2024 Freedom of Thought Conference: Panel 2 - The Challenge of Citizens United - The Freedom of Thought Podcast

Episode Transcript
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(00:01):
And get the doors please. Okay, welcome back. I'm Alita Cass,
vice president for Strategic Initiatives at theFederalist Society and director of the Freedom of

(00:24):
Thought Project. Our next panel,we'll now focus on theories of corporate rights
and how those have developed to includethe sort of expressive constitutional interests of today,
and as indicated by the title,we'll touch on the question of how
we should understand Citizens United. Perhapspart and in light of the conversation that

(00:48):
we just had on our prior panel. Directing this conversation, we have Judge
Greg Katsis. Judge Katsis as adouble Thomas Clerk. He serves on the
d Circuit Court of Appeals. Hisextensive and very impressive bio is on the
Federalist Society website. He has heldmany senior positions in the Department of Justice,

(01:08):
including head of the Civil Division,argued several arguments at the US Supreme
Court, and is a great friendof the Freedom of Thought Project. Judge
Katsis Flora's Yours thank you of CitizensUnited. It's a case that provokes some
pretty strong passions. It's not justevery Supreme Court decision that's produced kerfuffles between

(01:37):
a president and a sitting justice ata State of the Union address. What
is the challenge? The title ofthe panel is Challenge of Citizens United.
So what is Citizens United about?Well, to many, it's a case
about campaign finance. Right. Thespecific holding strikes down some expenditure limits in

(01:59):
the Bipartisan Campaign Reform Act. There'sa doctrinal debate about campaign finance cases like
Buckley versus Valleo and McConnell versus FEC, and when the court comes to apply
strict scrutiny, there's a policy debateabout what kind of corruption constitutes a compelling

(02:21):
government interest. Is it just quidpro quo or is it something broader like
undue influence. There's also a moregeneral aspect to Citizens United, linking to
the first panel that we've heard fromand the overall themes of the day,
which is is to what extent docorporations have constitutional rights? And how should

(02:45):
judges or academics or lawyers do thelegal analysis when it is a corporation invoking
some specific protection of the Bill ofRights. No one can imagine some pretty
categorical all or nothing positions. Onone extreme, you might say that a

(03:07):
corporate person has the same rights asflesh and blood humans, right, think
Mitt Romney, corporations are people too. Just treat the legal person as if
it were a natural person, andthat has some difficulties. It might be
implausible to think of a corporation asjust like real humans, and it might

(03:32):
not reflect how the framers thought aboutcorporations, all right. But then on
the other extreme of the spectrum,you might say, take, I'm not
sure if this was Ryan Newman's positions, but you might say, corporations just
have no constitutional rights. They're creaturesof state law. They have extraordinary legal

(03:53):
privileges like eternal life and limited liability, and so is state's power to create
corporations should imply a power to definetheir purposes and powers, and also rights
problems with that, you can imagineall sorts of really tough hypotheticals about content
based or even viewpoint based requirements orrestrictions on corporations. Also, if corporations,

(04:19):
if no corporation has any constitutional right, probably hobby lobby was wrongly decided.
And that is a result that mightnot be appealing to many in this
room. So what are some possibleintermediate positions one might take? Let me

(04:40):
just put three on the table.Do we want to distinguish but among types
of rights? Should we think ofdue process differently from free exercise? Due
process is about fair adjudications. Doesn'treally matter if the defendant is a real
person or a corporate entity versus freeexercise? Does it matter that's bound up

(05:03):
in beliefs and thoughts and conscience?Corporations don't have conscience. Do we want
to make a distinction like that?Do we want to distinguish among types of
speech? There's a whole body ofFirst Amendment law about commercial speech, and

(05:23):
views on that run the gamut fromJustice Thomas, who would afford it full
protection, to current doctrine which affordsit limited protection, to Chief Justice Renquist
who wanted to afford it no protection. What about political speech? Should we
distinguish between Delta Airlines speaking on politicalmatters related to airline safety, which is

(05:47):
core function of their business, VersusDelta Airlines speaking about voter ID requirements,
which would seem much more attenuated.Should we distinguish among types of corporations?
And there's been a lot of thoughtin the cases and the current fights on
this issue. Is there a distinctionbetween media corporations and other corporations. That

(06:12):
question figured very prominently in Citizens Uniteditself. Should we distinguish between for profits
and not for profits, which wasan issue at the fore of Hobby Lobby.
Should we distinguish between small and largecorporations, which was a line that
Texas drew in Net Choice in figuringout which one should be treated more like

(06:35):
persons? Or should we distinguish betweenpublicly traded and privately held With the predicate
for bearing rights is a link betweenthe human owners and legal control over the
state created entity. We've got agreat panel to discuss these issues. I'll

(06:56):
introduce them briefly. Robert Miller isthe f Arnold Dom Chair in Corporate Finance
and Law at the University of IowaCollege of Law. He co directs the
Program on Organizations, Business and Marketsat NYU Law School. He holds research
positions at the Law and Economics Centerat Scalia Law School and the James Wilson

(07:19):
Institute, and he's an expert oncorporate and securities law and law and economics.
Matt Stoller is the director of researchat the American Economic Liberties Project.
He writes about monopolies. He's theauthor of Goliath the one hundred year War
between monopoly power and democracy, andhe publishes an email newsletter called Big.

(07:46):
He lectured on competition policy and asa House staffer, he worked on Dodd
Frank. John Errett is chief counselto Senator Josh Holly and was a Republican
council on the Senate Judiciary Committee Subcommitteeon Privacy Technology in the Law. He

(08:07):
was previously an associated Gibson Dunn,a law clerk to Judge Hoe on the
Fifth Circuit and Judge Kaczinski on theNinth. And he's a graduate of Via
Law School. And Eric Wesson isthe Solicitor General of Iowa. He's that
state's lead appellate lawyer including in theUnited States and Iowa Supreme Courts. Graduated

(08:28):
University of Chicago Law School, andhe too clerk for Judge Hoe and also
for Judge John Ness on the NorthernDistrict of Illinois. So we're going to
get started with Professor Miller. Heis an expert on corporate law doctrines.
If we want to drill down onwhat rights corporations, what constitutional rights corporation

(08:54):
should have, we might want tohave a more precise understanding of their how
they emerge out of state law.So Professor Miller, thanks very much.
So my remarks here follow pretty closelyon some of the things that were said
on the last panel, as youheard there or if you were here to

(09:16):
hear it. If not, you'regoing to get a very brief recap of
it. When corporations first existed,they were created by individual acts of the
sovereign, and therefore to get acorporation you had to be able to go
into the sovereign and get him todo what you wanted him to do.
They were there for the province ofrich and connected people, and they almost

(09:37):
always were created with some type ofmonopoly rights or special economic rights, and
as far as I'm concerned, that'sreally bad. But fortunately that's not how
corporations evolved. By the middle ofthe nineteenth century and sort of by the
end of the nineteenth century, everystate had an enabling statute which allowed anybody
to go in and form a corporationby making inappropriate filing and paying a very

(10:01):
nominal fee. And those corporations didnot come with any special economic rights.
They did come with limited liability andperpetual existence, and I want to focus
on those because I want to suggestto you that the old view, where
corporations were the province of the richand connected and had special economic rights,

(10:24):
what I'm going to call the privilegedview of the corporation, should really,
in your mind, be completely supersededby what I'm going to call the contract
view of the corporation. What todaydo you get out of a corporation that
you couldn't get from a bunch ofprivate contracts. But I'm going to suggest
the answer to that is almost nothing. A corporation really is just a set

(10:48):
of contracts among ruling participants. Nowhow's that the case. Well, if
you look at the enabling statutes wehave in Delaware, our leading corporate more
jurisdiction besides the Delaware General Corporation want, we have the Delaware Limited Liability Company
Act. And the Limited Liability CompanyAct is a very beautiful thing because this
is what it says. Each provisionof the LLC Act says the company shall

(11:13):
be thus unless the members agree otherwise. You can literally agree to any internal
arrangements you want under the Limited LiabilityCompany Act, and you get an entity
that, for other purposes, actsa lot like a corporation. Even inside
the DGCL. There are a fewmandatory rules, and there's some good reasons

(11:35):
for having them. But inside thecorporation, the internal relations among the officers,
the directors, the shareholders, creditors, suppliers, anybody who enters into
a contract with the corporation is contractual. Now you might say, well,
what about perpetual existence. No contractscan go on as long as people want
them to go on. Contracts don'thave a natural termination date. You can

(11:58):
get perpetual existence out of a contractualarrangement. What about issuing shares? Don't
you need a statute to do that? Now, corporations issue bonds, which
are securities with a different set ofrights, But you could certainly by contract
issue equity like securities. That's preciselywhat we do under the Limited Liability Company

(12:20):
Act. The only thing really thatyou need the state to do is to
create limited liability for involuntary creditors ofthe corporation. Voluntary creditors could always negotiate
for the corporation could always negotiate forlimited liability against its voluntary creditors. It's
only the involuntary ones with whom itcan't negotiate because it doesn't know who they

(12:45):
are basically taught plaintiffs. It's onlythose creditors that require the state action to
create the type of entity we thinkof as a corporation or a limited liability
company with limited liability. Now,what I would suggest to you is that
even that would be what we wouldhave in a world where people could negotiate

(13:09):
for it, a Kocian world ofzero transactions costs. And why is that?
Well, the first thing to seeis that the world of unlimited liability,
where partners have unlimited liability for allthe acts of the company, is
nothing natural or descended from heaven,as if it had to be that way.

(13:31):
At Roman law, what we thinkof as a partnership was called a
sokiatas, and then the sokiitas.If you dealt with a member of the
sokiatas, what we would think ofas a partner, the sokiatas was liable
to you. That individual partner wasliable to you, but the other partners
were not all right, So therule in Roman law was sort of the
opposite of the common law rule.The rule the policy choice you face with

(13:56):
limited liability is this, in aworld of limited liability, if you end
up as an involuntary creditor of acorporation, and the corporation happens to be
bankrupt and it doesn't have adequate insuranceto cover your judgment, then you have
a chance of recovering from the individualpartners, the individual investors in a world

(14:22):
of unlimited liability. With a worldof limited liability, you don't get that.
On the other hand, you doget other things. You get a
world where people are willing to investin very large business ventures, where you
can raise capital from very large numbersof people, which is necessary to fund
things like railroads and big pharma andmicrochip companies and cell phone companies and airlines

(14:48):
and so on, and anything that'sa huge, big, capital intensive business.
So you can live in two worlds. World number one, a world
of unlimited liability, and if youend up a an involuntary creditor, your
chances of recovering are a little bigger. Or World number two, a world
where you can be a customer,an employee, and investor of these types

(15:11):
of large businesses which provide us withour standard of living that we have in
modern economies. Those are your choices. Most people, I think would go
for the latter, the world oflimited liability and modern economy proof of the
fact. If we wanted to changeour rule, we easily could by amending

(15:33):
the state corporation statutes to eliminate thepossibility of creating entities with limited liability.
We don't do that, okay.So if this contract view of the corporation
is correct, so that all youreally have is a very complicated web of
contracts among a very large number ofpeople, this should give you a pretty

(15:54):
strong view of the rights of corporations, because the rights of corporations are merely
the rights of the individual us behindit a corporation. Can a corporation suffer
racial discrimination? You might think,how could it? It has no race.
But imagine the government said we're gonnalet contracts to corporations but not to
ones who have shareholders of a particularrace. Well, that would clearly be

(16:17):
racial discrimination. If the government saidwe're gonna let contracts but not to corporations
owned by Catholics or Jews or Muslims, well that would be religious discrimination.
Whenever you if your corporate if youtake a corporation's property in the takings,
the shareholders are poorer for it.There's no way of violating the quote rights

(16:38):
of a corporation without violating the underlyingrights of the people behind it. I'll
just say one more thing about oneof the earlier presentations. What would happen
if you started doing things like havingFlorida say to Delaware corporations, you can't
bobby us unless you get a shareholder'svote to permit it. You know what

(17:02):
would happen. I'll tell you exactlywhat would happen. Every year when a
corporations directors stand for re election andthey reappoint their auditor, they would have
one more boiler played shareholder resolution.The corporation can lobby any government in the
United States that it wants, ormaybe even any foreign one too. And
you know what would happen. Theshareholders would vote in favor of it every

(17:23):
year. It would do nothing.Sitting in the audience listening to the past
panel, you know what makes menervous not big businesses. Big businesses are
more fragile than you think. Golook at the largest corporations in America in
nineteen seventy. When's the last timeyou bought something at Sears? Roebuck General

(17:48):
Motors was on that list. Gewhich is going to be lucky to avoid
bankruptcy. The biggest corporations in Americatoday, they weren't there and they wouldn't
exist for decades later. Corporations lastvery long. They come and they go.
They are not as rich as youthink. What's the profit margin of
the average public company in America lessthan seven percent. You know what makes

(18:11):
me worried? Government? A governmentofficial who comes here and says, we
don't want people criticizing us. Wedon't want people lobbying us. The government
to always the people with all theguns, the government of the people,
who have unlimited ability to litigate withtax paid dollars. They're the people you
should worry about, not so muchof the corporations. That's what I have

(18:33):
to tell you. Corporations at leastaccumulate some degree of wealth and influence,
and concerns about leveraging that or inthe heartland of anti trust and anti trust

(18:56):
is in the wheelhouse of Matt Stoller. Thank you so much. It's always
a pleasure to talk and learn frompeople here. I really enjoyed the last
panel and the discussion of the associationalistorigins of incorporation law and the religious origins

(19:19):
of it and I also appreciate Caleb'scomment about disestablishment that you only get that
at a fed Sock event, andI really appreciate that. So I kind
of want to offer a challenge becauseI look at Citizens United and I see
it as part of a nest ofdecisions by the courts that sort of set

(19:45):
our expectations with the legitimate locus ofgovernance from public institutions, public governments to
private governments, because I think oneway to look at corporations historically has been
as especially when they get large today, as private sovereign institutions. And that

(20:06):
challenge, I'm going to make itvery practical. What do we do about
Boeing? And the reason I askedthis is there was a hearing a few
days ago in the Senate and lotsof senators were very mad about Boeing and
what's happened. And I don't knowif you guys do this, but I
now when I book a plane flight, I look to see what kind of
plane it's gonna I want an olderplane, right, And we're all kind

(20:30):
of like terrified of that. Andthe senators were mad at the CEO,
but nobody proposed doing anything to fixit. And the same people that caused
this massive problem of this company thathas immense market power. They are tasked
with finding the next person to cleanup the mess the people created the mess.
And I think that's there's an expectationsetting that we've made for ourselves of

(20:55):
the last forty years. Where publicare public, we don't expect our public
institutions to do anything about what areclearly public problems. And so our politicians,
our political leader, our elected leaders, and we let them off the
hook. We let ourselves off thehook, and the result is a kind
of Sovietization of America. Everybody knowsthere are a lot of unsafe planes flying

(21:17):
around and it's someone else, andeveryone just sort of assumes someone else will
do something about that. And Ithink that is a function of an ideology
that we have embedded in our laws, in our culture. So this is
I'm going to start this quote with. This is Mark Zuckerberg talking about why
he hired former Treasury official RYL.Sandberg. In a lot of ways,

(21:37):
Facebook is more like a government thana traditional company. We have this large
community of people, and more thanother technologies, we're really setting policies.
So we used to call Facebook asocial utility. I think you would still
see that attitude there. That's notactually new. I think in the last
panel, we understand there's always beenthis tension between the sovereign and corporations.

(22:00):
Corporate charter. Constitution kind of consideredsort of a corporate charter in a sense.
You know, Alexander Hamilton, hewanted to monopolize water power in New
Jersey for the benefit of the nationthrough a corporation. We saw the rise
of you know, the nineteenth century, a lot of bitter fights over all

(22:22):
Travius over questions of how the stateshould regulate corporations and in the progressive era,
and this is something that I thinkpeople are kind of as we wrestle
without the two big apeal institutions likebanks like Boeing, things like that,
we are rediscovering. I think allof us history, particularly the history of

(22:45):
the progressive era of the early nineteenhundreds. One way to look at it
is to understand that progressives were tryingto and descended into both parties. Progressives
were trying to build para state institutionsoutside the government to govern because they didn't
trust democratically elected officials to do things. In one of these probably the most

(23:08):
important para state institutions were corporate America, large national corporations the nineteen thirties.
From that period until the nineteen thirties, there were bitter fights over that over
that question where is the locus oflegitimate governing power? Nineteen fifty Emmanual Seller

(23:30):
who passed the Seller Coulvalvaract on MergerControl, it was very clear that the
Congress passed a law to really restricthorizontal and vertical mergers. And in the
you can look at the legislative history, it's just corporate concentration has nothing to
do with price theory. I hada lot to do with fears of fascism.
Emmanual Seller said, monopolies quote.Monopolies brought Hitler to power. This

(23:52):
was a common view. Look forwardfrom the nineteenth century, fears of aristocracy
turned into twentieth century rhetoric. Sowe are now in a different position,
and that position where the legitimate locusof governing is in the hands of large
corporations. It's a very unusual andweird place for America to be. And

(24:17):
what happened was a revolution in thenineteen seventies, and that revolution came from
both the right and the left.Sometimes I talk about sort of the odd
couple. There's an odd couple ofJohn Kenneth Galbrith, and Robert Bork who
kind of did it together. SoGalbreth talked about how there has to be
a little bit of monopoly and acorporation for it to be progressive, and
he thought that was a good thing. But Bork and Galbreth shared a basic

(24:38):
disdain for populism, for populistic tendenciesthat sought to put controls on corporations.
So today we have a situation whereMark Zuckerberg can say what he said.
He's not the only one. SenatorJohn Kennedy said, Facebook is not a
corporation, it's a government. Buta whole series of decisions in our courts

(25:00):
that sometimes we don't look at asquestions of corporate power, questions of the
legitimate locus of governing, have putus in a kind of box, a
Breshnevian box. This would be thingslike Trinco, which important anti trust decision,
Reno v Aclu, which essentially gotrid of obscenity law. I don't

(25:22):
know how you can square that withoriginalist intent, Murphy v. NCAA,
which is a basically legalized sportscambling,because it's a very unusual thing for us
to do in this country. Totalwine, which literally just said the Nineteenth
Amendment talking about alcohol regulation at statelevel. Now dormant commerce clause overrules that

(25:48):
citizens united, and then other policychoices like ISDS. So now we're at
a position where things like age gatingand design requirements on children's websites, and
things like Amazon potentially using deceptive practiceson user interfaces. Well that's all under
the ambit of a grossly expanded FirstAmendment. So today we're wrestling politically,

(26:11):
I think, with what to do, and you're seeing a lot of grumbling
see renewal of tariffs. It's nota surprise that people are kind of grabbing
for this dusty old tool of antitrust and trying to revive it. You
see this on the left, butyou also see it on the right.
A lot of skepticism of ESG.They're trying to grab for the anti trust

(26:33):
tool as well. So I thinkfundamentally, you know, the Constitution not
a suicide pack the rest of it. You know, we have this problem
of dominant corporations which we allowed toconsolidate over the last forty years, and
we're sitting here with a bunch ofcompanies. Boeing is just the sort of
leading example that have almost sovereign powerover different parts of our society. They

(27:00):
control and determine how a lot ofour markets work. And we we are
we are stuck because there there isno ideological framework to actually address what are
clearly public problems in this with thisgroup of I'll mention the you know,
administrative state is big. It's alarge question, but you know you have

(27:25):
the challenge of dominant firms like Boeing. What are you going to do about
that? And I think that's thewhy is? Why is there? Ah?
Why is there? Why are thereso such creative limits to how we
think about policymaking and law that wecan't address such very obvious problems as that.

(27:45):
So anyway, thank you for invitingme, thank you for allowing me
to offer these thoughts. Okay,next up, John, you're a Hill
staffer. Question is what, ifanything Congress counter should do about citizens United.

(28:07):
Your boss has introduced a bill toseemingly overrule it and re establish some
of the specific expenditure limits on corporations. Do you all think there are five
votes on this court to overrule oris this mostly performative or where is there

(28:30):
a lot of subtlety there that I'vemissed? Well, thanks for having me
on this panel. I think themost important thing that a bill like this
does, and my boss is avery smart constitutional attorney, and he realizes
the lay of the legal land onthis. I think one of the biggest
goals with legislation like this is toreopen a conversation that's been closed for a
long time, or at least seeminglyclosed in twenty ten. The received wisdom

(28:52):
in the conservative legal movement has beenfor a long time that Citizens United was
a great decision. This was abreakthrough. This freed us from the tyranny
of Buckle versus Ville and a wholegeneration of bad campaign finance precedence. I
actually remember defending this decision for aboutforty five minutes in Judge Kaczinski's chambers back
in the day. But the thingabout conventional wisdom is that once it becomes
conventional wisdom, it becomes that muchharder to ask about the premises underlying that.

(29:15):
And so we knew our bill wasa direct challenge of Citizens United.
We want to have the conversation aboutwhether or not this is ultimately something that
could be justified according to the originalistterms that has traditionally been articulated in Now
we could make the policy arguments abouthow this bill addresses the problem with big
money in politics. I think myboss has messaged on that pretty extensively.
But this is an audience of lawyers, and we're originalists. I think this

(29:37):
is a conversation among the friends.This is a conversation about what originalism asks
of us. What does it meanto be faithful originalists when we come to
this question. One of my favoritephilosophers is Alistair McIntyre, and he makes
the point that a tradition is anongoing argument in many ways. You might
agree on grounding premises, but you'renegotiating to terms of those premises over time
and arguing continually about what's a legitimatedeveloped of that tradition versus what's not and

(30:02):
originalism I think as we see itbroadly worked out since the nineteen seventies or
nineteen eighties, where this method reallyfirst emerges. This is a tradition of
thought in this sense, and oneof the questions that I think we should
be asking now is this, manyyears on from the early days of originalism,
when we look at that tradition,can we take it to a deeper
level than it's previously been taken?Can we do better history than we've done

(30:23):
previously? Now, one of thestrange things about the Citizens United opinion is
just how short Justice Scalia's dissented excuseme as concurrences, and Justice Scalia gives
an Originalist, ostensibly response to JusticeStevens and his very cursory. I think
if you go back and rebriate it, you'll see how short this is,
especially compared to everything that Justice Stevensis marshaling. And one of the biggest

(30:44):
things that Justice Scalia does in thatis he kind of uses the term corporation
to cover a vast squad of entitiesthat existed at the time of the founding.
He doesn't do a lot of distinguishingbetween types of corporations or theory about
whether or not these are these wouldlogically possess the same categories of rights.
It's entirely legitimate for us to askthis far along on the originalist project,
and fourteen years after Siding is United, whether or not Justice Scalia got that

(31:07):
right. I think there at leasttwo reasons for wondering whether he did,
and the first one is whether ornot the founders and the cultural world they
were occupying would have conceived of campaignfinance restrictions the sort of thing that we're
inconsistent with the First Amendment. Nowin the American context, we tend to
think of free speech rights as prettymuch absolute as Trump's versus the international idea
of free speech rights is something tobe put into a proportionality analysis versus other

(31:30):
types of rights claims. And Ithink a lot of us on a normative
level see this is something that's reallygood. We're glad that there aren't hate
speech laws. But I think ifwe go back to the Founding era and
we asked that question, what kindof world rights thinking were the founders operating
in, we see that it looksdifferent than twentieth century First Amendment case law.
And jud Campbell has done really goodwork on this in the Yale Law
Journal, arguing that a natural rightsbased analysis ultimately does leave many of the

(31:52):
negotiation questions around First Amendment rights tothe political process as opposed to the digitial
process. As he writes, ignitionof natural rights simply set the terms of
political debate, not the outcomes.So what the argument is in political context
then, is it's something where peoplecan introduce alien and sedition acts and argue
about whether or not that's legitimate FirstAmendment protected law, and determine whether or

(32:15):
not that's something that's consistent with theconstitutional tradition. They ultimately find that it's
not. But the fact this isa live question in the founding area does
tell us something about how far ourmodern First Amendment jurisprudence has drifted from something
that the founders would have found remotelyintelligible. That's an extreme case, and
I'm not suggesting that an originalist SupremeCourt should go burn down huge amounts of
First Amendment case law. The kindsof cases that the Court grants sert on

(32:37):
that is a value judgment and ofits own right. But if we're talking
about the question that is a majornational significance, like citizens United, like
whether or not corporations as business corporationshave broad free speech rights consistent with this
huge bulk of very expansive twentieth centuryFirst Amendment case law, then that question
does, in fact, in termsof what the Court grants sert On what
the court ultimately reopens, that questiondoes begin to look a little different when

(33:00):
we try to step back into thethought world that the founders were actually occupying.
But let's say we're not convinced byCampbell. Not everybody has been,
So I think we can ask thena question that a first panel asked,
where corporations historically the natural possessors ofa speech right? And how far does
this go? Now? The historicalproblem is that, as I think,
while in others discussed business corporations didlook different in the Founding Area, they

(33:21):
were narrowly limited in their powers.In eighteen nineteen, you have John Marshall,
the first Chief Justice, arguing thata corporation the quote, possesses only
those properties which are the charter ofits creation confers upon it either expressly or
its incidental to its very existence,which is to say, it doesn't also
possess the inherent properties that a humanbeing also possesses. So when we think
about this in metaphysical or philosophical terms, the business corporation of the Founding Area

(33:43):
era doesn't seem to map onto anatural person, especially on a natural person
that has a really broad and expansiverange of First amendment rights that we've seen
through case law that has developed ina comparatively short window of time when we
look at the bigger American tradition,and so our legislation wants to be an
invitation for the Court to reask thisquestion, to say, look, now
we have a huge amount of originalistscholarship. The Court's composition is very different,

(34:05):
so a lot more intellectual resources arebeing devoted to the question of what
makes for an effective originalism and whatoriginalist claims ultimately demand of us. Just
as Striye on the Delaware Supreme Courtdid a really deep dive into questioning the
originalists underpinnings of the Citizens United decisionand found them wanting. And that's exactly
the conversation we should be having.That's the kind of conversation we should be
having more of. And one ofthe reasons that I'm really glad we have

(34:27):
this panel today just to briefly touchon something that Matt said previously in terms
of the implications of a failure toget this wrong for just our ability to
do basic governance. And I workin Congress, and so this is something
that we're obviously concerned with. Howcan Congress be effective, and I think
I might be getting a little aheadof this this conference, but the Net
Choice case is really an example parexcellence of this because you have in this

(34:51):
case social media platforms coming before theSupreme Court and alleging that their content moderation
decisions, specifically their content removal decisionsare First Amendment protected activity. That is,
the platforms themselves are speakers in theirown rights, depending on what kind
of content that they host or not. What's interesting about this is that the
logic of Section two thirty, theliability shield that protects these tech platforms,

(35:12):
rests on a completely different premise.It rests on the platform the idea that
these are dumb conduits that don't engagein editorial oversight of this content at all.
So in the Section two thirty context, you have platforms alleging they're not
speakers of the content that they host. In the Net Choice context before the
Supreme Court, you see you havein saying for First Amendment purposes, they
are speakers of the content that theyhost. The only way to resolve this

(35:34):
is to get down to ask thefundamental question, what is the nature of
this thing that is the corporation orthe social media platform. I see a
pressor Arcis sitting in the front row, and he taught me at the James
Wilson Institute Fellowship a few years ago, and one of the things that he
really emphasized was the importance of statingthe principle in legal decisions. And this
is something that the Court has evadeddoing for a long time. They're not
stating the principle on what this thingis that is a social media platform,

(35:58):
that is a corporation. In thisdeeper sense, we have these words.
These words have histories and concepts thatmight go well beyond what our immediate reflexive
intuitions and associations with those things are. And if we're going to be faithful
originalists, if we really want toexecute the original public meaning and not what
we retrofit and project backwards into thepast, those are questions we had to
ask. Okay, Eric, yourepresent a state. Citizens United creates some

(36:31):
pretty robust First Amendment rights for corporations, and that I assume creates some litigation
challenges for you. Thank you,Judge a lead of the Freedom of Thought
Conference, Fedsock, and my fellowpanelists, I'll try not to disappoint you
as I bring the level of zorureality down a few notches here. As

(36:53):
Judge Katsis started off with his remarks, Mitt Romney said something along the lines
of corporations are people too, Andin law school, which I think many
of the people in this room attended, we learned that that statement may not
have been as deserving of the derisionthat media companies leveled on it. Now.

(37:15):
I'll get to this in a littlebit, but what might shock you
is that many of those media companiesare corporations too, although as far as
I can tell, none of themare natural persons, at least not yet,
and so to the extent that corporationsare legal persons that then have many

(37:37):
of the same rights of natural persons, but not all of them. I
have yet to see the Salon dotcom article calling for large corporations to have
more voting rights, although perhaps there'sother reasons for that. I think it's
important to look at how Citizens United, which became this load star case for

(38:00):
campaign finance, is also really aload star case for how constitutional rights as
founding corporations can be applied. Andit's shocking to me when I see some
recent articles or lists of like theworst Supreme Court cases of all time,

(38:22):
and I'm not gonna necessarily delve toodeep into what would make my list,
but very frequently I see Citizens Unitedright there on the top. And to
me, that's a little shocking,because even if as many people increasingly on
the left and right agreed that CitizensUnited certainly has its flaws and may even

(38:42):
be wrongly decided to say it's theworst decision in US Supreme Court history,
places it in some real I guess, to use the Washington Post another corporations
phrase, like austere context. SoI'm going to approach this whole conversation a
little bit more from a practitioner's perspective, as Judge Katsus noted, trying to

(39:06):
find how Citizens United actually applies incertain circumstances, because as a state that
passes laws, sometimes even laws thatregulate legal persons as well as natural persons,
we often face challenges to those laws. And man, oh Man,
when John was talking, all Icould think is I wish that the Supreme

(39:30):
Court had laid out some clear andeasy to use tests to figure out what
is and is not constitutional. Butbefore talking about the legal principles and Citizens
United, I do think it's worthtalking a little bit about the facts underlying
the case, at least in broadterms, because at least in conversations I've
had, many people are not asfamiliar with what the case was actually about.

(39:57):
This group direct and produced a moviecalled Hillary Clinton The Movie, which
was about Hillary Clinton, who's abig politician of various offices, and in
advance of then, or I guess, in advance of Secretary Clinton's historic first

(40:22):
ever second place finish by a womanin a major party's presidential campaign, Citizens
United wanted to air this critical video, and they wanted to air it for
free on video on demand services.But they had the goal of wanting to
do so close to an election.So I think it's important to recognize that's

(40:45):
the context in which this case arose. And I'm sure that I know there
are a lot of people in herethat have really studied this case deeply,
and I may have gotten a specificor too wrong, but that's the gist
of what the case was about.And then the Supreme Court held that the
law that would have forbidden Citizens Unitedfrom criticizing Hillary Clinton was constitutionally indistinct from

(41:09):
other laws that would have prohibited activitythat many people would think would otherwise be
constitutionally protected, like the NRA runningads opposing a candidate that opposes Second Amendment
rights, or the Sierra Club fromrunning ads opposing a candidate for office that
supports sustainable lumberjacking, or whatever itis that the Sierra Club is passionate about

(41:34):
in the electioneering context, and soextending to Citizens United the group, because
I think it's important. Also,as I talked Citizens United the case versus
the Group, the right to engagein political speech, the Court enjoined,
enforcing parts of the law that wouldpreclude what it had characterized as political speech.
Before going too much further, Iwant to talk a little bit about

(41:55):
what Chief Justice Roberts raised in hisconcurrence. We've had a little talk about
the majority opinion about Justice Scalia andJustice Stevens's back and forth on originalism,
but Chief Justice Roberts raised the specterthe constitutionality. Constitutionally, there was very
little distinction between entities like Citizens Unitedand entities like The New York Times for

(42:20):
political purposes. The law in questionhad a carve out for media companies.
Unlike Justice Powell's famous phrase, Idon't know a media company when I see
it. So I'm not sure whya group that produces a documentary about a
highly salient political official wouldn't count asa media company. I'm not an expert

(42:40):
in that area of the law,but what Chief Justice Roberts recognized was if
Citizens United came out the other way, then media organizations and journalists, under
modifications to the law that was atissue in that case, could have faced
criminal penalties for election related coverage,and not merely because of errors in their
reporting. So, in short,Citizens United drew a constitutional line that extended

(43:07):
deep First Amendment protections to the groupbroadly speaking of corporations. Okay, and
besides saving journalists, many of whomseem extremely ungrateful for such a beneficial move
by the Court. And I knowwe're talking about the pros and cons here,

(43:28):
so I hope none of you aretoo persuaded by Chief Justice Roberts's strong
argument against Citizens United. But Ithink Citizens United itself introduced a high degree
of controversy and tension not only intojudiciary in the various follow up cases,
and not only into the political sphere, but also into the corporations themselves.

(43:52):
Because anytime constitutional rights with deep protectionsare extended and any possible attendant regulations are
removed from the arena of political debate. It necessarily creates conflict and im viewing
legal persons with some of the constitutionalrights of natural persons such that they can
speak. But as we all know, speech has consequences. There's no reason

(44:16):
necessarily that just because they have theability to speak, that these organizations should
speak, and that tension creates somereal problems for the corporations themselves, at
least under an area in which Ihave a little more familiarity, which is
state law. As many of youmay be surprised to hear. Working for

(44:37):
a state, I take state lawvery seriously. One of my primary directives
from my boss, who is alsoan awesome lawyer, is to defend the
laws of the state of Iowa,and in many states, corporations their management
have obligations to their owners and totheir shareholders various duties, including a fiduciary

(44:59):
duty, duty of loyalty, allsorts of duties that basically boil down to
running your company well and competently,or at least doing your best to try
to do so. And even nonprofitorganizations often and again depending on the state,
have a state and purpose or amission in their incorporating documents, that

(45:20):
is the purpose of that organization forwhich they're raising money and engaging in whatever
activities they engage in. But yet, after Citizens United, many of these
corporations feel not only like or notonly have the right to speak, as
guaranteed by the US Supreme Court,but a lot of them feel an obligation

(45:42):
to speak on issues that don't relateto any of those duties, and also
don't relate to, in the caseof a nonprofit, their underlying mission.
That is a real problem because sometimesspeech has costs, speech has consequences,
and those consequences is may not becriminal and punitive from the government, but

(46:04):
may lead to boycotts or economic losses. You know, with recent controversies and
different companies taking different stances, thosehave an impact on the bottom line,
and to the extent that a companyis affirmatively you know, taking a stance
in a way that causes harm,and they're aware of that harm beforehand.

(46:27):
I haven't seen any cases along thoselines, but I would worry if I
had a fiduciary duty and I wasdoing something that I knew was going to
destroy shareholder value. That seems likea real problem for me, or would
if I were in that position.Thankfully, I don't believe I have any
duties on that front, and nonprofitorganizations that have a clear state admission and

(46:50):
that often are working towards that missionnow are opening on all sorts of matters
that may not be tied to thatmission. And while I understand broadly speaking,
the concept of intersectionality, and youknow, a win for one cause
is a win for all the causes, I recently learned that sometimes causes are

(47:15):
on opposite sides of an issue,and not every win means that everyone is
a winner. I know that thatkind of trade off approach may not be
a nice thing to hear, butit does impose real costs on organizations that
decide to color outside of the alliance. And you know, I think one

(47:39):
question I have that you know,hopefully the folks on this panel will help
me with, because I looking intoa lot of these areas, it seems
like there is some under theorization inplay. And one analogy that immediately came
to mind again just because when weget sued, especially over state laws,
we're often talking about laws and legislativeand tent. We're usually saying, don't

(48:01):
think about the legislative intent, becausewe try to be good originalists in our
office. But everyone knows it canbe really hard to discern the intent of
a legislature for a variety of reasons. And I don't know why it would
be any easier to discern when acorporation is speaking, depending on its size

(48:21):
and depending on how it's composed,who's speaking is when a big public company
speaks, can that speech be attributedto all of its shareholders or just the
management or some subset. And Iknow that there's definitely some work done there
generally, But when it comes tothe constitutional implications, I think those are

(48:42):
big questions that need to be answered. Violating duties to the public, to
shareholders, duties of candor to potentialdonors, all of these are real risks
that come with corporate speech. Andso two, at the risk of potentially
admitting consumer fraud. You know,if you have some store I think I

(49:05):
read an article in Canada. Youknow, some cafe was there to like
hand out food for free, likepay whatever you want, and they were
some sort of nonprofit. I definitelydon't know anything about Canadian nonprofit law.
But if it turned out the wholething was like some kind of scheme and
someone was making a profit and theywere violating the local laws of that community,
that would be a huge problem.And that would be a problem that

(49:30):
citizens united. Expansive protections for FirstAmendments speech would not protect them from extending
the First Amendments protections broadly to awide group of entities, and interpreting the
First Amendment to cover a broad rangeof speech ensures continued tension as people get

(49:50):
uncomfortable with speech that is protected.And as someone who talks a lot and
often ends up with people feeling veryuncomfortable, that is something I can sympathize
with. But fortunately I'm not acorporation, and I'm pretty sure that at
least i have constitutional rights to saywhat I would like as long as I'm
not violating any other loss. Butas this area of law continues to develop,

(50:13):
critiques of extending such broad rights tocorporations, which has long been a
subject from the left, but Ithink increasingly is being thoughtfully challenged from the
right as well, is something thatwill continue to face increasing scrutiny. And
with one last note about the extensionof these rights. I think it's important
to remember that, you know,many people in this room probably have strong

(50:37):
policy preferences, and maybe even peoplein this room might disagree on things.
But when an issue becomes constitutionalized andthe ability to regulate or make policy in
an area is removed from the publicarena, one, the debate often becomes
stultified because people are unable to addresstheir concerns in the political process. But

(51:01):
two that even if you have reallystrong views, your views may not actually
be what the Constitution is originally readwere. That was something that's always tough
for me, because you know,I like to think I'm always right on
things, but as a recently marriedindividual, I know that's definitely wrong.

(51:22):
But I think that it really isimportant because it's easy to read the Constitution,
especially when some of these parts havebroad principles at stake, and to
think, oh, my view ofwhat is right is clearly what the founders
intended because they're smart. I'm smart. What else could it be? But
I'm going to put this out there. Maybe you guys aren't on the same

(51:43):
page as the founders were. Iknow often, you know, my instincts
or intuitions might be at a stepwith what real historical research shows would have
been the case back then, andhow they would have read or understood certain
ideas and concepts, and so,especially in areas as important as those touching
on political speech, recognizing that approachingthese questions with some intellectual humility and knowing

(52:07):
that you might be wrong. Evenif you're totally right and your policy is
the only thing standing between the republicand falling apart, that doesn't necessarily mean
that the Constitution is on your sideon that argument. Is something that is
really important and I think is worthhighlighting, especially in the context of Citizens
United. So thanks all for listeningto that ramble, and thanks to my

(52:30):
fellow panelists for all of your interestingthoughts. I've been actively taking notes,
which is not my forte, butit's all really interesting stuff. Okay,
I will give each of our panelistsa chance to respond to comments. Professor

(52:51):
Miller, we heard a fair amountof skepticism about Citizens United and corporate speech.
You want to you have any rebuttalYeah, So, following on a
couple of things that were said,the internal corporate laws limiting corporate speech,

(53:14):
so, in other words, shareholdersdon't like what their board is doing the
board is out engaged in some formof political advocacy and so on. Is
there a corporate law solution to that? The answers that is usually no,
because under Delaware law, the boardis required to manage the corporation in order
to maximize shareholder value. And nowthat sounds really powerful because you can say,

(53:37):
well, what is what are theexamples given so far? What is
Delta Airlines? How does how doesadvocating for or against voter id laws maximize
value for a major airline like Delta? It probably doesn't. But the problem
is, if you're a shareholder andyou soone making that claim, you going

(54:00):
to run into the business judgment role. And what the business judgment rule says
is that the court will not askitself whether such political ads advocacy actually maximizes
value for Delta shareholders. They'll askthemselves some other questions instead. Did the
Delta board think about this carefully beforedeciding to do it? Did they honestly,

(54:22):
sincerely, in their heart of hearts, believe it was in the best
interest of Delta in the sense ofmaximizing value for shareholders. And as long
as those two tests are passed,it's going to the action will be upheld.
So shareholders have very little ability legalability to control bad speech by corporations.

(54:44):
But as I constantly tell my students, if you look at a corporation
and the first thing you ask yourselfis what's legal and what's illegal, what's
the relevant legal rule, you've usuallymissed the point what actually controls corporations or
market realities. So Johnny Carson usto say I would never tell a political
joke because I'll immediately lose half theaudience. That same thing is very true

(55:07):
for corporations. Corporations by and largedon't want to get into the political advocacy
business. You can see how itblows up on them. Put the bud
lighte of marketing fiasco. More thanthat, more than any other time in
history, shareholders now have much morepower over corporations than they've ever had in
the past. Every large corporate,very large, publicly traded corporation in America

(55:30):
sixty seventy eighty percent of the sharesare held by large institutions. There are
now a handful of measured in acouple hundred large institutions that will have controlling
positions. Taken together, in everycorporation these people will know each other.
They all have each other on speeddial. They are easily organized, and

(55:52):
most CEOs spend a good part oftheir time going out talking to their larger
shareholders to make sure those people arehappy. And if they turns out that
they start to be unhappy, thenthere's another form of market participant called the
activist shareholder, who will announce thatthey're going to run a slate of directors

(56:13):
or a short slate of directors inless than a whole board in order to
change the direction of the company.And these people tend to be fairly successful.
You don't hear about so many ofthe successes because the corporations will quickly
figure out that they're going to losethe proxy contest, and then they settle
with the activists. So there arelots of examples of shareholders losing proxy contests.

(56:37):
Disney just one one against Norman Feltz, but there are plenty of examples
of shareholders of companies agreeing with theshareholders about what the shareholders want. So
if you're interested in really what controlscorporate speech, it's not the law,
all right, People like us lawyers, we always tend to think of it's

(56:59):
the law, it's usually not thelaw here in its mall confluences. I
mean, I think Citizens United wasit's hard to it's hard to square a
kind of the way that we readFirst Amendment law in an era of broadcast

(57:20):
television, lots of newspapers with anera where we have one search engine that
everybody uses and a small number offirms that really structure speech. And I
think that kind of gets to theheart of the problem Citizens United in and
of itself is you know, Ithink you could read it as a protecting

(57:44):
certain speech rights. You could readit in many different ways. But it
came after decades of consolidation. Itcame after a tremendous relaxation of antitrust laws
that facilitated the rise of firms withimmense market power. And throughout American history

(58:06):
we've always seen such concentrations of economicpower as concentrations of political power. So
you know, if you know,there are clear tensions between claims of speech
free speech rights in Section two thirtywhich came out and have come out in

(58:27):
several Supreme Court deliberations this this session. But fundamentally, these these decisions just
don't make sense for a world inwhich digital world in which First Amendment can
potentially cover everything. And so weare moving on from Citizens United. The

(58:51):
question is where do we draw theline on how the state and public bodies
can structure the workings of corporations.And I kind of the way that I
think about it is I think thesecond of Judge Katzits' point, which is
that you distinguish between big business andlittle business because one of them is more

(59:14):
akin to natural personhood and the otherone isn't. The other one is more
akin to private government. Yeah.I just wanted to briefly follow up on
something that Professor Miller said that corporationsdon't want to get into the political business,
because I think this really does kindof cut to the quick of what
we're talking about when we talk aboutreopening questions about the nature and origin of

(59:35):
the corporation. And I guess myresponse to that would be the corporation is
always political. In William Blackstone,the king himself is defined as a corporation's
soul, sold to refer to thefact that his regal authority persists over time.
That's what a corporation does. Itendures over time. So corporation just
in the very oldest sense, justa body that continues over time, that
has rights and responsibilities and powers thatgo on beyond time. And so we

(01:00:00):
raise the question of what power corporationsexercise, we're asking a question about what
the nature of politics is, andthat do we find ourselves as we go
about our daily lives in different hierarchiesof authority that exercise control or governance of
various aspects of our lives, And, as Matt said, corporations do that
in a lot of ways, especiallyhuge corporations that drive and shape our economy,

(01:00:20):
our speech, our political decision making. These are quintessentially political questions.
And in choosing to say that basicallywe're going to take pretty hands off approach
to the regulation of the corporate space, that's kind of demarcation of an independent
economic domain. That's a value judgmentand of itself. It's saying that we
believe that the values that can begained from a pretty hands off approach to
corporate governance ultimately serve the good ofthe country in a deeper way. And

(01:00:45):
that's the question that I think we'rereally asking ourselves. Now, can we
pass the legislation that allows us toprotect kids from the more so most abusive
kind of material on the Internet.And you know, you've got huge amounts
of tech companies, the huge amountsof lobbying dollars simply saying no, that
they'd like to continue to have theability to profit immensely from a lack of
regulation in this space. Some companiesare good actors, so I don't want
to downplay that, but some ofthe biggest companies have really been bad actors

(01:01:07):
in this space. And so whenwe ask ourselves the question of our corporations
engaged in political business by the factthat we've let them grow to this point
that we declined to enforce our antitrustlaws, that we've created legal doctrines that
give them rights analogous, those arethe natural person. We have made them
political, and in fact, theywere all as political. And I'll just

(01:01:27):
build up two statements or two ideasraised by John and Professor Miller. First,
I think dealing with this issue ofthe corporations not wanting to be political
and the shareholder voting situation, onearea that I think is really worth paying
attention to is in the area ofproxy advisors. So a lot of you

(01:01:49):
have investments, a lot of pensionfunds have investments. The Big three investment
companies have investments, and many Thereare so many companies and they each have
all of these different shares. Sareholdervotes that go on. Some are binding,
some are non binding, some resolutions. They're just a couple companies that
basically make recommendations on how to vote, and depending on which company and which

(01:02:12):
vote, sometimes those votes are notdone explicitly in accordance with fiduciary duty,
but instead with ESG concerns to achievecertain preferred political outcomes. So maybe the
company is agnostic on politics, butif the folks voting their shares are all
being advised by politically inclined actors,then they might end up in the business

(01:02:36):
of politics, even unintentionally or maybeintentionally but with some plausible deniability. And
I think that that's another area that'sreally worth some deeper exploration. And then
to just turned very quickly to somethingthat John dealt with mentioned as protecting kids.
I just had an argument in theEighth Circuit about state law requiring age

(01:03:00):
inappropriate books not beyond public school libraryshelves. And I think a lot of
people in this room might have differentviews on that but if the state government
cannot choose what books go on tothe state's school funded shelves, I think
that even beyond corporations, there justmight be some real questions about the limits

(01:03:23):
of the First Amendment and how thataffects government's ability to regulate and protect children.
And of course I'd be really remissif I didn't say that if these
issues all sound really interesting to you, then going to work in a state
AG's office means that you get exposureto them all the time. And even
if you have the mistake in viewthat you don't want to end up in

(01:03:44):
Des Moines and you want to gosomewhere else, you should definitely after the
panel come up and talk, becausethese issues are at the forefront. And
if this is interesting and you don'tlike the weather in June or July and
DC, maybe you want to besomewhere else. All right, we'll go
to Q and A. If peoplewant to start lining up, I'm just

(01:04:06):
going to exercise a moderator's prerogative andask one or two quickies. So,
Professor Miller, short term versus longterm, let's stipulate that corporations, as
a practical matter, things change,markets change, the leading corporations today might

(01:04:30):
not be around in ten or twentyyears. But in the short term,
I mean, there's a raging debateabout a contested election. There are two
or three platforms that are dominant oneside. Speakers on one side of that
debate are getting kicked off the platforms, and then the response is, well,

(01:04:51):
go build your own damn platform,and then they try with Parlor and
Parlor gets kicked off Amazon. Imean it seems like in the short term,
Yeah, that's a pretty sost issue. That's not a corporate issue,
all right. The same issue wouldexist if the entity was not organized as
a corporation but was organized as anLLC or as a partnership. Right,
So market power is bad whether it'sheld by an individual, by a corporation,

(01:05:15):
by a cortel. Right, I'mall against market power, but that's
not a corporate issue. Properly speaking, It's all right. Market power could
exist in many different forms. Itdoesn't have to be it's nothing really to
do with being corporate, Okay,man, any follow up on that.

(01:05:36):
I think it's all pretty bad.But at least we were protected from the
Russian disinformation regarding Hunter Biden's laptop.All right, one more, one more,
and then we we'll go to theaudience. So Eric, here a
lot of your comments on the factsof Citizens United. You mentioned the NRA,

(01:06:00):
Sierra Club, I mentioned hobby lobby. This sort of suggests we might
want to try to draw a linebetween Google and Apple and corporations like that.
So anyone want to take a stabat what that line should be.
I threw out a couple of possibilities, but let's try to pin that down.

(01:06:21):
Luckily, I'm not a legislator,so I am not or a constitutional
line, yeah, or a constitutionthat's true. I've never been accused of
that before. But the subjects thatyou listed, I thought the ways to
differentiate are really interesting. They matcha little bit with some of the excellent
work that Texas and Florida have donein trying to help clarify this whole confusing

(01:06:45):
area of law. But ultimately,there has to be some way to allow
corporations to operate and to provide theirproducts while at the same time protecting the
natural persons that are in the countryand using those products from you know,
coercion or any sort of other negativeconsequence. And historically that type of work

(01:07:11):
has been done via you know,state police powers and other ways of trying
for the states to serve as therein their role as sandboxes of democracy or
whatever the quote is, which mayor may not be a good thing.
But yeah, all right, professor, right, I can see how hard
that that distinction is to draw.Eric just mentioned you to Twitter taking off

(01:07:34):
the lego post New York Post.Okay, Twitter's a corporation, right,
Well no, actually, yeah,of course it is. But Twitter is
controlled by Elon Musk. So ifyou start limiting Twitter's right, so you're
really limiting Elon Musk. Rice.Facebook is a multi billion dollar publicly traded
corporation, but is controlled by MattZuckerberg. He has all the voting shares.

(01:07:57):
So it's really one individual there thatyou're talking about, mattic Zuckerberg,
not not the corporation. Drawing thatline between the public company and the non
public company. You know, thereare gigantic companies that are not public.
There are gigantic companies which have lotsof shares trading off exchanges that don't exect

(01:08:19):
that don't count as public because theyhaven't hit the magic number of the number
of his shareholders yet. I thinkdrawing that distinction is going to prove to
be impossible. Let's go to questionslike I can't see in the lights set
John, Yes, okay, John. So Matt a question for you that
Professor Miller anticipated in part. Youmentioned that it makes it may make more

(01:08:42):
sense to accord an extension of naturalrights to two smaller companies. And intuitively,
there's some I think there's some residentsof that Masterpiece cake Shop is in
some way an extension of Jack Phillipsthe man, and imputing to him to
Masterpiece cake Shop First Amendment rights.It seems to be seemed to be pretty

(01:09:02):
pretty attractive, but is there Howwould you look at the other dimension in
terms of ownership structure, so betweenclosely and widely held companies irrespective of size.
The Twitter example is a good onebecause Twitter was through the period in

(01:09:24):
question with the laptop story. Itwas publicly traded, it was widely held,
and it was reflective reflective of thebig tech blog. Whereas since Elon
took it private, it has cometo assume more of the characteristics of his
distinctive personality. So do you thinkthere's a reason why why ownership structure may

(01:09:45):
may affect whether it makes sense toimpute more of these sort of mental or
conscious rights of speech or religion tolarge companies, if privately held or closely
held. I mean, you knowit's interesting to say, well, Twitter
is now Elon Musk's company, orFacebook is Mark Zuckerberg's company, and therefore

(01:10:09):
structuring rules around Facebook or Twitter isan infringement on their rights, because I
don't. I think when Mark Zuckerbergdoes things with Facebook, a lot of
people are affected by it and theirrights are effective. It's kind of like
saying, well, the shareholders ofBoeing or I mean, sorry to get
back to bowing, I'm just freadflying. But you know, it's like

(01:10:32):
other people are affected other than Boeingshareholders when the seven or seven max crashes.
Right, there's a there's a there'san element here of kind of unreality,
right like Twitter is a is publicinfrastructure. I mean, yes,
it's there are private shareholders, butit it. But it's public infrastructure.
So so so is Facebook. Imean this is we all know this.

(01:10:55):
This is like intuitive to how wethink about the world. I guess not
all of a think of that asbeing publicized. Well, I mean multiple
supreme court justices talked about how theInternet and social media is our our is
our town square, It is ourdigital town square. This is it may
not be intuitive to certain readings ofcorporate law, but it's intuitive to everyone

(01:11:17):
on a basic level, which iswhy everyone is mad at big tech,
right, and so it just I'mnot a lawyer, I don't really have
any credentials. I feel it's Ifeel like there's there is a level of
unreality here where we're not when youlook at how the how Google, for

(01:11:39):
example, organizes its content moderation,or Visa MasterCard, or or large corporations
with essentially governing how are they startto look like administrative states. They almost
you know, if you look atVisa MasterCard or Visa's kind of guidebook.
They have notice and comment periods,they have rulemaking right. It these there's

(01:12:02):
a reason why it's really easy tomove back and forth between a large government
administration and a large tech firm.In a sense, it's the same work.
I rememberhen Amazon hired a direct likethey were hiring for their public policy
team, but they didn't mean lobbying. They meant actually policy for their marketplace.
Right, So it's weird that wetalk about corporations like they're the private

(01:12:24):
property of shareholders, when really whatthey are our public infrastructure. It's how
we've always understood these kinds of institutions, it's how we've always governed them.
And it sort of feels like weneed to get back to thinking about the
governance of public corporations as a discrete, important policy and legal area in and

(01:12:45):
of itself. I just think thewhole looking at this as a speech question
is weird. It's just weird.The language doesn't fit, the reality doesn't
fit. Okay, other side ofthe room, Well, great segue,
Matt. My question really was onthe other flip side of that coin.
My question really is for all panelists, are there solutions to come up with

(01:13:08):
the problem two problems that have beenmentioned today, one problem being the fiduciary
duty to those of us who areshareholders and the interest of the corporation.
I guess would be better put thefiduciary interest to the corporation within the charter
and within its mission. What canbe done to curtail wild diversions from that

(01:13:33):
path, if anything? One second, what can be done, if anything,
to rein in the unbridled aggregation ofshareholder proxies that was mentioned as a
as a means of moving corporations againaway from their mission. Are the solutions

(01:13:55):
you have for these things? All? Right? Well, I mean this
is a hammer nail question. Iwould just say anti trust and anti trust,
the wild diversion from the corporate charter. There's a siddingly I've been wanting
to say for a while in thisbecause I think both this panel and the
last panel there's this view of,well, what Disney is doing in Florida

(01:14:20):
has nothing to do with their business. They just decided they wanted to do
this, Or what American Airlines isdoing with Indiana voting rights has nothing to
do with profit. But you know, I listen to people at Disney talking
about why gay rights is fundamental totheir business. They think it makes the
money. Maybe they're wrong, maybethey're right, But it's a little bit
of a dodge to say, well, that has nothing to do with their

(01:14:41):
fiduciary obligation. It's just they're doingsomething to make money in a way that
maybe conservatives don't like or liberals don'tlike. So is it really a question
Is this really a fiduciary question oris this just an attempt to square an
ideology in which we should be handsoff towards corporations with the fact that we

(01:15:02):
don't like what corporations are doing.Man, it is a hammer and nail
question. I agree with you,I understand your position, but I'd really
love to hear from panelists who maydisagree with you can and have the concern
that I just expressed. If so, I'm delighted to actually have something to
agree with you about. I dothink that I think Disney really thinks that

(01:15:25):
this is what's in their best interest. Maybe they're wrong. They probably are,
I think, but I don't know. I don't know run theme pal
parks. Right, So disney sharesprice has also been cut in half since
twenty twenty one. Partly that hasto do with the fact that their streaming
business as a disaster, but thisis probably part of it. Right.
So, there are built in mechanismsto the system, you know, like,

(01:15:48):
eventually, if you run your companybadly enough, as Henry Manny taught
us sixty years ago, someone elsecan take you over right and fix it.
On the proxy advisory question, sowhenever there's a contested proxy contest,
the two proxy advisory firms Iss,which has about eighty percent of the proxy

(01:16:08):
market, and Glass Lewis, whichhas the other twenty. All big institutional
shareholders subscribe to both. They getthe reports from both, and they also
have their own professionals who tend tomake up their own minds about these things.
So all the big three and evenVanguard, State Street, black Rock,
all the big share institutions, evenwhen's much smaller than those, they

(01:16:30):
have their own staff. They makeup their own minds, and this is
what always happens in a contested proxyelection. The twenty to twenty five percent
of the shares held by retail shareholdersmom and pop. They vote the way
management tells them. They couldn't careless what the proxy advisors say. They
probably don't even know if there's anactivist on board. The activists will have

(01:16:53):
a significant number of shares and there'llbe some other activists clubbing with them,
and those activists will vote the waythe activist wants, and the balance of
power. Power is held by thelarge institutional shareholders, the people like Vanguard,
the Van God, five hundreds,the passive funds, and those people
want is what happens, and sometimesthey go with the proxy advisors and sometimes

(01:17:13):
they don't. Next question, thankyou, Thank you as big as an
opponent as I am of antitrust solutionswherever they exist. As judgecast has pointed
out, many of Senator Holly's proposalswould not survive Supreme Court scrutiny, as
Senator Holly himself absolutely is aware of. Given that Congress has the role of

(01:17:39):
writing amendments to the Constitution, I'mreally curious to hear first what sort of
amendment you would you would propose toaddress some of those problems. And then,
second, given that states have coequalpower under the Article five Convention process
to write amendments as well as theultimate step of rapplication, I'm really curious

(01:18:00):
from mister Wesson, what sort ofproposal you would think would address some of
your concerns and survive that very highbar gratification by thirty four states. Sure
so, on the constitutional amendment front, I think there are already pretty well
tailored constitutional proposals for citizens United inparticular that are floating around out there.
I think they're multiple at this point, and so at least we were concerned

(01:18:21):
within our legislation was specifically the problemof publicly traded companies making independent expenditures,
funding political ads or contributing to superPACs. But there is a larger conversation
that could be had about exactly whatkind of constitutional amendment you would want.
I think the broader goal that wewould have in such an amendment would be
to thin out the constitutionalization of questionsinvolving corporate rights and corporate duties and to

(01:18:45):
make that in Congress's responsibility, becausejust because we say that, you know,
corporations don't have a speech right underthe First Amendment, doesn't mean that
we can't negotiate questions of who's speakingin what particular context and who is liable
for what in the context of statutorylaw be the business of Congress. That's
something that Congress should be doing.We don't need to necessarily touch the Constitution
to do that, and to Ithink it might be easier it's just simply

(01:19:08):
to have a overturn Citizens United andpast the constitutional amendment, because you got
get states involved in that process,and so ideally I think you'd get some
sort of legislation pass and have atest case that results in the reverse loib
Citizens United. But a constituial amendmenton that front would be wonderful if something
went that could happen. I don'thave any specific language, but I think
that process wise, i'd prefer tosee, and this is not just for

(01:19:29):
the first amendment across the board,a move towards a jurisprudence closer to the
original understanding of what the various amendmentsmeant at the relevant times, along with
the necessary context for those amendments.And I think you know John mentioned Professor
Arcis there. I think a lotof that may incorporate some idea of the
natural rights understanding that a lot ofthe founders had. But I think once

(01:19:54):
we reset, or if we resetto a place where the Constitution is being
applied as its originally stood, atthat point, I'll have a much better
idea of what sort of changes shouldbe made. But when you're too far
afield from what the text means,it becomes really difficult to know what additional
or new text how that might beinterpreted, and what new pitfalls that might

(01:20:16):
introduce into the system. So I'drather figure out what we sort of get
our no noun knowns figured out first, and then we can move on to
the unknowns after that. Thank you. Let's keep going. I see we're
running a little short on time,and I see at the back of the
line the chief executive officer of theFederalist Society. I want to make sure

(01:20:39):
he gets to the mic. Sonext question over here. Hi, So,
I think for those of us whoare kind of worried about this rise
in corporate power and shareholder power,the two solutions I feel like we've heard
today are kind of this revival orstrengthening of antitrust or a removal of the

(01:21:00):
kind of judicial interventions I think,as they were called in the last panel.
And I'm wondering whether you all seethese things either as opposing each other
or working together, or if there'sone or the other that you kind of
would prefer to use to maybe tacklethis issue, or if you think,
kind of maybe Professor Millier think neithershould be used. I'm happy to do

(01:21:27):
any type of legitimate antitrust enforcement againstmonopolies. I'll go that forbody else.
I would just say that the lackof anti trust enforcement has gone hand in
hand with the expansive account of corporatepower that something like it is as United
gives you. And I think thatin part reflects a as I've said before,

(01:21:50):
a set of value judgments about thefact that you know, we want
to demarcate this space is something thatotherwise political concerns don't enter into. And
I think the original intent of theantitrust laws themselves are the original meaning of
the antitrust laws is they're pretty broad. They say the government should get involved
in these particular contexts to break upcompanies like this. And so to the

(01:22:11):
extent that because we've wanted a particularkind of economy with a particular kind of
corporate configuration, our doctrine has tendedto evolve to reflect that, and our
enforcement priorities have tended to evolve toreflect that. And maybe that's too legal
realist for a FEDZOC event, butI think that has been the institutional culture
for a long time, and tothe extent that we can brace questions about
whether or not that's authentically originalist,that's worth asking to go one step more

(01:22:34):
legal realists than that. Bringing casesand losing doesn't help anyone, So pick
your I think for folks that arelooking to have more robust antitrust I would
hope that the attorneys bringing those caseswork really hard to make sure that they're
winners. I mean, one wayto combine the two is to note that

(01:22:56):
cases just take too long win orlose. The Trump administration brought the case
skins Google on search in twenty twenty. It hasn't been decided yet. He
brought one against Facebook that's not evengoing to trial until I think next year.
Maybe. I mean, that's crazylike that, that's there. This
is not a way to enforce thelaw. I don't know what, I
don't know how judges think about it, but there's no if you can't whatever

(01:23:20):
you think about the philosophy of antitrusted enforcement, if you can't get a
resolution of a for five ten yearson a monopoly, it's not really a
functional. Sadly, slip in fourcases can take four years too. Okay,
yeah, next question on my lefthere, thank you. A real

(01:23:45):
question that's being debated here is whowill hold companies accountable? And obviously I'm
referring here to particularly to publicly tradedcompanies. What is being neglected, I
think for fundamental discussion here is therole of corporate governance. I do view
corporate governance in the US as beingextremely weak and would advocate much stronger,

(01:24:13):
much stronger structure of corporate governance inwhich the role of the chairman is seriously
separated from the role of the chiefexecutive, and it is the duty of
the chief execut of the chairman tolook at the way in which the company
is behaving, and if he andthe board are not satisfied with the conduct

(01:24:33):
of the chief executive and his lackof accountability or her lack of accountability for
proper oversight of the company, thenthat board and the chairman have the right
and that indeed the duty, tosack the chief executive and any other senior
managers responsible. So accountability the firststage before you consider going to court should

(01:24:59):
be the role of a really strongform of corporate governance. Boards do have
the right to sack chief executives,and they occasionally do. I was just
trying to look up statistics. Icouldn't do it quickly enough, but they
were a wave of of shareholder proposalsto separate chief executives and CEO positions or

(01:25:24):
create an independent lead director position.I think we got that. It's just
a question of the will to useit in appropriate cases, and we're probably
more disagreeing about what the appropriate casesare than whether boards have authority to sack
executives over here. Last two yeah, or most of the discussion here is

(01:25:49):
too difficult for me. So I'mjust gonna circle back to Boeing for mister
Stoller, and I'll start with acurse. May you always fly in Soviet
made aircraft? Yeah, you know, I didn't quite that was meanly.

(01:26:15):
Is it really fair to say,for Boeing that you're leaving the same people
who created the problem there in chargeof fixing the problem. A lot of
people have gotten fired, and ifthose problems are not fixed and everyone is
in favor of, say a aircraft, more people will be fired. There'll
be a whole new set of peoplein there running it. Now. This

(01:26:38):
is the same thing that happens inthe federal government, except not enough where
you really don't see people fired whenthey have spectacular screw ups like nine to
eleven, and you know, endlessnumbers of other things. Was that in
terms of your creative solutions? Iunderstand now you're thinking about anti anti trust.

(01:26:59):
I think they are good reasons whythere are only two major aircraft companies
in the world. But were youthinking of any other creative solutions? I'd
be interested in hearing things. Yeah, I was just pointing at Boeing is
like as the most obvious example ofwhat firston Veblin used to call absentine ownership,
where no one's in charge, andI think that that's really I wasn't
trying to I don't know how tofix Boeing, but I was just trying

(01:27:24):
to say that there is this,it's a very there. We have placed
kind of limited expectations on our onour selves as a society to be able
to address I think what are commonlyagreed upon social problems. As you noted,
everyone wants safe aircraft. I don'tthink anybody thinks there's been any move
towards that, and that is thedisjuncture I was trying to point to last,

(01:27:46):
but not least gene I want.I had to be out during his
presentation, but I wanted to findit if any Frustram Millie's presentation, But
I wanted to find it if uhhe would want to defend or not defense
to this United because I haven't reallyheard any defense of it as well.

(01:28:09):
It's certainly a controversial decision. Certainlyseems like they're some pretty good arguments for
it. Oh sure, I'm happyto defend Citizens United, right, I
mean, what what is citizens TheUnited basically says it's as people with an
economic interest in a public issue shouldbe able to talk about it, right,
And I have absolutely no problem withthat, and only go on the

(01:28:30):
contrary. I think it's a goodthing. You know, I'm sorry to
disagree with Matt. I don't thinkof corporations as being big governments. You
know, while the corporations differ fromgovernments, they don't usually have monopolies,
only a few do, and theynever have monopolies on force, and they
don't have the subpoena power, andthey can't put you in jail. They

(01:28:50):
don't have anything like the power ofcorporations, don't have anything like the power
of a government. Governments are alwaysmore powerful than corporations, and I think
that they're powerful enough to be ableto be criticized by corporations and lobbied by
corporations. If Citizens United where it'sa disaster, then you might think that,

(01:29:11):
you know, there must have beensome great pullback and regulation since twenty
eleven when corporations could finally start,you know, really lobbying for pullbacks and
regulations. I didn't see that inany in any area I'm familiar with,
I don't think it's happened at all. So I am full throatedly in favor
of Citizens United, and I thankyou Gee for the opportunity to let me

(01:29:34):
emphasize it. We are out oftime, so before I invite a leader
to tell us where to go next, please join me in thanking our panelists
for an excellent presonation. Thank you, Judge Keatsis and I agree, a

(01:29:56):
fantastic panel, fantastic conversation. Wenow have fifteen minutes to make our way
to the luncheon in the Palm Court. For those who have specifically registered for
the luncheon and confirmed and paid forit, it is a sold out event,
so please please only make your waythere if you're registered for it.

(01:30:17):
That will begin our conversation. Forthose live streaming, that will be our
fireside chat with Judge Palmaty interviewing newFTC Commissioner Andrew Ferguson. That'll start at
twelve thirty. We will zoom backin this room at two o'clock for the
third panel of the day. Thankyou so much.

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2024 Freedom of Thought Conference: Panel 2 - The Challenge of Citizens United

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}2024 Freedom of Thought Conference: Panel 2 - The Challenge of Citizens United