10 Supreme Court Rulings That Turned Corporations Into People

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http://www.alternet.org/10-supreme-court-rulings-turned-corporations-people



1809 ( Bank of the United States v. Deveaux): In the early days of the republic, when state and federal courts were still working out their jurisdictions, the Bank of the United States—a precursor to the US Treasury—sued a Georgia tax collector named Peter Deveaux for property he had seized when the bank failed to pay state taxes. Deveaux argued that, because corporations weren't people, they couldn't sue in federal court. Chief Justice John Marshall agreed. This meant businesses could only sue or be sued in federal court if all the shareholders, and at least one member of the opposing party, lived in the same state. According to Burt Neuborne, a corporate law professor at New York University, Wall Street banks hated this decision because it restricted suits to state courts where judges were partial to the banks' local clients—typically Midwestern farmers.

1844 (Louisville, Cincinnati, and Charleston Railroad v. Letson): It soon became apparent that Marshall's decision in Bank of the United States was unworkable because it put corporations outside the reach of the federal courts. Thirty-five years later, after hearing the Louisville, Cincinnati, and Charleston Railroad case, the Supreme Court shifted course, ruling that corporations were "citizens" of the states where they incorporated. Still, it was difficult for a corporation to sue or be sued in federal court unless all its shareholders lived in the same state.

1853 (Marshall v. Baltimore and Ohio Railroad): The Supreme Court later upheld the notion that corporations were citizens, but only for the purposes of court jurisdiction; they did not have the same constitutional rights as actual people. The court also ruled that, for litigation purposes, shareholders would be considered citizens of their company's home state. This made it easier for corporations to sue or be sued in federal court by eliminating jurisdictional conflicts.

1886 (County of Santa Clara v. Southern Pacific Railroad): Now that corporations were legally citizens, corporate attorneys worked to expand their rights. When California officials levied a special tax on the Southern Pacific Railroad, the railroad sued, arguing that singling out the company violated its rights to equal protection under the 14th Amendment, which was intended to protect freed slaves. In a strange twist, the court reporter—a former railroad man—wrote in the published notes on the case that the 14th Amendment did, in fact, apply to the company. Even though this notion appeared nowhere in the high court's actual ruling, 11 years later the court declared it was " well settled" that "corporations are persons within the provisions of the Fourteenth Amendment," citing Santa Clara.