The Contracts Clause

Most constitutional lawyers are familiar with Home Building & Loan Ass’n v. Blaisdell, which held that the Contracts Clause did not prohibit a state from giving home mortgage debtors an extension of time to fulfill their obligations.  This case, in practice, drained the Contracts Clause of any significance unless a state actually annuls a debt.  Justice Sutherland authored an epic dissent in Blaisdell, which I’ve posted about before.

What I did not know was that there was a companion case to Blaisdell.  W.B. Worthen v. Thomas invalidated an Arkansas statute as a violation of the Contracts Clause.  That law said no payout from an insurance policy could be used to satisfy any debt (including ones entered into before the law was enacted).  The Court held that this was unreasonable because “the relief sought to be afforded is neither temporary nor conditional. In placing insurance moneys beyond the reach of existing creditors, the Act contains no limitations as to time, amount, circumstances, or need. We find the legislation, as here applied, to be a clear violation of the constitutional restriction.”

Sutherland concurred but wrote that this case was not distinguishable from Blaisdell.  He explained that four Justices were:

“[U]nable then, as we are now, to concur in the view that an emergency can ever justify, or, what is really the same thing, can ever furnish an occasion for justifying, a nullification of the constitutional restriction upon state power in respect of the impairment of contractual obligations. Acceptance of such a view takes us beyond the fixed and secure boundaries of the fundamental law into a precarious fringe of extraconstitutional territory in which no real boundaries exist. We reject as unsound and dangerous doctrine, threatening the stability of the deliberately framed and wise provisions of the Constitution, the notion that violations of those provisions may be measured by the length of time they are to continue or the extent of the infraction, and that only those of long duration or of large importance are to be held bad. Such was not the intention of those who framed and adopted that instrument. The power of this court is not to amend but only to expound the Constitution as an agency of the sovereign people who made it and who alone have authority to alter or unmake it. We do not possess the benevolent power to compare and contrast infringements of the Constitution and condemn them when they are long-lived or great or unqualified, and condone them when they are temporary or small or conditioned.”

You may also like...

1 Response

  1. Joe says:

    That’s a notable case — it was a unanimous reminder that the Contracts Clause still had bite.