THE CONSTITUTIONAL LAW OF PROPERTY

Property & Economic Regulation

1. Rules

   1. Background principles. The constitutional law of property is divided into two camps, illustrated by the opinions of Justices Chase and Iredell in Calder v. Bull.

      1. Chase. Property is a pre-political right that is protected by not only the Constitution, but reason itself.

         1. Legislatures bound by first principles. “An act of the legislature (for I cannot call it a law), contrary to the great first principles of the social compact, cannot be considered a rightful exercise of legislative authority.”

         2. Constitution not only set of requirements. “It is against all reason and justice for a people to intrust a legislature with [a power that “takes property from A, and gives it to B”].... The legislature... cannot punish innocence as a crime; or violate the right of an antecedent lawful private contract; or the right of private property. To maintain that our federal or state legislature possesses such powers, if they had not been expressly restrained, would, in my opinion, be a political heresy altogether inadmissible in our free republican governments....”

         3. Positive law governs management of property. Nevertheless, “the right, as well as the mode, or manner, of acquiring property and of alienating or transferring, inheriting, or transmitting it, is conferred by society...and is always subject to the rules prescribed by positive law....”

      2. Iredell. Regardless of whether property is a natural right, a court is limited to evaluating whether a law is constitutional.

         1. Court has no power to overrule legislature re: natural justice. “It is true...that a legislative act against natural justice must, in itself, be void; but I cannot think that, under such a government any court of justice would possess a power to declare it so.”

         2. Constitutions are only restraints. “In order, therefore, to guard against so great an evil,” Americans have adopted constitutions “to define with precision the objects of legislative power, and to restrain its exercise within marked and settled boundaries.”

         3. No standard for natural justice. If a legislature passes a law “within the general scope of their constitutional power, the court cannot pronounce it to be void, merely because it is, in their judgment, contrary to the principles of natural justice. The ideas of natural justice are regulated by no fixed standard;...[only constitutional] fundamental law...must be our guide, whenever we are called...to determine [its] validity.”

   2. The Ex Post Facto Clause (art. I, §9). This prohibits only retroactive criminal laws, not civil regulations or benefits, such as pardons. Calder. But see Eastern Enterprises.

   3. The Due Process Clause (amend. XIV).

      1. Lochner Era. The Fourteenth Amendment prohibits states from depriving an individual of life, liberty, or property—including the liberty to purchase or sell one’s labor. States’ inherent “police powers,” however, authorize them to protect their citizens’ safety, welfare, and morals. So long as an economic regulation has a “direct relation” to a “legitimate” end, it is okay. Lochner. But economic laws that require someone to accept personal services of another on terms to which he did not assent violate the 14th Amendment. Coppage.

         1. Holmes’ dissents. Only when “fundamental principles” are at stake should a Court overrule a legislature; the Constitution tolerates many different theories of “natural rights”; “The 14th Amendment does not enact Mr. Herbert Spencer’s Social Statics.” Lochner. Instead, it authorizes legislatures to establish an equality of position between reasonable bargainers. Coppage.

      2. New Deal Era. 14th Amend. “demands only that the law not be unreasonable, arbitrary, or capricious. Nebbia. “[R]egulation which isreasonable in relation to its subject and is adopted in the interests of the community is due process.” W. Coast Hotel.

      3. Eastern Enterprises. Justice Kennedy in his concurrence, infra, wrote that a severe retroactive liability violates the Due Process Clause because of the minor fit between justification and means. Justice Thomas wrote that such a liability might violate the Ex Post Facto Clause. E. Enters.

1. Analysis

   1. Due Process Clause.

      1. Lochner Era. The Lochner Court observed that “it must, of course, be conceded that there is a limit to the valid exercise of the [police power]. Otherwise states would have “unbounded power.” If one accepts that “freedom of contract” is a “fundamental” liberty, then a state should not be able to violate it by just calling any act a “police power.” This should satisfy both Chase and Iredell. Lochner.

         1. Holmes’s dissent. Holmes took an Iredellian position that Court may only overrule actions explicitly prohibited by the Constitution.

      2. New Deal Era. “[N]either property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows....Equally fundamental with the private right is that of the public to regulate it in the common interest.” Nebbia. “[T]here is no closed class or category of business affected with a public interest.” Nebbia; cf. Error! Reference source not found..

         1. Institutional justification. “We refuse to sit as a ‘super-legislature to weigh the wisdom of legislation.” Ferguson.

2. Major Cases

   1. Calder v. Bull (U.S. 1798) (Supp. V, 1)

      1. (Chase, J.) Conn. ct. declared will void. Legislature told court to set judgment aside. According to natural justice, this is okay retrospective law.

      2. (Iredell, J., concurring) No constitutional prohibition against what Conn. did.

   2. Lochner v. New York (U.S. 1905) (Supp. V, 5)

      1. (Peckham, J.) N.Y. passed law imposing 10 hr/day maximum and provided for inspections of facilities. Since law is “a labor law, pure and simple,” the link to police powers is too “shadowy” to be Constitutionally authorized.

      2. (Harlan, J., dissenting) Court should vest discretion in the legislature; the burden is on Δ to prove there is no real...

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