Delaware Giving Companies Right To Vote Raises Legal Questions

A proposed law in Delaware that would give companies with property in one of its cities the right to vote in local elections has raised questions about whether it would stand up to legal concerns if challenged in court.

The legislation, titled HB 121, which passed the state House on June 30, would allow "artificial entities," such as corporations, partnerships and trusts which own property in Seaford, Delaware's seventh largest municipality, each a single vote.

Advocates say they hope to improve voter turnout with the new law, while critics have said it would allow corporate interests to "overwhelm" people in elections.

Richard Pildes, a professor in constitutional law at New York University, told Newsweek that while there could be "legitimate" reasons for such legislation, it was a "strange way" to increase turnout and there was a risk it could set a precedent for potential "vehicles for gerrymandering" elsewhere.

If it were challenged, it would likely be under Delaware's state constitution, but could end up at the U.S. Supreme Court if ruled an unlawful dilution of voters by a lower court, Pildes said.

The issue of gerrymandering is a hot topic at the moment, after a series of rulings by the U.S. Supreme Court regarding the redrawing of electoral district maps.

In early June, justices ruled that congressional districts drawn up in Alabama violated racial discrimination prohibitions, and later the same month ruled that state legislatures did not have carte blanche over drawing election maps, in a case brought by North Carolina Republicans.

The law would amend Seaford's charter to allow both "bona fide" residents—i.e. those who are permanent, full-time residents of the city—as well as non-residents who own property in the area, the right to vote in local elections.

According to Pildes, these extensions of voting rights are not a new phenomenon and something that other local jurisdictions have done, which courts have tended to uphold.

However, what is less common about the proposed law is that it extends voting rights to non-human "real property" owners that are "in good standing." David Genshaw, Seaford's Mayor, cited similar voting rights in towns such as Fenwick Island and Henlopen Acres, which according to Bloomberg have allowed businesses to vote for decades.

Typically, in the eyes of the law, corporations are considered individuals in certain ways, such as entering into contracts and being subject to lawsuits. But Pildes noted: "The federal constitutional doctrine is that corporations have certain sorts of rights; it doesn't mean they are citizens or that they have the full rights of citizenship."

He outlined two potential legal challenges that the law could face if passed: on the basis that state courts have in some cases already said their constitutions do not permit "extensions of the franchise to non-citizens;" and if they did, "they've always been concerned that that not be used as a pretext for manipulating the vote or diluting the vote of residents."

"I think both of those last wishes would be the relevant kinds of questions that would get litigated about this extension," Pildes said. "Does the state constitution prevent the extension of the vote to non-citizens? And even if it permits that, is this a pretext for diluting the vote of the existing residents or trying to manipulate the vote of existing residents?"

Delaware's constitution extends voting rights to non-residents who have moved out of the state three months prior to a presidential election, "but for no other offices."

In February, Democrats in Delaware's state legislature introduced a bill that "makes clear that corporations and other artificial entities may not be given a vote in municipal elections." While that bill currently remains in committee, it could set the conflicting pieces of proposed legislation on a direct collision course that would likely be settled in court.

Pildes said he expected any legal challenges to the proposed law to be brought within the state's judicial system, but could not rule out a U.S. Supreme Court appeal.

"The primary issues are going to be under the Delaware constitution, but impermissible vote dilution—if that's what the courts were to decide was going on here—could raise a federal issue as well," the leading legal scholar explained.

While he said it was "hard to imagine" similar legislative moves being taken up across the rest of the U.S., Pildes cautioned that "there is a risk that these kinds of extensions of the franchise can be vehicles for trying to gerrymander the vote.

"There can be legitimate reasons for doing this, but there can be those kinds of concerns. If other jurisdictions did this for those kinds of gerrymandering reasons, one would hope the courts would stand in the way of that."

The proposed law limits corporate voting rights to entities which own property in Seaford, so a local election could not be swayed by special interests simply registering a number of businesses as nominally located in the city.

Advocates have argued that it would give companies that contribute to the local area more of a say in how it is shaped politically, and also increase turnout. At an election in April, just 340 votes were cast out of a population of 8,250, according to Delaware Online.

"These are folks that have fully invested in their community with the money, with their time, with their sweat," Genshaw told local news channel WRDE in June. "We want them to have a voice if they choose to take it."

State Rep. Danny Short, who originally introduced HB 121, said in a July 1 statement that "business owners have a major stake" in Seaford, which had been "recovering from more than 20 years of economic struggle."

He told Newsweek: "Business owners have a legitimate expectation of having a small role in shaping the government responsible for the policies under which they operate and levying the taxes they pay. Taxation without representation, after all, is one of the leading grievances that launched the American Revolution."

But David Cay Johnston, a journalist and lecturer in law at Syracuse University, warned that "business voters could overwhelm humans" in elections. Delaware Online estimated that there were 234 entities that would be given the vote under the proposed law.

"It's certainly a strange way to increase turnout, to expand the electorate," Pildes commented. "If that's the main motivation, you would think they would be working on measures to increase turnout from residents."

Short responded that the proposed law "does not break any new ground" and that "although increasing voter turnout is an area in which all Delaware municipalities need to improve, that is an entirely different conversation."

"There is no reason to think making this change would have any detrimental outcome on elections," he said. "To my knowledge, no critic of this proposal has cited any instance involving the 14 Delaware municipalities allowing artificial entities to vote in at least some city/town elections where this feature has produced skewed results."

Update 07/07/23, 2:54 a.m. ET: This article was updated to include comment from state Representative Danny Short.