Rethinking Resistance to Corporate Rule

Historically penalties imposed on corporations that broke the law were more severe than simple fines (that are usually taken as tax write-offs these days). Revoking a corporation's charter was the most severe action and was common during the first hundred years of this country's founding. Charter revocation - essentially a corporate death penalty - means that the corporation's assets are divided amongst its chief creditors (in some cases this was the workers of the company) and stockholders, and the corporation was no longer permitted to exist. Each state has its own charter revocation process. In California the state Attorney General files the revocation on behalf of the citizens (this keeps citizens from bearing the potentially enormous costs of confronting a huge corporation). Charter revocations are still a legal mechanism that 'We the People' could begin to utilize again in order to protect ourselves from corporate harm.

• On 10 September 1998, the National Lawyers Guild (joined by 30 other groups and individuals) filed a 129-page legal petition to California’s previous Republican Attorney General Dan Lungren requesting that he revoke the charter of Union Oil Company of California (UNOCAL corporation) for its decades of lawbreaking and global harms. He responded with a terse non-explanation. On 19 April 1999, now joined by 150 additional endorsing organizations and individuals, the petition was resubmitted to the newly elected Democratic Attorney General Bill Lockyer, who also promptly responded with a brief non-response. (A book including the petition, information about how to file such a document, and details about the endorsing organizations is available through our bookstore.)

• The New York Attorney General’s office has shown surprising leadership in challenging corporate charters. The previous Republican AG (Dennis Vacco) successfully revoked the charters of two non-profit tax-exempt front groups for the tobacco corporations (Tobacco Institute and Council for Tobacco Research), and seized and distributed their assets to two public institutions. The current Democratic AG (Eliot Spitzer) proposed - in a pre-election speech - a "death penalty" for corporations that cause serious harm, though he has failed to take any action since his election.

• In June 1998, retired Alabama judge William Wynn, acting as a private citizen, filed a lawsuit seeking the charter revocation of five tobacco corporations that have broken state laws (some dating back to 1901) and therefore should be shut down (Philip Morris, Brown & Williamson, R.J. Reynolds, The Liggett Group, and Lorillard Corporations). The list of violated laws includes: contributing to the dependency of a minor, unlawful distribution of material harmful to a minor, endangering the welfare of a child, assault in the third degree, recklessly endangering another, deceptive business practice, and causing the delinquency of a child. The case was ultimately transferred from state to federal court and then back again, where it was dismissed with no opinion given to explain a reason. Both the governor and attorney general have close links to the tobacco industry. (Federal Citation of the case: 51 F.Supp.2d 1232)

• In March 2000, Ohio State Representative Barbara Pringle (with the help of American Friends Service Committee) wrote to the Ohio Attorney General asking that the AG initiate corporate charter revocation proceedings against the Cleveland Clinic (a non-profit corporation). The Clinic sought to purchase two Cleveland area hospitals to shut them down, thereby reducing the availability of healthcare to many Clevelanders. This exercise of citizen authority over corporations contributed to the Clinic's decision to instead sell the hospitals to another healthcare corporation rather than closing them. To read her letter click here.

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