Tuesday, July 15, 2014

Does Hobby Lobby Make Pain & Suffering Available for Entities?

The Hobby Lobby decision states:

No known understanding of the term "person" includes some but not all corporations. The term "person" sometimes encompasses artificial persons (as the Dictionary Act instructs), and it sometimes is limited to natural persons. But no conceivable definition of the term includes natural persons and nonprofit corporations, but not for-profit corporations. 20 Cf. Clark v. Martinez, 543 U. S. 371 , 378 (2005) ("To give th[e] same words a different meaning for each category would be to invent a statute rather than interpret one").

The decision continues:

Under the Dictionary Act, "the wor[d] 'person' . . . include[s] corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals." Ibid .; see FCC v. AT&T Inc., 562 U.S. ___, ___ (2011) (slip op., at 6) ("We have no doubt that 'person,' in a legal setting, often refers to artificial entities. The Dictionary Act makes that clear"). Thus, unless there is something about the RFRA context that "indicates otherwise," the Dictionary Act provides a quick, clear, and affirmative answer to the question whether the companies involved in these cases may be heard. 

Thus, unless otherwise stated, any place a person can recover claims, so can “corporations, companies, associations, firms, partnerships, societies, and joint stock companies.” There are opinions that have distinguished the “fictional person” from the “natural person.”  See, e.g., All Comp Const. Co., LLC v. Ford, 999 P.2d 1122, 1123 (Okla. App. Div. 1 2000) (stating that an LLC was a "fictional 'person' for legal purposes and thus any damages due to the LLCs would be "due to it as a fictional person," and thus certain damages were not recoverable because LLCs are not "capable of experiencing emotions such as mental stress and anguish"). RFRA, per Hobby Lobby, though, does not make such a distinction.

As such, it seems to me there are places where federal law uses the term person that might now extend potential recovery to entities for things like pain and suffering or mental anguish.  Maybe I am missing something here.  Any ideas come to mind?  Maybe civil rights laws?

The ripples, it seems, are just beginning. 



Business Associations, Corporations, Joshua P. Fershee, LLCs, Religion | Permalink


Josh, on this issue, I subscribe to the view, shared by Eric Orts and others, that corporate personhood is contextual--based on statutory construction and policy objectives. I understand that this view puts a lot of pressure on the clause in the Dictionary Act that qualifies the use of the definitions it provides: i.e., the definitions apply "unless the context indicates otherwise." I am not confident that the Court's Hobby Lobby opinion changes the analysis (or even adds to it measurably). The real problem here, as I see it, is that the point already was conceded (since non-profits were being treated as persons under the law already) or that the government failed to effectively, convincingly argue the point. (The Court: “We see nothing in RFRA that suggests a congressional intent to depart from the Dictionary Act definition, and HHS makes little effort to argue otherwise.”)

Do you disagree? If so, what am I missing? This is an issue of interest to/for me. Thanks for blogging on it.

Posted by: joanheminway | Jul 15, 2014 4:09:19 PM

Joan, thanks for the comment. I am concerned that court could use this decision to chip away at concept of natural versus fictional personhood, even though the court tried to be very limited here. I posted a while back on a West Virginia case where the lower court allowed a dissolved entity’s shareholders to recover for emotional distress caused by the defendant. The high court reversed and got the case right, I think, but a sympathetic court (like the court below) could use Hobby Lobby to allow such an outcome, I think, based on the “modern corporate law” language of the court. Hobby Lobby moves that ball forward. Here's the post I am referencing, Courts Should Tread Lightly When Disregarding (Even Dissolved) Entities

When you look at the lower court's language, which I’d be happy to share, I think it’s a risk, if not an imminent one. Probably less of an issue federally, as you suggest, though it still seems possible to me.

Posted by: Joshua Fershee | Jul 15, 2014 5:25:44 PM

Thanks for these additional thoughts. As an inherent optimist, I hope that courts look at these matters on a case-by-case basis and that the parties and amici (where they are desired/desirable and available) brief the court well on the rationale(s) for allowing or denying corporate personhood in the specific regulatory, statutory, and constitutional contexts before the court. I will keep my eye out for more on this.

Posted by: joanheminway | Jul 15, 2014 5:43:35 PM

Given how surprised many people (including, I assume, jurists) were by the Court's conclusion that the context of practicing religion does not exclude corporations, I think one has to expect at least some ripple effect undermining the prior respect extended to corporate/entity separateness.

Posted by: Stefan Padfield | Jul 16, 2014 8:52:08 AM

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