Immune corporate persons

June 10, 2014 | By | 9 Replies More

Excellent discussion of corporate immunity, including mandatory pre-dispute arbitration clauses:

Following the 2011 and 2013 Supreme Court rulings, dozens of other giant corporations—from Comcast and Wells Fargo to Ticketmaster and Dropbox—have secured the same legal immunity. So have companies ranging from airlines, gyms, payday lenders, and nursing homes, which have quietly rewritten the fine print of their contracts with consumers to include a shield from lawsuits and class actions. Meanwhile, businesses including Goldman Sachs, Northrop Grumman, P. F. Chang’s, and Uber have tucked similar clauses into their contracts with workers.

Hastily clicking through terms of service is now all it can take to surrender your rights to these companies. Once you do, your only path for recourse if you’re harmed by any one of them is “mandatory arbitration,” where the arbitrator is often chosen by the corporation you’re challenging, and any revelations about the company’s wrongdoing tend to be kept secret. Rather than band together under the light of the public courtroom, each individual has to work through the darkness of a private tribunal, alone, where arbitrators can interpret laws however they wish. Certain inalienable rights, the Court has ruled, are actually kind of alienable.


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About the Author ()

Erich Vieth is an attorney focusing on consumer law litigation and appellate practice. He is also a working musician and a writer, having founded Dangerous Intersection in 2006. Erich lives in the Shaw Neighborhood of St. Louis, Missouri, where he lives half-time with his two extraordinary daughters.

Comments (9)

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  1. “Legal Immunity”: an OFM if ever I saw one.

    Nice going, SCOTUS! How did George Carlin put it? “They’ve long since paid for congress, the senate, they have the judges in their back pockets…….”

    Viewed from the pond-wide sideline it seems that these days the term “Constitutional Scholar” describes someone who is an expert in dismantling the US constitution, and is employed as such, like POTUS.

    Am I missing something here?

  2. Edgar Montrose says:

    Interesting how, at the very same time that corporations are demanding and receiving more personal rights (“corporations are people”), they are avoiding more personal responsibilities (“legal immunity”). No one is supposed to be able to have it both ways — if they have the rights of “people” then they have the responsibilities of “people”; if they don’t have the responsibilities of “people” then they don’t have the rights of “people”.

  3. grumpypilgrim says:

    I am of one mind with Edgar. When click-through “agreements” first came out, the courts often rejected them on the basis that they were adhesion contracts, so there was no ‘meeting of the minds.’ It is frightening that that has now changed. The thing I don’t understand is how SCOTUS can read them into the Bill of Rights when they didn’t come into existence until 100 years after it was written. It baffles me how the conservative members of SCOTUS (Scalia, et al.) can say with a straight face that a limited liability legal entity that exists only on paper is equivalent to a person, or that personal rights should apply to them. In what way does strict construction support the assertion that the Founders intended such inalienable rights to apply to entities that exist only on paper and that enjoy limits on their responsibilities which humans do not enjoy? The Founders must be spinning in their graves.

  4. grumpypilgrim says:

    As regards the suggestion that the Hobby Lobby case might pierce the corporate veil, I have not yet read the decision, nor am I up to date with my corporate law, but I heard that the decision is founded, in part, on the fact that Hobby Lobby is a “closely held” corporation — so wasn’t the corporate veil already fairly thin?

    In any case, when we add this case to Citizens United, we should question why the Roberts court is expanding corporate rights without doing anything to expand corporate responsibilities. What is good for corporations, and their owners and executives, is probably not so good for the rest of us.

    • Edgar Montrose says:

      As I understand it (and I am most definitely not an attorney), a corporation, closely-held or not, provides certain *significant* protections against personal liability for its owners and officers. Otherwise, what would be the point of incorporating? — a sole proprietorship or partnership would be just as effective and a lot simpler.

      I await the first lawsuit in which one of Hobby Lobby’s employees becomes pregnant, alledgedly because the company health insurance refused to cover contraception, and the employee sues the company’s owners for child support.

    • Erich Vieth says:

      Edgar: I like this thought experiment. In reality, case would be dismissed by any federal court for lack of subject matter jurisdiction. If a state court brashly allowed, it, I would applaud. The case is about controlling women, not religious “rights.” How else can you explain that Hobby Lobby still covers vascectomies and Viagra?

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