Santa Clara County v. Southern Pacific Railroad

Santa Clara County v. Southern Pacific Railroad
Supreme Court of the United States
Argued January 26–29, 1886 Decided May 10, 1886
Full case name	Santa Clara County v. Southern Pacific Railroad Company
Citations	118 U.S. 394 (more) 6 S. Ct. 1132, 30 L. Ed. 118
Prior history	Error to the Circuit Court of the United States for the District of California
Holding
The railroad corporations are persons with the intent of the Fourteenth Amendment to the U.S. Constitution.
Court membership
Chief Justice Morrison Waite Associate Justices Samuel F. Miller · Stephen J. Field Joseph P. Bradley · John M. Harlan William B. Woods · T. Stanley Matthews Horace Gray · Samuel Blatchford
Case opinions
Majority	Harlan, joined by unanimous court
Laws applied
14 Stat. 292, §§ 1, 2, 3, 11, 18 (an Act of 1866 giving special privileges to the Atlantic and Pacific Railway Corporation)

Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886) was a United States Supreme Court case dealing with taxation of railroad properties. The decision was instrumental in laying the foundation for modern laws regarding corporate personhood, ruling that the Fourteenth Amendment equal protection clause granted constitutional protections to corporations as well as to natural persons. For its opinion, the Court consolidated three separate cases:

• Santa Clara County v. Southern Pacific Railroad Company
• California v. Central Pacific Railroad Company
• California v. Southern Pacific Railroad Company

History and legal dispute

At the California Constitutional Convention of 1878-79, the 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."^[1] 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 (14 Stat. 292, §§ 1, 2, 3, 11, 18).

San Mateo County, along with neighboring counties, filed suit against the railroads to recoup the massive losses in tax revenue stemming from Southern Pacific's refusal to pay. After hearing arguments in San Mateo County v. Southern Pacific Railroad Company, the California Supreme Court sided with the county. Using the Jurisdiction and Removal Act of 1875, a law created so black litigants could bypass hostile southern state courts if they were denied justice, Southern Pacific was able to appeal all the way to the U.S. Supreme Court.^[2]

The headnote

Bancroft Davis, the Court Reporter and former president of Newburgh and New York Railway

The decisions reached by the Supreme Court are promulgated to the legal community by way of books called United States Reports. Preceding every case entry is a headnote, a short summary in which a court reporter summarizes the opinion as well as outlining the main facts and arguments. For example, in United States v. Detroit Timber Lumber Company (1906), headnotes are defined as "not the work of the Court, but are simply the work of the Reporter, giving his understanding of the decision, prepared for the convenience of the profession."^[3]

The court reporter, former president of the Newburgh and New York Railway Company, J.C. Bancroft Davis, wrote the following as part of the headnote for the case:

"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."^[4]

In other words, the headnote indicated that corporations enjoyed the same rights under the Fourteenth Amendment as did natural persons.^[5] However, this issue was not decided by the Court.

Before publication in United States Reports, Davis wrote a letter to Chief Justice Morrison Waite, dated May 26, 1886, to make sure his headnote was correct:

Dear Chief Justice, I have a memorandum in the California Cases Santa Clara County v. Southern Pacific &c As follows. In opening the Court stated that it did not wish to hear argument on the question whether the Fourteenth Amendment applies to such corporations as are parties in these suits. All the Judges were of the opinion that it does.^[6]

Waite replied:

I think your mem. in the California Railroad Tax cases expresses with sufficient accuracy what was said before the argument began. I leave it with you to determine whether anything need be said about it in the report inasmuch as we avoided meeting the constitutional question in the decision.^[6]

C. Peter Magrath, who discovered the exchange while researching Morrison R. Waite: The Triumph of Character, writes "In other words, to the Reporter fell the decision which enshrined the declaration in the United States Reports...had Davis left it out, Santa Clara County v. Southern Pac[ific] R[ailroad] Co. would have been lost to history among thousands of uninteresting tax cases."^[7]

Author Jack Beatty wrote about the lingering questions as to how the reporter's note reflected a quotation that was absent from the opinion itself.

Why did the chief justice issue his dictum? Why did he leave it up to Davis to include it in the headnotes? After Waite told him that the Court 'avoided' the issue of corporate personhood, why did Davis include it? Why, indeed, did he begin his headnote with it? The opinion made plain that the Court did not decide the corporate personality issue and the subsidiary equal protection issue.^[8]

Decision

The court's actual decision was uncontroversial. A unanimous decision, written by Justice Harlan, ruled on the matter of fences, holding that the state of California illegally included the fences running beside the tracks in its assessment of the total value of the railroad's property. As a result, the county could not collect taxes from Southern Pacific that it was not allowed to collect in the first place.^[9]

The Supreme Court's actual decision never hinged on the equal protection claims. Nevertheless, the case had clear constitutional consequences affirming the protection of corporations under the Fourteenth Amendment. ^[10]

Significance

In his dissent in the 1938 case of Connecticut General Life Insurance Company v. Johnson, Justice Hugo Black wrote "in 1886, this Court in the case of Santa Clara County v. Southern Pacific Railroad, decided for the first time that the word 'person' in the amendment did in some instances include corporations. [...] The history of the amendment proves that the people were told that its purpose was to protect weak and helpless human beings and were not told that it was intended to remove corporations in any fashion from the control of state governments. [...] The language of the amendment itself does not support the theory that it was passed for the benefit of corporations."^[11]

Justice William O. Douglas wrote in 1949, "the Santa Clara case becomes one of the most momentous of all our decisions. [...] Corporations were now armed with constitutional prerogatives."^[12]

See also

• Corporate personhood
• Juristic person
• Equal protection
• List of United States Supreme Court cases, volume 118

Notes

1. ^ Swisher, Carl Brent (1969), "Motivation and Political Technique", The California Constitutional Convention 1878-1879, New York: Da Capo, p. 78 .
2. ^ Williams, R. Hal (1973), The Democratic Party and California Politics, 1880-1896, Stanford: Stanford University Press, pp. 34–36 .
3. ^ United States v. Detroit Timber Lumber Company 200 U.S. 321, 322 (1906), (Syllabus).
4. ^ According to the official court Syllabus in the United States Reports, Santa Clara County v. Southern Pacific Railroad Company 118 U.S. 394, 396 (1886).
5. ^ Westlaw, http://www.answers.com/topic/santa-clara-county-v-southern-pacific-railroad .
6. ^ ^{a b} Beatty, Jack (2007), Age of Betrayal: The Triumph of Money in America, 1865-1900, New York: Alfred A. Knopf, p. 172, ISBN 9781400040285 .
7. ^ Magrath, C. Peter (1963), Morrison R. Waite: The Triumph of Character, New York: Macmillan, p. 117 .
8. ^ Beatty 2007, p. 173.
9. ^ 118 US Reports 412-17.
10. ^ Westlaw, http://www.answers.com/topic/santa-clara-county-v-southern-pacific-railroad .
11. ^ Connecticut General Life Insurance Company v. Johnson 303 U.S. 77, 87 (1938), (Black, J. dissenting).
12. ^ Douglas, William O. (1949), "Stare Decisis", Columbia Law Review 49 (6): 735–758, doi:10.2307/1119147 .

References

• Horwitz, Morton J. (1985), "Santa Clara Revisited: The Development of Corporate Theory", West Virginia Law Review 88: 173–224 

External links

• Text of Santa Clara County v. Southern Pacific Railroad, 118 U.S. 394 (1886) is available from: Justia · Findlaw

• Library of resources on Corporate Personhood, including many addressing the Santa Clara decision (ReclaimDemocracy.org).
• Barry Yeoman, When Is a Corporation Like a Freed Slave?, Mother Jones
• "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights" by Thom Hartmann