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Why Corporations Can't Act

Many decried the U.S. Supreme Court's decision in Citizens United v. Federal Election Commission, 558 U.S. 310 (2010).  The California legislature was so upset that it passed a resolution memorializing its disagreement and asseverating that "Corporations are not people but, instead, are entities created by the laws of states and nations".  AJR No. 22. Apparently, the Second Appellate District was not convinced for it recently found that a corporation was a person for purposes of California's fire liability law.  Presbyterian Camp & Conference Ctrs., Inc. v. Super. Ct., Case No. 2d Civil No. B297195 (Nov. 18, 2019).  

The Court begins its opinion by noting the "legal fiction" that "that corporations are people, with many of the same rights and responsibilities as natural persons".  However, the Court's analysis focuses on whether the legislature intended to impose vicarious liability on corporations under the fire liability law.  Thus, the opinion should not be regarded as broadly establishing that corporations are persons.  

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...