Over the years, the U.S. Supreme Court’s corporate personhood decisions have allowed for the corporation to become increasingly more “person-like” by recognizing corporate constitutional rights that were previously reserved for flesh-and-blood human beings. Yet in cases where the rights of corporations are evaluated, the Court’s analysis flows from an axiomatic conceptualization of the corporation as a static, theoretical being, as if plucked straight from a business organizations law school textbook. The result is a gulf between corporate rights as “persons” and corporate legal responsibilities. Nowhere is that gulf more evident than in the Court’s personal jurisdiction jurisprudence. In particular, this note addresses the fact that corporations are not amenable to suits brought via tag jurisdiction, because tag jurisdiction is premised on physical presence within a territory. A corporation, under the classic view, is only physically present in its state of incorporation, the state of its principal place of business, and wherever its contacts are so systematic and continuous that the exercise of personal jurisdiction does not offend traditional notions of fair play and substantial justice. The Supreme Court has never addressed the issue of corporate tag jurisdiction, but several circuit courts have held that the doctrine does not apply to corporate entities.
This note focuses on the implications of the Court’s decision in Hobby Lobby and asserts that the majority opinion in that case marked a fundamental deviation from the traditional notion of physical presence associated with corporate entities. In Hobby Lobby, the Supreme Court held that closely held corporations were persons for purposes of claiming a religious exemption from the Affordable Care Act’s birth control mandate. Importantly, though, the Court departed from its motif of assessing the corporate personhood right at issue as it applied to all corporations and instead arbitrarily extended the religious exemption only to closely held corporations, which the majority failed to define. Drawing on the majority’s opinion and other existing definitions of closely held, this note proposes that closely held should be defined as corporations at least 50% owned by a single shareholder, with no more than 100 total shareholders. Working with that definition in mind, this note then deconstructs the “new” corporate person spawned by the Hobby Lobby decision and argues that religious closely held corporations are so “person-like” that the divide between the theoretical corporation and its management no longer exists, and instead, closely held corporations now are more akin to other business entities like partnerships, which are subject to tag jurisdiction. Therefore, in an effort to better match corporate rights and responsibilities, this note argues that closely held corporations should be subject to tag jurisdiction.
Andrew J. Fleming,
Dissecting Hobby Lobby's Corporate Person: A Procedural Proposal for Aligning Corporate Rights and Responsibilities,
81 Brook. L. Rev.
Available at: http://brooklynworks.brooklaw.edu/blr/vol81/iss4/14