Chapter III: Individual Rights.
Starts out with Badnarik being very clear that he is a natural rights proponent as opposed to a legal positivist.
Claim: Unlimited right to contract.
He starts out citing a passage from a United States Supreme Court case.
Hale v. Henkel, 201 U.S. 43. (1905)
The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the state or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to criminate him. He owes no such duty to the state, since he receives nothing therefrom, beyond the protection of his life and property. His rights are such as existed by the law of the land long antecedent to the organization of the state... He owes nothing to the public so long as he does not trespass upon their rights.
This passage is used as evidence for an unlimited right to contract. Badnarik then claims that this means you can wind up being tricked as but still bound. This will become important later when he gets into his “Sovereign Citizen” material.
More importantly, Badnarik is just wrong about his claim. First, as the
Hale case is about the fifth amendment right to remain silent, and does not address any issue about the nature of the right to contract, the “absolute right to contract” line is dicta. I’ll illustrate this below after addressing the second problem, that there is no unlimited right to contract.
The Supreme Court has made it clear there is no unlimited right to contract in cases before and after
Hale.
See Holden v. Hardy, 169 U.S. 366 (1898) (Holding state laws limiting employee ability to contract constitutional because “This right of contract, however, is itself subject to certain limitations which the state may lawfully impose in the exercise of its police powers. While this power is inherent in all governments, it has doubtless been greatly expanded in its application during the past century, owing to an enormous increase in the number of occupations which are dangerous or so far detrimental to the health of employés as to demand *392 special precautions for their well-being and protection, or the safety of adjacent property.”
See also West Coast Hotel Co.v. Parrish, 300 U.S. 379 (1937) (Affirming
Holden v. Hardy as good law.)
We take from this that the very source Badnarik cites to prove the existence of an unlimited right has been very, very clear that there is no unlimited right, that the state can in fact regulate that right within certain bounds. One example is regulation of an employment contract to protect the health of a worker. This is part of a bigger concept known as a
a contract of adhesion. This doctrine allows a court to invalidate a contract where the parties “have such unequal bargaining positions that little real negotiation takes place.”
Back to the first point, that Badnarik is misusing the caselaw. One basic principle of analyzing a court decision is that the decision is only useful precedent when the court is addressing the issue put before it. If the court is to decide a particular issue regarding the Fifth Amendment right against self-incrimination, any language not addressing that particular right has no value as precedent. Such language is considered
obiter dictum, usually refered to as “dicta.” This is a Latin term meaning “said by the way.” This has no force in law as a court’s jurisdiction is limited to deciding issues placed before it.
This concept is important when dealing with crank legal claims, as a high percentage of the caselaw cited will be dicta. Most of these arguments use the simple technique of lifting passages out of context to prove a point. Often this is not a product of malicious deceit, rather that the author simply does not understand the concept. It is also a very common feature of “jailhouse lawyer” arguments.
The context of the passage Badnarik cites from
Hale does not concern contract. This part of the decision is deciding the application of the right to remain silent. Here is the larger passage, with Badnarik’s selection in bold:
If, whenever an officer or employee of a corporation were summoned before a grand jury as a witness he could refuse to produce the books and documents of such corporation, upon the ground that they would incriminate the corporation itself, it would result in the failure of a large number of cases where the illegal combination was determinable only upon the examination of such papers. Conceding that the witness was an officer of the corporation under investigation, and that he was entitled to assert the rights of corporation with respect to the production of its books and papers, we are of the opinion that there is a clear distinction in this particular between an individual and a corporation, and that the latter has no right to refuse to submit its books and papers for an examination at the suit of the state. The individual may stand upon his constitutional rights as a citizen. He is entitled to carry on his private business in his own way. His power to contract is unlimited. He owes no duty to the state or to his neighbors to divulge his business, or to open his doors to an investigation, so far as it may tend to criminate him. He owes no such duty to the state, since he receives nothing therefrom, beyond the protection of his life and property. His rights are such as existed by the law of the land long antecedent to the organization of the state, and can only be taken from him by due process of law, and in accordance with the Constitution. Among his rights are a refusal to incriminate himself, and the immunity of himself and his property from arrest or seizure except under a warrant of the law. He owes nothing to the public so long as he does not trespass upon their rights.
Upon the other hand, the corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the state and the limitations of its charter.
It is clear from this that the “power to contract is unlimited” is a throwaway line, “said by the way,” and does not relate to the larger issue, that an individual has greater rights than a corporation. This also is a great illustration of the purpose behind the whole concept of dicta. Here, a justice, in passing, uses a phrase that is taken alone is not consistent with the overwhelming weight of precedent. If this were held to somehow overrule reams of caselaw in which a court was actually charged with deciding the issue in question, the whole idea of court precedent would devolve into chaos.
The larger point is that Badnarik's factual basis for his contract analysis is simply wrong. Down the road this will be one problem when he attempts to synthesize his larger concept of the “Sovereign Citizen.”