admitted, “In the absence of very considerable concentration of economic power in a given area, the problem does not arise.” The court faced the difficult if not impossible question of separating out those corporations with government-like power from those without it.
Another reason Black’s view of corporations as governments withered can be gleaned from the controversy over the NAACP’s membership list in NAACP v. Alabama ex rel. Patterson. As the NAACP’s experience made clear, sometimes corporations were indeed the victims of political repression by the government and needing of constitutional protection. The NAACP in Alabama, at least, was much less less like Gulf Shipbuilding, a massive corporation that controlled a whole town, and more like Grace Marsh, a dissenter being silenced. The NAACP case thus presented Black with a dilemma. To support the NAACP meant accepting that at least some types of corporations had at least some constitutional rights.
* * *
ALABAMA’S JOHN PATTERSON HAD many allies in his effort to stop racial integration after Brown. In 1956, over one hundred representatives and senators signed the Southern Manifesto, which encouraged states to resist the Supreme Court’s decision. The next year, as the controversy over the NAACP’s membership list was making its way to the Supreme Court, Arkansas governor Oral Faubus deployed the state’s National Guard to prevent the “Little Rock Nine,” a group of fearless African American students, from integrating Central High School. In 1958, the same year the court would decide the NAACP’s membership list case, the justices felt obligated to issue the unprecedented decision in Cooper v. Aaron, which forcefully declared that state officials were indeed obligated to obey federal court orders mandating integration. In this environment, the NAACP’s case was a major civil rights case, not just a minor dispute about the scope of corporate rights.
No one understood better than Black the depths of southern intransigence. And although Black recognized in the justices’ conference that the “fact that the petitioner is a corporation raises a background problem similar to the Berea College case”—referring to the Lochner era decision that refused to extend the freedom of association to an educational corporation—he was adamant that a unified front of justices was essential to enforcing the court’s rulings. As a result, Black explained to Justice John Marshall Harlan II, who would ultimately author the court’s opinion in the membership list case, that he was “willing to go a long way to obtain such unanimity” in civil rights cases.21
Harlan, the grandson of the nineteenth-century justice with the same name, was a moderate on the liberal Warren court. He sided with the majority in the Warren court’s major race cases, but often expressed reservations about the judiciary becoming “a general haven for reform movements.” He proposed a compromise to decide the NAACP membership list case—one that echoed the first corporate rights case, Bank of the United States v. Deveaux. Like Horace Binney, the lawyer for the Bank, Harlan suggested piercing the corporate veil. The court need not say anything about whether the NAACP had rights of its own. Instead, the NAACP should be allowed to assert and defend the constitutional rights of its members. The NAACP’s members were unquestionably people, and they had the full panoply of constitutional rights, including liberty rights like the freedom of association. While recognizing that the court “has generally insisted that the parties rely only on constitutional rights which are personal to themselves,” Harlan’s opinion held that the court would look past the corporate form and base the decision instead on the associational rights of members. The decision was, as Black thought necessary, unanimous.22
JUSTICE JOHN M. HARLAN II AUTHORED THE SUPREME COURT’S OPINION IN NAACP V. ALABAMA EX REL. PATTERSON.
Harlan’s opinion departed from Bank of the United States in one important way. Although the court pierced the corporate veil, Harlan suggested that such an approach was justified in this case precisely because the NAACP was not a business. It was, instead, a voluntary, nonprofit membership corporation and the people who joined did so specifically “to make more effective the expression of their own views” about racial justice. Unlike a business corporation, there was a unique “nexus” between th
e NAACP and its members that made the two “in every practical sense identical.” Given the NAACP’s status as a voluntary, nonprofit membership organization, it could act as the members’ representative. For all intents and purposes, the corporation bore the rights of its members—in this case, the freedom of association, a right of personal liberty.
NAACP v. Alabama ex rel. Patterson would be celebrated as an important landmark in both the civil rights movement and the development of First Amendment principles. “Effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association,” Justice Harlan’s opinion explained. “It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by” the Constitution. For the NAACP, however, the fight was hardly over. Southern resistance would bring the question of corporate rights back to the Supreme Court in NAACP v. Button (1963), where the justices held that “though a corporation,” the NAACP could assert freedom of association “on its own behalf” while it could also “assert the corresponding rights of its members.”23
The freedom of association established in the NAACP cases would be used primarily by advocacy groups, not business corporations, to fight against repressive laws. Yet the court’s language was broad. “Of course, it is immaterial whether the beliefs sought to be advanced by association pertain to political, economic, religious or cultural matters,” Justice Harlan explained. In time, the notion that business corporations were a form of association dedicated to constitutionally protected advocacy on economic matters would fuel the expansion of political speech rights for business.