ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, July 5, 2022

Should Contracts Profs Cheer for a Return to the Lochner Era?

Justice Peckham
Justice Peckham
Author of the majority opinion in Lochner

On the one hand, of course we should.  Law reviews will beg us for submissions.  All of their symposium issues will be dedicated to the fundamental right to freedom of contract, and we will stroke our beards our twirl our locks and consider whether intermediate or strict scrutiny is the best way to safeguard those rights.  All of those fancy public law people will have to listen to us talk about offer, acceptance, consideration, and assent, and they will feel as inadequate as we do when they drone on about, e.g. the differences among original expected application, original public meaning, original methods, and original law.  We will host the Con Law Podcast, and when people ask, "By 'Con Law,' do you mean constitutional law or contracts law?" we will smile roguishly and answer, "Yes!"  

Why do I mention this?  James B. Stewart, the grizzled veteran of The New York Times business pages (his 2005 Disney War was an important source for my article on the business judgment rule), warned on Saturday that we might be returning to the Lochner era.  As I've been writing about the interaction of contracts and constitutional law for the past year (most recently here, with links to the other posts), this caught my eye.  I feel compelled to write a separate opinion concurring in part.

Let me start with areas of agreement between me and Mr. Stewart.  While Lochner itself invalidated a New York state labor regulation, the Lochner era was about the Court invalidating economic regulation generally.  Lochner upheld freedom of contract over state attempts at implementing health and safety regulations, and a separate but related line of cases struck down federal attempts at similar regulation by reading the Commerce Clause narrowly.  I agree with Mr. Stewart, and others cited in his article, that this is an anti-regulatory Court.  However, in my view, the Court is unlikely to revisit Lochner itself, because it can achieve the same effect through other doctrinal routes for which it has already laid the groundwork.  

Mr. Stewart's evidence that a return to Lochner flows from this paragraph:

The case for Lochner is plainly embedded in the Dobbs decision. Writing for the majority, Justice Samuel Alito said that rights not explicitly mentioned in the Constitution had to be “deeply rooted in this Nation’s history and tradition” and “implicit in the concept of ordered liberty.” Unlike a right to abortion, freedom of contract is widely believed to meet that definition.

220px-Clarence_Thomas_official_SCOTUS_portraitThe problem with that paragraph, in my view, is that the cited test relates to substantive due process protections for unenumerated rights.  Freedom of contract is not an expressly-protected federal right.  Under our jurisprudence, Justice Alito contends, abortion does not meet the test for substantive due process.  Some version of freedom of contract might meet the test.  However, this Court is not in the business of expanding substantive due process rights.  It has to tread cautiously, because of the Second Amendment, which it also protected under substantive due process in McDonald.  It will be very hard for the Court to whittle away, as it will no doubt continue to do, at the right to privacy in the context of its bedroom politics while expanding economic substantive due process protections in other areas.  This is especially true because Justice Thomas (and perhaps Justice Gorsuch based on his concurrence in Timbs), and most originalists now writing on the topic, think that the Fourteenth Amendment's Privileges or Immunities clause, rather than substantive due process, should provide the basis for protections of individual rights vis a vis the states.  Justice Thomas had to do some very fancy tap-dancing to write for the majority this term in Bruen, which applied McDonald, given that he wrote separately in McDonald rejecting the majority's substantive due process justification for making the  Second Amendment applicable as to the states.  So, I only count, at most, four votes for a new embrace of economic substantive due process rights.  Could they get there through Privileges or Immunities?  Anybody's guess, which is why the move to Privileges or Immunities is so unsettling.

As for the Court's animus towards federal regulation, it does not need to rely on Lochner to achieve its goals there.  The anti-regulatory GOP has enough power in the Senate to prevent any significant new regulatory legislation.  In any case, regulation almost always comes from the administrative state, not from the legislature, which lacks the expertise and the ability to respond fluidly to an evolving regulatory context.  For that reason, Congress has traditionally delegated regulatory power to the agencies. 

Associate_Justice_Neil_Gorsuch_Official_Portrait_(cropped_2)A few years back, in Gundy, Justice Gorsuch, writing for himself, the Chief, and Justice Thomas, was all for reviving the non-delegation doctrine and reducing Congress's power to delegate.  Justice Alito wrote separately but called for the Court to re-visit the non-delegation doctrine with equal force.  By the logic of the current Court, there could have been six votes to return us to the world of Schechter Poultry. Enter Julian Mortsenson and Nicholas Bagley, who have made extremely compelling originalist arguments that boil down to the following: there was no non-delegation doctrine at the Founding.  And it's not even close.  Using originalism to beat back the administrative state is not as easy as it seemed.  Rather than fighting that battle, Justice Gorsuch, in his concurring opinion in this term's West Virginia v. EPA, declares it a tie because he can cite a bunch of law review articles in a footnote that have different perspectives on the non-delegation doctrine (never mind that half of them pre-date Mortenson & Bagley's sea-changing scholarship and so are unresponsive to their arguments).  Ah for the days of judicial humility, when courts deferred to the political branches on close questions.  

Disarmed of the non-delegation doctrine, the Court's majority has embraced the "major questions doctrine" like Hopper picking up that sword in the final episode of Season 4 of Stranger Things. 

As West Virginia v. EPA and other cases this term illustrate, that's a potent enough weapon if you are looking to dismantle the federal regulatory state.  And so, I concur, in part with Mr. Stewart, that the Court will embrace freedom of contract when it comes to pairing back federal regulation, but it hardly needs to rely on Lochner for that.

But I don't see a full-throated embrace of Lochner, because doing so would force the conservative majority to walk back a great deal of the federalism talk of the Rehnquist Court, and I don't see how they can do so while also singing the praises of the laboratories of democracy in Dobbs.  You may think they just did so with respect to gun regulation in Bruen.  Touché.  But then there are other impediments to prioritizing contracts rights that were not at issue in 1905 (which should be telling if you think this is really an originalist Court).  As my previous posts on this subject indicate, the Court has very little interest in contracts rights when they come up against rights that it cares about more, sometimes free expression rights, but mostly Free Exercise rights, both of which are entirely a product of 20th-century jurisprudence.  

Mr. Stewart gives the last word to Yale's Akhil Amar, who doesn't see a return to Lochner on the horizon.  Professor Amar cautions that, even though this last term was an earthquake, it was an originalist earthquake, not a libertarian earthquake.  I'm more inclined to reverse that, but for me the main takeaways from this term are that this is a Court that has a legislative agenda, and the members of the conservative majority are ticking things off their to-do list.  And as Bruen, West Virginia, Dobbs, and other cases illustrate, they are going to decide the issues they want to decide whether or not those issues arrive at the Court in the appropriate procedural posture.  Abortion, guns, the administrative state, voting rights, Free Exercise, and the Establishment Clause all got their check marks this term.  Protections for LGBTQ+, affirmative action, and the independent state legislature theory are already cued up for next term.  If you are a litigant who wants to pare back the Commerce Clause, this is your moment!

Here's to the Court that can't pass the marshmallow test!

Thanks to the Strict Scrutiny podcast for the perfect analogy.

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The Due Process Clause of the 14A is the wormhole through which bits of the Bill of Rights (including the 2d Amendment) become applied to the states via the theory of Incorporation, thereby becoming Substantive Due Process. But wait! There’s more! Once 14A Due Process is seen to extend to enumerated substantive rights, it also embraces unenumerated rights.
And SCOTUS professes a staunch aversion to unenumerated rights and the judges who may discover them. What do you suppose will happen when the originalists on SCOTUS seek to discover in our ancient traditions a constitutional right against a state that imposed a Chinese-style surveillance state? Rights against government action must evolve to meet the threats posed by government action.
“Freedom of Contract” has never, either before or after Lochner, enjoyed a general protection from state regulation. Any contracts scholar could take a deep breath and list dozens of both ancient and modern state and federal laws that limit the kinds of contracts and contract terms that a person can lawfully make. Holmes had it right.
Finally, whether something as abstract as “a right to an abortion” has a historical pedigree is, to my mind, irrelevant to the issue. Abortion today, as a standard medical procedure and crucial element of family planning, is as different from what it was in the 18th and 19th Century as an AR-15 is from a musket. Again, the question is whether people (I think women still qualify as people even with this Court) have a right to medical care that is free from state control. That level of privacy would seem to have ancient roots in this country.

Posted by: Sidney DeLong | Jul 5, 2022 4:07:59 PM

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