Charles River Bridge v. Warren Bridge
CHARLES RIVER BRIDGE V. WARREN BRIDGE
The 1837 landmark U.S. Supreme Court decision Charles River Bridge v. Warren Bridge, 36 U.S. (11 Pet.) 420, 9 L. Ed. 773, illustrated the shift in politics brought about by the presidency of andrew jackson. Nineteenth-century federalism, a dominant political doctrine from the time of the drafting of the U.S. Constitution, favored the protection of private investments. The Charles River Bridge decision espoused newly popular Jacksonian political beliefs, which favored free enterprise. Arguably, the case altered the course of economic jurisprudence in the United States.
The facts of Charles River Bridge began in 1650 when the state of Massachusetts granted a charter to Harvard College (now Harvard University) to operate for profit a ferry over the Charles River between Boston and Charlestown. Later, in 1785, the Massachusetts Legislature granted a charter to a group of Charlestown businessmen to build the Charles River Bridge. These entrepreneurs were to fund the bridge's construction and in return the state would allow them to collect revenue from a specified toll for the next forty years. As part of the agreement, the entrepreneurs were to pay an annuity to Harvard College to replace ferry profits lost by the building of the new bridge.
The bridge was immediately successful and immensely profitable. Prompted by its popularity, the Massachusetts Legislature in 1792 chartered the building of a second bridge, known as the West Boston Bridge. To appease the proprietors of the Charles River Bridge, who faced competition from the West Boston Bridge, the state of Massachusetts extended the Charles River Bridge charter from forty to seventy years.
In 1828 Massachusetts chartered a third bridge, the Warren Bridge, which was to be constructed within a few rods of the Charles River Bridge. The Charles River Bridge proprietors strongly objected to this third bridge because the competition would diminish their profits. But Massachusetts citizens viewed the Charles River Bridge as monopolistic and welcomed competition and reduced tolls. The Warren Bridge was completed as planned.
Within a year the Charles River Bridge suffered a 40 percent drop in revenues. The bridge's proprietors, represented by daniel webster and lemuel shaw, went to court, seeking an injunction against the Warren Bridge. Webster and Shaw argued that the Warren Bridge's charter with the state violated the Contracts Clause of the U.S. Constitution by interfering with the state's separate obligations under its charter with the Charles River Bridge proprietors. They maintained that as successors to the original ferry service charter held by Harvard College, the Charles River Bridge proprietors had an implied exclusive right to tolls charged for crossing the Charles River. Moreover, they said that judicial policy should protect investments; without security in investments, entrepreneurs would not be willing to take risks in technological developments such as bridges and railroads. And this reluctance to take risks would only prove detrimental to the public.
Lawyers for the Warren Bridge proprietors countered that no exclusive rights existed for transportation over the Charles River and that judicial policy should favor technological progress and free enterprise over the rights of those investing in private property. After hearing oral arguments in October 1829, the Supreme Judicial Court of Massachusetts ruled in favor of the Warren Bridge proprietors. The Charles River Bridge group appealed the case to the U.S. Supreme Court.
In March 1831, the Supreme Court first heard arguments in the case. At that time john marshall was chief justice and the Court was dominated by Federalists. But several justices were absent during that argument, so the Court scheduled a second argument. This action had a significant consequence: several justices resigned or died prior to the second argument, and, taking advantage of his privilege of appointing new justices, President Jackson changed the membership of the Court to primarily Democratic.
Following a second argument in 1837 the Court held that the Warren Bridge charter did not violate the Contracts Clause of the Constitution. Chief Justice roger b. taney, who authored the opinion, held that any state legislation that chartered a private entity to provide a public service, such as a bridge, turnpike, or ferry, was to be strictly construed (interpreted) in favor of the state and against the private entity. The Court found that no implied rights had passed from the Harvard College ferry charter to the Charles River Bridge charter.
Chief Justice Taney further observed the harm in ruling for the Charles River Bridge proprietors simply because they faced competition and reduced profits owing to the Warren Bridge. He suggested that such a holding would encourage turnpike proprietors to sue the railroads for destroying turnpike profits. In Taney's view, economic development was better served by public improvements than by protections for monopolies.
The Charles River Bridge decision received widespread attention. Hard-line Federalists disputed the Court's rationale, insisting that only by protecting vested property rights would future financing for transportation technology be ensured. And although railroads were not at issue in Charles River Bridge, many historians believe that the Taney Court placed great faith in the future of railroads in the United States, and in rendering its opinion was attempting to facilitate their growth. There is little doubt among legal scholars that Charles River Bridge signified the introduction of Jacksonian politics into U.S. jurisprudence.
Mensel. 1994. "Privilege against Public Right: A Reappraisal of the Charles River Bridge Case." Duquesne Law Review 33.
Charles River Bridge Case
CHARLES RIVER BRIDGE CASE
CHARLES RIVER BRIDGE CASE, 11 Peters 420 (1837). In 1785, Massachusetts chartered a bridge over the Charles River, linking Boston and Charlestown. The Charles River Bridge proprietors completed the project the next year, and the bridge significantly enhanced commerce between the two areas.
The enterprise proved financially lucrative. The original charter provided the right to charge tolls for forty years, which later was extended to seventy. In the 1820s, political controversies, such as a fight over the Bank of the United States, focused on increasing opportunities in a market economy against the power of entrenched privilege. After extensive public criticism decrying the proprietors' "privileged monopoly," the Massachusetts legislature in 1828 chartered a new company to build a competing bridge, paralleling the existing one. The new Warren Bridge was to become toll-free after six years.
The proprietors of the first bridge, which included Harvard College, contended that the new bridge charter violated the Contract Clause (Article I, Section 10) of the United States Constitution as it unconstitutionally impaired the obligations of the original contract. The Massachusetts high court split on the issue in 1828, and the case went to the United States Supreme Court in 1831. Chief Justice John Marshall, in a significant deviation from his usual broad construction of the Contract Clause, favored sustaining the new charter, but the Court was sharply divided and lacked a full bench for a decisive ruling.
In 1837, however, recently appointed Chief Justice Roger B. Taney and his new colleagues sustained the Warren Bridge charter, with only one dissenting vote. Taney followed Marshall's formulation, strictly construing corporate charters in favor of "the rights of the community." The state, he determined, had never explicitly promised the Charles River Bridge proprietors the right to an exclusive bridge and toll.
Taney's opinion particularly emphasized the role of science and technology to promote material progress. The law, he insisted, must spur, not impede, such improvements. If the Charles River Bridge proprietors prevailed, Taney feared that turnpike corporations would make extravagant claims and jeopardize new innovations such as railroads. Taney cast the law with new entrepreneurs as the preferred agents for progress. "[T]he object and end of all government," he said, "is to promote the happiness and prosperity of the community which it established, and it can never be assumed, that the government intended to diminish the power of accomplishing the end for which it was created." Taney's opinion fit his times and reflected the American premium on the release of creative human energy to propel "progress" against the expansive claims of privilege by older, vested interests.
Hurst, James Willard. Law and the Conditions of Freedom. Madison: University of Wisconsin Press, 1956.
Kutler, Stanley I. Privilege and Creative Destruction: The Charles River Bridge. Philadelphia: Lippincott, 1971. Reprint, Baltimore: Johns Hopkins University Press, 1992.