Friday, December 8, 2017

Masterpiece Cakeshop and the Political Supreme Court Justices

I have had an opportunity to read the oral argument transcript (112 pages) from Tuesday's oral argument in the Masterpiece Cakeshop case. 

One of the first things that struck me was that it seemed pretty clear that most of the justices have already taken sides. This is not surprising, but it does sadden me. 

I wish that judges, especially justices on the Supreme Court of the United States, were really trying to get the "correct" answer rather than reasoning backward from some predetermined outcome.  Perhaps that is naive. Perhaps that is not possible. My former Constitutional Law professor warned of some of the political issues with the Supreme Court and recently wrote about the issues in his book Supreme Myths: Why the Supreme Court Is Not a Court and Its Justices Are Not Judges. 

Only Justice Kennedy is thought to be "in play" in this case. All intelligent people of integrity, however, should be aware of their biases, open to the possibly that their initial thoughts are wrong, and open to persuasion based on the law and the facts. Maybe that is too much to ask. Or maybe on of the "reliably conservative" or "reliably liberal" justices will surprise us in this case. In any event, I am definitely looking forward to reading this opinion; it will undoubtedly bring significant consequences.   

(As an aside, corporate law scholars may be interested in pages 96-98 regarding who is speaking - Masterpiece Cakeshops (the entity) or Jack Phillips (the individual)).

Business Associations, Haskell Murray, Lawyering | Permalink


As federal law and policy continues to intertwine itself into the daily life of an individual, sadly, we will continue to see cases like this.

Posted by: Tom N | Dec 9, 2017 1:15:37 PM

Haskell is right that the colloquy between Justice Sotomayor and Waggoner (the petitioner’s counsel) on pages 96-98 presents the most interesting issue of this case from a corporate law standpoint.

Justice Sotomayor puts her finger on the rub of the case: Does the petitioner corporation have First Amendment speech and religious rights independent of those of its shareholder? (p. 97). Citizens United and Hobby Lobby both extended such shareholder rights to the corporations, but didn’t clearly ground those decisions in corporate law.

A coherent corporate law approach to these cases was offered by Prof. Stephen Bainbridge a few years ago in his article "Using Reverse Veil Piercing To Vindicate The Free Exercise Rights Of Incorporated Employers," 16 Green Bag 2d 235 (Spring 2013). Prof. Bainbridge, writing before Hobby Lobby was decided, suggests that a doctrinally sound approach to such cases could be “reverse insider veil-piercing,” (“RVP-I),” wherein “the shareholder is asking the court to disregard the corporation’s separate legal personhood so as to allow the shareholder to vindicate his constitutional rights. “ Id. At 245.

Adopting this approach for closely-held corporations in Masterpiece Cake might make doctrinal sense and put the Citizens United and Hobby Lobby decisions on firmer corporate doctrinal ground. But this approach wouldn’t necessarily result in a favorable outcome for Phillips the baker: the Court would still need to determine if baking a custom-ordered cake is constitutionally protected speech or religious free exercise.

Posted by: Jim Hayes | Dec 9, 2017 5:32:57 PM

Thanks for this thoughtful comment, Jim.

Posted by: Haskell Murray | Dec 9, 2017 5:38:23 PM

I haven't yet read Prof. Bainbridge's article, although I have long been meaning to. But it strikes me that it makes more sense to think of the individual actor as an agent of the corporation than as a shareholder. That person may not be a shareholder at all. E.g., a non-shareholder employee could have refused service and, acting as an agent, bound their principal, the company. Under this view, it may be that only the agent's views should be considered, and we don't have to worry about whether a corporation is representing its shareholders at all. Of course it may not be, but I'm not sure that is any different than any other variation on the agency problem, and I'm not sure that it requires any new response. (Of course you may not like the basic availability of an exception, but that is a separate issue.)

Posted by: Justin Pace | Dec 11, 2017 12:01:56 PM

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