How Corporations Became People
Most people don’t know this fascinating and appalling little bit of legal history. I first learned about it back in 2003, from my friend and colleague Ted Nace’s Gangs of America.
Accounts of it are all over the web, but I’ll try to give you the short story here.
In casual discussions from the bench prior to arguments for Santa Clara County v. Southern Pacific Railroad (1886; a dispute over corporate taxation), Chief Justice Morrison Waite said something obiter dictum — “said in passing” — to the following effect:
…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.
The court reporter included this statement in the “headnote” to the case entry in the United States Reports — the record of Supreme Court decisions.
That court reporter was J.C. Bancroft Davis, former president of the Newburgh and New York Railway Company.
Davis checked with the chief justice before including the passage. The justice did not demur, though he did acknowledge:
we avoided meeting the constitutional question in the decision
So the passage — in the headnote, not the decision itself — had no force of law, no value as precedent.
But just three years later it was cited as precedent by Associate Justice Stephen J. Field in Minneapolis & St. Louis Railway Company v. Beckwith. It has been cited repeatedly thereafter.
Corporations are persons within the meaning of the clauses in the Fourteenth Amendment to the Constitution concerning the deprivation of property, and concerning the equal protection of the laws. Santa Clara County v. Southern Pacific Railroad, 118 U. S. 394, and Pembina Mining Co. v. Pennsylvania, 125 U. S. 181, followed.
Field was there for Santa Clara, so he knew it held no precedent value, but he cited it anyway, as if it did. For the grimy details of Field’s conflicts of interest, I’ll direct you here.