The Substantive Politics of Formal Corporate Power
50 Pages Posted: 11 Jun 2006
Corporations increasingly dominate the U.S. civil justice system, as Marc Galanter explains in his recent article, Planet of the APs: Reflections on the Scale of Law and its Users, 53 Buffalo L. Rev. 1369 (2006). My article builds on Galanter's discussion of corporate legal power by subjecting it to a critical legal perspective. In the conventional legal framework, corporations' privileged position appears to be an intractable puzzle, not an urgent injustice. That is because corporate power seems to be the generally necessary byproduct of a generally benign form (large, complex, legalistic organizations) or of generally benign, widely-shared normative principles (economic efficiency or proceduralism). Critical analysis, in contrast, opens the door to substantive change by exploring how substantive political conflict and subordination permeates and supports particular dilemmas of form and formal principle.
This article explores the particular substance of the contemporary U.S. corporation not as the natural and necessary modernization of economics and law but as a contingent result of political conflict - and more specifically and substantively, as the result of class and caste hierarchy. The article traces how this substantive politics of class and caste became institutionalized as seemingly neutral corporate form in the nineteenth century, and also became constitutionalized through Supreme Court decisions affording corporations increasing protections from democratic process. The article argues that the Supreme Court's recent decision in State Farm Mutual Automobile Ins. Co. v. Campbell further constitutionalizes class hierarchy through a revived substantive economic due process doctrine that has implications beyond the narrow question of punitive damages at issue in the case. Inverting the reasoning of Carolene Products footnote four, the Court construed large corporations as persons deserving special protection from substantive political and legal accountability, despite - or perhaps because of - corporations' particular power to subvert the political and legal process in the interest of the most privileged. The article concludes by explaining that progressive reforms should aim not to supplement the corporate form (or judicial formalism) with more moral and social substance, but instead to challenge and change both the particular substantive values and the technical institutional forms that structure the corporate-centered U.S. legal and economic system.
Keywords: inequality, law and economics, corporations, critical legal studies, civil justice
JEL Classification: P30, P10, P17, J70, I30
Suggested Citation: Suggested Citation