No CrossRef data available.
Published online by Cambridge University Press: 05 August 2009
Recent cases suggest the Supreme Court may be moving toward a new era of open-ended judicial oversight of economic regulation. Viewed in strictly legal terms today's efforts to infuse economic individualism into the Constitution take a form different from that popularized in the laissez-faire era at the turn-of-the-century. The takings clause of the Fifth Amendment rather than the due process clause of the Fourteenth appears to be the favored vehicle. But, in the past and in the present, those who have insisted that the Constitution creates a significant check on the government's ability to regulate private economic activity consistently have relied upon two interrelated ideas to support their view. First they take the Framers' interest in protecting property to be an endorsement of a free market economic system. Secondly they argue that, because the very idea of liberty in the American tradition has included property, their version of individualism is reflected in constitutional jurisprudence from the time of John Marshall to at least the 1930s. This article explores the extent to which these two factors actually support a theory that the Constitution creates a broad and open-ended prohibition or limitation on government involvement in economic matters. Further, it will suggest that the relationship between liberty and property in the American constitutional tradition must take into consideration a third factor—the public ingredient of private property.
1. Goldwin, Robert A. and Schambra, William A, eds.How Capitalistic Is the Constitution (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1982).Google Scholar
2. Lochner v. New York, 198 U.S. 45, 75–76 (1905), Holmes, dissenting.
3. West Coast Hotel v. Parrish, 300 U.S. 379 (1937).
4. United States v. Caroline Products, Co., 304 U.S. 144 (1938).
5. Funston, Richard, “The Double Standard of Constitutional Protection in the Era of the Welfare State,” Political Science Quarterly 90 (Summer 1975): 261–92CrossRefGoogle Scholar, demonstrated that the double standard would frustrate some liberal policy if applied to cases involving the “new property” in welfare and entitlements. Also see, Shapiro, Martin M., “The Constitution and Economic Rights,” in Essays on the Constitution of the United States, ed. Harmon, M. Judd (Port Washington, NY: Kennikat Press, 1978), pp. 74–98Google Scholar; Shapiro, Martin M., “The Supreme Court's Return to Economic Regulation,” in Studies in American Political Development, ed. Orren, Karen and Skowronek, Stephen (New Haven: Yale University Press, 1986): 1:91–141.Google Scholar
6. Bruchey, Stuart, “The Impact of Concern for the Security of Property Rights on the Legal System of the Early American Republic,” Wisconsin Law Review (1980): 1136.Google Scholar
7. Nedelsky, Jennifer, Private Property and the Limits of American Constitutionalism: The Madisonian Framework and Its Legacy (Chicago: University of Chicago Press, 1990).Google Scholar
8. The term “radical individualism” is intended here to mean extreme individualism. One source of recent expressions of these views is Dorn, James A. and Manne, Henry G., eds. Economic Liberties and the Judiciary (Fairfax, VA: George Mason University Press, 1987).Google Scholar Others, of course, may argue that these characteristics are not out of the mainstream. See, Crovitz, L. Gordon, “Property and Liberty: Clarence Thomas and the Coming Conservative-Libertarian Split on the Supreme Court,” Presidential Studies Quarterly 22 (Fall 1992): 713.Google Scholar
9. The most imaginative and convincing probably being Richard Epstein's theory which is based on the “Takings” clause of the Fifth Amendment rather than the “due process” clause of the Fourteenth. Epstein, Richard A., Takings: Private Property and the Power of Eminent Domain (Cambridge, MA: Harvard University Press, 1985).Google Scholar See, also, Siegan, Bernard H., Economic Liberties and the Constitution (Chicago: University of Chicago Press, 1980).Google Scholar For a recent critique of both see, Schwartz, Bernard, The New Right and the Constitution (Boston: Northeastern University Press, 1990), pp. 73–136.Google Scholar
10. Macedo, Stephen, “Resurrecting Economic Rights: The Doctrine of Economic Due Process Reconsidered,” Harvard Law Review 103 (1990): 1368Google Scholar; Bernard H. Siegan, “The Constitution and the Protection of Capitalism,” in Goldwin, and Schambra, , How Capitalistic Is the Constitution, pp. 106-26.Google Scholar
11. Epstein, Takings; Epstein also explored a theory that the contract clause placed a general limit on the power of government. Epstein, Richard A., “Toward a Revitalization of the Contract Clause,” Chicago Law Review 51 (1984): 703–51.CrossRefGoogle Scholar
12. Merrill, Thomas W., “Public Contracts, Private Contracts, and the Transformation of the Constitutional Order,” Case Western Reserve Law Review 37 (1987): 627–29.Google Scholar
13. Commager, Henry Steele, ed., Documents of American History 7th edition (New York: Appleton-Century-Crofts, 1963)Google Scholar, emphasis added. The Ordinance for the Northwest Territory was passed by Congress on 13 July 1787.
14. Kmiec, Douglas W. and Mcginnis, John O., “The Contract Clause: A Return to the Original Understanding,” Hastings Constitutional Law Quarterly 14 (Spring 1987): 534Google Scholar; Hunting, Warren B., The Obligation of Contracts Clause of the United State Constitution (reprint 1919, Westport, CT: Greenwood Press, 1976), pp. 119–20.Google Scholar
15. Mendelson, Wallace, Supreme Court Statecraft (Ames, IA: Iowa State University Press, 1985) p. 347Google Scholar. There were few objections to the clause, and none to the language itself at the Convention. Wright, Benjamin Fletcher, The Contract Clause of the Constitution (Cambridge, MA: Harvard University Press, 1938), p. 8Google Scholar; Mcdonald, Forrest, Novus Ordo Seclorum (Lawrence, KS: University Press of Kansas, 1985) p. 271Google Scholar; Farrand, Max, ed., Records of the Federal Convention of 1787, 4 vols. (New Haven, CT: Yale University Press, 1937), 2: 439.Google Scholar
16. Wright, , Contract Clause of the Constitution, p. 9Google Scholar; Farrand, , Records of the Federal Convention, 2: 375–76.Google Scholar
17. Farrand, , Records of the Federal Convention, 2: 619, 636Google Scholar; Wright, , Contract Clause of the Constitution, p. 9.Google Scholar
18. Mcdonald, , Novus Ordo Seclorum, p. 272Google Scholar, Members of the committee were Morris, Madison, Johnson, King, and Hamilton.
19. Wright, , Contract Clause of the Constitution, p. 10.Google Scholar
20. Mcdonald, , Novus Ordo Seclorum, pp. 272–73Google Scholar; earlier writings usually guess James Wilson was the author of the changes. See, Wright, , Contract Clause of the Constitution, p. 11Google Scholar; Hunting, , Obligation of Contracts Clause, p.114Google Scholar, citing the arguments in Sturges v. Crouminshield, 17 U.S. (4 Wheat.) 122 (1819).
21. Mcconnell, Michael W., “Contracts Rights and Property Rights,” in Liberty, Property, & the Foundations of the American Constitution, ed. Paul, Ellen Frank and Dickman, Howard (Albany, NY: State University of New York Press, 1989), pp. 141–68.Google Scholar This also formed part of Daniel Webster's argument and Marshall's dissent in Ogden v. Sanders, 25 U.S. (12 Wheat) 212 (1827).
22. Kmiec, and Mcginnis, , “The Contract Clause: A Return to the Original Understanding,” pp. 533–34.Google Scholar
23. Epstein, , “Towards Revitalization of the Contract Clause,” pp. 710, 715.Google Scholar
24. Bruchey, , “The Impact of Concern for the Security of Property Rights,” p. 1145Google Scholar, reaches the opposite conclusion, that lack of debate reflects a post-Revolution antipathy to state legislation.
25. Palmer, Robert C., “Obligations of Contracts: Intent and Distortion, ” Case Western. Reserve Law Review 37 (1987): 672–73Google Scholar arguing that the contract clause was not intended to protect individual rights at all but was motivated by considerations of federalism; see also, Mcconnell, , “Contract Rights and Property Rights,” pp. 152–53Google Scholar explaining that the “Hamiltonian View” as the contract clause as part of a plan to prevent states from interfering with interstate commerce.
26. Wright, , Contract Clause of the Constitution, p. 9Google Scholar; Farrand, , Records of the Federal Convention, 2: 619–36.Google Scholar
27. See, Hall, Kermit L., The Magic Mirror: Law in American History (New York: Oxford University Press, 1989) pp. 40–41, 94–96.Google Scholar
28. See, Mcdonald, , Novus Ordo Seclorum, pp. 97–142.Google Scholar
29. The Federalist Papers, No. 44, in The Federalist, ed. Cooke, Jacob E. (Middletow CT: Wesleyan University Press, 1961), p. 301.Google Scholar
30. Mcdonald, , Novus Ordo Seclorum, p. 100Google Scholar; Mendelson, , Supreme Court Statecraft, p. 338Google Scholar, citing Adams, C. F., The Works of John Adams (1851), 6: 280.Google Scholar
31. Matson, Cathy D. and Onuf, Peter S., A Union of Interests: Political and Economic Thought in Revolutionary America (Lawrence, KS: University Press of Kansas, 1990), p. 100.Google Scholar
32. This is not to say that the Framer's concern for property is uninteresting. See, for example, Nedelsky, Private Property and the Limits of American Constitutionalism, who discusses the long term impact of this concern on thinking about rights in general.
33. Ogden v. Sounders, 25 U.S. (12 Wheat.) 213 (1827).
34. Sturges v. Crouminshield, 17 U.S. (4 Wheat.) 122 (1819).
35. “By classing bills of attainder, ex post facto laws and laws impairing the obligations of contract together, the general intent becomes very apparent; it is a general provision against arbitrary and tyrannical legislation over existing rights whether of person or property ” Ogden, at 286 (Johnson) emphasis added; see also, Washington's opinion atp. 266; Daniel Webster had argued, and Marshall agreed, that the contract clause was connected to the bankruptcy and currency provisions found at the beginning of Article I, sec. 10, see, Ibid., pp. 251–54, 335,336.
36. Ibid., pp. 282–91 (Johnson); p. 261 (Washington).
37. Ibid., pp. 259–61 (Washington); pp. 282–84 (Johnson); pp. 299–302 (Thompson).
38. Ibid., p. 345 (Marshall dissenting).
39. Ibid., pp. 322–27 (Trimble).
40. Ibid., pp. 334, 337, 354 (Marshall dissenting).
41. Ibid., pp. 347–54 (Marshall dissenting).
42. Ibid., pp. 336–38.(Marshall dissenting).
43. Epstein, , “Towards Revitalization of the Contract Clause,” p. 733.Google Scholar
44. Ibid., pp. 355–56.
45. Wright, , Contract Clause of the Constitution, p. 257.Google Scholar
46. Nedelsky, , Private Property and the Limits of American Constitutionalism, p. 8.Google Scholar
47. Ibid., p. 152.
48. Lamar, Lucius Q., A Compilation of the Laws of the State of Georgia, 1810–1819 (Augusta, GA: T. S. Hannon, 1821), pp. 302–303.Google Scholar
49. Virginia, , A Collection of all such Acts of the General Assembly of Virginia of Public and Permanent Nature as are Now In Force, 2nd ed. (Richmond, VA: Samuel Pleasants, Printer, 1814), pp. 356–83.Google Scholar
50. Ibid., p. 136.
51. Ibid., pp. 40,277–80.
52. Fletcher v. Peck, 10 U.S.(6 Cranch) 87 (1810).
53. Wright, , Contract Clause of the Constitution, p. 28Google Scholar: “[Marshall] was able to make the contract clause a mighty instrument for the protection of the rights of private property.”
54. Two thorough studies of the development of nineteenth-century contract law jurisprudence are: Benjamin Wright's 1938 book, The Contract Clause and the Constitution; and Siegel, Stephen A., “Understanding the Nineteenth Century Contract Clause: The Role of the Property-Privilege Distinction and ‘Takings’ Clause Jurisprudence,” Southern California Law Review 60 (1986): 1–108.Google Scholar
55. Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819).
56. Providence Bank v. Billings, 29 U.S. (4 Pet.) 514 (1830).
57. Ibid., p. 560.
58. Ibid., p. 561.
59. Ibid., p. 563.
60. Charles River Bridge v Warren Bridge, 36 U.S. (11 Pet) 420 (1837); for differing views about the significance of the case compare White, G. Edward, The Marshall Court and Cultural Change 1815–1835 (New York: McMillian, 1988) pp. 669–73Google Scholar, with Mendelson, , Supreme Court Statecraft, pp. 34–47.Google Scholar
61. Charles River Bridge, p. 544.
62. Kutler, Stanley L., Privilege and Creative Destruction: the Charles River Bridge Case (Philadelphia: J. B. Lippincott Company, 1971), p.5.Google Scholar
63. See, Ibid., p. 93. “Taney cast his lot with the new entrepreneurs, the present risk takers rather than past risk takers as the preferred agents of material progress.”
64. Wright, , Contract Clause of the Constitution, p. 250.Google Scholar
65. Allgeyer v. Louisiana, 165 U.S. 578 (1897), represents the first instance of the United States Supreme Court basing a decision on this theory. The idea was popularized much earlier in state court cases and legal writing, however.
66. Slaughter-House Cases, 83 U.S. (16 Wall.) 36,88,110 (1872), Field, dissenting; In Re Jacobs, 98 N.Y. 98,107 (1885); Allgeyer v. Louisiana, 165 U.S. 578, 589 (1897); Chicago, Milwaukee & St. Paul Railway Co. v. Minnesota, 134 U.S. 418, 452 (1890), argument for the plaintiff in error.
67. Munn v. Illinois, 94 U.S. (4 Otto.) 113 (1877).
68. Ibid., pp. 125–26,130.
69. See, In re Jacobs, 98 N.Y. at 107; Lochner v. New York, 198 U.S. 45,53 (1905).
70. Hovenkamp, Herbert, “The Political Economy of Substantive Due Process,” Stanford Law Review 40 (1988): 395.CrossRefGoogle Scholar
71. Macedo, , “Resurrecting Economic Rights,” p. 1369Google Scholar; Siegan, Bernard H.. “Rehabilitating Lochner,” San Diego Law Review 22 (1985): 453–97.Google Scholar
72. Wright, , Contract Clause of the Constitution, p. 258Google Scholar. Wright actually refers to displacement by due process of law.
73. Mccurdy, Charles W., “Justice Field and the Jurisprudence of Government-Business Relations: Some Parameters of Laissez-Faire Constitutionalism, 1863–1897,” Journal of American History 61 (1975): 970–1005CrossRefGoogle Scholar; Benedict, Michael Les, “Laissez-Faire and Liberty: A Re-Evaluation of the Meaning and Origins Of Laissez-Faire Constitutionalism,” Law and History Review 3 (Fall 1985): 293–331.CrossRefGoogle Scholar
74. Benedict, , “Laissez-Faire and Liberty,” p. 298.Google Scholar
75. Siegel, , “Understanding the Nineteenth Century Contract Clause,” pp. 76, 103–108Google Scholar; Hovenkamp, Herbert, Enterprise and American Law 1836–1937 (Cambridge, MA:Harvard University Press, 1991), pp. 108–109.CrossRefGoogle Scholar
76. Nedelsky, , Private Property and the Limits of American Constitutionalism, pp. 5, 30Google Scholar, finds that Madison, at least, had a sophisticated understanding of property.
77. Epstein, , Takings, pp. 90–92.Google Scholar
78. Ibid., p. 62. Brigham, John, Property and the Politics of Entitlement (Philadelphia: Temple University Press, 1990)Google Scholar, seems to have turned Epstein's theory on its head. Defining property in even broader terms, he argues that the takings clause would protect statutory entitlements such as welfare and government employment.
79. Munn v. Illinois, p. 140, Field, dissenting.
80. Epstein, , Takings, pp. 112–13.Google Scholar
81. Ibid., p. 128.
82. Ibid., p. 22, citing Blackstone, William, Commentaries, 2: 2.Google Scholar
83. Siegan, , “The Constitution and the Protection of Capitalism,” p. 109Google Scholar, citing Blackstone, , Commentaries, 1; 14,135,140.Google Scholar
84. Hodel v. Irving, 481 U.S. 704 (1987); First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987); Nollan v. California Coastal Commission 483 U.S. 825 (1987).
85. Lucas v. South Carolina Coastal Council, — U.S. —, 112 S. Ct. 2886 (1992).
86. Ibid., p. 2893, citing Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,415 (1922), Holmes, dissenting.
87. Ibid., pp. 2894–95, 2900.
88. Ibid., p. 2903, Kennedy, concurring; see also, p. 2894.
89. Ibid., p. 2908, Blackmun, dissenting.
90. Ibid., p. 2925, Stevens, dissenting.
91. Ibid., p. 2906, Blackmun, dissenting.
92. Ibid., pp. 2924–25, Stevens, dissenting.
93. Ibid., p. 2900.
94. Ibid., p. 2895 note 8.