Lebron v. National Railroad Passenger Corporation

The cases of McCulloch v. Maryland (1819) and Osborn v. Bank of United States (1819) set the foundation for the constitutional status of federal government corporations. These two decisions established three clear principles concerning a federal government corporation. First, the federal government may charter private corporations. Second, the presence of a minority of directors appointed by the president, or federal ownership of a minority of shares, did not make an otherwise private corporation into an agency. Third, the federal government may give special advantages and powers, such as state and federal tax exemptions or control of the money supply, to a private federal corporation. No subsequent court decision has seriously questioned any of these general principles. The Supreme Court's decision in this case added a fourth principle to the list: A corporation created for a public purpose over which the government retains permanent control is a federal government corporation.