SUBSTANTIVE DUE PROCESS: THE PROTECTION OF ECONOMIC INTERESTS Flashcards
Due Process Clause Protects Liberty of Contract – Lochner v. New York (Overruled)
Facts: Lochner was fined for violating a state labor law. The law prohibited employment in bakeries for more than 60 hours a week or more than hours a day. Lochner permitted an employee to work in his baker for more than 60 hours a week.
Holding: The right to make a contract in relation to one’s business is protected by the due process clause of the 14th Amendment.
Rationale:
The Court stated that the right to contract is protected by due process clause of the 14th Amendment. The government may interfere with the freedom to contract only to serve a valid police purpose: to protect public safety, public health, or public morals. The act must have a direct relation to an appropriate state goal before it can interfere with an individual’s right to contract in relation to his labor.
The Court states that it relies on natural law to reach its conclusion – the ability to contract is the natural state of things. However, this rationale is problematic because a contract is a social construct.
The Court does not pay any deference to the NY legislature’s justifications for the statute. New York states that the purpose of the statute is to protect the health of the bakers. While protecting the health of employees is generally a legitimate end for governmental action, this justification is pretextual here. The purpose of this statute is to equalize bargaining power, and this is not a legitimate state end.
Retreat From Lochner
The Court no longer uses the due process clause to strike down state law that is regulatory of business and industrial conditions.
States have the power to legislate against what are found to be injurious practices in their internal commercial affairs, so long as their laws do not run afoul of some specific constitutional prohibition. (Ferguson v. Skrupa).
The Court applies conceivable rational basis review when analyzing these economic regulations. Regulatory legislation affecting ordinary commercial transaction is not to be pronounced unconstitutional unless in light of the facts made known or generally assumed it is of such character so as to preclude the assumption that it rests upon some rational basis. (US v. Caroline Products).
