It’s A Company Town

            One of the most important principles concerning Property is the concept of “exclusivity.”  Under this principle, a property owner has the right to exclusive use of his property, and he or she has the rights to exclude the entire world from using his or her property.  This principle is sometimes referred to as “Exclusivity.”

Most of us intuitively recognize that by “owning” Property, we have the right to exclude others from using it (unless we consent to their use of it).  But even though this right of control and exclusive use of Property is a basic right, it can sometimes be necessary to temper, or balance, that right against other important rights.  For example, there can be situations where the right of free speech can be infringed by a vigorous observation of property rights.  Following is a real-world example.

In the 1940’s, there was a “company town” in Alabama where a certain shipbuilding company owned the town – all of it.  The company owned all of the houses, all of the commercial buildings, and all of the downtown area. The company even owned all of the streets and all of the sidewalks in the town.  The company owned  literally all of the real estate in the town.  A deputy of the County Sheriff served as the town’s policeman, and the company paid his salary.  Merchants and business owners rented stores and places of business from the company, and the United States postal service ran a post office out of one of the buildings owned by the company.  There was a public four lane highway that ran parallel to the business district, and the general public were readily able to drive into the town and  onto the streets that were owned by the company.  There were no outward indications that all of the real estate in the town was owned by the company. However, the company had posted signs in the downtown stores that said “This Is Private Property, and Without Written Permission, No Street, or House Vendor, Agent or Solicitation of Any Kind Will Be Permitted.”

A member of a religious organization came into town, stood on the sidewalk near the post office, and began distributing religious literature.  This person was warned that she could not distribute such literature without a permit; she was also told that no permit would be issued to her.  She protested that she had a constitutional (free speech) right to distribute religious literature.  When asked to leave the sidewalk, she declined.

The deputy sheriff arrested her and she was charged in state court with violating an Alabama law which made it a crime to enter or remain on the premises of another after having been warned to leave.

At her trial, the woman protested that she had first and fourteenth amendment rights to freedom of speech and freedom of the press.  The Company (apparently) claimed that the woman was on private property controlled by the company, and that by refusing to leave after being warned, the woman was in direct violation of the Alabama statute which made it a crime to remain on private property after being told to leave (i.e. trespassing).

You be the judge.  Who was right?  Who should win?  The woman was on private property owned by the Company, and the Company wanted her gone.  But the woman wanted to speak her religious opinions to the persons who were in the Company town.

If you said that the Company should win and the woman didn’t have the right to distribute religious literature on Company property, then you would have agreed with the Alabama state trial court.  The trial court rejected the woman’s claims of first and fourteenth amendment rights. The Alabama Court of Appeals upheld the woman’s conviction by holding that the sidewalk belonged to the Company, and the public had not used the sidewalk in such a way as to result in an “irrevocable dedication to the public.”  In other words, though the public could use the sidewalk, it still belonged to the Company.

The woman appealed to the United States Supreme Court.  In that appeal, the State of Alabama argued that the Company’s right to “control the inhabitants” of the company town was similar to the right of a homeowner to “regulate the conduct of his (or her) guests.”  But the Supreme Court rejected that argument by holding that “Ownership does not always mean absolute dominion.  The more an owner, for his advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it.”  The Court further held “Thus, the owners of privately held bridges, ferries, turnpikes and railroads may not operate them as freely as a farmer does his farm.  Since these facilities are built and operated primarily to benefit the public and since their operation is essentially a public function, it is subject to state regulation.”

The woman won; the Company (and the State of Alabama) lost.  The case is reported as Marsh v. Alabama (1946) 326 U.S. 501.

Though the individual won this time, the outcome could be different under a different set of facts. First amendment rights of free speech and free assembly are governed by extensive case law interpreting and defining those rights.  Proper application and understanding of these rights involves complex legal considerations.  Persons with First Amendment claims, issues or questions should consult competent legal counsel.

Copyright 2017 ROBERT B. JACOBS