Historian and business biographer T.J. Stiles has posted some thoughts about the Hobby Lobby decision here.
The Supreme Court’s decision in the Hobby Lobby case raises a very interesting question. It has now created a distinct category of for-profit corporations—the closely held corporation; for that category it has broken down the distinction between the shareholders and managers and the corporation itself, as a legal entity. It has ruled that what the closely held corporation does is now what the shareholders and managers do. How far does that go? Has limited liability been erased? Can the shareholders and managers now be sued or prosecuted for the actions of corporation, or made liable for its debts? The court has breached a legal wall between the corporation and those who own its shares or manage it, and what will pour through is anyone’s guess.
I’m neither a lawyer nor a legal historian. I’m a simple business historian who knows a bit about the history of corporate law. I’m inclined to agree with Stiles that this decision may have all sorts of unintended consequences, perhaps along the lines he has anticipated, perhaps things we can’t imagine today. I agree with Megan McArdle that the practical results of this decision are fairly minor. The precedents and implications for legal theory are more momentous, perhaps. Or perhaps not. After all, I’m not a lawyer and even lawyers can’t predict the future.