Corporate Persons, Climate Homicides, Socialized Assets, Public Goods
The New Abolitionists Enlist the Law
Some close friends have told me this piece is too “technical”—that is, too specialized and legalistic for the general reader. I hope they’re wrong, but I thought I’d better go back and preface the thing with a kind of spoiler alert: it is pretty damn wonky because I had to get down into the linguistic weeds of the law reviews, where exactitude leads to verbal excess for fear of missing some obscure precedent or impending possibility. But my point is simple: there's a left-wing movement that is forging a post-capitalist legal regime from the raw materials at hand in constitutional, environmental, anti-trust, and criminal law. From it, we can gather a realistic set of hopes for the future—the kind of hopes that abolitionists mustered by reading the US Constitution as an anti-slavery document.
I
We’ve heard a lot about and from the Federalist Society lately. For example, how its alumni on the Supreme Court have radicalized and re-racialized the Constitution in the name of “conservative,” principled adherence to states’ rights—in effect, adherence to the Articles of Confederation as the model of national governance—to the separation of powers, and to a “color-blind” application of statutory law; how its representatives function as provocateurs and “thought leaders” in the law schools; and how its mastermind, Leonard Leo, plans to export its cadre-model methods to the larger ideological plane of the ongoing Culture War over the very soul of America.
We have heard a lot less about another less audible ideological movement, or moment, in contemporary legal (thus political) thinking, a current that is nonetheless making intellectual waves and establishing new beach-heads in courts and case law. It has no unifying agenda or confirmed set of principles, save this: the rights of persons shall take precedence over the rights of property where these two cardinal objects of government happen to make competing claims, and “persons” shall have as many meanings as necessary to press their claims against the threats of property to the life and/or liberty of individuals.
The movement, if that is the right word, doesn’t deny or abrogate the rights of property, for that would undermine a distinction worth preserving—a distinction that clarifies and enables new conceptions of workers’ rights and public goods, among other good things. More important for my present purposes, the preservation of this distinction also allows for the citation of constitutional precedent and the enlistment of “original intent” in argument on behalf of the rights of persons. Which is to say that it allows for learning from the founders in ways analogous to those devised by anti-slavery jurists and activists in the antebellum decades, men and women who treated the US Constitution as a crucial instrument in destroying the legitimacy of the Slave Power in American life.
This plodding, lawful procedure no doubt seems too incremental or complacent in view of the “polycrisis” we face—that is, the combination of climate change, economic insecurity and inequality, illiberal, anti-democratic, quasi-fascist political lunges from the Right, and feckless appeals to precedent, civility, and “the facts” from the Left. I get that, it does feel like more radical, more strenuous means to our democratic ends are now in order. And it’s not as if the Right and the Left have the same Constitution in mind as they go about their interpretive business: the alumni of the Federalist Society are bent on eviscerating its letter as well as its spirit, and the jurists who oppose them have no doubt that it needs amendment (not the dustbin). It’s open season on an open book.
But, like those activists and ideologues who carved an anti-slavery document from a Constitution that made slavery a legal property/labor system—these were mere ”moderates,” not abolitionists—lawyers on and plaintiffs from the contemporary Left are building a case for a new conception of the relation between the rights of property and the rights of persons. In doing so, they might well destroy the legitimacy of the Corporate Power in American life.
There are three elements of this new thinking I want to highlight here, as a guide and a goad to more thinking, and, in the longer run, as a reason to believe that a bend toward justice in the arc of our moral universe is already being mapped. I’ll leave the historical analogue of crafting an anti-slavery Constitution for a later post, where I’ll take up James Oakes’s argument in The Crooked Path to Abolition (2021), and assess our prospects of mapping a similarly lawful exit from the decrepit equation of liberty and property.
II
The first element worth our attention operates at a local, national, and global level. The “local” is exemplified by the case of Held v. Montana being pressed by Our Children’s Trust, a non-profit founded by Julia Olson; it began in 2011 with a petition to the state Supreme Court, and returned with OCT’s new suit in 2020; it finally comes to trial in June over the strenuous objections and obstructions of the Republican governor’s office. The premise of the plaintiffs (16 in all, a diverse group of mostly teenagers led by 21-year old Ricki Held) is that the state constitution of 1972—a radical revision of the original from 1889, which deferred to the coal and copper mining industries that then dominated Montana politics—guarantees residents “the right to a clean and healthful environment.” (The constitutions of Pennsylvania and New York have similar guarantees.)
For now these plaintiffs seek only “declaratory relief,” which means that they hope the court will simply acknowledge the role of fossil fuels in climate change, and thus overrule a 2011 rule that forbids any consideration by state agencies of that proven fact in issuing new mining permits to private companies. Such relief, to quote the New York Times’ reporting, will solidify the plaintiffs’ larger claim, that the state’s “extensive support for fossil fuels like coal, oil and gas is unconstitutional because the resulting pollution is dangerously heating the planet and has robbed them of a healthy environment.” [NYT 3/24/2023]
The national counterpart to Held v. Montana is a case again brought by OCT and being argued in the federal district court of Oregon, a part of the Ninth Circuit, by Olson herself. This is Juliana v. United States [947 F.3d 1159 (9th Cir. 2020)] which Trump’s Department of Justice fought with everything it had, including at least three petitions for writs of mandamus, that is, extraordinary challenges to the jurisdiction (in effect, the legal standing) of the courts themselves, and which Joe Biden’s administration has continued to stall—settlement negotiations between the 21 youth plaintiffs named by OCT and the Department of Justice ended without resolution in November 2021. The case was filed in August 2015 in the U.S. District Court of Oregon, and it has since gone back and forth between that venue, the 9th Circuit (panels and en banc), and SCOTUS, with motions to stay or dismiss coming every few months from self-appointed defendants among fossil fuel companies and, more recently, from 18 states’ attorneys general (all Republicans, of course). As it stands, as of March 15, 2023, these latter defendants, like their predecessors, have been removed by the District Court of Oregon and the plaintiffs wait for a decision from the 9th Circuit on their second amended complaint.
You might assume—I did—that the US Supreme Court would be standing athwart these proceedings, but on two occasions it has, in fact, denied motions to stay from the Department of Justice, affirmed the legitimacy of the plaintiffs’ claims, and reinstated trial dates set by lower courts. The 9th Circuit has been more of an obstacle, ruling, or example, on January 17, 2020 that the (putative) remedies for plaintiffs’ claimed injuries—to their life, liberty, and property—are beyond the powers of the courts because they entail the design of policies the courts themselves are not equipped to supply, either as experts in the interpretation of the law or as constrained by the constitutional separation of powers. A recent article in the Harvard Law Review notes that this ruling puts an effective stop on the progress of the case. I don’t think so. For the decision explicitly recognizes (a) the gravity of the evidence regarding plaintiffs’ injuries from climate change, (b) the government’s role in causing them, and therefore (c ) that the government is violating plaintiffs’ constitutional rights. https://harvardlawreview.org/2021/03/juliana-v-united-states/
The global or international rendition of these claims of injuries from climate change has made its way to the International Court of Justice at The Hague after a recent UN resolution—March 29, 2023—backed it, asking for an advisory opinion on obligations of and legal consequences for nations known to have caused “significant harm to the climate system and other parts of the environment.” It began in a Pacific Island nation, the Republic of Vanuatu, in 2021, with a human rights complaint fashioned by youth groups there, whose draft was formally submitted to the UN for discussion by member states in November 2022. No one knows what the results will be in view of enforceable international law. [https://blogs.law.columbia.edu/climatechange/2023/03/29/the-icjs-advisory-opinion-on-climate-change-what-happens-now/]
III
The second element of the new thinking about the relation between the rights of persons and the rights of property is less systematic, and is not yet a matter of case law, nor even an object of special attention in the law schools and reviews. It is nonetheless important, for my purposes, because it addresses the headquarters of the post-industrial economy—the financial sector that reaps a disproportionate share of the profits generated by corporations and controls the majority of the savings made by individuals—and because it figures in the remedies proposed by experts in both anti-trust law and the criminal liability of fossil fuel companies. I mean, of course, (a) the recent discussions of banking, central and otherwise, in view of the serial economic crises that have plagued us since the dawn of the 21st century, and (b) the still emergent discussion of the law as it applies to the irreparable damage done by corporations that mine and/or distribute fossil fuels.
Regarding the financial sector, I will just note my reviews of relevant books at Public Books and Project Syndicate and my recaps of related articles here at Substack, and these only as preface to a summary of what is happening in anti-trust and environmental law. By almost all accounts, the headquarters of capitalism as such—the banking system—is already thoroughly socialized through the insurance of deposits and the Fed’s deployment of its expanded powers in bailing out or arranging the absorption of specific institutions (not all of which are banks or US-based) since 2008; it is, then, a short step to codify the actual situation. I also note a treatment of the issues at stake in Citizens United, the 2010 SCOTUS case that assigned 1st Amendment rights to corporations, which I wrote for my old blog back in 2011.
https://www.publicbooks.org/atlas-mugged/
https://www.project-syndicate.org/onpoint/review-of-menand-bernanke-chancellor-on-crisis-and-federal-reserve-by-james-livingston-2022-12
https://www.project-syndicate.org/onpoint/reviving-democracy-after-end-of-capitalism-by-james-livingston-2203-03?utm_source=Project+Syndicate+Newsletter&utm_campaign=af2a91d9ed-sunday_newsletter_03_12_2023&utm_medium=email&utm_term=0_73bad5b7d8-af2a91d9ed-107115341&mc_cid=af2a91d9ed&mc_eid=5c47be853f
[https://politicsandletters.wordpress.com/2012/04/25/talk-on-citizens-united/]
IV
As I see it, the third element in the new legal (thus political) thinking about the relation between the rights of persons and the rights of property is to be found, at least to begin with, in new twists on anti-trust law, which, according to their proponents, are now new at all, but are instead results of returning to the traditional concerns and procedures of their trade—the concerns and procedures that preoccupied anti-trust lawyers and regulators until a 1982 rewrite of guidelines from the Department of Justice placed the Reagan administration on the side of Robert Bork’s radical reinterpretation of the Sherman Act in The Antitrust Paradox (1978). (But this book wasn’t all that original: it was the culmination of a comprehensive “Chicago School” campaign against regulation of the market, on which see the relevant historical sections in articles by Lina Khan and William Boyd cited below.)
The most outspoken and prominent of these proponents of a return to the traditional concerns of anti-trust law and enforcement—they often label themselves as followers of the progressive jurist Louis Brandeis—are Lina Khan, the current chair of the FTC, and Jonathan Kanter, her deputy; Matt Stoller, a former Congressional staffer who is now the proprietor of BIG, an anti-monopoly Substack newsletter devoted to anti-trust issues; and Barry Lynn, Robert Pitofsky, Eleanor Fox, et al., law school professors who have urged their colleagues to refocus their attention on the ways anti-trust law illuminates the problem of private power (“private government,” as Elizabeth Anderson puts it in her book [2017] of that title) rather than, as Bork would have it, on how it makes for efficiency or “consumer welfare” measured in retail prices.
Khan’s article, “Amazon’s Antitrust Paradox,” Yale Law Journal 126:3 (2017), pp. 710-805, is a forceful, frontal assault on Bork’s logic and its consequences: it’s a manifesto demanding that we treat anti-trust law as a lens by which to examine “the architecture of power in the 21st century marketplace.” In this sense, her argument is a plea for a return to the insights of corporate liberalism as it emerged in the thirty years after the passage of the original Sherman Anti-Trust Act in 1890, an epochal event charted definitively in Martin Sklar’s masterpiece, The Corporate Reconstruction of American Capitalism, 1890-1916: The Market, the Law, and Politics (1988). For Khan is trying to steer the law between the “trust-busting” regulatory minimalism promoted by William Howard Taft—for whom the choice was either the restoration of vigorous inter-firm competition or the advent of outright socialism—and the liberal statist capitalism promoted by Teddy Roosevelt, whose Bull Moose insurgency was animated by what voters then and politicians now mistake for a socialist agenda.** Here is how she frames her programmatic purpose: “Foundational to these interests [those contained in the ‘original intent’ of the Sherman Act] is the distribution of ownership and control—inescapably a question of structure. Promoting a competitive process also minimizes the need for regulatory involvement. [But a] focus on process [e.g., business methods of gaining market share] assigns government the task of creating background conditions rather than intervening to manufacture or interfere with outcomes.” [745-46]
This focus places her in the middle ground of corporate liberalism staked out by Woodrow Wilson, where “positive government” mediates between the state and civil society, the public and the private sector, by enlisting both the courts and the Federal Trade Commission in maintaining the common law understanding of combinations in restraint of trade—that is, the distinction between good and bad “trusts,” as the language of the late-19th and early 20th centuries named them. The “rule of reason” reinstated by SCOTUS in the Standard Oil case of 1911 was a simple restatement of that distinction, which demanded that John D. Rockefeller’s empire be dispersed into separate, competing companies because its overwhelming market share had been built on “unfair business practices.”
I say that Khan is closer to Wilson than to Taft—or to the iconic jurist in the “trust-busting” Hall of Fame, Louis Brandeis, whom she cites approvingly [742]—because Wilson understood that a public utility model would sooner or later become the mainstream method of regulating “natural monopolies,” those that provided essential public goods on a scale that required massive investment but delivered such meager returns that private capital sources would be absent or insufficient. In concluding, Khan applies exactly this logic to the case of Amazon, a corporation that foregoes profits to gain market share, and that provides an essential, indeed indispensable intermediary service—a public good if ever there was one—in distributing every kind of commodity at discounted prices.
For my purposes, these concluding remarks are significant in their own right, by showing how anti-trust law can be creatively deployed in thinking about and acting upon concentrations of economic and political power, but also as they open onto two other domains where the law as it stands (or as easily modified) might be used as means to social-democratic ends. Those domains are, as previously noted, the financial sector and the power sector, the crucial subset of the economy where fossil fuels are produced and distributed.
In this closing section, Khan cites Saule Omarova, the Cornell Law professor who withdrew her nomination to be Comptroller of the Currency under Joe Biden because the American Bankers Association mounted a scurrilous but effective attack on her personal life and political beliefs. [794-96, nn. 420-21, 423-28] Omarova’s “notoriety” derives from her application of the public utility model to banking as such, proposing that a representative of the public interest be seated on the boards of financial institutions to reduce risk—the so-called Golden Share—and that prophylactic limits on vertical integration (e.g., the merger of banking and commerce that GE pioneered) be imposed on the financial sector as a whole. Banking, in her view, is an essential intermediary that, because it is crucial to the maintenance of everyday life, and is already both monopolized and socialized with government approval and support, must be treated as an “infrastructure” like transportation, thus subject to close public supervision. Khan sees her approach to Amazon in the same terms: “it accepts the benefits of monopoly and instead [of restoring competition] chooses to limit how a monopoly may use its power.” [797]
Khan then cites the detonating event in the interpretation of the 14th Amendment, which eventually led, by a very crooked path, to Citizens United. This is Munn v. Illinois (94 US 113 [1877]), the case that excluded the due process clause of that amendment in upholding the state’s regulation of warehousing prices in a decision written by the chief justice of SCOTUS, Morrison R. Waite—who declared that “property does become clothed with a public interest when used in a manner to make it of public consequence.” In other words, the companies claiming that their property had been taken without due process, thus depriving them of their liberty, had no standing because they were not “persons” at the law as conceived and designated by the 14th Amendment. (Later decisions, particularly Santa Clara County v. Southern Pacific Ry. Co. 114 US 394 [1886] and Chicago, Milwukee & St. Paul Ry. Co. v. Minnesota [1890], rendered corporations as persons according to the 14th Amendment, and property as expected income, not merely tangible assets, but the courts resisted the conflation of corporate and “natural” persons until Citizens United.)
In the same concluding pages, Khan cites William Boyd, “Public Utility and the Low-Carbon Future,” UCLA Law Review 61 (2014), pp. 1614-1710. Here Boyd lays out the case for reinstating the Progressive Era’s broad concept of public utility and applying it to the power sector, where the generation and distribution of electricity—thus the future of the Grid—have long been understood as dimensions of a “natural monopoly,” an essential intermediary service that requires massive investment ($2 trillion over the next 20 years), long-range planning, far-flung coordination, and regional cooperatives to merely function on a day-to-day basis. He summarizes that concept as follows:
“Such an undertaking requires that we distinguish between the current IOU [Investor Owned Utility, as per Commonwealth or Consolidated Edison] business model and the broader concept of public utility. Although often conflated, they are not the same. As understood here, public utility is first and foremost a normative effort directed at ensuring that the governance of essential network industries, such as electric power, proceeds in a manner that protects the public from the abuses of market power by providing stable, reliable, and universal service at just and reasonable rates. Public utility, in this broader sense, is not a thing or a type of entity but an undertaking—a collective project aimed at harnessing the power of private enterprise and directing it toward public ends. The traditional IOU business model is thus a manifestation of public utility. But it hardly exhausts the category, and it would be a mistake to presume that there is only one right way to organize and regulate the power sector within the broad framework of public utility.” [1620]
The application of this reinvigorated public utility model to the power sector, particularly the generation and distribution of electricity, has become an acutely pressing need, Boyd argues, in view of increasing demand for access to the Internet and electric vehicles, on the one hand, and increasing demand for ways to reduce carbon emissions, on the other, especially since coal still serves as a principal energy source in producing electricity. Waiting on new, disruptive technologies, or relying on carbon pricing, simply won’t do, because “careful planning and sequencing of investments in various segments of the industry (and at multiple scales) will be necessary to create an electric power system that has a vastly reduced emissions profile compared to the current system.” [1625]
Boyd’s intellectual inspiration, like Khan’s three years later, flows from two sources, Progressive Era thinking about corporate power, personality, and regulation in terms of anti-trust law—Boyd explicitly associates this thinking with John Dewey’s pragmatism [1650]—and the locus classicus of modern public utility law in the US, Munn v. Illinois. [1636-51] But he nails down the argument by quoting the later legal realism of Supreme Court Justice Felix Frankfurter, who explained why what we call the Grid is something the government must administer, and closely, not leave to random, market-driven stages of development: “As Felix Frankfurter put it in 1930, ‘[t]o think of contemporary America without the intricate and pervasive systems which furnish light, heat, power, water, transportation, and communication, is to conjure up another world. The needs thus met are today as truly public services as the traditional governmental functions of police and justice.’” [1638, from The Public and Its Government, a title clearly meant as both compliment and complement to John Dewey’s book of 1929, The Public and Its Problems, the one Boyd cites, which was, in turn, a direct reply to Walter Lippmann’s polemic of 1927, The Phantom Public. I analyze this debate in Pragmatism, Feminism, and Democracy (2001), chap. 2.]
The practical question that this new thinking about anti-trust and public utility as it applies to the financial sector, retail distribution, and the power sector, is plainly, How to turn what are now privately owned, publicly-traded corporations into public utilities? The answer may well be found in the intricacies of environmental law, conceived first on the plane of constitutional (or human) rights, as we have seen, but now moving at the level of criminal law in accordance with previous procedures that forced settlements from tobacco and pharmaceutical companies.
Here I have in mind the new (actually still a draft) article by David Arkush & Donald Braman, “Climate Homicide: Prosecuting Big Oil for Climate Deaths,” Harvard Environmental Law Review 48:1 (2024), pp. 1-70, a sweeping, breathtaking indictment of fossil fuel companies (FFCs) not for murder in the first degree but for “negligent homicide” in causing the deaths of hundreds of thousands of people. The authors prove that FFCs had, and have, a “culpable mental state,” that is, reliable knowledge of the severe environmental damage done by the greenhouse gases their operations produce, thus the deaths that follow “naturally”: internal memos from as early as 1959 demonstrate as much. But they don’t claim that the purpose or intent of these operations was to kill people—merely that they did. [5-51, esp. 38]
Notice the language deployed throughout, which, in accordance with Citizens United, treats corporations, persons, people, and individuals as interchangeable words that designate legal entities or moral agents subject to criminal liability for their actions, premeditated or not. “People are regularly indicted and convicted over momentary negligence that kills a single person.” [8] Why not corporations? “Prosecutors regularly bring charges against corporations for far less serious crimes [than ‘lethal conduct’]. But many are reluctant to prosecute corporations, perhaps because they see no obvious benefit. A corporation, after all, cannot be thrown in jail. These prosecutors may be unaware of modern remedies that can effectively force corporate actors to adopt pro-social practices while preserving the value of the corporation itself. This Article reviews these remedies, highlighting one particularly appropriate sanction: restructuring into public benefit corporations.” [4-5]
In sum, then, Arkush and Braman argue that criminal prosecution of FFCs is the way to force them to make settlements of the kind prescribed by the courts in the case of Purdue Pharma (it is pending review after appeal)—settlements that will protect the rights of property by preserving the value of FFCs as profit-seeking entities and, at the same time, expand the scope of the rights of persons, to encompass protection from the lethal conduct of FFCs, at present and in the future. [56-70, esp. 61-62] The public benefit corporations (PBCs) that result will function very much like the public utilities that Khan, Omarova, and Boyd propose as remedies for the problems of market power and/or recurrent crisis specific to retail distribution, the financial sector, and the Grid. Their new business model will be able, at last, to balance the two cardinal objects of government, the rights of property and the rights of persons, and with them private interests and public goods.
____________
**See Sklar, Corporate Reconstruction, pp. 1-40, and esp. 285-441.
Jim,
Your argument is that broadening corporate person rights at the expense of individual rights doesn't run afoul of the 14th? I'll have to read your citations.
Thanks, Tony
Nicely done, Jim. In my opinion, the Santa Clara case Is the one that started the corporate personhood fiction. The issue wasn't even before the court and a footnote was the basis for the corporate personhood's beginning. (I believe). My belief has always been the corporate personhood violates the 14th Amendments equal protection clause in that it grants rights to corporate persons that are not afforded to individuals as a whole. Then again, I could be wrong