CORPORATE RIGHTS [and our communities]
“I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country.” — Thomas Jefferson, 1816
“In 1819 in Dartmouth College v. Woodward, the U.S. Supreme Court introduced a distinction between the rights of a public corporation and a private one. The U.S. Constitution’s contract clause did not protect the political powers granted in the charter of a public corporation such as a municipality. State legislatures could, therefore, unilaterally amend or revoke municipal charters and strip a city of authority without the municipality’s consent. But the charter of a private corporation, such as a business enterprise or a privately endowed college, was an inviolate grant of property rights guaranteed by the nation’s Constitution.” — Jon C. Teaford, Municipal Charters
Since the early 1800s, corporations have gained rights and protections under the United States Constitution. While we never find the word “corporation” in the Constitution, corporations are able to invoke constitutional “rights” and protections under the Commerce Clause and Contracts Clause, as well as under the First, Fourth, Fifth, Sixth, and Fourteenth Amendments.
Corporations use these “rights” to challenge state and local laws, and to chill efforts at the local level to fight corporate siting plans. Thanks to the U.S. Supreme Court’s ruling in the Dartmouth case in 1819, “private” business corporations first gained constitutional protection from government interference in internal governance, ostensibly under the Contract Clause of the Constitution. Curiously, the court found no reason to similarly protect municipal corporations, such as towns, boroughs, cities and counties from state interference with self-government.
As an example: the Waste Management Corporation was able to successfully sue the State of Virginia under the Commerce Clause to overturn a state law which prohibited the importation of out-of-state waste, arguing that the law interfered with the flow of commerce. With the First Amendment, we see corporations participating in the writing of our laws and the election of candidates at all levels of government. Citing the Fifth Amendment “Takings Clause,” the U.S. Supreme Court ruled in Pennsylvania Coal Co. v. Mahon (1922), that coal corporations must be compensated for property value lost due to laws protecting homes from mining subsidence. Under the Fourteenth Amendment, corporations are able to claim equal protection and due process rights.
Charters of incorporation seem to grant special privileges for private wealth, including limited liability protections from legal responsibility by individuals benefiting by dint of this corporate shield, along with the “rights” of pershonhood bestowed by the courts. Any yet charters do not actually grant rights, but rather they deny rights held by all by identifying corporations as a specially protected class under the law.
While corporate charters once privileged all corporations to the degree that the sovereign specified in each individual charter, another outcome of the Dartmouth case was that the federalist judges, lead by John Marshall, created the unprecedented distinction between “private” business corporations and “public” corporations like municipalities. The rights recognized judicially for publicly chartered business corporations were withheld from municipal corporations. This bias toward the “rights of property” (corporations) and against the right to assert self-governance through incorporated municipalities explains how it is that business corporations today dictate governance in our communities. The people are denied authority to “violate the rights” of corporations, and the right to assert self-governance in the communities where they live, using that government closes to them, is denied and usurped.