In 1934, in the midst of the Depression, the United States Supreme Court, in Home Building & Loan Ass’n v. Blaisdell, upheld the constitutionality of the Minnesota Mortgage Moratorium Act. The Court’s 5-4 decision marked a significant step in the Court’s transformation of its jurisprudence of economic liberty, as a bare majority of the Court, led by Chief Justice Charles Evans Hughes, flexibly interpreted the Contract Clause prohibition of the impairment of contractual obligations to allow a state to modify a mortgage agreement. In so doing, the divided Hughes Court signaled a willingness to adapt the Constitution to changing economic circumstances. Although it would be three more years before a majority of the Court consistently adapted living constitutionalism in support of the laboratories of democracy and the power of government – both state and federal- to regulate private economic affairs in the public interest, Chief Justice Hughes’s Blaisdell opinion was an integral step in the constitutional revolution of the 1930s.
This article analyzes the Blaisdell decision from the duel historical perspectives of the nineteenth and early twentieth century Contract Clause jurisprudence and the pragmatic federalism of Charles Evans Hughes. It explains that the Court’s decision to reconcile the Contract Clause prohibition of state laws that impaired contract obligations with the reasonable exercise of state police powers reflected a long line of cases that constrained the scope of the constitutional limitation through the prism of federalism.
From this perspective, Chief Justice Hughes crafted a fairly modest opinion that nudged the Court along the path of living constitutionalism yet also heeded Court precedent that recognized the authority of states to modify contract remedies in ways that left intact underlying contract obligations. The article also examines the extent to which Hughes’s judicial statesmanship allowed for significant contributions by Justices Stone and Cardozo in the creation of an important opinion in the evolution of federalism and Supreme Court judicial review.
Wednesday, November 19, 2014
Olken on Hughes's Blaisdell Opinion
Samuel R. Olken, John Marshall Law School, has posted Charles Evans Hughes and the Blaisdell Decision: A Historical Study of Contract Clause Jurisprudence, which appeared in the Oregon Law Review 72 (1993): 513-602. Here is the abstract: