THE COMMUNITY ENVIRONMENTAL LEGAL DEFENSE FUND, INC.
THE PROGRAM ON CORPORATIONS, LAW, AND DEMOCRACY, and
RICHARD L. GROSSMAN
Thomas Alan Linzey, Esq.1
Daniel E. Brannen, Jr., Esq., Of Counsel
Community Environmental Legal Defense Fund, Inc.
2859 Scotland Road
Chambersburg, Pennsylvania 17201
Counsel for Amici Curiae Community Environmental
Legal Defense Fund, Inc. and The Program
On Corporations, Law, and Democracy Richard L. Grossman, pro se
Table of Contents Table of Authorities. . . . . . . . . . . . . . . . . . . . . . [omitted]
Summary of the Argument. . . . . . . . . . . . . . . . . . . . . . . 4
I. It is Axiomatic That People Secure and Protect Their Inalienable Rights to Life, Liberty, Happiness, and a Republican Form of Government Through the Institution of Democratic Governments. . . . . . . . . . . . . . . . . . . . . . .5
II. Corporations are Created by State Governments as Subordinate, Public Entities Through the Chartering Process, and Thus Cannot Act to Deny People’s Rights to Safety, Liberty, the Pursuit of Happiness, or a Republican Form of Government Within this Nation’s Frame of Governance. . . . . . . . . . . . . . . . 11
III. Over the Past 150 Years, the Judiciary Has “Found” Corporations Within the U.S. Constitution, and Bestowed Constitutional Rights Upon Them. . . . . . .18
A. “Finding” Corporations in the Fourteenth Amendment. . . . . . . . 19
B. Corporations and the Bill of Rights. . . . . . . . . . . . . . . .24
(1). “Finding” Corporations in the First Amendment. . . . . . . 25
(2). “Finding” Corporations in the Fourth Amendment. . . . . . .27
(3). “Finding” Corporations in the Fifth Amendment. . . . . . . 29
(4). “Finding” Corporations in the Contracts and Commerce Clauses. 31
IV. Corporations Illegitimately Wielding Constitutional Rights of Persons Against People and Communities Regularly Deny the People Their Inalienable Rights, Including Their Right to a Republican Form of Government. . . . . . . . . .33
A. Corporate Personhood and the Denial of People’s Inalienable Rights. . 35
B. Corporate First Amendment Rights and the Denial of People’s Inalienable Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
C. Corporate Privacy Rights and the Denial of People’s Rights to Safety, Security, Health, and Welfare. . . . . . . . . . . . . . . . . . . 49
D. Corporate Fifth Amendment Takings and the Denial of People’s Inalienable Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
E. Corporations Wielding the Contracts and Commerce Clauses Interfere With the People’s Inalienable Right to Life, Liberty, and a Republican Form of Government. . . . . . . . . . . . . . . . . . . . . . . . . .53
V. This Court Must Dismiss All Constitutional Claims Brought by [X] Corporation Against [Y] Government Because the Assertion and Validation of Those Rights Denies the People’s Inalienable Rights, Including Their Right to a Republican Form of Government. . . . . . . . . . . . . . . . . . . . . . . . . . . 60
VI. Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Summary of Argument The people of these United States created local, state, and federal governments to protect, secure, and preserve the people’s inalienable rights, including their rights to life, liberty, and the pursuit of happiness. It is axiomatic that the people of these United States – the source of all governing authority in this nation - created governments also to secure the people’s inalienable right that the many should govern, not the few. That guarantee — of a republican form of government —provides the foundation for securing people’s other inalienable rights and vindicates the actions of people and communities seeking to secure those rights.
Corporations are created by State governments through the chartering process. As such, corporations are subordinate, public entities that cannot usurp the authority that the sovereign people have delegated to the three branches of government. Corporations thus lack the authority to deny people’s inalienable rights, including their right to a republican form of government, and public officials lack the authority to empower corporations to deny those rights.
Over the past 150 years, the Judiciary has “found” corporations within the people’s documents that establish a frame of governance for this nation, including the United States Constitution. In doing so, Courts have illegitimately bestowed upon corporations immense constitutional powers of the Fourteenth, First, Fourth, and Fifth Amendments, and the expansive powers afforded by the Contracts and Commerce Clauses.
Wielding those constitutional rights and freedoms, corporations regularly and illegitimately deny the people their inalienable rights, including their most fundamental right to a republican form of government. Such denials are beyond the authority of the corporation to exercise.
Such denials are also beyond the authority of the Courts, or any other branches of government, to confer.
Accordingly, the constitutional claims asserted by the [x corporation] against [y government] must be dismissed because those claims deny the people’s rights to life and liberty, and their fundamental right to self-governance.
Argument I. It is Axiomatic That People Secure and Protect Their Inalienable Rights to Life, Liberty, Happiness, and a Republican Form of Government Through the Institution of Democratic Governments. If there is one bedrock principle upon which the people of these United States established local, state, and federal governments, it is that governments are instituted to secure and protect the people’s inalienable rights, including their right to a republican form of government.
As eloquently proclaimed by the Declaration of Independence,
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness - That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.2
The Declaration of Independence para. 1 (U.S. 1776).
That principle, echoed by this nation’s colonists throughout the Resolves of the Continental Congress,3 early state Constitutions,4 and the Articles of Confederation,5 is reflected throughout the writings of Locke, Hume, Montesquieu6 that the early colonists used to deepen and strengthen the American Revolution – to frame their dispute as one in which the King and Parliament were incapable of providing a remedy premised on self-governance.7
The Revolution thus reflected the understanding that people, otherwise existing in a state of nature, do not relinquish their inalienable rights when governments are instituted, but that governments are instituted specifically to guarantee and protect those freedoms and rights. Thomas Gordon once summarized that fundamental principle in the form of a question, asking:
What is Government, but a Trust committed by All, or the Most, to One, or a Few, who are to attend upon the Affairs of All, that every one may, with the more Security, attend upon his own?
Thomas Gordon, Cato’s Letters, No. 38, July 22, 1721.
Early Americans used the U.S. Constitution to codify that understanding by declaring that a federal government would be formed by the States to protect and preserve people’s rights, stating that:
We the people of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America (emphasis added).
People struggling to drive civil rights for newly freed slaves into the Constitution following the Civil War fashioned the Fourteenth Amendment, which refers to inalienable rights as “privileges and immunities” of citizens. Through that Amendment, they sought to further guarantee the underlying principle – that governments are instituted by people to protect rights – by declaring:
No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
U.S. Const. amend. XIV.
Through the Fourteenth Amendment, the abolitionists constitutionalized the people’s inalienable rights to life, liberty, and happiness, driving the principles of the Declaration of Independence into the Constitution.8 As scholar Robert J. Reinstein explained:
[A] national political movement brought the Declaration of Independence “back into American life.” The Declaration was the secular credo of the abolitionists. The Declaration not only supported their moral and political assaults on slavery but was the foundation of their constitutional theories.9
Thus, the founding documents of the States and the United States codify the understanding that governments are instituted to secure inalienable rights possessed by people, including their right to enjoy life and liberty, and the right to pursue and obtain happiness and safety. Underlying that principle is the belief that securing those freedoms and rights requires the institution of a republican form of government, and that the right to a republican form of government is a separate guarantee.10 That right guarantees that the powers of governance are vested in the majority, not in the hands of a privileged minority who might seek to use government to attain private goals.11
In the words of delegates writing the first Massachusetts Constitution, “[n]o man, nor corporation, or association of men, [shall] have any other title to obtain advantages, or particular and exclusive privileges, distinct from those of the community” and that if governments are subverted for the “profit, honor, or private interest of any one man, family, or class of men,” then the fundamental principle underlying the institution of governments is usurped.12
II. Corporations are Created by State Governments as Subordinate, Public Entities Through the Chartering Process, and Thus Cannot Act to Deny People’s Rights to Safety, Liberty, the Pursuit of Happiness, or a Republican Form of Government Within this Nation’s Frame of Governance. The cause of the American Revolution was the systemic usurpations of the rights of colonists by the English King and Parliament.13 Those usurpations occurred primarily through the King’s empowerment of eighteenth century corporations of global trade - such as the East India Company - and through Parliamentary Acts taxing colonial trade. Oft-cited as the final spark of the Revolutionary War, the Boston Tea Party was the direct result of colonial opposition to the East India Company’s use of the English government to enable the Company to monopolize the tea market in the colonies. 14
The signing of the Declaration of Independence transformed crown corporations and royal proprietorships into constitutionalized states. Elected State legislators, possessing personal knowledge of the power of English trading corporations,15 worked to ensure that corporations within the new nation would be controlled and defined exclusively by legislatures.16
Accordingly, people made certain that legislatures issued charters, one at a time and for a limited number of years.17 They kept a tight hold on corporations by spelling out rules each business had to follow, holding business owners liable for harms or injuries, and revoking corporate charters.18
Side by side with control and authority over corporations – exercised through their elected legislators – the people experimented with various forms of enterprise and finance. Artisans and mechanics owned and managed diverse businesses; farmers and millers organized profitable cooperatives; shoemakers created unincorporated business associations.19 Towns routinely promoted agriculture and manufactures. They subsidized farmers, public warehouses, and municipal markets, protected watersheds, and discouraged overplanting.20
Legislatures also chartered profit-making corporations to build turnpikes, canals, and bridges, declaring that corporations could only be chartered for “public purposes.”21 By the beginning of the 1800’s, only some three hundred such charters had been granted.
Many people argued that under the Constitution no business could be granted special corporate privileges. Others worried that once incorporators amassed wealth, they would control jobs and markets, buy the newspapers, and dominate elections and the courts.22
Premised upon the widespread public knowledge of the powers wrought by English corporations and the people’s opposition to them, early legislators granted few charters, and only after long, hard debate. Legislators usually denied charters to would-be incorporators when communities opposed the proposed corporation.23
People shared the belief that granting charters was their exclusive right. Moreover, as the Supreme Court of Virginia reasoned in 1809, if the applicants’
object is merely “private” or selfish; if it is detrimental to, or not promotive of,
the public good, they have no adequate claim upon the legislature for the privileges.
Morton J. Horwitz, The Transformation of American Law, 1780-1860 112 (1977).
States limited corporate charters to a set number of years. Maryland legislators restricted manufacturing charters to fifty years, and most others to thirty. Pennsylvania limited manufacturing charters to twenty years. Unless a legislature renewed an expiring charter, the corporation was dissolved and its assets divided among shareholders.
Citizen authority clauses dictated rules for issuing stock, for shareholder voting, for obtaining corporate information, for paying dividends and keeping records. They limited capitalization, debts, land holdings, and sometimes profits. They required a company’s accounting books to be turned over to a legislature upon request.
Interlocking directorates were outlawed. Shareholders had the right to remove directors at will. Some state laws required banks to make loans for local manufacturing, fishing, and agricultural enterprises, and to the states themselves. Banking corporations were forbidden to engage in trade. Most state legislatures provided that directors and stockholders remained personally liable for debts and harms caused by their corporations. One corporation could not own another, or own shares in other corporations. In short, corporations were nothing more than what the people defined them to be through legislation, and possessed only those rights granted by such legislation.24
The people of these United States did not want business owners hidden behind legal shields, but in clear sight. As the Pennsylvania legislature declared in 1834:
A corporation in law is just what the incorporating act makes it. It is the creature of the law and may be moulded to any shape or for any purpose that the Legislature may deem most conducive for the general good.
Carter Goodrich, The Government and the Economy, 1783-1861 374 (1967).
People believed that when a corporation subverted the fundamental purpose for which governments were instituted, legislatures should dissolve the corporation. Accordingly, all states adopted corporate charter revocation laws to codify the common law writ of quo warranto (“by what authority”) – not only to revoke the charters of specific corporations, but to recognize that a corporation exceeding its limited authority injures the entire body politic.25
This short history of corporations in these United States reveals that corporations - because of the American revolutionaries’ successful resistance to illegitimate rule - were chartered as merely one of many subordinate, public entities used by the people to achieve the fundamental purposes for which governments were instituted.
It is well settled law that corporations are creations of the state.26 The United States Supreme Court has reaffirmed the principle that corporations are “creatures of the state” in at least thirty-six different rulings.27 It is also well-settled law that the Constitution not only protects people against the “State itself,” but also against “all of its creatures.” See West Virginia State Board of Education v. Barnette, 319 U.S. 624, 637 (1943).
As public creations, corporations lack any authority within this nation’s frame of governance to deny people’s inalienable rights to life, liberty, safety, security, health, and freedom, or to interfere with the operation of the people’s republican governments.
III. Over the Past 150 Years, the Judiciary Has “Found” Corporations Within the U.S. Constitution, and Bestowed Constitutional Rights Upon Them. Over the past 150 years of existence of the United States, the judiciary has conferred constitutional protections - once intended to protect only natural persons - upon corporations. The method by which the judiciary has conferred rights upon corporations has consisted of “finding” corporations in the Fourteenth Amendment, the First Amendment, the Fourth Amendment, the Fifth Amendment, and the Contracts and Commerce Clauses of the Constitution.28 A. “Finding” Corporations in the Fourteenth Amendment
After political expedience convinced Abraham Lincoln to use the Civil War to outlaw slavery, people forced the federal government to pass the Civil Rights Act of 1866 and constitutional amendments to give rights to newly freed slaves, which the drafters of the Constitution failed to define as “persons.”29 Adopted in 1868, Section 1 of the Fourteenth Amendment says:
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
The guarantees of the Fourteenth Amendment have been expanded to include a litany of personal liberty rights.30
Working for corporate clients enriched and empowered by the Civil War, lawyers began persuading judges to use the language of the Fourteenth Amendment to overturn state legislation originally intended to subordinate corporations. Their efforts led to a transformation of the law, undermining the republican frame of governance. As Justice Brennan has declared, “by 1871, it was well understood that corporations should be treated as natural persons for virtually all purposes of constitutional and statutory analysis.” Monell v. Department of Social Services of the City of New York, 436 U.S. 658, 687 (1978).
In San Mateo v. Southern Pacific R. Co., 13 F. 722 (C.C.D. Cal. 1882), corporate lawyers attacked a provision of the California constitution that assessed property taxes against railroad corporations differently from assessments for non-corporate properties. Attorneys for the railroad companies argued that by taxing their property differently from the property of natural persons, California violated corporate “rights” secured by the Equal Protection Clause of the Fourteenth Amendment.
When the case reached oral argument in the Supreme Court in 1885, Roscoe Conkling, a former member of the joint congressional committee that had crafted the Fourteenth Amendment - and lawyer for the Southern Pacific Railroad Company - suggested to the Court that the committee had corporations in mind when it put pen to paper in 1866: "[a]t the time the Fourteenth Amendment was ratified," Conkling alleged, "individuals and joint stock companies were appealing for congressional and administrative protection against invidious and discriminating State and local taxes." Conkling then intimated that the drafters of the Fourteenth Amendment had purposely used the word “persons” - instead of “citizens” - to specifically shield corporations from those State and local taxes.31
The parties settled San Mateo before the Supreme Court announced a decision. During oral argument in another California railroad taxation case several years later, Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886), Chief Justice Morrison Waite accepted Conkling’s proclamation, declaring:
[t]he Court does not wish to hear arguments on the question whether the provision of the 14th Amendment to the Constitution which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to corporations. We are all of the opinion that it does.32 Three years later, the Court “found” corporations in the Due Process Clause of the Fourteenth Amendment and bestowed Due Process protections upon corporations. Minneapolis & St. Louis Railroad Company v. Beckwith, 129 U.S. 26 (1889). The inclusion of corporations within the Equal Protection and Due Process Clauses of the Fourteenth Amendment, however, has been challenged by even Supreme Court jurists.33
Thus, at least from the standpoint of Supreme Court caselaw, did corporations become “persons” under the Constitution, empowered to wield corporate Due Process and Equal Protection rights under the authority of the Fourteenth Amendment, just like natural persons. Attempts by the legal community to justify those conferrals paralleled those judicial developments.34
B. Corporations and the Bill of Rights
Prior to the submission of the Constitution to state legislatures for ratification, eight states had already prefaced their own Constitutions with a Bill of Rights. Accordingly, many states conditioned their ratification of the Constitution upon the addition of a Bill of Rights to the document.35 In 1789, state delegates succeeded in amending the U.S. Constitution with a Bill of Rights that prohibited the federal government from interfering with crucial individual freedoms, including the freedoms of speech, assembly, and petition, protection from unreasonable searches and seizures, and the right to due process in criminal trials.
As Franklin Delano Roosevelt once keenly observed, "the Bill of Rights was put into the Constitution not only to protect minorities against intolerance of majorities, but to protect majorities against the enthronement of minorities." The Public Papers and Addresses of Franklin D. Roosevelt 366 (1941).
(1). “Finding” Corporations in the First Amendment
The First Amendment to the U.S. Constitution declares, in part, that governments shall “make no law. . . abridging the freedom of speech.” U.S. Const. amend. I
In First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978), the Supreme Court “found” corporations in the First Amendment when the Court threw out a Massachusetts law that prohibited corporations from spending money to influence legislation unrelated to their business. The ruling nullified the laws of thirty states that had adopted similar legislation.36
Dissenting in Bellotti, Justice White described the impact of this decision:
It has long been recognized, however, that the special status of corporations has placed them in a position to control vast amounts of economic power which may, if not regulated, dominate not only the economy but also the very heart of our democracy, the electoral process . . . . The State need not permit its own creation to consume it.