Santa Clara County v. Southern Pacific Railroad Company, (1886) was a United States Supreme Court case dealing with taxation of railroad properties. The case is most notable for the obiter dictum statement that corporations are entitled to protection under the Fourteenth Amendment. The California State Legislature drew up a new constitution that denied railroads "the right to deduct the amount of their debts [i.e., mortgages] from the taxable value of their property, a right which was given to individuals."Southern Pacific Railroad Company refused to pay taxes under these new changes. The taxpaying railroads challenged this law, based on a conflicting federal statute of 1866 which gave them privileges inconsistent with state taxation.
The Supreme Court told the California Supreme Court, "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."
This is one of the “reconstruction amendments passed in the wake of the US Civil War. What the Supreme Court did in Santa Clara County v. Southern Pacific Railroad was to give to corporation the rights adumbrated in the Constitution. They cannot vote but they have the rights an individual was granted by the Fourteenth Amendment. Until this amendment it was questionable if the Bill of Rights applied to the states which was made clearly so that it did by the Fourteenth Amendment. But what was startling was the Waite Court’s opinion that they also in many cases applied to Corporations. Corporations are chartered by the state and fulfill a vital role in the industrialization of our country because they are greater than the sum of their parts, the share holders.
The Supreme Court does not have to have legal precedents to make a ruling and in this case it didn’t.
If you are wondering what all this has to do with today’s America, I refer you to the recent decision of the Robert’s Court that corporations could spend unlimited funds on campaigns and electioneering as any individual.
I have always had trouble with Santa Clara County v Southern Pacific and ruling after ruling granting corporations the rights of persons. Abraham Lincoln was insistent that the Constitution must be viewed in light of the Declaration of Independence. The founding fathers (the brilliant James Madison was one) saw liberties as a type of property that an individual owns. Our Declaration of Independence was largely about security and property.
The problem I have is that Corporations have no moral imperative as do all individuals save sociopaths. Most of us have some desire to do the right things and to myself as do many, success is achieved not by the accumulation of wealth but as player in the invisible world of time, mind, love, courage, compassion, tolerance and charity to name a few. Success is not merely the accumulation of wealth.
While we sometimes talk about good corporate citizens, a business corporation (not P.B.S. or the Harvard Corporation) exists solely to accumulate wealth and as such does not deserve all the rights of a person. The court is aware of this. The corporation as is the modern university, modeled after the Catholic monastery in which there is a faculty or in the case of the corporation, officers who are criminally liable for the actions of the corporations.
But as dreadful as some actions of corporations have been, there has not been suitable punishment. For what Enron did to California, the punishments were extremely liberal, something the Courts of the United States no longer are. The bleeding heart judge is a myth.
The truth of the matter is the judge (who is the court) is likely a former prosecutor as well as is the defendant’s counsel.
President Obama is to be applauded for the appointment of Justice Kegan to the Supreme Court as someone who has excellent academic credentials as well as a first hand knowledge of the Supreme Court.
What I don’t like is corporations having the rights of individuals. As an example, I do not believe a corporation should have the right to the Fifth Amendment.
The damned things aren’t alive and all the Republican Party’s electricity is not going to make Frankenstein breathe.