Why Corporations Can't Act

Allen Matkins
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Allen Matkins

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.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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