Limits on States: A Reference Guide to the United States Constitution (Reference Guides to the United States Constitution)

Limits on States: A Reference Guide to the United States Constitution

James M. McGoldrick, Jr.

PRAEGER

Limits on States

Recent Titles in Reference Guides to the United States Constitution Jack Stark, Series Editor The Right to the Assistance of Counsel James J. Tomkovicz Prohibited Government Acts Jack Stark State Sovereign Immunity Melvyn R. Durchslag Constitutional Remedies Michael Wells and Thomas A. Eaton Privileges and Immunities David Skillen Bogen Searches, Seizures, and Warrants Robert M. Bloom The Supremacy Clause Christopher R. Drahozal Procedural Due Process Rhonda Wasserman Double Jeopardy David S. Rudstein Freedom of the Press Lyrissa Barnett Lidsky and R. George Wright The Taxing Power Erik M. Jensen Freedom of Speech Keith Werhan The Religion Guarantees Peter K. Rofes

Limits on States A Reference Guide to the United States Constitution James M. McGoldrick, Jr. Foreword by Kenneth Starr

REFERENCE GUIDES TO THE UNITED STATES CONSTITUTION, NUMBER 14 Jack Stark, Series Editor

Library of Congress Cataloging-in-Publication Data McGoldrick, James M., 1944– Limits on states : a reference guide to the United States Constitution / James M. McGoldrick, Jr. ; foreword by Kenneth Starr. p. cm.— (Reference guides to the United States Constitution, ISSN 1539–8986 ; no. 14) Includes bibliographical references and index. ISBN 0–313–31233–8 (alk. paper) 1. Exclusive and concurrent legislative powers—United States. 2. State governments—United States. 3. Constitutional law—United States. I. Title. II. Series. KF4600.M36 2005 342.73'042—dc22 2004028182 British Library Cataloguing in Publication Data is available. Copyright © 2005 by James M. McGoldrick, Jr. All rights reserved. No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2004028182 ISBN: 0–313–31233–8 ISSN: 1539–8986 First published in 2005 Praeger Publishers, 88 Post Road West, Westport, CT 06881 An imprint of Greenwood Publishing Group, Inc. www.praeger.com Printed in the United States of America TM

The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z39.48–1984). 10 9 8 7 6 5 4 3 2 1

To Ron and Jamie

Contents

Series Foreword by Jack Stark Foreword by Kenneth Starr Chapter 1: History and Introduction to Article I, Section 10 Notes

ix xiii 1 4 5 5 16 26

Chapter 2: The Contract Clause The Marshall Court and the Contract Clause The Contract Clause from 1837 to 1934 The Modern Approach to the Contract Clause, After 1934 The Court Rediscovers—and Quickly Abandons—the Contract Clause, 1975 to the Present Summary of the Supreme Court Contract Clause Cases The Public Purpose Balancing Test Notes

31 45 48 53

Chapter 3: Bills of Attainder History and Introduction The Court’s Approach to Bills of Attainder Notes

55 55 57 64

Chapter 4: Ex Post Facto Laws History and Introduction Limiting Ex Post Facto Laws to Criminal Cases Retroactively Defining a Crime Aggravating a Crime Changes in Penalty Changing the Rules of Evidence and Procedural Changes

65 65 66 68 69 70 75

Chapter 5: The Nonretroactive Provisions of Article I, Section 10 Introduction

81 81

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The State Treaty Clause Granting Letters of Marque and Reprisal Coining Money, Emitting Bills of Credit, and Making Anything but Gold and Silver a Tender in Payment of Debt Titles of Nobility Notes Chapter 6: The Import–Export Clause Introduction The Original Package Doctrine: When the Immunity from State Taxation Ends When Is a Tax an Import–Export Tax? When the Immunity of Exports Begins The Inspection Exception Note

82 83 83 86 87 89 89 91 94 96 99 100

Chapter 7: Interstate Compacts Introduction Determining if a Compact Requires Consent Factors in Determining When a Pact Is a Compact Requiring Congressional Approval Consent of Congress The Interpretation of a Compact Sanctioned by Congress Notes

101 101 103

Chapter 8: Concluding Comments on Article I, Section 10 Note

111 113

Bibliographical Essay Table of Cases Index

115 125 131

105 106 107 108

Series Foreword Jack Stark One can conceive of the United States Constitution in many ways. For example, noting the reverence in which it has been held, one can think of it as equivalent to a sacred text. Unfortunately, most of its devotees have had less knowledge and even less understanding of the document than they have had reverence for it. Sometimes it is treated as primarily a political document and on that basis has been subjected to analysis, such as Charles Beard’s An Economic Interpretation of the Constitution of the United States. One can plausibly argue that the Constitution seems most astounding when it is seen in the light of the intellectual effort that has been associated with it. Three brief but highly intense bursts of intellectual energy produced, and established as organic law, most of the Constitution as it now exists. Two of these efforts, sustained over a long period of time, have enabled us better to understand that document. The first burst of energy occurred at the Constitutional Convention. Although some of the delegates’ business, such as the struggle between populous and nonpopulous states about their representation in Congress, was political, much of it was about fundamental issues of political theory. A few of the delegates had or later achieved international eminence for their intellects. Among them were Benjamin Franklin, Alexander Hamilton, and James Madison. Others, although less well known, had first-rate minds. That group includes George Mason and George Wythe. Many of the delegates contributed intelligently. Although the Convention’s records are less than satisfactory, they indicate clearly enough that the delegates worked mightily to constitute not merely a polity but a rational polity—one that would rise to the standards envisioned by the delegates’ intellectual ancestors. Their product, though brief, is amazing. William Gladstone called it “the most wonderful work ever struck off.” Despite the delegates’ eminence and the Constitution’s excellence as seen from our place in history, its ratification was far from certain. That state of affairs necessitated the second burst of intellectual energy associated with that document: the debate over ratification. Soon after the Convention adjourned, articles and

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speeches—some supporting the Constitution and some attacking it—began to proliferate. A national debate commenced, not only about the document itself, but also about the nature of the polity that ought to exist in this country. Both sides included many writers and speakers who were verbally adroit and steeped in the relevant political and philosophical literature. The result was an accumulation of material that is remarkable for both its quantity and its quality. At its apex is The Federalist Papers, a production of Alexander Hamilton, James Madison, and John Jay that deserves a place among the great books of Western culture. Another burst, not as impressive as the first two but highly respectable, occurred when the Bill of Rights was proposed. Some delegates to the Constitutional Convention had vigorously asserted that such guarantees should be included in the original document. George Mason, the principal drafter of the Virginia Declaration of Rights, so held, and he walked out of the Convention when he failed to achieve his purpose. Even those who had argued that the rights in question were implicit recognized the value of adding protection of them to the Constitution. The debate was thus focused on the rights that were to be explicitly granted, not on whether any rights ought to be explicitly granted. Again many writers and speakers entered the fray, and again the debate was solidly grounded in theory and was conducted on a high intellectual level. Thus, within a few years a statement of organic law and a vital coda to it had been produced. However, the meaning and effect of many of that document’s provisions were far from certain; the debates on ratification of the Constitution and the Bill of Rights had demonstrated that. In addition, the document existed in a vacuum, because statutes and actions had not been assessed by its standards. The attempt to resolve these problems began after Chief Justice John Marshall, in Marbury v. Madison, asserted the right of the U.S. Supreme Court to interpret and apply the Constitution. Judicial interpretation and application of the Constitution, beginning with the first constitutional case and persisting until the most recent, is one of the sustained exertions of intellectual energy associated with the Constitution. The framers would be surprised by some of the results of those activities. References in the document to “due process,” which seems to refer only to procedures, have been held also to have a substantive dimension. A right to privacy has been found lurking among the penumbras of various parts of the text. A requirement that states grant the same “privileges and immunities” to citizens of other states that they granted to their own citizens, which seemed to guarantee important rights, was held not to be particularly important. The corpus of judicial interpretations of the Constitution is now as voluminous as that document is terse. As the judicial interpretations multiplied, another layer—interpretations of interpretations—appeared, and also multiplied. This layer, the other sustained intellectual effort associated with the Constitution, consists of articles, most of them published in law reviews, and books on the Constitution. This material

Series Foreword

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varies in quality and significance. Some of these works of scholarship result from meticulous examination and incisive thought. Others repeat earlier work, or apply a fine-tooth comb to matters that are too minute even for such a comb. Somewhere in that welter of tertiary material is the answer to almost every question that one could ask about constitutional law. The problem is finding the answer that one wants. The difficulty of locating useful guidance is exacerbated by the bifurcation of most constitutional scholarship into two kinds. In “Two Styles of Social Science Research,” C. Wright Mills delineates macroscopic and molecular research. The former deals with huge issues, the latter with tiny issues. Virtually all of the scholarship on the Constitution is of one of those two types. Little of it is macroscopic, but that category does include some first-rate syntheses such as Jack Rakove’s Original Meanings. Most constitutional scholarship is molecular and, again, some fine work is included in that category. In his essay, Mills bemoans the inability of social scientists to combine the two kinds of research that he describes to create a third category that will be more generally useful. This series of books is an attempt to do for constitutional law the intellectual work that Mills proposed for social science. The author of each book has dealt carefully and at reasonable length with a topic that lies in the middle range of generality. Upon completion, this series will consist of thirtyseven books, each on a constitutional law topic. Some of the books, such as the book on freedom of the press, explicate one portion of the Constitution’s text. Others, such as the volume on federalism, treat a topic that has several anchors in the Constitution. The books on constitutional history and constitutional interpretation range over the entire document, but each does so from one perspective. Except for a very few of the books, for which special circumstances dictate minor changes in format, each book includes the same components: a brief history of the topic, a lengthy and sophisticated analysis of the current state of the law on that topic, a bibliographical essay that organizes and evaluates scholarly material in order to facilitate further research, a table of cases, and an index. The books are intellectually rigorous—in fact, authorities have written them—but, due to their clarity and to brief definitions of terms that are unfamiliar to laypersons, each is comprehensible and useful to a wide audience, one that ranges from other experts on the book’s subject to intelligent nonlawyers. In short, this series provides an extremely valuable service to the legal community and to others who are interested in constitutional law, as every citizen should be. Each book is a map of part of the U.S. Constitution. Together they map all of that document’s territory that is worth mapping. When this series is complete, each book will be a third kind of scholarly work that combines the macroscopic and the molecular. Together they will explicate all of the important constitutional topics. Anyone who wants assistance in understanding either a topic in constitutional law or the Constitution as a whole can easily find it in these books.

Foreword Kenneth Starr Historically, Article I, Section 10, represented the single most important limitation on state power in the main body of the Constitution. Its importance has now been largely overshadowed by due process and equal protection limits in the Fourteenth Amendment, but in addition to its historical significance, Article I, Section 10, has relevance to the modern-day lawyer as well. Professor McGoldrick brings to light the many provisions of this section of the Constitution, emphasizing those of the most importance today. The Contract Clause, in particular, has had a checkered history, going from the main provision for Chief Justice John Marshall’s attempt to advance federalist interest by limiting state powers to what appeared to be a quiet and permanent demise to its recent rediscovery by the Supreme Court. Though the modern Court may again have lost some of its enthusiasm for the Contract Clause, as Professor McGoldrick illustrates, no state may safely ignore its preexisting contractual agreements without closely considering the constitutional limits, however limited they may be. The Ex Post Facto Clause is particularly fascinating; virtually every year brings new ex post facto claims to state and federal courts, and many of them find their way to the U.S. Supreme Court. Though there is a surface simplicity to the prohibition, its various permutations are anything but simple. With problems running from retroactive application of sentencing guidelines to the impact of evidentiary changes, Professor McGoldrick points out the surprisingly controversial nature of this fundamental limitation on retroactive legislation. Though the prohibition on bills of attainder has proven to be less important as a constitutional limit, Professor McGoldrick traces the reasons why the historical limits on that doctrine have made it a less effective limitation on governmental powers than many might have hoped. There is no attempt here to fully discuss the Import–Export Clause, but the key underlying themes are clearly identified. The story of the rise and fall of the Original Package Doctrine is a particularly interesting one. Though there are a number of other books on the details of interstate compacts, Professor Mc-

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Goldrick gives a helpful overview of the complex issues that they can create. The impact on federal law and on federal court jurisdiction is an important one that probably deserves more attention in the the legal literature than it is normally given. Also intriguing are Professor McGoldrick’s brief concluding remarks about the various forms of constitutional interpretation used in developing different constitutional phrases in the same article and section. There seems to be some disconnect between the easy abandonment of the absolute language of the Contract Clause and the strict historical limits of the Ex Post Facto Clause. For persons interested not only in our constitutional history but also in a practical evaluation of these provisions for the modern lawyer, Professor McGoldrick has provided a balanced approach that should be helpful to everyone with a love and appreciation for the wonderful document we call the United States Constitution.

1

History and Introduction to Article I, Section 10

Clause 1. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin as Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility. Clause 2. No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress. Clause 3. No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay. (United States Constitution, Article 1, Section 10)

This book traces the rise and fall of Article I, Section 10, and emphasizes its most important provisions: the Contract Clause, the Bill of Attainder and Ex Post Facto Clauses, the Import–Export Clause, and the Compact Clause. Article I, Section 10, was the most important provision that limited the state governments in the original U.S. Constitution and, even including the Bill of Rights, that remained true for many decades. Such is no longer the case. Charles Pinckney, during the South Carolina ratifying convention, called it “the soul of the Constitution, as containing, in a few words, those restraints upon the states, which . . . keep them from interfering with the powers of the Union.”1 In 2000, Justice John Paul Stevens, quoting Madison and Hamilton in the Federalist Papers, number 44 and number 84, characterized the prohibition against bills of attainder, ex post facto laws, or any law impairing the obligation of contracts as preventing acts “contrary to the first principles of the social compact and to every principle of sound

2

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legislation.” The Framers, Justice Stevens said, thought this provision provided “perhaps greater securities to liberty and republicanism than any [the Constitution] contains” (Carmell v. Texas, 2000). Although this may have been the intent of the legislators, it is hard to take Justice Stevens’s statement seriously as a description of modern constitutional law. A 1977 Supreme Court case stated it more accurately: “The many decisions of this Court involving the Contract Clause are evidence of its important place in our constitutional jurisprudence. Over the last century, however, the Fourteenth Amendment has assumed a far larger place in constitutional adjudication concerning the States” (U.S. Trust Co. of New York v. New Jersey, 1977). Article I, Section 10, was once the most important provision in the Constitution limiting state powers because there were few provisions in the Constitution with that purpose. Until the passage of the Fourteenth Amendment and the resulting incorporation of the Bill of Rights as applicable to the states, the U.S. Constitution contained few provisions limiting the states in terms of the protection of individual rights or the structure of government. Other than Article I, Section 10, the main body contains virtually none. In Article I, Section 8, Clause 3, Congress is given the power to regulate commerce among the several states, and that federal power is read as imposing an implied limitation on the states’ ability to discriminate against interstate commerce or impose unreasonable burdens on it. This inherent limitation of the Commerce Clause protects some commercial rights of out-of-state companies from state regulations. Indirectly, the Privileges and Immunities Clause of Article IV, Section 2, provides some protection against unfair state laws in that it requires states to give the same privileges and immunities to out-of-state citizens that its state laws give to its own citizens. To the degree that in-state citizens use their political power to have state laws passed that protect privileges and immunities, those same laws protect out-of-state citizens. Generally, privileges and immunities include those important interests that are fundamental to interstate harmony, such as access to the state courts, the right to own real and personal property, and the equal opportunity to pursue lawful callings. With regard to the structure of government found in the U.S. Constitution and its famed checks and balances, it was the intent of the Constitution to define the scope of the power of the federal government, but there is no comparable provision in the Constitution limiting state governments. Rather, the Tenth Amendment to the Constitution says that the powers not delegated to the federal government and not prohibited to the states “are reserved to the States respectively, or to the people.” As the Tenth Amendment implies, and as Article VI, Section 2, specifically says, federal law is supreme over state law. Congress thus had some power to limit the states, but Article I, Section 10, is one of the few provisions in the original Constitution that in and of itself placed specific limitations on state powers. Even the protection of individual rights found in the Bill of Rights initially

History and Introduction to Article I, Section 10

3

limited only Congress and had no application to the states (Barron v. City of Baltimore, 1833). As of 1968, the Supreme Court had incorporated the most important provisions of the Bill of Rights through the Due Process Clause of the Fourteenth Amendment. Through this process of incorporation, these important provisions became fully applicable to the states (Duncan v. Louisiana, 1968). Other than the Fifth Amendment right to indictment by grand jury in serious criminal cases and the Seventh Amendment right to trial by jury in civil cases involving more than $20, most of the other rights found in the Bill of Rights are now applicable to the states. Those individual rights found in the Fourteenth Amendment and the Bill of Rights, as made applicable to the states, have gradually replaced Article 1, Section 10, as the major limitation on state power. Article I, Section 10, has three clauses containing at least seventeen different proscriptions limiting the states. These limitations range from the almost quizzical ban on titles of nobility, to the important protection of interstate and foreign commerce found in the ban on state taxation of imports and exports, to the more familiar ban on the trifecta of retroactive legislation: no impairment of obligations of contract, no bills of attainder, and no ex post facto laws. Historically, the most important provision in Article I, Section 10, is the Contract Clause, which provides, “No State shall . . . pass any . . . Law impairing obligations of Contracts.” The Contract Clause reflects a concern for the validity of preexisting obligations, and in that sense seems to be tied to the prohibition in the same clause on a state’s coining money, issuing bills of credit, or making anything other than gold and silver appropriate tender in the payment of debt. The Contract Clause is also the third of a trio of phrases in Article I, Section 10, limiting retroactive legislation: the prohibition of any bill of attainder, ex post facto law, or law impairing obligations of contract. Article I, Section 9, Clause 3, imposes on Congress the prohibition of any bill of attainder or ex post facto law, but does not specifically say that Congress may not impair contractual rights. The ban on ex post facto laws has been limited to criminal laws and has no usefulness with regard to retroactive civil deprivations. This was the controversial holding of Calder v. Bull in 1798. Because textually the Contract Clause does not apply to the federal government, any limitation on Congress’s ability to impair contractual rights must be found in the Due Process Clause of the Fifth Amendment (Armstrong v. Fairmont Community Hospital Association, 1987). There is little specific information as to why the Contract Clause was included in the Constitution, but the underlying history is clear enough. The Framers were concerned about the validity of public and private debt in the face of considerable pressure for state legislation providing debtor relief. From the Records of the Federal Convention, it appears that the principal concern was the danger of the states’ caving in to political pressure and issuing paper money.2 There was some debate about the necessity of also banning bills of credit, but Madison’s view that any inconveniences would on the whole “be overbalanced by the utility” of such a ban carried the day.3

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Another reason for the Contract Clause relates to the ban on ex post facto laws. John Marshall defined an ex post facto law as a law “which renders an act punishable in a manner in which it was not punishable when it was committed.” Initially, it was thought that the ban on ex post facto laws would limit all retroactive legislation. When the point was raised during the constitutional debates that ex post facto laws might be limited to criminal cases, the prohibition on laws impairing contracts was added to emphasize the importance of public faith.4 Nonetheless, a motion to impose such a limitation on Congress died without being seconded. James Madison, in the Federalist Papers, number 44, grouped bills of attainder, ex post facto laws, and laws impairing contractual rights together as “contrary to the first principles of the social compact, and to every principle of sound legislation.” He said that the prohibition of such laws was a “constitutional bulwark in favor of personal security and private rights.” Recent history, he reasoned, had shown the evils of legislative interference in cases affecting personal rights, favoring influential speculators over the more industrious, less connected members of society. He thought the prohibitions were necessary to “banish speculations on public measures, inspire a general prudence and industry, and give a regular course to the business of society.” Pinckney, in the South Carolina ratification debates, argued that the article was necessary “to restore your credit with foreigners—to rescue your national character from . . . the most flagrant violations of public faith and private honesty!”5 There were a few voices arguing that limitations on the fiscal authority of the states, including the ban on impairing obligations of contracts, would preclude the states from being able to respond appropriately in times of “great public calamities and distress,” and the current crushing burden of private debt, but these dissenting voices did not carry the day.6 NOTES 1. Jonathan Elliot, ed., The Debates in the Several State Conventions on the Adoption of the Federal Constitution, 4 at 333–36 (1941). 2. Max Farrand, ed., The Records of the Federal Convention of 1787, 2 at 439 (1911). 3. Id. at 440. 4. Id. at 619. 5. Elliot, Debates, at 336. 6. Philip B. Kurland & Ralph Lerner, eds., The Founders’ Constitution, Luther Marin, “Genuine Information 1788, Storing 2.4.75–78,” 3 at 394 (1987).

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No State shall . . . pass any . . . Law impairing the Obligation of Contracts. (Article 1, Section 10, Clause 1)

THE MARSHALL COURT AND THE CONTRACT CLAUSE No understanding of the Contract Clause is complete without a full appreciation of the role that our most famous chief justice, John Marshall, played in defining the clause. He initially used the Contract Clause as an alternative to natural law limits on state legislation. As an entrenched Federalist favoring a strong central government, he necessarily believed that the states should be limited in their power. There were few specific limits on state power in the main Constitution, and Marshall looked initially to natural law for those limits. He soon turned, however, from natural-law limits to the specific language of the Contract Clause to protect the kind of economic interest found in contractual rights. There are four important themes that run through the Marshall cases. First, the Contract Clause was intended to limit the state’s modification of its own contracts, so-called public-law contracts, as well as private contracts between private individuals. Though there is some scholarly disagreement about the validity of extending the Contract Clause to public contracts, this extension has not been challenged. In fact, the modern trend is to limit the state’s ability to change its own contracts even more severely than the limits on private contracts. Second, consistent with the specific constitutional prohibition, contractual rights were entitled to the highest level of protection. The early cases considered preexisting contractual rights to be sacrosanct. Unlike the more modern cases, there was no consideration of overriding public interest that might justify abridging preexisting contractual rights. Third, although this was not emphasized in the Marshall portion of the opinions, the Contract Clause protected only preexisting contracts. It did not protect the right to contract as such in regard to future matters but limited only the state’s ability to abridge contracts already entered into. In this, the

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Contract Clause was like its two neighboring provisions in the constitution, the Bill of Attainder Clause and the ex post facto clause. The three together expressed profound distrust for retroactive legislation. The fourth theme, developed primarily in the concurring opinions, was that the state with regard to state corporate charters, could reserve the right to make changes in the future. Although finding state corporate charters to be the kind of public contract that was subject to Contract Clause limits may have been potentially far-reaching, the state’s ability to reserve the right to make future changes in such contracts effectively eliminated whatever impact the extension of the Contract Clause to such contracts might have had. A careful parsing of the Marshall Court’s Contract Clause opinions is crucial for a complete understanding of the early development of the clause. The first U.S. Supreme Court case involving the impairment of obligations of contract was Fletcher v. Peck (1810), the first in a series of decisions by Chief Justice John Marshall construing the Contract Clause. In a contrived and friendly lawsuit, Fletcher sued Peck for breach of contract in the sale by Peck to Fletcher of 15,000 acres of land on the Mississippi River formerly belonging to the state of Georgia. Fletcher’s claim in essence was that the persons from whom Peck had purchased the property had not obtained valid title to the land from the state of Georgia. On January 7, 1795, the Georgia legislature, by statutory grant, agreed to sell massive amounts of land, essentially the current states of Alabama and Mississippi, to four land companies. It soon became common knowledge that the Georgia legislature had been induced to sell the land by being offered shares in the property. As a result of the political uproar that resulted from this so-called Yazoo land fraud, the corrupt rascals were tossed out and the new Georgia legislature, a little more than one year later (on February 13, 1796), rescinded the sale. In the period between the grant and its repeal, the land companies sold millions of acres to others such as Peck. The “victims” of this land fraud appealed to Congress for help, but many in Congress did not believe that the purchasers of the land had clean hands and refused to provide legislative relief. Because of the sovereign immunity of the state specified in the Eleventh Amendment, it was impossible to sue the state of Georgia directly, so Peck, a dealer in these western lands, concocted this suit with Fletcher to try to gain judicial acceptance of his land claims. Among other issues, Fletcher’s lawsuit claimed that Georgia’s rescission of its initial grant precluded Peck from having valid title. Peck’s defense was that the rescission violated the Contract Clause, and thus the Contract Clause issue was nicely brought into play without naming the state of Georgia as a party. Georgia argued that a subsequent legislature must have the implicit ability to rescind earlier acts. Marshall recognized the importance of the underlying issue: “The principle asserted is, that one legislature is competent to repeal any act which a former legislature was competent to pass; and that one legislature cannot abridge the powers of a succeeding legislature.” As for “general legislation,”

The Contract Clause

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he said that this principle could never be controverted. But, he said, “If an act be done under a law, a succeeding legislature cannot undo it. The past cannot be recalled by the most absolute power.” In the particular case, legislative conveyances had been made that led to vested rights that could not be undone: “When, then, a law is in its nature a contract, when absolute rights have vested under that contract, a repeal of the law cannot devest [sic] those rights.” And once the law was “in its nature a contract,” as opposed to “general legislation,” the legislature was not free to change its mind. If it could do so in this case, Marshall said, it could do so “by a power applicable to the case of every individual in the community.” Marshall offered a number of reasons why Georgia could not rescind its initial grant. First, he stated his doubt based upon natural-law principles, “whether the nature of society and of government does not prescribe some limits to the legislative power.” He argued, “The validity of this rescinding act, then, might well be doubted, were Georgia a single sovereign power.” Second, since Georgia was not a single sovereign power, in addition to these natural-law limits Marshall felt that Georgia’s rescission was contrary to Article I, Section 10, of the U.S. Constitution. He was of the opinion that Georgia’s rescission was in violation of either the proscription against bills of attainder and ex post facto laws, or of the Contract Clause. It is hard to take seriously Marshall’s attempt to equate Georgia’s rescission with legislative punishment barred by the prohibition of bills of attainder. It is even harder to see the rescission as an ex post facto law that had been limited in earlier cases to retroactive applications of criminal laws. The Contract Clause, however, was not given much more serious weight than general natural-law principles or the prohibition on bills of attainder and ex post facto laws, and Marshall, without any precision, concluded that the rescission was invalid “either by general principles which are common to our free institutions, or by the particular provisions of the Constitution of the United States.” Marshall made two points regarding the Contract Clause that have survived the lack of conviction of their origin. First, he held that a legislative grant was an executory contract and was every bit as binding as more traditional completed or executed contracts: A contract is a compact between two or more parties, and is either executory or executed. An executory contract is one in which a party binds himself to do, or not to do, a particular thing; such was the law under which the conveyance was made by the governor.

Second, and more important, Marshall concluded that the Contract Clause covered public contracts, those in which the state was a party, as well as private contracts, those in which the state did not have a legal interest. As Marshall framed the issue, “Is the clause to be considered as inhibiting the state from impairing the obligation of contracts between two individuals, but as excluding from that inhibition contracts made with itself?” As is typical of many of Marshall’s opin-

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ions, he seemed to feel that, in framing the issue in untenable terms, no real answer was required. Marshall concluded, “The words themselves contain no such distinction. They are general, and are applicable to contracts of every description.” He said that apprehension as to the abuse of governmental power was one of the motivating factors for the new Constitution, and that “restrictions on the legislative power of the states are obviously founded in this sentiment.” Marshall also pointed out that the prohibition on bills of attainder and ex post facto laws obviously limited the state legislature. Surely, he intimated, the Contract Clause, in the same sentence, should have a similar reach. He asked: Why, then, should violence be done to the natural meaning of words for the purpose of leaving to the legislature the power of seizing, for public use, the estate of an individual in the form of a law annulling the title by which he holds that estate? The court can perceive no sufficient grounds for making this distinction.

Marshall then flirted with calling the rescission an ex post facto law. He said that it had the “effect of an ex post facto law.” He continued, “It forfeits the estate of Fletcher for a crime not committed by himself, but by those from whom he purchased.” Marshall eventually found his way back to the Contract Clause: “This cannot be effected in the form of an ex post facto law, or bill of attainder; why, then, is it allowable in the form of a law annulling the original grant?” Marshall concluded, in the “unanimous opinion of the court,” that either based upon “general principles which are common to our free institutions, or by the particular provisions of the Constitution of the United States,” Georgia was restrained from legally impairing or rendering null and void the purchase, at least insofar as “the estate having passed into the hands of a purchaser for a valuable consideration, without notice.” After a cursory discussion of Georgia’s legal claim to the land in question, Marshall said the Court—though not the unanimous Court—had determined that the disputed land was within the state of Georgia, “the state of Georgia had power to grant it,” and Indian claims were not “absolutely repugnant” to the state’s claim. Although Chief Justice Marshall’s opinion is rightly famous, Justice William Johnson’s dissenting opinion is the precursor to more modern cases. He agreed in the conclusion that a state, if it held valid title, could not revoke its grant, but he disagreed on every other aspect of the decision, eventually concluding that Georgia did not have the authority to transfer lands over which Indians had valid federal claims. More important from a constitutional point of view, Johnson specifically disavowed any reliance on the Contract Clause, which he called “a subject of the greatest delicacy and much difficulty.” He pointed out that both the states and the federal government “are continually legislating on the subject of contracts, prescribing the mode of authentication, the time within which suits shall be prosecuted for them, in many cases affecting existing contracts by the laws which they pass.” Surely, he argued, such laws were within “correct limits

The Contract Clause

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of legislative powers, and most beneficially exercised, and certainly could not have been intended to be affected by this constitutional provision.” Yet if that is the case, “where to draw the line, or how to define or limit the words, ‘obligations of contracts,’ will be found a subject of extreme difficulty.” Johnson also recognized the key problem with regard to a restrictive view of the Contract Clause that Marshall did not specifically acknowledge: a state needs to impact preexisting rights in order to meet community needs. He wrote: To give it the general effect of a restriction of the state powers in favour [sic] of private rights, is certainly going very far beyond the obvious and necessary import of the words, and would operate to restrict the states in the exercise of the right which every community must exercise, of possessing itself of the property of the individual, when necessary for public uses.

The most important holding of Fletcher v. Peck was its acceptance that the Contract Clause applied to both private and public contracts, including legislative enactments in the latter. The historical record indicates that the Contract Clause was intended to limit the states in their ability to change private contractual terms, such as allowing state banknotes to be used to repay private debt as opposed to the gold clauses in the contract. However, Marshall was not the only contemporary voice to assume that the Contract Clause applied to public contracts as well. Alexander Hamilton, one of the key authors of the Constitution, wrote a legal brief on behalf of purchasers of the western lands that claimed the Contract Clause would preclude state rescission. In addition, several members of Congress, in deciding whether to give relief to purchasers of the western land, expressed the opinion that the state rescission was in violation of the Contract Clause. It is doubtful that much weight should be given to Hamilton’s legal advocacy or to individual congressmen pursuing a political resolution as an authoritative interpretation of the Contract Clause. At the very least, the application of the Contract Clause to public contracts was subject to debate.1 As one scholar has said, “It is apparent then that although there was no Supreme Court case involving the interpretation of the Contract Clause before 1810, John Marshall was by no means the first American to attach a broad meaning to the clause.”2 In many ways a less famous case, New Jersey v. Wilson (1812), was an even more extreme use of the Contract Clause to strike down state legislation. On August 12, 1758, the legislature of the New Jersey colony agreed to a land exchange with a remnant of a tribe of Delaware Indians. The land exchange legislation provided that the Indian land could not be transferred to anyone else and would not “hereafter be subject to any tax.” Sometime in 1801, the Delaware Indians obtained permission from the state of New Jersey to sell their land, which sale was completed in 1803 to Wilson and other plaintiffs. In 1804 the New Jersey legislature repealed the portion of the 1758 legislation that exempted the lands in question from taxation. The purchasers challenged the validity of the repeal in state

10

Limits on States

court, and the New Jersey courts eventually upheld the validity of the repealing act. The U.S. Supreme Court reviewed the constitutionality of the 1804 act that had repealed the tax immunity, and reversed the state court. Chief Justice Marshall again wrote the opinion for the Court. He concluded that the 1758 legislation had “every requisite to the formation of a contract.” Although the purpose of the grant was to benefit the Indians, the terms of the privilege to be free from taxation were annexed to the land itself, not to the persons of the Indians, and such a privilege was intended to enhance the value of the land upon resale. Marshall said that the state could have insisted on a surrender of the land’s tax-free status as a condition for allowing it to be sold, but since it failed to do so, the purchasers took it with its immunity from taxation intact: “The purchaser succeeds, with the assent of the state, to all the rights of the Indians.” The conclusion of the Court was thus inevitable: The 1804 repealing act, “in the opinion of this Court, is repugnant to the Constitution of the United States, in as much as it impairs the obligation of a contract, and is, on that account, void.” The conclusion of the Court in New Jersey v. Wilson had none of the ambiguity of Fletcher v. Peck. There was no discussion of natural rights or alternative constitutional provisions such as bills of attainder or ex post facto laws. This was a violation of the Contract Clause, pure and simple, as applied to public contracts executed in the form of state legislation. The Court did not address, in even the most cursory form, any concern for a legislative body in 1804 being bound by legislation passed forty-six years before, even as to such a fundamental aspect of a sovereignty as taxation. There apparently was no thought given to resolving any ambiguity in favor of preserving state power, such as by holding that the exemption was to be for the Indians alone and did not travel with the land. Finally, the Court did not consider the problem of binding the state of New Jersey under a provision of the U.S. Constitution to the terms of a contract entered into by the colony of New Jersey acting under the authority of King Charles II of England. Although the Court has never repudiated the holding that a state may not repeal its bargained-for grant of exemption from taxation, the land in question was actually held to be subject to taxation some seventy-four years later. The owners of the land inexplicably paid taxes from 1814 to 1876, apparently unaware of the exemption of the land, before one of the owners challenged the tax in a case that also went to the United States Supreme Court (New Jersey v. Wright, 1886). The Court there held that since taxes had been paid for over sixty years, the state could presume a surrender of the exemption. Also, significantly, it said that if it were deciding the case as a new open Contract Clause issue, it would require the clearest language in the legislation showing the intent to give up the power to tax the land in question. After Fletcher v. Peck, the most famous of Marshall’s Contract Clause cases was Trustees of Dartmouth College v. Woodward, decided in 1819. On December 13, 1769, King George III of England gave a charter to operate Dartmouth

The Contract Clause

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College in New Hampshire as a private eleemosynary (“created for the promotion of religion, of charity, or of education”) corporation. The new college carried the title of William Legge, the earl of Dartmouth, whose generosity and fund-raising efforts allowed the college to open for the education of Native American children and others. According to the terms of the charter, the new college was to be run by twelve trustees and “their successors for ever,” with successors appointed by current board members. As one result of a partisan political battle, the New Hampshire legislature amended the charter on June 27, 1816, to increase the number of trustees to twenty-one, to be appointed by the state governor, and to create a twenty-fiveperson board of overseers with the power to review and control most important trustee decisions. This amendment moved the power over the college from the college’s private trustees, who previously selected their successors without any state supervision of their decisions, to state control of succession and state supervision via the state-appointed board of overseers. The new trustees attempted to oust the old trustees. A further state amendment provided that the current secretary and treasurer of the trustees of the college, William H. Woodward, who was willing to follow the dictates of the state and the new trustees, should continue in that office. The old trustees fired Woodward and brought an action in state court for the return of the books and records of the college. Whether that action was valid or not depended on the legitimacy of the amendment to the college charter. The illustrious Daniel Webster famously argued on behalf of the college, “It is, Sir, as I have said, a small college, and yet there are those who love it.”3 Initially, the Supreme Court was split, and it put off further argument and a decision on the case until the following term. When the state arrived with counsel to continue argument in the case, Marshall surprised the participants by announcing the decision of the Court. Marshall, as was common for him, resolved a major issue without any discussion. He said that the charitable charter was a contract: “It can require no argument to prove, that the circumstances of this case constitute a contract.” He did not discuss whether the state of New Hampshire could be bound by a contract between the king of England and the Dartmouth College founders, just as in the earlier case he did not discuss the propriety of binding the state of New Jersey by the acts of the colony of New Jersey. Rather, Marshall just assumed it, stating, “This is plainly a contract to which the donors, the trustees and the crown (to whose rights and obligations New Hampshire succeeds) were the original parties.” One might think that whether or not New Hampshire was bound by a fiftyyear-old contract with the king of England would deserve more consideration. Marshall then turned to what he said were the key issues. First, was this a contract protected by the Constitution of the United States? Second, was the contract impaired by the legislation in question? As to the issue of whether this contract was of the type protected by the Contract Clause, it was argued that too broad a use of the term “contract” for con-

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Limits on States

stitutional purposes would disrupt the state’s ability to govern its civil institutions. For example, a broad view of the term would make marriage a contract and would prevent the state from changing its divorce laws. Marshall acknowledged that an overly expansive view of the Contract Clause would be harmful, that it: would be an unprofitable and vexatious interference with the internal concerns of a state, would unnecessarily and unwisely embarrass its legislation, and render immutable those civil institutions, which are established for purposes of internal government, and which, to subserve those purposes, ought to vary with varying circumstances.

He said that the Framers of the Constitution could not have intended a provision so “unnecessary,” “mischievous,” and “repugnant to [the Constitution’s] general spirit,” and that it had to be “understood in a more limited sense.” Marshall’s more limited view of the kind of contract protected by the Constitution, he said, was shaped by the history of the Contract Clause. The purpose of the Contract Clause was “to restrain the legislature in future from violating the right to property” or “some object of value.” He said: Anterior to the formation of the Constitution, a course of legislation had prevailed in many, if not in all, of the states, which weakened the confidence of man in man, and embarrassed all transactions between individuals, by dispensing with a faithful performance of engagements.

It is assumed that he was referring to controversial state attempts, prior to the new Constitution, to provide debt relief to a country struggling to come back from the costly war of independence, an approach that would have threatened the foreign investments that the developing new country desperately needed. Marshall concluded that the Contract Clause was limited to “contracts respecting property, under which some individual could claim a right to something beneficial to himself.” With typical Marshall confidence, he observed, “The general correctness of these observations cannot be controverted.” Marshall held that, based upon the charter, the college was a party to a contract with the Crown under which it could take control of the donated property of the earl of Dartmouth, and that the charter provision giving the trustees control was a contract binding on all sides. Marshall acknowledged that it was unlikely that the Framers of the Constitution had this type of contract in mind when the Contract Clause was added, but he turned constitutional analysis on its head by insisting that the burden was on the person challenging this application of the clause to show that the language intended to exclude such contracts. The sparseness of the Constitution and its limited legislative history made it easy to conclude that no exception could be found: “There is no expression in the constitution, no sentiment delivered by its contemporaneous expounders, which would justify us in making it.” Marshall then opened the floodgates wide, stat-

The Contract Clause

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ing, “Almost all eleemosynary corporations . . . are of the same character. The law of this case is the law of all.” He found no reason why such contracts should be excluded from protection under the Contract Clause or why the legislature might need the authority to modify or alter them freely. The charter was a contract, and it could not be impaired. The move of power from the private trustees to the state was certainly a significant change. A repeal of the charter prior to the adoption of the Constitution, Marshall said, would have been “an extraordinary and unprecedented act of power,” but one limited only by the state constitution. There was no mention of the naturallaw limits that were so important in Fletcher v. Peck. The addition of the Contract Clause to the Constitution made it an easy call for Marshall, who concluded that “the Constitution of the United States has imposed this additional limitation, that the legislature of a state shall pass no act ‘impairing the obligation of contracts.’ ” Thus the acts of the New Hampshire legislature amending the charter were “repugnant to the Constitution of the United States.” As for the marriage/divorce hypothetical, Marshall gave three different answers. First, the Contract Clause was never intended to restrict the general right to legislate on divorce. Second, legislation on divorce is not an impairment, but an attempt to liberate one party because of the breach of the contract by the other. Finally, if the law were changed to annul all marriage contracts, or to allow one of the parties to annul the contract without the consent of the other, there would be time enough to consider the constitutional issues. In a concurring opinion, Justice Joseph Story agreed that the charter was a contract but said, importantly, that such a charter was “subject to no other control on the part of the crown, than what is expressly or implicitly reserved by the charter itself.” He continued, “Unless a power be reserved for this purpose,” the charter could not be changed without the consent of the corporation. The holding of this concurring opinion has long been an accepted gloss on the case: that the state may reserve the right to change corporate charters. Prior to this case, states sometimes reserved the right to change corporate charters, but afterward, reservation clauses in state corporate charters became routine, effectively eliminating the significance of the case regarding corporate charters and the Contract Clause. Justice Story also discussed the marriage/divorce hypothetical in his concurring opinion. He felt that general laws regulating divorces were like laws regulating contractual remedies that were “not necessarily” laws impairing obligations of contract. In later cases, this became an important distinguishing theme. Nonetheless, he said, marriage was a contract, and a law permitting dissolution “without any default or assent of the parties” could very well be prohibited by the Contract Clause. Devoid of any modern sensibilities, he concluded, “A man has just as good a right to his wife, as to the property acquired under a marriage contract.” In Sturges v. Crowninshield, also decided in 1819, Chief Justice Marshall found a New York bankruptcy/insolvency law contrary to the Contract Clause for debts contracted prior to the passage of the law, and perhaps even for those con-

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Limits on States

tracted after its passage. Marshall based his decision on the Contract Clause. The agreement to pay money in satisfaction of a debt was a contract. State laws that released the obligation to repay that debt were an impairment of that contract. Marshall equated such state bankruptcy laws with the kinds of problems that led the Framers to place the Contract Clause in the Constitution. As he put it, to relieve the distress of debt after the War of Independence, the states took various actions: To relieve this distress, paper money was issued; worthless lands, and other property of no use to the creditor, were made a tender in payment of debts; and the time of payment, stipulated in the contract, was extended by law. These were the peculiar evils of the day.

And the result: “So much mischief was done, and so much more was apprehended, that general distrust prevailed, and all confidence between man and man was destroyed.” The new Constitution specifically addressed these evils by preventing the new states from issuing paper money, but it also established the more general principle “that contracts should be inviolable.” In discussing hypothetical arguments regarding changes in the statutes of limitations and changes in the laws against excessive interest rates, Marshall emphasized that the Contract Clause was principally concerned with retroactive application of laws. While he did not see that laws changing the statutes of limitations or the definition of usurious interest for future actions presented any constitutional problems, he had “little doubt” that such changes, retroactively applied to preexisting contracts, “would be clearly unconstitutional.” Despite Marshall’s emphasis that the holding was limited to the retroactive application of a state bankruptcy law, it was widely believed that the Court would strike down any prospective bankruptcy laws as well. In a case it decided eight years later, the Court laid to rest those fears regarding contracts by citizens of the state passing the bankruptcy law (Ogden v. Saunders, 1827). The debtor, Ogden, was given relief under a New York state bankruptcy or insolvency law in regard to a contract entered into under the laws of New York sometime after the state law was passed. Ogden subsequently moved to Louisiana, which would prove fatal to his defense. The majority of the Court, with Marshall dissenting, emphasized that the Contract Clause prevented impairing “the obligations of contracts,” not the impairing of contracts. What this meant to the majority was that state law necessarily shaped the legal obligations under any contracts entered into after the state law was passed. State laws involving such things as statute of frauds, statute of limitations, and bankruptcy by their nature shaped all contractual obligations, and any contracts entered into after the passage of the law were limited by the state law. In the case it was argued that the Contract Clause should be read as an absolute prohibition on state power both prospectively and retroactively, as were the provisions in Article I, Section 10, which declared that “No State shall . . .

The Contract Clause

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coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.” The Court believed that the Contract Clause was more like the bill of attainder and ex post facto prohibitions in Article I, Section 10, mainly concerned with retroactive legislation. The Court called these provisions “members of the same family brought together in the most intimate connexion [sic] with each other.” It described such laws as “oppressive, unjust and tyrannical,” and then concluded that the “injustice and tyranny which characterizes ex post facto laws, consists altogether in their retrospective operation, which applies with equal force, although not exclusively, to bills of attainder.” The conclusion was thus inevitable: A State has authority, since the adoption of the Constitution, to pass a law, whereby a contract made with the State, after the passage of the law, may be discharged, upon the party obtaining a certificate of discharge, as an insolvent, in the manner prescribed by the law of the state.

Chief Justice Marshall, disagreeing with the majority, believed that the Impairment Clause was like the absolute prohibition on a state’s coining money. Marshall argued that if the Framers had intended to limit the Impairment Clause to retrospective application, they would have specifically said so. The words themselves suggest, he said, more than just a retrospective application: “Had this been the intention of the Convention, is it not reasonable to believe that it would have been so expressed?” He went on to say that it was “scarcely conceivable that some word would not have been used indicating this idea.” Marshall also emphasized the natural-law limits on a state’s ability to impair contracts, which had been such an important part of his opinion in Fletcher v. Peck but had given way to a more straightforward application of the Contract Clause. The natural-law argument, however, had the advantage of not being limited to retrospective applications. He emphasized the natural-law respect for contracts by imagining a prehistorical barter of food for skins: One man may have acquired more skins than are necessary for his protection from the cold; another more food than is necessary for his immediate use. They agree each to supply the wants of the other from his surplus. Is this contract without obligation?

Marshall also pointed out that nations feel compelled to keep their international contracts even though there is no law that compels it. As for the argument that state laws become a part of future contracts, Marshall framed one of his typically brilliant hypotheticals. What if a state passed a law that said that one of the components of all future contracts was that the state could retrospectively change it in any way it wanted to? This law, if constitutional, would nullify the Impairment Clause, and the enormity of such a result would be unfathomable. (In Justice Story’s generally accepted view, the result of Dartmouth College v. Woodward was exactly that, as applied to corporate char-

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Limits on States

ters. The state could reserve the right to change its corporate charters.) Marshall also pointed out that if one took seriously the notion that state laws became a part of future contracts, then any change of the law would itself raise impairment issues: “Are gentlemen prepared to say, that an insolvent law, once enacted, must, to a considerable extent, be permanent? That the legislature is incapable of varying it so far as respects existing contracts?” Approximately one month after upholding the validity of the New York law as applied to future contracts, the majority of the Court changed regarding the judgment in the case. Justice Johnson switched his vote, holding that since Ogden had become a citizen of Louisiana, he could not assert the New York law as a defense. Johnson reached this conclusion based upon “a conflict of sovereign power, and a collision with the judicial powers granted to the United States.” The extraterritorial effect of the New York law was to him of a different variety than the New York law that made the contract valid in the first place. No other justices joined in this opinion, but when Johnson’s change in vote was added to the opinion of Marshall and two other dissenters in the seven-person court, judgment was entered for Saunders, the creditor, and the bankruptcy under New York law was not a valid defense. The final Marshall era Contract Clause case, Providence Bank v. Billings (1830), raised issues similar to those raised in New Jersey v. Wilson with a crucial difference. Providence Bank claimed immunity from state taxation since its charter in 1791 by the state of Rhode Island and challenged an 1822 Rhode Island law imposing a tax contrary to its initial charter. The charter did not contain a specific exemption from state taxation. Rather, it was claimed that the tax was implicitly contrary to the charter, in that the power to tax was the power to destroy. This argument was based upon the holding of a famous case involving the division of power between the federal government and the states (McCullough v. Maryland, 1819). The Court reaffirmed two of its basic Contract Clause principles: First, the clause applies not only to private contracts but also to those between a state and an individual, and second, a state charter incorporating an entity such as a bank is a contract with the state. Nonetheless, the Court was unwilling to assume that the mere existence of the chartered bank was implicitly inconsistent with such a fundamental state power as the power to tax. THE CONTRACT CLAUSE FROM 1837 TO 1934 In the 100 years following the Marshall Court’s strong protection of Contract Clause rights, four themes emerged limiting the force of the early opinions. First, the Court began to construe the state’s own contracts more narrowly, to avoid finding any preexisting contractual rights. If there was no contract, there could be no impairment. Initially, the Court was still very strict in protecting the terms of private contracts, even in the face of important social policies. Second, the Court attempted to limit the reach of the Contract Clause by dis-

The Contract Clause

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tinguishing between the substantive provisions of the contract itself, which in the language of the Constitution it called “obligations” of contract, and contractual remedies. The Constitution limited retroactive changes in obligations of contract, not contractual remedies. This attempt to limit the scope of the Contract Clause was not entirely successful because there was no very clear dividing line between what were substantive provisions in the contract, and thus obligations, and what were remedies subject to retroactive state change. Even more important, the Court recognized that retroactive material changes in even what were acknowledged to be remedies would work an impairment of the underlying substantive contractual rights. This attempt to distinguish between substantive rights and remedies was used in a number of cases, but never really became the dominant approach. Third, the Court developed the theory that with regard to public contracts, there were certain attributes of state sovereignty that could not be contracted away. In contrast to private contracts that might run for years, the Court became uncomfortable with one legislature binding some future legislature into perpetuity by entering into long-term contracts. This view that the state could not contract with regard to certain of its powers was related to the first theme. The Court, when it could, construed the underlying contract as not providing for the giving up of the sovereign power. If the contract did not provide specifically that the state could not use its power of eminent domain to purchase a contractual right, then the Court did not have to address whether the state could in fact contract away its right to use that power. If the state did in fact contract away certain powers, then the Court would hold that certain attributes of state power could not be contracted away at all. This Sovereign Power limitation became an important gloss on the Contract Clause. The more modern Public Purpose Balancing Test, developed later, largely supplants the need for this exception, but it is still of some importance. Fourth, with regard to private contracts the Court came to doubt the wisdom of allowing private individuals to insulate their activities from state regulation by the mere fact of entering into private contracts prior to the state regulation. When the state, for example, moved in the direction of regulating the rate that companies infused with a public interest, such as railroads, could charge, it did not seem reasonable that private/private contracts at some other rate should take precedent over the state’s attempt to protect the public interest. The first case decided by the post–Marshall Court of Chief Justice Roger Taney concluded that the state’s grant of a contract to build a toll bridge did not preclude the state from contracting for a nearby free bridge (Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 1837). The initial public contract to build the toll bridge was narrowly construed. In 1640, Massachusetts granted Harvard College the right to operate a ferry service across the Charles River in Boston. In 1785, the state entered into a legislative contract with the Charles River Bridge Company to build a bridge at the site of the ferry crossing, with appropriate compensation for Harvard. In exchange for the expense

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Limits on States

and risk of building one of the longest bridges then in existence, Charles River Bridge was given the right to collect designated tolls for forty years (modified in 1792 to seventy years, after which the bridge was to become the property of the state). The bridge was extraordinarily difficult to build. As Justice Story said in his dissenting opinion: It is well known, historically, that this was the very first bridge ever constructed, in New England, over navigable tide-waters so near the sea. The rigors of our climate, the dangers from sudden thaws and freezing, and the obstructions from ice in a rapid current, were deemed by many persons to be insuperable obstacles to the success of such a project. It was believed, that the bridge would scarcely stand a single severe winter.

In 1828, Massachusetts incorporated the Warren Bridge Company to build a bridge virtually adjoining the Charles River Bridge; it was to be free within six years, or as soon as the tolls paid off the cost of construction. At the time the U.S. Supreme Court heard the case on appeal from its dismissal by an equally divided state supreme court, the Warren Bridge was free, making the right to collect tolls on the Charles River Bridge virtually valueless. Charles River Bridge sued Warren Bridge, alleging, among other claims, that the act approving the new bridge was an impairment of the obligations of contract flowing from the 1792 grant of toll rights for seventy years. Charles River Bridge had in over forty years collected over $1 million in tolls, far in excess of the $46,000 cost of building the bridge. The majority of the Court, in an opinion by Chief Justice Taney, found that no part of the legislative contract gave Charles River Bridge the right to be free from a competing service. The Court said that the U.S. Constitution did not bar retrospective changes in vested rights unless they were in violation of the Contract Clause or in the character of an ex post facto law. Since the Ex Post Facto Clause was limited to criminal laws, only the Contract Clause had any possible application. The Court said that no provision in the legislative contract made any reference whatsoever to the Charles River Bridge being assigned the exclusive right to be free from competition. The Court made two major points. First, in the absence of any express provision, any ambiguity in a contract with a public entity must operate against the private claimant in favor of the public entity. Second, it could not be assumed that the state was contracting away its sovereign ability to react to changing conditions in the future. The fact that the legislature in 1792 thought that a single bridge was enough for the next seventy years would not preclude the state some forty years later from deciding that another bridge was needed. It saw the case as covered by Providence Bank v. Billings on both points. There, the bank’s charter with the state did not exempt it from state taxes, and absent such an express provision, no such exemption from the fundamental sovereign power of taxation could be assumed.

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The Court viewed the power to advance new channels of communication in travel and trade to be every bit as fundamental as the state’s power to tax. It said: Advancing the public prosperity, by providing safe, convenient and cheap ways for the transportation of produce, and the purposes of travel, shall not be construed to have been surrendered or diminished by the state; unless it shall appear by plain words, that it was intended to be done.

It then concluded with the litany of horrors that would occur if being free from competition were to be assumed. It imagined that early turnpike corporations, long since supplanted by railroads and canals, would suddenly arise from the ashes to bring suit. The Court was also bothered by the scope of any implied agreement not to compete. Would the implied agreement be not to build another bridge within 100 yards, or would it be not to build one within miles? Justice Story dissented on the ground that failure to construe the statutory grant to build the bridge as not including the right to be free from a competing bridge between the same two cities, drawing from exactly the same users, made the grant illusory. He pointed out that the law incorporating the Charles River Bridge Company to build the bridge did not confer any authority actually to build a bridge, nor did it state where the bridge was to be built. Yet, he reasoned, who would question that “the court must, in the construction of this very act of incorporation, resort to the common principles of interpretation; and imply and presume things, which the legislature has not expressly declared?” As for the claim that the Charles River Bridge Company took the risk that a competing free bridge might be built, he asked, “Is there a man living, of ordinary discretion or prudence, who would have accepted such a charter, upon such terms? I fearlessly answer, no.” Six years later, the Taney court took a stricter Contract Clause approach with regard to a state law impacting preexisting private contractual rights (Bronson v. Kinzie, 1843). On February 19, 1841, Illinois passed a law giving all mortgagors twelve months to cure a default by repaying the purchase price with interest at the rate of 10 percent. In addition, the property in default could not be sold at a foreclosure auction unless the bid was two-thirds or more of its appraised value. The Kinzie mortgage was executed in Illinois on Chicago property on July 13, 1838, to Bronson, a New York mortgage holder. The mortgage contained what the court called “the usual provisos,” allowing Bronson to sell the property at auction after any default in the payment, principal, interest, or any part thereof. After default by the Kinzies, Bronson filed his suit in federal circuit court, on March 27, 1841, to foreclose on the mortgage. In an opinion by Chief Justice Taney, the Court said that if the law “had done nothing more than change the remedy upon contracts of this description, they would be liable to no Constitutional objection.” The Court did not mean that changes in remedies were never violations of the Contract Clause, just that they

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Limits on States

were less likely to be violations than changes in the substantive provisions. It cited a change in the time for barring suits under the statute of limitations, exempting certain things from execution on judgment, and protecting citizens from unjust and harassing litigation as three examples of regulations that “in every civilized community, as properly belonging to the remedy, [are] to be exercised or not by every sovereignty, according to its own views of policy and humanity.” The dissent added doing away with imprisonment for debt as a further example. The fact that such a change in remedy might be “less convenient than the old one, and may in some degree render the recovery of debts more tardy and difficult, yet it will not follow that the law is unconstitutional.” The Court then quickly modified this broad statement: Whatever belongs merely to the remedy may be altered according to the will of the state, provided the alteration does not impair the obligation of the contract. But if that effect is produced, it is immaterial whether it is done by acting on the remedy or directly on the contract itself. In either case it is prohibited by the Constitution.

Without specifically discussing any distinction between acting on the remedy and directly on the contract itself, the Court made it clear that any change in the law of contracts, remedy or otherwise, that materially impacted preexisting contractual rights violated the Contract Clause. The Court said, If these acts so change the nature and extent of existing remedies as materially to impair the rights and interests of the owner, they are just as much a violation of the compact as if they directly overturned his rights and interests. (Quoting Green v. Biddle, 1823)

The Court made clear its respect for contract rights protected by the Contract Clause: “It was undoubtedly adopted as a part of the Constitution for a great and useful purpose. It was to maintain the integrity of contracts, and to secure their faithful execution throughout this Union. . . . And it would but ill become this court under any circumstances to depart from the plain meaning of the words used, and to sanction a distinction between the right and the remedy, which would render this provision illusive and nugatory.” The Court did not attempt to examine those changes in remedies that would not impair contractual rights versus those material changes that would. There is no discussion at all as to what might be a material change other than the reference to maintaining the integrity of contracts. The Court viewed the right of the mortgagee to sell on default to be a settled rule of law or equity and, absent any state law or contractual provision to the contrary, it should be respected. The Court felt that to delay the right to sell the property for a period of one year was the equivalent to giving the mortgagor and any judgment creditor an equitable estate in the property inconsistent with the absolute right of possession of the mortgagee given by the contract. As for the lim-

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21

itation on the sale of the property for less than two-thirds of its appraised value, the Court was willing to accept this as a limitation upon the remedy, but still a violation of the Contract Clause. The two-thirds appraisal rule, oddly, applied only to contracts entered into before May 1, 1841. The Court felt that such a limitation would “frequently render any sale altogether impossible.” The fact that it was also limited to a certain class of contracts made it “still more objectionable.” Finally, the Court was clear that contracts entered into after the date of the change in the law were subject to the new law: “Mortgages made since the passage of these laws must undoubtedly be governed by them; for every state has the power to prescribe the legal and equitable obligations of a contract to be made and executed within its jurisdiction.” For emphasis, it repeated that “of course” the state law was limited in its prospective operation as to “contracts made and to be executed in the state.” In an 1848 case, the Taney Court found that contractual rights were subject to the eminent domain powers of the state, just as any other property interest was (West River Bridge Co. v. Dix, 1848). In 1795, Vermont had given the plaintiff, West River Bridge Company, the exclusive privilege of erecting a bridge over West River within four miles of its mouth, and the right to collect tolls for a period of 100 years. In 1839, Vermont created a Roads Commission with authority to build new public roads and take private property upon just compensation. A public road was built across the West River Bridge, and compensation was assessed and awarded to the West River Bridge Company. Pending the proceedings for compensation, the company brought suit to enjoin the taking of its contractual franchise. It argued that the taking of preexisting contractual rights, even with compensation, was not allowed absent the highest level of necessity. In the particular case, the company argued that it was unnecessary to take its bridge in order to build the public road in question. The Court recognized the inviolability of contractual rights, yet “there inheres necessarily the right and the duty of guarding its [the state’s] own existence, and of protecting and promoting the interests and welfare of the community at large.” It continued, This power-denominated the eminent domain of the State, is, as its name imports, paramount to all private rights vested under the government, and these last are, by necessary implication, held in subordination to this power, and must yield in every instance to its proper exercise.

As for Contract Clause rights specifically: A correct view of this matter must demonstrate, moreover, that the right of eminent domain in government in no wise interferes with the inviolability of contracts; that the most sanctimonious regard for the one is perfectly consistent with the possession and exercise of the other.

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The Court said that all contracts, those between the state and individuals and those between individuals, were conditioned by terms not arising out of the terms of the contract, but “are superinduced by the preexisting and higher authority of the laws of nature, of nations, or of the community to which the parties belong.” It said that it was to be presumed that all contracting parties were aware of these preexisting superseding conditions and that all contracts were “made in subordination to them.” One such condition is the power of eminent domain. The Court said that “the whole policy of the country, relative to roads, mills, bridges, and canals, rests upon this single power,” and that the preexisting contractual rights of chartered corporations were not superior to this fundamental attribute of government. In another case, the Court found an 1851 personal property tax on state banks to be a Contract Clause violation because it ran contrary to an 1845 law that authorized state banks and provided for only a 6 percent tax on dividends (Piqua Branch of State Bank of Ohio v. Knoop, 1853). By an Ohio act of 1845, any five or more individuals could form an association to carry on banking in Ohio at least until May 1866, subject to a 6 percent dividend tax that was “in lieu of all taxes to which the company, or the stockholders therein, would otherwise be subject.” In 1851, Ohio applied its personal property tax to the assets of the bank, billing Piqua Bank an additional $12,067.63. Piqua had already paid a dividend tax of $862.50 and refused to pay the additional property tax of $12,067.63. Ohio sued to collect the additional tax. Piqua defense was that the 1845 law authorizing state banks obligated such banks to pay only the dividend tax and that any change of that obligation would be in violation of the Contract Clause. The state supreme court sustained the additional tax of 1851. The state court had reasoned that the act of 1845 was just a general taxing statute, which could be changed at the will of the legislature at any time. It did not see any enforceable contract at all. It viewed the “in lieu” language in the 1845 tax as referring to other taxes in existence at that time, not as an exemption from future taxing law. Justice John McLean, writing for the U.S. Supreme Court, ruled that the 1845 act was an enforceable contract that fixed the type and rate of tax. The act made an offer that induced investors to form banking companies that, when formed, were sufficient consideration for contract formation. The 1851 attempt to add further taxes was a breach, and was thus in violation of the Contract Clause. The Court recognized that there was no contractual exemption from additional taxation, but it felt that the “in lieu” language carried the clear presumption that no additional taxes would be allowed. As for the state court’s claim that the phrase referred only to an exemption from other current taxes, not future taxes, McLean pointed out that there were no other taxes in 1845 that applied to banks, all of the others having been repealed. The logic was then clear: since the “in lieu” language could not refer to existing taxes because there were none, it had to refer to an exemption from future taxes. The Court also thought it important that, historically, Ohio had encouraged the creation of state banks without any express

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language on taxation, but without success. The Court thought that the 6 percent dividend limitation was a key provision inducing investors to create state banks. Since the tax limitation was part of the laws involving the creation of state banks, the Court felt that all banks created under the 1845 laws could take advantage of this contractual agreement. It did not view the tax as a part of the general taxing scheme of the state that could be changed at the will of the state. It rejected the notion that the power to tax was the same as the power of eminent domain, that it could always be exercised by a future legislature because eminent domain involved payment for the taking and taxation was an assessment against property for the benefit of the government. Finally, the Court addressed the claim that a state could not contract away its right to tax because, contrary to essential attributes of sovereignty: Having the power to make the contract, and rights becoming vested under it, it can no more be disregarded nor set aside by a subsequent legislature, than a grant for land. This act, so far from parting with any portion of the sovereignty, is an exercise of it.

Absent the constitutional limits of the Contract Clause, the Court said, a state would have the sovereign power to abrogate its contracts, but that did not mean that exemptions from taxation were in violation of sovereign principles: “The vague and undefined and indefinable notion, that every exemption from taxation or a specific tax, which withdraws certain objects from the general tax law, affects the sovereignty of the State, is indefensible.” The idea that there are certain attributes of sovereignty that cannot be contracted away finally carried the day in a case where the unanimous Court held that a contract to run a state lottery for twenty-five years did not preclude the state from making the lottery illegal (Stone v. Mississippi, 1879). In 1867, the provisional state government had given a charter to Stone’s company that granted the right to hold a state lottery for twenty-five years. The company was to pay a one-time franchise fee of $5,000, an annual tax of $1,000, and 0.50 percent of the annual receipts. The next year, the state adopted a new constitution that specifically prohibited the legislature from ever authorizing any lottery and barred the sale of any lottery ticket, specifically including “any lottery heretofore authorized.” The Court said that whether there was a contract or not within the corporate charter depended on the authority of the legislature to bind the state: “All agree that the legislature cannot bargain away the police power of a State.” Exactly how to define the police power that could not be contracted away, the Court admitted, was a difficult matter, but whatever might be arguable about the police power, “[n]o one denies . . . that it extends to all matters affecting the public health or the public morals. Neither can it be denied that lotteries are proper subjects for the exercise of this power.” In contrast to the early days of the Union, the fact that at the time there was

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“scarcely a State in the Union where lotteries . . . [were] tolerated” made it easy for the Court to find a ban on lotteries to be a part of the police power that could not be contracted away. As it had said in an earlier case: Common forms of gambling are comparatively innocuous when placed in contrast with the widespread pestilence of lotteries. The former are confined to a few persons and places, but the latter infests the whole community; it enters every dwelling; it reaches every class; it preys upon the hard earnings of the poor; and it plunders the ignorant and simple. (Phalen v. Virginia, 1850)

“The power of governing,” the Court stated, “is a trust committed by the people to the government, no part of which can be granted away.” The Court went on to say that the contracts protected by the Constitution “are those that relate to property rights, not governmental.” Again, it admitted that the line between the two would be difficult to draw, but suppressing lotteries was clearly governmental. Therefore, anyone who accepted a state lottery charter did so “with the implied understanding that the people, in their sovereign capacity, and through their properly constituted agencies, may resume it at any time when the public good shall require, whether it be paid for or not.” The person with a lottery charter simply held a license to enjoy the privilege for the term specified “unless it be sooner abrogated by the sovereign power of the State.” This was not to say that the lottery charter was without value. It was certainly valid under existing laws, just subject to future change or withdrawal. The state’s innate police power as a limitation on contract rights became the prevailing doctrine. In an 1884 case, the Court said that New Orleans’s grant of a slaughterhouse monopoly to Crescent City for twenty-five years did not prevent the city from changing its law (Butchers’ Union Slaughter-House & Live-Stock Landing Co. v. Crescent City Live-Stock Landing & Slaughter-House Co., 1884). It would not say that the state could not contract away any of its police power: “We think that, in regard to two subjects so embraced, it cannot, by any contract, limit the exercise of those powers to the prejudice of the general welfare. These are the public health and public morals.” The Court cited, in support of this proposition, a case that held that a state franchise for converting slaughterhouse residue into fertilizer was not impaired by a city law regulating its transportation (Northwestern Fertilizing Co. v. Village of Hyde Park, 1878). Based upon principles of nuisance law, the Court in that case allowed the village of Hyde Park to prevent transportation of the residue through the town, effectively closing down the expensive processing plant. In that case, the Court had said: An examination of the evidence in this case clearly shows that this factory was an unendurable nuisance to the inhabitants for many miles around its location; that the stench was intolerable, producing nausea, discomfort, if not sickness, to the people; that it depreci-

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ated the value of property, and was a source of immense annoyance. . . . And the transportation of this putrid animal matter through the streets of the village, as we infer from the evidence, was offensive in a high degree both to sight and smell.

Nonetheless, the inherent police power reasoning did not protect every change in the law. In another case, the Court found that a law allowing a new company to provide gas lighting to New Orleans impaired an exclusive fifty-year franchise that provided for such lighting (New Orleans Gas-light Co. v. Louisiana Light & Heat Producing & Manufacturing Co., 1885). The Court rejected the police power defense to the impairment, saying, “With reference to the contract in this case, it may be said that it is not, in any legal sense, to the prejudice of the public health or the public safety.” The fact that the city had the police power to regulate safety aspects of the distribution of gas lighting did not give it the right to abrogate its earlier contract giving an exclusive franchise. The Court rejected the claim that the grant of a monopoly was inherently contrary to the public interest. The fact that the change in the state law resulted from a change in the state constitution also did not impress the Court: “[a] state can no more impair the obligation of a contract by her organic law than by legislative enactment; for her constitution is a law within the meaning of the contract clause of the national constitution.” If the state wanted to abandon its agreed-upon exclusive franchise, it could do so upon just compensation, using its power of eminent domain. In 1905, in Manigault v. Springs, the Court found that a state law authorizing the building of a dam to address flooding problems did not impair an earlier contract to not build a dam. In 1898, in settlement of a lawsuit, the defendants agreed to remove a dam that impacted a creek important to the plaintiff’s mill business. In 1903, the state of South Carolina passed a law specifically authorizing the defendants to build the dam. The Court rejected a suit to enjoin the dam. It said that “the obligation of contracts [sic] does not prevent the state from exercising such powers as are vested in it for the promotion of the common weal, or are necessary for the general good of the public,” even though existing contracts might be impacted. It called this the police power, which it defined as “an exercise of the sovereign right of the government to protect the lives, health, morals, comfort, and general welfare of the people, and is paramount to any rights under contracts between individuals.” As examples of the state’s ability to use its police power to overturn contracts valid when made, the Court mentioned contracts to sell liquor, operate a brewery, or carry on a lottery. It concluded that “parties, by entering into contracts, may not estop the legislature from enacting laws intended for the public good.” Although noting that this power was subject to some limitations, the Court cautioned that the legislature had wide discretion in exercising the power with which the courts would ordinarily not interfere. It concluded that the act allowing the dam was a proper exercise of the police power and “defensible in its broader meaning of providing for the general welfare of the people” by addressing the many problems related to the overflowing creek.

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Limits on States

It pointed out that the law specifically allowed damages for any compensable harm as the result of the dam. THE MODERN APPROACH TO THE CONTRACT CLAUSE, AFTER 1934 The most famous Contract Clause case of the modern era is Home Building & Loan Assn. v. Blaisdell. In 1934 the Court, in an opinion by Chief Justice Charles Evans Hughes, upheld the constitutionality of the Minnesota Mortgage Moratorium Law passed in 1933 to address the rash of foreclosures resulting from the Great Depression. The act allowed the postponement of foreclosure sales and the extension of the period of redemption for up to two years. It required that the mortgagor continue to pay the reasonable rental or income value of the property to the mortgagee pending the sale or redemption of the property. The rental amount was to be applied to taxes, insurance, interest, and, if anything was left, to the principal. The law was specifically limited to “the continuance of the emergency and in no event beyond May 1, 1935.” Capturing the extreme nature of the economic emergency, the U.S. Supreme Court quoted the Minnesota supreme court: The present nation wide and world wide business and financial crisis has the same results as if it were caused by flood, earthquake, or disturbance in nature. It has deprived millions of persons in this nation of their employment and means of earning a living for themselves and their families.

The preamble to the law itself referred to “an almost complete lack of credit . . . and a general and extreme stagnation of business, agriculture and industry.” Chief Justice Hughes took judicial notice that among the other effects of the depressed economy, “[n]o bank would directly or indirectly loan on real estate mortgages.” The Supreme Court recognized, but downplayed, the clear impact of the state law on preexisting contractual rights. Although the law did make the mortgagee “unable to obtain possession, or to obtain or convey title in fee, as he would have been able to do had the statute not been enacted,” it did require the payment of the rental value and did not impair the integrity of the underlying mortgage indebtedness. The Court minimized the loss of the right to possession, saying that as far as rental value was concerned, “the equivalent of possession during the extended period” was available. The Court briefly traced the historical origins of the Contract Clause, finding that it was necessary to protect investor confidence in the newly liberated country. It quoted Chief Justice Marshall’s concern that unreasonable creditor relief not only would “impair commercial intercourse, and threaten the existence of credit, but [also would] sap the morals of the people, and destroy the sanctity of private faith” (Ogden v. Saunders, 1827). Nonetheless, the Court made it clear

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where it expected its review of its precedents to come out: “These [judicial decisions] put it beyond question that the prohibition is not an absolute and is not to be read with literal exactness like a mathematical formula.” The state, for example, had some ability to modify contractual remedies, provided that such changes did not substantially impair preexisting rights. Thus, the state could eliminate imprisonment for civil debt (In re Penniman, 1880), but could not increase the property amount of a judgment debtor exempted from execution (Edwards v. Kearzey, 1877). The Court recognized that there was no clear line for determining when changes in remedies were allowed and when they were found to be substantial impairments, saying, “In all such cases the question becomes, therefore, one of reasonableness, and of that the legislature is primarily the judge” (Home Building and Loan Assn. v. Blaisdell, 1934). The Court in Bronson v. Kinzie had found in violation of the Contract Clause the state’s attempt to address the panic of 1837 by extending the time for redemption of foreclosed property by twelve months, but in that case there was no provision for securing the rental value of the property to the mortgagee. Impairment included any law that rendered the obligations of a contract invalid or one that released or extinguished those obligations, but it was not required that contractual rights be destroyed. Substantial departure was enough. More important, the Court said that in addition to the state’s ability to adjust contractual remedies to some degree, it also had the “reserved power” to safeguard its people’s vital interests. The economic interest of the state justified its exercising its “continuing and dominant protective power” to override preexisting private contracts. The state could, for example, authorize a dam to be built to increase the value of lowland property, despite a private contract agreeing that the dam would not be built (Manigault v. Springs, 1905). If one is subject to state regulations, entering into a private contract does not insulate the subject matter from state regulation. If the state has the authority to regulate rates charged by public utilities, a private rate agreement would not preclude that authority. It does not matter whether the state impacts contractual rights either directly or incidentally; it has the same authority: “The question is not whether the legislative action affects contracts incidentally, or directly or indirectly, but whether the legislation is addressed to a legitimate end and the measures taken are reasonable and appropriate to that end.” The state’s reserved ability to impair preexisting contracts in the exercise of its higher powers is not limited to those contracts that are hostile to public morals, health, or safety, or are otherwise injurious to the public good. On the other hand, the reserved power of the state must be exercised in a way consistent with the Constitution. The state, under the guise of exercising its reserved power, is not free to repudiate debt, destroy contracts, or deny the means to enforce contracts. Temporary and limited restrictions of the enforcement of contracts necessary to address “great public calamity such as fire, flood, or earthquake” are certainly allowed. The reserved power to address such extraordinary

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Limits on States

conditions is deemed a part of all contracts, as well as other public interests. Further, the Court said, if there is reserved power to impact the enforcement of contracts for physical causes, it naturally follows that the state has the power to address urgent public needs produced by economic causes. This police power can, without violating the intent of the Constitution, be used to place temporary and conditional restraints on the enforcement of the literal terms of contracts in order to prevent harm to vital public interests. The cases holding that state regulation of certain economic matters does not violate the Due Process Clause are supportive of this right. There must be some “rational compromise,” the Court said, between the rights of individuals and the public welfare. In the early days, it may have been thought that rights of individuals were paramount, but as we become a more complex society, the Court said, the contractual rights of private parties must yield to “reasonable means to safeguard the economic structure upon which the good of all depends.” The Constitution is a living document, and the Contract Clause precedents recognize this evolution. The Court has imposed limits on the Contract Clause “to prevent the perversion of the clause though its use as an instrument to throttle the capacity of the states to protect their fundamental interests.” In short, the evolution of the Contract Clause cases upholds one clear principle: “The reservation of the reasonable exercise of the protective power of the state is read into all contracts.” As for the particular law in the case, the Court emphasized five points. First, an emergency existed, giving the proper occasion for the exercise of the state’s reserved power to protect its vital interest. Second, the legislation was for a legitimate purpose: protecting a basic interest of society, not just that of particular individuals. Third, given the clear validity of the contracts, the legislative relief needed to be of a character appropriate to the emergency and to be granted only upon reasonable conditions. Fourth, the extension of the period of redemption was not unreasonable. The underlying indebtedness was in no way impaired, interest continued to run, and the mortgage holder received a judicially determined rental value during the extended redemption period. Fifth, the legislation was temporary in operation, and limited to the exigency of the moment. The Court also observed that it was not up to it to judge the wisdom, or lack of wisdom, of the law. It said that this was also true with regard to any substantive due process claims. It also found that there were no arbitrary classifications in violation of equal protection rights. The dissenting opinion of Justice George Sutherland, speaking for four justices, emphasized that the Contract Clause was placed in the Constitution for the very purpose of preventing debtor relief not unlike that being granted by the Minnesota law. “[The Contract Clause] was framed and adopted with the specific and studied purpose of preventing legislation designed to relieve debtors especially in time of financial distress.” The sanctity of private contracts required that they be respected in good times and in bad times. The importance of a written constitution was that its words would be used to protect basic rights from the va-

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garies of various emergencies: “Debtors, instead of seeking to meet their obligations by painful effort, by industry and economy, began to rest their hopes entirely upon legislative interference.” In a 1935 case, the Court indicated that the Contract Clause still had some teeth, at least when contractual rights were blatantly ignored (W.B. Worthen Co. v. Kavanaugh). Municipal improvement districts organized under Arkansas law could issue bonds secured by mortgage benefit assessments. Under the initial law, upon default the mortgage holder could force a foreclosure sale within sixty-five days and with a 20 percent penalty. The state of Arkansas extended the time for curing the default to at least two and a half years, and in some instances, as long as six and a half years. The penalty was reduced to 3 percent. Any municipality could take advantage of this extension without any necessity of showing the inability to pay. The Court recognized that the cases distinguished between changes of the substance of the contract and changes of the remedy. Nonetheless, it said, “Not even changes of the remedy may be pressed so far as to cut down the security of a mortgage without moderation or reason or in a spirit of oppression.” It cautioned that even when the government’s reserved power to address matters of public welfare was invoked, “these bounds must be respected.” W.B. Worthen Co. v. Kavanagh is often cited for the proposition that a complete destruction of contract rights is not required for a Contract Clause violation. In East New York Savings Bank v. Hahn (1945), the Court took it as given that moratorium legislation related to the Great Depression would not violate the Contract Clause. In the case, the state had continued the moratorium long after the depression had been replaced by the robust wartime economy. It summarized the proper contract clause principle as follows: When a widely diffused public interest has become enmeshed in a network of multitudinous private arrangements, the authority of the State “to safeguard the vital interest of its people” is not to be gainsaid by abstracting one such arrangement from its public context and treating it as though it were an isolated private contract constitutionally immune from impairment.

The Court also believed that the police power of the state to protect the general welfare of the people was paramount to any contract between two people. The Court felt that it had no right to question the legislative judgment about the need to continue the moratorium legislation. It viewed W.B. Worthen Co. v. Kavanaugh as involving that situation where the state law showed “studied indifference to the interests of the mortgagee or to his appropriate protection.” The Court thought that suddenly ending the moratorium on liquidations after more than eight years might create an emergency more acute than the depression. It concluded, “It would indeed be strange if there were anything in the Constitution of the United States which denied the State the power to safeguard its people against such dangers. There is nothing.”

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Limits on States

In addition to Home Building & Loan Assn. v. Blaisdell, the most widely cited case of the modern era is no doubt El Paso v. Simmons (1965). In this case, the state of Texas changed the time in which to cure a default in the purchase of state lands from an unlimited period to five years. From the time it became a state, Texas had reserved half of its public lands to sell to fund its public schools. Under the terms of the original purchase, any defaulting purchaser had the unlimited right to cure the default by paying back interest, unless the property was then owned by someone other than the state. The cost of this easy source of money for public schools was chaos in land titles, with speculators able to claim property that later came to have value because of discovery of oil or gas or because the city of Houston was now built on it. The 1941 act changed the contract to allow reinstatement for a period of only five years and only for the last purchaser of record. The 630 acres in question in El Paso v. Simmons had originally been purchased in 1910. In 1947, the land was forfeited for nonpayment of interest, with notice that there was a five-year period in which to cure the forfeiture. Simmons, who had taken the property by quitclaim deed, tendered the required payments exactly five years and two days later—two days too late. In 1955, the property was sold to the city of El Paso for $6.50 per acre. Simmons’s purchase price would have been $1.50 per acre. Simmons sued in federal district court to determine title in the land. The Court said that the prohibition of the Contract Clause was not absolute and did not have to be read with “literal exactness like a mathematical formula.” The Court stated three different rationales for changing preexisting contractual rights. First, the state retained a measure of control over remedial processes. Second, the state continued to possess the authority to safeguard the interest of its people. And third, just as existing laws are read into every contract, so “the reservations of essential attributes of sovereign power” are read into contracts as well. In construing this sovereign right to protect the general welfare of the people as part of the reserved power of the state, the Court was to respect the wide discretion of the legislature. Of course, the Court cautioned, the reserve power of the state was not without limits. It had to be “consistent with the fair intent” of the Contract Clause. Thus, for example, the state could not adopt as policy the repudiation of debts, the destruction of contracts, or the denial of means to enforce them. The Court traced the history of the sale of Texas public lands to fund its public schools, with the early laws being frequently modified in favor of purchasers. The state’s purpose in changing the period to cure a forfeiture was obvious. With the discovery of gas and oil and the evolution of Texas from “a frontier society to a modern State”—a hopeful thought—the state of Texas had to address the chaos of its land titles and the problem of its letting productive state lands remain unused. Thousands of purchase contracts involving millions of acres of school land had been forfeited. Many of the parcels had been sold and forfeited several times. Various state attempts to repurchase the land had not been successful. As far as private interests were concerned, the Court conveniently ig-

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nored the speculative purpose behind the land sales and said that the promise of reinstatement was not the primary consideration for the buyers’ undertaking. Given the fact that a right to reinstatement could be defeated by a valid thirdparty purchase, the Court said that the buyer could not seriously contend that he “was substantially induced to enter into this contract on the basis of a defeasible right to reinstatement” or that he would have thought that such a right was everlasting. Of course, as Justice Hugo Black pointed out in dissent, this was exactly what the speculative purchasers of this land thought. The Court said that the failure of the plan to sell public lands in a way that led to stable purchases was an unexpected and unforeseen burden that gave the purchaser considerable advantage and placed costly and difficult burdens on the state. It said that its decisions have never given a law which imposes unforeseen advantages or burdens on a contracting party constitutional immunity against change. . . . Laws which restrict a party to those gains reasonably to be expected from the contract are not subject to attack under the Contract Clause.

The Court concluded that the five-year limitation to reinstate was a reasonable time. It described the limitation as a “mild one indeed, hardly burdensome to the purchaser who wanted to adhere to his contract of purchase.” The state’s interest in getting maximum revenue from its school lands and its interest in addressing the uncertainty of land titles with all of the attendant costs justified the change in contract rights. In a famous dissent, Justice Black argued that the Court was improperly applying a Rational Basis Test instead of the language of the Contract Clause. He rightly noted that the Court undervalued the importance of private rights of purchasers of Texas lands and failed to consider that Texas could have paid for the land in question. He viewed the law as a way for Texas to get land for free that it should have paid for with tax revenues if it had wanted the land. He thought the canceling of a valid contract was also a taking of private property without just compensation, in violation of the Fifth Amendment. Balancing, Black said, was just a way for the Court to substitute its modern notions of fairness for the Framers’ intent to protect contract rights from the “fluctuating policy” of the state. Justice Black seemed to be using the Contract Clause to continue his argument in favor of the absolute protection of free speech rights as much as to express any apparent dedication to the language of the Contract Clause. THE COURT REDISCOVERS—AND QUICKLY ABANDONS— THE CONTRACT CLAUSE, 1975 TO THE PRESENT Surprisingly, the Supreme Court rediscovered the Contract Clause as a significant restriction on state legislation in two mid-1970s cases, and just when it seemed that the Contract Clause might regain some prominence as a way of pro-

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Limits on States

tecting economic interest against retroactive legislation, the Court just as quickly reversed course and again relegated the Contract Clause to limited judicial review. As interesting as the sudden change of heart is the total absence of explanation by the Court as to why in El Paso v. Simmons, after relegating the Contract Clause to the rational basis garbage can of judicial review, it suddenly had some interest in such rights, only to quickly lose interest. The result is a very schizophrenic approach in which the Court requires an elaborate balancing of competing interests, only to easily resolve the balance to allow the state all but free rein in modifying preexisting contractual rights. In 1975, in U.S. Trust Co. of New York v. New Jersey, the Court decided a Contract Clause case for the first time since El Paso v. Simmons some ten years previously. Even more surprisingly, the Court found that a state law had unconstitutionally impaired Contract Clause rights. In 1974, New Jersey and New York repealed a statutory covenant entered into in 1962 to protect bondholders of the New York and New Jersey Port Authority, created by a 1921 interstate compact to build and maintain the bridges across the Hudson River joining the two states. The Port Authority sold private bonds to finance the construction. Initially, some part of the tolls collected was set aside to redeem the bonds when they became due, but when the need to fund additional commuter rail lines led to the greater use of the reserves. When the Port Authority took on the financial obligation for a failing commuter line, the investors threatened lawsuits. In order to assure the investors of the continued validity of their security, the two states in 1962 entered into what was called a statutory covenant in which they agreed to maintain certain reserves and to limit the investment of the toll funds in rapid transit. When ambitious plans to build rail lines to Kennedy Airport in New York and to Newark Airport in New Jersey failed because of a loss of financing, the states looked elsewhere for money. An oil shortage due to cutbacks by the oil-producing Middle Eastern countries made the need for mass transit all the more desperate. The possibility of accessing federal funds if the states could come up with their share led the two states to pass legislation repealing the 1962 statutory covenant. The Court first determined that the 1962 statutory covenant was indeed a contract. It recognized that the Contract Clause did not prohibit a state from “repealing or amending statutes generally, or from enacting legislation with retroactive effects.” In this instance, the language of the statute made it clear that a contract was intended. The trial court had so found, and New Jersey did not contest the issue on appeal. Indeed, the historical record revealed that the very purpose of the 1962 statutory covenant was to claim the Contract Clause rights for the bondholders. The Court again used the familiar modern litany that the prohibition was not an absolute one and that it lacked the exactness of a mathematical formula, but still there had been what the Court called “a technical impairment,” which required that it attempt to reconcile the limitations of the Contract Clause with the “ ‘essential attributes of sovereign power’ necessarily reserved by the States to safeguard the welfare of their citizens.” It stated that the language of the Con-

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tract Clause had “been subsumed in the overall determination of reasonableness.” Legislation that the Court had sustained in other cases had been adopted pursuant to a declared emergency and had been strictly limited in duration. Subsequent decisions had upheld state laws that were not so limited, indicating that these limitations were not absolute requirements. Nonetheless, the Court said the existence of an emergency and the limited duration of a relief measure were relevant factors to be considered in determining the reasonableness of an impairment, even though they were not essential in every case. Initially, the Court had to decide whether the state could bind itself at all. It recognized that it was often said that the legislature could not bargain away its intrinsic police power. Prior to any determination of the reasonableness of any public purpose, it first had to be determined that the contract was not inconsistent with this principle: “In short, the Contract Clause does not require a State to adhere to a contract that surrenders an essential attribute of its sovereignty.” For example, in an earlier case the Court had found that a state maintained the inherent right to cancel a twenty-five-year charter to operate a lottery. It said that past cases had also held that a state could not agree not to exercise its police power or not to exercise its power of eminent domain, but past cases had held that it could bind itself financially in various ways. Such financial commitments were within the sovereign power of the state and thus were subject to the restrictions of the Contract Clause: “The instant case involves a financial obligation and thus as a threshold matter may not be said automatically to fall within the reserved powers that cannot be contracted away.” Nonetheless, the Court said: The Contract Clause is not an absolute bar to subsequent modification of a State’s own financial obligations. As with laws impairing the obligations of private contracts, an impairment may be constitutional if it is reasonable and necessary to serve an important public purpose.

Normally, this standard required deference to the legislative branch, but not when the state was canceling its own contract to protect its self-interest. The Court said disapprovingly: A governmental entity can always find a use for extra money, especially when taxes do not have to be raised. If a State could reduce its financial obligations whenever it wanted to spend the money for what it regarded as an important public purpose, the contract clause would provide no protection at all.

The Court rejected what it viewed as the trial court’s “total destruction” test, whereby an impairment of a contract was not unconstitutional unless the contractual rights were totally destroyed. The Court said this was a misreading of W. B. Worthen Co. v. Kavanaugh, which had stated only an “outermost limits” test because the impairment in that case was so egregious. Although the extent

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of the impairment was a relevant factor in determining reasonableness, the Contract Clause prevented impairments even when there was not a total disregard of contractual right: “But we cannot sustain the repeal of the 1962 covenant simply because the bondholders’ rights were not totally destroyed.” Although the issue was in sharp dispute, the Court thought the alteration of a municipal bond contract was a serious breach of the security rights of the bondholders. The market for the bonds had fallen after the repeal, but they later gained back most, if not all, of their value, and the rating remained unchanged. Although it could not be proven that the change had impacted the value of the bonds at all, the Court concluded that the bondholders had been harmed by the change. It said: [a]s a security provision, the covenant was not superfluous; it limited the Port Authority’s deficits and thus protected the general reserve fund from depletion. Nor was the covenant merely modified or replaced by an arguably comparable security provision. Its outright repeal totally eliminated an important security provision and thus impaired the obligation of the States’ contract.

It was argued in the case that mass transportation, energy conservation, and environmental protection were important matters of public concern that outweighed the harm to contract rights. The Court rejected this balancing approach, saying: We do not accept this invitation to engage in a utilitarian comparison of public benefit and private loss. . . . Thus, a State cannot refuse to meet its legitimate financial obligations simply because it would prefer to spend its money to promote the public good rather than meet its responsibility to its creditors.

It continued, “We can only sustain the repeal of the 1962 covenant if that impairment was both reasonable and necessary to serve the admittedly important purposes claimed by the State.” To the argument that the harm to bondholders was slight, the Court responded that it then should be easy for the state to use its power of eminent domain to pay for the right to change the contract. As for the specific purpose of encouraging the greater use of public transportation, the Court could not see why it was necessary to abridge this contract to achieve this purpose or why it was reasonably related to any responsibility of the bondholders. Even if some abridgment was necessary, it did not have to be as extreme as the cancellation of all limits. Further, the Court said, there were no changes in circumstances from the time when the contract was entered into that justified the impairment. The fact that the states needed funds for mass transit was well known, and it was the exact intent of the 1962 statutory covenant to limit the states in their ability to tap these funds for that purpose. As for legislative discretion, the Court said that a State is not completely free to consider impairing the obligations of its own contracts on a par with other policy alternatives. Similarly, a State is not free to impose a drastic

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impairment when an evident and more moderate course would serve its purposes equally well.

This was especially true when the state was changing its own contracts as opposed to regulating private contracts between others. The normal level of deference to the legislature, whatever it may have been, did not apply in this situation. The states could encourage use of mass transportation by increasing tolls, raising the tax on gasoline, upping the cost of parking, or in any number of other ways. They did not need to cancel this contract. In El Paso v. Simmons, the Court said, the retroactive changes limited the purchasers to reasonable investmentbased expectations and denied them the benefit of unreasonable speculation. Here, the bondholders were denied exactly what they had bargained for. In Allied Structural Steel Co. v. Spannaus (1978), the Court continued its revival of the Contract Clause, this time finding Minnesota’s attempt to protect employees from changes in their employer-based pension plans to be in violation of the Contract Clause. Allied Structural Steel Co. had its principal place of business in Illinois but maintained an office with thirty employees in Minnesota. Since 1963, the company had voluntarily contributed to an IRS-qualified, single employer 401 pension plan. In order to be eligible for the pension payable at age sixty-five, an employee had to have worked for the company between fifteen and twenty-five or more years, depending on age and length of employment. On April 9, 1974, Minnesota enacted the Private Pension Benefits Protection Act, which in essence provided vested rights to a limited class of employees who had worked for ten years. It required any private employer with more than 100 employees, any one of whom was a Minnesota resident, to pay a “pension funding charge” if the company terminated a pension plan or closed a Minnesota office. On July 31, Allied began closing its Minnesota office and laid off eleven of the thirty employees, nine of whom did not have vested pension rights under the company’s pension plan but did under the Minnesota law. The company was notified that it owed a pension funding charge of approximately $185,000. In a 5–3 opinion, the Supreme Court found the change in the time for vesting pension rights to be in violation of the Contract Clause. The Court said that the unambiguously absolute language of the Contract Clause was not as draconian as it seemed to be, and that such literalism “would make it destructive of the public interest by depriving the State of its prerogative of self-protection.” Although the Court acknowledged that the Contract Clause was “perhaps the strongest single constitutional check on state legislation during our early years as a Nation,” it felt that it had been largely replaced in importance by the Equal Protection and Due Process Clauses. Still, the Court said, “It is not a dead letter.” Although the clause did not obliterate the police power of the states, it did impose some limits upon the states’ ability to abridge existing contracts. The Court stated that the catalyst for any Contract Clause claim was that the state law “operated as a substantial impairment on the contractual relationship.” The “severity of the impairment measures the height of the hurdle” the state law must clear.

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Minimal impairment might foreclose further inquiry, while severe impairment would call for “careful examination of the nature and purpose of the state legislation.” The Court provided little guidance in determining the difference between a minimal impairment allowing for summary resolution and a substantial impairment calling for careful balancing. The Court obliquely said that the severity could be “measured by the factors that reflect the high value the Framers placed on the protection of private contracts.” It then observed that contracts enable individuals to order their personal and business lives according to their own particular needs and, once arranged, the parties can rely on them, but there was no indication of what “high value” factors the Framers had in mind. As the Court saw it, in the particular case the employer had contracted to provide a pension plan as a fringe benefit. The company had no reason to believe that the benefits would vest except as provided for in the plan. It relied on this “legitimate contractual expectation” in its annual contributions to the pension trust fund. The state law substantially impaired one of the basic presumptions: that a person with ten years employment had no vested pension rights. Suddenly, the company had to pay another $185,000 to fund pensions for persons who under the company plan had no pension rights. The Court said that reliance is vital in funding a pension plan. A responsible employer would contribute a little each year to avoid just such a contingency. This law, the Court said, “nullifies” express contractual terms and imposes “completely unexpected liability” in “potentially disabling amounts.” There was no evidence that this “severe” disruption was necessary to meet some important general social problem. The Court also objected to the lack of any clear statement of legislative purpose for the law. It saw it as only a narrow legislative response to a few companies in Minnesota that were closing down, and certainly not as a law addressing a broad societal interest such as the Great Depression. The Court did caution that something other than an emergency of great magnitude could justify a contract impairment. Here was a law imposing a “sudden, totally unexpected” burden, a “substantial retroactive obligation,” grossly distorting preexisting contractual rights for a poorly articulated purpose not even “remotely approaching the broad and desperate emergencies” of the depression of the 1930s. In fact, this law regulated only those companies that had been progressive enough to have a pension plan and that happened to be closing their Minnesota offices. It concluded that the Minnesota law, first, was not enacted to deal with a broad, generalized economic or social problem. Second, it did not operate in an area already subject to state regulation, but invaded an area never before regulated. Third, this was not a temporary change but a severe, permanent, immediate, and irrevocable change. Fourth, its aim was narrowly focused on just a few employers, and the most enlightened to boot. Even though the Court was unwilling to characterize the law as being “without moderation or reason or in spirit of oppression,” it was nonetheless a far cry from what the Contract Clause would constitutionally permit. The dissent of Justice William Brennan, in which Byron White and Thurgood Marshall joined, argued that the Contract Clause was not the appropriate analy-

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sis for a law adding new obligations to a company. Prior to this law employers did not have to vest pension plans for ten-year employees; after this law they did. As the dissent argued, the imposition of new conditions on preexisting business is common. Private pension plans were often unfair, and this law remedied some of that unfairness. It made no more sense, the dissent argued, to call this an impairment than would a law imposing the requirement of severance pay. The dissenters also thought that the main focus of the Contract Clause was to prevent the state from repudiating valid debt. The dissent claimed that the law is clear that the state can impose financial obligations, prospective or retrospective, provided it satisfies the due process requirement that the obligation be rationally related to some legitimate end. Decisions over the past fifty years, the dissent claimed, had developed a coherent, unified interpretation of all the constitutional provisions that may protect economic expectations, and these decisions had recognized a broad latitude in states to effect even severe interference with existing economic values when such interference was reasonably necessary to promote the general welfare. Absent “utter indifference” to legitimate contract interests, the dissenters did not believe that the Contract Clause was a significant restriction on legislative acts: “To permit this level of scrutiny of laws that interfere with contract based expectations is an anomaly. There is nothing sacrosanct about expectations rooted in contract that justify [sic] according them a constitutional immunity denied other property rights.” If the state could retroactively close down a brickyard (Hadacheck v. Sebastian, 1915), or require that ornamental red cedar trees be cut down to protect apple orchards (Miller v. Schoene, 1928), surely it could impose the new financial burdens in this case. The only difference was that here there was a contract. The dissenters then undertook a due process analysis and concluded that the law was rationally related to the legitimate governmental interest in protecting the pension rights of employees. In 1983, in Energy Reserves Group, Inc. v. Kansas Power and Light Co., the Court began its full-out reburial of the newly resurrected Contract Clause. In the case, a 1975 contract between Energy Reserves, a natural gas company, and Kansas Power and Light, a privately owned public utility, allowed Energy Reserves to raise its contract price for the sale of intrastate natural gas to that which might later be allowed by the federal or state government. Under state law, Kansas Power was by and large able to pass on any increases to Kansas consumers. The initial purchase price was $1.50 per unit. Under other price escalation provisions, it was increased to $1.77 in 1977. In December 1978, the federal government set the rate for interstate sales at $1.63 per unit and for the first time regulated intrastate sales of natural gas, allowing intrastate natural gas to be sold for $2.078 per unit, subject to superseding state legislation. In March 1979, Kansas passed a state law limiting the sale price of intrastate natural gas to $1.63, but not lower than prices already paid, effectively keeping Energy Reserves at $1.77 per unit and not the higher $2.078 per unit allowed under the contract. Energy Reserves sued in state court for a declaratory judgment that it could cancel

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its contract with Kansas Power because of breach. Kansas Power defended on the basis of the state law, which Energy Reserves claimed was in violation of the Contract Clause. The state courts found no Contract Clause violation, and the U.S. Supreme Court unanimously affirmed. The Court began its analysis with the now familiar litany. Although the language of the Contract Clause seemed “facially absolute,” it must be balanced against the inherent police power of the state “to safeguard the vital interest of its people.” The Court then clearly articulated for the first time a three-part test that seemed to be intended to control any Contract Clause analysis. First, the threshold inquiry was whether there had been a “substantial impairment.” Second, if there was a substantial impairment, the state must justify the impairment with a “significant and legitimate public purpose.” Third, if there was a legitimate public purpose, the change in contract rights had to be based on “reasonable conditions” and “appropriate” to the public purpose that led to the change. As for the threshold requirement that there must be substantial impairment, the Court emphasized that natural gas was a heavily regulated industry. Since the industry had been regulated in other ways, the parties should reasonably expect future regulations, and thus, because they were expected, any regulations were therefore a less substantial form of impairment. Although Kansas had regulated the price of natural gas in the past, it did not do so at the time of the contract. Still, “its supervision of the industry was extensive and intrusive.” Further, price regulation by the Federal Power Commission was common, although not until the current case was the intrastate market included. The contract itself expressly recognized the extensive and controlling regulation by state and federal law. On the other hand, the parties could not have anticipated that federal law would deregulate the intrastate market of natural gas, letting the prices flow higher than the parties could have expected. Thus, the impairment was less substantial than it might have been because some regulation was to be expected, but not expected was the windfall federal deregulation, especially of intrastate gas. In other words, Energy Reserves should have had reasonable investment-based expectations of additional state regulations including prices, although none currently existed, but should not have reasonably thought that it was entitled to the windfall profits that resulted from federal deregulation, although the parties knew deregulation was a possibility. The Court was conclusory in resolving this threshold substantial impairment requirement. “In short,” it said, “ERG’s reasonable expectations have not been impaired by the Kansas Act.” Nonetheless, the Court went on to say that “to the extent, if any” that Kansas law impaired Energy Reserve’s contractual interest, it was justified by the significant and legitimate public purpose in protecting consumers from the escalation of natural gas prices caused by deregulation. The state, it said, had an interest in correcting the imbalance between the interstate and intrastate markets. In the deregulation process, federal law allowed higher prices to be set for intrastate than interstate gas. Energy Reserves argued that the state legislation was advantaging only a small special-interest group. The Court

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rejected this, pointing out that Kansas Power would be allowed, in all likelihood, to pass on the higher cost to its consumers, so Kansas consumers, not the utility company itself, would be the beneficiary of the state law. It concluded, “There can be little doubt about the legitimate public purpose behind the Act.” Finally, as to the third factor, the Court said that the means chosen were not deficient. The act regulated only natural gas that presented the danger of rapidly increasing prices. It exempted the types of new gas whose production Congress wanted to encourage. It was temporary in that it ended when federal price regulation ended, and it allowed the gradual escalation of prices consistent with the federal goal of deregulation. All of these points go to the reasonableness of the change in a contractual term. In Exxon Corporation v. Eagerton (1983), whatever interest the modern Court had in the Contract Clause appeared to be seriously waning. In the case, Alabama increased its severance tax on oil and gas from 4 percent to 6 percent, and in a change in state law prohibited producers from passing the tax increase through to consumers. Many prior contracts of the appellant oil companies had a passthrough provision allowing them to pass on increases in taxes to the consumer. Without dissent, the Court found no impairment of the Contract Clause. The ease with which the Court disregarded the Contract Clause limitations and the absence of any meaningful attempt to apply the earlier three-part test seemed to be more telling than its conclusions. The Court summarized Contract Clause doctrine thus: “Although the language of the Contract Clause is facially absolute, its prohibition must be accommodated to the inherent police power of the State ‘to safeguard the vital interests of its people.’ ” It said that a statute does not violate the Contract Clause simply because it has the effect of restricting, or even barring altogether, the performance of duties created by contracts entered into prior to its enactment. If the law were otherwise, “one would be able to obtain immunity from state regulation by making private contractual arrangements.” The Contract Clause does not deprive the states of their “broad power to adopt general regulatory measures without being concerned that private contracts will be impaired, or even destroyed, as a result.” Again the Court said that the absolute language of the Contract Clause had to yield to the states’ inherent police power to protect the vital interest of the people, even if that meant impairing or destroying private contracts. It found ridiculous the notion that persons might be able to immunize themselves from state regulation by entering into private contracts. The Court pointed out that its precedents allowed the ban on the sale of beer and lottery tickets to be applied to individuals who had contracts to sell those products. It said that workers’ compensation laws had been held to be applicable to employee contracts that had no provision for work-related injury. To emphasize the ludicrousness of any Contract Clause claim, it reached back to a hypothetical in an 1816 state court case: Let us suppose, that in one of the states there is no law against gaming, cock-fighting, horse-racing, or public masquerades, and that companies should be formed for the pur-

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pose of carrying on these practices. And suppose, that the legislature . . . should venture to interdict them: will it be serious [sic] contended, that the Constitution of the United States has been violated? (Myers v. Irwin, 1816)

Of course the very framing of the hypothetical question dictates the answer— obviously not. The Court did not specifically undertake to apply the three-part test of Energy Reserves Group, Inc. v. Kansas Power and Light Co. Rather, it emphasized that the law was “a generally applicable rule of conduct designed to advance a broad societal interest, that is, protecting consumers from excessive prices.” Although this point seems to be similar to the requirement that there be some significant state interest justifying substantial impairment, the Court seemed to be focusing on something different. Because the law was one of general applicability, it was “sharply distinguishable” from the laws in U.S. Trust Co. of New York v. New Jersey and Allied Structural Steel Co. v. Spannaus. In U.S. Trust Co. of New York v. New Jersey, the law was intended to change a particular contract; thus it was not a law of general applicability. In Allied Structural Steel Co. v. Spannaus, the law was intended to regulate the few companies that had pension plans and intended to close Minnesota offices; thus the law did not address a matter of broad societal interest. The Court then turned to a number of older precedents that held that the state rate-making authority superseded privately negotiated rates. The Court saw no difference between the power of the state to set superseding rates and its power to limit the passing on of additional cost flowing from increased state taxation. It found its conclusion “buttressed” by the fact that the contract involved an industry subject to heavy regulation. It also pointed out that the state was not canceling its own contracts. In a later case, the Court more carefully applied the three-part test of Energy Reserves Group, Inc. v. Kansas Power and Light Co., but still found that a Pennsylvania law imposing liability contrary to preexisting contracts did not violate the Contract Clause (Keystone Bituminous Coal Assn. v. DeBenedictis, 1987). A 1986 Pennsylvania act limited the right of coal companies to take a certain amount of subsidence coal and imposed liability to the surface landowner for damage done through subsidence mining. Contracts as old as seventy years provided immunity for damage to the land surface, an immunity that under Pennsylvania law flowed with the land. The imposition of liability for damage to the surface, contrary to the private contracts, was claimed to be in violation of the Contract Clause. The majority found no Contract Clause violation. The limitation on the right to take the coal was also held not to be a taking without compensation in violation of the Fifth Amendment. The district court and the Court of Appeals had found the Pennsylvania act to be justified by the legislative finding that subsidence mining damage could devastate surface structures and threaten the health, safety, and welfare of the state and its citizens. The Supreme Court felt that strong public interests were more

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than adequate to justify the impact on preexisting contractual agreements. The Court acknowledged that prior to the Fourteenth Amendment, the Contract Clause was the primary check on state legislative power. It did not attempt to explain why the passage of the Fourteenth Amendment would have weakened the Contract Clause strictures, although it was obvious that it had. The Court, in a more extensive discussion of the underlying issues than had become the norm in the most recent cases, repeated the beginning mantra: the Contract Clause was not to be read literally. This, the Court said, was because its main historical purpose was to prevent the state from repudiating or adjusting preexisting debtor–creditor relationships. Yet even with regard to such core concerns, the clause was not to be given a literal reading, but was subject to the state’s pursuing the legitimate end of protecting a basic interest of society and not just giving some advantage to a favored group. The Court said that it had to identify the precise contractual right that had been impaired and the nature of the impairment, but then promptly proceeded to do neither. It did, however, apply, up to a point, the Energy Reserves Group, Inc. v. Kansas Power and Light Co. three-part test, but with significant spins that are likely to be important in future cases. First, it assumed that there was substantial impairment even though the facts of the case were far from clear on that point. Indeed, the extent of the impairment was the main dividing line between the majority and the dissent on the No Takings Clause issue. Although noting that the severity of the impairment dictated the level of scrutiny, the Court said that it could assume that the impairment in this case was “total” and still uphold the law. In view of the ease with which the Court now finds justifications for impairment of contracts, it is unlikely to take seriously the requirement that the impairment be substantial or that the level of impairment dictates the level of review. Even total impairments are easily justified. As for the second part of the three-part test, the requirement of a significant and legitimate public purpose, the Court viewed the assertion of a contractual right to “make a shambles” of all surface structures as being obviously outweighed by the strong public interest in preventing this kind of harm, “the environmental effect of which transcends any private agreement between contracting parties.” There was no discussion of the alternative of the state’s paying to erase these contractual rights. Regarding the requirement that the advancement of even significant and legitimate public purposes be pursuant to reasonable conditions and appropriate to the public purpose, the Court gave its most important spin to the three-part test. As it said it had “repeatedly held,” unless the state is impairing its own contract, the courts must defer to the legislative judgment as to the necessity and reasonableness of any particular impairment. This legislative deference seems as conclusive as the presumption of rationality in applying the Rational Basis Test to Equal Protection Clause and due process issues. If there is any conceivable justification, that is likely to be the end of it. It is also likely that the Court will

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make its conclusion based upon the legislation itself, without any close look at contradictory evidence. In another case, the Court rejected a Contract Clause challenge by General Motors (GM) and Ford to a Michigan change in the workers’ compensation obligation of a number of companies, on the grounds that there had been no preexisting contract, and thus there could be no Contract Clause violation (General Motors v. Romein, 1992). In a state law to take effect on March 31, 1982, Michigan revised its workers’ compensation laws to allow employers to decrease benefits to disabled employees who received disability compensation from other employer-funded sources. It was unclear whether this “benefit coordination” provision applied to employees injured prior to the effective date. Two prominent Michigan companies, Ford and GM, interpreted the law to include employees injured before the effective date. As of May 14, 1987, Michigan amended its law to state specifically that the “benefit coordination” provision of the 1982 law did not apply retroactively to employees injured prior to March 31, 1982. For employees injured before March 31, 1982, Ford and GM had mistakenly deducted other benefits, such us company medical benefits, from worker compensation benefits. This change meant that Ford and GM had retroactive liability of $25 million to disabled employees. The Michigan supreme court upheld the law against both Contract Clause and Fourteenth Amendment due process challenges, and the U.S. Supreme Court affirmed. The Court said that generally the first issue in any Contract Clause case was whether the state law had substantially impaired a contractual relationship. The Court said that this test necessarily involved three components: Was there a contractual relationship? Did the change in the law impair it? Was the impairment substantial? Although no previous Court had broken down the requirement into precisely these component parts, it was necessary in this case because the Court’s conclusion was that there was no contract, and thus no need to consider whether any impairment was substantial. The employment contracts that were claimed to be impaired by the 1987 law were entered into prior to 1981, but the Court said that the contracts contained no provisions about how to treat workers’ compensation benefits. The companies argued that such benefits were an implied term of the contracts because they were assumed when the companies and their employees negotiated other terms. Once the companies paid benefits pursuant to the then applicable law, their obligation was closed. Increasing the benefits would reopen their obligation, contrary to their settled expectations. The Court said that whether there was a contract or not was a matter of federal constitutional law. It concluded that since the employment contracts were entered into prior to 1981, neither party would even be contemplating whether benefit coordination rules could be applied to reduce payment for injuries prior to the act. Because the companies made the familiar Contract Clause argument that laws that exist at the time of the employment contracts are incorporated by law into the contracts, the Court felt that it had to address why those past holdings were

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not controlling. The Court said that state laws are automatically implied in contracts “only when those laws affect the validity, construction, and enforcement of contracts.” Even a change in the remedies would be an impairment if it made the contract practically unenforceable. The 1987 law did not make the employment contracts unenforceable; rather, the workers’ compensation provision was never bargained for. The Court said that the assertion that workplace regulations became an inherent part of an employment contract would freeze workplace safety regulations, employment tax obligations, and even laws prohibiting workplace discrimination. Such a view, the Court said, “would severely limit the ability of state legislatures to amend their regulatory legislation.” The most interesting assertion of the Court was that to read workplace regulations into employment contracts would cause the Contract Clause to lose its “anchoring purpose, i.e., ‘enabling individuals to order their personal and business affairs according to their particular needs and interests.’ ” The Court does not indicate how this became the anchoring purpose of the Contract Clause, nor what it means if it is. Somewhat questionably, the Court said that incorporating workplace regulations into private contracts “would render the Contract Clause itself entirely dependent on state law.” The car companies also argued that any retroactive changes violated their due process rights. The Court said such a retroactive law presents problems of unfairness more serious than prospective legislation “because it can deprive citizens of legitimate expectations and upset settled transactions.” But then it said both retroactive and prospective aspects of economic regulation must be justified by only “a legitimate legislative purpose furthered by rational means.” The Court summarily found that the protection of the expectations of workers who were injured prior to the effective date of the workers’ compensation revision easily met this test. In Pension Benefit Guaranty Corp. v. R. A. Gray & Co., (1984), the Court contrasted its approach in contract clause cases with its approach using the Rational Basis Test to resolve economic-related due process issues. In the case, federal pension law was retroactively changed, imposing a $201,359 burden on R. A. Gray & Company. The Contract Clause, by its very terms and by its historical purposes, was intended to apply only to the states, not to the federal government. The Court said: It could not justifiably be claimed that the Contract Clause applies, either by its own terms or by convincing historical evidence, to actions of the National Government. Indeed, records from the debates at the Constitutional Convention leave no doubt that the Framers explicitly refused to subject federal legislation impairing private contracts to the literal requirements of the Contract Clause.

Even retroactive federal laws changing contractual rights had to satisfy only the Fifth Amendment Due Process Clause, meaning that they must not be arbitrary

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and irrational. The Court refused to say whether a Contract Clause analysis might be relevant to a due process analysis. Specifically, the Court said that it had never held that “the principles embodied in the Fifth Amendment’s Due Process Clause are coextensive with prohibitions existing against state impairments of preexisting contracts.” The Court said that indeed in earlier cases it had “contrasted the limitations imposed on states by the Contract Clause with the less searching standards imposed on economic legislation by the Due Process Clauses.” Although the Contract Clause limits only the states and has no application to actions by the federal government, a 1996 case (United States v. Winstar Corp., 1996) involving the repeal of a federal government contract highlighted an important Contract Clause issue, the so-called Unmistakability Doctrine. As a way of avoiding Contract Clause issues involving contracts between the state and private parties, the Court had long construed the contracts strictly, in order to avoid finding that the state had contracted away any essential attributes of sovereignty, absent unmistakable terms to the contrary in the contract. In essence, it was easier for the Court to find that the state had not contracted away a power, such as the power of eminent domain, than to try to determine if and when the state could change such a contract. Thus, absent clear language, the presumption was that the state had not contracted away some clear attribute of sovereignty. In the 1980s, during the heyday of trying to address the crisis of monumental savings and loan failures, the federal government, through the Federal Home Loan Bank Board, had induced a number of successful savings and loan companies to acquire failing savings and loans by authorizing favorable accounting methods that offered financial and tax advantages offsetting the liabilities of the failing companies. These advantages also encouraged successful savings and loans to make riskier loans, and in 1989 led Congress to impose new capital requirements inconsistent with the initial inducements. When the companies could not meet the new capital requirements, primarily because they had relied on the initial inducements, they were seized by federal regulators. The seized savings and loans argued that the initial inducements were binding federal contracts and that they were entitled to damages for their breach. It had long been established that the federal government was bound by its contracts when contracting like a private entity: “Valid contracts are property, whether the obligor be a private individual, a municipality, a state, or the United States. Rights against the United States arising out of a contract with it are protected by the Fifth Amendment” (Lynch v. United States, 1934). The government’s defense was premised on three arguments. First, it argued that unless the inducements made it unmistakably clear that the government was promising not to revoke or change them, then the contract should be construed to allow the government to change them as it willed. Second, the government was unable to contract away such an essential attribute of sovereignty even if it wanted to; this was the Reserve Doctrine under which the government always reserved the right to exercise its sovereign power. Third, under the Sovereign Acts

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Doctrine, the federal government argued that it could not be sued for acting as a government. The Court found that since it was obvious that successful savings and loans would not have taken on the liabilities of failing savings and loans without the accounting advantages, there was an implied agreement not to change those practices (United States v. Winstar Corp., 1996). Although there was no express language that the permissive rules would remain, the obvious intent was enough to satisfy the “unmistakably clear” requirement. Since the savings and loans were suing for breach, they were not interfering with the government’s sovereign right to change the capital requirements for savings and loans; however, the government had to pay for the damages that this breach caused those with contrary contracts. A suit for injunctive relief or its equivalent would be contrary to the government’s sovereignty, but a suit for damages for the breach was not. As for the Sovereign Acts Doctrine, the Court did not feel that it was applicable, since in this case the government had acted like a private entity in entering into the initial contracts. SUMMARY OF THE SUPREME COURT CONTRACT CLAUSE CASES There are a number of historical themes running through the Contract Clause cases. First, the state may specifically reserve the right to change its own contracts. This reservation of the right to make changes is necessary because the Court defined state contracts broadly to include the agreement to enter into corporate charters. Now it is routine for states to reserve the right to change the terms of corporate charters. The reservation of this right to change its contracts is not the same thing as the “Sovereign Power” Doctrine, which involves the inherent ability of the state to reserve its power to protect the public good. Second, state contracts are not to be read as giving up a key sovereign power unless the contract is clear that such is the intent of the state. This is a matter of construction of the contract. If no contract is found, then there can be no impairment issue. While the determination of whether or not there is a contract would be primarily a matter of state law, there is a constitutional aspect to the determination as well. If the state has in fact contracted away an attribute of state sovereignty, then the question is whether, consistent with the Contract Clause, the state can repudiate that contract. For the courts to construe state contracts to avoid that constitutional issue only makes good sense. The real difficulty is in determining when the contract threatens some sovereign power that calls for a narrow construction of the contract, as opposed to a normal state contract that would call for the normal rules of construction. This issue is related to the notion that a state cannot contract away essential attributes of sovereignty. To the degree that contracts are construed to avoid this tricky issue, the courts can avoid having to tackle it.

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Third, the Contract Clause precludes changes in obligations of a contract, but not necessarily changes in contractual remedies. This difference between the substantive provisions of a contract and the remedial provisions allows the state some leeway to change contractual remedies. The distinction between contractual obligations that could not be changed and contractual remedies that could be changed was never a very happy one. It allowed early Courts to avoid the strictures of the absolute language of the Contract Clause, but since there was no clear line between what was an obligation that could not be changed and a remedy that could be changed, the analysis was far from satisfying. For example, the elimination of imprisonment as a means of enforcing debt was considered a change in the remedy, but the extension of the time to cure a default was considered an unconstitutional change in the obligation. During the early years when the Contract Clause was regarded as an absolute bar to any impairment, it was important to treat remedies in a manner distinct from substantive contract obligations in order to avoid the strictness of the constitutional language. It was also recognized very early that the distinction between remedies and obligations was not absolute. Impairment of a remedy was held to be unconstitutional if it effectively reduced the value of substantive contract rights. More recent decisions have not relied on the remedy/obligation distinction, primarily because it is now recognized that obligations as well as remedies may be modified without necessarily violating the Contract Clause. Although now largely an outdated formalism, the remedy/obligation distinction may be viewed as approximating the result of a more particularized inquiry into the legitimate expectations of the contracting parties. The parties may rely on the continued existence of adequate statutory remedies for enforcing their agreement, but they are unlikely to expect that state law will remain entirely static. Thus, a reasonable modification of statutes governing contract remedies is much less likely to upset expectations than a law adjusting the express terms of an agreement. A fourth theme that runs through the cases is that the state cannot contract away certain attributes of the state’s inherent sovereign power. This is closely related to the rule of construction that the state’s contracts are to be construed to avoid this danger. Another way this concept is framed is to claim that a state legislature cannot bind future legislators with regard to certain matters. Early on, the Court rejected this claim with regard to a contract exempting certain properties from taxation. It was claimed that the power of taxation was an inherent power of the sovereignty and that any contract to exempt from taxation could not bind future legislators. The Court was quite comfortable with the notion that such a contract was binding on the state and that any future abrogation was contrary to the Contract Clause. The Court’s early use of the notion that inherent sovereign powers were incapable of being contracted away involved the use of the power of eminent domain. In West River Bridge Co. v. Dix (1848), the plaintiff, West River, had an exclusive contract for 100 years to operate a toll bridge. The state purchased the bridge, using its power of eminent domain. The Court held

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that the state could not contract away its inherent power of eminent domain. This case is different from most of the inherent sovereignty cases in that the contract did not specifically provide that the value of the bridge could not be taken for public use; thus, there may not have been any contract at all for purposes of the Contract Clause. Perhaps more important, the state was paying for the privilege of canceling the contract. In most impairment cases, the state is not offering to pay for its breach, but simply wants to rid itself or its citizens of an inconvenient contract. In an 1879 case, the inherent sovereignty concept carried the day (Stone v. State of Mississippi, 1879). There, a state contract gave the privilege of running a lottery for seventy years, but subsequent legislation made the lottery illegal. The Court used the example of regulating the private sale of alcoholic beverages to illustrate that contracts could not possibly prevent the state from enacting changes in the criminal law. There was no offer to compensate the lottery company for its lost investment and business opportunities. The “Sovereign Power” Doctrine is the fifth and most important theme running through the cases that shaped the modern Public Purpose Balancing Test. In its simplest form, the “Sovereign Power” Doctrine means that the state inherently has the power to modify contracts to meet some ill-defined public need. Another way of framing it would be that implicit in all contracts is the right of the state to modify the contract to address some public need. This framing would build on Trustees of Dartmouth College v. Woodward, which recognized that the state could reserve the power to change corporate charters. The idea that the “Sovereign Power” Doctrine is an implicit part of all contracts is a fiction, and it does not materially add to the more straightforward recognition that states have the inherent power to modify preexisting contracts if they are sufficiently related to the public good. Initially, the “Sovereign Power” Doctrine was defined as limited to changes in contracts necessitated by physical disasters, but was extended to economic disasters as well. The emergency economic situation created by the Great Depression, for example, was equated with the kinds of emergencies resulting from natural catastrophes. Subsequent cases downplayed the significance of the emergency situation. For example, in El Paso v. Simmons, the state had entered into an unfortunate series of contracts in the sale of lands to fund local schools, but there was no emergency that required contractual rights to be canceled, and in no sense were the changes in rights temporary in nature. Finally, although the “Sovereign Power” Doctrine recognizes the legitimacy of changes in preexisting contractual rights, it is the Public Purpose Balancing Test that gives meaning and dimension to the doctrine. It tells us not only that there is some power, but also that the power is much broader than any concern for emergencies and temporary measures would suggest. The Public Purpose Balancing Test is usually traced back to the 1934 Home Building & Loan Assn. v. Blaisdell case, in which the Court openly balanced the emergency financial exigencies of the Great Depression against the importance of protecting private contractual rights, but the Energy Reserves Group, Inc. v. Kansas Power and Light

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Co. case gives it its most common modern framing. In its early cases, the Court had been more circumspect in balancing contractual rights against public need. It had distinguished between contractual remedies and contractual obligations; it had found that the state could not contract away essential attributes of sovereignty; and it had recognized some ability to respond to natural catastrophes. In its own way, each of these is similar to public purpose balancing, in that the Contract Clause is recognized not to be an absolute limit but is subject to being overridden in some circumstances. In Home Building & Loan Assn. v. Blaisdell, the Court blatantly said that the government could require some private economic interests to yield to other private economic interests. The special protection given in the Constitution to contractual rights, at least as read by the Marshall Court, was largely relegated to the dustbin of history. THE PUBLIC PURPOSE BALANCING TEST There are three aspects to the Public Purpose Balancing Test. First, there must be a “substantial impairment” of a preexisting contractual right. Second, if there is a substantial impairment, the state must justify the impairment with a “significant and legitimate public purpose.” Third, if there is a legitimate public purpose, the change in contract rights must be based on “reasonable conditions” and be “appropriate” to the public purpose that led to the change. As for the “substantial impairment” requirement, it of course excludes laws with a minor impact on such rights, but it also makes clear that total destruction is not a requirement. The Court has said that the level of severity of the impairment increases the level of scrutiny, but it is hard to see this variability in the actual cases. The two most interesting aspects of the degree of impairment under the Public Purpose Balancing Test are the emphasis on the impact of limiting the parties to the gains that they should reasonably have expected, and on past governmental regulations. The first limitation is often stated as limiting the parties to reasonable investment-based expectations. The second limitation is often framed in terms of the reasonable foreseeability of future regulations. These two are related. To the degree that an industry has been subject to past state regulations, the parties are under an obligation to consider the possibility of additional state regulations impacting their contractual agreements. Alterations of preexisting contracts by the state in an area already heavily regulated is not considered as substantial an impairment, in that it should have been foreseeable to the parties. To state it another way, the reasonable investment-based expectations of the parties are limited by the foreseeability of future state modifications. As it is commonly put, the parties cannot free themselves of state regulations by the terms of their private contracts. If a party contracts to pay “X dollars” for natural gas, this does not prevent the state from fixing the price at which natural gas can be sold at some other amount. The Court commonly quotes Justice Oliver Wendell Holmes’s famous summary: “One whose rights, such as they are, are

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subject to state restriction, cannot remove them from the power of the State by making a contract about them” (Hudson Water Co. v. McCarter, 1908). The issue of foreseeability seems to cut both ways. While it is true that the parties should foresee certain types of future regulations as perhaps being likely, it is also true that if the future situation is foreseeable, there is no change of circumstance that justifies ignoring the contractual terms. The parties should have negotiated on the basis of easily foreseeable consequences. Certainly, there would seem to be nothing like an emergency change of circumstances justifying state intervention. In U.S. Trust Co. of New York v. New Jersey, the Court, in rejecting the need to use funds set aside by a statutory covenant for bondholders to buy a commuter railroad, had found it important that there were no changes in circumstances since the contract was entered into that justified the impairment. The fact that the states needed funds for mass transit was well known, and it was the exact intent of the 1962 statutory covenant to limit the states in their ability to tap these funds for that purpose. Despite the artificiality of the Court’s definition of substantial impairment, the case indicates that this threshold should usually be exceeded by any impairment that is in fact significant. Absent fairly minor impairment, one would expect the Court to consider the other two parts of the test. The second part of the test requires that if there is a substantial impairment, the state must justify the impairment with a “significant and legitimate public purpose.” The Court said that an example of such a purpose would be the remedying of a broad and general social or economic interest, as opposed to benefiting a narrow special interest. It is not necessary that the law be limited to addressing an emergency situation or that it be limited in its duration. Other than preferring laws that are broad in their operation, as opposed to narrow, the Court gives little guidance in applying this balancing part of the test. It does not, for example, make clear who has the burden of proof in showing some overriding public purpose. Its reference to the deference to be given the legislative branch would indicate that the person challenging the law has the burden. Also, in discussing the third part of the test, the requirement of reasonable conditions appropriate to the purpose, the Court said that the presumptions were in favor of the legislation. This would seem to apply to the purpose part of the analysis as well. On the other hand, in other cases the Court’s emphasis that the test has more teeth than a typical due process, rational basis approach might indicate that the state has the burden of at least showing initially that there is some overriding public interest. The lower courts are split as to who has the burden on this crucial issue. The Court has said that if the state is changing its own contracts, there is less deference. Third, if it is a legitimate public purpose, the change in contract rights must be based on “reasonable conditions” and be “appropriate” to the public purpose that led to the change. Unless the state is adjusting its own contracts, the Court said that “as is customary in reviewing economic and social regulation, . . . courts properly defer to legislative judgment as to the necessity and reasonableness of

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a particular measure.” This third part of the test seems to involve two concerns. First, the changes in preexisting contractual rights must be a reasonable attempt by the state to be fair in balancing the competing interests. Home Building & Loan Assn. v. Blaisdell is a good example of this. Although the loan company did not have the same right to repossess the property, it was entitled to a reasonable rental rate in the interim. Even in Energy Reserves Group, Inc. v. Kansas Power and Light Co., the natural gas companies were entitled to the rate increase they had already received. While heavy presumptions are in favor of the legislative changes, the Court’s perception that the changes seemed to indicate a fair consideration of the underlying contractual rights is important. The additional requirement, that it must be appropriate to the public purpose, is a common one in constitutional litigation. The law passed must actually advance its purpose. The degree to which any particular law must in fact accomplish its purpose varies and depends on the level of review. With a low level of review such as the Rational Basis Test, it must only be conceivable that the law advances its purpose. For laws getting a strict scrutiny, the Compelling State Interest Test requires that the law must be necessary or narrowly tailored to accomplish its purposes. In determining whether a law is narrowly tailored, the Court will see whether there are reasonable other ways of accomplishing the same end without hurting the interest at stake. If there are other alternatives, the Court will say that is not necessary to accomplish its purpose. The requirement that the conditions be “appropriate” to accomplish the purpose of the law is so imprecise as to provide no guidelines at all to the lower courts. This low standard would not appear to require consideration of reasonable alternatives, but some lower courts have concluded otherwise. The Public Purpose Balancing Test is now the recognized approach to resolving a Contract Clause issue. It would seem to replace all of the other historical tests. It is no longer necessary to say that there are inherent attributes of sovereignty that cannot be contracted away. Nonetheless, it is certainly true that the contract must very clearly state that it include provisions limiting whatever attributes of sovereignty are at stake. The line between changes in the contractual remedies and changes in the contractual obligations may have some continued usefulness. Certain changes in the remedies that do not significantly impact contractual rights may not be treated as Contract Clause cases at all, but the distinction between obligations and remedies does not seem to be that important. If the change in the remedy significantly impacts the underlying contractual obligations, then the Court may find a Contract Clause issue. And changes in the underlying contractual rights that are not substantial will fail the first part of the Contract Clause analysis, which requires “substantial impairment.” The “Sovereign Power” Doctrine seems even less significant. The doctrine’s rationale set the stage for public purpose balancing, but has now been largely replaced by it. Under the doctrine, the state inherently reserves the right to modify preexisting contracts, but the degree to which it can do so is determined by

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the Public Purpose Balancing Test. If it passes that test, it falls within the “Sovereign Power” Doctrine, and if it fails the test, it does not. The common claim that private entities cannot by a private contract take away the state’s ability to act is also subsumed in the Public Purpose Balancing Test. If there is a sufficiently important governmental interest, then it can impair preexisting private contracts, but if there is not some overriding public interest, it cannot. Even the common claim that the state is more limited in the change of its own contract seems to be of uncertain importance. If the state has a sufficiently important interest, it may cancel its own contracts just like any private contract. It is standard doctrine that a higher level of justification is required when the state is canceling its own contract and that there is less deference to the legislative discretion, but the level of review under the Public Purpose Balancing Test is so low that it is hard to tell if it has been elevated at all. Since the government is balancing varying public interests when it changes its own contracts or private contracts, it’s not clear that there is any justification for elevating the level of review. Any perceived conflict of interest is more ephemeral than real. It’s not as though the legislature were actually paying for the harm caused by its contractual misadventures. For example, if during a time of apparent scarcity, the state entered into long-term contracts for the purchase of natural gas at very high prices, it might chafe at paying those high prices if the scarcity suddenly ended. Politically, the state may prefer to pass on the cost to the energy companies, as opposed to consumers, but any changes in private contracts are similarly motivated. In Home Building & Loan Assn. v. Blaisdell, the motivation was similar, asking the mortgage holder to bear more of the burden rather than the more politically numerous home owners. Any retroactive changes the state makes in its own contracts or in private contracts will be the result of its view of the public good, a view that under the Public Purpose Balancing Test, the Court is prone to accept. In addition to the claimed higher level of scrutiny given in cases where the state changes its own contracts, it is common for the Court to say that the degree of impairment is relevant, in that the more the contractual rights are impacted, the higher the level of scrutiny. Despite these widely claimed assertions, it is hard to see this varying level of scrutiny working in the Contract Clause cases. Rather, the scrutiny seems to be uniformly low, no matter the impact on preexisting contractual rights. The Public Purpose Balancing Test certainly refers to reasonable conditions as one of the factors to be considered, so one cannot discount this as a potentially important factor. But absent blatant and arbitrary disregard of contractual rights, the scrutiny given under the Public Purpose Balancing Test is not likely to be particularly strict. The level of review the Court gives to any particular case is crucial to its outcome, and the Public Purpose Balancing Test seems to be a relatively permissive level of review. There are three main levels of review. Absent fundamental rights, or certain suspect or quasi-suspect classifications, the Court will apply what is called the Rational Basis Test. The Rational Basis Test is the most permissive

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level of judicial scrutiny. If a particular law rationally relates to any legitimate governmental interest, it is upheld. In applying the test, the Court will look for any conceivable facts to support any conceivable purpose. In Equal protection cases, the Court will use the Rational Basis Test to assess the need to use particular classifications. Any conceivable justifications again will allow the state to classify as it chooses. Facts in support of the legislation will be presumed, and the heavy burden is on the person challenging the law. Using this test, virtually all legislation is upheld. Laws that classify based on gender or legitimacy of one’s birth get what is called an intermediate level of scrutiny. The classifications must substantially relate to important governmental interest or be exceedingly persuasive. The test for classifications based upon the legitimacy of one’s birth seems to be a much weaker form of this intermediate test. Laws that impact one of the fundamental rights or that involve suspect classifications receive what is called strict scrutiny. That is, they must be narrowly tailored to accomplish some compelling state interest. Fundamental rights include the right to privacy, the right to vote, and the right to travel interstate. Suspect classifications include race, ethnic origin, and some laws as to alienage. State laws classifying upon the basis of alienage in regard to most government benefits must pass this strict test. State laws classifying upon the basis of alienage in regard to eligibility for state jobs related to the political function of the state must pass only the Rational Basis Test. Because of the importance of allowing the federal government to control the national borders, all federal laws classifying as to alienage must pass only the Rational Basis Test. The Public Purpose Balancing Test is closer to the Rational Basis Test than the intermediate or Compelling State Interest Test. This was Justice Black’s complaint in El Paso v. Simmons: that the Public Purpose Balancing Test was essentially the same as the Rational Basis Test. Though the Court denies that this is the case, it is close to being the case. It is not really a balancing test in any fair use of that word. The intermediate test is sometimes called a balancing test because the courts openly consider the competing factors on both sides. With the Rational Basis Test, the presumptions are such that there is no fair consideration of interests in opposition to the state purposes. With the Compelling State Interest Test, private interests are so important that little consideration is given to the competing governmental interest. Some cases do not apply the same presumptions in the Public Purpose Balancing Test as they do in the Rational Basis Test. They require that the government introduce evidence in support of its purpose and actually look to see that the governmental purpose outweighs the harm. In other cases, the court comes closer to applying a strictly rational basis approach, upholding an impairment if there is any conceivable justification for it. Though the statement of the Supreme Court’s tests in Energy Reserves Group, Inc. v. Kansas Power and Light Co. looks like a more substantial test than rational basis, its application in Exxon Corp. v. Eagerton disputes that. Although the current Court seems to have lost much of its earlier enthusiasm for the Contract Clause,

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it needs to specifically reconcile the inconsistency between its statement of the level of protection given to contractual rights and the actual application of the Public Purpose Balancing Test. NOTES 1. Benjamin Fletcher Wright, Jr., The Contract Clause of the Constitution at 21–25 (1938). 2. Id. at 25. 3. Rufus Choate, The Works of Rufus Choate: With a Memoir of His Life (Boston: Little, Brown and Company, 1862).

3

Bills of Attainder

No State shall . . . pass any Bill of Attainder. Article I, Section 10, Clause 1

HISTORY AND INTRODUCTION Article I, Section 10, prohibits states from passing bills of attainder and ex post facto laws. Article I, Section 9, imposes the same limitations on Congress. Justice John Paul Stevens, in a case involving the Ex Post Facto Clause (Carmell v. Texas, 2000), in language equally applicable to bills of attainder, said such laws were cruel and unjust, an example of “injustice and tyranny,” “oppressive, unjust, and tyrannical,” and “condemned by the universal sentence of civilized man.” He quoted Alexander Hamilton in The Federalist Papers, number 84, as calling them “the favorite and the most formidable instruments of tyranny.” Finally, quoting the historically seminal Calder v. Bull ex post facto case, he said they were “often used to effect the most detestable purposes” (Calder v. Bull, 1798). The constitutional meaning of the prohibition is the same in both Section 9, applicable to Congress, and Section 10, applicable to the states. This chapter will develop the meaning of the two clauses, using the precedents involving Section 9 and Section 10. Although most of the cases involve state laws, there is no attempt to limit the discussion to primarily state cases. Prohibitions of bills of attainder and ex post facto laws have a similar purpose: to prevent retroactive punishment for past conduct. Bills of attainder are legislative acts that impose punishment for prior conduct on named individuals or easily ascertainable members of a group without a judicial trial. They substitute legislative determinations of guilt and punishment for judicial findings and sentence. Courts of justice are employed only to register the edict and carry the sentence into execution. Ex post facto laws make criminal, acts that have already occurred. They do not necessarily identify particular individuals, and may or may not involve a judicial trial and sentence. Bills of attainder specify the offense of which the charged party is deemed guilty and the punishment, but the offense

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may be a new crime or a preexisting crime. If there is not a preexisting crime, as is common, the bill of attainder will also be an ex post facto law, and thus the provisions are often stated in tandem. For example, if seditious libel is already a crime on the books and a law is passed declaring that a particular person or group is guilty of commiting the crime of seditious libel, the new law would be a bill of attainder, but not an ex post facto law. If the new law both creates seditious libel as a crime not previously illegal and then declares a particular person or group guilty of committing that crime, the law would be both a bill of attainder and an ex post facto law. Although the two clauses overlap to some degree and many provisions are challenged as violating both clauses, this book will first cover bills of attainder and then ex post facto laws. Bills of attainder are impermissible legislative acts that impose punishment on named or easily identified individuals for past conduct. While the prohibition sounds straightforward enough, it is anything but. In our history, the Supreme Court has struck down only a handful of laws as being in violation of this prohibition, but the argument is often raised. In a 1983 law review article, it was claimed, “In the 116 years since the Supreme Court first addressed the meaning of the bill of attainder clause in Cummings v. Missouri and used it to invalidate a legislative enactment, it has been invoked successfully in the federal courts only twelve times.”1 Only five of the twelve cited federal cases were Supreme Court decisions. In recent years, it has been argued that bills of attainder include laws requiring that a person be registered for the draft in order to receive university financial aid,2 laws guaranteeing states the right to determine who is married for purposes of state law,3 laws regulating the monopoly power of the major telephone companies (SBC Communications, Inc. v. FCC, 1997), and an extradition treaty.4 The difficulty of the prohibition is that almost all legislation will advantage some people and disadvantage others, but most laws are not viewed as legislative punishments. As the Court has said, referring to a state law disqualifying felons from practicing medicine: The fact that harm is inflicted by governmental authority does not make it punishment. Figuratively speaking all discomforting action may be deemed punishment because it deprives of what otherwise would be enjoyed. But there may be reasons other than punitive for such deprivation. A man may be forbidden to practice medicine because he has been convicted of a felony, or because he is no longer qualified. (United States v. Lovett, 1946)

Such laws may raise equal protection or due process issues under the Fifth and Fourteenth Amendments, but absent fundamental rights or suspect classifications, the law under those provisions need only rationally advance some legitimate governmental interests. There is virtually no mention of the bill of attainder in the constitutional debates and little in the ratification process. At the time, legislative punishment was an accepted legislative practice, and it is clear that the Framers intended this to

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stop. One would expect that the Framers would have believed that legislative punishment was inconsistent with the careful separations of legislative and judicial powers found in the main body of the Constitution, but the Framers may also have shared the sense of unfairness of such legislative punishment of prior conduct, particularly as related to political dissent. A logical starting place for an inquiry into the meaning of the prohibition is its historical background. The bill of attainder was a legislative act sentencing to death one or more specific persons, more often than not for actions related to the overthrow of the government. It was used regularly in England in the centuries before the American Revolution and in the early American colonies as well. Historically, a technical bill of attainder called for the death penalty and often carried with it something called “a corruption of blood,” which meant that attainted persons could not devise their property to their heirs. A penalty short of death, such as loss of civil liberties or banishment, was called a “bill of pains and penalties.” The constitutional phrase “bill of attainder” has always been taken to mean the latter as well.

THE COURT’S APPROACH TO BILLS OF ATTAINDER The first Supreme Court case striking down a law as a bill of attainder was in 1866, in Cummings v. Missouri. In that case, the state of Missouri amended its constitution to require that persons in a number of professions swear an oath of loyalty that they had not participated in the Civil War against the Union before they could legally continue their profession. Cummings, a Roman Catholic priest, was unable to make such an oath and as a result was convicted of the crime of being a priest without having first taken the oath, fined $500, and sentenced to imprisonment until the fine was paid. In a 5–4 opinion, Justice Stephen Field for the majority found the oath to be a bill of attainder. It was certainly retroactive in that it required an affirmation that certain things were not done during the Civil War, “directed not merely against overt and visible acts of hostility to the government, but is intended to reach words, desires, and sympathies, also.” He said the oath did not simply state a qualification for a particular position, in that there was no relationship between having had certain connections to the defeated South in the Civil War and being a priest. The law, Justice Field said, was clearly for punitive purposes. “It was exacted, not from any notion that the several acts designated indicated unfitness for the callings, but because it was thought the several acts deserved punishment.” The Court said that the deprivation of any civil or political right may, depending on the circumstances, be punishment. As the Court noted, such bills were often passed in England as a response to some kind of rebellion. Although typically such bills were addressed against named individuals, they could be directed against a class as well. Also, such bills could inflict punishment absolutely or

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conditionally, as the Missouri law did. The Court viewed the loyalty oath as presuming the guilt of all priests and clergyman unless they purged themselves by taking the required oath. In a companion Civil War case, this time involving a federal law and thus the parallel Article 1, Section 9, provision, the Court invalidated a congressional law requiring a loyalty oath of all attorneys, in order to practice before a federal court, that they had not participated with the Confederacy in the Civil War (Ex Parte Garland, 1888). As it did in Cummings v. Missouri, the Court rejected the government’s claim that the law was merely stating the qualifications for practice before the federal bar. Garland had been admitted to practice before the federal courts in 1860, but was a resident of Arkansas during the Civil War and a state political figure of some note. He received a full pardon from the president in 1865. He claimed both that the federal oath was an unconstitutional bill of attainder and that, even if it was constitutional, his pardon freed him from its terms. The Court agreed on both counts. Since without the oath, Garland could not practice before the federal courts, the Court thought that the oath could be viewed “in no other light than as punishment for such conduct.” To the degree that he was being punished for crimes not punishable when they were committed, the oath was also an ex post facto law. The Court thought that the presidential pardon reconfirmed its conclusion. Even if the oath were an otherwise valid form of punishment, the presidential pardon had placed Garland beyond the scope of Congress’s power to inflict any form of punishment. The four-person dissent of Justice Samuel Miller focused for the most part on Ex Parte Garland but applied to Cummings v. Missouri as well. Justice Miller argued that Congress had the power to set the qualifications for practice before the federal bar, just as it always had. If Congress wanted to amend the rules to say that a person convicted of treason could not practice, that would not be retroactive legislative punishment. Practicing law in the federal courts was a privilege, subject to whatever rules Congress should set. The dissenters argued that neither the congressional oath nor the Missouri oath was a bill of attainder, in that neither identified persons to be punished. Justice Miller identified both a separation of powers issue and a procedural fairness issue for the proscription on bills of attainders and thought that the oaths violated neither. Setting qualifications was well within legislative power; thus there was no separation of powers issue. As for procedural unfairness, no one was convicted or sentenced by legislative proclamation for anything. Only persons who wanted to pursue the particular callings in question had to take the oath, and that was strictly their choice. The finding of the oaths to be punishment, not qualifications, made the line between unconstitutional bills of attainder and legitimate standards difficult to draw. In another case, the Court held that a state’s proscription of persons who had not graduated from medical school from being doctors was not a bill of attainder (Dent v. West Virginia, 1889). Later, it found that it was constitutional for the state to bar a felon from being a doctor (Hawker v. New York, 1898). In both instances, the state was changing the qualifications for remaining a doctor;

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it was not intending to punish any particular person or class. Since the Court concluded that neither law was a bill of attainder, it then viewed both as simply regulations, which under the Due Process Clause meant they only had to rationally relate to legitimate governmental ends—which they obviously did. Although the line between the cases is far from clear as a conceptual matter, it is hard to argue with the Court’s conclusions. The legislatures in the Civil War cases were trying to punish for involvement in the Civil War, whereas the legislatures in the latter cases were trying to better regulate the practice of medicine. Perhaps the clearest example of a bill of attainder ever passed by Congress was United States v. Lovett (1946). The House Un-American Activities Committee identified three federal government employees, Lovett, Watson, and Dodd, as having engaged in “subversive activity.” The House refused to approve a routine appropriation bill without a provision barring the three from being paid out of regular federal funds. Despite the Senate’s dislike of that provision and the president’s open disapproval of it, the appropriation bill with the limiting provision was passed. The individuals were considered valued employees, and they continued to work, but without pay. They filed a suit in the Court of Claims for back pay, which the court granted. The government, on behalf of Congress, appealed. In his opinion for the Court, Justice Hugo Black pointedly noted that the bill was not attacked on free speech grounds, but as a forbidden bill of attainder. As for the bill of attainder issue, Justice Black was of the opinion that the provision denying pay was a clear bill of attainder. He said that the obvious purpose of the law was to punish the specifically named individuals for behavior of which the House committee disapproved. The House, after lengthy committee hearings examining the political views and affiliations of a number of government employees, had identified the three individuals as unworthy of continued federal employment and barred any of the appropriated federal funds being used to pay their salaries. Justice Black emphasized the procedural unfairness of allowing the legislative process to impose punishment without the protection of the rights of criminal defendants found in the Bill of Rights. The legislative process in the particular case actually did provide for a hearing for the accused, but without any right to an attorney being present. In Black’s opinion, this was a classic bill of attainder because it specifically identified individuals, it punished them for their past acts by denying them federal government employment, and it did all of this without the full procedural protections given in the Constitution. Justice Felix Frankfurter, in a concurring opinion, preferred to avoid the constitutional issue and instead chose to view the law more narrowly, as one barring their normal paycheck, but not preventing the Court of Claims from granting them compensation for their past efforts. Justice Frankfurter thought that prohibited bills of attainder should be strictly limited to historical bills of attainder, that is, to those laws that announced the guilt of individuals or groups of a particular crime and then imposed a sentence. He did not view the references to subversive activities and appropriation of salaries as doing that. He believed that the clause had a narrow and explicit historical meaning and could be recognized by

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several immutable characteristics: a specified offense for a specified individual, a declaration of the guilt of that individual, ex post facto application, and a clear decree of punishment. In Frankfurter’s view, if the legislature did not expressly condemn the individuals, then the courts could not find an intent to punish.5 In the cases after United States v. Lovett, Frankfurter’s strict historical interpretation gained the upper hand. Frankfurter agreed that the principle behind the Bill of Attainder Clause was procedural fairness, but he nevertheless believed that the clause had specific historical limits and that its enforcement had to respect those historical limits. According to Justice Frankfurter, the Framers did not intend the clause to prohibit unfairness in general or even unfairness against particular individuals. His analysis made the distinguishing feature of historical bills of attainder the “substitution of legislative determination of guilt and legislative imposition of punishment for judicial finding and sentence” (United States v. Lovett, 1946). To fall within the clause, that substitution must both “specify the offense” and declare the guilt of the individual or the class to which the individual belonged. Under the sway of Frankfurter’s strict historical approach, the Court, for roughly twenty years, consistently denied bills of attainder challenges. During the McCarthy era, many laws limiting the activity of the Communist Party were unsuccessfully challenged on bill of attainder grounds. In a 1961 case involving a federal law requiring that the Communist Party register as a “communist action organization,” the Supreme Court refused to find a bill of attainder because the targets of the statute were not specifically identified (Communist Party v. Subversive Activities Control Board, 1961). In another case, requiring labor organizations to file “non-communist” affidavits, the Court again refused to find a bill of attainder because the law seemed to prevent future acts, not to punish past acts (American Communications Association v. Douds, 1950). In United States v. Brown (1965), the Court abandoned Frankfurter’s strict historical limitations and invalidated a federal statute forbidding anyone who had been a member of the Communist Party during the previous five years from serving as an officer or employee of a labor union. The case represents the Court’s most expansive use of the Bill of Attainder Clause to strike down legislation. According to the Court, the statute’s flaw was its designation of Communist Party members as the objects of its disqualification. Since the law was limited to people who in the past five years had been members of the Communist Party, the Court felt that this was a sufficiently specific group. Although no one was identified by name, it was possible to determine fairly easily the group of individuals who were disqualified. As for the punishment requirement, the Court believed that the historical definition of bills of attainder had been broadened in the more modern cases to include the denial of lawful employment. Members of the Communist Party were punished by being denied jobs as union officials. Congress could have described characteristics that union officials could not have and left it to the judicial branch to determine if any particular official fell within the forbidden cat-

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egories, but it did not do so. It violated separation of powers principle, the Court said, for Congress simply to punish all members of the Communist Party in this way. The Court distinguished an earlier case, involving conflict of interest legislation, that prevented any employee of a stock underwriting company from holding a position with a federal bank. The Court said the anticommunist law intended to punish members of a political group that was considered to be a threat to the national security, whereas the conflict of interest legislation was intended to protect the banking system, not to punish anyone. The banking law was an attempt to prevent undue influence on the advice given by banks to customers regarding investments. For Justice Byron White in dissent, these conflict of interest cases were key. White went back to the holding in Hawker v. New York, which distinguished laws disqualifying doctors who had been convicted of felonies, from Ex Parte Garland’s punishment of lawyers for their participation on the losing side in the Civil War. White suggested that the majority’s reasoning would also strike down legitimate regulation of the sort approved in Hawker v. New York. Using as an example the law forbidding stock underwriters from serving on national bank boards, he argued that neither specificity nor punishment offered any means of distinguishing such permissible legislation from the anticommunist act. Both statutes specified groups of persons who were disqualified from otherwise lawful occupations. In defining the groups to which these prohibitions were to apply, both laws used objective characteristics as a convenient shorthand for harder to define subjective traits. Thus, the underwriter statute sought to prevent selfdealing by underwriters who might use their positions on national bank boards to promote their underwriting firms. The law did not, however, outlaw such selfdealing directly; rather, it assumed persons who were simultaneously members of national bank boards and employees of underwriting firms were likely to selfdeal. It accordingly prohibited the double employment. The anticommunist statute invalidated in United States v. Brown sought to minimize the number of political strikes, an objective the Court found legitimate. But this law, too, did not reach its aim directly; instead, it defined the Communist Party as a group whose members were likely to promote political strikes and forbade that group from holding offices in labor unions. Justice White did not see this as punishment, but rather the rational pursuit of a legitimate governmental end. In a case involving an attempt by Congress to prevent President Nixon from altering historical documents, the Court dealt with the closest thing to the naming of a particular individual for disparate treatment of any of the bill of attainder cases, yet concluded that there was no legislative punishment (Nixon v. Adminstrator of General Services, 1977). Title I of the Presidential Recordings and Materials Preservation Act of 1974 specifically provided that the tape recordings and historical papers of President Richard M. Nixon were to be taken by the General Services Administration. After his forced resignation and pardon, President Nixon had claimed possession of some 42 million pages of documents

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and some 880 tape recordings of conversations, and asserted the right to determine which of these historical materials would be destroyed. Every president prior to Nixon had made similar claims, but given the disgrace of Nixon’s exit, the historical importance of the materials, and the possible use of the papers in later criminal cases, Congress voted to keep control of Nixon’s historical materials. Title II of the Act provided for later determination of how to treat the papers of future presidents. Nixon, in addition to asserting that the act violated separation of powers and free speech principles, claimed that the act was an unconstitutional bill of attainder. Although the Act was certainly more specific than prior acts that had been found to be bills of attainder, the Court believed that Nixon was a valid legislative class of one. He presented a unique danger to the historical record not presented by any other president, living or dead, and thus was validly singled out for special treatment. Despite the specificity of the Act, the Court did not believe that its purpose was to punish Nixon. The Court identified a three-part test to determine if the law was intended to inflict punishment. First, how similar were the penalties to the historical definitions of bills of attainder? Second, did the disabilities rationally relate to nonpunitive purposes? And third, was there any evidence that the actual purpose of the law was to inflict punishment? In the case at bar, first, the act was not similar to those historically found to be punishments. While loss of property historically had been one of the penalties imposed by bills of attainder, the Court did not think it was clear that any property of Nixon’s was being taken. The Act even provided for later compensation to Nixon for the loss of any private papers, which reinforced the notion that the law was not punitive in nature. Second, the purpose of the Act was not to punish. Its purpose was to preserve the historical record. The fact that the Act rationally advanced this nonpunitive legislative purpose prevented it from being a bill of attainder. While what could be considered punishment under the bill of attainder cases was very broad, it did not include laws passed for valid nonpunitive reasons. Third, there was no subjective evidence in the legislative history that Congress simply wanted to punish Nixon for his misdeeds, as opposed to being legitimately concerned about the historical materials. Chief Justice Warren Burger and Justice William Rehnquist in dissent focused on the specificity of the legislation. They argued that singling Nixon out by name for treatment different from that of any other president in history was enough to make the Act a bill of attainder, without any additional proof that the law was retributive in nature. In another case, the Supreme Court, reversing the district court, held that a section of the Military Selective Service Act that disqualified persons who had not registered for the draft from receiving federal financial aid for college expenses was not a bill of attainder (Selective Service System v. Minnesota Public Interest Research Group, 1984). The Court identified three elements required for a bill of attainder. First, the law must specify an identifiable individual. Second, it must inflict punishment on that affected person. Third, it must do so without the benefit of a judicial trial. The Court found that there was no judicial trial, but

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did not agree that either of the other two elements had been found. The district court viewed the section finding ineligible for federal college financial aid anyone between eighteen and twenty-six who had not registered within thirty days of the date specified in the Act as being punishment for past behavior of a specific group, those who had not timely registered for the draft. The Supreme Court rejected that view of the Act, finding that the law allowed affected persons to register within thirty days of receiving notice of noncompliance. There was no identifiable specific group that was punished, since any person could always register and receive financial aid. Even more important, the Court could not see that the act was intended to punish without a judicial trial. Using the three-part Nixon v. Administrator of General Services test, the Court first compared the loss of financial aid with the historical punishment inflicted by bills of attainder. While in modern days, bills of attainder were held to include the loss of gainful employment, here the loss was of what the Court called a “noncontractual governmental benefit.” While the loss of such a benefit might raise procedural due process issues, it did not rise to the level of a property necessary for finding a bill of attainder. That was especially true in this case, since the deprivation of benefits was not permanent. Any affected person could become eligible for aid at any point in time simply by registering. The Court said that these persons “carry the keys of their prison in their own pockets.” Second, the law could be said to reasonably advance the nonpunitive goals of encouraging registration for the draft and of the fair allocation of federal dollars to those students who had met their responsibilities to the United States by registering for the draft. The accident of eighteen being the age when registration for the draft was required and the approximate time when students started college made it rational to tie federal aid to the completion of the registration requirement. Failure to register was a crime. The deprivation of federal financial aid was not to punish further, but to encourage compliance. Third, the Court looked for evidence of a legislative motive to punish. In this case, it said that there was a total absence of any such evidence. The Court pointed out that the law did not, for example, distinguish between those who inadvertently had failed to register and those who intentionally had not done so. The Court also found that the registration requirement did not violate the Fifth Amendment prohibition of selfincrimination. Although Justices William Brennan and Thurgood Marshall believed that the registration requirement violated the Fifth Amendment, they agreed with the majority’s bill of attainder analysis. The emphasis in recent cases on the presence of legitimate nonpunitive purposes for legislation as disproving the forbidden punishment motivation raises real doubt about the continued validity of United States v. Brown. The desire to prevent the labor unrest that would be created by Communist members in positions of responsibility in labor unions would seem to be a sufficient nonpunitive purpose. Still, there appears to be something of an ad hoc commonsense reasoning at play in these cases that may continue. In United States v. Brown, the Court could plainly see that Congress was trying to punish Communists, while

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in Nixon v. Administrator of General Services, it felt that Congress legitimately wanted to preserve the historical record. Whatever test the Court applies, that commonsense practical evaluation of the underlying motivations may turn out to be the only consistent theme. NOTES 1. Jane Welsh, The Bill of Attainder Clause: An Unqualified Guarantee of Process 50 Bklyn. L. Rev. 77 (1983). 2. David P. Restaino, Conditioning Financial Aid on Draft Registration: A Bill of Attainder and Fifth Amendment Analysis 54 Col. L. Rev. 775 (1984). 3. Mark Strasser, Ex Post Facto Laws, Bills of Attainder, and the Definition of Punishment: On DOMA, the Hawaii Amendments, and Federal Constitutional Constraints 48 Syr. L. Rev. 227 (1998). 4. Katherine M. Sheehan, And Then There Was One: Peter Gabriel John McMullen’s Bill of Attainder Challenge to the U.K.–U.S. Supplementary Extradition Treaty 57 Alb. L. Rev. 235 (1993). 5. Welsh, The Bill of Attainder Clause 50 at 96.

4

Ex Post Facto Laws

No State shall . . . pass any . . . ex post facto Law. Article I, Section 10, Clause 1

HISTORY AND INTRODUCTION In a 1798 case, Calder v. Bull, the Court found that the ban on limited ex post facto laws did not apply to civil cases, but applied only to retroactive legislative changes in criminal law. In the case, a Connecticut probate court found the will of Normand Morrison invalid and gave Morrison’s property to his heirs, Calder and his wife. The Connecticut legislature passed an act that granted a new probate hearing on the will. During the new hearing, the will was admitted to probate and duly recorded, with Bull and his wife taking Morrison’s property under the will. The Calders eventually appealed to the U.S. Supreme Court, arguing that the Connecticut law that granted a new hearing was an ex post facto law in violation of Article I, Section 10. The Court concluded that ex post facto laws were limited to criminal penalties. In Justice Samuel Chase’s view, there would be no need for the U.S. Constitution to ban impairment of obligations of contracts if the ban on ex post facto laws reached retroactive changes in property rights. Since one should not conclude that there were extraneous provisions in the Constitution, Justice Chase concluded that the ban on ex post facto laws did not prohibit retroactive legislation generally, but only retroactive legislation imposing harsher penalties in criminal cases. Although ex post facto laws were limited to criminal cases, Justice Chase, relying largely on early English precedents, did define broadly the kinds of changes in the criminal law that would violate the ex post facto prohibition. Although his observations were obviously only dicta, the importance of these categories to modern ex post facto cases cannot be emphasized enough, and even in modern days the Court will search the common-law historical record for the meaning of this prohibition. Even the modern Court has made clear that the starting place for any ex post facto analysis must begin with the Calder v. Bull factors (Collins

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v. Youngblood, 1990). Despite the seeming simplicity of the categories in Calder v. Bull, they have been surprisingly difficult for the modern Court. First, according to Calder v. Bull, the ban precluded considering something a crime that was done before the act was passed, and was therefore innocent when done. This would be the most commonly accepted definition of an ex post facto law. Second, the ban also prevented a law from aggravating a crime, making it greater than when it was committed. For example, a misdemeanor could not be made a felony. Third, the legislation could not retroactively change the punishment for a crime by inflicting a harsher penalty than when the act was committed. Finally, the law could not alter the legal rules of evidence in criminal cases in a way that made it easier to get a conviction than at the time the act was committed. For example, if the law at the time the act was committed required two eyewitnesses, the law could not be changed to allow conviction based upon a single witness. Because of the importance of the Calder v. Bull factors, they will be discussed separately. In addition to closely examining the historical record to see if any particular law runs afoul of one of the Calder v. Bull categories, some members of the Court will more openly examine whether any particular law is contrary to the purposes of the ban on such laws. The Court has said that the Ex Post Facto Clause was intended to address three main concerns: the lack of fair warning that was inconsistent with an individual’s reliance interest, a desire to restrict arbitrary and potentially vindictive legislation, and concern for fundamental fairness (Carmell v. Texas, 2000). Those justices using this approach do so as an adjunct to a Calder v. Bull analysis. It seems that these fundamental fairness concerns must influence these justices’ conclusion that a particular law falls within one of the Calder v. Bull forbidden categories. Stogner v. California (2003) seems to be a prime example of this. In the case, a 5–4 majority was convinced that California’s extending the statute of limitations for crimes already barred by an earlier statute of limitations was an oppressively unfair bending of the rules by the state. This sense of unfairness seemed to lead the Court to attempt to shoehorn the law into the Calder v. Bull category that forbade aggravating a crime. The dissenters’ lack of appreciation for criminals finally getting their due made them equally unbending in insisting that it was a distortion of the historical record to find a change in the statute of limitations to be an aggravation of a crime or in any other way an ex post facto law. LIMITING EX POST FACTO LAWS TO CRIMINAL CASES First, it is important to reiterate that Calder v. Bull held that the Ex Post Facto Clause is limited to criminal cases. This has been the Court’s consistent holding even with regard to civil proceedings that seemed to closely parallel criminal proceedings. Even in a case involving confinement similar to imprisonment, the Court reemphasized that the Ex Post Facto Clause had no application to proce-

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dures that were not, strictly speaking, criminal (Kansas v. Hendricks, 1997). Sometime after the defendant Hendricks was convicted of various sexual offenses, and while he was serving his prison sentence, Kansas passed the Kansas Sexually Violent Predator Act. It provided for the civil commitment of persons convicted of sexually violent offenses who, as the result of mental abnormality or personality disorder, were likely to engage in additional predatory acts of sexual violence. Just as Hendricks was scheduled to be released to a halfway house in 1994, the new Kansas law was passed. A hearing was then held, including a jury trial in which Hendricks was found to be a sexually dangerous predator and was committed for “control, care and treatment” until such time as it would be safe to release him. Much of the evidence against him came from his own compelled testimony. In addition to Fifth Amendment self-incrimination issues, Hendricks claimed that the new law violated the Ex Post Facto Clause. The Court held that the determination of whether a particular proceeding was criminal or civil was primarily one of statutory construction, with the Court ordinarily deferring to the legislature’s stated intent. Kansas intended to create a civil proceeding, as evidenced by its placement of the act within the state probate code, not its criminal code, and there was insufficient evidence that its purpose was in fact punitive in nature. The Court said that the civil label was not always controlling, but only the clearest proof that the law’s purpose or effect was punitive would negate the stated intent that it be civil. Here, the Court said, the purpose of commitment was neither retribution nor deterrence, nor were there the scienter requirements commonly found in criminal statutes. Although the persons found within the act were the subject of affirmative restraints, the Court did not believe that this was based on a desire to punish, as opposed to protecting the public (similar to other civil commitment procedures). Since the law was civil in nature and not criminal, neither ex post facto nor Fifth Amendment selfincrimination issues could be raised. The Court later reaffirmed, in Seling v. Young (2001), that the Ex Post Facto Clause has no application to civil cases, even civil cases with close criminal law parallels. Washington State’s Community Protection Act of 1990 authorized the civil commitment of sexually violent predators whose mental abnormality made it likely that they would engage in future acts of sexual violence. Despite the fact that the Court had upheld the constitutionality of a similar Kansas scheme (Kansas v. Hendricks, 1997) as a civil commitment proceeding consistent with due process requirements, the Ninth Circuit found the Washington scheme to be punitive, in violation of double jeopardy and ex post facto limitations. The Court reversed on both grounds. It said that based upon the text and legislative history, the clear intent of the state to create a civil proceeding was controlling absent “the clearest proof that the statutory scheme is so punitive in either purpose or effect as to negate the State’s intention.” The Ninth Circuit had found that despite the intent to create a civil system, the actual condition of Young’s confinement, within the perimeter of a larger state prison and lacking any significant

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treatment aspects, was punitive in nature as applied, which made it criminal in scope as applied to him. The Court rejected this “as applied” approach in determining whether the confinement was punitive in nature for purposes of double jeopardy or ex post facto claims. It believed that any claims based upon the condition of confinement would have to be addressed on due process and statutory grounds. In another case the Supreme Court reversed a Ninth Circuit decision finding Alaska’s retroactive application of its sex offender registration program to be an ex post facto law (Smith v. Doe, 2003). The Supreme Court found that Alaska’s registration program was civil, not punitive in nature, and that ex post facto limits did not apply. The Ninth Circuit agreed that Alaska did not have a punitive intent in passing the law, but did not find that conclusive. It said that even if the intent was nonpunitive, if the evidence was strong enough, a court might nonetheless conclude that the law had a punitive effect that made it criminal under an ex post facto analysis. Key to the finding of an overriding punitive effect in the case was the fact that Alaska’s law worked a significant affirmative disability or restraint. It required in-person, yearly registration for fifteen years at the local police station for less serious sex crimes and registration at the police station four times a year for life for more serious sex crimes. The Ninth Circuit thought that the registration process so closely tied the registrant to the local community that it was roughly the equivalent of supervised release. The Supreme Court disagreed, finding that registration did not have to be in person. It refused to equate the registration requirement with supervised release imposed retroactively, which would be punishment in violation of the Ex Post Facto Clause. RETROACTIVELY DEFINING A CRIME Making something a crime that was done prior to the act being made criminal is the clearest example of a forbidden ex post facto law and, perhaps because of its obvious nature, the least common. However, there have been a few cases involving status offenses that raise ex post facto issues. In a case involving past criminal activity as related to current status, the Court held that a federal law disqualifying persons living in a state of bigamy or polygamy from voting in the Utah Territory was not an ex post facto law (Murphy v. Ramsey, 1885). The Court said that the law did not punish individuals for their past crimes—in fact, a threeyear statute of limitations immunized the past acts—but rather imposed a disability upon them for their status of being in such a relationship at the time they attempted to register to vote. In a similar vein, the Court later found no ex post facto violation from a law, passed in 1893, disqualifying from the practice of medicine any person who had ever been convicted of a felony (Hawker v. New York, 1898). The defendant, Hawker, had been convicted of performing a criminal abortion in 1878. The Court said that the law was intended to establish current standards for the practice of

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medicine, and character was as relevant as learning. While disqualifying everyone who had ever committed a felony was somewhat arbitrary, it was within the general power of the legislature to set qualifications for the practice of medicine, and was not intended as additional punishment for the earlier crime. Cummings v. Missouri and Ex Parte Garland, involving both bill of attainder and ex post facto issues, were distinguished as cases where the required oath respecting past conduct during the Civil War was intended as punishment and had no relationship to current qualifications. In Samuels v. McCurdy (1925) the Court found that there was no ex post facto violation from a 1917 change in Georgia law that for the first time made possession of alcoholic beverages in the home a crime, even alcohol purchased prior to 1917. The Court said that it was the current possession that was the crime, not the past purchase, and therefore there was no ex post facto violation. AGGRAVATING A CRIME This Calder v. Bull factor is difficult to define because it seems to encompass the third category, related to changes in penalty. The hypothetical violation of changing a misdemeanor to a felony illustrates the difficulty because it would almost assuredly also involve an increase in penalty. Few cases have raised this factor, but a recent case raised it with a vengeance. In Stogner v. California (2003), the Court in a highly contentious 5–4 decision found the retroactive application of a change in the criminal statute of limitations for child abuse to be an ex post facto law. California brought a criminal prosecution after expiration of the time periods set forth in previously applicable statutes of limitations. A 1993 law permitted the resurrection of such timebarred criminal prosecutions, provided that (1) a victim had reported an allegation of abuse to the police, (2) there was independent evidence that clearly and convincingly corroborated the victim’s claim, and (3) the prosecution was begun within one year of the victim’s report. In 1998, a California grand jury indicted Marion Stogner for sex-related child abuse crimes committed between 1955 and 1973, well after the three-year statute of limitations. Stogner moved for the complaint’s dismissal. He argued that the Constitution’s Ex Post Facto Clause prevented revival of a previously time-barred prosecution. The change in California law was motivated by the recent revelations of sexual abuse of minors by priests, and the lack of any remedy as the result of relatively short civil and criminal statutes of limitations. While the change in civil penalties did not raise ex post facto issues, reinstating criminal charges that had been barred by the prior criminal statute of limitations was to the Court a clear example of an ex post facto law. The majority opinion by Justice Stephen Breyer held that a change in the statute of limitations was contrary to the overall purpose of preventing ex post facto laws, and specifically contrary to one of the Calder v. Bull factors. First,

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the Court said, the overall purpose of the ex post facto prohibition was to prevent laws that were “manifestly unjust and oppressive” in their retroactive effects. For example, it believed that the change denied the defendant “fair warning” that might have led him to preserve exculpatory evidence. Second, the majority believed that the change was specifically contrary to the second category in Calder v. Bull, preventing “every law that aggravates a crime, or makes it greater than it was, when committed.” It listed one example of this as inflicting “punishments, where the party was not, by law, liable to any punishment.” Since the statute of limitations had expired at the time the new law was passed, the Court viewed this new law as punishing a party for something that was not then liable to punishment. The Court did not think that it would be a violation of the ex post facto limitation to change the statute of limitations regarding crimes for which the statute had not expired. The dissenting opinion of Justice Anthony Kennedy, as the majority said, “closely parsed the historical record” and concluded that the change in the statute of limitations for crimes on which the statute had expired was not an ex post facto law. As the dissent saw it, the crime was not aggravated, nor was any punishment increased: “The offense is described in the same terms as before . . . ; the punishment remains the same. The character of the offense is therefore unchanged; it is perceived by the criminal justice system in the same way as before, and punished with the same force.” For the dissent, the only change was that Stogner could be prosecuted, while before he could not. The dissent further did not see any “oppressive” unfairness in requiring the defendant to stand trial for his crimes, however long ago they might have been committed. It did not feel that any criminal could claim detrimental reliance on the accident of not being tried sooner. CHANGES IN PENALTY The third Calder v. Bull factor is a common one, and a relatively easy case for the Court to find a violation. An easy case for the Court involving increased punishment was Jaehne v. New York (1888), whereby state law was amended to supersede city law and, in so doing, increased the penalty for bribery from two to ten years. For crimes committed before the change in the law, this was an obvious violation of the ex post facto clause. On the other hand, the Court in a later case (McDonald v. Massachusetts, 1901) did not consider a “habitual criminal” law to be an ex post facto violation. State law imposed a twenty-five-year sentence on anyone convicted of a felony who had been convicted of two previous felonies either in that state or another state. The Court considered the sentence as the punishment for the current crime, not as additional punishment for the prior crimes. Indicating the importance of any change in punishment, the Court in another decision found an ex post facto violation in even the fairly minor changes in the

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conditions of custody of an individual awaiting the imposition of the death penalty (In re Medley, 1890). As the majority saw it, Colorado law was changed after the crime to provide that a person sentenced to death was to be held in solitary confinement pending the execution date, and the exact date of the execution was to be kept from the condemned prisoner. The Court viewed solitary confinement in state prison, even if only for the approximately four weeks from the sentence to the execution, as being a harsher form of punishment than the looser form of imprisonment in county jail under the law at the time the crime was committed. Also, the Court thought the change in the law that deprived the person of the knowledge of the exact date so increased the level of anxiety as to be additional punishment. It was not enough that the prisoner knew that the execution was to take place within a window of about a week. It was not clear that in actual operation, the nature of the waiting period for the execution was greatly different, but the majority thought that it might be more severe, and that was enough to find an ex post facto violation. In a similar case, but with different results, the Court found that a new law requiring close confinement for six to nine months in a state penitentiary prior to execution was not a material change from the prior law, which required confinement in a county jail for three to six months prior to execution (Rooney v. North Dakota, 1905). The Court noted that the new law extended life for three months and that “close confinement” was not necessarily the same as the “solitary confinement” previously found improper. The Court later found no ex post facto violations in a change in the method of execution from hanging to electrocution (Malloy v. South Carolina, 1915). It viewed the change in method as an attempt to impose the execution in a less painful and more humane way than hanging. Generally, changes in the law that are viewed as more ameliorative and less punitive will not be viewed as increasing the penalty. In Lindsey v. Washington, (1937), the Court found an ex post facto violation in a change of the judge’s sentencing discretion. At the time of the crime, the maximum sentence for grand larceny was fifteen years, but the minimum sentence was, at the judge’s discretion, between six months and five years. The law was changed to require a sentence by the judge of the maximum of fifteen years. The state parole board later determined the actual sentence. Since under the prior law the maximum sentence might have been considerably less than fifteen years, the Court found this an easy example of an ex post facto violation. The fact that the actual sentence might have been the fifteen-year maximum in both instances was not persuasive to the Court. The possibility of a harsher penalty for a crime already committed was enough for the violation. The Court later distinguished Lindsey v. Washington in a decision upholding a change in the way Florida administered the death penalty (Dobbert v. Florida, 1977). In 1971 and 1972, when the horrendous murders in the case occurred, Florida law required the death penalty for a conviction of first-degree murder unless the jury, by majority vote, recommended mercy. The failure to mandate con-

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sideration of mitigating circumstances was inconsistent with the Court’s 1972 decision in Furman v. Georgia, which had found Georgia’s similar death penalty statute unconstitutional. In late 1972, Florida adopted a new death penalty statute that it applied in the case of Dobbert v. Florida. This law required that the jury consider aggravating and mitigating circumstances and by majority vote issue an advisory opinion on the death penalty. The judge was charged with weighing the same factors and could, upon written findings, disregard the jury recommendation and make the ultimate determination. In the case, the jury voted 10–2 not to recommend the death penalty, but the judge, calling the murders the most “heinous, atrocious and cruel” that he had seen, entered the death penalty. Dobbert made three arguments. First, he argued that under the law in existence when he committed the crimes, the jury’s recommendation of mercy would have precluded the death penalty. That law mandated the death penalty unless the jury recommended mercy, which it had done in this case. Second, he claimed that at the time of the offense there was no constitutional Florida death penalty. Third, he argued that a change in the minimum sentence was an ex post facto law. The new law required a twenty-five-year minimum sentence for first-degree murder, whereas the old law had no minimum. As for the first argument, the Court said that the change in the sentencing procedure was either just a procedural change that did not implicate the ex post facto prohibition or was primarily ameliorative, which did not violate the clause. The Court said there was no change in the quantum of punishment, just the procedural method for imposing it. Such procedural changes could operate to the disadvantage of the defendant without violating the Ex Post Facto Clause. In this particular case, however, an independent basis for finding no violation was that the law was primarily ameliorative, in most instances far more protective in the application of the death penalty than the earlier law. Under the prior law, if the jury did not recommend mercy, the death penalty was required. Under the revised law, the trial court judge could independently decide not to impose the death penalty. Also, the new law provided for more extensive review by the Florida supreme court. Though in the particular case the jury vote might have indicated that the defendant would not have received the death penalty under the old law, the Court said that this was not necessarily the case. It could not be certain what the jury might have done under the old approach. For example, under the new law, the jury knew that it did not have to make the final decision, which may have caused it to not impose the death penalty, leaving the onus of that decision on the judge. As for the second claim, that there was no valid death penalty statute at the time of the crime, the Court said that the death penalty then on the books, even though later found to be unconstitutional, gave fair warning to any defendant that was enough for the Ex Post Facto Clause. The later changes in procedure did not change the nature of the punishment. As for the third claim, that changes in the life sentence penalty constituted an invalid ex post facto law, the Court agreed, but said that Dobbert did not have

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standing to assert those claims because he had been sentenced to death. The Florida courts had already ruled that this change could not be applied to crimes committed before the law’s effective date. In Weaver v. Graham (1981), the Court incorporated many of the elements in its earlier cases in finding Florida’s change in the way it awarded good-time or gain-time credits to be in violation of the ex post facto clause. For a crime committed in 1976, the defendant in the case was sentenced to fifteen years. Florida law at the time of the crime provided for five to fifteen days per month of goodtime credit. The good-time credit became more generous during the latter years of a sentence. In 1979, Florida recast its credits as gain-time, and decreased the credit for good behavior to three to nine days per month, effectively adding two years to the defendant’s overall sentence. It also provided other ways of earning gain-time, but none as clearly advantageous as the former good-time provisions. The Florida courts had rejected the ex post facto claims because they said no vested interests were at stake; rather, the good-time or gain-time provisions were given by the grace of the legislature. The Supreme Court said that the Ex Post Facto Clause, unlike the Contract Clause or procedural due process, applied to rights that were not vested. Its main purpose was to give fair warning as to what was criminal and what the penalty was. It was enough that the changed law did in fact impose enhanced punishment. The Court also said that though it was true that ameliorative changes would not violate the Ex Post Facto Clause, it did not believe that the discretionary gaintime provisions offset in any significantly ameliorative way the automatic reduction of the sentence attributable to the prior good-time credits. Florida argued that the changes were procedural only, but the Court did not take this claim very seriously. The change in credits did not seem procedural at all, but the Court said that alteration of a substantial right was not procedural even when it seemingly took a procedural form. In another decision, the Court found a violation of the Ex Post Facto Clause in the retroactive application of a change in an early release program adopted by the state of Florida to address prison overcrowding (Lynce v. Mathis, 1997). In an earlier settlement of a lawsuit, Florida agreed to avoid prison overcrowding. As a result, when the prison population came within a few percentage points of full capacity, additional early release “provisional credits” were given to prisoners. A 1992 change in Florida law denied these provisional credits to persons convicted of murder or attempted murder and applied this denial retroactively. The defendant in the case had pled guilty in 1986 to attempted murder, and as the result of provisional credits was released in 1992. After the change in Florida law, he was rearrested. Provisional credits for some 2,789 inmates still in custody and 164 persons who had been released were all canceled. The Court said that the change in the law, whatever its purpose, increased the punishment after the crime, which violated the Ex Post Facto Clause. The mere possibility of some increase in penalty is not enough for an ex post facto violation. In California Department of Corrections v. Morales (1995), the

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Court found that the retroactive application of a law allowing the parole board to delay parole hearings for multiple murderers from every year to every three years was not an increase in punishment, in violation of the Ex Post Facto Clause. The purpose and effect of the law were not to increase punishment, but only to avoid the holding of costly and time-consuming parole hearings when release was improbable. Given the fact that the law applied only to multiple murderers, the Court did not believe that there was any real danger of a person actually serving a longer sentence because of the decreased frequency of the parole hearings. (California law was amended in 1994 to allow up to a five-year deferral even in cases of only a single murder, but its retroactive application was limited.) The Court also pointed out that California law likely would allow an earlier hearing upon some drastic change of circumstance indicating that the defendant might in fact be eligible for earlier parole. In Garner v. Jones (2000), the Court found constitutional Georgia’s far more expansive change in the frequency of parole hearings. Georgia law at the time of Garner’s murder sentence in 1982—a murder committed while the defendant was an escapee from an earlier murder conviction—provided for a first parole hearing after seven years for anyone serving a life sentence and every three years thereafter. In 1985, the parole board, acting under its authority to set the time for review, changed it rules to provide for a second review at least every eight years. The defendant in the case was denied parole in 1989 at the seven-year mark, with the second hearing set for the maximum of eight years. The Court of Appeals found that the possibility of extending the period for parole consideration by five years, from three to eight years, was bound to sweep within its coverage a person who might reasonably expect to have gotten a parole. The Supreme Court said that not every retroactive procedural change created a risk of changing the length of punishment. It was a “matter of degree,” and only if there was “sufficient risk” of increasing punishment was the Ex Post Facto Clause violated. The “speculative and attenuated possibility” of an increase in punishment was not enough. It said the key question was whether the Georgia changes created a “significant risk” of prolonging the defendant’s incarceration. Given the Georgia parole board’s high level of discretion and the serious nature of the defendant’s crime, the Court thought there was a very low possibility of the change increasing his sentence. Also, the Court found it important that the parole board’s discretionary policies, though not enforceable in court, provided for expedited parole hearings in case of changed circumstances. Justice Antonin Scalia, in an interesting concurring opinion, argued that the Ex Post Facto Clause did not apply to the discretionary rules of the parole board. He said it was as free to change its procedures as it was its substantive standards for the exercise of its discretion. The Court in another case found a Solomon-like solution to a change in the handling of supervised release programs after the prison term was completed (Johnson v. United States, 2000). The circuits were hopelessly divided as to the ex post facto consequences of a new federal law that allowed the sentencing court

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not only to revoke supervised release and order imprisonment, but then, in an apparent change from prior law, to order additional supervised release after imprisonment. The Court gave part of the baby to each side. It assumed, without deciding, that a change in the law that allowed an additional sentence of supervised release after imprisonment would be a retroactive change in punishment, in violation of the Ex Post Facto Clause. It then tortured the language of the old statute to conclude that it also had allowed the imposition of additional supervised release after imprisonment. Since the law at the time of the crime allowed for the same sentence as the new law, there was no increase in punishment and thus no ex post facto violation. The Court at least was open in recognizing that it was torturing the language of the old statute to avoid what would otherwise have been a fairly obvious ex post facto violation. CHANGING THE RULES OF EVIDENCE AND PROCEDURAL CHANGES The fourth Calder v. Bull factor involved changes in evidence. This particular concern has also led the Court to explore the ex post facto consequences of other procedural changes. Taken together, evidentiary and procedural changes have formed a very difficult version of this problem for the Court. An expansive view of the Ex Post Facto Clause is found in a case involving the withdrawal of a guilty plea (Kring v. Missouri, 1883). The defendant Kring had pled guilty to second-degree murder but appealed his twenty-five-year sentence, claiming that an accepted plea bargain called for only a ten-year sentence. The state Court of Appeals agreed, set aside his sentence, and ordered a new trial. At the trial, the defendant refused to withdraw his guilty plea to second-degree murder, but the trial court did it for him. He was retried for first-degree murder, and the jury gave him the death penalty. At the time of the crime, Missouri law did not allow a person who had pled guilty to second-degree murder to be retried for first-degree murder. At the time that Kring was retried, Missouri law had been changed to allow such a person to be retried for first-degree murder. The state argued that this change was not an ex post facto law, but just a change in procedure that was not forbidden, especially when the trial took place after the change in the Missouri law. The Court was not impressed with either argument. At the time of Kring’s crime and initial guilty plea to second-degree murder, he could not later be charged with first-degree murder. Whether it was called a procedural change or something else, Kring was subject to a greater penalty as the result of the change in the law. That was enough for the Court to find the change an ex post facto law. In very expansive language, it said that the Ex Post Facto Clause prevented the altering of any situation in a way that disadvantaged the defendant. The exact holding of Kring v. Missouri has been relied on in few, if any, cases, and this expansive language was later specifically rejected. In Collins v. Youngblood (1990), the Court went out of its way to reverse Kring v. Missouri. It said

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that defining an ex post facto law to include the altering of any situation to a defendant’s disadvantage was an unconstitutional expansion of the historical meaning of the Ex Post Facto Clause as described in Calder v. Bull. The Texas trial court jury had improperly sentenced Collins, an individual convicted of sexual abuse, to life imprisonment and a fine of $10,000. Texas law did not authorize a fine for this crime. At the time Collins was convicted, Texas law treated the unauthorized jury sentence as void, and the law required that the verdict be set aside and the case sent back to the trial court for a new verdict. While the defendant Youngblood was seeking state habeas review of his sentence, a new law was passed allowing the appellate court to reform the jury verdict by deleting the improper fine. In an interesting tracing of the historical underpinnings of the Ex Post Facto Clause, Chief Justice William Rehnquist’s opinion restated the essence of the Ex Post Facto Clause as follows: “Legislatures may not retroactively alter the definition of crimes or increase the punishment for criminal acts.” He felt that the new statute was a procedural change that did not raise any ex post facto concerns. He cast doubt on prior cases that had held that procedural changes which deprived “a defendant of ‘substantial protections’ ” or arbitrarily infringed on “ ‘substantial personal rights’ ” violated the clause. He felt that such language expanded the Ex Post Facto Clause beyond the historical understanding in Calder v. Bull. While simply calling a change a procedural change did not immunize a law from an ex post facto challenge, if a change was in truth a procedural change, the fact that it impacted substantial rights did not make it an ex post facto law. While acknowledging that the line between procedural changes upheld by the Court and those not upheld could hardly be distinguished, Rehnquist blamed this confusion on the overly broad language of Kring v. Missouri and specifically overruled the holding in that case that any change which “alters the situation of a party to his disadvantage” violates the Ex Post Facto Clause. In an 1884 case the Court held that Kring v. Missouri did not apply where the law was changed to allow a witness to testify in a criminal case when the witness would have been incompetent to testify at the time the crime was committed (Hopt v. Utah, 1884). The defendant Hopt, and co-defendant Emerson, were indicted for murder. Emerson was convicted first and was a witness against Hopt. At the time the crime was committed, Utah law provided that a convicted felon was incompetent to be a witness in a civil case and that the same rules for incompetency that applied in civil cases also applied in criminal cases. During Hopt’s trial, the law was changed to allow convicted felons to testify. The Court said that since the law did not make criminal an act that was innocent when committed, since it did not expand the punishment for any crime, and since it did not alter the level or quantity of proof required for conviction—but only who could be a witness—the ex post facto prohibition did not apply. Emerson could be allowed to testify as a witness to the crime. In a later case, the Court also found that a change in the rules of evidence related to handwriting comparisons was not an ex post facto law (Thompson v.

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Missouri, 1898). The defendant Thompson’s conviction for first-degree murder was reversed on appeal. The key piece of evidence, a prescription for strychnine, was tied to Thompson by comparing the handwriting on it with letters to his wife. The state supreme court held that it was an error to admit letters to his wife for such purposes. While Thompson was awaiting a second trial, the Missouri legislature amended the law to allow the “comparison of a disputed writing with any writing.” Thompson’s conviction was then affirmed on appeal. The Supreme Court thought that if, as it had held, a state could change the law to allow a felon to testify, it did not see why Missouri could not change the law to allow additional evidence of handwriting analysis. It emphasized that the law did not enlarge the punishment, make any new offense criminal, nor change the level of proof required for conviction. As the Court saw it, the change of law altered only a rule of evidence and did not materially alter any substantial rights of the defendant. The Court did not think controlling the language from Calder v. Bull, that “every law that alters the legal rules of evidence, and receives less or different testimony,” is an ex post facto law. The Court, obviously referencing what it considered to be overly broad Calder v. Bull language, said that it was applying the principles in former cases “without attaching undue weight to general expression in them that go [sic] beyond the questions necessary to be determined.” It did, however, observe that had the law changed some fundamental rule in criminal trials, it would likely have been an ex post facto law. For example, it would be an ex post facto law to take from the jury the right to determine the sufficiency of the handwriting comparisons and give that responsibility to the judge. Another case provides an extreme example of a change in evidentiary rules not being in violation of ex post facto principles (Splawn v. California, 1977). Sometime after the defendant had sold two reels of obscene film, California changed its jury instructions specifically to allow the jury to consider evidence of pandering. In determining whether the material was in fact without redeeming social value, and thus obscene, pandering was defined as the commercial exploitation of the sexually explicit portions of the material. Under federal practice, pandering could be considered in determining the issue of obscenity, but a California supreme court case seemed to have specifically rejected this evidence prior to the legislative change. Though the jury instructions were quite clearly adopted after the crime, the Court believed that they did not create any new substantive offense, “but merely declare[d] what type of evidence may be received and considered” in determining the issue of obscenity. This case pushes the envelope as to what evidentiary changes can be made without violating the ex post facto prohibition. The Court also found no ex post facto violations when a state law was changed after the commission of a crime to allow the state greater procedural rights to appeal (Mallett v. North Carolina, 1901). In the case, the defendants were convicted of fraud in criminal court. Their conviction was appealed to and reversed by the state superior court. In a change in North Carolina law adopted after the crime but before the first appeal to the state superior court, the state was given the right

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to appeal to the state supreme court any reversals of convictions by the superior court. (It could not do so previously.) The U.S. Supreme Court said that there were no vested rights in particular remedies and methods of procedures in state trial courts, and that modes of procedure were as subject to change in criminal cases as in civil cases. This case was made even easier by the fact that the defendants had used another provision of the new law in perfecting their appeal to the superior court. The Court said that there was no retroactive deprivation of the accused of any substantial right or immunity. No one would have committed a crime thinking that the state could not appeal the reversal of a conviction, and there were no unfair notice problems. In one of the Court’s more divisive ex post facto decisions, Justice John Paul Stevens, speaking for a 5–4 majority, found the retroactive application of a change in the rules of evidence in sexual assault cases to be in violation of the Ex Post Facto Clause (Carmell v. Texas, 2000). Previously, Texas law provided that the victim’s testimony could support a conviction only if it was corroborated by other evidence or if it was reported to another within six months of the crime’s occurrence. Prior to 1993, this so-called outcry or corroboration requirement did not apply to victims under the age of fourteen. In 1993, this child victim exception was extended to any victim under the age of eighteen. The defendant was convicted in 1996 of sexually assaulting his stepdaughter over a four-year period from 1991 to 1995, with some of the occurrences being prior to the 1993 change of the law. The Court found that the change in the evidentiary rules regarding the offenses prior to the passage of the law in 1993 was an ex post facto violation. This, it said, was contrary to the fourth category in Calder v. Bull, a prohibition of the change of evidence required for a conviction. While it was widely thought that this limitation applied only to the change in the quality of proof required for conviction—say, a change from reasonable doubt to preponderance of evidence—the Court said that the change in the age of the child victim exception went to the sufficiency of evidence needed to convict, and was thus similar to a change in the quality of proof. It did not feel that the case should be controlled by decisions related to the changes in the law allowing a felon to testify, or those allowing additional handwriting analysis. As to these cases involving other kinds of evidence, the Court said that the additional evidence might either help or hurt the prosecution’s case. The lowering of the sufficiency of the evidence, on the other hand, could advantage only the prosecution’s case. The Court believed that even though its limiting decision in Collins v. Youngblood had disapproved of a more expansive view of the Ex Post Facto Clause, that decision had nonetheless endorsed the Calder v. Bull four-category definition. The Court noted that Collins v. Youngblood did not specifically mention the evidentiary prong, but it did not specifically disavow it either, as it did with other aspects of the ex post facto rules. The Court said that the Ex Post Facto Clause was intended to address three main concerns: the lack of fair warning that was inconsistent with an individ-

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ual’s reliance interest, a desire to restrict arbitrary and potentially vindictive legislation, and concern for fundamental fairness. Interestingly, it volunteered that changes in “ordinary rules of evidence” would not violate the Ex Post Facto Clause, even if such changes in any particular case might be unfair or unjust. It is not clear how such changes in the ordinary rules of evidence were different from the changes in this particular case. The dissent, written by Justice Ruth Bader Ginsberg, argued that the Texas rule was primarily a change regarding the competency of witnesses and was an outdated rule of evidence that distrusted the witness victims of sexual assaults (unlike the witness victims of other crimes). She saw the change as essentially the same as allowing the testimony of a felon or the broadening of handwriting evidence. Justice Ginsberg said that the two major purposes of the Ex Post Facto Clause were fair warning, including the related reasonable reliance, and concern for arbitrary or vindictive legislative acts. She said that the evidentiary changes in this case raised neither issue. There is also an interesting historical debate in the case between Justice Stevens and Justice Ginsberg as to whether a 1702 British bill of attainder involving Sir John Fenwick, a traitor to King William III, was or was not, in addition to being a bill of attainder, also an improper ex post facto law because of its change in the number of witness required for a prosecution for treason. The degree to which each side searched the historical material to support its view is, given the extensive nature of the modern cases, fascinating. In Rogers v. Tennessee (2001), the Court found that it was not in violation of the Ex Post Facto Clause for the Tennessee supreme court to retroactively abandon the common-law rule that a person could not be convicted of first-degree murder if the victim died more than “a year and a day” after the injury. In a 5–4 opinion, the Court held that the Ex Post Facto Clause was limited to retroactive legislation, not judicial opinions. Article I, Section 10, specifically refers to “laws.” In an earlier case, the Court had in dicta indicated that ex post facto principles did apply to judicial decisions by way of the Due Process Clause (Bouie v. City of Columbia, 1964). The Court in Rogers v. Tennessee rejected those dicta. In Bouie v. City of Columbia, the Court found that the South Carolina supreme court had violated the Due Process Clause by changing the definition of a criminal trespass clause so that it did not include advance notice that trespass was forbidden. That case was one of many involving black civil rights demonstrators being punished for refusing to leave after being denied service at drugstore lunch counters. The Court had referred to the kinds of changes that would violate procedural due process rights as being “unexpected and indefensible.” The Court in Rogers v. Tennessee said that the principal concern was one of fair notice and warning, as required by procedural due process. The Court believed that the common-law evolution that led to the abandonment of the “year and a day” rule was entirely predictable. First, advances in medical science mooted the causation issues at the root of what was a thirteenth-century rule.

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Second, many other state courts had rejected the rule. Finally, the rule was only tenuously recognized in Tennessee in any event. The Rogers v. Tennessee majority believed that the text and longtime precedents were clear in that the Ex Post Facto Clause was limited to legislative changes. Although the due process limitations on court decisions included an ex post facto element, it was not the same as the textual limitation on the legislative branch. The Court said that to equate the two in a jot-for-jot kind of way would “circumvent the clear constitutional text” and “evince too little regard for the important institutional and contextual differences between legislation . . . and common-law decision making.” In particular, it thought that strict ex post facto limitations “would unduly impair the incremental and responded development of precedent that is the foundation of the common-law system.” It was important that common-law courts be able to redefine common-law doctrines, such as causation and intent, in order to bring them into conformity with logic and common sense. The due process requirement of fair notice and warning was adequately protected with the “unexpected and indefensible” test found in Bouie v. City of Columbia without incorporating ex post facto limits whole hog. A strong dissent written by Justice Scalia, and including Justice Stephens, argued that under Tennessee law at the time of the offense, the defendant could have been convicted only of manslaughter. The change in the law was so abrupt and precise, he said, that it had to violate ex post facto principles, and due process limitations as well. Justice Scalia did not view this decision as being consistent with the kind of evolutionary changes that the common law was intended to allow.

5

The Nonretroactive Provisions of Article I, Section 10

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; . . . or grant any Title of Nobility. Article I, Section 10, Clause 1

INTRODUCTION The nonretroactive provisions of Article I, Section 10, Clause 1, prevent the states from (1) entering into any “Treaty, Alliance, or Confederation”; (2) granting “Letters of Marque and Reprisal”; (3) coining “Money,” emitting “Bills of Credit,” or making anything other than gold and silver coin “a Tender in Payment of Debts”; or (4) granting “any Title of Nobility.” These provisions are all distinct and will be discussed separately. They are alike in that they are outright and absolute prohibitions regarding the powers of the states and allow no room for exceptions. This absolute prohibition distinguishes these provisions from Article I, Section 10, Clause 2 (dealing with duties on state exports and imports), and Clause 3 (dealing with tonnage, maintaining troops or ships during times of peace, interstate compacts, and entering into war), which allow states to engage in certain types of activities with the consent of Congress. The provisions of Article I, Section 10, Clause 1, of the U.S. Constitution that are not related to retroactive legislation have not individually, for the most part, been significant in the constitutional history of the United States. Nonetheless, Chief Justice John Marshall saw them, as well as Clause 2 and Clause 3, as important as a group in emphasizing national power. He said that they “generally restrain state legislation on subjects intrusted [sic] to the general government, or in which the people of all the states feel an interest.” Further, he continued, although it would be “tedious” to discuss all of the limits, “They will be found, generally, to restrain state legislation on subjects intrusted [sic] to the govern-

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ment of the Union, in which the citizens of all the states are interested” (Barron v. City of Baltimore, 1833). THE STATE TREATY CLAUSE Article I, Section 10, of the Constitution prohibits a state from entering into any “Treaty, Alliance, or Confederation,” and is intended to include within its proscriptions both other states and foreign nations (Port Authority Trans-Hudson Corp. v. Feeney, 1990). This clause is commonly referred to as the State Treaty Clause. Treaties, alliances, and confederations have been said to be “relatively permanent and general associations” that are “an intrinsic threat to the federal government.”1 It is clear that the Framers of the Constitution “anxiously desired to cut off all connection or communication between a state and a foreign power” (Holmes v. Jennison, 1840), and the purpose of the State Treaty Clause was to “ensure that whatever sovereignty a State possesses within its own sphere of authority ends at its political border” (Port Authority Trans-Hudson Corp. v. Feeney, 1990). Chief Justice Marshall said that if states were to enter into treaties with foreign countries, they would “interfere with the treaty-making power, which is conferred entirely on the general government” (Barron v. City of Baltimore, 1833). Treaties between states for political purposes would seem to be the clearest example of a conflict with the general purpose of this constitutional provision, creating a conflict with the normal concept of federalism between the states and the central government. One of the difficulties is distinguishing the absolute ban on state treaties with other states from state compacts with other states that are allowed with congressional approval in Section 10, Clause 3. In one of the few cases discussing the clause (U.S. Steel Corp. v. Multistate Tax Commission, 1978), the Court quoted approvingly from William Blackstone. Blackstone had said that treaties “relate ordinarily to subjects of great national magnitude and importance, and are often perpetual, or made for a considerable period of time.” The state is “altogether prohibited” from making treaties. Agreements or compacts, on the other hand, he said, concern “transitory or local affairs,” and thus did not affect national interest in the same way as treaties. Congress could consent to such local agreements and compacts.2 Without any real attempt to clarify the issue, the Court pointed out that Justice Joseph Story had found this definition to be singularly unilluminating. Story had said that “this is at best a very loose and unsatisfactory exposition, leaving the whole matter open to the most latitudinarian construction.” He asked: What are subjects of great national magnitude and importance? Why may not a compact or agreement between States be perpetual? If it may not, what shall be its duration? Are not treaties often made for short periods, and upon questions of local interest, and for temporary objects?3

In either an artful dodge or a refreshing admission of ignorance, the Court said, “This suggests that the Framers used the words ‘treaty,’ ‘compact,’ and ‘agree-

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ment’ as terms of art, for which no explanation was required and with which we are unfamiliar.” And later in the same case, “Whatever distinct meanings the Framers attributed to the terms in Art. I, § 10, those meanings were soon lost” (U.S. Steel Corp. v. Multistate Tax Commission, 1978).

GRANTING LETTERS OF MARQUE AND REPRISAL In colonial times, private individuals were commonly relied on to fight wars on land and sea.4 Letters of marque and reprisal were government authorization of private individuals to take warlike actions against other private individuals. At common law the terms had precise technical meanings, but by the time of the American Revolution, letters of marque and reprisal were general “government authorizations to private shipowners to seize property of foreign parties, usually ships or property from ships.”5 The ban on states’ issuing letters of marque and reprisal is the use of arcane language to state a very simple point. Only Congress was to conduct war. Article I, Section 8, Clause 11, gives Congress the power to declare war and includes the power to issue letters of marque and reprisal. The states were not to have this power. When drafting the Constitution, the Framers seemed to give little thought to letters of marque and reprisal, and the ratification debates “were little concerned with how the new government would initiate war.”6 States were prohibited from granting letters of marque and reprisal because allowing them to do so “would lead directly to war; the power of declaring which is expressly given to congress” (Barron v. City of Baltimore, 1833). Furthermore, the power to grant letters of marque and reprisal is one that must be “national in . . . nature, and which [is] vested in Congress, as the sovereign power of the nation or Union” (Sturges v. Crowninshield, 1819). The power to grant letters of marque could not be given to the states in the Constitution because it “appl[ies] to the Union, for which the legislature of no one State ever could legislate.” Also, granting letters of marque and reprisal could involve state “intercourse with foreign nations, and therefore, necessarily concern[s] the whole nation collectively, and no one part of it in particular.” Therefore, under Article I, Section 10, of the Constitution, states were no longer permitted to issue letters of marque and reprisal, and that power was given directly to Congress in Article I, Section 8, Clause 11.

COINING MONEY, EMITTING BILLS OF CREDIT, AND MAKING ANYTHING BUT GOLD AND SILVER A TENDER IN PAYMENT OF DEBT Under the Articles of Confederation, both the states and Congress had the power to coin money.7 In the Constitution, however, Congress has the express author-

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ity to coin money, and the states are prohibited from doing so (Article I, Section 8, Clause 10). There have been few issues involving the limitation on the states’ ability to coin money. The one seminal case in the field involved whether Congress had the power to make Treasury notes legal tender. In the Legal Tender Cases, the Supreme Court held that the federal act of May 31, 1878, which reissued Treasury notes that were originally issued during the Revolutionary War, was constitutional and that the buyers’ tender of such notes was a tender of lawful money in payment of debt (Legal Tender Cases, 1884). In upholding the federal notes the Court discussed why the states were forbidden from coining money. It said that the power to coin money was taken from the states because “a right of coinage in the particular States could have no other effect than to multiply expensive mints, and diversify the forms and weights of the circulating pieces.” The Court did, however, say that not every state grant of value was in violation of the prohibition. It said, “ ‘Money,’ in the phrase ‘to coin money,’ ” does not embrace “other substances beside those precious metals, alone in use throughout all the world as coin,” because to include other substances would merely “utter promises to pay money” and “would not be ‘coining,’ or ‘to coin money.’ ” In the history of the states, “the skins of the beaver passing by tale; strings of shells, known as wampum passing by measure; and packages of tobacco of defined weights were, in the absence of precious metals, used as money, and were made the medium of exchanges” (Legal Tender Cases, 1884). However, none of these items were considered to be legal tender, “or ever had anything but a local and limited circulation, or ever [were] used as a substitute for money, after money was introduced.” As has been said, “precious metals . . . have always been the great and universal medium of exchanges.” In the case of Craig v. Missouri (1830), the Supreme Court addressed, for the first time, what constituted a bill of credit under the Constitution. In this case, the constitutionality of a promissory note issued under an act of the state of Missouri was challenged. Promissory notes issued under this act were to be used in the payment of debts owed to the state. The Court declared that “to ‘emit bills of credit,’ conveys to the mind the idea of issuing paper intended to circulate through the community for its ordinary purposes, as money, which paper is redeemable at a future day.” Furthermore, if the prohibition against emitting bills of credit was to have any affect, “it must comprehend the emission of any paper medium, by a state government, for the purpose of common circulation.” The Court held that the notes in question did constitute bills of credit that were prohibited by the Constitution because the denominations of the bills, from ten dollars to fifty cents, fitted them for the purpose of ordinary circulation; and their reception in payment of taxes, and debts to the government and to corporations, and of salaries and fees, would give them currency. They were to be put into circulation; that is, emitted, by the government.

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Therefore, since these notes were “made in consideration of an act which [was] forbidden by law,” they were void. In Briscoe v. Bank of the Commonwealth of Kentucky (1837), the Kentucky bank brought suit against Briscoe to recover on a note for $2,048.37 owed to the bank. Briscoe challenged the constitutionality of the note and claimed that the state-chartered bank did not have the power to issue bills of credit. He argued, therefore, that the note should be void for illegality. The Supreme Court had to determine “whether the notes issued by the bank [were] bills of credit, emitted by the state, in violation of the constitution of the United States.” The Court adopted a broad definition for bills of credit, calling them paper issued by the sovereign power, containing a pledge of its faith, and designed to circulate as money. . . . It is a paper which circulates on the credit of the state, and is so received and used in the ordinary business of life. The individual or committee who issues the bill, must have the power to bind the state; they must act as agents, and, of course, do not incur any personal responsibility, nor impart, as individuals, any credit to the paper.

The Court claimed that the Constitution did not prohibit states from granting acts that incorporate banks. In fact, when the Constitution was approved, there were many state banks operating and using notes: “It cannot, therefore, be supposed, that the notes of these banks were intended to be inhibited by the constitution; or that they were considered as bills of credit, within the meaning of that instrument.” The Court held that the banknotes in this case were not bills of credit prohibited in the Constitution, even though the bank was established “in the name and behalf of the Commonwealth of Kentucky.” This was so because the notes did “not purport to be issued by the state, but by the president and directors of the bank”; the notes did not contain a “pledge of the faith of the state, in any form,” but were instead “issued on the credit of the funds of the bank”; and the president and directors of the bank were not acting as state agents, nor were they given the authority to legally bind the state. Furthermore, “the notes were not only payable in gold and silver, on demand; but there was a fund, . . . a sufficient fund, to redeem them. This fund was in [the] possession of the bank, and under the control of the president and directors,” not of the state. The Court noted another difference between the notes in this case and the bills of credit prohibited by the Constitution. Here, the holder of a banknote “could not only look to the funds of the bank for payment, but he had, in his power, the means of enforcing it” because “the bank could be sued.” States, however, must consent to being sued, and there had never before been a suit brought against a state regarding bills of credit. It is clear, at least, that “no suit could have been maintained, on this ground, prior to the Constitution.” Finally, the Court acknowledged that the state of Kentucky was a stockholder in the bank. However, this fact did not change the outcome of the case because “a state, when it be-

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comes a stockholder in a bank, imparts none of its attributes of sovereignty to the institution.” In his dissent, Justice Story claimed that he was not against the issuing of banknotes in general, but that banknotes issued by state-owned banks were unconstitutional. He declared: The constitution does not prohibit the emission of all bills of credit, but only the emission of bills of credit by a state: and when I say, by a state, I mean by or in behalf of a state, in whatever form issued.

In another case, the Court held that coupons issued by the state of Virginia on its credit were not forbidden bills of credit (Poindexter v. Greenhow, 1885). Even though the coupons were negotiable and could be passed from hand to hand, they were not intended to circulate as money between individuals or between the government and individuals. In the case the plaintiff, Poindexter, owed $12.45 in taxes to the city of Richmond, Virginia. The city treasury refused the state coupons as payment of the taxes and took possession of Poindexter’s desk, to be sold to pay the taxes. In this lawsuit, Poindexter sued to get back his desk or its $30 value. The Court held that the coupons were legal tender under Virginia law and that they were not unconstitutional bills of credit. The prohibition on bills of credit was not intended to prevent the transfer of all negotiable instruments, but only to prevent the state from issuing forms of payment meant to be substituted for the money that only the federal government could issue. It said of the coupons: It is very plain to us that the coupons pay money. Their payment and redemption are based on the credit of the state, but they were not emitted by the state in the sense in which a government emits its treasury notes, or a bank its bank-notes—a circulating medium or paper currency—as a substitute for money.

TITLES OF NOBILITY Before the adoption of the Constitution, many colonies allowed the granting of titles of nobility.8 However, at the Constitutional Convention, and in The Federalist Papers, number 84, it was said by Alexander Hamilton that “nothing need be said to illustrate the importance of the prohibition of titles of nobility. . . . [F]or so long as they are excluded, there can never be serious danger that the government will be any other than that of the people.”9 States were prohibited from granting titles of nobility in Article I, Section 10, and Congress was prohibited from doing the same in Article I, Section 9.10 The nobility clause of the Constitution have been discussed in a few Supreme Court cases, but “they have not controlled the outcome of any significant litigation.”11 Justice Potter Stewart, in a case upholding a limited, race-based, federal affirmative action program, said that the Framers “lived at a time when the Old World still operated in the shadow of ancient feudal traditions,” and they “set out

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to establish a society that recognized no distinctions among white men on account of their birth” (Fullilove v. Klutznick, 1980). In the concurring opinion of Zobel v. Williams, decided in 1982, four justices cited the clause in disapproving a fiscal giveaway by Alaska that distributed oil tax revenues to state citizens based upon the length of residence. The clause has had little importance. NOTES 1. Felix Frankfurter & James M. Landis, The Compact Clause of the Constitution— A Study in Interstate Adjustments 34 Yale L. J. 693–94 (1925). 2. William Blackstone, Commentaries, S. Tucker, ed. 1 at 310 (1803). 3. J. Story, Commentaries on the Constitution of the United States, T. Cooley, ed. 2 at 263 (1873). 4. Jules Lobel, Covert War and Congressional Authority: Hidden War and Forgotten Power 134 U. Pa. L. Rev. 1044–45 (1986). 5. C. Kevin Marshall, Putting Privateers in Their Place: The Applicability of the Marque and Reprisal Clause to Undeclared Wars 64 Chi. L. Rev. 958 (1997). 6. Charles A. Lofgren, War-Making Under the Constitution: The Original Understanding 81 Yale L. J. 683 (1972). 7. Ali Khan, The Evolution of Money: A Story of Constitutional Nullification 67 U. Cin. L. Rev. 393 n. 56 (1990). 8. Jol A. Silversmith, The “Missing Thirteenth Amendment”: Constitutional Nonsense and Titles of Nobility 8 S. Cal. Interdis. L. J. 577 (1999). 9. Id., at 577–78. 10. Id., at 578. 11. Id., supra note 177, at 606.

6

The Import–Export Clause

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress. Article I, Section 10, Clause 2

INTRODUCTION The ban on state imposition of import and export taxes, except as necessary for valid inspection laws, addresses one of the principal problems under the Articles of Confederation that had left the individual colonies free to burden interstate and international commerce as they saw fit. In one of the most important modern cases, the Court called this “one of the major defects of the Articles of Confederation, and a compelling reason for the calling of the Constitutional Convention of 1787” (Michelin Tire Corp. v. Wages, 1976). With regard to international commerce, all of the colonies with international ports could burden states without such accessible ports, creating considerable resentment among the states not so geographically blessed. In the words of James Madison: The other source of dissatisfaction was the peculiar situation of some of the States, which having no convenient ports for foreign commerce were subject to be taxed by their neighbors, thro whose ports, their commerce was carried on. New Jersey, placed between Philadelphia and New York, was likened to a cask tapped at both ends: and N. Carolina between Virginia and South Carolina to a patient bleeding at both arms.1

The Import–Export Clause’s ban on such taxes by the states was intended to remedy this defect and to give only the federal government the power to pass

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taxes that would provide it with an important and regular source of revenue. In modern times the commerce power of the federal government is read as though it imposes implied limitations on the states’ power to regulate such commerce. To the degree that the implied limitations on the states’ ability to regulate interstate and foreign commerce limits state taxation of foreign commerce, the Commerce Clause overlaps the Import–Export Clause. Nonetheless, the Import–Export Clause by its own force is limited to foreign commerce and does not apply to interstate commerce. In Woodruff v. Parham (1868), the Court examined the history of the Constitution’s formation and adoption, and concluded that the words “imports” and “imposts” were used with exclusive reference to articles imported from foreign countries. In another case involving an Alabama law claimed to be discriminatory against alcohol from other states, the Court said that “the constitutional provision against taxing imports by the States does not extend to article brought from a sister State” (Hinson v. Lott, 1868). The first case before the Supreme Court directly involving the Import–Export Clause was Brown v. Maryland (1827). Maryland passed a law that required all “importers of foreign articles or commodities” to obtain a license from the state that cost $50. The Court relied upon both the Import–Export Clause and the Commerce Clause to conclude that the law violated the Constitution. The inherent limitations of the Commerce Clause also imposed limits on state taxation of foreign commerce, thus overlapping the prohibitions of the Import–Export Clause on state taxation of foreign imports. John Marshall juxtaposed the restriction upon the states’ ability to tax imports and exports with the power of the states to tax persons and property within their boundaries. He said that when the imported property “has become incorporated and mixed up with the mass of property in the country, it has perhaps lost its distinctive character as an import,” and thus is “subject to the taxing power of the state.” Prior to that, “while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported,” any tax would be an invalid duty on imports contrary to the Constitution. This doctrine became known as the Original Package Doctrine. Under Marshall’s view, the ban on import–export taxes and the exclusive power of the federal government over foreign commerce continued until the imported commerce was so mixed up with domestic commerce as no longer to be in danger of being discriminated against. Also, though the Maryland license tax on the importer–exporter was not a direct tax on imports and exports, Marshall reasoned that it burdened the process of importing in the same way that a direct tax did, and was thus also an unconstitutional tax on imports. Brown v. Maryland raised a number of issues prompting considerable litigation in later times. First, the Court had to determine the scope of the Original Package Doctrine, which defined when imported goods lost their immunity from state taxation as imports and exports and became part of the general instate commerce. Second, the Court had to decide what state taxes other than direct taxes

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on imports and exports were also barred by the prohibition. Third, with regard to exports, the Court developed the law for determining when the immunity from state taxation of exports began. Fourth, since the clause specifically excluded from the immunity any taxes and fees related to the inspection of imported goods, the Court had to determine the scope of the inspection exception. THE ORIGINAL PACKAGE DOCTRINE: WHEN THE IMMUNITY FROM STATE TAXATION ENDS The Court used the Original Package Doctrine to determine when imported goods lost their immunity from state taxation. The logic was that the immunity should continue until the imported goods were so mixed with local goods that they were no longer subject to unfair or discriminatory taxation. The Original Package Doctrine cases generated considerable litigation throughout the years and was the source of many complicated maneuvers in an attempt to gain protection under it or to avoid its application. Finally, the Original Package Doctrine was largely abandoned in Michelin Tire Corp. v. Wages (1976) as a way of determining when foreign goods and goods in interstate commerce lost their immunity from taxation. The Commerce Clause and import–export cases are interchangeable in this respect. In Michelin Tire Corp. v. Wages, the Court dropped the Original Package Doctrine in import and export cases as well as Commerce Clause cases. The Court adopted a more straightforward approach that the immunity was lost when the goods came to rest at their ultimate destination. Historically, under the various tenets of the Original Package Doctrine, goods could lose their immunity in many different ways. The major way to lose the immunity was to break down the original package into smaller packages of a size more suitable for retail purposes. As long as the original package was not broken down, the immunity remained. Goods still in the original package lost their immunity on the first sale within the United States. They also could lose their immunity when they were necessary for current manufacturing needs or when mixed with other raw products for later use. In Hooven & Allison v. Evatt (1945), the Hooven & Allison Company was engaged in the business of buying various types of fiber from foreign countries to use in manufacturing ropes in the United States. The fibers were stored in a warehouse until the time of manufacture. Ohio assessed state property taxes on the fibers, an act that the petitioner said violated the Import–Export Clause. The state argued that the goods had lost their status as imports because the rule applied to imports only for the purpose of sale. The Court concluded that the imported fibers did maintain their immunity, but in a later case held that the immunity would be lost if they became necessary for current manufacturing needs (United States Plywood v. Algoma, 1958). The Court also modified its inventory rule for imported fungible commodities such as iron ore (Youngstown Sheet & Tube v. Bowers, 1957). The iron ore, the Court said, ceased to be a protected import after it had been commingled with other iron ore

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imported at a different time and after portions of such iron ore had been removed for use in manufacturing. Substantial changes in the imported raw materials was another way for them to lose the immunity. In one case, the Court determined that a Texas tax placed upon fish caught in the Gulf of Mexico did not violate the Import–Export Clause because the fish had lost their distinctive character as imports through their processing within the state (Gulf Fisheries v. MacInerney, 1928). The fish had been cleaned, beheaded, and de-gilled before being shipped to other destinations. Even in its simplest form, the breaking of the bulk of the original package, the doctrine caused considerable problems. There were easy cases, such as when the Court held that California was not allowed to place a tax on wine “remaining in the original cases, unbroken and unsold, in the hands of the importer” (Low v. Austin, 1871). In another import–export case (F. May & Co. v. New Orleans, 1900), the May Company was engaged in the business of importing various goods from Europe for sale in the United States, including linen, towels, and (occasionally) dolls. In 1897, Louisiana taxed goods that the plaintiffs claimed were still in their original packages (and thus the tax was in violation of the Import–Export Clause). Smaller packages were made by the manufacturer, then given to the shipper. The smaller packages were then placed in larger bales. The Court was faced with determining whether the smaller packages from the manufacturer or the larger bales in which the smaller packages were placed for transport were to be considered the original package. Since the items were shipped in the larger bales, the Court easily found that the larger bales were the original package. The Court scornfully rejected the following hypothetical: “If a jeweler desires to buy 50 Geneva watches for the purpose of selling them here without paying taxes upon them as property, he need only direct them to be placed in separate cases, however small, and then put them all together in one box.” The Court revealed some adroitness in avoiding the technicalities of the Original Package Doctrine when it found the need to do so. In a Commerce Clause case, the state legislature of Tennessee passed a law in 1897 that made it illegal to import cigarettes for sale in the state (Austin v. Tennessee, 1900). The cigarettes were imported in their individual packs in an attempt to avoid the application of the state ban. The Court accepted that the law would be invalid if the cigarettes came under the Original Package Doctrine. The Court phrased the issue as follows: [W]e are remitted to the inquiry whether a paper package of three inches in length and one and a half inches in width, containing ten cigarettes, is an original package protected by the Constitution of the United States against any interference by the state while in the hands of the importer?

The opinion examined the Original Package Doctrine:

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Whether the decision would have been the same if the original packages in that case, instead of being bales of dry goods or hogsheads, barrels or tierces of liquors, had been so minute in size as to permit of their sale directly to consumers, may admit of considerable doubt. Obviously the doctrine of the case is directly applicable only to those large packages in which from time immemorial it has been customary to import goods from foreign countries. It is safe to assume that it did not occur to the Chief Justice that, by a skillful alteration of the size of the packages, the decision might be used to force upon a reluctant people the use of articles denounced as noxious by the legislatures of the several states.

In Michelin Tire Corp. v. Wages (1976), the Court announced its weariness of 150 years of wrestling with the idiosyncrasies of the Original Package Doctrine and determined that the immunity ended when the goods reached their final destination. The Court did not believe that imported goods needed the same level of protection as they did in earlier times and that the complexities of the Original Package Doctrine were no longer necessary. When the goods came to rest, the absolute immunity was ended and nondiscriminatory state property taxes were allowed. The Court said: Nothing in the history of the Import–Export Clause even remotely suggests that a nondiscriminatory ad valorem property tax which is also imposed on imported goods that are no longer in import transit was the type of exaction that was regarded as objectionable by the Framers of the Constitution.

It felt that “such nondiscriminatory property taxation can have no impact whatsoever on the Federal Government’s exclusive regulation of foreign commerce, probably the most important purpose of the Clause’s prohibition.” It felt that property taxes deprived the federal government of no revenues, in contrast to imposts and duties, “which are essentially taxes on the commercial privilege of bringing goods into a country.” It said that “such property taxes are taxes by which a State apportions the cost of such services as police and fire protection among the beneficiaries according to their respective wealth; there is no reason why an importer should not bear his share of these costs along with his competitors handling only domestic goods.” While the Import–Export Clause clearly prevented state taxation based upon the foreign origin of goods, it did not protect those goods from nondiscriminatory taxes applied to all such goods within the state. Any impact on federal revenues, it was reasoned, was no more than the kinds of state taxes already allowed: Taxes imposed after an initial sale, after the breakup of the shipping packages, or the moment goods imported for use are committed to current operational needs are also all likely to have an incidental effect on the volume of goods imported; yet all are permissible.

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WHEN IS A TAX AN IMPORT–EXPORT TAX? In Michelin Tire Corp. v. Wages the Court adopted a policy-based approach for determining when a tax was of a type barred by the ban on import and export taxes. In the past, direct taxes on imports and exports, so-called duties and imposts, were easily found to be forbidden, but more indirect taxes were hard to assess. In Brown v. Maryland, Justice Marshall found a license tax on importers to be a forbidden import–export tax. And in another case, the Court struck down a Louisiana law that required each vessel arriving in the port of New Orleans to pay a tax (Steamship Co. v. Portwardens, 1867). It said, “The general prohibition upon the States against levying duties on imports or exports would have been ineffectual if it had not been extended to duties on the ships which serve as the vehicles of conveyance.” On the other hand, in Reading Railroad Co. v. Pennsylvania (1872), the Court upheld a state tax on gross receipts of the railroad, including on the transportation of imported goods. The tax did not violate the Import–Export Clause because the tax was “laid upon the gross receipts of the company; laid upon a fund which has become the property of the company, mingled with its other property, and possibly expended in improvements or put out at interest.” In a later case, the Court struck down a Pennsylvania law that required auctioneers to pay a tax based upon the amount of imported goods they sold (Cook v. Pennsylvania, 1878). In the Michelin Tire Co. v. Wages case, Georgia assessed a property tax against tires and tubes imported from France and Nova Scotia. Previous cases had assumed that all taxes on imports and exports and on the importing and exporting processes were banned by the Import–Export Clause. Before this case, the focus of the consideration was whether the tax under review was on imports and exports. Instead, this case analyzed the nature of the tax to determine whether it was an impost or a duty. The Court said the key issue was whether the tax offended any of the three policy considerations that led the Framers to include the clause in the Constitution. The Court found three main reasons why the framers included the clause in the Constitution: (1) they wanted to prevent seaboard states with port facilities from taking advantage of inland states by taxing imports and exports; (2) they wanted to secure a source of revenue for the federal government; and (3) they believed that the federal government should speak with one voice with respect to trade with foreign governments. The Court found that a nondiscriminatory property tax was not the type that the Framers of the Constitution had in mind, an “impost” or “duty.” The Court found that such taxes, unlike discriminatory state taxes against imported goods, were not “an impediment that severely hampered commerce or constituted a form of tribute to seaboard States to the disadvantage of other states.” Georgia’s tax did not deprive the federal government of the “exclusive right to all revenues from imposts and duties on imports and exports, since that right by definition only extends to revenues from exactions of a particular category.” The Court found that

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such property taxes are taxes by which a state apportions the cost of such services as police and fire protection among the beneficiaries according to their respective wealth; there is no reason why an importer should not bear his share of these costs along with his competitors handling only domestic goods.

In 1978, the Court examined Washington State’s tax upon the occupation of stevedoring, the business of loading and unloading cargo from ships. The court noted that there were two major distinctions between the tax in this case and that in Michelin Tire Corp. v. Wages. First, the tax clearly fell on goods still in transit, not goods at rest, which made it seem more like a duty or impost tax. On the other hand, here the tax did not fall on the goods themselves, but on activities related to the loading and unloading of the goods, which made it seem less like a duty or impost tax. Taking the two matters together, the Court concluded that this was not a tax forbidden by the Import–Export Clause. Applying the reasoning of Michelin Tire Corp. v. Wages, it said that, first, the tax did not restrain the federal government’s ability to conduct foreign policy. Second, “the effect of the Washington tax on federal import revenues is identical to the effect in Michelin” (Dept. of Revenue v. Assn. of Washington Stevedoring, 1978). The Court found that the tax merely compensated the state for services and protection extended by Washington to the stevedoring business. Last, regarding friction between Washington and inland states, the Court found that the tax would not affect this relationship, but rather was properly apportioned, did not discriminate, and was reasonably related to state-provided services. Thirty-nine years after the Court’s decision that struck down Ohio’s property tax on imported fibers stored in a warehouse (Hooven & Allison v. Evatt, 1945), the Court was faced with the same facts and the same Ohio law (Limbach v. Hooven & Allison, 1984). The Court’s decision in Michelin Tire Corp. v. Wages had abandoned the concept that the Import–Export Clause constituted a broad prohibition against all forms of state taxation that fell upon imports. Hooven & Allison tried to argue that the state was prohibited from collecting the tax because of collateral estoppel, but the Court rejected this proposition because the years for which the tax was owed were different. The Court did not reach the merits of the case and remanded the case back to the state of Ohio, but it was clear that the Michelin Tire Corp. v. Wages approach would uphold the tax. In a 1986 Commerce Clause Case, the Court examined R. J. Reynolds’s claim that North Carolina’s property tax violated the Import–Export Clause (R. J. Reynolds v. Durham County, 1986). The tobacco company stored imported tobacco in warehouses in the state for up to two years for aging. The Court found that North Carolina’s tax was “indistinguishable from the tax in Michelin Tire Corp. v. Wages in terms of those policies.” It did not interfere with the federal government’s regulation of foreign commerce, did not single out imported goods for disparate treatment, and was just an attempt to apportion the cost of “such services as police and fire protection among the beneficiaries according to their respective wealth.” Reynolds argued that the decision in Michelin Tire Corp. v.

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Wages was not applicable to its case because that case did not involve goods in transit. However, the Court rejected this position and found that “the imported tobacco here, we repeat, has nothing transitory about it: it has reached its State— indeed its county—of destination and only the payment of the customs duty, after the appropriate aging, separates it from entrance into the domestic market.” In another case, the Court found that Tennessee’s sales tax levied against Itel did not violate the Import–Export Clause (Itel Containers International v. Huddleston, 1993). The tax was assessed on proceeds that Itel earned from leased containers delivered in Tennessee that were used only for international shipping. The Court found, under the Michelin Tire Corp. v. Wages tests, that the tax did not hinder the relationship between seaboard and inland states and that it did not infringe on the federal government’s power to speak with one voice concerning international trade. The Court then focused on whether the tax diverted import revenue from the federal government. The tax did not violate the Import–Export Clause because it passed the Michelin Tire Corp. v. Wages test. WHEN THE IMMUNITY OF EXPORTS BEGINS The Original Package Doctrine dealt with when the immunity of imported goods ended, but on the other end of the scale was the issue of when the immunity of exported goods began. This latter decision, it turned out, was much easier than determining when the immunity ended. The basic rule is that the immunity does not begin until the journey abroad begins or until the goods are committed to a common carrier for that journey. The rule was developed in a series of cases involving the similar immunity of goods traveling in interstate commerce from state taxation. In one such case, the Court found that the immunity from taxation for goods in interstate commerce did not begin until the journey began or until the goods were irrevocably committed to the common carrier for that journey (Turpin v. Burgess, 1886). This has remained the basic rule. In that case, Virginia law provided that an excise tax of 32 cents per pound was imposed on all manufactured tobacco. This tax was required to be paid by purchasing stamps that were to be affixed to the packages before the tobacco could be removed. Tobacco intended for exportation was relieved from paying this tax, and instead a stamp costing 25 cents had to be affixed to each package, regardless of its weight. The Court held that this law did not violate the Constitution. It said that goods intended for exportation to another state are liable to taxation as part of the general mass of property of the state of their origin until actually started in course of transportation to the state of their destination, or delivered to a common carrier for that purpose

provided only that they were “taxed in the usual way in which such property is taxed, and not taxed by reason or because of such exportation or intended ex-

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portation.” The Court asked rhetorically: “Will the mere word of the owner that they are intended for exportation make them exports? This cannot for a moment be contended. It would lead to the greatest of frauds.” Perhaps the best-known case involving the requirement that the journey must begin before there is any immunity is Coe v. Town of Errol (1886). Again, this case was not an import–export case, but it involved the similar issue of when goods destined for interstate commerce become immune from state taxation. In Coe v. Town of Errol, logs were held in a stream, awaiting the spring runoff, before being shipped in interstate commerce. In framing the issue, the Court asked, “Does the owner’s state of mind in relation to the goods, that is, his intent to export them, and his partial preparation to do so, exempt them from taxation?” The goods were not to be classified as exports until they commenced “their final movement for transportation from the state of their origin to that of their destination.” Again, although both Coe v. Town of Errol and Turpin v. Burgess dealt with goods shipped interstate, the same concept applies to goods bound to foreign destinations. In another case that did involve the Import–Export Clause, the Court was faced with an interesting version of the problem of when the journey begins (Empresa Siderurgica v. Merced County, 1949). In this case, a cement plant in California was sold to a corporation in Colombia for export to South America. A common carrier company was employed to do the dismantling and packaging for shipment. California levied a personal property tax on the remainder of the plant. The Court found that the unshipped portions of the plant could not be considered an export. It said that it was “not enough that on the tax date there was a purpose and plan” that the property be exported. It continued, “Nor is it sufficient that in due course that plan was fully executed.” The part of the plant that had been dismantled but not yet delivered by tax date to a common carrier for export was subject to state taxation. The Court’s seriousness in requiring some movement is revealed in a 1974 case in which the Court upheld a state tax on cash registers made expressly for the foreign market and that had no local use (Koysdar v. National Cash Register, 1974). The state of Ohio assessed a personal property tax on cash registers. The company argued that the machines were immune from the tax because they were in a warehouse and were bound for foreign markets. National Cash Register maintained no inventory. Instead, a salesman from the international division would receive an order from a customer. The machines were then specifically built for the customer according to his specifications. Testimony also confirmed that because of the unique construction and special adaptation for foreign use, the crated machines were not salable domestically. The Court held that the machines were nonetheless liable for state taxes. The Court concluded that although title and possession were in NCR, payment had not yet been made by the putative purchasers, no export license had [been] issued, and the machines were in the complete con-

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trol of the respondent. More important, there had simply been no movement of the goods—no shipment, and no commencement of the process of exportation.

Once the journey began, there was immunity from taxation, and that immunity continued even during pauses in the journey. In Carson Petroleum Co. v. Vial (1929), the Court expanded the immunity for goods in transport to include pauses in the journey that were inherently part of the mode of transportation. The Court said that the immunity of goods in transport continued, provided “the journey has already begun in good faith and temporary interruption of the passage is reasonable and in furtherance of the intended transportation.” In that case, oil was brought in on railroad cars from Kansas, Oklahoma, and Texas; then, near New Orleans, the shipment was halted and the oil was transferred into storage tanks. The oil was held in Louisiana until it could be placed in smaller containers for shipment via the Gulf of Mexico. The oil company contended that the interstate and foreign shipment of the oil from the refineries, across the states and eventually across the sea, constituted continuous interstate and foreign shipment, notwithstanding the stop outside of New Orleans. The Court noted that the selection of the point of shipment and the equipment at that point were solely for the speedy and continuous export of the product abroad and for no other purpose. No oil was sold within the state and there was other business there, so the oil was to be exempt from state taxation. This approach was followed in Richfield Oil Corp. v. State Board of Equalization (1946). California sought to place a retail sales tax on oil that was brought by pipeline from the refinery to the port, where it was stored in tanks until shipment. The question before the Court was whether the sale of the oil constituted an export within the constitutional meaning of the word. Commitment of the goods to a common carrier was the best evidence that the foreign journey had begun, but even if no common carrier was involved, the same degree of certainty could exist. The Court had little difficulty concluding that the foreign journey had begun, and that when the oil was pumped from the tanks into the hold of the vessel, “it passed into the control of a foreign purchaser and there was nothing equivocal in the transaction which created even a probability that the oil would be diverted to domestic use.” California had tried to evade violating the clause by showing that the tax was for the privilege of conducting a retail business measured by the gross receipts from sales. The Court said that the prohibition against taxation on exports contained in the Import–Export Clause clearly involved more than a “mere exemption from taxes laid specifically upon the exported goods themselves.” The tax was found to be an impost, and therefore the oil company was exempt. Goods in interstate or foreign commerce that would otherwise be immune from state taxation can lose that immunity if the interstate journey or foreign journey is interrupted for purposes unrelated to the method of transportation. Any significant processing is a sure way to lose that immunity as well. The Court dis-

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tinguished Richfield Oil v. State Board of Equalization on these grounds in another case (Joy Oil v. State Tax Commission, 1948). Joy Oil, a Canadian company, bought oil from a company located in the United States, then transported the oil via rail to Dearborn, Michigan. There the oil was stored for eighteen months, pending shipment to Canada. The buyer was prohibited by federal regulation from shipping the inflammable oil by truck over an international bridge as he had intended, and the buyer delayed in shipping by river barge. The Court concluded that the period of storage “was so long as to preclude holding that the first step toward exportation would inevitably be followed by others.” It said that “neither the character of the property nor any event equivalent to its redelivery to a common carrier made export certain for all practical purposes.” If the interruption is inherent in the means of transportation, the immunity continues, but if there is a substantial interruption for any other business purposes of the shipper, the immunity is lost. THE INSPECTION EXCEPTION The ban on import–export taxes specifically provides an exception for reasonable inspection fees. In one early case, Maryland passed inspection laws that essentially required tobacco to be weighed and recorded, and included a tax to be paid to the state for this purpose (Turner v. Maryland, 1883). If the tobacco was packed in the county in which it was grown, the inspector did not have to sample its contents. If, however, the tobacco was grown and packaged in different counties, the contents had to be sampled by the inspector. The plaintiff argued that the tax was invalid because it was a law levying a duty on exports that did not fall within the class of laws known as inspection laws, and since his tobacco was grown and packaged in the same county, it was therefore exempt from the physical sampling. The Court did not agree with the plaintiff and stated that “the contention of the plaintiff in error is that a law which otherwise would be an inspection law ceases to be such if no provision is made for opening the package containing the article and examining the quality of its contents.” The Court held that examination of the quality of the article itself is not necessary for the law to be classified as an inspection law. In the case, the Court examined the intention of the Framers of the Constitution and concluded that it was their intent to allow such taxes, even though they amounted to an import–export tax, “to an extent absolutely necessary to execute such laws.” The Court cautioned that in the future it might have to “interpose, if at any time any statute, under the guise of an inspection law, goes beyond the limits prescribed by the constitution in imposing duties or imposts on imports or exports.” Virginia had a similar law regarding the inspection of flour (Voight v. Wright, 1891). The Court wrote that “yet in what manner and to what extent this may be done without coming in collision with the power of congress to regulate foreign

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and interstate commerce may be somewhat difficult to explain with precision.” However, the Court did not have to face this issue yet. Instead, the law was deemed unconstitutional on Commerce Clause grounds because it discriminated against interstate commerce and foreign commerce. The statute required that only flour from other states or countries be inspected, and exempted flour produced in Virginia. In 1898, the Court upheld North Carolina’s law pertaining to the regulation and inspection of fertilizer (Patapsco Guano v. Board of Agriculture of North Carolina, 1898). The Court said, “It is apparent that there is no other article entering into common use in many of the states, the inspection of which is so necessary for the protection of those citizens engaged in agricultural operations, as commercial fertilizers.” The Court went on to describe how dangerous these chemicals could be and concluded that this was a valid inspection law. NOTE 1. Max Farrand, ed., Records of the Federal Convention of 1787 2 at 440 (1911).

7

Interstate Compacts

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay. Article I, Section 10, Clause 3

INTRODUCTION Only the Compact Clause of Article I, Section 10, Clause 3, will be examined. The other provisions of Clause 3 have never raised any issues. The Compact Clause provides the authorization for compacts between states and supplies the one and only restriction on their creation. It states that “no State shall, without the Consent of Congress, . . . enter into any Agreement or Compact with another State.” The Compact Clause has been praised as a way of promoting effective solutions to local problems through cooperation of the various states.1 The requirement of congressional consent found within the clause, however, has been the most litigated and contested aspect of interstate compacts; and the Supreme Court has rendered a number of decisions on such issues as the purpose of congressional consent, which compacts must receive consent, how consent is given, and, of course, when consent must be given. The Framers of the Constitution clearly perceived “compacts” and “agreements,” which were allowed with the consent of Congress under the Compact Clause, as different from “treaties,” which were prohibited altogether. It was suggested that “treaties” referred to ongoing alliances of national importance, usually political and military alliances, while “compacts” and “agreements” referred to agreements concerning local and temporary issues that are accomplished “not by successive acts” but are instead “no sooner executed than they are completed and perfected.”2 Though this distinction most likely affected the drafting of Ar-

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ticle I, Section 10, of the Constitution, the records of the Constitutional Convention do not shed any light as to the precise types of agreements and compacts falling under the Compact Clause (U.S. Steel Corp. v. Multistate Tax Commission, 1978). The records of the state ratification conventions are of no help either; they state only that the Compact Clause fell “within reasonings which are either so obvious, or have been so fully developed” that it “may be passed over without remark” (The Federalist Papers, number 44). In any event, it is clear that the Framers acknowledged the importance of amicable resolution of disputes over boundaries and other problems between the states. The Articles of Confederation suggested a similar interpretation. Justice Lewis Powell said, “Congressional consent was clearly required before a State could enter into an ‘agreement’ with a foreign state or power or before two or more States could enter into ‘treaties, alliances, or confederations” (emphasis added). However, “consent was not required for mere ‘agreements’ between States” (emphasis added). The sections prohibiting treaties, confederations, and alliances between the states without Congress’s consent were intended to prevent any union of two or more States, having a tendency to break up or weaken the league between the whole; they were not designed to prevent arrangements between adjoining States to facilitate the free intercourse of their citizens, or remove barriers to their peace and prosperity. (Wharton v. Wise, 1894)

Many compacts were created, under the Articles of Confederation, between Pennsylvania and New Jersey and between Pennsylvania and Virginia in regard to boundaries, rights of fishery, and titles to land. The fact that these compacts were entered into without congressional consent “indicated that such consent was not deemed essential to their validity.” The Articles of Confederation clearly did not intend to prohibit agreements that could not weaken the power of Congress. The Supreme Court has declared that there are two main purposes of the consent element in the Compact Clause. Consent is required in the formation of interstate agreements, first, to prevent harm to other states that are not involved in the compact (Rhode Island v. Massachusetts, 1838) and, second, to prevent interference with “subjects placed under the control of Congress, such as commerce and the navigation of public waters” (Wharton v. Wise, 1894). Furthermore, the Court claimed that, through the consent requirement, the “Framers sought to ensure that Congress would maintain ultimate supervisory power over cooperative state action that might otherwise interfere with the full and free exercise of federal authority” (Cuyler v. Adams, 1981). In U.S. history, there have been about 175 compacts between the various States:3 thirty-six were adopted between 1783 and 1920, sixty-five between 1921 and 1955,4 forty-seven during the 1960s, and fewer than twenty in the 1970s.5 Most interstate compacts serve one of three functions. They (1) resolve boundary disputes, (2) institutionalize one-time interstate projects involving allocation

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of natural resources or building of bridges, or (3) establish administrative agencies.6 Of the cases prior to 1921, only the dispute leading to the 1862 separation of West Virginia from Virginia did not involve the first category, resolving boundary disputes. The first interstate compact to settle a regional problem was the Colorado River Compact of 1928, which was aimed at apportioning the water of the Colorado River among seven states.7 This was also the first compact to involve more than two states.8 New Jersey and New York, in 1921, entered into the first interstate compact to establish a governmental agency.9 The compact established the Port Authority of New York and New Jersey, which was authorized to “finance, build, and operate comprehensive transportation, terminal, and other facilities in the New York City–New Jersey port area.”10 In the 1930s, interstate compacts were enacted that dealt with bigger national issues, such as pollution, conservation of energy, and law enforcement.11

DETERMINING IF A COMPACT REQUIRES CONSENT If read literally, the Compact Clause would seem to require states to obtain the consent of Congress before forming any type of agreement, no matter its duration, content, or effect on other states or the federal government (U.S. Steel Corp. v. Multistate Tax Commission, 1978). The Supreme Court, however, has held that the Compact Clause should not be read literally. Early on, the Court expressed concern with agreements of a political nature. Justice Roger Taney suggested in dictum that the purpose of the Compact Clause was to “prevent any compact or agreement between any two States, which might affect injuriously the interest of others” (Florida v. Georgia, 1854). Similarly, in dictum, Justice John Marshall had stated that the prohibitions in the Compact Clause “generally restrain state legislation on subjects intrusted [sic] to the general government, or in which the people of all the states feel an interest” (Barron v. City of Baltimore, 1833). He went on to say that if states made compacts with each other for political purposes, they could “scarcely fail to interfere with the general purpose and intent of the constitution.” It was sentiments like these that prompted Justice Stephen Field’s opinion in Virginia v. Tennessee (1893). In that case, Virginia claimed that the boundary between Virginia and Tennessee, which had been agreed upon in 1803 and ratified by both state legislatures, did not follow the true boundary and should be redrawn. Virginia argued that the original compact was invalid because the states had not received congressional consent prior to entering into the agreement. Tennessee contended that they had a valid and unalterable compact and that the border was not open to debate. In his opinion, Justice Field recognized that, standing alone, the terms “agreement” and “compact” could include all forms of verbal or written agreements entered into on all types of subjects, including those that could increase the political influence of the states and could possibly intrude upon

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the supremacy of the federal government or interfere with subjects that should remain under the federal government’s complete control. There are nonetheless, he said, many areas upon which the states can enter into agreements that the United States would not have any objection to, or any interest in, and these types of agreements should not require the consent of Congress in order to be valid. Justice Field gave many examples of types of agreements between states that would not necessitate congressional approval. One state could come into possession of a small parcel of land in another state that the latter state might want to purchase. It would not, in this case, be essential for the states to obtain the consent of Congress before they could form a valid agreement for the purchase of the parcel. Similarly, if a state desired to send its exhibits to the World’s Fair in Chicago, and should need to transport them across another state, it would hardly be necessary for the states involved to obtain Congress’s consent before arranging for the transport. Finally, he continued, if a district on the border of two states should become infected with a disease, there were no good reasons why the states should have to obtain the consent of Congress before agreeing to drain the district and remove the disease. Justice Field stated that instead of adopting the literal meaning of the terms “compact” and “agreement,” it made more sense to look at the objective of the constitutional provision and construe the terms by reference to it. He said that a word of ambiguous meaning should be looked at in reference to associated words, and the meaning of the word could be expanded or narrowed by reference to the intent and purpose of the whole clause in which it was found. Looking at the objective of the whole clause, Justice Field thought it clear that the prohibition against compacts made without congressional consent was not intended in any absolute sense but was “directed to the formation of any combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States.” This statement came to define the nature of a compact that required consent by Congress under the Compact Clause. After establishing this way of interpreting the Compact Clause, the Court held that the 1803 agreement was not the kind of interstate compact barred by the Constitution and did not require the consent of Congress. Therefore, the compact could not now be revoked or altered by Virginia. In U.S. Steel Corp. v. Multistate Tax Commission, a number of states entered into a compact to create the Multistate Tax Commission. The commission sought to create uniformity of taxation on interstate businesses and to avoid duplicative taxation among member states. The Court held that the compact was not invalid under the Compact Clause, even though the states had not received the consent of Congress. The Court acknowledged that there was some minor increase in the member states’ bargaining power with the corporations under their taxing jurisdiction. Nonetheless, the compact was valid because it did not enhance state power in relation to the national government. It did not allow member states to exercise any powers that they could not have exercised without the compact. Fur-

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thermore, no sovereign power was given to the commission; each state could choose to accept or reject the rules and regulations advised by the commission; and each state was free to withdraw from the compact at any time. FACTORS IN DETERMINING WHEN A PACT IS A COMPACT REQUIRING CONGRESSIONAL APPROVAL The Supreme Court has, in past decisions, discussed characteristics and requirements for determining whether a pact between states is a compact under the Compact Clause.12 However, it has been argued that the Court has been unsuccessful at defining clear criteria that can be used to determine whether a pact between states must be a compact.13 Instead, the Court has given examples of forms a compact can take.14 For example, the Court has stated that “mere form of the interstate agreement cannot be dispositive” (U.S. Steel Corp. v. Multistate Tax Commission, 1978). The “constitutionality of the act” cannot depend on form because the “Constitution looked to the essence and substance of things, and not to mere form.” Furthermore, mere form cannot be relied upon in every case because even reciprocal legislation, which is very often informal, “may present opportunities for enhancement of state power at the expense of the federal supremacy similar to the threats inherent in a more formalized ‘compact.’ ” “The clause reaches both ‘agreements’ and ‘compacts,’ the formal as well as the informal. The relevant inquiry must be one of impact on our federal structure.” The Court has also declared that “the number of parties to an agreement is irrelevant if it does not impermissibly enhance state power at the expense of federal supremacy,” and that “powers delegated to [an interstate] administrative body,” in themselves, only turn a pact into a compact if they enhance “state power in relation to the Federal Government.” Furthermore, since compacts are contracts and cannot be unilaterally amended or revoked, a pact is generally not considered a compact if member states are free to give conditional consent to the laws enacted, or are free to modify, or completely terminate, their participation (Northeast Bancorp, Inc. v. Board of Governors of the Federal Reserve System, 1985). Although these statements by the Court do not give absolute or completely clear guidelines, commentators who have studied the decisions of the Supreme Court on this topic have concluded there are six basic components that establish that a compact has been made. These elements are (1) a formal and contractual agreement (2) made between states that is “similar in content, form, and wording to an international treaty, and [is] usually embodied in state law in an identifiable and separate document called the ‘compact’ ”; (3) the agreement is enacted by each state legislature, using almost identical language; (4) congressional consent must be sought, and Congress can choose to withhold consent; (5) the compact can be “enforced by suit in the Supreme Court of the United States if necessary”; and (6) the compact supersedes other state laws.15

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CONSENT OF CONGRESS If congressional consent is required for a compact between states to be valid under the Compact Clause because the compact could encroach upon the supremacy of the United States, the question is raised as to how and when that consent is appropriately obtained. “The Constitution does not state when the consent of Congress shall be given, whether it shall precede or may follow the compact made, or whether it shall be express or may be implied” (Virginia v. Tennessee, 1893). Congress will decide when and if consent will be given “according to the ordinary rules of law, and of right reason” (Green v. Biddle, 1823). In many situations, consent will come before the compact or agreement. When a compact is submitted to Congress for approval prior to enactment, “Congress does not pass upon [it] in the manner of a court of law deciding a question of constitutionality. Rather, the requirement that Congress approve a compact is to obtain its political judgment,” and Congress will ask whether the agreement is likely “to interfere with federal activity in the area, is it likely to disadvantage other States to an important extent, is it a matter that would better be left untouched by state and federal regulation?” (U.S. Steel Corp. v. Multistate Tax Commission, 1978). This can happen through a joint act or resolution approving the compact.16 As with other acts of Congress, the president has veto power, and Congress can then override the veto; however, this has been rare in the context of interstate compacts.17 Congress can also consent to compacts in advance by declaring it will allow the formation of all interstate compacts in a given field (as was done in the Crime Control Consent Act of 1934, discussed in Cuyler v. Adams in 1981).18 When an interstate agreement involves something that could not really be considered or approved until fully developed and implemented, congressional consent can be given after formation of the compact. Consent can be implied by subsequent acts of Congress, and does not have to be given in an express and formal statement. “An inference clear and satisfactory that Congress . . . intended to consent” to a compact is sufficient (Virginia v. West Virginia, 1871). Congressional consent “is always to be implied when Congress adopts the particular act by sanctioning its objects and aiding in enforcing them” (Virginia v. Tennessee, 1893). For example, when a state was admitted to the Union, upon the formation of a compact between it and the state it previously was a part of, Congress’s act of admitting the state could serve as an implied consent to the compact. Consent by Congress can also be implied from its subsequent legislation and involvement with the states involved. For example, in Virginia v. Tennessee, consent to the 1803 compact establishing the border between Virginia and Tennessee was implied when Congress began to exercise its jurisdiction over the part of the country “as a part of Tennessee on one side, and as a part of Virginia on the other, for a long succession of years, without question or dispute from any quarter.” This “furnishes as conclusive proof of assent by that body as can usually be obtained from its most formal proceedings.”

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In Green v. Biddle (1823), Justice Joseph Story declared that it was not required that congressional consent come before the compact. That case involved a dispute over the constitutionality of a compact between Kentucky and Virginia affecting landowners who claimed title under patents of Virginia before Kentucky became a state. “All that will be asked is, (what cannot be denied,) that [consent] must either precede or follow the compact.” The only question, according to Justice Story, was “has Congress, by some positive act, in relation to such agreement, signified the consent of that body to [the compact’s] validity?” In this case, it was determined that consent had been given, after formation of the compact, when Congress passed an act that acknowledged the compact and allowed the district of Kentucky to become a separate and independent state in the Union. Congress can also conditionally consent to an interstate compact.19 This happens when Congress adds “conditions that must be met or changes that must be made before the compact can go into operation.”20 The Supreme Court has held that Congress does have the power to consent conditionally, but very few decisions have addressed the limits of the conditions Congress can impose. In some cases, Congress has limited its consent to a certain number of years, after which there must be a renewal of consent in order for the compact to continue to operate.21 Still other compacts have been restricted in the types of functions and powers given to an agency formed under the compact.22 Finally, some compacts were approved by Congress on the stipulation that the member states would fully disclose any information deemed necessary by Congress.23 THE INTERPRETATION OF A COMPACT SANCTIONED BY CONGRESS Once Congress has consented to a compact under the Compact Clause, the construction or interpretation of this compact presents a federal question, and “the meaning of a compact is a question on which [the Supreme Court] has the final say” (Petty v. Tennessee–Missouri Bridge Commission, 1959). Furthermore, this is the case even when the issue in dispute concerns a question of state law that has already been dealt with by the state courts or other agencies of the state (West Virginia ex rel. Dyer v. Sims, 1951). The Supreme Court will show deference to state law, but state rulings are not binding. Cuyler v. Adams (1981), however, took this rule even further. In that case, a New Jersey prosecutor filed a detainer under the interstate agreement on detainers against Adams, a prisoner, in order to transfer him from a Pennsylvania prison to New Jersey so he could be prosecuted for charges pending against him there. This agreement “established procedures by which one jurisdiction may obtain temporary custody of a prisoner incarcerated in another jurisdiction for the purpose of bringing that prisoner to trial.” Adams fought the transfer, arguing that he should have been given a pretransfer hearing under the Uniform Criminal Extradition Act. This interstate agreement is similar to the interstate agreement on

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detainers, but applies to both prisoners and “persons at liberty” who are wanted on criminal charges. The Supreme Court decided that the state had to provide the pretransfer hearing of the Extradition Act, even though the prisoner was transferred under the detainer agreement. A Pennsylvania state court had earlier held that prisoners were not entitled to a pretransfer hearing under the detainer act (Pennsylvania ex rel. Coleman v. Cuyler, 1978). Normally, the Supreme Court is required to adhere to a state court’s interpretation of its own law (Murdock v. City of Memphis, 1874); however, the Court held that it did not have to adhere to state law in this case because “congressional consent transforms an interstate compact within [the Compact Clause] into a law of the United States” and “the construction of an interstate agreement sanctioned by Congress under the Compact Clause presents a federal question” (Cuyler v. Adams, 1981). The Court declared the rule that “where Congress has authorized the states to enter into a cooperative agreement, and where the subject matter of that agreement is an appropriate subject for congressional legislation, the consent of Congress transforms the States’ agreement into federal law under the Compact Clause.” Formerly, only those compacts that encroached on federal supremacy required consent of Congress and came under the Compact Clause, but under the rule of Cuyler v. Adams, any pact to which Congress consented would be characterized as a compact.24 The Court went on to say that Congress gave its consent to the detainer agreement, prior to its formation, by enacting the Crime Control Consent Act of 1934, which allowed states to “enter into agreements or compacts for cooperative effort and mutual assistance in the prevention of crime and in the enforcement of their respective criminal laws and policies” (4 U.S.C. 112(a)). The Court held that since the act was “intended to be a grant of consent under the Compact Clause,” and since the “subject matter of the Act is an appropriate subject for congressional legislation,” the detainer agreement was “a congressionally sanctioned interstate compact the interpretation of which presents a question of federal law.” NOTES 1. Marian E. Ridgeway, Interstate Compacts: A Question of Federalism 19 (1971). 2. J. Chitty (ed.) & E. Vattel, Law of Nations, 192 (T & J.W. Johnson, 1883). 3. Council of State Governments, Interstate Compacts and Agencies, vi (1983). 4. Weldon V. Barton, Interstate Compacts in the Political Process, 3 (University of North Carolina Press, 1967). 5. Parris N. Glendening & Mavis Mann Reeves, Pragmatic Federalism, 279–80 (Palisades, 2nd ed., 1984). 6. Jill Elaine Hasday, Interstate Compacts in a Democratic Society: The Problems of Permanency, 49 Fla. L. Rev. 3–4 (1997). 7. Id. at 4. 8. Id. 9. Id.

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10. Id. 11. Id. at 4–5. 12. L. Mark Eichorn, Cuyler v. Adams and the Characterization of Compact Law, 77 Va. L. Rev. 1387 (1991). 13. Id. at 1399. 14. Id. 15. Id., at 1411. 16. Hardy, Interstate Compacts at 17. 17. Id. 18. Id. 19. Id. at 18. 20. Id. 21. Id. 22. Id. 23. Id. at 19. 24. Eichorn, Cuyler v. Adams at 1393.

8

Concluding Comments on Article I, Section 10

Although the Framers intended Article I, Section 10, to be the principal limitation on state power in the new Constitution, the Fourteenth Amendment’s prohibition on state acts in violation of due process and equal protection rights has far outstripped Section 10 in modern importance. The Fourteenth Amendment by itself would have been important enough, but when the doctrine of incorporation is added, whereby through the Due Process Clause of the Fourteenth Amendment the most important provisions in the original Bill of Rights are also made applicable to the states, Section 10 stands as a weak reminder of a bygone era. Even historically, the implied limitations found in the Commerce Clause on the states’ ability to regulate or tax interstate commerce—a limitation not even expressly found in the Constitution—may have been an even more important limitation on state power. This is not to say that Section 10 is without importance, but just that it is not the kind of importance the Framers envisioned for it. Certainly, the Contract Clause continues to have validity. While its absolute language prohibiting state impairment of contracts has not held sway since at least the Great Depression (Home Building & Loan Assn. v. Blaisdell, 1934), even in more modern times states cannot casually cast aside either their own contracts (U.S. Trust Co. of New York v. New Jersey, 1977) or private contracts (Allied Structural Steel Co. v. Spannaus, 1978). While the modern Public Purpose Balancing Test gives the state every opportunity to justify impairing preexisting contracts by showing some overriding public interest, the test does not appear to be without at least some teeth. Even after a recent U.S. Supreme Court Contract Clause case as dismissive of preexisting contracts as Exxon Corp. v. Eagerton (1983), the lower courts still find a too callous disregard of contractual interest to be in violation of the Contract Clause. There is no denying that there is some tension in the lower court cases between courts that find that the constitutional singling out of contract rights for special protection still has significance and lower courts that view contract rights as just another economic interest subject to being overridden for any reason ra-

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tionally related to some conceivably legitimate governmental end. The Supreme Court likely will eventually address this clear division in the lower courts, and Exxon Corp. v. Eagerton does not necessarily give hope that it will side with lower courts that find the language of the Contract Clause calling for something more than merely some rational connection to the most dubious governmental end. Still, that day has not come yet, and the Contract Clause continues to require that states at least consider preexisting contractual rights as property and economic interests that are entitled to at least some constitutional respect. Of all the provisions in Section 10, few have had the continuing importance of the prohibition on bills of attainder and ex post facto laws, particularly the prohibition of the latter. While few laws have been struck down as contrary to the legislative punishment forbidden by the ban on bills of attainder, many laws have been found to be in violation of the ban on ex post facto laws. The concern for legislative punishment, except in cases involving some form of political suppression, has been replaced by a recognition of the need for government to classify. While in theory it may be difficult to know when new standards and qualifications are or are not legislative punishments, the Court has found it rather easy to limit that prohibition to cases in which individuals or groups have been singled out for mistreatment because of their political or associational views. The ban on retroactive application of criminal laws and penalties found in the ban on ex post facto laws has been of more lasting importance. Even though the modern court has indicated a desire to curb some of the historical expansiveness of the ban on ex post facto laws, states and the federal government regularly continue to run afoul of this important limitation on the retroactive reach of criminal penalties. In particular, the prohibition on the retroactive increase in criminal penalties seems to be of continuing importance. While most of the other limitations of Section 10 have been completely superseded by history—the only state issue involving coining money would be deciding what to put on each state’s collector edition quarter—the ban on import–export taxes is still an important limitation. Even without this express ban, much the same thing would be accomplished through application of the implied limitations from the Commerce Clause on state power to tax and regulate interstate and foreign commerce. Still, the express limitation continues to be protective of the flow of foreign goods into this country and of the power of the federal government to be preeminent in making those choices. While states now have many ways of taxing goods and services related to foreign commerce without running afoul of the prohibition, direct state taxes on imports and exports still remain off limits. Of some intriguing interest in the Court’s Section 10 cases are its somewhat inconsistent views of constitutional interpretation. Those who would hope for some easily applied and consistently principled view of constitutional construction will have a hard time finding it in the Section 10 cases. On the one hand, the absolute language of the Contract Clause is dismissed as being a product of

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a bygone era, inconsistent with modern government’s need to intervene and substitute its judgment of the underlying public good for preexisting contractual and other property rights. On the other hand, the historical record of our English ancestors is strictly reviewed to determine the scope of the modern limits of the ban on the Ex Post Facto Clause. The debate between Justice Ruth Bader Ginsberg in dissent and Justice John Paul Stevens for the majority in Carmell v. Texas about a 1702 English case involving penalties imposed on an English traitor to King William III would be almost amusing but for the seriousness of the subject matter. For them, it was important in determining an eligible witness in a modernday rape case. The import–export cases reveal a still different constitutional approach. After 150 years of attempting to apply the historically obtuse Original Package Doctrine first announced by Chief Justice Marshall in Brown v. Maryland, the Court in Michelin Tire Corp. v. Wages opted for a different test based upon the historical rationale of the Framers. The fact that the Original Package Doctrine had been used since almost the time of the framing of the Constitution did not seem to slow the Court in its desire to impose modern sympathies on this issue. The Court was now more concerned about foreign commerce paying its fair share of government and less concerned, in this era of a global economy, with state regulation singling out foreign goods for disparate treatment. And then there is the Compact Clause. The modern Court feels that the historical concern for states banding together in ways inconsistent with the new federalist government is less important than the need for states to cooperate to solve the increasingly interstate and international issues ranging from the environment to the economy. When all is said and done, Article I, Section 10, is not the “soul of the Constitution,”1 as was perhaps intended by the Framers of the Constitution, but it remains an important limitation on state power and a continuing source of much litigation. A study of it also reveals much about the strength of the Constitution as a document capable of evolution from the struggle of trying to make a new federalist government work to the monolith that is the federal government today. Some concerns of the Framers have remained timeless, such as the unfairness of retroactive punishment, while others seem dated and archaic. Finally, the ability of the Constitution to grow and change and to develop in peaceful ways as men and women of different political persuasions have wrestled with its meaning throughout our 200-plus years of history gives us certainty that we have a Constitution and a form of government that will change and meet whatever demands the future may bring. NOTE 1. Jonathan Elliot, ed., Debates in the Several State Conventions, 4 at 333–36 (1941).

Bibliographical Essay

CHAPTER 2: THE CONTRACT CLAUSE There is a book by Professor Benjamin Wright on the Contract Clause in an earlier series republished by Greenwood Press on the U.S. Constitution. It is perhaps the definitive book on the historical development of the Contract Clause. Wright’s command of the minutiae of the early Contact Clause cases knows no bounds. He does not attempt a treatise on the law of the Contract Clause but attempts to summarize the number and breadth of the U.S. Supreme Court decisions. Although invaluable as a historical reference, the book was published a few years after 1934, when the Court in Home Building & Loan Assn. v. Blaisdell began the more modern approach to the clause. Wright, Benjamin Fletcher, Jr., The Contract Clause of the Constitution (1938). There are a number of law review articles on the Contract Clause, many of them written shortly after the Supreme Court’s more recent rediscovery of the clause. Stephen A. Siegel’s article nicely places the clause in historical context, comparing the protection given to contracts with that given to other economic rights pursuant to an understanding of property vs. privilege and under the No Taking Clause of the Fifth Amendment. Stephen A. Siegel, Understanding the Nineteenth Century Contract Clause: The Role of the Property–Privilege Distinction and “Takings” Clause Jurisprudence. 60 S. Cal. L. Rev. 1 (1986). Espousing a view of the Contract Clause emphasizing reasonable investmentbased expectations, what he calls a reliance-based approach, Robert A. Graham fits the more modern cases into an overall historical pattern. Robert A. Graham, The Constitution, the Legislature, and Unfair Surprise: Toward a Reliance-based Approach to the Contract Clause, 92 Mich. L. Rev. 398 (1993). Although his article was written in 1984, Richard A. Epstein anticipates the Court’s rapid loss of interest in the Contract Clause as a meaningful restriction on state erosion of property rights. Richard A. Epstein, Toward a Revitalization of the Contract Clause, 51 U. Chi. L. Rev. 703 (1984).

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One of the best discussions of the most recent Contract Clause cases is in Leo Clarke’s article. His analysis of the No Taking Clause and the Contract Clause cases is particularly helpful. Also insightful is his recognition of the inconsistent approach of the Court in applying the Public Purpose Balancing Test, an inconsistency that has left the lower courts adrift. Leo Clarke, The Contract Clause: A Basis for Limited Judicial Review of State Economic Regulation, U. Miami L. Rev. 39 U. Miami L. Rev. 183 (1985). Michael L. Zigler traces the key recent contract clause cases and argues that a Fifth Amendment no takings argument would be a better conceptual way of dealing with legislative changes to public contracts. This approach, he says, would make it clearer that public contracts can be modified provided the contract holder is appropriately compensated. He does not believe that the modern contract clause approach leads to consistent fairness to the contracting parties. Michael L. Zigler, Taking Law and the Contract Clause: A Takings Law Approach to Legislative Modifications of Public Contracts. 36 Stan. L. Rev. 1447 (1984). CHAPTER 3: BILLS OF ATTAINDER Given the paucity of Supreme Court cases on the Bill of Attainder Clause, it comes as no great surprise that there are few extended articles on the clause. Those that have been written tend to emphasize a particular unusual claim of its application. Jane Welsh, in a 1983 article, is one of the few to trace the history of the clause from its beginning, but even her principal focus is on anticipating how the Court might rule in terms of the failure to register for the draft as a disqualification for student financial aid. She argues that the law should be viewed as a bill of attainder but acknowledges, as turned out to be the case, that it was unlikely that the Court would rule that it was. Jane Welsh, The Bill of Attainder Clause: An Unqualified Guarantee of Process, 50 Bklyn. L. Rev. 77 (1983). In perhaps the best general overview of the clause, Thoms B. Griffith posits that the best use of the clause is to protect First Amendment political activity from government interference. His questionable conclusion that the failure to register for the draft is political activity protected by the clause does not detract from his summary of the key historical themes. Thomas B. Griffith, Beyond Process: A Substantive Rationale for the Bill of Attainder Clause, 70 Va. L. Rev. 475 (1984). Also emphasizing the draft registration case, David P. Restaino concludes that conditioning financial aid on such registration was intended to regulate conduct, not to punish it, and thus is not in violation of the Bill of Attainder Clause. Contrary to the Court’s decision, he did, however, believe that it violated the Fifth Amendment prohibition against self-incrimination. David P. Restaino, Conditioning Financial Aid on Draft Registration: A Bill of Attainder and Fifth Amendment Analysis, 54 Col. L. Rev. 775 (1984).

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Correctly anticipating the subsequent Court of Appeals reversal, Michael L. Landsman traces the clause’s main themes in critiquing a federal district court decision that had found a bill of attainder in a limitation on local phone companies providing long-distance service. Though not terribly important in and of itself, the Landsman article is illustrative of the many attempts to expand the clause beyond current limits. Most such attempts, unlike the particular district court opinion, are not successful at that level, but it is worth noting that such claims are often made. Michael L. Landsman, From Enemies of the Crown to Regional Telephone Companies: Bills of Attainder Reappraised, 15 Touro L. Rev. 761 (1999). Discussing both the Ex Post Facto Clause and bills of attainder, Mark Strasser argues that the federal Defense of Marriage Act (DOMA) and the Hawaii law passed in response to it, which denies recognition to same-sex marriages, were intended to punish persons because of their sexual orientation. Although believing that the law violates both provisions, Strasser’s stronger argument is that such laws could be viewed as bills of attainder in that they inflict disabilities on an easily identifiable group. Although it is hard to see the case support for his conclusions, his article discusses the interaction of the two clauses and proposes an expansive view of both beyond their current limits. Mark Strasser, Ex Post Facto Laws, Bills of Attainder, and the Definition of Punishment: On DOMA, the Hawaii Amendments, and Federal Constitutional Constraints, 48 Syr. L. Rev. 227 (1998). Discussing quite an unusual case involving a special extradition treaty between the United States and Great Britain that allowed for the special extradition of a past member of the IRA and others, Katherine M. Sheehan concludes that the Senate action reversing an earlier U.S. magistrate’s decision was a bill of attainder. Although the circumstances of the Senate act were quite narrow, Sheehan discusses the broader underlying bill of attainder issues. Katherine M. Sheehan, And Then There Was One: Peter Gabriel John McMullen’s Bill of Attainder Challenge to the U.K.–U.S. Supplementary Extradition Treaty, 57 Alb. L. Rev. 235 (1993). CHAPTER 4: EX POST FACTO LAWS There have been many more Supreme Court cases involving the Ex Post Facto Clause than the Bill of Attainder Clause, and therefore many more articles. The clause is the subject of one chapter in the book on retroactive legislation by Daniel E. Troy. The main thesis of the book is the unfair harm done by retroactive legislation, with ex post facto laws being an egregious example. Troy does, however, conclude that the Supreme Court was correct in limiting the ex post facto clause to criminal statutes. Daniel E. Troy, Retroactive Legislation (1998). In a recent article, William F. Shimko takes the Court to task for its limited view of what is a criminal case. He traces the historical tests and concludes that

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the Court should have found the Alaska Sex Offender Registration Act a criminal act in violation of the ex post facto clause. He claims that the current test for distinguishing between criminal and civil provisions is inadequate and argues for an approach that focuses on the severity of the deprivation of the offender’s liberty. William F. Shimko, Constitutional Law—the Supreme Court Still Hasn’t Found What It Should Be Looking For: A Test That Effectively and Consistently Defines Punishment for Constitutional Protection Analysis, Smith v. Doe, 123 S. Ct. 1140 (2003), 4 Wyo. L. Rev. 477 (2004). In an article not directly involving ex post facto rights, Daniel James White discusses the historical ex post facto cases to support his claim that judicial decisions that change the criminal law should be viewed as in violation of the clause in the same way as changes in legislation. Since the clause specifically refers to laws, that has not been the Supreme Court’s position. White believes that significant judicial changes raise the same kinds of concern for notice and fair play and are not justified under any notions of the evolution of the common law. Daniel James White, Ex post Facto Excepted: Rogers v. Tennessee and the Permissible Retroactive Application of Judge Made Law, 71 U. Cin. L. Rev. 1141 (2003). Many of the articles on ex post facto laws involve particular uses of the clause. All courts agree that changes in sentencing guidelines after the crime has been committed would be invalid ex post facto laws, but William P. Ferranti discusses a conflict among the federal courts when a person is accused of more than one crime and one is committed before the revised guidelines and one committed afterward. An indication of much about the recidivist nature of persons who commit crimes is the number of such cases. The guidelines envision that the guidelines in effect when the most recent crime was committed should control for both crimes, but Ferranti is in agreement with the federal circuits that have held that such an approach is inconsistent with the ex post facto clause. William P. Ferranti, Revised Sentencing Guidelines and the Ex Post Facto Clause, 70 U. Chi. L. Rev. 1011 (2003). One of the most difficult ex post facto issues involves retroactive changes in evidentiary rules. While it is clear that some such changes will violate ex post facto principles, it is equally clear that others will not. The line between the two is murky at best. In an article on the repeal of accomplice corroboration requirements, Derek J. T. Adler asserts that only evidentiary changes which change the substantive elements of a crime run afoul of the clause. It is his view that such an evidentiary change should be considered procedural only, and not contrary to the clause. He believes that simply disadvantaging particular defendants is not enough to justify applying the clause; some more capricious or vindictive element is also required. Derek J. T. Adler, Ex Post Facto Limitations on Changes in Evidentiary Law: Repeal of Accomplice Corroboration Requirements, 55 Ford. L. Rev. 1191 (1987). The retroactive application of a 1996 federal law enhancing the victim’s right to restitution has generated considerable litigation concerning the ex post facto

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clause. The main point of contention in the cases is whether such laws are civil or criminal in nature, and indeed they have elements of both. In her 2001 article, Irene J. Chase concludes that the better analysis would be to view the laws as an increase in criminal penalties and thus invalid under an ex post facto analysis. Irene J. Chase, Making the Criminal Pay in Cash: The Ex Post Facto Implications of the Mandatory Victims Restitution Act of 1996, 68 U. Chi. L. Rev. 463 (2001). In a very unusual article involving an attempt to expand federal court jurisdiction over international crimes, Eric S. Kobrick opines that any attempt to expand universal jurisdiction over such crimes is an ex post facto law except to the degree that well established concepts of universal jurisdiction over certain heinous acts would have included many of the same acts within the jurisdiction of the federal courts. To the degree that concepts of universal jurisdiction would have already supported jurisdiction, the new expansion of jurisdiction would not be a retroactive law, just a clearer version of existing law. Eric S. Kobrick, The Ex Post Facto Prohibition and the Exercise of Universal Jurisdiction over International Crimes, 87 Colum. L. Rev. 1515 (1987). CHAPTER 5: THE NONRETROACTIVE PROVISIONS OF ARTICLE I, SECTION 10 The State Treaty Clause has generated a surprising amount of scholarly interest, in part because of the ambiguity of the lines between appropriate state agreements and inappropriate interference with national prerogatives. In his thoughtful and expansive use of the American experience to explore new global developments, especially the adopting of confederation principles in Europe, David Golove discusses the reasons why the states are precluded from interfering with the national power to craft international agreements. David Golove, The New Confederalism: Treaty Delegations of Legislative, Executive, and Judicial Authority, 55 Stan. L. Rev. 1697 (2003). One of the best discussions of the reach of treaty powers generally is by Robert Anderson IV, with much of his discussion going to the scope and limits of federal treaty power. However, he brings his understanding of federal treaty power to the problem of distinguishing between legitimate state agreements that require no congressional approval, to state compacts that do require congressional approval, and to the kind of state treaties that are absolutely forbidden. Anderson recognizes the haziness of the lines that have to be drawn, but nonetheless effectively points the way to the broad themes that need to be considered in drawing those lines. Robert Anderson IV, “Ascertained in a Different Way”: The Treaty Power at the Crossroads of Contract, Compact, and Constitution, 69 Geo. Wash. L. Rev. 189 (2001). Even more focused on federal treaty power is the article by Michael D. Ramsey, who attempts to explain the limits on state treaty power as well. Michael D. Ramsey, The Power of the States in Foreign Affairs: The Original Understanding of Foreign Policy Federalism, 75 N. D. L. Rev. 341 (1999).

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One of the more interesting, but narrow, discussions of the state treaty power is by Chelsea P. Ferrette. She explores the difficulty of states entering into agreements to enforce international child support provisions because of the constitutional limits on the states’ ability to enter into foreign treaties. She concludes that the better approach would be for Congress to use its commerce power to replace state regulation in this area. Chelsea P. Ferrette, A Critical Analysis of the International Child Support Enforcement Provisions of the Social Security Act: The (In)ability of States to Enter into Agreements with Foreign Nations, 6 ILSA J. Intl. Comp. L. 575 (2000). A recent Supreme Court decision striking down Massachusetts’ attempt to regulate the doing of business with the brutal regime in Myanmar was the basis for Sarah H. Cleveland’s discussion of state power over foreign affairs. She rejects the need for a federal “one voice” rationale and argues that more deference should have been given to legitimate state concerns. Sarah H. Cleveland, Crosby and the “One-Voice” Myth in U.S. Foreign Relations, 46 Vill. L. Rev. 975 (2001). Despite its nearly archaic proscription, there have been a few articles on the prohibition of letters of marque and reprisal. In a discussion of the dangers of contracting out important military duties to private companies, Matthew J. Gaul uses the old concerns over use of private pirates to propose legislation imposing limits on private military contractors. He describes how private military service contracts present potentially dangerous risks to the national security interest of the American people and quotes James Madison to reinforce the legitimacy of that concern. Matthew J. Gaul, Regulating the New Privateers: Private Military Service Contracting and the Modern Marque and Reprisal Clause, 31 Loy. L.A. L. Rev. 1489 (1998). Influenced in large part by criticism of the Vietnam War, Charles A. Lofgren uses the congressional power over letters of marque and reprisal as support for his belief that Congress should excercise more control over undeclared wars. Charles A. Lofgren, War-Making Under the Constitution: The Original Understanding, 81 Yale L. J. 672 (1972). Jules Lobel claims even more strongly that only Congress has the authority to support private actions short of declaration of war and finds support in the archaic language. Jules Lobel, Covert War and Congressional Authority: Hidden War and Forgotten Power, 134 U. Pa. L. Rev. 1035 (1986). Rejecting the conclusions of Lobel’s 1986 article that Congress’s power to issue letters of marque and reprisal supports limits on the ability of the president to conduct undeclared wars, C. Kevin Marshall concludes that the limits would come into play only if the president’s actions were independent of Congress’s power over the purse. These articles deal primarily with federal power issues, but both contain interesting historical discussions of the use of this form of private warfare, and in so doing, illustrate the kinds of state support for private acts of war forbidden to the states. C. Kevin Marshall, Putting Privateers in Their Place: The Applicability of the Marque and Reprisal Clause to Undeclared Wars, 64 U. Chi. L. Rev. 953 (1997).

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There have been a few articles involving the prohibition on titles of nobility, although most of them are a stretch at best. While one may be tempted to view such an article as an example of a law professor having too much free time on his hands, the article by Jol A. Silversmith is a fascinating bit of constitutional history. In a little-known piece of history recently brought to life on the Internet, he explores a proposed amendment to the Constitution regarding titles of nobility and the outrageous claims made. He notes the surprising number of cases raising titles of nobility issues, many involving lawyers as officers of the court, though he concludes that the clause has controlled the outcome in no significant case. Certainly, few articles stretch the phrase more than the Harvard Law Review note equating eugenic artificial insemination with the forbidden practice of awarding titles of nobility. Jol A. Silversmith, The “Missing Thirteenth Amendment”: Constitutional Nonsense and Titles of Nobility, 8 S. Cal. Interdis. L. J. 577 (1999). But Richard Delgado’s attempt to limit government largesse with analogies to the prohibition may be an even more extreme example of desperation in looking for constitutional limits. He posits that normal due process and equal protection approaches do not provide sufficient limits on government benefits and that this ancient prohibition might be a better approach. Richard Delgado, Inequality “from the Top”: Applying an Ancient Prohibition to an Emerging Problem of Distributive Justice, 32 UCLA L. Rev. 100 (1984). There has also been some surprising interest in the prohibitions on the states’ coining of money and issuing of bills of credit. One of the most interesting is the 1990 article by Ali Khan, which traces the evolution of money from the Articles of Confederation to the changes in the new Constitution. Ali Khan, The Evolution of Money: A Story of Constitutional Nullification, 67 U. Cin. L. Rev. 393 (1990). The most complete discussion of the issue from the point of view of the importance of federal power is the article by Ajit V. Pai. He does, however, describe the limits on the states in this arena and why those limits were viewed as so important by the Framers. Ajit V. Pai, Congress and the Constitution: The Legal Tender Act of 1862, 77 Ore. L. Rev. 535 (1998). In a sure sign of the apocalypse, Joshua B. Konvisser argues for federal recognition of e-cash to make Internet purchases easier. The constitutional limits on the states and the nature of the Internet make statewide options unacceptable. Joshua B. Konvisser, Coins, Notes, and Bits: The Case for Legal Tender on the Internet, 10 Harv. J. L. Tech. 321 (1997). Finally, Lewis D. Solomon argues somewhat quixotically for the desirability of regional currencies as a way of addressing local economic difficulties. He sees the federal centralized control of our monetary system as working a discrimination against the poor and minority interest that could be addressed by an acceptance of local currency. He describes various local alternatives to currency that he sees as paving the way for decentralizing our current system. Lewis D. Solomon, Local Currency: A Legal and Policy Analysis, 5 Kans. J. L. Pub. Pol. 59 (1996).

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CHAPTER 6: THE IMPORT–EXPORT CLAUSE A recent dissent by Justice Clarence Thomas, arguing for a broader view of the Import–Export Clause to include intrastate goods, was the impetus for Brannon P. Denning’s article. He details the history of the clause with its decisions limiting it to foreign commerce, and compares it with the limits of the dormant Commerce Clause on intrastate transactions. Although ultimately rejecting Justice Thomas’s approach as unworkable and unsupportable in history, Denning neatly traces the history of the clause and its principal developments. Brannon P. Denning, Justice Thomas, the Import–Export Clause, and Camps Newfound/ Owatonna v. Harrison, 70 U. Colo. L. Rev. 155 (1999). A short article by Scott L. David correctly spells out the modern demise of the Original Package Doctrine. Scott L. David, The “Original Package” Doctrine on the Ropes: Limbach v. Hooven & Allison Co., 38 Tax Law. 535 (1985). Perhaps the most comprehensive discussion of issues related to taxation of foreign commerce is found in the article by Christopher R. Drahozal, who accepts the Court’s distinction between tariffs and subsidies, though not necessarily the Court’s rationale. In addition to a complete discussion of the dormant Commerce Clause issues, he presents a thorough review of the import export cases. Christopher R. Drahozal, On Tariffs v. Subsidies in Interstate Trade: A Legal and Economic Analysis, 74 Wash. U. L. Q. 1127 (1996). CHAPTER 7: INTERSTATE COMPACTS Many of the articles dealing with the prohibition of state treaties also discuss the limitation in the Constitution that the states can enter into interstate compacts only with Congress’s approval. A number of books have been written on interstate compacts. Vincent V. Thursby, in his dated book on the Compact Clause, details the complex legal issues raised by this seemingly simple provision in the Constitution. So much has happened since its 1953 publication that it is but a starting place, but still an important starting place. Vincent V. Thursby, Interstate Cooperation: A Study of the Interstate Compact. Wash. D.C.: Public Affairs Press (1953). Although somewhat dated as well, Marian E. Ridgeway’s 1971 book is an even better discussion of the federalism issues inherent in interstate compacts. Marian E. Ridgeway, Interstate Compacts: A Question of Federalism (1971). Paul T. Hardy has perhaps the most helpful discussion of the various issues raised by interstate compacts. For anyone interested in the topic, his is the one invaluable resource. The increasing concerns for national issues such as the environment and the need for interstate cooperation in everything from child custody to water purity have made interstate compacts all the more common. It has become almost a legal specialty. Paul T. Hardy, Interstate Compacts: The Ties That Bind (1982).

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Jill Elaine Hasday, in addition to summarizing the law of interstate compacts, warns of the anti-democratic aspects of interstate compacts, which because of their inherent permanence, remain essentially beyond political accountability. Jill Elaine Hasday, Interstate Compacts in a Democratic Society: The Problems of Permanency, 49 Fla. L. Rev. 1 (1977). A comprehensive 1998 article in the Harvard Law Review explains the constitutional authority for interstate compacts, their historical uses, and the rapid expansion in their current uses. It also details the federal court and conflicts of laws issues raised by these special-purpose agreements between states. The article has a number of cites to the 1971 book by Marian E. Ridgeway that extensively discussed the conflict between compacts, some of them approved by Congress, and notions of federalism. Charting No Man’s Land: Applying Jurisdictional and Choice of Law Doctrines to Interstate Compacts, 111 Harv. L. Rev. 1991 (1998). Although he concentrates on a local Kansas–Missouri interstate cultural compact, Carlton James Gausman develops the history of the interstate compact in achieving regional solutions. He uses the Kansas–Missouri cultural pact as an illustration of the breadth of problems created by such compacts in the past and speculates about what the future will bring. Carlton James Gausman, The Interstate Compact as a Solution to Regional Problems: The Kansas City Metropolitan Culture District, 45 U. Kans. L. Rev. 897 (1997). The most comprehensive discussion of when state agreements should be treated as compacts requiring congressional approval, as opposed to those that do not, is by Michael S. Greve. He argues that the Supreme Court’s conclusion that the Multistate Tax Commission was not a compact requiring approval was wrongly decided. He believes that this led to the erroneous conclusion upholding the multistate agreement on tobacco litigation against Compact Clause challenges. In his view, both agreements were inconsistent with the need for equality and comity between states and were contrary to fundamental principles of federalism. Michael S. Greve, Compacts, Cartels, and Congressional Consent, 68 Mo. L. Rev. 285 (2003). It was Greve’s view that the more accepting view of interstate compacts found in these decisions was a product of the seminal 1925 law review article by (later) Justice Felix Frankfurter and James Landis. Greve refers to that article as a celebration of “the imaginative adaptation of the compact idea” to increased regionalism and “(t)he overwhelming difficulties confronting modern society.” Though the Frankfurter and Landis article did not call for compacts independent of congressional approval, the article, Greve says, “furnished the intellectual apparatus—and the soothing rhetoric of cooperation, flexibility, and localism—that later generations of scholars and judges would put to that purpose.” The result was that “the embrace of horizontal cooperation among states followed the same political and judicial trajectory,” with the Supreme Court then sustaining state agreements against a variety of challenges. Felix Frankfurter & James M. Lan-

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dis, The Compact Clause of the Constitution—A Study in Interstate Adjustments, 34 Yale L. J. 685 (1925). Calling Cuyler v. Adams a case that revolutionized the interpretation of the Compact Clause, L. Mark Eichorn fully discusses that case and the developments that led to it. The case, he says, is so important because it expanded compacts to include any that Congress consented to, whether that consent would have been necessary or not, and because it said that such compacts created their own variety of federal law and federal jurisdictional issues. L. Mark Eichorn, Cuyler v. Adams and the Characterization of Compact Law, 77 Va. L. Rev. 1387 (1991).

Table of Cases

A Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978) American Communications Association v. Douds, 339 U.S. 382 (1950) Armstrong v. Fairmont Community Hospital Assn., 684 F. Supp. 1486 (1987) Austin v. Tennessee, 179 U.S. 343 (1900)

B Barron v. City of Baltimore, 32 U.S. 243 (1833) Bouie v. City of Columbia, 378 U.S. 347 (1964) Briscoe v. Bank of the Commonwealth of Kentucky, 36 U.S. 257 (1837) Bronson v. Kinzie, 42 U.S. 311 (1843) Brown v. Maryland, 25 U.S. 419 (1827) Butchers’ Union Slaughter-House & Live-Stock Landing Co. v. Crescent City LiveStock Landing & Slaughter-House Co., 111 U.S. 746 (1884)

C Calder v. Bull, 3 U.S. 386 (1798) California Department of Corrections v. Morales, 514 U.S. 499 (1995) Carmell v. Texas, 529 U.S. 513, 521 (2000) Carson Petroleum Co. v. Vial, 279 U.S. 95, 103 (1929) Coe v. Town of Errol, 116 U.S. 517 (1886) Collins v. Youngblood, 497 U.S. 37, 43 (1990) Communist Party v. Subversive Activities Control Board, 367 U.S. 1 (1961) Cook v. Pennsylvania, 97 U.S. 566 (1878) Craig v. Missouri, 29 U.S. 410 (1830) Cummings v. Missouri, 71 U.S. 277 (1866) Cuyler v. Adams, 449 U.S. 433 (1981)

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D Dent v. West Virginia, 129 U.S. 114 (1889) Dept. of Revenue v. Assn. of Washington Stevedoring, 435 U.S. 734 (1978) Dobbert v. Florida, 432 U.S. 282 (1977) Duncan v. Louisiana, 391 U.S. 145 (1968)

E East New York Savings Bank v. Hahn, 326 U.S. 230 (1945) Edwards v. Kearzey, 96 U.S. 595 (1877) El Paso v. Simmons, 379 U.S. 497 (1965) Empresea Siderurgica v. Merced County, 337 U.S. 154 (1949) Energy Reserves Group, Inc. v. Kansas Power and Light Co., 459 U.S. 400 (1983) Ex Parte Garland, 71 U.S. 333 (1888) Exxon Corp v. Eagerton, 462 U.S. 176 (1983)

F F. May & Co. v. New Orleans, 178 U.S. 496 (1900) Fletcher v. Peck, 10 U.S. 87 (1810) Florida v. Georgia, 58 U.S. 478 (1854) Fullilove v. Klutznick, 448 U.S. 448 (1980) Furman v. Georgia, 409 U.S. 902 (1972)

G Garner v. Jones, 529 U.S. 244 (2000) General Motors v. Romein, 503 U.S. 181 (1992) Green v. Biddle, 21 U.S. 1 (1823) Gulf Fisheries v. MacInerney, 276 U.S. 124 (1928)

H Hadacheck v. Sebastian, 239 U.S. 394 (1915) Hawker v. New York, 170 U.S. 189 (1898) Hinson v. Lott, 75 U.S. 148 (1868) Holmes v. Jennison, 39 U.S. 540 (1840) Home Building & Loan Assn. v. Blaisdell, 290 U.S. 398 (1934) Hooven & Allison v. Evatt, 324 U.S. 652 (1945) Hopt v. Utah, 110 U.S. 574 (1884) Hudson Water Co. v. McCarter, 209 U.S. 349 (1908)

I In Re Medley, 134 U.S. 160 (1890) In Re Penniman, 103 U.S. 714 (1880) Itel Containers International v. Huddleston, 507 U.S. 60 (1993)

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J Jaehne v. New York, 128 U.S. 189 (1888) Johnson v. United States, 529 U.S. 694 (2000) Joy Oil Co. v. State Tax Commission, 337 U.S. 286 (1948) K Kansas v. Hendricks, 521 U.S. 346 (1997) Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U.S. 470 (1987) Koysdar v. National Cash Register, 417 U.S. 62 (1974) Kring v. Missouri, 107 U.S. 221 (1883) L Legal Tender Cases, 110 U.S. 421 (1884) Limbach v. Hooven & Allison, 466 U.S. 353 (1984) Lindsey v. Washington, 301 U.S. 397 (1937) Low v. Austin, 80 U.S. 29 (1871) Lynce v. Mathis, 519 U.S. 433 (1997) Lynch v. United States, 292 U.S. 571 (1934) M Mallett v. North Carolina, 181 U.S. 589 (1901) Malloy v. South Carolina, 237 U.S. 180 (1915) Manigault v. Springs, 199 U.S. 473 (1905) McCullough v. Maryland, 17 U.S. 316 (1819) McDonald v. Massachusetts, 180 U.S. 311 (1901) Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976) Miller v. Schoene, 276 U.S. 272 (1928) Murdock v. City of Memphis, 87 U.S. 590 (1874) Murphy v. Ramsey, 114 U.S. 15 (1885) Myers v. Irwin, 2 S. & R. (Pa.) 367, 372 (1816) N New Jersey v. Wilson, 11 U.S. 164 (1812) New Jersey v. Wright, 117 U.S. 648 (1886) New Orleans Gas-light Co. v. Louisiana Light & Heat Producing & Manufacturing Co., 115 U.S. 650 (1885) Nixon v. Administrator of General Services, 433 U.S. 425 (1977) Northeast Bancorp, Inc. v. Board of Governors of the Federal Reserve System, 472 U.S. 159 (1985) Northwestern Fertilizing Co. v. Village of Hyde Park, 97 U.S. 659 (1878) O Ogden v. Saunders, 25 U.S. 213 (1827)

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P Patapsco Guano v. Board of Agriculture of North Carolina, 171 U.S. 345 (1898) Pennsylvania ex rel. Coleman v. Cuyler, 396 A.2d 394 (1978) Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717 (1984) Petty v. Tennessee–Missouri Bridge Commission, 359 U.S. 275 (1959) Phalen v. Commonwealth of Virginia, 49 U.S. 163 (1850) Piqua Branch of State Bank of Ohio v. Knoop, 57 U.S. 369 (1853) Poindexter v. Greenhow, 114 U.S. 270 (1885) Port Authority Trans-Hudson Corp. v. Feeney, 459 U.S. 299 (1990) Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 36 U.S. 420 (1837) Providence Bank v. Billings, 29 U.S. 514 (1830) R Reading Railroad Co. v. Pennsylvania, 82 U.S. 284 (1872) Rhode Island v. Massachusetts, 37 U.S. 657 (1838) Richfield Oil v. State Board of Equalization, 329 U.S. 69, 83 (1946) R. J. Reynolds v. Durham County, 479 U.S. 130 (1986) Rogers v. Tennessee, 532 U.S. 451 (2001) Rooney v. North Dakota, 196 U.S. 319 (1905) S SBC Communications, Inc. v. FCC, 154 F.3d 226 (1997) Samuels v. McCurdy, 267 U.S. 188 (1925) Selective Service System v. Minnesota Public Interest Research Group, 468 U.S. 841 (1984) Seling v. Young, 531 U.S. 250 (2001) Smith v. Doe, 538 U.S. 84 (2003) Splawn v. California, 431 U.S. 595, 600 (1977) Steamship Co. v. Portwardens, 73 U.S. 31 (1867) Stogner v. California, 537 U.S. 1231 (2003) Stone v. State of Mississippi, 101 U.S. 814 (1879) Sturges v. Crowninshield, 17 U.S. 122 (1819) T Thompson v. Missouri, 171 U.S. 380 (1898) Trustees of Dartmouth College v. Woodward, 17 U.S. 518 (1819) Turner v. Maryland, 107 U.S. 38 (1883) Turpin v. Burgess, 117 U.S. 504 (1886) U United States v. Brown, 381 U.S. 437 (1965) United States v. Lovett, 328 U.S. 303 (1946) United States Plywood v. Algoma, 2 Wis. 2d 567 (1958)

Table of Cases United States v. Winstar Corp., 518 U.S. 839 (1996) U.S. Steel Corp. v. Multistate Tax Commission, 434 U.S. 452 (1978) U.S. Trust Co. of New York v. New Jersey, 431 U.S. 1 (1977) V Virginia v. Tennessee, 148 U.S. 503 (1893) Virginia v. West Virginia, 78 U.S. 39 (1871) Voight v. Wright, 141 U.S. 62 (1891) W W. B. Worthen Co. v. Kavanaugh, 295 U.S. 56 (1935) Weaver v. Graham, 450 U.S. 24 (1981) West River Bridge Co. v. Dix, 47 U.S. 507 (1848) West Virginia ex rel. Dyer v. Sims, 341 U.S. 22 (1951) Wharton v. Wise, 153 U.S. 155 (1894) Woodruff v. Parham, 75 U.S. 123 (1868) Y Youngstown Sheet & Tube v. Bowers, 355 U.S. 911 (1957) Z Zobel v. Williams, 457 U.S. 55 (1982)

129

Index

Allied Structural Steel Co. v. Spannaus, 35–37, 40, 41 American Communications Association v. Douds, 60 Armstrong v. Fairmont Community Hospital Assn., 3 Articles of Confederation, 83, 102 Austin v. Tennessee, 92 Barron v. City of Baltimore, 3, 82, 83, 103 Bills of Attainder, 4, 55–64, 112; definition, 55–56; history of, 55–57; related to constitutional interpretation, 112 Black, Justice Hugo, 31 Blackstone, William, 82 Bouie v. City of Columbia, 79, 80 Breyer, Justice Stephen, 69 Briscoe v. Bank of the Commonwealth of Kentucky, 85–86 Bronson v. Kinzie, 19–20, 27 Brown v. Maryland, 90, 94, 113 Butchers’ Union Slaughter-House & LiveStock Landing Co. v. Crescent City Live-Stock Landing & Slaughter-House Co., 24 Calder v. Bull, 3, 65–66, 69, 70, 76, 77, 78 California Department of Corrections. v. Morales, 73–74 Carmell v. Texas, 2, 78, 113

Carson Petroleum Co. v. Vial, 98 Chase, Justice Samuel, 65 Coe v. Town of Errol, 97 Coining money, 83–84 Collins v. Youngblood, 65–66, 75–76 Commerce Clause, implied limitations, 2 Communist Party v. Subversive Activities Control Board, 60 Compact Clause, 101–109; congressional consent requirement, 103–107; federal question jurisdiction, 107–108; history of, 101–102 Constitutional interpretation, 112–113 Contract Clause, 5–53; development of modern approach, 26–31; history of, 3–4; levels of constitutional scrutiny and, 51–52; Marshall Court and, 5–16; Post Marshall Court cases, 16–26; Public Purpose Balancing test, 48–53; recent decisions, 31–45; remedies v. obligations, 19–20, 46; Sovereign Power Doctrine, 45, 47, 50–51; summary of law, 45–53; Total Destruction Test, 29, 33 Cook v. Pennsylvania, 94 Craig v. Missouri, 84 Cummings v. Missouri, 56, 57–58, 68 Cuyler v. Adams, 102, 107, 108 Dent v. West Virginia, 58 Dept. of Revenue v. Assn. of Washington Stevedoring, 95

132

Index

Dobbert v. Florida, 71–73 Duncan v. Louisiana, 3 East New York Savings Bank v. Hahn, 29 Edwards v. Kearzey, 27 El Paso v. Simmons, 30–31, 32, 35, 47, 52 Empresea Siderurgica v. Merced County, 97 Energy Reserves Group, Inc. v. Kansas Power and Light Co., 37–39, 40, 41, 47, 50, 52 Ex Parte Garland, 58, 61, 69 Ex Post Facto laws, 65–80; aggravating a crime, 69–70; changes in rules of evidence and, 75–80; criminal cases only, 66–68; history of, 65–66; increase in punishment and, 70–75; retroactive requirement, 68–69 Exxon Corp v. Eagerton, 39–40, 52, 111, 112 F. May & Co. v. New Orleans, 92 Federalist Papers, 1, 4, 55, 84, 102 Field, Justice Stephen, 103–104 Fletcher v. Peck, 6–10 Florida v. Georgia, 103 Frankfurter, Justice Felix, 59–60 Fullilove v. Klutznick, 87 Furman v. Georgia, 72 Garner v. Jones, 74 General Motors v. Romein, 42 George III, King, 19 Ginsberg, Justice Ruth Bader, 79, 113 Green v. Biddle, 106, 107 Gulf Fisheries v. MacInerney, 92 Hadacheck v. Sebastian, 37 Hamilton, Alexander, 86 Hawker v. New York, 58–59, 61, 68 Hinson v. Lott, 90 Holmes, Justice Oliver Wendell, 83 Holmes v. Jennison, 82 Home Building & Loan Assn. v. Blaisdell, 26–29, 47, 48, 50, 51, 111

Hooven & Allison v. Evatt, 91, 95 Hopt v. Utah, 76 Hudson Water Co. v. McCarter, 49 Hughes, Chief Justice Charles Evans, 26 Import–Export Clause, 89–100; history of, 89–91; immunity under, 96–99; inspection exception to, 99–100; Original Package Doctrine and loss of immunity under, 91–94; taxes included under, 94– 96 In Re Medley, 71 In Re Penniman, 27 Incorporation doctrine, 3 Itel Containers International v. Huddleston, 96 Jaehne v. New York, 70 Johnson, Justice William, dissenting opinion re Contract Clause, 8–9 Johnson v. United States, 74–75 Joy Oil Co. v. State Tax Commission, 99 Kansas v. Hendricks, 67 Kennedy, Justice Anthony, 70 Keystone Bituminous Coal Assn. v. DeBenedictis, 40 Koysdar v. National Cash Register, 97 Kring v. Missouri, 75, 76 The Legal Tender Cases, 84 Letters of Marque and Reprisal, 83 Levels of constitutional scrutiny, 51–52 Limbach v. Hooven & Allison, 95 Lindsey v. Washington, 71 Low v. Austin, 92 Lynce v. Mathis, 73 Lynch v. United States, 44 Madison, James, 4 Mallet v. North Carolina, 77 Malloy v. South Carolina, 71 Manigault v. Springs, 25–26, 27 Marshall, Chief Justice John, 5–16, 26, 81, 90, 113

Index McCullough v. Maryland, 16 McDonald v. Massachusetts, 70 McLean, Justice John, 22 Michelin Tire Corp v. Wages, 89, 91, 93– 95, 96, 113 Miller, Justice Samuel, 58 Miller v. Schoene, 37 Murdock v. City of Memphis, 108 Murphy v. Ramsey, 68 Myers v. Irwin, 40 Natural law and the Contract Clause, 7, 10 New Jersey v. Wilson, 9–10 New Orleans Gas-light Co. v. Louisiana Light & Heat Producing & Manufacturing Co., 25 Nixon, President Richard M., 61–62 Nixon v. Administrator of General Services, 61–62, 63, 64 Northeast Bancorp, Inc. v. Board Of Governors of the Federal Reserve System, 105 Northwestern Fertilizing Co. v. Village Of Hyde Park, 24–25 Ogden v. Saunders, 14–16, 26 Original Package Doctrine, the Import– Export Clause, 90–94 Patapsco Guano v. Board of Agriculture of North Carolina, 99 Pennsylvania ex rel. Coleman v. Cuyler, 108 Pension Benefit Guarantee Corp. v. R. A. Gray & Co., 43–44 Petty v. Tennessee-Missouri Bridge Commission, 107 Phalen v. Commonwealth of Virginia, 24 Pinckney, Charles, 1, 4 Piqua Branch of State Bank of Ohio v. Knoop, 22–23 Poindexter v. Greenhow, 86 Port Authority Trans-Hudson Corp. v. Feeney, 82 Privileges and Immunities Clause, 2

133

Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 17–19 Providence Bank v. Billings, 16 Public Purpose Balance Test, the Contract Clause, 48–53 Reading Railroad Co. v. Pennsylvania, 94 Rhenquist, Justice William, 76 Rhode Island v. Massachusetts, 102 Richfield Oil v. State Board Of Equalization, 98 R. J. Reynolds v. Durham County, 95 Rogers v. Tennessee, 79–80 Rooney v. North Dakota, 71 Samuels v. McCurdy, 69 SBC Communications, Inc. v. FCC, 56 Scalia, Justice Antonin, 74, 80 Selective Service System v. Minnesota Public Interest Research Group, 62–63 Seling v. Young, 67 Smith v. Doe, 68 Sovereign Power Doctrine, Contract Clause, 47–68 Splawn v. California, 77 State Treaty Clause, 82–83 Steamship Co. v. Portwardens, 94 Stevens, Justice John Paul, 1, 2, 78, 80, 113 Stewart, Justice Potter, 86 Stogner v. California, 69–70 Stone v. State of Mississippi, 23–24, 47 Story, Justice Joseph, 13, 18, 19, 21, 82, 86 Sturges v. Crowninshield, 13–14, 83 Sutherland, Justice George, 28–29 Taney, Chief Justice Roger, 17, 19 Tenth Amendment, 2 Thompson v. Missouri, 76 Titles of Nobility, 86–87 Total Destructions Test, Contract Clause, 29, 33 Trustees of Dartmouth College v. Woodward, 10–13 Turner v. Maryland, 99 Turpin v. Burgess, 96

134 United States Plywood v. Algoma, 91 United States v. Brown, 60, 61, 63 United States v. Lovett, 59–60 United States v. Winstar Corp., 44–45 U.S. Steel Corp. v. Multistate Tax Commission, 82–83, 102, 103, 104, 105, 106 U.S. Trust Co. of New York v. New Jersey, 2, 32–35, 40, 49, 111 Virginia v. Tennessee, 103–106 Virginia v. West Virginia, 106 Voight v. Wright, 99

Index W. B. Worthen Co. v. Kavanaugh, 29, 33 Weaver v. Graham, 73 Webster, Daniel, 11 West River Bridge Co. v. Dix, 21, 46 West Virginia ex rel. Dyer v. Sims, 107 Wharton v. Wise, 102 Woodruff v. Parham, 90 Yazoo land scandal, Contract Clause, 6 Youngstown Sheet & Tube v. Bowers, 91 Zobel v. Williams, 87

About the Author JAMES M. McGOLDRICK Jr. is Professor of Law at Pepperdine University School of Law where he has served for thirty-three years, also serving as Associate Dean during eight of those years. He began his career as a trial attorney for the U.S. Department of Justice in the attorney general’s Program for Honor Law Graduates, Antitrust division. He is a member of the California State Bar Association and the American Bar Association.