LAW
Con Law 2 Sal F16.docx

V who should be the decision maker vi impairment of

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v. Who should be the decision maker? VI. Impairment of Contracts a. “No State shall…pass any…law impairing the Obligation of Contracts.” Article 1, § 10 i. Historically: The Framers wanted to protect contracts because they were afraid that in times of recession and depression, state legislatures would adopt laws to protect debtors who were unable to pay. This was meant to stop such debt relief. ii. It is firmly established that the provision applies only if a state or local law interferes with existing contracts. Challenges to federal interference with contracts must be brought under the due process clause where they will receive the deferential rational basis review. b. Home Building & Loan Association v. Blaisdell , 1934 i. “Mischief Rule” – way of interpreting statutes where you try to determine the initial mischief Congress was responding with when the statute was passed/enacted. ii. Facts : Post Great Depression, MN passed a law that prevented banks from foreclosing on homes for two more years. Banks challenged the law as an impairment of their right to contract. iii. Issue : Did the MN law violate the contracts clause? iv. Holding : No. 1. Even though this was exactly the type of debtor relief that the Framers wanted to prevent, the Court upheld it and emphasized the emergency nature of the legislation. 9
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a. “We must never forget that it is a constitution we are expounding – a constitution intended to endure for ages to come, and consequently, to be adapted to the various crises of human affairs.” i. This is HUGE because it’s a strong statement that the framer’s intent is not controlling in contemporary constitutional adjudication. b. the question is not whether legislative action affects contracts, but instead whether legislative action is reasonably appropriate to the achievement of a legitimate end 2. An emergency existed such that was a “proper occasion” for this use of the police power. a. the question is not whether legislative action affects contracts, but instead whether legislative action is reasonably appropriate to the achievement of a legitimate end 3. The legislation was “addressed to a legitimate end.” I.e.: the protection of a basic interest of society. ACUITY 4. The relief could only be “of a character appropriate” to the emergency. FIT 5. This relief could be granted only “upon reasonable conditions.” 6. This is the key case that defined the scope of the contracts clause in modern times. c. Emergency Reserves v. Kansas Power i. Facts : a contract for natural gas provided that the price to be paid would be increased if government regulators fixed a higher price than that specified in the contract. Subsequently, Kansas adopted a law that provided that the price to be paid for natural gas under a contract could not be increased because of prices set by federal authorities. The state law prevented the natural gas provider from charging the higher prices that it was entitled to under the contract. The gas company filed suit.
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  • Spring '18
  • Government, Fourteenth Amendment to the United States Constitution

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