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CALIFORNIA CORPORATE & SECURITIES LAW

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Court Holds Corporations Have No Constitutional Privacy Right, But . . .

Article I, Section 1 of the California Constitution provides that “all people” have an inalienable right of privacy.  Does this right extent to corporations?  Seemingly it would if corporations are considered “people”.  Some might cite the U.S. Supreme Court’s holding in Citizens United v. FEC, 558 U.S. 310, 394 (U.S. 2010) and argue that the corporations are people.  However, the Citizens United decision was concerned with a federal statute and the First Amendment to the United States Constitution.  More significantly, the Court in Citizens United did not hold that corporations are people.

Those troubled by the idea that corporations may be people too might be cheered by a recent decision by a panel of the California Court of Appeal.  Noting that Article I, Section 1 of the California Constitution refers only to “people”, the Court held that corporations do not have a constitutional right of privacy.  SCC Acquisitions, Inc. v. Superior Court, 2015 Cal. App. LEXIS 1180 (2015).  That was not the end of the Court’s analysis, however.  The Court went on to conclude that corporations do have a right of privacy, just not a constitutional right.  Thus, a corporation’s privacy right is subject to a balancing test.  In this case, an assignee of a creditor sought production of corporation documents.  Thus, the Court balanced question of whether the demanded production “appears reasonably calculated to lead to the discovery of admissible evidence” against the corporation’s right of privacy.

All people are persons but not all persons are people

Note that “persons” and “people” are two different words, with different etymons.  Notwithstanding the brouhaha engendered by Citizens United, the idea that corporations are “persons” is longstanding.  Corporate personhood is in fact embedded in numerous California statutes, including California Corporations Code Sections 18 (“‘Person’ includes a corporation as well as a natural person”); 15901.02(y) (“‘Person’ means an individual . . . corporation . . .”); and 25013 (“‘Person’ means an individual, a corporation . . .”).  “Person” is likely derived from the Latin word persona which interestingly meant a mask worn by actor.  Persona in turn may have been borrowed from the Etruscan word for a mask, ϕersu.  By transference, persona came to refer to character played by the actor.  Thus, the dramatis personae is a listing of the characters in the play.  “People”, on the hand, is derived from the Latin word populus, which conveniently means people.  SPQR, which appears everywhere in Rome, is an initialization for Senatus Populusque Romanus or the Senate and the Roman People.

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Inside an Etruscan tomb

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