In June, Ralph Nader and I wrote to U.S. Supreme Court Justice Antonin Scalia, to ask how a self-proclaimed constitutional “originalist” can justify applying Bill of Rights protections to corporations.
The full text of the letter follows:
P.O. Box 19312
Washington, D.C. 20036
June 30, 2006
Justice Antonin Scalia
Supreme Court of the United States
Washington, D.C. 20543
Dear Justice Scalia,
In January, we wrote you to “inquire as to how the application of Bill of Rights and related constitutional protections to the artificial creations known as corporations can be squared with a constitutional interpretation theory of ‘originalism.'”
We have not received a reply to that letter, and are writing again to invite a response. You are, after all, known for engaging jurisprudential dialogues outside of the courtroom.
This is not an academic exercise. Supreme Court doctrine holding that Bill of Rights protections apply to corporations has major import in a number of public policy arenas. To take just a few examples:
– Deregulation of vast swaths of the economy — from cable television to banking to telephone service to electricity — is leaving consumers increasingly vulnerable, without even the inadequate protections once afforded by state regulators. An obvious remedy is to permit consumers to band together into organizations that would create some countervailing power to oligopolist service providers. The most efficient way to organize such consumer groups would be to require service providers, at no cost to themselves, to include in their billing envelopes notices inviting consumers to join an independent, democratically controlled consumer group. Supreme Court-created corporate First Amendment rights make such an approach impossible, however. A 5-to-3 1986 Supreme Court decision, Pacific Gas and Electric v. Public Utility Commission,(1) held a requirement to include such a notice in a billing envelope to be unconstitutional. (Justice Rehnquist delivered a lengthy dissent.)
“The Commission’s access order also impermissibly requires appellant to associate with speech with which appellant may disagree,” the Court stated, and therefore to respond. “That kind of forced response is antithetical to the free discussion that the First Amendment seeks to foster.” The Court explicitly stated that “the identity of the speaker” — i.e, whether it is a real person or a corporation — “is not decisive in determining whether speech is protected.”
– Family farming as an economic way of life is under siege in the United States. Giant agribusiness is leveraging its power to craft international and national rules and subsidy arrangements that pose basic challenges to the feasibility of family farming. Some agricultural states and locales have sensibly decided to address the problem of agribusiness displacement of family farms directly, by prohibiting corporations from owning farms. South Dakota adopted by referendum a state constitutional amendment in 1998 to this effect.
In a decision that invalidated the South Dakota constitutional provision on dormant commerce clause grounds, an appellate court effectively interpreted interstate commerce as synonymous with the corporate right to conduct interstate commerce.(2) The appellate court reached its decision on the grounds that the South Dakota provision was discriminatory in intent against interstate commerce. The court cited language from the “pro” statement in a pro-con statement compiled for voters by South Dakota’s secretary of state. The pro statement, the court wrote, “explains that ‘Amendment E gives South Dakota the opportunity to decide whether control of our state’s agriculture should remain in the hands of family farmers and ranchers or fall into the grasp of a few, large corporations.’ We interpret the ‘pro’ statement to be ‘brimming with protectionist rhetoric’ [internal citations omitted].” The plain language cited, however, contains no discriminatory animus towards out-of-state interests whatsoever. The court could only conclude it did by equating guarantees for corporations’ right to undertake commerce with the protections mandated by the Commerce Clause.
– Smoking-related disease kills more than 400,000 Americans a year. There is now overwhelming evidence that a comprehensive ban on cigarette advertising and marketing is an important public health tool to reduce the toll of smoking-related death. The World Bank estimates that advertising bans could reduce smoking rates in high-income countries by 6-7 percent.(3) Recognizing this evidence, the world’s first public health treaty, the Framework Convention on Tobacco Control, (signed but not ratified by the United States) calls for a comprehensive ban of all tobacco advertising, promotion and sponsorship. Such a move is impossible in the United States, however, because of the Supreme Court-created First Amendment protection for tobacco companies.
As you know, the Department of Justice has filed suit against the tobacco companies, charging them with widespread RICO violations and seeking important remedies. A decision in this case is still pending. The joint defense from the tobacco companies(4) is replete with invocations of the First Amendment, as an argument why certain of their activities which might otherwise appear illegal must be permitted, and especially why many of the evidence-based remedies sought by the government are constitutionally impermissible. Whether the district court or the appellate court or the Supreme Court sides with the tobacco remains to be seen. Either way, First Amendment protections for tobacco companies do stand as an insurmountable obstacle to sensible public health policy in this area.
– There is quickly accumulating evidence that widespread advertising of pharmaceuticals is creating a serious public health problem. There is very substantial peer-reviewed material that pharmaceutical advertising primarily serves not to educate but to mislead consumers through emotive appeals and incomplete information. Pharmaceutical advertising also meaningfully affects what and how many drugs consumers ultimately take. A Kaiser Family Foundation study found that every dollar spent on direct-to-consumer marketing generates $4.20 in additional sales.(5) Nothing captures the dangers better than the Vioxx scandal, rated by Food and Drug Administration drug reviewer and whistleblower Dr. David Graham as maybe the single greatest U.S. drug-safety catastrophe. Graham estimates that people who took the drug suffered between 88,000 to 139,000 excess heart attacks or strokes as result. As many as 40 percent of these people — as many as 55,000 — died, Graham estimates. In many ways, the Vioxx disaster was fueled by advertising. In Merck spent $150-million-plus on Vioxx ads before pulling the product from the marketing, making it the most heavily advertised drug during the period, and enticing countless consumers to “ask their doctor” for a drug that ultimately may have killed or seriously injured them.
That there is a serious problem in this area is widely understood. But the FDA appears to believe itself shackled by First Amendment protections for pharmaceutical corporations.(6) Certainly the agency’s ability to serve its public health mission by banning direct-to-consumer advertising is, at best, highly uncertain while the Supreme Court continues to extend constitutional protections intended by the Framers for individuals — real, live persons — to corporations, including pharmaceutical corporations.
We raise these examples not to request your comment on any pending or potential litigation to come before the court, nor to seek your comment on the important policies blocked by the extension of constitutional protections to the artificial creations known as corporations. Our point here is only to make clear that there are very serious consequences to the Supreme Court activism that has permitted corporations to claim constitutional protections.
Noting, however, your willingness to engage in passionate, public discussion over the originalist approach to constitutional interpretation and its application to particular legal issues that remain very much unsettled, we do seek a response to the queries in our earlier letter. How does an originalist find that the Fourteenth Amendment should apply to corporations and thereby that the amendment can be used as a vehicle to extend other Bill of Rights protections to corporations?
Ralph Nader Robert Weissman
1. Pacific Gas & Electric Company v. Public Utility Commission, 475 U.S. 1 (1986)
2. S.D. Farm Bureau, Inc. v. Hazeltin, 340 F.3d 583 (8th Cir., 2003).
3. Prabhat Jha and Frank Chaloupka, Curbing the Epidemic: Governments and the Economics of Tobacco Control, Washington, D.C.: World Bank, 1999, chapter four.
4. United States of America v. Philip Morris, Corrected Post-Trial Brief of Defendants, U.S. District Court for the District of Columbia, 99-CV-02496 (GK), September 13, 2005.
5. Meredith Rosenthal, Ernst Berhnt, Julie Donohue, Arnold Epstein, Richard Frank, “Demand Effects of Recent Changes in Prescription Drug Promotion,” Menlo Park, CA: Kaiser Family Foundation, 2003.
6. See materials and transcripts in connection with Food and Drug Administration, Public Hearing on Direct-to-Consumer Promotion of Medical Products, November 1 and 2, 2005, available at http://www.fda.gov/cder/ddmac/dtc2005 and Food and Drug Administration, Request for Comment on First Amendment Issues, Federal Register: May 16, 2002 (Volume 67, Number 95), pp. 34942-34944.