Defending Individual Rights against Progressive Reform
By DAVID E. BERNSTEIN
THE UNIVERSITY OF CHICAGO PRESS
Copyright © 2011 David E. Bernstein
All right reserved.
The Rise of Liberty of Contract
Legal scholars across the political spectrum have long agreed that Lochner v. New York and other cases applying the liberty of contract doctrine to invalidate legislation were serious mistakes. This is hardly unusual. Many constitutional doctrines adopted by the Supreme Court have come and gone over the last two hundred–plus years. But the ferocity and tenacity of the liberty of contract doctrine's detractors is unique. For more than one hundred years, critics have argued that Lochner and its progeny did not involve ordinary constitutional errors, but were egregious examples of willful judicial malfeasance.
One common criticism is that the Court's use of the Fourteenth Amendment's Due Process Clause to protect substantive rights, including liberty of contract, was absurd as a matter of textual interpretation. John Hart Ely famously quipped that "substantive due process" is a contradiction in terms, akin to "green pastel redness." This line of attack has persisted even though it is anachronistic; the pre–New Deal Supreme Court's approach to interpreting the Due Process Clause did not recognize the modern categories of "substantive" and "procedural" due process.
The liberty of contract doctrine's academic foes have also asserted that it sprang ex nihilo out of Supreme Court justices' minds in the 1890s with the intent to favor the interests of big business and suppress the working class. The Lochner Court's justices are said to have been motivated by pernicious Social Darwinist ideology, and to have believed that "the strong could and should exploit the weak so that only the fittest survived."
The true story of the development of a substantive interpretation of the Due Process Clause, and of Supreme Court's subsequent adoption of the liberty of contract doctrine, is a far cry from this traditional morality tale of a malevolent Supreme Court serving as a handmaiden of large-scale capital. This chapter synthesizes and elaborates on existing revisionist scholarship. I draw two major conclusions. First, the idea that the guarantee of "due process of law" regulates the substance of legislation as well as judicial procedure arose from the long-standing Anglo-American principle that the government has inherently limited powers and the individual citizen has inherent rights. Second, the liberty of contract doctrine, while controversial even in its own heyday, evolved from long-standing American intellectual traditions that held that the government had no authority to enforce arbitrary "class legislation" or to violate the fundamental natural rights of the American people.
THE DEVELOPMENT OF A SUBSTANTIVE INTERPRETATION OF "DUE PROCESS OF LAW"
Before the Civil War
In the early nineteenth century, leading American legal theorists recognized that the united States federal government was a government of limited and enumerated powers, restrained by a written Constitution. Some jurists also thought that the exercise of federal power was limited by unenumerated first principles. Unlike the federal government, which could exercise only the powers delegated to it under the united States Constitution, states were thought to have inherent sovereign powers inherited from the British Parliament. State legislatures' power, therefore, could be restrained only by express federal or state constitutional provisions that limited their authority. Litigants opposing exercises of state power naturally turned to these provisions to support their positions.
Many state constitutions banned their governments from taking people's liberty or property without "due process of law," or except according to the "law of the land"—concepts that dated back to the Magna Carta. These concepts became associated with the idea that legislatures acted beyond their inherent powers when they passed laws that amounted to arbitrary deprivations of liberty or property rights.
Starting in the 1830s, a series of state court judicial opinions established that certain types of acts passed by legislatures could not be valid legislation, which naturally led to the conclusion that enforcing them could not be due process of law. Courts asserted that inherently invalid acts included legislation that purported to exercise judicial powers, such as by granting new trials; legislation that applied partially or unequally; and legislation that took or taxed private property for private purposes.
By the late 1850s, significant judicial authority held that enforcing the principle of due process of law required judges to carefully scrutinize the purpose of legislation and the means employed to achieve legislative ends. The development of this broad conception of due process of law was uneven, accepted explicitly by only some American jurisdictions, and applied mainly to the protection of vested property rights. Nevertheless, by 1857 numerous state constitutional law decisions held that due process or analogous constitutional provisions forbade legislatures from unjustly interfering with property rights.
Chief Justice Roger Taney's invocation of due process of law to protect substantive property rights in his infamous 1857 Supreme Court opinion in Scott v. Sandford thus had a considerable pedigree. Taney argued that the Fifth Amendment's Due Process Clause barred the federal government from banning slavery in the territories, because such a ban amounted to taking without due process of law the property of Southern slaveowners who traveled to those territories.
Robert Bork has claimed that Scott marked "the first appearance in American constitutional law of the concept of [what later came to be known as] 'substantive due process.'" As we have seen, however, the role of due process in protecting substantive property rights was widely accepted before Scott. In addition to the state court opinions referenced above, five years before Scott the Supreme Court had stated, albeit in nonbinding dicta, that Congress would violate the Due Process Clause if it enacted legislation that deprived an individual of lawfully acquired intellectual property.
None of Taney's Supreme Court colleagues disputed the idea that the Due Process Clause protected substantive property rights. This notion was also widely accepted by Scott's Republican critics. Abraham Lincoln, like Scott dissenting justice John McLean, argued that the problem with Taney's opinion was not its protection of property rights, but Taney's erroneous belief that for federal constitutional purposes slaves were mere property, like hogs or horses.
More generally, the Republicans and their ideological predecessors consistently relied on a substantive interpretation of "due process of law" to promote antislavery ends. In 1843 the abolitionist Liberty Party adopted a platform resolution at its national convention stating that the Due Process Clause incorporated the Declaration of Independence's statement that all men are created equal and are endowed by their creator with inalienable rights. Future Supreme Court Justice Salmon Chase told an 1845 antislavery convention that the Due Process Clause prohibited the federal government from sanctioning slavery, and from allowing it in any place of exclusive federal jurisdiction.
The 1848 platform of the Free Soil Party—a precursor to the Republican Party that absorbed many Liberty Party members—suggested that any federal recognition of slavery violated the Due Process Clause. The 1856 and 1860 Republican platforms also explicitly argued that permitting slavery in the federal territories violated the Due Process Clause because slavery took slaves' liberty without due process of law.
After the Civil War
Before the Civil war, states were thought to have inherent sovereign or "police" powers. With the important exception of a clause prohibiting the impairment of contract, these powers were largely untouched by the federal Constitution. State constitutions' due process or law of the land clauses limited the exercise of the states' police powers only in some jurisdictions, and usually only with regard to vested property rights.
The Civil war, however, undermined the idea of autonomous, sovereign states in favor of the view that states' powers were inherently limited. Thomas Cooley's influential 1868 treatise Constitutional Limitations asserted that "there are on all sides definite limitations which circumscribe the legislative authority, independent of the specific restrictions which the people impose by their State constitutions." Courts could set aside a state law as invalid even if the written constitution did not contain "some specific inhibition which has been disregarded, or some express command which has been disobeyed." In 1875, the united States Supreme Court declared that "there are limitations on [government] power which grow out of the essential nature of all free governments."
Even strong advocates of judicial restraint acknowledged the existence of an unwritten American constitution that bound state legislators. For example, prominent attorney Richard McMurtie conceded "that there is an unwritten Constitution here quite as much as there is in England." However, McMurtie claimed that courts had no power to enforce the unwritten American constitution against the legislature, just as English courts had no power to enforce the unwritten English constitution against Parliament.
Other commentators insisted that the American constitutional system's genius, and its improvement over the English system, was precisely that it allowed courts to review the constitutionality of legislation. A. v. Dicey, a leading English commentator on constitutionalism, wrote that judicial review was "the only adequate safeguard which has hitherto been invented against unconstitutional legislation." American legal scholar and treatise author Christopher Tiedeman urged courts to seize upon "general declarations of rights as an authority for them to lay their interdict upon all legislative acts which interfere with the individual's natural rights."
If judges did indeed have the power to enforce the "unwritten constitution" against the states, the source of that power needed to be identified. Soon after the Civil war, the Supreme Court began invalidating state legislation that went beyond what the justices saw as the states' legitimate powers. The Court did this in "diversity" cases, in which the plaintiff and the defendant were citizens of different states. The Court's ruling in Swift v. Tyson obligated it to apply general principles of constitutional law in diversity cases involving constitutional claims. Relying on such principles—and not on any specific provisions of the federal or state constitutions—the Court found that taxation must be geared toward public, not private, purposes; that property may not be taken without just compensation; and that rate regulation of public utilities must be reasonable.
Litigants who sought to have the Supreme Court enforce limitations on the states' regulatory authority in non-diversity situations naturally looked to the Fourteenth Amendment. The amendment, enacted in 1868, denied states the power to abridge the "privileges or immunities" of American citizens. The Privileges or Immunities Clause, however, was eviscerated by a 5–4 Supreme Court majority in the Slaughter-House Cases in 1873.
Slaughter-House involved a challenge to a state law that dealt with public health hazards attendant to the slaughtering industry by granting a state-chartered monopoly to a single downstream slaughterhouse. Independent butchers could work there if they paid a license fee to the slaughterhouse owner. The butchers, who resented being forced to work in a location dictated by the government and were buoyed by the knowledge of state court decisions that had invalidated similar slaughterhouse monopolies, claimed that the new law violated their Fourteenth Amendment rights. Justice Samuel Miller, writing for the Slaughter-House majority, concluded that the Privileges or Immunities Clause protected only an extremely narrow and largely inconsequential category of federal rights. These rights did not include the plaintiffs' asserted right to practice their occupation free from a government-sponsored monopoly.
After Slaughter-House, litigants, legal scholars, and judges seeking to limit the scope of state power turned to the Fourteenth Amendment's Due Process Clause. The clause, which parallels the Fifth Amendment's federal Due Process Clause, forbids states from depriving any person of life, liberty, or property without due process of law. In Slaughter-House, Justice Miller offhandedly dismissed the suggestion that the Due Process Clause spoke to the issue at hand. Miller declared, "under no construction of that provision [due process of law] that we have ever seen, or any that we deem admissible," could the law in question be declared void as a deprivation of property without due process of law.
Scholars have often assumed that Miller meant to preclude future reliance on the Due Process Clause to protect substantive rights. But leading jurists, including Justice Stephen Field, contended that the issue of due process and its relationship to the states' inherent police powers had not been properly presented or considered in Slaughter-House. Miller may have meant only that the Due Process Clause does not reach valid police power measures, like a law regulating slaughterhouses to combat the spread of disease.
The narrower interpretation of Miller's language is supported by his opinion four years later in Davidson v. New Orleans. Davidson is best known for Miller's complaint that the Due Process Clause "is looked upon as a means of bringing to the test of the decision of this Court the abstract opinions of every unsuccessful litigant in a state court of the justice of the decision against him, and of the merits of the legislation on which such a decision may be founded." But Miller also acknowledged that the Due Process Clause prohibits the invasion of private rights by the states and of vested property rights in particular—a position inconsistent with the notion that the Due Process Clause never protects substantive rights. This and other opinions authored by Miller suggest that he believed courts could invalidate state legislation on due process grounds, at least in exceptional circumstances.
Meanwhile, advocates of an expansive scope for the concept of "due process of law" argued that courts had the power and obligation to enforce all fundamental individual rights deemed essential to American liberty, including economic rights. For example, in 1878 the New York Court of Appeals wrote that the state constitution's due process clause was the "main guaranty of private rights against unjust legislation," including unjust regulations of property, labor, and taxation. This guarantee, the court continued, should not be "construed in any narrow or technical sense."
In 1884, in Hurtado v. California, the Supreme Court tied the concept of due process of law to the common law tradition of recognizing inherent limits on government authority. While in England the practical barrier "against legislative tyranny was the power of a free public opinion represented by the commons," in the united States "written constitutions were deemed essential to protect the rights and liberties of the people against the encroachments of power delegated to their governments."
Therefore, while in England the judiciary had no authority to constrain Parliament, and could only apply due process ("law of the land") provisions of the Magna Carta against "executive usurpation and tyranny," in the united States the due process clauses "have become also bulwarks against arbitrary legislation." They guarantee not just "particular forms of procedure, but the very substance of individual rights to life, liberty and property." "Not every act, legislative in form, is law," the Court continued. In particular, the exercise of "arbitrary power," including by a legislature, "is not law." A few years later, the Court reiterated that some acts of legislation are not a "legitimate exertion" of the police power.
Excerpted from REHABILITATING LOCHNER by DAVID E. BERNSTEIN Copyright © 2011 by David E. Bernstein. Excerpted by permission of THE UNIVERSITY OF CHICAGO PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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