Adam Winkler’s We the Corporations: How American Businesses Won Their Civil Rights identifies the legal foundations of corporate constitutional rights and traces the historical development of those rights. On Winkler’s account, the Supreme Court’ corporate rights cases treat corporations as “associations of citizens” — not as “separate legal persons.” Winkler uses the phrase “piercing the corporate veil” to describe the legal theory embraced by the Supreme Court in the seminal corporate rights cases.
This Review argues that the language of veil-piercing, even if used metaphorically, mischaracterizes the legal theory the Supreme Court embraces and weakens the full force of Winkler’s critique. Winkler is correct that the Supreme Court treats corporations as associations of persons, but he is incorrect that this treatment constitutes piercing the corporate veil. When a court pierces the corporate veil, it performs a practical, fact-based inquiry in which it determines whether the corporation is truly a separate juridical entity from its shareholders, creditors, and directors. If the court determines that there is no legal separateness, then it can hold shareholders personally liable for the obligations of the corporation. The Supreme Court does not provide any such analysis in the cases Winkler discusses. Rather than consider whether a particular corporation has acted in a manner that suggests that it is not truly a separate juridical entity, the Supreme Court seems to assert that corporations are never distinct from their shareholders when they are claiming constitutional protections. And the Court has offered no legal or theoretical defense for that assertion. Both veil-piercing and treating the shareholders as an association of persons look behind the corporate form, but the way the Court has treated corporations in corporate-rights cases is more radical and less justifiable than Winkler’s metaphor suggests. What Winkler has identified is not that the Supreme Court “pierces the corporate veil” in constitutional cases but rather that the Supreme Court refuses to recognize the very existence of the corporate form in those cases altogether. In describing this phenomenon as “piercing the corporate veil,” Winkler implies that the Supreme Court’s treatment of the corporation in constitutional cases is part of a sensible and coherent corporate law doctrine. What Winkler actually shows is that the Supreme Court’s existential theory of the corporation in constitutional rights cases is radically at odds with the existential theory of the corporation it adopts in every other area of the law.