Allgeyer v. Louisiana

One significant case that I discuss in my William Jennings Bryan book is Allgeyer v. Louisiana, 165 U.S. 578 (1897), which was the first Supreme Court case holding that the Fourteenth Amendment protected the “liberty of contract.”  I make two somewhat novel points about Allgeyer in the book.  The first is that the case came out within a few days of William McKinley’s inaugural, which is suggestive about the Court’s thinking in adopting this new doctrine that was partly an antidote to Populism.  The other is that Allgeyer overruled Slaughterhouse sub silentio, which set the stage for the Court’s subsequent reinterpretation of Slaughterhouse as an anti-incorporation case (in Maxwell v. Dow).

One thing that I did not do in the book that I now regret is discuss the merits of Allgeyer.  The case involved a state statute that regulated marine insurance contracts.  The Allgeyer firm contracted for marine insurance in New York with a NY company for ships that would never be in Louisiana, but the Louisiana courts held that this contract was governed by the Louisiana statute because the relevant documents were mailed to and from the state.  The Supreme Court held that this violated the Due Process Clause and contractual freedom.

This is an odd way to resolve the case.  Today I think we would say that a state law that was interpreted to act with broad extraterritorial reach runs afoul of the Dormant Commerce Clause.  I think that they could have said that then as well, since there were plenty of Dormant Commerce Clause cases at that point.  Perhaps there is some reason that they did not (e.g., the issue wasn’t raised in the briefs), but I wonder whether this means that the Court just crammed the liberty of contract into the first case that could bear that reading even when it wasn’t the best reading of the law.

UPDATE:  I’m now persuaded that since insurance was not viewed as commerce subject to federal regulation at this time, that means the Dormant Commerce Clause probably could not apply to this Louisiana statute.

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1 Response

  1. Chris says:

    Insurance still wasn’t considered commerce in 1897–that’s why they used P/I in Colgate v. Harvey, 296 U.S. 404 (1935), though they overruled it in Madden v. Kentucky, 309 U.S. 83 (1940).