The Doctrine of Corporate Separateness: Why the Hobby Lobby Decision Is an Absolute Farce

Do you know why people form corporations? One of the most important reasons is to protect the personal property of business' owners from creditors seeking payment for debts that business might incur. To put it more simply, corporations exist in order to create a legal separation between a business and its owners.

Such separation is a good thing. It encourages us to be entrepreneurial by ensuring that if a business we start goes belly up, we won't lose our house and our savings account with it. The corporation -- whatever else it is -- is not its owners. Corporations exist "precisely to distinguish their activities from those of their owners." Corporate separateness is "the foundational principle of corporate law." The 5-4 decision in Burwell v. Hobby Lobby makes an absolute farce of it. The five conservative justices in the majority did so by arguing:

The purpose of extending rights to corporations is to protect the rights of people associated with the corporation, including shareholders, officers, and employees. Protecting the free-exercise rights of closely held corporations thus protects the religious liberty of the humans who own and control them.

Wrong. Full stop. And don't take my word for it. Here's Justice Ginsburg, from her superb dissent:

By incorporating a business... an individual separates herself from the entity and escapes personal responsibility for the entity's obligations. One might ask why the separation should hold only when it serves the interests of those who control the corporation

Because corporations exist in order to put up a barrier between a business and its owners, that means that the religious liberty of the owners cannot be violated by anything the corporation is compelled, by law, to do. Business owners want to benefit from the doctrine of corporate separateness when creditors want their money, and start acting like Paulie from Goodfellas (i.e., "$@*% you, pay me!"). When that happens, the owners want to be able to throw up their hands and say, "Sorry, that's not me, that's the business." Piercing that corporate veil is supposed to be difficult. But all of a sudden, the Roberts Five is agreeing with business owners who want to turn around and say -- when it comes to their interpretation of religion -- that the business is the owners. They can't have it both ways.

I'm not a legal genius or a constitutional scholar, and I'm certainly not the only person to make this argument, as you can see above. But it is such a Captain Obvious point that the only explanation that fits is that Roberts Five simply doesn't care. I used the word farce. I stand by it.
Now, I haven't even mentioned the fact that the decision is an outrage on the grounds that it subjects a woman's access to health care to the whims of her employer. And yes, I said whims, not religious beliefs. Why do I say that? Because the "Christian" corporation at the center of this case, Hobby Lobby, does all kinds of business with -- wait for it! -- China. Jonathan Merritt penned a devastating takedown of Hobby Lobby's hypocrisy when it comes to China, citing that country's "nightmarish labor conditions, inadequate workplace regulation, and rampant child labor," as well as a government policy that continues to lead to forced abortions, not to mention another that seriously restricts the religious freedom of its own citizens. Merritt summed it up thusly:

If you want to call your business "Christian," by all means, go right ahead. But those who live by the label must die by it as well. You cannot call your business "Christian" when arguing before the Supreme Court, and then set aside Christian values when you're placing a bulk order for cheap wind chimes.

In addition to the gender discrimination and the religious hypocrisy, this decision -- along with the Citizens United case and a number of others produced by the Roberts-led conservative wing of the Supreme Court in recent years -- has one fundamental goal above all others. What is it? To increase the power of corporations. That's certainly been their effect.

We have seen the Roberts Court side with employers over employees in the Hobby Lobby case, weaken the ability of consumers to win a class-action lawsuit against a corporation that takes advantage of them, make it harder for a union to function by ensuring that those who benefit from its work have to share in the cost of its operation (seen in last Monday's other decision, in Harris v. Quinn, with a majority decision written by Justice Alito, who also wrote the Hobby Lobby decision), and, of course, allow corporations and unions (who spend far less than corporations, as you can see below) to spend as much money as they like to influence the political process.

Ultimately, the Hobby Lobby decision is a travesty on many levels. The reaction of people like Erick Erickson further demonstrates the utter stupidity behind the religious justifications for allowing employers to determine the specifics of their employees' health coverage.
My religion trumps your "€œright" to employer subsidized consequence free sex.

But let's not lose track of what's really going on here. The Roberts Five's decision is part of the larger conservative effort to give power to the people they believe deserve it. You know who they are. The virtuous ones. The ones who've demonstrated their virtue by their ability to earn wealth.

This is part of a fight that goes back centuries. There have always been people who believe that those without much property cannot really be trusted to participate in the political process, because they'll simply vote to take property away from those who've proven worthy enough to have it in great amounts. For decades in this country (and centuries in Europe), this argument provided a foundation for limiting the right to vote based on economic status. It's an argument that right-wingers still expound, both billionaires like Tom Perkins and "grassroots" (ha!) Tea Party leaders like Judson Phillips.

The job creators provide you with opportunities. And you should be grateful. Don't bite the hand that feeds you. Stop being a "taker" and try to be a "maker," or, if you're not clever enough, at least have the decency to shut up and say thank you.

Did the Roberts Five care that they were ignoring the age-old doctrine of corporate separateness in the Hobby Lobby case? I don't know for sure. But what I do know is that this decision is one more brick in the wall they are building. Actually, it's more like a castle. And from that castle, those whom FDR once called the "forces" of "organized money" are waging a class war against average Americans, the peasants, the people who work for a living.

Those are the stakes of the political battles we fight. Nothing less.