Fourteenth Amendment, Section 1:
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
Because of the nature of the business they carry on and the public’s interest in it, public utilities and common carriers are subject to state regulation, whether exerted directly by legislatures or under authority delegated to administrative bodies. 1 But because the property of these entities remains under the full protection of the Constitution, it follows that due process is violated when the state regulates in a manner that infringes the right of ownership in what the Court considers to be an
unreasonable way. 2 Thus, when a street railway company lost its franchise, the city could not simply take possession of its equipment, 3 although it could subject the company to the alternative of accepting an inadequate price for its property or of ceasing operations and removing its property from the streets. 4 Likewise, a city wanting to establish a lighting system of its own may not remove, without compensation, the fixtures of a lighting company already occupying the streets under a franchise, 5 although a city may compete with a company that has no exclusive charter. 6 However, a municipal ordinance that demanded, as a condition for placing poles and conduits in city streets, that a telegraph company carry the city’s wires free of charge, and that required that conduits be moved at company expense, was constitutional. 7
And, the fact that a state, by mere legislative or administrative fiat, cannot convert a private carrier into a common carrier will not protect a foreign corporation that has elected to enter a state that requires that it operate its local private pipe line as a common carrier. Such a foreign corporation is viewed as having waived its constitutional right to be secure against the imposition of conditions that amount to a taking of property without due process of law. 8