Santa Clara County v. Southern Pacific Railroad
Encyclopedia
Santa Clara County v. Southern Pacific Railroad Company, 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:
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.
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."
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:
In other words, the headnote indicated that corporations enjoyed the same rights under the Fourteenth Amendment as did natural persons. 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:
Waite replied:
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."
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.
, 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.
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.
, 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."
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."
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
case dealing with taxation of railroad properties. The decision was instrumental in laying the foundation for modern laws regarding corporate personhood
Corporate personhood
Corporate personhood is the status conferred upon corporations under the law, which allows corporations to have rights and responsibilities similar to those of a natural person. There is a question about which subset of rights that are afforded to natural persons should also be afforded to...
, ruling that the Fourteenth Amendment
Fourteenth Amendment to the United States Constitution
The Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...
equal protection clause
Equal Protection Clause
The Equal Protection Clause, part of the Fourteenth Amendment to the United States Constitution, provides that "no state shall ... deny to any person within its jurisdiction the equal protection of the laws"...
granted constitutional protections to corporations as well as to natural persons.
For its opinion, the Court consolidated three separate cases:
- Santa Clara CountySanta Clara County, CaliforniaSanta Clara County is a county located at the southern end of the San Francisco Bay Area in the U.S. state of California. As of 2010 it had a population of 1,781,642. The county seat is San Jose. The highly urbanized Santa Clara Valley within Santa Clara County is also known as Silicon Valley...
v. Southern Pacific RailroadSouthern Pacific RailroadThe Southern Pacific Transportation Company , earlier Southern Pacific Railroad and Southern Pacific Company, and usually simply called the Southern Pacific or Espee, was an American railroad....
Company - CaliforniaCaliforniaCalifornia is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
v. Central Pacific RailroadCentral Pacific RailroadThe Central Pacific Railroad is the former name of the railroad network built between California and Utah, USA that formed part of the "First Transcontinental Railroad" in North America. It is now part of the Union Pacific Railroad. Many 19th century national proposals to build a transcontinental...
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." 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
San Mateo County, California
San Mateo County is a county located in the San Francisco Bay Area of the U.S. state of California. It covers most of the San Francisco Peninsula just south of San Francisco, and north of Santa Clara County. San Francisco International Airport is located at the northern end of the county, and...
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
Jurisdiction and Removal Act of 1875
The Jurisdiction and Removal Act of 1875: "An Act to determine the jurisdiction of circuit courts of the United States, and to regulate the removal of causes from State courts, and for other purposes."18 Stat. 470...
, 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.
The headnote
United States Reports
The United States Reports are the official record of the rulings, orders, case tables, and other proceedings of the Supreme Court of the United States. Opinions of the court in each case, prepended with a headnote prepared by the Reporter of Decisions, and any concurring or dissenting opinions are...
. Preceding every case entry is a headnote
Headnote
A headnote is a brief summary of a particular point of law that is added to the text of a court decision to aid readers in locating discussion of a legal issue in an opinion...
, a short summary in which a court reporter
Supreme Court of the United States Reporter of Decisions
The Reporter of Decisions of the Supreme Court of the United States is the official charged with editing and publishing the Court's opinions both when announced and when they are published in permanent bound volumes of the United States Reports. The Reporter of Decisions is responsible for only...
summarizes the opinion as well as outlining the main facts and arguments. For example, in United States v. Detroit Timber Lumber Company
United States v. Detroit Timber Lumber Company
United States v. Detroit Timber & Lumber Company, , is a decision of the Supreme Court of the United States. Although the primary issue to the parties of the case was to determine ownership of 44 tracts of timberland, the case has become the standard reference to warn attorneys not to rely on the...
(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."
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 AmendmentFourteenth Amendment to the United States ConstitutionThe Fourteenth Amendment to the United States Constitution was adopted on July 9, 1868, as one of the Reconstruction Amendments.Its Citizenship Clause provides a broad definition of citizenship that overruled the Dred Scott v...
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."
In other words, the headnote indicated that corporations enjoyed the same rights under the Fourteenth Amendment as did natural persons. However, this issue was not decided by the Court.
Before publication in United States Reports, Davis wrote a letter to Chief Justice Morrison Waite
Morrison Waite
Morrison Remick Waite, nicknamed "Mott" was the seventh Chief Justice of the United States from 1874 to 1888.-Early life and education:...
, 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.
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.
C. Peter Magrath
C. Peter Magrath
Claude Peter Magrath is a higher education administrator who has served as provost or president at multiple American universities. He was born on April 23, 1933 in Brooklyn, New York and received political science degrees as an undergraduate at the University of New Hampshire and as a Ph.D. at...
, 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."
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.
Decision
The court's actual decision was uncontroversial. A unanimous decision, written by Justice HarlanJohn Marshall Harlan
John Marshall Harlan was a Kentucky lawyer and politician who served as an associate justice on the Supreme Court. He is most notable as the lone dissenter in the Civil Rights Cases , and Plessy v...
, 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.
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.
Significance
In his dissent in the 1938 case of Connecticut General Life Insurance Company v. JohnsonConnecticut General Life Insurance Company v. Johnson
Connecticut General Life Insurance Company v. Johnson, 303 U.S. 77 is a case in which the United States Supreme Court dealt with corporate entities. The case involved whether the state of California could levy a tax, on a company licensed to do business in that state, for transactions that...
, Justice Hugo Black
Hugo Black
Hugo Lafayette Black was an American politician and jurist. A member of the Democratic Party, Black represented Alabama in the United States Senate from 1927 to 1937, and served as an Associate Justice of the Supreme Court of the United States from 1937 to 1971. Black was nominated to the Supreme...
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."
Justice William O. Douglas
William O. Douglas
William Orville Douglas was an Associate Justice of the United States Supreme Court. With a term lasting 36 years and 209 days, he is the longest-serving justice in the history of the Supreme Court...
wrote in 1949, "the Santa Clara case becomes one of the most momentous of all our decisions. [...] Corporations were now armed with constitutional prerogatives."
See also
- Corporate personhoodCorporate personhoodCorporate personhood is the status conferred upon corporations under the law, which allows corporations to have rights and responsibilities similar to those of a natural person. There is a question about which subset of rights that are afforded to natural persons should also be afforded to...
- Juristic person
- Equal protection
- List of United States Supreme Court cases, volume 118
External links
- 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