In the News, On the Bar: Starbase, Texas and the Company Town Doctrine

From time to time, real-world headlines offer a natural opportunity to revisit foundational legal principles. This series draws on those moments to help reinforce concepts commonly tested on the bar exam—always with care and respect for the people and circumstances involved.

If you're a bar exam taker and you've been doomscrolling the news, you may have seen headlines like:

🗞️ "SpaceX’s remote site on the Gulf coast will become the next city in Texas" (CNN)

🗞️ "Elon Musk's Starbase in Texas will officially become a city" (BBC)

🗞️ "Elon Musk’s company town: SpaceX employees vote to create 'Starbase'" (The Guardian)

While this story is certainly buzzy, it's also bar-worthy. That's because "company town" is more than a news headline—it's a legal term of art that has shown up on bar exams, especially in First Amendment and Fourteenth Amendment contexts.

A Quick Review: The Company Town Doctrine

The key case is Marsh v. Alabama (1946). In Marsh, a Jehovah's Witness was arrested for distributing religious literature on the sidewalk of a town entirely owned by a private corporation. The Supreme Court ruled that because the town functioned like a municipality, the company could not restrict her First Amendment rights. The takeaway? When a private actor performs traditional government functions, its actions can be considered state action.

Translation: If it walks like a government and talks like a government, constitutional protections may apply.

What’s Happening in Starbase

Starbase is now a legally incorporated municipality—and a modern-day company town. It’s no longer just branding or a nickname.

On May 3, 2025, Starbase, Texas was officially incorporated as a city under Texas law. The vote passed with 212 in favor and only 6 against. Nearly all of Starbase’s residents are SpaceX employees or family members, and many of the newly elected officials are company executives.

That means:

✅ Starbase is now a state actor under constitutional law.

✅ The First and Fourteenth Amendments apply to its official actions.

✅ If the city tries to suppress speech or limit access based on content or viewpoint, constitutional scrutiny applies.

Bar Exam Takeaway

Would this appear verbatim on the bar? Probably not. But the Marsh v. Alabama doctrine could.

If the bar exam gives you a scenario involving a private company running a town—issuing fines, regulating speech, or acting like a local government—flag it. Ask whether the private entity is performing a traditional public function or is so entwined with government responsibilities that constitutional protections kick in.

And if a town named Starbase ever shows up on your bar exam? You'll know exactly what to do.