Study Notes on Due Process and Economic Powers

THE DEATH CHAMBER

Lesson 6: Due Process & Economic Powers

Early Considerations of the Founders

  • Article I, Section 10:

    • Prohibitions placed on states include:

    • No state shall enter into any treaty, alliance, or confederation.

    • No state shall grant letters of marque and reprisal.

    • No state shall coin money.

    • No state shall emit bills of credit.

    • No state shall make anything but gold and silver coins a tender in payment of debts.

    • No state shall pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts.

    • No state shall grant any title of nobility.

  • Focus of the Framers:

    • The Framers insulated matters of currency, credit, and commerce from state government control.

    • They were concerned about state policies that might threaten commerce and economic wellbeing.

Important Legal Concepts

  • Contract Clause (Art. I, Sec. 10):

    • Prohibits states from interfering in contract obligations.

  • Procedural Due Process:

    • Involves legal procedures that ensure fair treatment of individuals.

  • Substantive Due Process:

    • Refers to specific rights or liberties that exist within the concept of due process.

  • Economic Substantive Due Process:

    • A subclass of substantive due process that specifically deals with economic and corporate liberties.

  • Main Focus of the Lesson:

    • An in-depth exploration of these concepts and their applications in legal precedents.

The Slaughterhouse Cases

Facts & Case History

  • Background:

    • In 1896, Louisiana enacted a law that regulated slaughterhouses in New Orleans.

    • The law created a monopoly for a single company in the slaughterhouse industry, requiring all other operators to use its facilities for a fee.

    • The Butcher’s Benevolent Association, comprising small slaughterhouse operators and butchers, sued but lost in state court on three separate occasions.

    • These cases were consolidated by the Supreme Court into what became known as the Slaughterhouse Cases.

The Butcher’s Arguments

  • Claims Made:

    • The Louisiana act violated several constitutional amendments:

    • 13th Amendment: Prohibition of slavery and involuntary servitude.

    • Privileges and Immunities Clause of the 14th Amendment: Protects the rights of citizens against state infringement.

    • Due Process Clause of the 14th Amendment: Guarantees legal rights.

    • Equal Protection Clause of the 14th Amendment: Mandates equal protection under the laws.

  • Court’s Ruling:

    • The amendments were interpreted as providing protections for former slaves against racially discriminatory state and local legislation, but not for butchers.

    • The rights affected were deemed related to national citizenship, thus preserving state regulatory authority in this matter.

    • The Louisiana act was declared constitutional with the Butcher’s arguments deemed invalid.

The Court’s Rationale

  • Interpretation of the 13th Amendment:

    • The amendment was designed to declare freedom for American slaves and is not applicable to issues of private property.

  • Interpretation of the 14th Amendment:

    • The Privileges and Immunities Clause cannot be uniformly applied across U.S. and state citizenships.

    • Application against state regulatory legislation was ruled out.

    • If applied broadly, it could result in unlimited federal authority over state regulation.

  • Constitutional Implications:

    • The act in question did not deprive individuals of property.

Procedural Due Process vs. Substantive Due Process

  • Procedural Due Process:

    • Mandates that protections must be provided before the law is enforced.

  • Equal Protection Clause:

    • Supreme Court limited applicability strictly to issues concerning race.

Freedom of Contract

Allgeyer v. Louisiana

  • Case Summary:

    • The Supreme Court invalidated state legislation under substantive due process grounds.

    • A Louisiana insurance regulation was struck down due to freedom of contract.

  • Definition of Freedom of Contract:

    • A liberty allowing individuals the freedom to enter into contracts, especially concerning employment.

  • Source of Freedom of Contract:

    • Rooted in the 14th Amendment.

  • Interpretation of Liberty:

    • The “liberty” mentioned in the 14th Amendment encompasses not only freedom from physical restraint but also the right to use one’s faculties freely in lawful ways, choose employment, and enter into appropriate contracts.

Lochner v. New York

Facts

  • Background:

    • New York enacted a law limiting bakery employees to a maximum of 10 hours a day and 60 hours a week.

    • Joseph Lochner was fined $50 for violating this law.

Court’s Ruling

  • Outcome:

    • Lochner's conviction was overturned, affirming the rights of employers and employees to negotiate employment contracts freely.

Court’s Rationale

  • Extent of Police Powers:

    • The court ruled that police powers had indeed overstepped constitutional boundaries.

    • The New York act could not sufficiently justify itself as a health regulation meant to protect bakery employees.

Other Miscellaneous Cases

  • Santa Clara County v. Southern Pacific Railroad:

    • In this ruling, the Supreme Court declared that corporations are considered “persons” within the context of the 14th Amendment.

  • Ferguson v. Skrupa:

    • Upheld a Kansas statute permitting only lawyers to conduct debt adjustment, asserting that legislative choices should reside with state legislatures rather than the courts.

    • This aligns with the Judicial Restraint approach to judicial decision-making.

  • Implications for Substantive Due Process:

    • The decline of substantive due process in economic matters paradoxically allowed for expanded legislative power for both state and federal governments.