Corporate Rights

The structure of federal and state law – both statutory and constitutional – empowers corporations to override local democratic decision making.   The Community Environmental Legal Defense Fund has assisted the first communities in the United States to eliminate corporate "rights" at the municipal level.

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 that 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 "personhood" bestowed by the courts. And 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 closed to them, is denied and usurped.

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