Fourteenth Amendment--Rights Guaranteed:
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[[Page 1559]]
FOURTEENTH AMENDMENT
__________
RIGHTS GUARANTEED
PRIVILEGES AND IMMUNITIES OF CITIZENSHIP,
DUE PROCESS AND EQUAL PROTECTION
__________
CONTENTS
Page
Section 1. Rights Guaranteed.............................. 1565
Citizens of the United States............................. 1565
Privileges and Immunities................................. 1568
Due Process of Law........................................ 1572
The Development of Substantive Due Process........ 1572
``Persons'' Defined....................... 1578
Police Power Defined and Limited.......... 1579
``Liberty''............................... 1581
Liberty of Contract............................... 1581
Regulatory Labor Laws Generally........... 1581
Laws Regulating Hours of Labor............ 1586
Laws Regulating Labor in Mines............ 1586
Laws Prohibiting Employment of Children in
Hazardous Occupations................. 1587
Laws Regulating Payment of Wages.......... 1587
Minimum Wage Laws......................... 1587
Workers' Compensation Laws................ 1588
Collective Bargaining..................... 1591
Regulation of Business Enterprises: Rates,
Charges, and Conditions of Service............ 1594
``Business Affected With a Public
Interest''............................ 1594
Nebbia v. New York........................ 1596
Judicial Review of Publicly Determined Rates and
Charges....................................... 1597
Development............................... 1597
Limitations on Judicial Review............ 1600
The Ben Avon Case......................... 1602
History of the Valuation Question......... 1603
Regulation of Public Utilities (Other Than Rates). 1607
In General................................ 1607
Compulsory Expenditures: Grade Crossings,
and the Like.......................... 1608
Compellable Services...................... 1610
Safety Regulations Applicable to Railroads 1612
Statutory Liabilities and Penalties
Applicable to Railroads............... 1613
Regulation of Corporations, Business, Professions,
and Trades.................................... 1614
Corporations.............................. 1614
Business in General....................... 1615
Laws Prohibiting Trusts, Discrimination,
Restraint of Trade.................... 1615
Laws Preventing Fraud in Sale of Goods and
Securities............................ 1616
Banking, Wage Assignments and Garnishment. 1618
Insurance................................. 1619
Miscellaneous Businesses and Professions.. 1622
Protection of State Resources..................... 1624
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Oil and Gas............................... 1624
Protection of Property and Agricultural
Crops................................. 1625
Water..................................... 1626
Fish and Game............................. 1627
Ownership of Real Property: Limitations, Rights... 1628
Zoning and Similar Actions................ 1628
Estates, Succession, Abandoned Property... 1630
Health, Safety, and Morals........................ 1632
Safety Regulations........................ 1632
Sanitation................................ 1633
Food, Drugs, Milk......................... 1633
Intoxicating Liquor....................... 1634
Regulation of Motor Vehicles and Carriers. 1634
Protecting Morality....................... 1636
Vested Rights, Remedial Rights, Political
Candidacy..................................... 1636
Control of Local Units of Government.............. 1637
Taxing Power...................................... 1637
Generally................................. 1637
Public Purpose............................ 1638
Other Considerations Affecting Validity:
Excessive Burden; Ratio of Amount Of
Benefit Received...................... 1638
Estate, Gift and Inheritance Taxes........ 1639
Income Taxes.............................. 1640
Franchise Taxes........................... 1640
Severance Taxes........................... 1640
Real Property Taxes....................... 1641
Jurisdiction to Tax............................... 1642
Sales/Use Taxes........................... 1643
Land...................................... 1643
Tangible Personalty....................... 1643
Intangible Personalty..................... 1646
Transfer (Inheritance, Estate, Gift) Taxes 1650
Corporate Privilege Taxes................. 1654
Individual Income Taxes................... 1655
Corporate Income Taxes: Foreign
Corporations.......................... 1656
Insurance Company Taxes................... 1657
Procedure in Taxation............................. 1659
Generally................................. 1659
Notice and Hearing in Relation to Taxes... 1659
Notice and Hearing in Relation to
Assessments........................... 1660
Collection of Taxes....................... 1662
Sufficiency and Manner of Giving Notice... 1664
Sufficiency of Remedy..................... 1665
Laches.................................... 1665
Eminent Domain.................................... 1666
Substantive Due Process and Noneconomic Liberty... 1666
Abortion.................................. 1669
Privacy: Its Constitutional Dimensions.... 1679
Family Relationships...................... 1688
Liberty Interests of Retarded and Mentally
Ill: Commitment and Treatment......... 1690
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``Right to Die''.......................... 1692
Procedural Due Process: Civil............................. 1693
Some General Criteria............................. 1693
Ancient Use and Uniformity................ 1693
Equality.................................. 1694
Due Process, Judicial Process, and
Separation of Powers.................. 1694
Power of the States to Regulate Procedure......... 1695
Generally................................. 1695
Commencement of Actions................... 1696
Pleas in Abatement........................ 1696
Defenses.................................. 1697
Amendments and Continuances............... 1697
Costs, Damages, and Penalties............. 1698
Statutes of Limitation.................... 1699
Evidence and Presumptions................. 1701
Jury Trials............................... 1704
Appeals................................... 1704
Jurisdiction...................................... 1705
Generally................................. 1705
In Personam Proceedings Against
Individuals........................... 1707
Suability of Foreign Corporations......... 1710
Actions in Rem: Proceedings Against Land.. 1716
Actions in Rem: Attachment Proceedings.... 1718
Actions in Rem: Estates, Trusts,
Corporations.......................... 1720
Notice: Service of Process................ 1722
The Procedure Which Is Due Process................ 1723
The Interests Protected: Entitlements and
Positivist Recognition................ 1723
Proceedings in Which Procedural Due
Process Must Be Observed.............. 1732
When Is Process Due....................... 1735
The Requirements of Due Process........... 1740
Procedural Due Process: Criminal.......................... 1745
Generally......................................... 1745
The Elements of Due Process....................... 1747
Clarity in Criminal Statutes: The Void-
for-Vagueness Doctrine................ 1747
Other Aspects of Statutory Notice......... 1749
Entrapment................................ 1750
Criminal Identification Process........... 1752
Initiation of the Prosecution............. 1753
Fair Trial................................ 1753
Guilty Pleas.............................. 1757
Prosecutorial Misconduct.................. 1758
Proof, Burden of Proof, and Presumptions.. 1761
Sentencing................................ 1765
The Problem of the Incompetent or Insane
Defendant or Convict.................. 1769
Corrective Process: Appeals and Other
Remedies.............................. 1770
Rights of Prisoners....................... 1772
Probation and Parole...................... 1776
The Problem of the Juvenile Offender...... 1780
The Problem of Civil Commitment........... 1783
Equal Protection of the Laws.............................. 1786
Scope and Application..................................... 1786
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State Action...................................... 1786
``Persons''....................................... 1802
``Within Its Jurisdiction''....................... 1803
Equal Protection: Judging Classifications by Law.......... 1804
Traditional Standard: Restrained Review........... 1805
The New Standards: Active Review.................. 1809
Testing Facially Neutral Classifications Which Impact on
Minorities............................................ 1815
Traditional Equal Protection: Economic Regulation and
Related Exercises of the Police Powers........................ 1821
Taxation.................................................. 1821
Classification for Purpose of Taxation............ 1821
Foreign Corporations and Nonresidents............. 1824
Income Taxes...................................... 1825
Inheritance Taxes................................. 1826
Motor Vehicle Taxes............................... 1826
Property Taxes.................................... 1827
Special Assessment................................ 1828
Police Power Regulation................................... 1829
Classification.................................... 1829
Other Business and Employment Relations................... 1834
Labor Relations................................... 1834
Monopolies and Unfair Trade Practices............. 1835
Administrative Discretion......................... 1835
Social Welfare.................................... 1836
Punishment of Crime............................... 1838
Equal Protection and Race................................. 1839
Overview.................................................. 1839
Education................................................. 1840
Development and Application of ``Separate But
Equal''....................................... 1840
Brown v. Board of Education....................... 1842
Brown's Aftermath................................. 1843
Implementation of School Desegregation............ 1845
Northern Schools: Inter- and Intradistrict
Desegregation................................. 1847
Efforts to Curb Busing and Other Desegregation
Remedies...................................... 1852
Termination of Court Supervision.................. 1853
Juries.................................................... 1854
Capital Punishment........................................ 1857
Housing................................................... 1858
Other Areas of Discrimination............................. 1859
Transportation.................................... 1859
Public Facilities................................. 1859
Marriage.......................................... 1860
Judicial System................................... 1860
Public Designation................................ 1861
Public Accommodations............................. 1861
Elections......................................... 1861
Permissible Remedial Utilization of Racial Classifications 1861
The New Equal Protection.................................. 1869
Classifications Meriting Close Scrutiny................... 1869
Alienage and Nationality.......................... 1869
Sex............................................... 1875
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Illegitimacy...................................... 1886
Fundamental Interests: The Political Process.............. 1892
Voter Qualifications.............................. 1893
Access to the Ballot.............................. 1897
Apportionment and Districting..................... 1902
Weighing of Votes................................. 1911
The Right to Travel....................................... 1911
Durational Residency Requirements................. 1911
Marriage and Familial Relations........................... 1914
Poverty and Fundamental Interests: The Intersection of Due
Process and Equal Protection.......................... 1916
Generally......................................... 1916
Criminal Procedure................................ 1918
The Criminal Sentence............................. 1920
Voting............................................ 1921
Access to Courts.................................. 1922
Educational Opportunity........................... 1923
Abortion.......................................... 1925
Section 2. Apportionment of Representation................ 1926
Sections 3 and 4. Disqualification and Public Debt........ 1928
Section 5. Enforcement.................................... 1928
Generally................................................. 1928
State Action.............................................. 1929
Congressional Definition of Fourteenth Amendment Rights... 1933
[[Page 1565]]
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
Section 1. All persons born or naturalized in the United States, and
subject to the jurisdiction thereof, are citizens of the United States
and the State wherein they reside. No State shall make or enforce any
law which shall abridge the privileges or immunities of citizens of the
United States; nor shall any State deprive any person of life, liberty,
or property, without due process of law; nor deny to any person within
its jurisdiction the equal protection of the laws.
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED:
CITIZENS OF THE UNITED STATES
In the Dred Scott Case,\1\ Chief Justice Taney for the Court
ruled that United States citizenship was enjoyed by two classes of
individuals: (1) white persons born in the United States as descendents
of ``persons, who were at the time of the adoption of the Constitution
recognized as citizens in the several States and [who] became also
citizens of this new political body,'' the United States of America, and
(2) those who, having been ``born outside the dominions of the United
States,'' had migrated thereto and been naturalized therein. The States
were competent, he continued, to confer state citizenship upon anyone in
their midst, but they could not make the recipient of such status a
citizen of the United States. The ``Negro,'' or ``African race,''
according to the Chief Justice, was ineligible to attain United States
citizenship, either from a State or by virtue of birth in the United
States, even as a free man descended from a Negro residing as a free man
in one of the States at the date of ratification of the Constitution.\2\
Congress, first in Sec. 1 of the Civil Rights Act of 1866 \3\ and then
in the first sentence
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of Sec. 1 of the Fourteenth Amendment,\4\ set aside the Dred Scott
holding in a sentence ``declaratory of existing rights, and affirmative
of existing law. . . .''\5\
\1\Scott v. Sandford, 60 U.S. (19 How.) 393, 404-06, 417-18,
419-20 (1857).
\2\The controversy, political as well as constitutional, which
this case stirred and still stirs, is exemplified and analyzed in the
material collected in S. Kutler, The Dred Scott Decision: Law or
Politics? (1967).
\3\``That all persons born in the United States and not subject
to any foreign power, excluding Indians not taxed, are hereby declared
to be citizens of the United States; and such citizens, of every race
and color, without regard to any previous condition of slavery or
involuntary servitude . . . shall have the same right[s]. . . .'' Ch.
31, 14 Stat. 27.
\4\The proposed amendment as it passed the House contained no
such provision, and it was decided in the Senate to include language
like that finally adopted. Cong. Globe, 39th Cong., 1st Sess. 2560,
2768-69, 2869 (1866). The sponsor of the language said: ``This amendment
which I have offered is simply declaratory of what I regard as the law
of the land already, that every person born within the limits of the
United States, and subject to their jurisdiction, is . . . a citizen of
the United States.'' Id. at 2890. The legislative history is discussed
at some length in Afroyim v. Rusk, 387 U.S. 253, 282-86 (1967) (Justice
Harlan dissenting).
\5\United States v. Wong Kim Ark, 169 U.S. 649, 688 (1898).
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While clearly establishing a national rule on national
citizenship and settling a controversy of long standing with regard to
the derivation of national citizenship, the Fourteenth Amendment did not
obliterate the distinction between national and state citizenship, but
rather preserved it.\6\ The Court has accorded the first sentence of
Sec. 1 a construction in accordance with the congressional intentions,
holding that a child born in the United States of Chinese parents who
themselves were ineligible to be naturalized is nevertheless a citizen
of the United States entitled to all the rights and privileges of
citizenship.\7\ Congress' intent in including the qualifying phrase
``and subject to the jurisdiction thereof,'' was apparently to exclude
from the reach of the language children born of diplomatic
representatives of a foreign state and children born of alien enemies in
hostile occupation, both recognized exceptions to the common-law rule of
acquired citizenship by birth,\8\ as well as children of members of
Indian tribes subject to tribal laws.\9\ The lower courts have generally
held that the citizenship of the parents determines the citizenship of
children born on vessels in United States territorial waters or on the
high seas.\10\
\6\Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 74 (1873).
\7\United States v. Wong Kim Ark, 169 U.S. 649 (1898).
\8\Id. at 682.
\9\Id. at 680-82; Elk v. Wilkins, 112 U.S. 94, 99 (1884).
\10\United States v. Gordon, 25 Fed. Cas. 1364 (C.C.S.D.N.Y.
1861) (No. 15,231); In re Look Tin Sing, 21 F. 905 (C.C.Cal. 1884); Lam
Mow v. Nagle, 24 F.2d 316 (9th Cir. 1928).
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In Afroyim v. Rusk,\11\ a divided Court extended the force of
this first sentence beyond prior holdings, ruling that it withdrew
[[Page 1567]]
from the Government of the United States the power to expatriate United
States citizens against their will for any reason. ``[T]he Amendment can
most reasonably be read as defining a citizenship which a citizen keeps
unless he voluntarily relinquishes it. Once acquired, this Fourteenth
Amendment citizenship was not to be shifted, canceled, or diluted at the
will of the Federal Government, the States, or any other government
unit. It is true that the chief interest of the people in giving
permanence and security to citizenship in the Fourteenth Amendment was
the desire to protect Negroes. . . . This undeniable purpose of the
Fourteenth Amendment to make citizenship of Negroes permanent and secure
would be frustrated by holding that the Government can rob a citizen of
his citizenship without his consent by simply proceeding to act under an
implied general power to regulate foreign affairs or some other power
generally granted.''\12\ In a subsequent decision, however, the Court
held that persons who were statutorily naturalized by being born abroad
of at least one American parent could not claim the protection of the
first sentence of Sec. 1 and that Congress could therefore impose a
reasonable and non-arbitrary condition subsequent upon their continued
retention of United States citizenship.\13\ Between these two decisions
there is a tension which should call forth further litigation efforts to
explore the meaning of the citizenship sentence of the Fourteenth
Amendment.
\11\387 U.S. 253 (1967). Though the Court upheld the involuntary
expatriation of a woman citizen of the United States during her marriage
to a foreign citizen in Mackenzie v. Hare, 239 U.S. 299 (1915), the
subject first received extended judicial treatment in Perez v. Brownell,
356 U.S. 44 (1958), in which by a five-to-four decision the Court upheld
a statute denaturalizing a native-born citizen for having voted in a
foreign election. For the Court, Justice Frankfurter reasoned that
Congress' power to regulate foreign affairs carried with it the
authority to sever the relationship of this country with one of its
citizens to avoid national implication in acts of that citizen which
might embarrass relations with a foreign nation. Id. at 60-62. Three of
the dissenters denied that Congress had any power to denaturalize. See
discussion supra pp. 272-76. In the years before Afroyim, a series of
decisions had curbed congressional power.
\12\Afroyim v. Rusk, 387 U.S. 253, 262-63 (1967). Four
dissenters, Justices Harlan, Clark, Stewart, and White, controverted the
Court's reliance on the history and meaning of the Fourteenth Amendment
and reasserted Justice Frankfurter's previous reasoning in Perez. Id. at
268.
\13\Rogers v. Bellei, 401 U.S. 815 (1971). This, too, was a
five-to-four decision, Justices Blackmun, Harlan, Stewart, and White,
and Chief Justice Burger in the majority, and Justices Black, Douglas,
Brennan, and Marshall dissenting.
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Citizens of the United States within the meaning of this
Amendment must be natural and not artificial persons; a corporate body
is not a citizen of the United States.\14\
\14\Insurance Co. v. New Orleans, 13 Fed. Cas. 67 (C.C.D.La.
1870). Not being citizens of the United States, corporations accordingly
have been declared unable ``to claim the protection of that clause of
the Fourteenth Amendment which secures the privileges and immunities of
citizens of the United States against abridgment or impairment by the
law of a State.'' Orient Ins. Co. v. Daggs, 172 U.S. 557, 561 (1869).
This conclusion was in harmony with the earlier holding in Paul v.
Virginia, 75 U.S. (8 Wall.) 168 (1869), to the effect that corporations
were not within the scope of the privileges and immunities clause of
state citizenship set out in Article IV, Sec. 2. See also Selover, Bates
& Co. v. Walsh, 226 U.S. 112, 126 (1912); Berea College v. Kentucky, 211
U.S. 45 (1908); Liberty Warehouse Co. v. Tobacco Growers, 276 U.S. 71,
89 (1928); Grosjean v. American Press Co., 297 U.S. 233, 244 (1936).
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[[Page 1568]]
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED:
PRIVILEGES AND IMMUNITIES
Unique among constitutional provisions, the privileges and
immunities clause of the Fourteenth Amendment enjoys the distinction of
having been rendered a ``practical nullity'' by a single decision of the
Supreme Court issued within five years after its ratification. In the
Slaughter-House Cases,\15\ a bare majority of the Court frustrated the
aims of the most aggressive sponsors of this clause, to whom was
attributed an intention to centralize ``in the hands of the Federal
Government large powers hitherto exercised by the States'' with a view
to enabling business to develop unimpeded by state interference. This
expansive alteration of the federal system was to have been achieved by
converting the rights of the citizens of each State as of the date of
the adoption of the Fourteenth Amendment into privileges and immunities
of United States citizenship and thereafter perpetuating this newly
defined status quo through judicial condemnation of any state law
challenged as ``abridging'' any one of the latter privileges. To have
fostered such intentions, the Court declared, would have been ``to
transfer the security and protection of all the civil rights . . . to
the Federal Government, . . . to bring within the power of Congress the
entire domain of civil rights heretofore belonging exclusively to the
States,'' and to ``constitute this court a perpetual censor upon all
legislation of the States, on the civil rights of their own citizens,
with authority to nullify such as it did not approve as consistent with
those rights, as they existed at the time of the adoption of this
amendment. . . . [The effect of] so great a departure from the structure
and spirit of our institutions . . . is to fetter and degrade the State
governments by subjecting them to the control of Congress, in the
exercise of powers heretofore universally conceded to them of the most
ordinary and fundamental character. . . . We are convinced that no such
results were intended by the Congress . . . , nor by the legislatures
. . . which ratified'' this amendment, and that the sole ``pervading
purpose'' of this and the other War Amendments was ``the freedom of the
slave race.''
\15\83 U.S. (16 Wall.) 36, 71, 77-79 (1873).
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Conformably to these conclusions, the Court advised the New
Orleans butchers that the Louisiana statute, conferring on a single
corporation a monopoly of the business of slaughtering cattle, abrogated
no rights possessed by them as United States citizens; insofar as that
law interfered with their claimed privilege of pursuing the lawful
calling of butchering animals, the privilege thus terminated was merely
one of ``those which belonged to the citizens of the States as such.''
Privileges and immunities of state citizenship
[[Page 1569]]
had been ``left to the state governments for security and protection''
and had not been placed by this clause ``under the special care of the
Federal Government.'' The only privileges which the Fourteenth Amendment
protected against state encroachment were declared to be those ``which
owe their existence to the Federal Government, its National character,
its Constitution, or its laws.''\16\ These privileges, however, had been
available to United States citizens and protected from state
interference by operation of federal supremacy even prior to the
adoption of the Fourteenth Amendment. The Slaughter-House Cases,
therefore, reduced the privileges and immunities clause to a superfluous
reiteration of a prohibition already operative against the states.
\16\Id. at 78-79.
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Although the Court has expressed a reluctance to attempt a
definitive enumeration of those privileges and immunities of United
States citizens which are protected against state encroachment, it
nevertheless felt obliged in the Slaughter-House Cases ``to suggest some
which owe their existence to the Federal Government, its National
character, its Constitution, or its laws.''\17\ Among those which it
then identified were the right of access to the seat of Government and
to the seaports, subtreasuries, land officers, and courts of justice in
the several States, the right to demand protection of the Federal
Government on the high seas or abroad, the right of assembly, the
privilege of habeas corpus, the right to use the navigable waters of the
United States, and rights secured by treaty. In Twining v. New
Jersey,\18\ the Court recognized ``among the rights and privileges'' of
national citizenship the right to pass freely from State to State,\19\
the right to petition Congress for a redress of grievances,\20\ the
right to vote for national officers,\21\ the
[[Page 1570]]
right to enter public lands,\22\ the right to be protected against
violence while in the lawful custody of a United States marshal,\23\ and
the right to inform the United States authorities of violation of its
laws.\24\ Earlier, in a decision not mentioned in Twining, the Court had
also acknowledged that the carrying on of interstate commerce is ``a
right which every citizen of the United States is entitled to
exercise.''\25\
\17\Id. at 79.
\18\211 U.S. 78, 97 (1908).
\19\Citing Crandall v. Nevada, 73 U.S. (65 Wall.) 35 (1868). It
was observed in United States v. Wheeler, 254 U.S. 281, 299 (1920), that
the statute at issue in Crandall was actually held to burden directly
the performance by the United States of its governmental functions. Cf.
Passenger Cases, 48 U.S. (7 How.) 282, 491-92 (1849) (Chief Justice
Taney dissenting). Four concurring Justices in Edwards v. California,
314 U.S. 160, 177, 181 (1941), would have grounded a right of interstate
travel on the privileges and immunities clause. More recently, the Court
declined to ascribe a source but was content to assert the right to be
protected. United States v. Guest, 383 U.S. 745, 758 (1966); Shapiro v.
Thompson, 394 U.S. 618, 629-31 (1969). Three Justices ascribed the
source to this clause in Oregon v. Mitchell, 400 U.S. 112, 285-87 (1970)
(Justices Stewart and Blackmun and Chief Justice Burger, concurring in
part and dissenting in part).
\20\Citing United States v. Cruikshank, 92 U.S. 542 (1876).
\21\Citing Ex parte Yarbrough, 110 U.S. 651 (1884); Wiley v.
Sinkler, 179 U.S. 58 (1900). Note Justice Douglas' reliance on this
clause in Oregon v. Mitchell, 400 U.S. 112, 149 (1970) (concurring in
part and dissenting in part).
\22\Citing United States v. Waddell, 112 U.S. 76 (1884).
\23\Citing Logan v. United States, 144 U.S. 263 (1892).
\24\Citing In re Quarles and Butler, 158 U.S. 532 (1895).
\25\Crutcher v. Kentucky, 141 U.S. 47, 57 (1891).
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In modern times, the Court has continued the minor role accorded
to the clause, only occasionally manifesting a disposition to enlarge
the restraint which it imposes upon state action. Colgate v. Harvey,\26\
which was overruled five years later,\27\ represented the first attempt
by the Court since adoption of the Fourteenth Amendment to convert the
privileges and immunities clause into a source of protection of other
than those ``interests growing out of the relationship between the
citizen and the national government.'' Here, the Court declared that the
right of a citizen resident in one State to contract in another, to
transact any lawful business, or to make a loan of money, in any State
other than that in which the citizen resides was a privilege of national
citizenship which was abridged by a state income tax law excluding from
taxable income interest received on money loaned within the State. In
Hague v. CIO,\28\ two and perhaps three justices thought that freedom to
use municipal streets and parks for the dissemination of information
concerning provisions of a federal statute and to assemble peacefully
therein for discussion of the advantages and opportunities offered by
such act was a privilege and immunity of a United States citizen, and in
Edwards v. California\29\ four Justices were prepared to rely on the
clause.\30\ In Oyama v. California,\31\ in a single sentence the Court
agreed with the contention of a native-born youth that a state Alien
Land Law, applied to work a forfeiture of property purchased in his name
with funds advanced by his parent, a Japanese alien ineligible for
citizenship and precluded from owning land, deprived him ``of his
privileges as an American citizen.'' The right to acquire and retain
property had previously not been set
[[Page 1571]]
forth in any of the enumerations as one of the privileges protected
against state abridgment, although a federal statute enacted prior to
the proposal and ratification of the Fourteenth Amendment did confer on
all citizens the same rights to purchase and hold real property as white
citizens enjoyed.\32\
\26\296 U.S. 404 (1935).
\27\Madden v. Kentucky, 309 U.S. 83, 93 (1940).
\28\307 U.S. 496, 510-18 (1939) (Justices Roberts and Black;
Chief Justice Hughes may or may not have concurred on this point. Id. at
532). Justices Stone and Reed preferred to base the decision on the due
process clause. Id. at 518.
\29\314 U.S. 160, 177-83 (1941).
\30\See also Oregon v. Mitchell, 400 U.S. 112, 149 (1970)
(Justice Douglas); id. at 285-87 (Justices Stewart and Blackmun and
Chief Justice Burger).
\31\332 U.S. 633, 640 (1948).
\32\Civil Rights Act of 1866, ch. 31, 14 Stat. 27, now 42 U.S.C.
Sec. 1982, as amended.
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In other respects, however, claims based on this clause have
been rejected.\33\
\33\E.g., Holden v. Hardy, 169 U.S. 366, 380 (1898) (statute
limiting hours of labor in mines); Williams v. Fears, 179 U.S. 270, 274
(1900) (statute taxing the business of hiring persons to labor outside
the State); Wilmington Mining Co. v. Fulton, 205 U.S. 60, 73 (1907)
(statute requiring employment of only licensed mine managers and
examiners and imposing liability on the mine owner for failure to
furnish a reasonably safe place for workmen); Heim v. McCall, 239 U.S.
175 (1915); Crane v. New York, 239 U.S. 195 (1915) (statute restricting
employment on state public works to citizens of the United States, with
a preference to citizens of the State); Missouri Pacific Ry. v. Castle,
224 U.S. 541 (1912) (statute making railroads liable to employees for
injuries caused by negligence of fellow servants and abolishing the
defense of contributory negligence); Western Union Tel. Co. v. Milling
Co., 218 U.S. 406 (1910) (statute prohibiting a stipulation against
liability for negligence in delivery of interstate telegraph messages);
Bradwell v. Illinois, 83 U.S. (16 Wall.) 130, 139 (1873); In re
Lockwood, 154 U.S. 116 (1894) (refusal of state court to license a woman
to practice law); Kirtland v. Hotchkiss, 100 U.S. 491, 499 (1879) (law
taxing a debt owed a resident citizen by a resident of another State and
secured by mortgage of land in the debtor's State); Bartemeyer v. Iowa,
85 U.S. (18 Wall.) 129 (1874); Mugler v. Kansas, 123 U.S. 623 (1887);
Crowley v. Christensen, 137 U.S. 86, 91 (1890); Giozza v. Tiernan, 148
U.S. 657 (1893) (statutes regulating the manufacture and sale of
intoxicating liquors); In re Kemmler, 136 U.S. 436 (1890) (statute
regulating the method of capital punishment); Minor v. Happersett, 88
U.S. (21 Wall.) 162 (1875) (statute regulating the franchise to male
citizens); Pope v. Williams, 193 U.S. 621 (1904) (statute requiring
persons coming into a State to make a declaration of intention to become
citizens and residents thereof before being permitted to register as
voters); Ferry v. Spokane, P. & S. Ry., 258 U.S. 314 (1922) (statute
restricting dower, in case wife at time of husband's death is a
nonresident, to lands of which he died seized); Walker v. Sauvinet, 92
U.S. 90 (1876) (statute restricting right to jury trial in civil suits
at common law); Presser v. Illinois, 116 U.S. 252, 267 (1886) (statute
restricting drilling or parading in any city by any body of men without
license of the Governor); Maxwell v. Dow, 176 U.S. 581, 596, 597-98
(1900) (provision for prosecution upon information, and for a jury
(except in capital cases) of eight persons); New York ex rel. Bryant v.
Zimmerman, 278 U.S. 63, 71 (1928) (statute penalizing the becoming or
remaining a member of any oathbound association (other than benevolent
orders, and the like) with knowledge that the association has failed to
file its constitution and membership lists); Palko v. Connecticut, 302
U.S. 319 (1937) (statute allowing a State to appeal in criminal cases
for errors of law and to retry the accused); Breedlove v. Suttles, 302
U.S. 277 (1937) (statute making the payment of poll taxes a prerequisite
to the right to vote); Madden v. Kentucky, 309 U.S. 83, 92-93 (1940),
(overruling Colgate v. Harvey, 296 U.S. 404, 430 (1935)) (statute
whereby deposits in banks outside the State are taxed at 50 cents per
$100); Snowden v. Hughes, 321 U.S. 1 (1944) (the right to become a
candidate for state office is a privilege of state citizenship, not
national citizenship); MacDougall v. Green, 335 U.S. 281 (1948)
(Illinois Election Code requirement that a petition to form and nominate
candidates for a new political party be signed by at least 200 voters
from each of at least 50 of the 102 counties in the State,
notwithstanding that 52% of the voters reside in only one county and 87%
in the 49 most populous counties); New York v. O'Neill, 359 U.S. 1
(1959) (Uniform Reciprocal State Law to secure attendance of witnesses
from within or without a State in criminal proceedings); James v.
Valtierra, 402 U.S. 137 (1971) (a provision in a state constitution to
the effect that low-rent housing projects could not be developed,
constructed, or acquired by any state governmental body without the
affirmative vote of a majority of those citizens participating in a
community referendum).
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[[Page 1572]]
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED:
DUE PROCESS OF LAW
The Development of Substantive Due Process
Although many years after ratification the Court ventured the
not very informative observation that the Fourteenth Amendment
``operates to extend . . . the same protection against arbitrary state
legislation, affecting life, liberty and property, as is offered by the
Fifth Amendment,''\34\ and that ``ordinarily if an act of Congress is
valid under the Fifth Amendment it would be hard to say that a state law
in like terms was void under the Fourteenth,''\35\ the significance of
the due process clause as a restraint on state action appears to have
been grossly underestimated by litigants no less than by the Court in
the years immediately following its adoption. From the outset of our
constitutional history due process of law as it occurs in the Fifth
Amendment had been recognized as a restraint upon government, but, with
the conspicuous exception of the Dred Scott decision,\36\ only in the
narrower sense that a legislature must provide ``due process for the
enforcement of law.''
\34\Hibben v. Smith, 191 U.S. 310, 325 (1903).
\35\Carroll v. Greenwich Ins. Co., 199 U.S. 401, 410 (1905). See
also French v. Barber Asphalt Paving Co., 181 U.S. 324, 328 (1901).
\36\Scott v. Sandford, 60 U.S. (19 How.) 393, 450 (1857), is the
exception.
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Thus, in the Slaughter-House Cases,\37\ in which the clause was
invoked by a group of butchers challenging the validity of a Louisiana
statute which conferred upon one corporation the exclusive privilege of
butchering cattle in New Orleans, the Court declared that the
prohibition against a deprivation of property ``has been in the
Constitution since the adoption of the Fifth Amendment, as a restraint
upon the Federal power. It is also to be found in some forms of
expression in the constitution of nearly all the States, as a restraint
upon the power of the States. . . . We are not without judicial
interpretation, therefore, both State and National, of the meaning of
this clause. And it is sufficient to say that under no construction of
that provision that we have ever seen, or any that we deem admissible,
can the restraint imposed by the State of Louisiana upon the exercise of
their trade by the butchers of New Orleans be held to be a deprivation
of property within the meaning of that provision.'' Four years later, in
Munn v. Illinois,\38\ the Court again refused to interpret the due
process clause as invalidating
[[Page 1573]]
state legislation regulating the rates charged for the transportation
and warehousing of grain. Rejecting contentions that such legislation
effected an unconstitutional deprivation of property by preventing the
owner from earning a reasonable compensation for its use and by
transferring to the public an interest in a private enterprise, Chief
Justice Waite emphasized that ``the great office of statutes is to
remedy defects in the common law as they are developed. . . . We know
that this power [of rate regulation] may be abused; but that is no
argument against its existence. For protection against abuses by
legislatures the people must resort to the polls, not to the courts.''
\37\83 U.S. (16 Wall.) 36, 80-81 (1873).
\38\94 U.S. 113, 134 (1877).
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Deploring such attempts, nullified consistently in the preceding
cases, to convert the due process clause into a substantive restraint on
the powers of the States, Justice Miller in Davidson v. New Orleans,\39\
obliquely counseled against a departure from the conventional
application of the clause, albeit he acknowledged the difficulty of
arriving at a precise, all-inclusive definition thereof. ``It is not a
little remarkable,'' he observed, ``that while this provision has been
in the Constitution of the United States, as a restraint upon the
authority of the Federal government, for nearly a century, and while,
during all that time, the manner in which the powers of that government
have been exercised has been watched with jealousy, and subjected to the
most rigid criticism in all its branches, this special limitation upon
its powers has rarely been invoked in the judicial forum or the more
enlarged theatre of public discussion. But while it has been part of the
Constitution, as a restraint upon the power of the States, only a very
few years, the docket of this court is crowded with cases in which we
are asked to hold that state courts and state legislatures have deprived
their own citizens of life, liberty, or property without due process of
law. There is here abundant evidence that there exists some strange
misconception of the scope of this provision as found in the Fourteenth
Amendment. In fact, it would seem, from the character of many of the
cases before us, and the arguments made in them, that the clause under
consideration is looked upon as a means of bringing to the test of the
decision of this court the abstract opinions of every unsuccessful
litigant in a State court of the justice of the decision against him,
and of the merits of the legislation on which such a decision may be
founded. If, therefore, it were possible to define what it is for a
State to deprive a person of life, liberty, or property without due
process of law, in terms which would cover every exercise of power thus
forbidden to the State, and exclude
[[Page 1574]]
those which are not, no more useful construction could be furnished by
this or any other court to any part of the fundamental of law.
\39\96 U.S. 97, 103-04 (1878).
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``But, apart from the imminent risk of a failure to give any
definition which would be at once perspicuous, comprehensive, and
satisfactory, there is wisdom . . . in the ascertaining of the intent
and application of such an important phrase in the Federal Constitution,
by the gradual process of judicial inclusion and exclusion, as the cases
presented for decision shall require. . . .''
A bare half-dozen years later, in again reaching a result in
harmony with past precedents, the Justices gave fair warning of the
imminence of a modification of their views. After noting that the due
process clause, by reason of its operation upon ``all the powers of
government, legislative as well as executive and judicial,'' could not
be appraised solely in terms of the ``sanction of settled usage,''
Justice Mathews, speaking for the Court in Hurtado v. California,\40\
declared that ``[a]rbitrary power, enforcing its edicts to the injury of
the persons and property of its subjects, is not law, whether manifested
as the decree of a personal monarch or of an impersonal multitude. And
the limitations imposed by our constitutional law upon the action of the
governments, both state and national, are essential to the preservation
of public and private rights, notwithstanding the representative
character of our political institutions. The enforcement of these
limitations by judicial process is the device of self-governing
communities to protect the rights of individuals and minorities, as well
against the power of numbers, as against the violence of public agents
transcending the limits of lawful authority, even when acting in the
name and wielding the force of the government.'' Thus were the States
put on notice that every species of state legislation, whether dealing
with procedural or substantive rights, was subject to the scrutiny of
the Court when the question of its essential justice was raised.
\40\110 U.S. 516, 528, 532, 536 (1884).
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What induced the Court to dismiss its fears of upsetting the
balance in the distribution of powers under the federal system and to
enlarge its own supervisory powers over state legislation was the
increasing number of cases seeking protection of property rights against
the remedial social legislation States were enacting in the wake of
industrial expansion. At the same time, the added emphasis on the due
process clause afforded the Court an opportunity to compensate for its
earlier virtual nullification of the privileges and immunities clause of
the Amendment. So far as such modification of its position needed to be
justified in legal terms, theories concerning the relation of government
to private rights were available
[[Page 1575]]
to demonstrate the impropriety of leaving to the state legislatures the
same ample range of police power they had enjoyed prior to the Civil
War. Preliminary to this consummation, however, the Slaughter-House
Cases and Munn v. Illinois had to be overruled at least in part, and the
views of the dissenting Justices in those cases converted into majority
doctrine.
About twenty years were required to complete this process, in
the course of which the restricted view of the police power advanced by
Justice Field in his dissent in Munn v. Illinois,\41\ namely, that it is
solely a power to prevent injury, was in effect ratified by the Court
itself. This occurred in Mugler v. Kansas,\42\ where the power was
defined as embracing no more than the power to promote public health,
morals, and safety. During the same interval, ideas embodying the social
compact and natural rights, which had been espoused by Justice Bradley
in his dissent in the Slaughter-House Cases,\43\ had been transformed
tentatively into constitutionally enforceable limitations upon
government.\44\ The consequence was that the States in exercising their
police powers could foster only those purposes of health, morals, and
safety which the Court had enumerated, and could employ only such means
as would not unreasonably interfere with the fundamentally natural
rights of liberty and property, which Justice Bradley had equated with
freedom to pursue a lawful calling and to make contracts for that
purpose.\45\
\41\94 U.S. 113, 141-48 (1877).
\42\123 U.S. 623, 661 (1887).
\43\83 U.S. (16 Wall.) 36, 113-14, 116, 122 (1873).
\44\Loan Association v. Topeka, 87 U.S. (20 Wall.) 655, 662
(1875). ``There are . . . rights in every free government beyond the
control of the State. . . . There are limitations on [governmental
power] which grow out of the essential nature of all free governments.
Implied reservations of individual rights, without which the social
compact could not exist. . . .''
\45\``Rights to life, liberty, and the pursuit of happiness are
equivalent to the rights of life, liberty, and property. These are
fundamental rights which can only be taken away by due process of law,
and which can only be interfered with, or the enjoyment of which can
only be modified, by lawful regulations necessary or proper for the
mutual good of all. . . . This right to choose one's calling is an
essential part of that liberty which it is the object of government to
protect; and a calling, when chosen, is a man's property right. . . . A
law which prohibits a large class of citizens from adopting a lawful
employment, or from following a lawful employment previously adopted,
does deprive them of liberty as well as property, without due process of
law.'' Slaughter-House Cases, 83 U.S. (16 Wall.) 36, 116, 122 (1873)
(Justice Bradley dissenting).
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So having narrowed the scope of the state's police power in
deference to the natural rights of liberty and property, the Court next
proceeded to read into the concepts currently accepted theories of
laissez faire economics, reinforced by the doctrine of Social Darwinism
as elaborated by Herbert Spencer, to the end that ``liberty,'' in
[[Page 1576]]
particular, became synonymous with governmental hands-off in the field
of private economic relations. In Budd v. New York,\46\ Justice Brewer
in dictum declared: ``The paternal theory of government is to me odious.
The utmost possible liberty to the individual, and the fullest possible
protection to him and his property, is both the limitation and duty of
government.'' And to implement this point of view the Court next
undertook to water down the accepted maxim that a state statute must be
presumed to be valid until clearly shown to be otherwise.\47\ The first
step was taken with opposite intention. This occurred in Munn v.
Illinois,\48\ where the Court, in sustaining the legislation before it,
declared: ``For our purposes we must assume that, if a state of facts
could exist that would justify such legislation, it actually did exist
when the statute now under consideration was passed.'' Ten years later,
in Mugler v. Kansas,\49\ this procedure was improved upon, and a state-
wide anti-liquor law was sustained on the basis of the proposition that
deleterious social effects of the excessive use of alcoholic liquors
were sufficiently notorious for the Court to be able to take notice of
them, that is to say, for the Court to review and appraise the
consideration which had induced the legislature to enact the statute in
the first place.\50\ However, in Powell v. Pennsylvania,\51\ decided the
following year, the Court, confronted with a similar act involving
oleomargarine, concerning which it was unable to claim a like measure of
common knowledge, fell back upon the doctrine of presumed validity and
sustained the measure, declaring that ``it does not appear upon the face
of the statute, or from any of the facts of which the Court must take
judicial cognizance, that it infringes rights secured by the fundamental
law.''
\46\143 U.S. 517, 551 (1892).
\47\See Fletcher v. Peck, 10. U.S. (6 Cr.) 87, 128 (1810).
\48\94 U.S. 113, 123, 182 (1877).
\49\123 U.S. 623 (1887).
\50\Id. at 662. ``We cannot shut out of view the fact, within
the knowledge of all, that the public health, the public morals, and the
public safety, may be endangered by the general use of intoxicating
drinks; nor the fact . . . that . . . pauperism, and crime . . . are, in
some degree, at least, traceable to this evil.''
\51\127 U.S. 678, 685 (1888).
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In contrast to the presumed validity rule, under which the Court
ordinarily is not obliged to go beyond the record of evidence submitted
by the litigants in determining the validity of a statute, the judicial
notice principle, as developed in Mugler v. Kansas, carried the
inference that unless the Court, independently of the record, is able to
ascertain the existence of justifying facts accessible to it by the
rules governing judicial notice, it will be obliged to invalidate a
police power regulation as bearing no reasonable or adequate relation to
the purposes to be subserved by the latter;
[[Page 1577]]
namely, health, morals, or safety. For appraising state legislation
affecting neither liberty nor property, the Court found the rule of
presumed validity quite serviceable, but for invalidating legislation
constituting governmental interference in the field of economic
relations, and, more particularly, labor-management relations, the Court
found the principle of judicial notice more advantageous. This advantage
was enhanced by the disposition of the Court, in litigation embracing
the latter type of legislation, to shift the burden of proof from the
litigant charging unconstitutionality to the State seeking enforcement.
To the State was transferred the task of demonstrating that a statute
interfering with the natural right of liberty or property was in fact
``authorized'' by the Constitution, and not merely that the latter did
not expressly prohibit enactment of the same.
In 1934 the Court in Nebbia v. New York\52\ discarded this
approach to economic legislation, and has not since returned to it. The
modern approach was evidenced in a 1955 decision reversing a lower
court's judgment invalidating a state statutory scheme regulating the
sale of eyeglasses to the advantage of ophthalmologists and optometrists
in private professional practice and adversely to opticians and to those
employed by or using space in business establishments. ``The day is gone
when this Court uses the Due Process Clause of the Fourteenth Amendment
to strike down state laws, regulatory of business and industrial
conditions, because they may be unwise, improvident, or out of harmony
with a particular school of thought. . . . We emphasize again what Chief
Justice Waite said in Munn v. Illinois, 94 U.S. 113, 134, `For
protection against abuses by legislatures the people must resort to the
polls, not to the courts.'''\53\ Yet the Court went on to assess the
reasons which might have justified the legislature in prescribing the
regulation at issue, leaving open the possibility that some regulation
might be found unreasonable.\54\ More recent decisions, however, have
limited inquiry to whether the legislation is arbitrary or irrational,
and have not addressed ``reasonableness.''\55\
\52\291 U.S. 502 (1934).
\53\Williamson v. Lee Optical Co., 348 U.S. 483, 488 (1955).
\54\Id. at 487, 491.
\55\The Court has pronounced a strict ``hands-off'' standard of
judicial review, whether of congressional or state legislative efforts
to structure and accommodate the burdens and benefits of economic life.
Such legislation is to be ``accorded the traditional presumption of
constitutionality generally accorded economic regulations'' and is to be
``upheld absent proof of arbitrariness or irrationality on the part of
Congress.'' That the accommodation among interests which the legislative
branch has struck ``may have profound and far-reaching consequences
. . . provides all the more reason for this Court to defer to the
congressional judgment unless it is demonstrably arbitrary or
irrational.'' Duke Power Co. v. Carolina Environmental Study Group, 438
U.S. 59, 83-84 (1978). See also Usery v. Turner Elkhorn Mining Co., 428
U.S. 1, 14-20 (1976); Hodel v. Indiana, 452 U.S. 314, 333 (1981); New
Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 106-08 (1978); Exxon
Corp. v. Governor of Maryland, 437 U.S. 117, 124-25 (1978); Brotherhood
of Locomotive Firemen v. Chicago, R.I. & P. R.R., 393 U.S. 129, 143
(1968); Ferguson v. Skrupa, 372 U.S. 726, 730, 733 (1963).
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[[Page 1578]]
``Persons'' Defined.--Notwithstanding the historical controversy
that has been waged concerning whether the framers of the Fourteenth
Amendment intended the word ``person'' to mean only natural persons, or
whether the word was substituted for the word ``citizen'' with a view to
protecting corporations from oppressive state legislation,\56\ the
Supreme Court, as early as the Granger Cases,\57\ decided in 1877,
upheld on the merits various state laws without raising any question as
to the status of railway corporation plaintiffs to advance due process
contentions. There is no doubt that a corporation may not be deprived of
its property without due process of law,\58\ and although prior
decisions had held that the ``liberty'' guaranteed by the Fourteenth
Amendment is the liberty of natural, not artificial, persons,\59\
nevertheless a newspaper corporation was sustained, in 1936, in its
objection that a state law deprived it of liberty of press.\60\ As to
the natural persons protected by the due process clause, these include
all human beings regardless of race, color, or citizenship.\61\
\56\See Graham, The ``Conspiracy Theory'' of the Fourteenth
Amendment, 47 Yale L. J. 371 (1938).
\57\Munn v. Illinois, 94 U.S. 113 (1877). In a case arising
under the Fifth Amendment, decided almost at the same time, the Court
explicitly declared the United States ``equally with the States . . .
are prohibited from depriving persons or corporations of property
without due process of law.'' Sinking Fund Cases, 99 U.S. 700, 718-19
(1879).
\58\Smyth v. Ames, 169 U.S. 466, 522, 526 (1898); Kentucky Co.
v. Paramount Exch., 262 U.S. 544, 550 (1923); Liggett Co. v. Baldridge,
278 U.S. 105 (1928).
\59\Northwestern Life Ins. Co. v. Riggs, 203 U.S. 243, 255
(1906); Western Turf Ass'n v. Greenberg, 204 U.S. 359, 363 (1907);
Pierce v. Society of Sisters, 268 U.S. 510, 535 (1925). Earlier, in
Northern Securities Co. v. United States, 193 U.S. 197, 362 (1904), a
case interpreting the federal antitrust law, Justice Brewer, in a
concurring opinion, had declared that ``a corporation . . . is not
endowed with the inalienable rights of a natural person.''
\60\Grosjean v. American Press Co., 297 U.S. 233, 244 (1936)
(``a corporation is a `person' within the meaning of the equal
protection and due process of law clauses''). In First Nat'l Bank of
Boston v. Bellotti, 435 U.S. 765 (1978), faced with the validity of
state restraints upon expression by corporations, the Court did not
determine that corporations have First Amendment liberty rights--and
other constitutional rights--but decided instead that expression was
protected, irrespective of the speaker, because of the interests of the
listeners. See id. at 778 n.14 (reserving question). But see id. at 809,
822 (Justices White and Rehnquist dissenting) (corporations as creatures
of the state have the rights state gives them).
\61\Yick Wo v. Hopkins, 118 U.S. 356 (1886); Terrace v.
Thompson, 263 U.S. 197, 216 (1923). See Hellenic Lines v. Rhodetis, 398
U.S. 306, 309 (1970).
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Ordinarily, the mere interest of an official as such, in
contrast to an actual injury sustained by a natural or artificial person
through invasion of personal or property rights, has not been
[[Page 1579]]
deemed adequate to enable him to invoke the protection of the Fourteenth
Amendment against state action.\62\ Similarly, municipal corporations
are viewed as having no standing ``to invoke the provisions of the
Fourteenth Amendment in opposition to the will of their creator,'' the
State.\63\ However, state officers are acknowledged to have an interest,
despite their not having sustained any ``private damage,'' in resisting
an ``endeavor to prevent the enforcement of laws in relation to which
they have official duties,'' and, accordingly, may apply to federal
courts for the ``review of decisions of state courts declaring state
statutes which [they] seek to enforce to be repugnant to the''
Fourteenth Amendment.\64\
\62\Pennie v. Reis, 132 U.S. 464 (1889); Taylor and Marshall v.
Beckham (No. 1), 178 U.S. 548 (1900); Tyler v. Judges of Court of
Registration, 179 U.S. 405, 410 (1900); Straus v. Foxworth, 231 U.S. 162
(1913); Columbus & G. Ry. v. Miller, 283 U.S. 96 (1931).
\63\City of Pawhuska v. Pawhuska Oil Co., 250 U.S. 394 (1919);
City of Trenton v. New Jersey, 262 U.S. 182 (1923); Williams v. Mayor of
Baltimore, 289 U.S. 36 (1933). But see Madison School Dist. v. WERC, 429
U.S. 167, 175 n.7 (1976) (reserving question whether municipal
corporation as an employer has a First Amendment right assertable
against State).
\64\Coleman v. Miller, 307 U.S. 433, 441, 442, 443, 445 (1939);
Boynton v. Hutchinson Gas Co., 291 U.S. 656 (1934); South Carolina Hwy.
Dept. v. Barnwell Bros., 303 U.S. 177 (1938).
The converse is not true, however, and the interest of a state
official in vindicating the Constitution gives him no legal standing to
attack the constitutionality of a state statute in order to avoid
compliance with it. Smith v. Indiana, 191 U.S. 138 (1903); Braxton
County Court v. West Virginia, 208 U.S. 192 (1908); Marshall v. Dye, 231
U.S. 250 (1913); Stewart v. Kansas City, 239 U.S. 14 (1915). See also
Coleman v. Miller, 307 U.S. 433, 437-46 (1939).
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Police Power Defined and Limited.--The police power of a State
today embraces regulations designed to promote the public convenience or
the general prosperity as well as those to promote public safety,
health, and morals, and is not confined to the suppression of what is
offensive, disorderly, or unsanitary, but extends to what is for the
greatest welfare of the state.\65\
\65\Long ago Chief Justice Marshall described the police power
as ``that immense mass of legislation, which embraces every thing within
the territory of a State, not surrendered to the general government.''
Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 202 (1824). See California
Reduction Co. v. Sanitary Works, 199 U.S. 306, 318 (1905); Chicago B. &
Q. Ry. v. Drainage Comm'rs, 200 U.S. 561, 592 (1906); Bacon v. Walker,
204 U.S. 311 (1907); Eubank v. Richmond, 226 U.S. 137 (1912);
Schmidinger v. Chicago, 226 U.S. 578 (1913); Sligh v. Kirkwood, 237 U.S.
52, 58-59 (1915); Nebbia v. New York, 291 U.S. 502 (1934); Nashville, C.
& St. L. Ry. v. Walters, 294 U.S. 405 (1935). See also Penn Central
Transp. Co. v. City of New York, 438 U.S. 104 (1978) (police power
encompasses preservation of historic landmarks; land-use restrictions
may be enacted to enhance the quality of life by preserving the
character and aesthetic features of city); City of New Orleans v. Dukes,
427 U.S. 297 (1976); Young v. American Mini Theatres, 427 U.S. 50
(1976).
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Because the police power is the least limitable of the exercises
of government, such limitations as are applicable are not readily
definable. These limitations can be determined, therefore, only
[[Page 1580]]
through appropriate regard to the subject matter of the exercise of that
power.\66\ ``It is settled [however] that neither the `contract' clause
nor the `due process' clause had the effect of overriding the power of
the state to establish all regulations that are reasonably necessary to
secure the health, safety, good order, comfort, or general welfare of
the community; that this power can neither be abdicated nor bargained
away, and is inalienable even by express grant; and that all contract
and property [or other vested] rights are held subject to its fair
exercise.''\67\ Insofar as the police power is utilized by a State, the
means employed to effect its exercise can be neither arbitrary nor
oppressive but must bear a real and substantial relation to an end which
is public, specifically, the public health, public safety, or public
morals, or some other phase of the general welfare.\68\
\66\Hudson Water Co. v. McCarter, 209 U.S. 349 (1908); Eubank v.
Richmond, 226 U.S. 137, 142 (1912); Erie R.R. v. Williams, 233 U.S. 685,
699 (1914); Sligh v. Kirkwood, 237 U.S. 52, 58-59 (1915); Hadacheck v.
Sebastian, 239 U.S. 394 (1915); Hall v. Geiger-Jones Co., 242 U.S. 539
(1917); Panhandle Eastern Pipeline Co. v. Highway Comm'n, 294 U.S. 613,
622 (1935).
\67\Atlantic Coast Line R.R. v. Goldsboro, 232 U.S. 548, 558
(1914).
\68\Liggett Co. v. Baldridge, 278 U.S. 105, 111-12 (1928);
Treigle v. Acme Homestead Ass'n, 297 U.S. 189, 197 (1936).
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A general rule often invoked is that if a police power
regulation goes too far, it will be recognized as a taking of property
for which compensation must be paid.\69\ Yet where mutual advantage is a
sufficient compensation, an ulterior public advantage may justify a
comparatively insignificant taking of private property for what in its
immediate purpose seems to be a private use.\70\ On the other hand, mere
``cost and inconvenience (different words, probably, for the same thing)
would have to be very great before they could become an element in the
consideration of the right of a state to exert its reserved power or its
police power.''\71\ Moreover, it is elementary that enforcement of
uncompensated obedience to a regulation passed in the legitimate
exertion of the police power is not a taking without due process of
law.\72\ Similarly, initial compliance with a regulation which is valid
when adopted occasions no forfeiture of the right to protest when that
regulation subsequently loses its validity by becoming confiscatory in
its operation.\73\
\69\Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922); Welch
v. Swasey, 214 U.S. 91, 107 (1909). See also Penn Central Transp. Co. v.
City of New York, 438 U.S. 104 (1978); Agins v. City of Tiburon, 447
U.S. 255 (1980). See supra, pp. 1382-95.
\70\Noble State Bank v. Haskell, 219 U.S. 104, 110 (1911).
\71\Erie R.R. v. Williams, 233 U.S. 685, 700 (1914).
\72\New Orleans Public Service v. New Orleans, 281 U.S. 682, 687
(1930).
\73\Abie State Bank v. Bryan, 282 U.S. 765, 776 (1931).
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[[Page 1581]]
``Liberty''.--The ``liberty'' guaranteed by the due process
clause has been variously defined by the Court, as will be seen
hereinafter. In general, in the early years, it meant almost exclusively
``liberty of contract,'' but with the demise of liberty of contract came
a general broadening of ``liberty'' to include personal, political and
social rights and privileges.\74\ Nonetheless, the Court is generally
chary of expanding the concept absent statutorily recognized rights.\75\
\74\See the tentative effort in Hampton v. Mow Sun Wong, 426
U.S. 88, 102 & n.23 (1976), apparently to expand upon the concept of
``liberty'' within the meaning of the Fifth Amendment's due process
clause and necessarily therefore the Fourteenth's.
\75\See the substantial confinement of the concept in Meachum v.
Fano, 427 U.S. 215 (1976); and Montanye v. Haymes, 427 U.S. 236 (1976),
in which the Court applied to its determination of what is a liberty
interest the ``entitlement'' doctrine developed in property cases, in
which the interest is made to depend upon state recognition of the
interest through positive law, an approach contrary to previous due
process-liberty analysis. Cf. Morrissey v. Brewer, 408 U.S. 471, 482
(1972). For more recent cases, see DeShaney v. Winnebago County Social
Servs. Dep't, 489 U.S. 189 (1989) (no Due Process violation for failure
of state to protect an abused child from his parent, even though abuse
had been detected by social service agency); Collins v. City of Harker
Heights, 112 S. Ct. 1061 (1992) (failure of city to warn its employees
about workplace hazards does not violate due process; the due process
clause does not impose a duty on the city to provide employees with a
safe working environment).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Liberty of Contract
Regulatory Labor Laws Generally.--Liberty of contract, a concept
originally advanced by Justices Bradley and Field in the Slaughter-House
Cases,\76\ was elevated to the status of accepted doctrine in Allgeyer
v. Louisiana.\77\ Applied repeatedly in subsequent cases as a restraint
on federal and state power, freedom of contract was also alluded to as a
property right, as is evident in the language of the Court in Coppage v.
Kansas.\78\ ``Included in the right of personal liberty and the right of
private property--partaking of the nature of each--is the right to make
contracts for the acquisition of property. Chief among such contracts is
that of personal employment, by which labor and other services are
exchanged for money or other forms of property. If this right be
[[Page 1582]]
struck down or arbitrarily interfered with, there is a substantial
impairment of liberty in the long-established constitutional sense.''
\76\83 U.S. (16 Wall.) 36 (1873).
\77\165 U.S. 578, 589 (1897). ``The liberty mentioned in that
[Fourteenth] Amendment means not only the right of the citizen to be
free from the mere physical restraint of his person, as by
incarceration, but the term is deemed to embrace the right of the
citizen to be free in the enjoyment of all his faculties, to be free to
use them in all lawful ways; to live and work where he will; to earn his
livelihood by any lawful calling; to pursue any livelihood or avocation,
and for that purpose to enter into all contracts which may be proper,
necessary and essential to his carrying out to a successful conclusion
the purposes above mentioned.''
\78\236 U.S. 1, 14 (1915).
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By a process of reasoning that was almost completely discarded
during the Depression, the Court was nevertheless able, prior thereto,
to sustain state ameliorative legislation by acknowledging that freedom
of contract was ``a qualified and not an absolute right. . . . Liberty
implies the absence of arbitrary restraint, not immunity from reasonable
regulations and prohibitions imposed in the interest of the community.
. . . In dealing with the relation of the employer and employed, the
legislature has necessarily a wide field of discretion in order that
there may be suitable protection of health and safety, and that peace
and good order may be promoted through regulations designed to insure
wholesome conditions of work and freedom from oppression.''\79\
\79\Chicago, B. & Q. R.R. v. McGuire, 219 U.S. 549, 567, 570
(1911). See also Wolff Packing Co. v. Industrial Court, 262 U.S. 522,
534 (1923).
---------------------------------------------------------------------------
While continuing to acknowledge in abstract terms that freedom
of contract is not absolute, the Court in fact was committed to the
principle that freedom of contract is the general rule and that
legislative authority to abridge it could be justified only by
exceptional circumstances. To maintain such abridgments at a minimum,
the Court intermittently employed the rule of judicial notice in a
manner best exemplified by a comparison of the early cases of Holden v.
Hardy\80\ and Lochner v. New York,\81\ decisions which bear the same
relation to each other as Powell v. Pennsylvania\82\ and Mugler v.
Kansas.\83\
\80\169 U.S. 366 (1898).
\81\198 U.S. 45 (1905).
\82\127 U.S. 678 (1888).
\83\123 U.S. 623 (1887).
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In Holden v. Hardy,\84\ the Court, in reliance upon the
principle of presumed validity, allowed the burden of proof to remain
with those attacking the validity of a statute and upheld a Utah act
limiting the period of labor in mines to eight hours per day. Taking
cognizance of the fact that labor below the surface of the earth was
attended by risk to person and to health and for these reasons had long
been the subject of state intervention, the Court registered its
willingness to sustain a limitation on freedom of contract which a state
legislature had adjudged ``necessary for the preservation of health of
employees,'' and for which there were ``reasonable grounds for believing
that . . . [it was] supported by the facts.''
\84\169 U.S. 366, 398 (1898).
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Seven years later, however, a radically altered Court was
predisposed in favor of the doctrine of judicial notice, and applied
that
[[Page 1583]]
doctrine to conclude in Lochner v. New York\85\ that a law restricting
employment in bakeries to ten hours per day and 60 hours per week was an
unconstitutional interference with the right of adult laborers, sui
juris, to contract for their means of livelihood. Denying that in so
holding the Court was in effect substituting its own judgment for that
of the legislature, Justice Peckham nevertheless maintained that whether
the act was within the police power of the State was a ``question that
must be answered by the Court,'' and then, in disregard of the
accumulated medical evidence proffered in support of the act, uttered
the following observation. ``In looking through statistics regarding all
trades and occupations, it may be true that the trade of a baker does
not appear to be as healthy as some trades, and is also vastly more
healthy than still others. To the common understanding the trade of a
baker has never been regarded as an unhealthy one. . . . It might be
safely affirmed that almost all occupations more or less affect the
health. . . . But are we all, on that account, at the mercy of the
legislative majorities?''\86\
\85\198 U.S. 45 (1905).
\86\Id. at 58-59.
---------------------------------------------------------------------------
Two dissenting opinions were filed in the case. Justice Harlan,
pointing to the abundance of medical testimony tending to show that the
life expectancy of bakers was below average, that their capacity to
resist diseases was low, and that they were peculiarly prone to suffer
irritations of the eyes, lungs, and bronchial passages, concluded that
the very existence of such evidence left the reasonableness of the
measure open to discussion and that the latter fact of itself put the
statute within legislative discretion. ``The responsibility therefor
rests upon the legislators, not upon the courts. No evils arising from
such legislation could be more far reaching than those that might come
to our system of government if the judiciary, abandoning the sphere
assigned to it by the fundamental law, should enter the domain of
legislation, and upon grounds merely of justice or reason or wisdom
annul statutes that had received the sanction of the people's
representatives. . . . [T]he public interests imperatively demand that
legislative enactments should be recognized and enforced by the courts
as embodying the will of the people, unless they are plainly and
palpably, beyond all question, in violation of the fundamental law of
the Constitution.''\87\
\87\Id. at 71, 74 (quoting Atkin v. Kansas, 191 U.S. 207, 223
(1903)).
---------------------------------------------------------------------------
The second dissenting opinion, written by Justice Holmes, has
received the greater measure of attention because the views expressed
therein were a forecast of the line of reasoning to be fol
[[Page 1584]]
lowed by the Court some decades later. ``This case is decided upon an
economic theory which a large part of the country does not entertain. If
it were a question whether I agreed with that theory, I should desire to
study it further and long before making up my mind. But I do not
conceive that to be my duty, because I strongly believe that my
agreement or disagreement has nothing to do with the right of a majority
to embody their opinions in law. It is settled by various decisions of
this court that state constitutions and state laws may regulate life in
many ways which we as legislators might think as injudicious or if you
like as tyrannical as this, and which equally with this interfere with
the liberty to contract. . . . The Fourteenth Amendment does not enact
Mr. Herbert Spencer's Social Statics. . . . But a constitution is not
intended to embody a particular economic theory, whether of paternalism
and the organic relations of the citizen to the state or of laissez
faire. It is made for people of fundamentally differing views, and the
accident of our finding certain opinions natural and familiar or novel
and even shocking ought not to conclude our judgment upon the question
whether statutes embodying them conflict with the Constitution. . . . I
think that the word liberty in the Fourteenth Amendment is perverted
when it is held to prevent the natural outcome of a dominant opinion,
unless it can be said that a rational and fair man necessarily would
admit that the statute proposed would infringe fundamental principles as
they have been understood by the traditions of our people and our
law.''\88\
\88\198 U.S. at 75-76 (1905).
---------------------------------------------------------------------------
In part, Justice Holmes' criticism of his colleagues was unfair,
for his ``rational and fair man'' could not function in a vacuum, and,
in appraising the constitutionality of state legislation, could no more
avoid being guided by his preferences or ``economic predilections'' than
were the Justices constituting the majority. Insofar as he accepted the
broader conception of due process of law in preference to the historical
concept thereof as pertaining to the enforcement rather than the making
of law, and did not affirmatively advocate a return to the maxim that
the possibility of abuse is no argument against possession of a power,
Justice Holmes, whether consciously or not, was thus prepared to
observe, along with his opponents in the majority, the very practices
which were deemed to have rendered inevitable the assumption by the
Court of a ``perpetual censorship'' over state legislation. The basic
distinction, therefore, between the positions taken by Justice Peckham
for the majority and Justice Holmes, for what was then the minority, was
the
[[Page 1585]]
espousal of the conflicting doctrines of judicial notice by the former
and of presumed validity by the latter.
Although the Holmes dissent bore fruit in time in the form of
the Bunting v. Oregon\89\ and Muller v. Oregon\90\ decisions modifying
Lochner, the doctrinal approach employed in the earlier of these by
Justice Brewer continued to prevail until the Depression in the 1930's.
In view of the shift in the burden of proof which application of the
principle of judicial notice entailed, counsel defending the
constitutionality of social legislation developed the practice of
submitting voluminous factual briefs replete with medical or other
scientific data intended to establish beyond question a substantial
relationship between the challenged statute and public health, safety,
or morals. Whenever the Court was disposed to uphold measures pertaining
to industrial relations, such as laws limiting hours of work,\91\ it
generally intimated that the facts thus submitted by way of
justification had been authenticated sufficiently for it to take
judicial cognizance thereof. On the other hand, whenever it chose to
invalidate comparable legislation, such as enactments establishing
minimum wage for women and children,\92\ it brushed aside such
supporting data, proclaimed its inability to perceive any reasonable
connection between the statute and the legitimate objectives of health
or safety, and condemned the statute as an arbitrary interference with
freedom of contract.
\89\243 U.S. 426 (1917).
\90\208 U.S. 412 (1908).
\91\Id.
\92\Adkins v. Children's Hospital, 261 U.S. 525 (1923); Stettler
v. O'Hara, 243 U.S. 629 (1917); Morehead v. New York ex rel. Tipaldo,
298 U.S. 587 (1936).
---------------------------------------------------------------------------
During the great Depression, however, the laissez faire tenet of
self-help was supplanted by the belief that it is peculiarly the duty of
government to help those who are unable to help themselves. To sustain
remedial legislation enacted in conformity with the latter philosophy,
the Court had to revise extensively its previously formulated concepts
of ``liberty'' under the due process clause. Not only did the Court take
judicial notice of the demands for relief arising from the Depression
when it overturned prior holdings and sustained minimum wage
legislation,\93\ but, in upholding state legislation designed to protect
workers in their efforts to organize and bargain collectively, the Court
had to reconsider the scope of an
[[Page 1586]]
employer's liberty of contract and recognize a correlative liberty of
employees that state legislatures could protect.
\93\West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937). Thus
the National Labor Relations Act was declared not to ``interfere with
the normal exercise of the right of the employer to select its employees
or to discharge them.'' However, restraint of the employer for the
purpose of preventing an unjust interference with the correlative right
of his employees to organize was declared not to be arbitrary. NLRB v.
Jones & Laughlin Steel Corp., 301 U.S. 1, 44, 45-46 (1937).
---------------------------------------------------------------------------
To the extent that it acknowledged that liberty of the
individual may be infringed by the coercive conduct of other individuals
no less than by the arbitrary action of public officials, the Court in
effect transformed the due process clause into a source of encouragement
to state legislatures to intervene affirmatively to mitigate the effects
of such coercion. By such modification of its views, liberty, in the
constitutional sense of freedom resulting from restraint upon
government, was replaced by the civil liberty which an individual enjoys
by virtue of the restraints which government, in his behalf, imposes
upon his neighbors.
Laws Regulating Hours of Labor.--Even during the Lochner era,
the due process clause was construed as permitting enactment by the
States of maximum hours laws applicable to women workers\94\ and to
workers in specified lines of work thought to be physically demanding or
otherwise worthy of special protection.\95\ Because of the almost
plenary powers of the State and its municipal subdivisions to determine
the conditions for work on public projects, statutes limiting the hours
of labor on public works were also upheld at a relatively early
date.\96\
\94\Miller v. Wilson, 236 U.S. 373 (1915) (statute limiting work
to 8 hours/day, 48 hours/week); Bosley v. McLaughlin, 236 U.S. 385
(1915) (same restrictions for women working as pharmacists or student
nurses). See also Muller v. Oregon, 208 U.S. 412 (1908) (10 hours/day as
applied to work in laundries); Riley v. Massachusetts, 232 U.S. 671
(1914) (violation of lunch hour required to be posted).
\95\See, e.g., Holden v. Hardy, 169 U.S. 366 (1898) (statute
limiting the hours of labor in mines and smelters to eight hours per
day); Bunting v. Oregon, 243 U.S. 426 (1917) (statute limiting to ten
hours per day, with the possibility of 3 hours per day of overtime at
time-and-a-half pay, work in any mill, factory, or manufacturing
establishment).
\96\Atkin v. Kansas, 191 U.S. 207 (1903).
---------------------------------------------------------------------------
Laws Regulating Labor in Mines.--The regulation of mines being
patently within the police power, States during this period were also
upheld in the enactment of laws providing for appointment of mining
inspectors and requiring payment of their fees by mine owners,\97\
compelling employment of only licensed mine managers and mine examiners,
and imposing upon mine owners liability for the willful failure of their
manager and examiner to furnish a reasonably safe place for workmen.\98\
Other similar regulations which have been sustained have included laws
requiring that underground passageways meet or exceed a minimum
width,\99\ that boundary pillars be installed between adjoining coal
properties as
[[Page 1587]]
a protection against flood in case of abandonment,\100\ and that
washhouses be provided for employees.\101\
\97\St. Louis Consol. Coal Co. v. Illinois, 185 U.S. 203 (1902).
\98\Wilmington Mining Co. v. Fulton, 205 U.S. 60 (1907).
\99\Barrett v. Indiana, 229 U.S. 26 (1913).
\100\Plymouth Coal Co. v. Pennsylvania, 232 U.S. 531 (1914).
\101\Booth v. Indiana, 237 U.S. 391 (1915).
---------------------------------------------------------------------------
Law Prohibiting Employment of Children in Hazardous
Occupations.--To make effective its prohibition against the employment
of persons under 16 years of age in dangerous occupations, a State has
been held to be competent to require employers at their peril to
ascertain whether their employees are in fact below that age.\102\
\102\Sturges & Burn v. Beauchamp, 231 U.S. 320 (1913).
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Laws Regulating Payment of Wages.--No unconstitutional
deprivation of liberty of contract was deemed to have been occasioned by
a statute requiring redemption in cash of store orders or other
evidences of indebtedness issued by employers in payment of wages.\103\
Nor was any constitutional defect discernible in laws requiring
railroads to pay their employees semimonthly\104\ and to pay them on the
day of discharge, without abatement or reduction, any funds due
them.\105\ Similarly, freedom of contract was held not to be infringed
by an act requiring that miners, whose compensation was fixed on the
basis of weight, be paid according to coal in the mine car rather than
at a certain price per ton for coal screened after it has been brought
to the surface, and conditioning such payment on the presence of no
greater percentage of dirt or impurities than that ascertained as
unavoidable by the State Industrial Commission.\106\
\103\Knoxville Iron Co. v. Harbison, 183 U.S. 13 (1901); Dayton
Coal and Iron Co. v. Barton, 183 U.S. 23 (1901); Keokee Coke Co. v.
Taylor, 234 U.S. 224 (1914).
\104\Erie R.R. v. Williams, 233 U.S. 685 (1914).
\105\St. Louis, I. Mt. & S.P. Ry. v. Paul, 173 U.S. 404 (1899).
\106\Rail Coal Co. v. Ohio Industrial Comm'n, 236 U.S. 338
(1915). See also McLean v. Arkansas, 211 U.S. 539 (1909).
---------------------------------------------------------------------------
Minimum Wage Laws.--The theory that a law prescribing minimum
wages for women and children violates due process by impairing freedom
of contract was finally discarded in 1937.\107\ The modern theory of the
Court, particularly when labor is the beneficiary of legislation, was
stated by Justice Douglas for a majority of the Court, in the following
terms: ``Our recent decisions make plain that we do not sit as a
superlegislature to weigh the wisdom of legislation nor to decide
whether the policy which it expresses offends the public welfare. The
legislative power has limits. . . . But the state legislatures have
constitutional authority to experiment with new techniques; they are
entitled to their own standard
[[Page 1588]]
of the public welfare; they may within extremely broad limits control
practices in the business-labor field, so long as specific
constitutional prohibitions are not violated and so long as conflicts
with valid and controlling federal laws are avoided.''\108\ Proceeding
from this basis the Court sustained a Missouri statute giving employees
the right to absent themselves four hours on election day, between the
opening and closing of the polls, without deduction of wages for their
absence.
\107\West Coast Hotel Co. v. Parrish, 300 U.S. 379 (1937)
(overruling Adkins v. Children's Hospital, 261 U.S. 525 (1923), a Fifth
Amendment case); Morehead v. New York ex rel. Tipaldo, 298 U.S. 587
(1936).
\108\Day-Brite Lighting, Inc. v. Missouri, 342 U.S. 421, 423
(1952).
---------------------------------------------------------------------------
It was admitted that this was a minimum wage law, but, said
Justice Douglas, ``the protection of the right of suffrage under our
scheme of things is basic and fundamental,'' and hence within the police
power. ``Of course,'' the Justice added, ``many forms of regulation
reduce the net return of the enterprise. . . . Most regulations of
business necessarily impose financial burdens on the enterprise for
which no compensation is paid. Those are part of the costs of our
civilization. Extreme cases are conjured up where an employer is
required to pay wages for a period that has no relation to the
legitimate end. Those cases can await decision as and when they arise.
The present law has no such infirmity. It is designed to eliminate any
penalty for exercising the right of suffrage and to remove a practical
obstacle to getting out the vote. The public welfare is a broad and
inclusive concept. The moral, social, economic, and physical well-being
of the community is one part of it; the political well-being, another.
The police power which is adequate to fix the financial burden for one
is adequate for the other. The judgment of the legislature that time out
for voting should cost the employee nothing may be a debatable one. It
is indeed conceded by the opposition to be such. But if our recent cases
mean anything, they leave debatable issues as respects business,
economic, and social affairs to legislative decision. We could strike
down this law only if we returned to the philosophy of the Lochner,
Coppage, and Adkins cases.''\109\
\109\Id. at 424-25. See also Dean v. Gadsden Times Pub. Co., 412
U.S. 543 (1973) (sustaining statute providing that employee excused for
jury duty should be entitled to full compensation from employer, less
jury service fee).
---------------------------------------------------------------------------
Workers' Compensation Laws.--``This court repeatedly has upheld
the authority of the States to establish by legislation departures from
the fellow-servant rule and other common-law rules affecting the
employer's liability for personal injuries to the employee.''\110\
``These decisions have established the propositions that the rules of
law concerning the employer's responsibility for personal injury or
death of an employee arising in the course of em
[[Page 1589]]
ployment are not beyond alteration by legislation in the public
interest; that no person has a vested right entitling him to have these
any more than other rules of law remain unchanged for his benefit; and
that, if we exclude arbitrary and unreasonable changes, liability may be
imposed upon the employer without fault, and the rules respecting his
responsibility to one employee for the negligence of another and
respecting contributory negligence and assumption of risk are subject to
legislative change.''\111\ Accordingly, a state statute which provided
an exclusive system to govern the liabilities of employers and the
rights of employees and their dependents to compensation for disabling
injuries and death caused by accident in certain hazardous
occupations,\112\ was held not to work a denial of due process in
rendering the employer liable irrespective of the doctrines of
negligence, contributory negligence, assumption of risk, and negligence
of fellow-servants, nor in depriving the employee or his dependents of
the higher damages which, in some cases, might be rendered under these
doctrines.\113\ Likewise, an act which allowed an injured employee an
election of remedies permitting restricted recovery under a compensation
law although guilty of contributory negligence, and full compensatory
damages under the Employers' Liability Act, did not deprive an employer
of his property without due process of law.\114\
\110\New York Cent. R.R. v. White, 243 U.S. 188, 200 (1917).
\111\Arizona Employers' Liability Cases, 250 U.S. 400, 419-20
(1919).
\112\In determining what occupations may be brought under the
designation of ``hazardous,'' the legislature may carry the idea to the
``vanishing point.'' Ward & Gow v. Krinsky, 259 U.S. 503, 520 (1922).
\113\New York Central R.R. v. White, 243 U.S. 188 (1917);
Mountain Timber Co. v. Washington, 243 U.S. 219 (1917).
\114\Arizona Employers' Liability Cases, 250 U.S. 400 (1919).
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The imposition upon coal mine operators, and ultimately coal
consumers, of the liability of compensating former employees who
terminated work in the industry before passage of the law for black lung
disabilities contracted in the course of their work was sustained by the
Court as a rational measure to spread the costs of the employees'
disabilities to those who have profited from the fruits of their
labor.\115\ Legislation readjusting rights and burdens is not unlawful
solely because it upsets otherwise settled expectations, but it must
take account of the realities previously existing, i.e., that the danger
may not have been known or appreciated, or that actions might have been
taken in reliance upon the current state of the law; therefore,
legislation imposing liability on the basis of deterrence or of
blameworthiness might not have passed muster.
\115\Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 14-20
(1976). But see id. at 38 (Justice Powell concurring).
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[[Page 1590]]
Contracts limiting liability for injuries, consummated in
advance of the injury received, may be prohibited by the legislature,
which may further stipulate that subsequent acceptance of benefits under
such contracts shall not constitute satisfaction of a claim for injuries
thereafter sustained.\116\ Also, as applied to a nonresident alien
employee hired within the State but injured outside, an act forbidding
any contracts exempting employers from liability for injuries outside
the State has been construed as not denying due process to the
employer.\117\ The fact that a State, after having allowed employers to
cover their liability with a private insurer, subsequently withdrew that
privilege and required them to contribute to a state insurance fund was
held to effect no unconstitutional deprivation as applied to an employer
who had obtained protection from an insurance company before this change
went into effect.\118\ As long as the right to come under a workmen's
compensation statute is optional with an employer, the latter, having
chosen to accept benefits thereof, is estopped from attempting to escape
its burdens by challenging the constitutionality of a provision thereof
which makes the finding of fact of an industrial commission conclusive
if supported by any evidence regardless of its preponderance.\119\
\116\Chicago, B. & Q. R.R. v. McGuire, 219 U.S. 549 (1911).
\117\Alaska Packers Ass'n v. Industrial Accident Comm'n, 294
U.S. 532 (1935).
\118\Thornton v. Duffy, 254 U.S. 361 (1920).
\119\Booth Fisheries v. Industrial Comm'n, 271 U.S. 208 (1926).
---------------------------------------------------------------------------
When, by the terms of a workers' compensation statute, the
wrongdoer, in case of wrongful death, is obliged to indemnify the
employer or the insurance carrier of the employer of the decedent, in
the amount which the latter were required under the act to contribute
into special compensation funds, no unconstitutional deprivation of the
wrongdoer's property was discernible.\120\ By the same course of
reasoning neither the employer nor the carrier was held to have been
denied due process by another provision in an act requiring payments by
them, in case an injured employee dies without dependents, into special
funds to be used for vocational rehabilitation or disability
compensation of injured workers of other establishments.\121\
Compensation also need not be based exclusively on loss of earning
power, and an award authorized by statute for injuries resulting in
disfigurement of the face or head, independent of compensation for
inability to work, has been conceded to be neither an arbitrary nor
oppressive exercise of the police power.\122\
\120\Staten Island Ry. v. Phoenix Co., 281 U.S. 98 (1930).
\121\Sheehan Co. v. Shuler, 265 U.S. 371 (1924); New York State
Rys. v. Shuler, 265 U.S. 379 (1924).
\122\New York Cent. R.R. v. Bianc, 250 U.S. 596 (1919).
Attorneys are not deprived of property or their liberty of contract by
restriction imposed by the State on the fees which they may charge in
cases arising under the workmen's compensation law. Yeiser v. Dysart,
267 U.S. 540 (1925).
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[[Page 1591]]
Collective Bargaining.--During the 1930s, liberty, as translated
into what one Justice labeled the Allgeyer-Lochner-Adair-Coppage
doctrine,\123\ lost its potency as an obstacle to legislation calculated
to enhance the bargaining capacity of workers as against that already
possessed by their employers. Prior to the manifestation, in Senn v.
Tile Layers Union,\124\ of a greater willingness to defer to legislative
judgment as to the wisdom and need of such enactments, the Court had, on
occasion, sustained measures affecting the employment relationship,
e.g., a statute requiring every corporation to furnish, upon request by
any employee being discharged or leaving its service, a letter, signed
by the superintendent or manager, setting forth the nature and duration
of the employee's service and the true cause for leaving.\125\ Added
provisions that such letters should be on plain paper selected by the em
[[Page 1592]]
ployee, signed in ink and sealed, and free from superfluous figures and
words, were also sustained as not amounting to any unconstitutional
deprivation of liberty and property.\126\ On the ground that the right
to strike is not absolute, the Court in a similar manner upheld a
statute under which a labor union official was punished for having
ordered a strike for the purpose of coercing an employer to pay a wage
claim of a former employee.\127\
\123\Justice Black in Lincoln Federal Labor Union v.
Northwestern Iron & Metal Co., 335 U.S. 525, 535 (1949). In his
concurring opinion, contained in the companion case of AFL v. American
Sash & Door Co., 335 U.S. 538, 543-44 (1949), Justice Frankfurter
summarized the now obsolete doctrines employed by the Court to strike
down state laws fostering unionization. ``[U]nionization encountered the
shibboleths of a premachine age and these were reflected in juridical
assumptions that survived the facts on which they were based. Adam Smith
was treated as though his generalizations had been imparted to him on
Sinai and not as a thinker who addressed himself to the elimination of
restrictions which had become fetters upon initiative and enterprise in
his day. Basic human rights expressed by the constitutional conception
of `liberty' were equated with theories of laissez faire. The result was
that economic views of confined validity were treated by lawyers and
judges as though the Framers had enshrined them in the Constitution.
. . . The attitude which regarded any legislative encroachment upon the
existing economic order as infected with unconstitutionality led to
disrespect for legislative attempts to strengthen the wage-earners'
bargaining power. With that attitude as a premise, Adair v. United
States, 208 U.S. 161 (1908), and Coppage v. Kansas, 236 U.S. 1 (1915),
followed logically enough; not even Truax v. Corrigan, 257 U.S. 312
(1921), could be considered unexpected.''
In Adair and Coppage the Court voided statutes outlawing
``yellow dog'' contracts whereby, as a condition of obtaining
employment, a worker had to agree not to join or to remain a member of a
union; these laws, the Court ruled, impaired the employer's ``freedom of
contract''--the employer's unrestricted right to hire and fire. In
Truax, the Court on similar grounds invalidated an Arizona statute which
denied the use of injunctions to employers seeking to restrain picketing
and various other communicative actions by striking employees. And in
Wolff Co. v. Industrial Court, 262 U.S. 522 (1923); 267 U.S. 552 (1925)
and Dorchy v. Kansas, 264 U.S. 286 (1924), the Court had also ruled that
a statute compelling employers and employees to submit their
controversies over wages and hours to state arbitration was
unconstitutional as part of a system compelling employers and employees
to continue in business on terms not of their own making.
\124\301 U.S. 486 (1937).
\125\Prudential Ins. Co. v. Cheek, 259 U.S. 530 (1922). In
conjunction with its approval of this statute, the Court also sanctioned
judicial enforcement of a local policy rule which rendered illegal an
agreement of several insurance companies having a local monopoly of a
line of insurance, to the effect that no company would employ within two
years anyone who had been discharged from, or left, the service of any
of the others.
\126\Chicago, R.I. & P. Ry. v. Perry, 259 U.S. 548 (1922).
\127\Dorchy v. Kansas, 272 U.S. 306 (1926).
---------------------------------------------------------------------------
The significance of Senn v. Tile Layers Union\128\ as an
indicator of the range of the alteration of the Court's views concerning
the constitutionality of state labor legislation, derives in part from
the fact that the statute upheld therein was not appreciably different
from that voided in Truax v. Corrigan.\129\ Both statutes withheld the
remedy of injunction. Because, however, the invalidated act did not
contain the more liberal and also more precise definition of a labor
dispute set forth in the sustained enactment and, above all, did not
affirmatively purport to sanction peaceful picketing only, the Court was
enabled to maintain that Truax v. Corrigan, insofar as ``the statute
there in question was . . . applied to legalize conduct which was not
simply peaceful picketing,'' was distinguishable. The statute upheld in
Senn authorized the giving of publicity to labor disputes, declared
peaceful picketing and patrolling lawful, and prohibited the granting of
injunctions against such conduct; the statute was applied to deny an
injunction to a tiling contractor being picketed by a union because he
refused to sign a closed shop agreement containing a provision requiring
him to abstain from working in his own business as a tile layer or
helper. Inasmuch as the enhancement of job opportunities for members of
the union was a legitimate objective, the State was held competent to
authorize the fostering of that end by peaceful picketing, and the fact
that the sustaining of the union in its efforts at peaceful persuasion
might have the effect of preventing Senn from continuing in business as
an independent entrepreneur was declared to present an issue of public
policy exclusively for legislative determination.\130\
\128\301 U.S. 468 (1937).
\129\257 U.S. 312 (1921).
\130\Cases disposing of the contention that restraints on
picketing amount to a denial of freedom of speech and constitute
therefore a deprivation of liberty without due process of law have been
set forth under the First Amendment. See pp. 1102, 1121, supra.
---------------------------------------------------------------------------
Years later, the policy of many state legislatures had evolved
in the direction of attempting to control the abuse of the enormous
economic power that previously enacted protective measures had
[[Page 1593]]
enabled labor unions to amass, and here too the Court found restrictions
constitutional. Thus the Court upheld application of a state prohibition
on racial discrimination by unions, rejecting claims that the measure
interfered unlawfully with the union's right to choose its members and
abridged its property rights, and liberty of contract. Inasmuch as the
union ``[held] itself out to represent the general business needs of
employees'' and functioned ``under the protection of the State,'' the
union was deemed to have forfeited the right to claim exemption from
legislation protecting workers against discriminatory exclusion.\131\
\131\Railway Mail Ass'n v. Corsi, 326 U.S. 88, 94 (1945).
Justice Frankfurter, concurring, declared that ``the insistence by
individuals of their private prejudices . . ., in relations like those
now before us, ought not to have a higher constitutional sanction than
the determination of a State to extend the area of nondiscrimination
beyond that which the Constitution itself exacts.'' Id. at 98.
---------------------------------------------------------------------------
Similarly approved as constitutional in Lincoln Federal Labor
Union v. Northwestern Iron & Metal Co.\132\ and AFL v. American Sash &
Door Co.\133\ were state laws outlawing the closed shop. When labor
unions invoked in their own defense the freedom of contract doctrine
that hitherto had been employed to nullify legislation intended for
their protection, the Court, speaking through Justice Black, announced
its refusal ``to return . . . to . . . [a] due process philosophy that
has been deliberately discarded. . . . The due process clause,'' it
maintained, does not ``forbid a State to pass laws clearly designed to
safeguard the opportunity of nonunion workers to get and hold jobs, free
from discrimination against them because they are nonunion
workers.''\134\ Also in harmony with the last mentioned pair of cases is
UAW v. WERB,\135\ upholding enforcement of the Wisconsin Employment
Peace Act to proscribe as an unfair labor practice efforts of a union,
after collective bargaining negotiations had become deadlocked, to
coerce an employer through a ``slow-down'' in production achieved by the
frequent, irregular, and unannounced calling of union meetings during
working hours. ``No one,'' declared the Court, can question ``the
State's power to police coercion by . . . methods'' which involve
``considerable injury to
[[Page 1594]]
property and intimidation of other employees by threats.''\136\ Finally,
in Giboney v. Empire Storage Co.,\137\ the Court acknowledged that no
violation of the Constitution results when a state law forbidding
agreements in restraint of trade is construed by state courts as
forbidding members of a union of ice peddlers from peacefully picketing
a wholesale ice distributor's place of business for the sole purpose of
inducing the latter not to sell to nonunion peddlers.
\132\335 U.S. 525 (1949).
\133\335 U.S. 538 (1949).
\134\335 U.S. 525, 534, 537. In a lengthy opinion, in which he
registered his concurrence with both decisions, Justice Frankfurter set
forth extensive statistical data calculated to prove that labor unions
not only were possessed of considerable economic power but by virtue of
such power were no longer dependent on the closed shop for survival. He
would therefore leave to the legislatures the determination ``whether it
is preferable in the public interest that trade unions should be
subjected to state intervention or left to the free play of social
forces, whether experience has disclosed `union unfair labor practices,'
and if so, whether legislative correction is more appropriate than self-
discipline and pressure of public opinion. . . .'' Id. at 538, 549-50.
\135\336 U.S. 245 (1949).
\136\Id. at 253.
\137\336 U.S. 490 (1949). Other recent cases regulating
picketing are treated under the First Amendment. See pp. 1173-79, supra.
---------------------------------------------------------------------------
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Regulation of Business Enterprises: Rates, Charges, and Conditions
of Service
``Business Affected With a Public Interest''--In endeavoring to
measure the impact of the due process clause upon efforts by the States
to control the charges exacted by various businesses for their services,
the Supreme Court, almost from the inception of the Fourteenth
Amendment, devoted itself to the examination of two questions: (1)
whether the clause precluded that kind of regulation of certain types of
business, and (2) the nature of the restraint, if any, which this clause
imposed on state control of rates in the case of businesses as to which
such control existed. For a brief interval following the ratification of
the Fourteenth Amendment, the Supreme Court appears to have
underestimated the significance of the due process clause as a
substantive restraint on the power of States to fix rates chargeable by
an industry deemed appropriately subject to such controls. Thus, in Munn
v. Illinois,\138\ the first of the ``Granger Cases,'' in which maximum
charges established by a state legislature for Chicago grain elevator
companies were challenged, not as being confiscatory in character, but
rather as a regulation beyond the power of any state agency to impose,
the Court, in an opinion that was largely dictum, declared that the due
process clause did not operate as a safeguard against oppressive rates,
that if regulation was permissible, the severity thereof was within
legislative discretion and could be ameliorated only by resort to the
polls. Not much time elapsed, however, before the Court effected a
complete withdrawal from this position. By 1890 \139\ it had fully
converted the due process clause into a positive restriction which the
judicial branch was duty bound to enforce whenever state agencies sought
to impose rates which, in its estimation, were arbitrary or
unreasonable.
\138\94 U.S. 113 (1877).
\139\Chicago, M. & St.P. Ry. v. Minnesota, 134 U.S. 418 (1890).
---------------------------------------------------------------------------
[[Page 1595]]
In contrast to the speed with which the Court arrived at those
above mentioned conclusions, more than fifty years were to elapse before
it developed its currently applicable formula for determining the
propriety of subjecting specific businesses to state regulation of their
prices or charges. Prior to 1934, unless a business was ``affected with
a public interest,'' control of its prices, rates, or conditions of
service was viewed as an unconstitutional deprivation of liberty and
property without due process of law. During the period of its
application, however, this standard, ``business affected with a public
interest,'' never acquired any precise meaning, and as a consequence
lawyers were never able to identify all those qualities or attributes
which invariably distinguished a business so affected from one not so
affected. The most coherent effort by the Court was the following
classification prepared by Chief Justice Taft.\140\ ``(1) Those
[businesses] which are carried on under the authority of a public grant
of privileges which either expressly or impliedly imposes the
affirmative duty of rendering a public service demanded by any member of
the public. Such are the railroads, other common carriers and public
utilities. (2) Certain occupations, regarded as exceptional, the public
interest attaching to which, recognized from earliest times, has
survived the period of arbitrary laws by Parliament or Colonial
legislatures for regulating all trades and callings. Such are those of
the keepers of inns, cabs and grist mills. . . . (3) Businesses which
though not public at their inception may be fairly said to have risen to
be such and have become subject in consequence to some government
regulation. They have come to hold such a peculiar relation to the
public that this is superimposed upon them. In the language of the
cases, the owner by devoting his business to the public use, in effect
grants the public an interest in that use and subjects himself to public
regulation to the extent of that interest although the property
continues to belong to its private owner and to be entitled to
protection accordingly.''
\140\Wolff Packing Co. v. Industrial Court, 262 U.S. 522, 535-36
(1923).
---------------------------------------------------------------------------
Through application of this now outmoded formula the Court found
it possible to sustain state laws regulating charges made by grain
elevators,\141\ stockyards,\142\ and tobacco warehouses,\143\ and fire
insurance rates\144\ and commissions paid to fire insurance agents.\145\
Voided, because the businesses sought to be controlled
[[Page 1596]]
were deemed to be not so affected, were state statutes fixing the price
at which gasoline may be sold,\146\ or at which ticket brokers may
resell tickets purchased from theatres,\147\ and limiting competition in
the manufacture and sale of ice through the withholding of licenses to
engage therein.\148\
\141\Munn v. Illinois, 94 U.S. 113 (1877); Budd v. New York, 143
U.S. 517, 546 (1892); Brass v. North Dakota ex rel. Stoesser, 153 U.S.
391 (1894).
\142\Cotting v. Kansas City Stock Yards Co., 183 U.S. 79 (1901).
\143\Townsend v. Yeomans, 301 U.S. 441 (1937).
\144\German Alliance Ins. Co. v. Kansas, 233 U.S. 389 (1914);
Aetna Insurance Co. v. Hyde, 275 U.S. 440 (1928).
\145\O'Gorman & Young v. Hartford Ins. Co., 282 U.S. 251 (1931).
\146\Williams v. Standard Oil Co., 278 U.S. 235 (1929).
\147\Tyson & Bro. v. Banton, 273 U.S. 418 (1927).
\148\New State Ice Co. v. Liebmann, 285 U.S. 262 (1932). See
also Adams v. Tanner, 244 U.S. 590 (1917); Weaver v. Palmer Bro., 270
U.S. 402 (1926).
---------------------------------------------------------------------------
Nebbia v. New York.--In upholding, by a vote of five-to-four, a
depression-induced New York statute fixing prices at which fluid milk
might be sold, the Court in 1934 finally shelved the concept of ``a
business affected with a public interest.''\149\ Older decisions,
insofar as they negatived a power to control prices in businesses found
not ``to be clothed with a public use'' were now viewed as resting,
``finally, upon the basis that the requirements of due process were not
met because the laws were found arbitrary in their operation and effect.
Price control, like any other form of regulation, is [now]
unconstitutional only if arbitrary, discriminatory, or demonstrably
irrelevant to the policy the legislature is free to adopt, and hence an
unnecessary and unwarranted interference with individual liberty.''
Conceding that ``the dairy industry is not, in the accepted sense of the
phrase, a public utility,'' that is, a ``business affected with a public
interest,'' the Court in effect declared that price control henceforth
is to be viewed merely as an exercise by the government of its police
power, and as such is subject only to the restrictions which due process
imposes on arbitrary interference with liberty and property. Nor was the
Court disturbed by the fact that a ``scientific validity'' had been
claimed for the theories of Adam Smith relating to the ``price that will
clear the market.'' However much the minority might stress the
unreasonableness of any artificial state regulation interfering with
[[Page 1597]]
the determination of prices by ``natural forces,''\150\ the majority was
content to note that the ``due process clause makes no mention of
prices'' and that ``the courts are both incompetent and unauthorized to
deal with the wisdom of the policy adopted or the practicability of the
law enacted to forward it.''
\149\Nebbia v. New York, 291 U.S. 502, 531-32, 535-37, 539
(1934). In reaching this conclusion the Court might be said to have
elevated to the status of prevailing doctrine the views advanced in
previous decisions by dissenting Justices. Thus, Justice Stone,
dissenting in Ribnik v. McBride, 277 U.S. 350, 359-60 (1928), had
declared: ``Price regulation is within the State's power whenever any
combination of circumstances seriously curtails the regulative force of
competition so that buyers or sellers are placed at such a disadvantage
in the bargaining struggle that a legislature might reasonably
anticipate serious consequences to the community as a whole.'' In his
dissenting opinion in New State Ice Co. v. Liebmann, 285 U.S. 262, 302-
03 (1932), Justice Brandeis had also observed: ``The notion of a
distinct category of business `affected with a public interest'
employing property `devoted to a public use' rests upon historical
error. In my opinion the true principle is that the State's power
extends to every regulation of any business reasonably required and
appropriate for the public protection. I find in the due process clause
no other limitation upon the character or the scope of regulation
permissible.''
\150\Justice McReynolds, speaking for the dissenting Justices,
labelled the controls imposed by the challenged statute as a ``fanciful
scheme to protect the farmer against undue exactions by prescribing the
price at which milk disposed of by him at will may be resold.''
Intimating that the New York statute was as efficacious as a safety
regulation which required ``householders to pour oil on their roofs as a
means of curbing the spread of a neighborhood fire,'' Justice McReynolds
insisted that ``this Court must have regard to the wisdom of the
enactment,'' and must determine ``whether the means proposed have
reasonable relation to something within legislative power.'' 291 U.S.,
556, 558 (1934).
---------------------------------------------------------------------------
Having thus concluded that it is no longer the nature of the
business that determines the validity of a regulation of its rates or
charges but solely the reasonableness of the regulation, the Court had
little difficulty in upholding, in Olsen v. Nebraska,\151\ a state law
prescribing the maximum commission which private employment agencies may
charge. Rejecting the contentions of the employment agencies that the
need for such protective legislation had not been shown, the Court held
that differences of opinion as to the wisdom, need, or appropriateness
of the legislation ``suggest a choice which should be left to the
States;'' and that there was ``no necessity for the State to demonstrate
before us that evils persist despite the competition'' between public,
charitable, and private employment agencies. The older case of Ribnik v.
McBride,\152\ which had invalidated similar legislation upon the now
obsolete concept of a ``business affected with a public interest,'' was
expressly overruled.
\151\313 U.S. 236, 246 (1941).
\152\277 U.S. 350 (1928). Adams v. Tanner, 244 U.S. 590 (1917),
was disapproved in Ferguson v. Skrupa, 372 U.S. 726 (1963), and Tyson &
Bro. v. Banton, 273 U.S. 418 (1927), was effectively overruled in Gold
v. DiCarlo, 380 U.S. 520 (1965), without the Court hearing argument on
it.
---------------------------------------------------------------------------
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Judicial Review of Publicly Determined Rates and Charges
Development.--In Munn v. Illinois,\153\ its initial holding
concerning the applicability of the Fourteenth Amendment to governmental
price fixing,\154\ the Court not only asserted that governmental
regulation of rates charged by public utilities and allied businesses
was within the States' police power, but added that the determination of
such rates by a legislature was conclusive and not subject to judicial
review or revision. Expanding the range of per
[[Page 1598]]
missible governmental fixing of prices, the Court in Nebbia\155\
declared that prices established for business in general would invite
judicial condemnation only if ``arbitrary, discriminatory, or
demonstrably irrelevant to the policy the legislature is free to
adopt.'' The latter standard of judicial appraisal, as will be
subsequently noted, represents less of a departure from the principle
enunciated in the Munn case than that which the Court evolved, in the
years following 1877, to measure the validity of state imposed public
utility rates, and this difference in the judicial treatment of prices
and rates accordingly warrants an explanation at the outset. Unlike
operators of public utilities who, in return for the grant of certain
exclusive, virtually monopolistic privileges by the governmental unit
enfranchising them, must assume an obligation to provide continuous
service, proprietors of other businesses are in receipt of no similar
special advantages and accordingly are unrestricted in the exercise of
their right to liquidate and close their establishments. Owners of
ordinary businesses, therefore, at liberty to escape by dissolution the
consequences of publicly imposed charges deemed to be oppressive, have
thus far been unable to convince the courts that they too, no less than
public utilities, are in need of protection through judicial review.
\153\94 U.S. 113 (1877). See also Peik v. Chicago & Nw. Ry., 94
U.S. 164 (1877).
\154\Rate-making is deemed to be one species of price fixing.
FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 603 (1942).
\155\Nebbia v. New York, 291 U.S. 502, 539 (1934).
---------------------------------------------------------------------------
Consistently with its initial pronouncement in the Munn case
that reasonableness of compensation allowed under permissible rate
regulation presented a legislative rather than a judicial question, the
Court, in Davidson v. New Orleans,\156\ also rejected the contention
that, by virtue of the due process clause, businesses were nevertheless
entitled to ``just compensation'' for losses resulting from price
controls. Less than a decade was to elapse, however, before the Court,
appalled perhaps by prospective consequences of leaving business ``at
the mercy of the majority of the legislature,'' began to reverse itself.
Thus, in 1886, Chief Justice Waite, in the Railroad Commission
Cases,\157\ warned that ``this power to regulate is not a power to
destroy; [and] the State cannot do that in law which amounts to a taking
of property for public use without just compensation or without due
process of law;'' in other words, a confiscatory rate could not be
imposed. By treating ``due process of law'' and ``just compensation'' as
equivalents, the Court, contrary to its earlier holding in Davidson v.
New Orleans, was in effect asserting that the imposition of a rate so
low as to damage or diminish private property ceased to be an exercise
of a State's police
[[Page 1599]]
power and became one of eminent domain. Nevertheless, even the added
measure of protection afforded by the doctrine of the Railroad
Commission Cases proved inadequate to satisfy public utilities; the
doctrine allowed courts to intervene only to prevent legislative
imposition of a confiscatory rate, a rate so low as to be productive of
a loss and to amount to taking of property without just compensation.
The utilities sought nothing less than a judicial acknowledgment that
courts could review the ``reasonableness'' of legislative rates.
Although as late as 1888 the Court doubted that it possessed the
requisite power,\158\ it finally acceded to the wishes of the utilities
in 1890, and, in Chicago, M. & St.P. Railway v. Minnesota\159\ ruled as
follows: ``The question of the reasonableness of rates . . . , involving
as it does the element of reasonableness both as regards the company and
as regards the public, is eminently a question for judicial
investigation, requiring due process of law for its determination. If
the company is deprived of the power of charging rates for the use of
its property, and such deprivation takes place in the absence of an
investigation by judicial machinery, it is deprived of the lawful use of
its property, and thus, in substance and effect, of the property itself,
without due process of law. . . .''
\156\96 U.S. 97 (1878). See also Chicago, B. & Q. R.R. v.
Chicago, 166 U.S. 226 (1897).
\157\116 U.S. 307 (1886).
\158\Dow v. Beidelman, 125 U.S. 680 (1888).
\159\134 U.S. 418, 458 (1890).
---------------------------------------------------------------------------
Despite a last-ditch attempt to reconcile Munn with Chicago, M.
& St.P. Railway by confining application of the latter decision to cases
in which rates had been fixed by a commission and denying its pertinence
to rates directly imposed by a legislature,\160\ the Court in Reagan v.
Farmer's Loan and Trust Co.\161\ set at rest all lingering doubts over
the scope of judicial intervention by declaring that, ``if a carrier,''
in the absence of a legislative rate, ``attempted to charge a shipper an
unreasonable sum,'' the Court, in accordance with common law principles,
will pass on the reasonableness of its rates, and has ``jurisdiction
. . . to award the shipper any amount exacted . . . in excess of a
reasonable rate. . . . The province of the courts is not changed, nor
the limit of judicial inquiry altered, because the legislature instead
of a carrier prescribes the rates.''\162\ Reiterating virtually the same
principle in Smyth v. Ames,\163\ the
[[Page 1600]]
Court not only obliterated the distinction between confiscatory and
unreasonable rates but contributed the additional observation that the
requirements of due process are not met unless a court not only reviews
the reasonableness of a rate but also determines whether the rate
permits the utility to earn a fair return on a fair valuation of its
investment.
\160\Budd v. New York, 143 U.S. 517 (1892).
\161\154 U.S. 362, 397 (1894).
\162\Insofar as judicial intervention resulting in the
invalidation of legislatively imposed rates has involved carriers, it
should be noted that the successful complainant invariably has been the
carrier, not the shipper.
\163\169 U.S. 466 (1898). Of course the validity of rates
prescribed by a State for services wholly within its limits must be
determined wholly without reference to the interstate business done by a
public utility. Domestic business should not be made to bear the losses
on interstate business and vice versa. Thus a State has no power to
require the hauling of logs at a loss or at rates that are unreasonable,
even if a railroad receives adequate revenues from the intrastate long
haul and the interstate lumber haul taken together. On the other hand,
in determining whether intrastate passenger railway rates are
confiscatory, all parts of the system within the State (including
sleeping, parlor, and dining cars) should be embraced in the
computation, and the unremunerative parts should not be excluded because
built primarily for interstate traffic or not required to supply local
transportation needs. See Minnesota Rate Cases (Simpson v. Shepard), 230
U.S. 352, 434-35 (1913); Chicago, M. & St.P. Ry. v. Public Util. Comm'n,
274 U.S. 344 (1927); Groesbeck v. Duluth, S.S. & A. Ry., 250 U.S. 607
(1919). The maxim that a legislature cannot delegate legislative power
is qualified to permit creation of administrative boards to apply to the
myriad details of rate schedules the regulatory police power of the
State. To prevent a holding of invalid delegation of legislative power,
the legislature must constrain the board with a certain course of
procedure and certain rules of decision in the performance of its
functions, with which the agency must substantially comply to validate
its action. Wichita R.R. v. Public Util. Comm'n, 260 U.S. 48 (1922).
---------------------------------------------------------------------------
Limitations on Judicial Review.--Even while reviewing the
reasonableness of rates the Court recognized some limits on judicial
review. As early as 1894, the Court asserted: ``The courts are not
authorized to revise or change the body of rates imposed by a
legislature or a commission; they do not determine whether one rate is
preferable to another, or what under all circumstances would be fair and
reasonable as between the carriers and the shippers; they do not engage
in any mere administrative work; . . . [however, there can be no doubt]
of their power and duty to inquire whether a body of rates . . . is
unjust and unreasonable . . . and if found so to be, to restrain its
operation.''\164\ And later, in 1910, the Court made a similar
observation that courts may not, ``under the guise of exerting judicial
power, usurp merely administrative functions by setting aside'' an order
of the commission within the scope of the power delegated to such
commission, upon the ground that such power was unwisely or expediently
exercised.\165\
\164\Reagan v. Farmers' Loan & Trust Co., 154, U.S. 362, 397
(1894).
\165\ICC v. Illinois Cent. R.R., 215 U.S. 452, 470 (1910). This
statement, made in the context of federal ratemaking, appears to be
equally applicable to judicial review of state agency actions.
---------------------------------------------------------------------------
Also inferable from these early holdings, and effective to
restrict the bounds of judicial investigation, is a distinction between
factual questions that relate only to the wisdom or expediency of a rate
order, and are unreviewable, and other factual determinations that bear
on a commission's power to act and are inseparable from the
constitutional issue of confiscation, hence are reviewable. This
distinction was accorded adequate emphasis by the Court in
[[Page 1601]]
Louisville & Nashville R.R. v. Garrett,\166\ in which it declared that
``the appropriate question for the courts'' is simply whether a
``commission,'' in establishing a rate, ``acted within the scope of its
power'' and did not violate ``constitutional rights . . . by imposing
confiscatory requirements.'' The carrier contesting the rate was not
entitled to have a court also pass upon a question of fact regarding the
reasonableness of a higher rate the carrier charged prior to the order
of the commission. All that need concern a court, it said, is the
fairness of the proceeding whereby the commission determined that the
existing rate was excessive, but not the expediency or wisdom of the
commission's having superseded that rate with a rate regulation of its
own.
\166\231 U.S. 298, 310-13 (1913).
---------------------------------------------------------------------------
Likewise, with a view to diminishing the number of opportunities
courts have for invalidating rate regulations of state commissions, the
Court placed various obstacles in the path of the complaining litigant.
Thus, not only must a person challenging a rate assume the burden of
proof,\167\ but he must present a case of ``manifest constitutional
invalidity'';\168\ if, notwithstanding this effort, the question of
confiscation remains in doubt, no relief will be granted.\169\ Moreover,
even though a public utility which has petitioned a commission for
relief from allegedly confiscatory rates need not await indefinitely for
the commission's decision before applying to a court for equitable
relief,\170\ the court ought not to interfere in advance of any
experience of the practical result of such rates.\171\
\167\Des Moines Gas Co. v. Des Moines, 238 U.S. 153 (1915).
\168\Minnesota Rate Cases (Simpson v. Shepard), 230 U.S. 352,
452 (1913).
\169\Knoxville v. Water Co., 212 U.S. 1 (1909).
\170\Smith v. Illinois Bell Tel. Co., 270 U.S. 587 (1926).
\171\Willcox v. Consolidated Gas Co., 212 U.S. 19 (1909).
---------------------------------------------------------------------------
In the course of time, however, a distinction emerged between
ordinary factual determinations by state commissions and factual
determinations which were found to be inseparable from the legal and
constitutional issue of confiscation. In two older cases arising from
proceedings begun in lower federal courts to enjoin rates, the Court
initially adopted the position that it would not disturb findings of
fact insofar as these were supported by substantial evidence. Thus, in
San Diego Land Company v. National City,\172\ the Court declared that
after a legislative body had fairly and fully investigated and acted, by
fixing what it believed to be reasonable rates, the courts cannot step
in and set aside the action due to a different conclusion about the
reasonableness of the rates. ``Judicial
[[Page 1602]]
interference should never occur unless the case presents, clearly and
beyond all doubt, such a flagrant attack upon the rights of property
under the guise of regulation as to compel the court to say that the
rates prescribed will necessarily have the effect to deny just
compensation for private property taken for the public use.'' And in a
similar later case\173\ the Court expressed even more clearly its
reluctance to reexamine ordinary factual determinations. It is not bound
``to reexamine and weigh all the evidence . . . or to proceed according
to . . . [its] independent opinion as to what are proper rates. It is
enough if . . . [the Court] cannot say that it was impossible for a
fair-minded board to come to the result which was reached.''
\172\174 U.S. 739, 750, 754 (1899). See also Minnesota Rate
Cases (Simpson v. Shepard), 230 U.S. 352, 433 (1913).
\173\San Diego Land & Town Co. v. Jasper, 189 U.S. 439, 441, 442
(1903). See also Van Dyke v. Geary, 244 U.S. 39 (1917); Georgia Ry. v.
Railroad Comm'n, 262 U.S. 625, 634 (1923).
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Moreover, in reviewing orders of the Interstate Commerce
Commission, the Court, at least in earlier years,\174\ chose to be
guided by approximately the same standards it had originally formulated
for examining regulations of state commissions. The following excerpt
from its holding in ICC v. Union Pacific R.R.\175\ represents an
adequate summation of the law as it stood prior to 1920: ``[Q]uestions
of fact may be involved in the determination of questions of law, so
that an order, regular on its face, may be set aside if it appears that
the rate is so low as to be confiscatory . . . ; or if the Commission
acted so arbitrarily and unjustly as to fix rates contrary to evidence,
or without evidence to support it; or if the authority therein involved
has been exercised in such an unreasonable manner as to cause it to be
within the elementary rule that the substance, and not the shadow,
determines the validity of the exercise of the power. . . . In
determining these mixed questions of law and fact, the Court confines
itself to the ultimate question as to whether the Commission acted
within its power. It will not consider the expediency or wisdom of the
order, or whether, on like testimony, it would have made a similar
ruling . . . [The Commission's] conclusion, of course, is subject to
review, but when supported by evidence is accepted as final; not that
its decision . . . can be supported by a mere scintilla of proof--but
the courts will not examine the facts further than to determine whether
there was substantial evidence to sustain the order.''
\174\For its current position, see Crowell v. Benson, 285 U.S.
22 (1932).
\175\222 U.S. 541, 547-48 (1912). See also ICC v. Illinois Cent.
R.R., 215 U.S. 452, 470 (1910).
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The Ben Avon Case.--These standards of review were abruptly
rejected by the Court in Ohio Valley Co. v. Ben Avon Bor
[[Page 1603]]
ough,\176\ as being no longer sufficient to satisfy the requirements of
due process. Unlike previous confiscatory rate litigation, which had
developed from rulings of lower federal courts in injunctive
proceedings, this case reached the Supreme Court by way of appeal from a
state appellate tribunal;\177\ although the state court had in fact
reviewed the evidence and ascertained that the state commission's
findings of fact were supported by substantial evidence, it also
construed the statute providing for review as denying to state courts
``the power to pass upon the weight of such evidence.'' Largely on the
strength of this interpretation of the applicable state statute, the
Court held that when the order of a legislature, or of a commission,
prescribing a schedule of maximum future rates is challenged as
confiscatory, ``the State must provide a fair opportunity for submitting
that issue to a judicial tribunal for determination upon its own
independent judgment as to both law and facts; otherwise the order is
void because in conflict with the due process clause, Fourteenth
Amendment.''
\176\253 U.S. 287 (1920).
\177\Id. at 289. In injunctive proceedings, evidence is freshly
introduced whereas in the cases received on appeal from state courts,
the evidence is found within the record.
---------------------------------------------------------------------------
Without departing from the ruling previously enunciated in
Louisville & Nashville R.R. v. Garrett,\178\ that the failure of a State
to grant a statutory right of judicial appeal from a commission's
regulation is not violative of due process as long as relief is
obtainable by a bill in equity for injunction, the Court also held that
the alternative remedy of injunction expressly provided by state law did
not afford an adequate opportunity for testing judicially a confiscatory
rate order. It conceded the principle stressed by the dissenting
Justices that ``where a State offers a litigant the choice of two
methods of judicial review, of which one is both appropriate and
unrestricted, the mere fact that the other which the litigant elects is
limited, does not amount to a denial of the constitutional right to a
judicial review.''\179\
\178\231 U.S. 298 (1913).
\179\253 U.S. 287, 291, 295 (1920).
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History of the Valuation Question.--For almost fifty years the
Court wandered through a maze of conflicting formulas for valuing public
service corporation property only to emerge therefrom in 1944 at a point
not very far removed from Munn v. Illinois.\180\
[[Page 1605]]
By holding in FPC v. Natural Gas Pipeline Co.,\181\ that the
``Constitution does not bind rate-making bodies to the service of any
single formula or combination of formulas,'' and in FPC v. Hope Natu
[[Page 1606]]
ral Gas Co.,\182\ that ``it is the result reached not the method
employed which is controlling, . . . [that] it is not the theory but the
impact of the rate order which counts, [and that] if the total effect of
the rate order cannot be said to be unjust and unreasonable, judicial
inquiry under the Act is at an end,'' the Court, in effect, abdicated
from the position assumed in the Ben Avon case.\183\ Without
surrendering the judicial power to declare rates unconstitutional on
ground of a substantive deprivation of due process,\184\ the Court
announced that it would not overturn a result it deemed to be just
simply because ``the method employed [by a commission] to reach that
result may contain infirmities. . . . [A] Commission's order does not
become suspect by reason of the fact that it is challenged. It is the
product of expert judgment which carries a presumption of validity. And
he who would upset the rate order . . . carries the heavy burden of
making a convincing showing that it is invalid because it is unjust and
unreasonable in its consequences.''\185\ The Court recently reaffirmed
Hope Natural Gas's emphasis on the bottom line: ``[t]he Constitution
within broad limits leaves the States free to decide what rate-setting
methodology best meets their needs in balancing the interests of the
utility and the public.''\186\
\180\94 U.S. 113 (1877). Because some of these methods or
formulas, no longer required as a matter of constitutional law, may
continue to be used by state commissions in drafting rate orders, a
survey is provided below.
(1) Fair Value.--On the premise that a utility is entitled to
demand a rate schedule that will yield a ``fair return upon the value''
of the property which it employs for public convenience, the Court in
Smyth v. Ames, 169 U.S. 466, 546-47 (1898), held that determination of
such value necessitated consideration of at least such factors as ``the
original cost of construction, the amount expended in permanent
improvements, the amount and market value of . . . [the utility's] bonds
and stock, the present as compared with the original cost of
construction, [replacement cost], the probable earning capacity of the
property under particular rates prescribed by statute, and the sum
required to meet operating expenses.
(2) Reproduction Cost.--Prior to the demise in 1944 of the Smyth
v. Ames fair value formula, two of the components thereof were accorded
special emphasis with the second quickly surpassing the first in measure
of importance. These were: (1) the actual cost of the property (``the
original cost of construction together with the amount expended in
permanent improvements'') and (2) reproduction costs (``the present as
compared with the original cost of construction''). For varied
application of the reproduction cost formula, see San Diego Land Co. v.
National City, 174 U.S. 739, 757 (1899); San Diego Land & Town Co. v.
Jasper, 189 U.S. 439, 443 (1903); Willcox v. Consolidated Gas Co., 212
U.S. 19, 52 (1909); Minnesota Rate Cases (Simpson v. Shepard), 230 U.S.
352 (1913); Galveston Elec. Co. v. Galveston, 258 U.S. 388, 392 (1922);
Missouri ex rel. Southwestern Bell Tel. Co. v. Public Serv. Comm'n, 262
U.S. 276 (1923); Bluefield Co. v. Public Serv. Comm'n, 262 U.S. 679
(1923); Georgia Ry. v. Railroad Comm'n, 262 U.S. 625, 630 (1923);
McCardle v. Indianapolis Co., 272 U.S. 400 (1926); St Louis & O'Fallon
Ry. v. United States, 279 U.S. 461 (1929).
(3) Prudent Investment (Versus Reproduction Cost).--This method
of valuation, championed by Justice Brandeis in a separate opinion in
Missouri ex rel. Southwestern Bell Tel. Co. v. Public Serv. Comm'n, 262
U.S. 276, 291-92, 302, 306-07 (1923), was defined as follows: ``The
compensation which the Constitution guarantees an opportunity to earn is
the reasonable cost of conducting the business. Cost includes not only
operating expenses, but also capital charges. Capital charges cover the
allowance, by way of interest, for the use of capital . . . the
allowance for the risk incurred; and enough more to attract capital.
. . . Where the financing has been proper, the cost to the utility of
the capital, required to construct, equip and operate its plant, should
measure the rate of return which the Constitution guarantees opportunity
to earn.'' Advantages to be derived from ``adoption of the amount
prudently invested as the rate base and the amount of the capital charge
as the measure of the rate of return'' would, according to Justice
Brandeis, be nothing less than the attainment of a ``basis for decision
which is certain and stable. The rate base would be ascertained as a
fact, not determined as a matter of opinion. It would not fluctuate with
the market price of labor, or materials, or money.
As a method of valuation, the prudent investment theory was not
accorded any acceptance until the Depression of the 1930's. The sharp
decline in prices which occurred during this period doubtless
contributed to the loss of affection for reproduction costs. In Los
Angeles Gas Co. v. Railroad Comm'n, 289 U.S. 287 (1933) and Railroad
Comm'n v. Pacific Gas Co., 302 U.S. 388, 399, 405 (1938), the Court
upheld respectively a valuation from which reproduction costs had been
excluded and another in which historical cost served as the rate base.
Later, in 1942, when in FPC v. Natural Gas Pipeline Co., 315 U.S. 575,
the Court further emphasized its abandonment of the reproduction cost
factor, there developed momentarily the prospect that prudent investment
might be substituted. This possibility was quickly negatived, however,
by the Hope Gas case, (FPC v. Hope Natural Gas Co., 320 U.S. 591
(1944)), which dispensed with the necessity of relying upon any formula
for the purpose of fixing valid rates.
(4) Depreciation.--No less indispensable to the determination of
the fair value mentioned in Smyth v. Ames was the amount of depreciation
to be allowed as a deduction from the measure of cost employed, whether
the latter be actual cost, reproduction cost, or any other form of cost
determination. Although not mentioned in Smyth v. Ames, the Court gave
this item consideration in Knoxville v. Water Co., 212 U.S. 1, 9-10
(1909); but notwithstanding its early recognition as an allowable item
of deduction in determining value, depreciation continued to be the
subject of controversy arising out of the difficulty of ascertaining it
and of computing annual allowances to cover the same. Indicative of such
controversy was the disagreement as to whether annual allowances shall
be in such amount as will permit the replacement of equipment at current
costs, i.e., present value, or at original cost. In the Hope Gas case,
320 U.S. at 606, the Court reversed United Railways v. West, 280 U.S.
234, 253-254 (1930), insofar as that holding rejected original cost as
the basis of annual depreciation allowances.
(5) Going Concern Value and Good Will.--Whether intangibles were
to be included in valuation was not passed upon in Smyth v. Ames, but
shortly thereafter, in Des Moines Gas Co. v. Des Moines, 238 U.S. 153,
165 (1915), the Court declared it to be self-evident ``that there is an
element of value in an assembled and established plant, doing business
and earning money, over one not thus advanced, . . . [and that] this
element of value is a property right, and should be considered in
determining the value of the property, upon which the owner has a right
to make a fair return. . . .'' Generally described as going concern
value, this element has never been precisely defined by the Court. In
its latest pronouncement on the subject, uttered in FPC v. Natural Gas
Pipeline Co., 315 U.S. 575, 589 (1942), the Court denied that there is
any ``constitutional requirement that going concern value, even when it
is an appropriate element to be included in a rate base, must be
separately stated and appraised as such. . . . [Valuations have often
been sustained] without separate appraisal of the going concern element.
. . . When that has been done, the burden rests on the regulated company
to show that this item has neither been adequately covered in the rate
base nor recouped from prior earnings of the business.'' Franchise value
and good will, on the other hand, have been consistently excluded from
valuation; the latter presumably because a utility invariably enjoys a
monopoly and consumers have no choice in the matter of patronizing it.
The latter proposition has been developed in the following cases:
Willcox v. Consolidated Gas Co., 212 U.S. 19 (1909); Des Moines Gas Co.
v. Des Moines, 238 U.S. 153, 163-64 (1915); Galveston Elec. Co. v.
Galveston, 258 U.S. 388 (1922); Los Angeles Gas Co. v. Railroad Comm'n,
289 U.S. 287, 313 (1933).
(6) Salvage Value.--It is not a constitutional error to
disregard theoretical reproduction cost for a plant which ```no
responsible person would think of reproducing.'' Accordingly, where, due
to adverse conditions, a street-surface railroad had lost all value
except for scrap or salvage, it was permissible for a commission, as the
Court held in Market Street Ry. v. Railroad Comm'n, 324 U.S. 548, 562,
564 (1945), to use as a rate the price at which the utility offered to
sell its property to a citizen. Moreover, the Commission's order was not
invalid even through under the prescribed rate the utility would operate
at a loss; for the due process clause cannot be invoked to protect a
public utility against business hazards, such as the loss of, or failure
to obtain patronage. On the other hand, in the case of a water company
whose franchise has expired, but where there is no other source of
supply, its plant should be valued as actually in use rather than at
what the property would bring for some other use in case the city should
build its own plant. Denver v. Denver Union Water Co., 246 U.S. 178
(1918).
(7) Past Losses and Gains.--``The Constitution [does not]
require that the losses of . . . [a] business in one year shall be
restored from future earnings by the device of capitalizing the losses
and adding them to the rate base on which a fair return and depreciation
allowance is to be earned.'' FPC v. Natural Gas Pipeline Co., 315 U.S.
575, 590 (1942). Nor can past losses be used to enhance the value of the
property to support a claim that rates for the future are confiscatory,
Galveston Elec. Co. v. Galveston, 258 U.S. 388 (1922), any more than
profits of the past can be used to sustain confiscatory rates for the
future Newton v. Consolidated Gas Co., 258 U.S. 165, 175 (1922); Board
of Comm'rs v. New York Tel. Co., 271 U.S. 23, 31-32 (1926).
\181\315 U.S. 575, 586 (1942).
\182\320 U.S. 591, 602 (1944). Although this and the previously
cited decision arose out of controversies involving the National Gas Act
of 1938, the principles laid down therein are believed to be applicable
to the review of rate orders of state commissions, except insofar as the
latter operate in obedience to laws containing unique standards or
procedures.
\183\Ohio Valley Co. v. Ben Avon Borough, 253 U.S. 287 (1920).
\184\In FPC v. Natural Gas Pipeline Co., 315 U.S. 575, 599
(1942), Justices Black, Douglas, and Murphy, in a concurring opinion,
proposed to travel the road all the way back to Munn v. Illinois, and
deprive courts of the power to void rates simply because they deem the
latter to be unreasonable. In a concurring opinion, in Driscoll v.
Edison Co., 307 U.S. 104, 122 (1939), Justice Frankfurter temporarily
adopted a similar position; he declared that ``the only relevant
function of law . . . [in rate controversies] is to secure observance of
those procedural safeguards in the exercise of legislative powers which
are the historic foundations of due process.'' However, in his dissent
in FPC v. Hope Natural Gas Co., 320 U.S. 591, 625 (1944), he
disassociated himself from this proposal, and asserted that ``it was
decided [more than fifty years ago] that the final say under the
Constitution lies with the judiciary.''
\185\FPC v. Hope Natural Gas Co., 320 U.S. 591, 602 (1944), See
also Wisconsin v. FPC, 373 U.S. 294, 299, 317, 326 (1963), wherein the
Court tentatively approved an ``area rate approach,'' that is ``the
determination of fair prices for gas, based on reasonable financial
requirements of the industry, for . . . the various producing areas of
the country,'' and with rates being established on an area basis rather
than on an individual company basis. Four dissenters, Justices Clark,
Black, Brennan, and Chief Justice Warren, labelled area pricing a ``wild
goose chase,'' and stated that the Commission had acted in an arbitrary
and unreasonable manner entirely outside traditional concepts of
administrative due process. Area rates were approved in Permian Basin
Area Rate Cases, 390 U.S. 747 (1968).
\186\Duquesne Light Co. v. Barasch, 488 U.S. 299, 316 (1989)
(rejecting takings challenge to Pennsylvania rule preventing utilities
from amortizing costs of canceled nuclear plants).
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[[Page 1607]]
In dispensing with the necessity of observing the old formulas
for rate computation, the Court did not articulate any substitute
guidance for ascertaining whether a so-called end result is
unreasonable. It did intimate that rate-making ``involves a balancing of
the investor and consumer interests,'' which does not, however,
```insure that the business shall produce net revenues'. . . . From the
investor or company point of view it is important that there be enough
revenue not only for operating expenses but also for the capital costs
of the business. These include service on the debt and dividends on the
stock. . . . By that standard the return to the equity owner should be
commensurate with returns on investments in other enterprises having
corresponding risks. That return, moreover, should be sufficient to
assure confidence in the financial integrity of the enterprise, so as to
maintain its credit and to attract capital.''\187\
\187\FPC v. Hope Natural Gas Co., 320 U.S. 591, 603 (1944)
(citing Chicago G.T. Ry. v. Wellman, 143 U.S. 339, 345-46 (1892));
Missouri ex rel. Southwestern Bell Tel. Co. v. Public Serv. Comm'n, 262
U.S. 276, 291 (1923).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Regulation of Public Utilities (Other Than Rates)
In General.--By virtue of the nature of the business they carry
on and the public's interest in it, public utilities are subject to
state regulation exerted either directly by the legislature or by duly
authorized administrative bodies.\188\ But because the property of
public utilities remains under the full protection of the Constitution,
it follows that whenever the state regulates in a manner that infringes
the right of ownership in what the Court considers to be an
``arbitrary'' or ``unreasonable'' way, due process is violated.\189\
Thus, a city cannot take possession of the equipment of a street railway
company, the franchise of which has expired,\190\ although it may
subject the company to the alternative of accepting an inadequate price
for its property or of ceasing operations and removing its property from
the streets.\191\ Likewise, a city desirous of establishing a lighting
system of its own may not remove, without compensation, the fixtures of
a lighting company already occupying the streets under a franchise,\192\
although it may compete with a com
[[Page 1608]]
pany that has no exclusive charter.\193\ The property of a telegraph
company is not illegally taken, however, by a municipal ordinance that
demands, as a condition for the establishment of poles and conduits in
city streets, that the city's wires be carried free of charge, and which
provides for the moving of the conduits, when necessary, at company
expense.\194\
\188\Atlantic Coast Line R.R. v. Corporation Comm'n, 206 U.S. 1,
19 (1907) (citing Chicago, B. & Q. R.R. v. Iowa, 94 U.S. 155 (1877)).
See also Prentis v. Atlantic Coast Line, 211 U.S. 210 (1908); Denver &
R.G. R.R. v. Denver, 250 U.S. 241 (1919).
\189\Chicago & G.T. Ry. v. Wellman, 143 U.S. 339, 344 (1892);
Mississippi R.R. Comm'n v. Mobile & Ohio R.R., 244 U.S. 388, 391 (1917).
See also Missouri Pacific Ry. v. Nebraska, 217 U.S. 196 (1910);
Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405, 415 (1935).
\190\Cleveland Electric Ry. v. Cleveland, 204 U.S. 116 (1907).
\191\Detroit United Ry. v. Detroit, 255 U.S. 171 (1921). See
also Denver v. New York Trust Co., 229 U.S. 123 (1913).
\192\Los Angeles v. Los Angeles Gas Corp., 251 U.S. 32 (1919).
\193\Newburyport Water Co. v. Newburyport, 193 U.S. 561 (1904).
See also Skaneateles Water Co. v. Skaneateles, 184 U.S. 354 (1902);
Helena Water Works Co. v. Helena, 195 U.S. 383 (1904); Madera Water
Works v. Madera, 228 U.S. 454 (1913).
\194\Western Union Tel. Co. v. Richmond, 224 U.S. 160 (1912).
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And, the fact that a State, by mere legislative or
administrative fiat, cannot convert a private carrier into a common
carrier will not protect a foreign corporation which has elected to
enter a State the constitution and laws of which require that it operate
its local private pipe line as a common carrier. Such foreign
corporation is viewed as having waived its constitutional right to be
secure against imposition of conditions which amount to a taking of
property without due process of law.\195\
\195\Pierce Oil Corp. v. Phoenix Ref. Co., 259 U.S. 125 (1922).
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Compulsory Expenditures: Grade Crossings, and the Like.--
Generally, the enforcement of uncompensated obedience to a regulation
for the public health and safety is not an unconstitutional taking of
property without due process of law.\196\ Thus, where the applicable
rule so required at the time of the granting of its charter, a water
company may be compelled to furnish connections at its own expense to
one residing on an ungraded street in which it voluntarily laid its
lines.\197\ However, if pipe and telephone lines are located on a right
of way owned by a pipeline company, the latter cannot, without a denial
of due process, be required to relocate such equipment at its own
expense,\198\ but if its pipes are laid under city streets, a gas
company validly may be obligated to assume the cost of moving them to
accommodate a municipal drainage system.\199\
\196\Atlantic Coast Line R.R. v. Goldsboro, 232 U.S. 548, 558
(1914). See also Chicago, B. & Q. R.R. v. Chicago, 166 U.S. 226, 255
(1897); Chicago, B. & Q. Ry. v. Drainage Comm'rs, 200 U.S. 561, 591-92
(1906); New Orleans Pub. Serv. v. New Orleans, 281 U.S. 682 (1930).
\197\Consumers' Co. v. Hatch, 224 U.S. 148 (1912).
\198\Panhandle Eastern Pipe Line Co. v. Highway Comm'n, 294 U.S.
613 (1935).
\199\New Orleans Gas Co. v. Drainage Comm'n, 197 U.S. 453
(1905).
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To require a turnpike company, as a condition of its taking
tolls, to keep its road in repair and to suspend collection thereof,
conformably to a state statute, until the road is put in good order,
does not take property without due process of law, notwithstanding the
fact that present patronage does not yield revenue sufficient to
[[Page 1609]]
maintain the road in proper condition.\200\ Nor is a railroad bridge
company unconstitutionally deprived of its property when, in the absence
of proof that the addition will not yield a reasonable return, it is
ordered to widen its bridge by inclusion of a pathway for pedestrians
and a roadway for vehicles.\201\
\200\Norfolk Turnpike Co. v. Virginia, 225 U.S. 264 (1912).
\201\International Bridge Co. v. New York, 254 U.S. 126 (1920).
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Similarly upheld against due process/taking claims were
requirements that railroads repair a viaduct under which they
operate,\202\ or reconstruct a bridge or provide means for passing water
for drainage through their embankment,\203\ or sprinkle that part of the
street occupied by them.\204\ On the other hand, a requirement that an
underground cattle-pass is be constructed, not as a safety measure but
as a means of sparing the farmer the inconvenience attendant upon the
use of an existing and adequate grade crossing, was held to be a
prohibited taking of the railroad's property for private use.\205\ As to
grade crossing elimination, the rule is well established that the state
may exact from railroads the whole, or such part, of the cost thereof as
it deems appropriate, even though commercial highway users, who make no
contribution whatsoever, benefit from such improvements.
\202\Chicago, B. & Q. R.R. v. Nebraska, 170 U.S. 57 (1898).
\203\Chicago, B. & Q. Ry. v. Drainage Comm'n, 200 U.S. 561
(1906); Chicago & Alton R.R. v. Tranbarger, 238 U.S. 67 (1915); Lake
Shore & Mich. So. Ry. v. Clough, 242 U.S. 375 (1917).
\204\Pacific Gas Co. v. Police Court, 251 U.S. 22 (1919).
\205\Chicago, St. P., Mo. & O. Ry. v. Holmberg, 282 U.S. 162
(1930).
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While the power of the State in this respect is not unlimited,
and an ``arbitrary'' and ``unreasonable'' imposition may be set aside,
the Court's modern approach to substantive due process analysis makes
this possibility far less likely than it once was. Distinguishing a 1935
case invalidating a statutorily mandated 50% cost sharing which in
effect prevented particularized findings of reasonableness (and which
contained language suggesting that railroads could not fairly be
required to subsidize competitive transportation modes),\206\ the Court
in 1953 ruled that the costs of grade separation improvements need not
be allocated solely on the basis of benefits that would accrue to
railroad property.\207\ While the Court cautioned that ``allocation of
costs must be fair and reasonable,'' it also took an approach very
deferential to local governmental decisions, stating that in the
exercise of the police power to meet transportation, safety, and
convenience needs of a growing community,
[[Page 1610]]
``the cost of such improvements may be allocated all to the railroads.''
\206\Nashville, C. & St. L. Ry. v. Walters, 294 U.S. 405 (1935).
See also Lehigh Valley R.R. v. Commissioners, 278 U.S. 24, 35 (1928)
(upholding imposition of grade crossing costs on a railroad although
``near the line of reasonableness,'' and reiterating that ``unreasonably
extravagant'' requirements would be struck down).
\207\Atchison T. & S.F. Ry. v. Public Util. Comm'n, 346 U.S.
346, 352 (1953).
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Compellable Services.--The primary duty of a public utility
being to serve on reasonable terms all those who desire the service it
renders, it follows that a company cannot pick and choose and elect to
serve only those portions of its territory which it finds most
profitable, leaving the remainder to get along without the service which
it alone is in a position to give. Compelling a gas company to continue
serving specified cities as long as it continues to do business in other
parts of the State entails therefore no unconstitutional
deprivation.\208\ Likewise, a railway may be compelled to continue the
service of a branch or part of a line although the operation involves a
loss.\209\ But even though a utility, as a condition of enjoyment of
powers and privileges granted by the State, is under a continuing
obligation to provide reasonably adequate service, and even though that
obligation cannot be avoided merely because performance occasions
financial loss, yet if a company is at liberty to surrender its
franchise and discontinue operations, it cannot be compelled to continue
at a loss.\210\
\208\United Gas Co. v. Railroad Comm'n, 278 U.S. 300, 308-09
(1929). See also New York ex rel. Woodhaven Gas Light Co. v. Public
Serv. Comm'n, 269 U.S. 244 (1925); New York & Queens Gas Co. v. McCall,
245 U.S. 345 (1917).
\209\Missouri Pac. Ry. v. Kansas, 216 U.S. 262 (1910);
Chesapeake & Ohio Ry. v. Public Serv. Comm'n, 242 U.S. 603 (1917); Fort
Smith Traction Co. v. Bourland, 267 U.S. 330 (1925).
\210\Chesapeake & Ohio Ry. v. Public Serv. Comm'n, 242 U.S. 603,
607 (1917); Brooks-Scanlon Co. v. Railroad Comm'n, 251 U.S. 396 (1920);
Railroad Comm'n v. Eastern Tex. R.R., 264 U.S. 79 (1924); Broad River
Co. v. South Carolina ex rel. Daniel, 281 U.S. 537 (1930).
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Pursuant to the principle that a State may require railroads to
provide adequate facilities suitable for the convenience of the
communities they serve,\211\ such carriers have been obligated to
establish stations at proper places for the convenience of patrons,\212\
to stop all their intrastate trains at county seats,\213\ to run a
regular passenger train instead of a mixed passenger and freight
train,\214\ to furnish passenger service on a branch line previously
devoted exclusively to carrying freight,\215\ to restore a siding used
principally by a particular plant but available generally as a public
track, and to continue, even though not profitable by itself,
sidetrack\216\ as well as the upkeep of a switch track leading from its
main line to
[[Page 1611]]
industrial plants.\217\ However, a statute requiring a railroad without
indemnification to install switches on the application of owners of
grain elevators erected on its right-of-way was held void.\218\ Whether
a state order requiring transportation service is to be viewed as
reasonable may necessitate consideration of such facts as the likelihood
that pecuniary loss will result to the carrier, the nature, extent and
productiveness of the carrier's intrastate business, the character of
the service required, the public need for it, and its effect upon
service already being rendered.\219\ Requirements for service having no
substantial relation to transportation have been voided, as in the case
of an order requiring railroads to maintain cattle scales to facilitate
trading in cattle,\220\ and a prohibition against letting down an
unengaged upper berth while the lower berth was occupied.\221\
\211\Atchison, T. & S.F. Ry. v. Railroad Comm'n, 283 U.S. 380,
394-95 (1931).
\212\Minneapolis & St. L. R.R. v. Minnesota, 193 U.S. 53 (1904).
\213\Gladson v. Minnesota, 166 U.S. 427 (1897).
\214\Missouri Pac. Ry. v. Kansas, 216 U.S. 262 (1910).
\215\Chesapeake & Ohio Ry. v. Public Serv. Comm'n, 242 U.S. 603
(1917).
\216\Lake Erie & W. R.R. v. Public Util. Comm'n, 249 U.S. 422
(1919); Western & Atlantic R.R. v. Public Comm'n, 267 U.S. 493 (1925).
\217\Alton R.R. v. Illinois Commerce Comm'n, 305 U.S. 548
(1939).
\218\Missouri Pacific Ry. v. Nebraska, 217 U.S. 196 (1910).
\219\Chesapeake & Ohio Ry. v. Public Serv. Comm'n, 242 U.S. 603,
607 (1917).
\220\Great Northern Ry. v. Minnesota, 238 U.S. 340 (1915); Great
Northern Ry. Co. v. Cahill, 253 U.S. 71 (1920).
\221\Chicago, M. & St. P. R.R. v. Wisconsin, 238 U.S. 491
(1915).
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``Since the decision in Wisconsin, M. & P.R. Co. v. Jacobson,
179 U.S. 287 (1900), there can be no doubt of the power of a State,
acting through an administrative body, to require railroad companies to
make track connections. But manifestly that does not mean that a
Commission may compel them to build branch lines, so as to connect roads
lying at a distance from each other; nor does it mean that they may be
required to make connections at every point where their tracks come
close together in city, town and country, regardless of the amount of
business to be done, or the number of persons who may utilize the
connection if built. The question in each case must be determined in the
light of all the facts and with a just regard to the advantage to be
derived by the public and the expense to be incurred by the carrier.
. . . If the order involves the use of property needed in the discharge
of those duties which the carrier is bound to perform, then, upon proof
of the necessity, the order will be granted, even though `the furnishing
of such necessary facilities may occasion an incidental pecuniary loss.'
. . . Where, however, the proceeding is brought to compel a carrier to
furnish a facility not included within its absolute duties, the question
of expense is of more controlling importance. In determining the
reasonableness of such an order the Court must consider all the facts--
the places and persons interested, the vol
[[Page 1612]]
ume of business to be affected, the saving in time and expense to the
shipper, as against the cost and loss to the carrier.''\222\
\222\Washington ex rel. Oregon R.R. & Nav. Co. v. Fairchild, 224
U.S. 510, 528-29 (1912). See also Michigan Cent. R.R. v. Michigan R.R.
Comm'n, 236 U.S. 615 (1915); Seaboard Air Line R.R. v. Georgia R.R.
Comm'n, 240 U.S. 324, 327 (1916).
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Although a carrier is under a duty to accept goods tendered at
its station, it cannot be required, upon payment simply for the service
of carriage, to accept cars offered at an arbitrary connection point
near its terminus by a competing road seeking to reach and use the
former's terminal facilities. Nor may a carrier be required to deliver
its cars to connecting carriers without adequate protection from loss or
undue detention or compensation for their use.\223\ But a carrier may be
compelled to interchange its freight cars with other carriers under
reasonable terms,\224\ and to accept, for reshipment over its lines to
points within the State, cars already loaded and in suitable
condition.\225\
\223\Louisville & Nashville R.R. v. Stock Yards Co., 212 U.S.
132 (1909).
\224\Michigan Cent. R.R. v. Michigan R.R. Comm'n, 236 U.S. 615
(1915).
\225\Chicago, M. & St. P. Ry. v. Iowa, 233 U.S. 334 (1914).
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Due process is not denied when two carriers, who wholly own and
dominate a small connecting railroad, are prohibited from exacting
higher charges from shippers accepting delivery over said connecting
road than are collected from shippers taking delivery at the terminals
of said carriers.\226\ Nor is it ``unreasonable'' or ``arbitrary'' to
require a railroad to desist from demanding advance payment on
merchandise received from one carrier while it accepts merchandise of
the same character at the same point from another carrier without such
prepayment.\227\
\226\Chicago, M. & St. P. Ry. v. Minneapolis Civic Ass'n, 247
U.S. 490 (1918). Nor are railroads denied due process when they are
forbidden to exact a greater charge for a shorter distance than for a
longer distance. Louisville & Nashville R.R. v. Kentucky, 183 U.S. 503,
512 (1902); Missouri Pacific Ry. v. McGrew Coal Co., 244 U.S. 191
(1917).
\227\Wadley Southern Ry. v. Georgia, 235 U.S. 651 (1915).
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Safety Regulations Applicable to Railroads.--Governmental power
to regulate railroads in the interest of safety has long been conceded.
The following regulations have been upheld: a prohibition against
operation on certain streets,\228\ restrictions on speed, operations,
and the like, in business sections,\229\ requirement of construction of
a sidewalk across a right of way,\230\ or removal of a track crossing at
a thoroughfare,\231\ compelling the presence of a flagman at a crossing
notwithstanding that automatic devices might be cheaper and better,\232\
compulsory examination of
[[Page 1613]]
employees for color blindness,\233\ full crews on certain trains,\234\
specification of a type of locomotive headlight,\235\ safety appliance
regulations,\236\ and a prohibition on the heating of passenger cars
from stoves or furnaces inside or suspended from the cars.\237\
\228\Railroad Co. v. Richmond, 96 U.S. 521 (1878).
\229\Atlantic Coast Line R.R. v. Goldsboro, 232 U.S. 548 (1914).
\230\Great Northern Ry. v. Minnesota ex rel. Clara City, 246
U.S. 434 (1918).
\231\Denver & R. G. R.R. v. Denver, 250 U.S. 241 (1919).
\232\Nashville, C. & St. L. Ry. v. White, 278 U.S. 456 (1929).
\233\Nashville, C. & St. L. Ry. v. Alabama, 128 U.S. 96 (1888).
\234\Chicago, R.I. & P. Ry. v. Arkansas, 219 U.S. 453 (1911);
St. Louis, I. Mt. & So. Ry. v. Arkansas, 240 U.S. 518 (1916); Missouri
Pacific R.R. v. Norwood, 283 U.S. 249 (1931); Firemen v. Chicago, R.I. &
P.R.R. 393 U.S. 129 (1968).
\235\Atlantic Coast Line R.R. v. Georgia, 234 U.S. 280 (1914).
\236\Erie R.R. v. Solomon, 237 U.S. 427 (1915).
\237\New York, N.H. and H.R.R. v. New York, 165 U.S. 628 (1897).
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Statutory Liabilities and Penalties Applicable to Railroads.--A
statute making the initial carrier,\238\ or the connecting or delivering
carrier,\239\ liable to the shipper for the nondelivery of goods is not
unconstitutional; nor is a law which provides that a railroad shall be
responsible in damages to the owner of property injured by fire
communicated by its locomotive engines and which grants the railroad an
insurable interest in such property along its route and authority to
procure insurance against such liability.\240\ Equally consistent with
the requirements of due process are the following two enactments: the
first, imposing on all common carriers a penalty for failure to settle
within a reasonable specified period claims for freight lost or damaged
in shipment and conditioning payment of that penalty upon recovery by
the claimant in a subsequent suit of more than the amount tendered,\241\
and the second, levying double damages and an attorney's fee upon a
railroad for failure to pay within a reasonable time after demand the
amount claimed by an owner for stock injured or killed. However, the
Court subsequently limited its approval of the latter statute to cases
in which the plaintiff had not demanded more than he recovered in
court;\242\ when the penalty is exacted in a case in which the plaintiff
initially demanded more than he sued for and recovered, a defendant
railroad is arbitrarily deprived of its property for refusing to meet
the initial excessive demand.\243\
\238\Chicago & N.W. Ry. v. Nye Schneider Fowler Co., 260 U.S. 35
(1922). See also Yazoo & Miss. V.R.R. v. Jackson Vinegar Co., 226 U.S.
217 (1912); cf. Adams Express Co. v. Croninger, 226 U.S. 491 (1913).
\239\Atlantic Coast Line R.R. v. Glenn, 239 U.S. 388 (1915).
\240\St. Louis & San Francisco Ry. v. Mathews, 165 U.S. 1
(1897).
\241\Chicago & N.W. Ry. v. Nye Schneider Fowler Co., 260 U.S. 35
(1922).
\242\Kansas City Ry. v. Anderson, 233 U.S. 325 (1914).
\243\St. Louis, I. Mt. & So. Ry. v. Wynne, 224 U.S. 354 (1912).
See also Chicago, M. & St. P. Ry. v. Polt, 232 U.S. 165 (1914).
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Also invalidated during this period of heightened judicial
scrutiny was a penalty imposed on a carrier that had collected
transportation charges in excess of established maximum rates; the
penalty of $500 liquidated damages plus a reasonable attorney's fee
[[Page 1614]]
was disproportionate to actual damages and was exacted under conditions
not affording the carrier an adequate opportunity to safely test the
validity of the rates before liability attached.\244\ Where the carrier
did have an opportunity to test the reasonableness of the rate, however,
and collection of an overcharge did not proceed from any belief that the
rate was invalid, the Court indicated that the validity of the penalty
imposed need not be tested by comparison with the amount of the
overcharge. Inasmuch as a penalty is imposed as punishment for violation
of law, the legislature may adjust its amount to the public wrong rather
than the private injury, and the only limitation which the Fourteenth
Amendment imposes is that the penalty prescribed shall not be ``so
severe and oppressive as to be wholly disproportioned to the offense and
obviously unreasonable.'' In accordance with the latter standard, a
statute granting an aggrieved passenger (who recovered $100 for an
overcharge of 60 cents) the right to recover in a civil suit not less
than $50 nor more than $300 plus costs and a reasonable attorney's fee
was upheld.\245\
\244\Missouri Pacific Ry. v. Tucker, 230 U.S. 340 (1913).
\245\St. Louis, I. Mt. & So. Ry. v. Williams, 251 U.S. 63, 67
(1919).
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For like reasons, the Court also upheld a statute requiring
railroads to erect and maintain fences and cattle guards, and making
them liable in double the amount of damages for their failure to so
maintain them,\246\ and another law that established a minimum rate of
speed for delivery of livestock and that required every carrier
violating the requirement to pay the owner of the livestock the sum of
$10 per car per hour.\247\ On the other hand, the Court struck down as
arbitrary and oppressive assessment of fines of $100 per day (and
aggregating $3,600) on a telephone company that, in accordance with its
established and uncontested regulations, suspended the service of a
patron in arrears.\248\
\246\Missouri Pacific Ry. v. Humes, 115 U.S. 512 (1885);
Minneapolis Ry. v. Beckwith, 129 U.S. 26 (1889).
\247\Chicago, B. & Q. R.R. v. Cram, 228 U.S. 70 (1913).
\248\Southwestern Tel. Co. v. Danaher, 238 U.S. 482 (1915).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Regulation of Corporations, Business, Professions, and Trades
Corporations.--Although a corporation is the creation of a
State, which reserves the power to amend or repeal corporate charters,
the retention of such power will not support the taking of corporate
property without due process of law. To terminate the life of a
corporation by annulling its charter is not to confiscate its property
but to turn it over to the stockholders after liquidation.\1\
\1\New Orleans Debenture Redemption Co. v. Louisiana, 180 U.S.
320 (1901).
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[[Page 1615]]
Foreign (out-of-state) corporations also enjoy the protection
which the due process clause affords, but such protection does not
entitle them to the unconditional right to enter another State or, once
having been permitted to enter, to continue to do business therein.
There is language in the early cases suggesting that the power of a
State to exclude or to expel a foreign corporation is almost plenary.\2\
While modern doctrines of the ``negative'' commerce clause constrain
states' authority to discriminate against foreign corporations in favor
of local commerce, it has always been acknowledged that states may
subject corporate entry or continued operation to reasonable, non-
discriminatory conditions. Thus, a state law which requires the filing
of articles with a local official as a condition prerequisite to the
validity of conveyances of local realty to such corporations is not
violative of due process.\3\ Also valid are statutes which require a
foreign insurance company, as part of the price of entry, to maintain
reserves computed by a specific percentage of premiums, including
membership fees, received in all States,\4\ or to consent to direct
actions filed against it by persons injured in the State by tort-feasors
whom it insures.\5\ Similarly a statute requiring corporations to
dispose of farm land not necessary to the conduct of their business was
not invalid as applied to a foreign hospital corporation, even though
the latter, because of changed economic conditions, was unable to recoup
its original investment from the sale which it is thus compelled to
make.\6\
\2\National Council U.A.M. v. State Council, 203 U.S. 151, 162-
63 (1906).
\3\Munday v. Wisconsin Trust Co., 252 U.S. 499 (1920).
\4\State Farm Ins. Co. v. Duel, 324 U.S. 154 (1945).
\5\Watson v. Employers Liability Assurance Corp., 348 U.S. 66
(1954).
\6\Asbury Hospital v. Cass County, 326 U.S. 207 (1945).
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Business in General.--``The Constitution does not guarantee the
unrestricted privilege to engage in a business or to conduct it as one
pleases. Certain kinds of business may be prohibited; and the right to
conduct a business, or to pursue a calling, may be conditioned. . . .
Statutes prescribing the terms upon which those conducting certain
businesses may contract, or imposing terms if they do enter into
agreements, are within the State's competency.''\7\
\7\Nebbia v. New York, 291 U.S. 502, 527-28 (1934). See also New
Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 106-08 (1978)
(upholding regulation of franchise relationship).
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Laws Prohibiting Trusts, Discrimination, Restraint of Trade.--
Even during the period when the Court was measuring statutes by
substantive due process liberty of contract principles, it recognized
the right of states to limit liberty of contract by prohibiting
combinations in restraint of trade. Thus, states could prohibit
[[Page 1616]]
agreements to pool and fix prices, divide net earnings, and prevent
competition in the purchase and sale of grain.\8\ Nor, the Court held,
does the Fourteenth Amendment preclude a State from adopting a policy
against all combinations of competing corporations and enforcing it even
against combinations which may have been induced by good intentions and
from which benefit and no injury may have resulted.\9\ Also upheld were
a statute that prohibited retail lumber dealers from uniting in an
agreement not to purchase materials from wholesalers selling directly to
consumers in the retailers' localities,\10\ and another law punishing
combinations for ``maliciously'' injuring a rival in the same business,
profession, or trade.\11\
\8\Smiley v. Kansas, 196 U.S. 447 (1905). See Waters Pierce Oil
Co. v. Texas, 212 U.S. 86 (1909); National Cotton Oil Co. v. Texas, 197
U.S. 115 (1905), also upholding antitrust laws.
\9\International Harvester Co. v. Missouri, 234 U.S. 199 (1914).
See also American Machine Co. v. Kentucky, 236 U.S. 660 (1915).
\10\Grenada Lumber Co. v. Mississippi, 217 U.S. 433 (1910).
\11\Aikens v. Wisconsin, 195 U.S. 194 (1904).
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Similarly, a prohibition of unfair discrimination for the
purpose of intentionally destroying competition of any other regular
dealer in the same commodity by making sales thereof at a lower rate in
one section of the State than in another, after equalization for
distance, effects no invalid deprivation of property or interference
with freedom of contract.\12\ A law sanctioning contracts requiring that
commodities identified by trademark will not be sold by the vendee or
subsequent vendees except at prices stipulated by the original vendor
does not violate the due process clause.\13\ Also upheld as not
depriving a company of due process was application of an unfair sales
act to enjoin a retail grocery company from selling below statutory cost
in violation of a state unfair sales act, even though its competitors
were selling at unlawful prices. There is no constitutional right to
employ retaliation against action outlawed by a State, and appellant had
available a remedy whereby it could enjoin illegal activity of its
competitors.\14\
\12\Central Lumber Co. v. South Dakota, 226 U.S. 157 (1912). But
cf. Fairmont Co. v. Minnesota, 274 U.S. 1 (1927) (invalidating on
liberty of contract grounds similar statute punishing dealers in cream
who pay higher prices in one locality than in another, the Court finding
no reasonable relation between the statute's sanctions and the
anticipated evil).
\13\Old Dearborn Co. v. Seagram Corp., 299 U.S. 183 (1936); Pep
Boys v. Pyroil, 299 U.S. 198 (1936).
\14\Safeway Stores v. Oklahoma Grocers, 360 U.S. 334 (1959).
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Laws Preventing Fraud in Sale of Goods and Securities.--Laws and
ordinances tending to prevent frauds and requiring honest weights and
measures in the sale of articles of general consumption have long been
considered lawful exertions of the po
[[Page 1617]]
lice power.\15\ Thus, a prohibition on the issuance or sale by other
than an authorized weigher of any weight certificate for grain weighed
at any warehouse or elevator where state weighers are stationed is not
unconstitutional.\16\ Nor is a municipal ordinance requiring that
commodities sold in load lots by weight be weighed by a public
weighmaster within the city invalid as applied to one delivering coal
from state-tested scales at a mine outside the city.\17\ A statute
requiring merchants to record sales in bulk not made in the regular
course of business is also within the police power.\18\
\15\Schmidinger v. City of Chicago, 226 U.S. 578, 588 (1913)
(citing McLean v. Arkansas, 211 U.S. 539, 550 (1909)).
\16\Merchants Exchange v. Missouri, 248 U.S. 365 (1919).
\17\Hauge v. City of Chicago, 299 U.S. 387 (1937).
\18\Lemieux v. Young, 211 U.S. 489 (1909); Kidd, Dater Co. v.
Musselman Grocer Co., 217 U.S. 461 (1910).
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Similarly, the power of a State to prescribe standard containers
to protect buyers from deception as well as to facilitate trading and to
preserve the condition of the merchandise is not open to question.
Accordingly, an administrative order issued pursuant to an authorizing
statute and prescribing the dimensions, form, and capacity of containers
for strawberries and raspberries is not arbitrary inasmuch as the form
and dimensions bore a reasonable relation to the protection of the
buyers and the preservation in transit of the fruit.\19\ Similarly, an
ordinance fixing standard sizes is not unconstitutional.\20\ Regulations
issued in furtherance of a statutory authorization which imposed a rate
of tolerance for the minimum weight for a loaf of bread were upheld.\21\
Likewise, a law requiring that lard not sold in bulk should be put up in
containers holding one, three, or five pounds weight, or some whole
multiple of these numbers, does not deprive sellers of their property
without due process of law.\22\
\19\Pacific States Co. v. White, 296 U.S. 176 (1935).
\20\Schmidinger v. City of Chicago, 226 U.S. 578 (1913).
\21\Petersen Baking Co. v. Bryan, 290 U.S. 570 (1934)
(tolerances not to exceed three ounces to a pound of bread and requiring
that the bread maintain the statutory minimum weight for not less than
12 hours after cooling). But cf. Burns Baking Co. v. Bryan, 264 U.S. 504
(1924) (tolerance of only two ounces in excess of the minimum weight per
loaf is unreasonable, given finding that it was impossible to
manufacture good bread without frequently exceeding the prescribed
tolerance).
\22\Armor & Co. v. North Dakota, 240 U.S. 510 (1916).
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The right of a manufacturer to maintain secrecy as to his
compounds and processes must be held subject to the right of the State,
in the exercise of the police power and in the promotion of fair
dealing, to require that the nature of the product be fairly set
forth.\23\
\23\Heath & Milligan Co. v. Worst, 207 U.S. 338 (1907); Corn
Products Ref. Co. v. Eddy, 249 U.S. 427 (1919); National Fertilizer
Ass'n v. Bradley, 301 U.S. 178 (1937).
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[[Page 1618]]
A statute providing that the purchaser of harvesting or
threshing machinery for his own use shall have a reasonable time after
delivery for inspecting and testing it, and permitting recission of the
contract if the machinery does not prove reasonably adequate, and
further declaring any agreement contrary to its provisions to be against
public policy and void, does not violate the due process clause.\24\ A
prohibitive license fee upon the use of trading stamps is not
unconstitutional.\25\
\24\Advance-Rumely Co. v. Jackson, 287 U.S. 283 (1932).
\25\Rast v. Van Deman & Lewis, 240 U.S. 342 (1916); Tanner v.
Little, 240 U.S. 369 (1916); Pitney v. Washington, 240 U.S. 387 (1916).
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In the exercise of its power to prevent fraud and imposition, a
State may regulate trading in securities within its borders, require a
license of those engaging in such dealing, make issuance of a license
dependent on a public officer's being satisfied of the good repute of
the applicants, and permit the officer, subject to judicial review of
his findings, to revoke the license.\26\ A State may forbid the giving
of options to sell or buy at a future time any grain or other
commodity.\27\ It may also forbid sales on margin for future
delivery,\28\ and may prohibit the keeping of places where stocks,
grain, and the like, are sold but not paid for at the time, unless a
record of the same be made and a stamp tax paid.\29\ Making criminal any
deduction by the purchaser from the actual weight of grain, hay, seed,
or coal under a claim of right by reason of any custom or rule of a
board of trade is valid exercise of the police power and does not
deprive the purchaser of his property without due process of law nor
interfere with his liberty of contract.\30\
\26\Hall v. Geiger-Jones Co., 242 U.S. 539 (1917); Caldwell v.
Sioux Falls Stock Yards Co., 242 U.S. 559 (1917); Merrick v. Halsey &
Co., 242 U.S. 568 (1917).
\27\Booth v. Illinois, 184 U.S. 425 (1902).
\28\Otis v. Parker, 187 U.S. 606 (1903).
\29\Brodnax v. Missouri, 219 U.S. 285 (1911).
\30\House v. Mayes, 219 U.S. 270 (1911).
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Banking, Wage Assignments and Garnishment.--Regulation of banks
and banking has always been considered well within the police power of
states, and the Fourteenth Amendment did not eliminate this regulatory
authority. A variety of regulations has been upheld over the years. For
example, state banks are not deprived of property without due process by
a statute subjecting them to assessments for a depositors' guaranty
fund.\31\ Also, a law requiring savings banks to turn over to the State
deposits inactive for thirty years (when the depositor cannot be found),
with provision for payment to the depositor or his heirs on
establishment of
[[Page 1619]]
the right, does not effect an invalid taking of the property of said
banks; nor does a statute requiring banks to turn over to the protective
custody of the State deposits that have been inactive ten or twenty-five
years (depending on the nature of the deposit).\32\
\31\Noble State Bank v. Haskell, 219 U.S. 104 (1911);
Shallenberger v. First State Bank, 219 U.S. 114 (1911); Assaria State
Bank v. Dolley, 219 U.S. 121 (1911); Abie State Bank v. Bryan, 282 U.S.
765 (1931).
\32\Provident Savings Inst. v. Malone, 221 U.S. 660 (1911);
Anderson Nat'l Bank v. Luckett, 321 U.S. 233 (1944). When a bank
conservator appointed pursuant to a new statute has all the functions of
a receiver under the old law, one of which is the enforcement on behalf
of depositors of stockholders' liability, which liability the
conservator can enforce as cheaply as could a receiver appointed under
the pre-existing statute, it cannot be said that the new statute, in
suspending the right of a depositor to have a receiver appointed,
arbitrarily deprives a depositor of his remedy or destroys his property
without the due process of law. The depositor has no property right in
any particular form of remedy. Gibbes v. Zimmerman, 290 U.S. 326 (1933).
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The constitutional rights of creditors in an insolvent bank in
the hands of liquidators are not violated by a later statute permitting
re-opening under a reorganization plan approved by the court, the
liquidating officer, and by three-fourths of the creditors.\33\
Similarly, a Federal Reserve bank is not unlawfully deprived of business
rights of liberty of contract by a law which allows state banks to pay
checks in exchange when presented by or through a Federal Reserve bank,
post office, or express company and when not made payable otherwise by a
maker.\34\
\33\Doty v. Love, 295 U.S. 64 (1935).
\34\Farmers Bank v. Federal Reserve Bank, 262 U.S. 649 (1923).
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In fixing maximum rates of interest on money loaned within its
borders, a State is acting clearly within its police power; and the
details are within legislative discretion if not unreasonably or
arbitrarily exercised.\35\ Equally valid as an exercise of a State's
police power is a requirement that assignments of future wages as
security for debts of less than $200, to be valid, must be accepted in
writing by the employer, consented to by the assignors, and filed in
public office. Such a requirement deprives neither the borrower nor the
lender of his property without due process of law.\36\
\35\Griffith v. Connecticut, 218 U.S. 563 (1910).
\36\Mutual Loan Co. v. Martell, 222 U.S. 225 (1911).
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Insurance.--The general relations of those engaged in the
insurance business\37\ as well as the business itself have been
peculiarly subject to supervision and control.\38\ Even during the
Lochner era the Court recognized that government may fix insurance rates
and regulate the compensation of insurance agents,\39\ and over the
years the Court has upheld a wide variety of regulation. A state may
impose a fine on ``any person `who shall act in any manner in the
negotiation or transaction of unlawful insurance
[[Page 1620]]
. . . with a foreign insurance company not admitted to do business
[within said State].'''\40\ A state may forbid life insurance companies
and their agents to engage in the undertaking business and undertakers
to serve as life insurance agents.\41\ Foreign casualty and surety
insurers were not deprived of due process, the Court held, by a Virginia
law which prohibited the making of contracts of casualty or surety
insurance except through registered agents, which required that such
contracts applicable to persons or property in the State be
countersigned by a registered local agent, and which prohibited such
agents from sharing more than 50% of a commission with a nonresident
broker.\42\ And just as all banks may be required to contribute to a
depositors' guaranty fund, so may all automobile liability insurers be
required to submit to the equitable apportionment among them of
applicants who are in good faith entitled to, but are financially unable
to, procure such insurance through ordinary methods.\43\
\37\La Tourette v. McMaster, 248 U.S. 465 (1919); Stipich v.
Insurance Co., 277 U.S. 311, 320 (1928).
\38\German Alliance Ins. Co. v. Kansas, 233 U.S. 389 (1914).
\39\O'Gorman & Young v. Hartford Ins. Co., 282 U.S. 251 (1931).
\40\Nutting v. Massachusetts, 183 U.S. 553, 556 (1902)
(distinguishing Allgeyer v. Louisiana, 165 U.S. 578 (1897)). See also
Hoper v. California, 155 U.S. 648 (1895).
\41\Daniel v. Family Ins. Co., 336 U.S. 220 (1949).
\42\Osborn v. Ozlin, 310 U.S. 53, 68-69 (1940). Dissenting from
the conclusion, Justice Roberts declared that the plain effect of the
Virginia law is to compel a nonresident to pay a Virginia resident for
services which the latter does not in fact render.
\43\California Auto. Ass'n v. Maloney, 341 U.S. 105 (1951).
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However, a statute which prohibited the insured from contracting
directly with a marine insurance company outside the State for coverage
of property within the State was held invalid as a deprivation of
liberty without due process of law.\44\ For the same reason, the Court
held, a State may not prevent a citizen from concluding a policy loan
agreement with a foreign life insurance company at its home office
whereby the policy on his life is pledged as collateral security for a
cash loan to become due upon default in payment of premiums, in which
case the entire policy reserve might be applied to discharge the
indebtedness. Authority to subject such an agreement to the conflicting
provisions of domestic law is not deducible from the power of a State to
license a foreign insurance company as a condition of its doing business
therein.\45\
\44\Allgeyer v. Louisiana, 165 U.S. 578 (1897).
\45\New York Life Ins. Co. v. Dodge, 246 U.S. 357 (1918).
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A stipulation that policies of hail insurance shall take effect
and become binding twenty-four hours after the hour in which an
application is taken and further requiring notice by telegram of
rejection of an application was upheld.\46\ No unconstitutional
restraint was imposed upon the liberty of contract of surety companies
by a statute providing that, after enactment, any bond exe
[[Page 1621]]
cuted for the faithful performance of a building contract shall inure to
the benefit of materialmen and laborers, notwithstanding any provision
of the bond to the contrary.\47\ Likewise constitutional was a law
requiring that a motor vehicle liability policy shall provide that
bankruptcy of the insured does not release the insurer from liability to
an injured person.\48\
\46\National Ins. Co. v. Wanberg, 260 U.S. 71 (1922).
\47\Hartford Accident Co. v. Nelson Co., 291 U.S. 352 (1934).
\48\Merchants Liability Co. v. Smart, 267 U.S. 126 (1925).
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There also is no denial of due process for a state to require
that casualty companies, in case of total loss, pay the total amount for
which the property was insured, less depreciation between the time of
issuing the policy and the time of the loss, rather than the actual cash
value of the property at the time of loss.\49\
\49\Orient Ins. Co. v. Daggs, 172 U.S. 577 (1899) (the statute
was in effect when the contract at issue was signed).
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Moreover, even though it had its attorney-in-fact located in
Illinois, signed all its contracts there, and forwarded therefrom all
checks in payment of losses, a reciprocal insurance association covering
real property located in New York could be compelled to comply with New
York regulations which required maintenance of an office in that State
and the countersigning of policies by an agent resident therein.\50\
Also, to discourage monopolies and to encourage rate competition, a
State constitutionally may impose on all fire insurance companies
connected with a tariff association fixing rates a liability or penalty
to be collected by the insured of 25% in excess of actual loss or
damage, stipulations in the insurance contract to the contrary
notwithstanding.\51\
\50\Hooperston Co. v. Cullen, 318 U.S. 313 (1943).
\51\German Alliance Ins. Co. v. Hale, 219 U.S. 307 (1911). See
also Carroll v. Greenwich Ins. Co., 199 U.S. 401 (1905).
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A state statute by which a life insurance company, if it fails
to pay upon demand the amount due under a policy after death of the
insured, is made liable in addition for fixed damages, reasonable in
amount, and for a reasonable attorney's fee is not unconstitutional even
though payment is resisted in good faith and upon reasonable
grounds.\52\ It is also proper by law to cut off a defense by a life
insurance company based on false and fraudulent statements in the
application, unless the matter misrepresented actually contributed to
the death of the insured.\53\ A provision that suicide, unless
contemplated when the application for a policy was made, shall be no
defense is equally valid.\54\ When a cooperative life insurance
association is reorganized so as to permit it to do a life insurance
business of every kind, policyholders are not deprived
[[Page 1622]]
of their property without due process of law.\55\ Similarly, when the
method of liquidation provided by a plan of rehabilitation of a mutual
life insurance company is as favorable to dissenting policyholders as
would have been the sale of assets and pro rata distribution to all
creditors, the dissenters are unable to show any taking without due
process. Dissenting policyholders have no constitutional right to a
particular form of remedy.\56\
\52\Life & Casualty Co. v. McCray, 291 U.S. 566 (1934).
\53\Northwestern Life Ins. Co. v. Riggs, 203 U.S. 243 (1906).
\54\Whitfield v. Aetna Life Ins. Co., 205 U.S. 489 (1907).
\55\Polk v. Mutual Reserve Fund, 207 U.S. 310 (1907).
\56\Neblett v. Carpenter, 305 U.S. 297 (1938).
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Miscellaneous Businesses and Professions.--An act imposing
license fees for operating employment agencies and prohibiting them from
sending applicants to an employer who has not applied for labor does not
deny due process of law.\57\ Also, a state law prohibiting operation of
a ``debt pooling'' or a ``debt adjustment'' business except as an
incident to the legitimate practice of law is a valid exercise of
legislative discretion.\58\
\57\Brazee v. Michigan, 241 U.S. 340 (1916). With four Justices
dissenting, the Court in Adams v. Tanner, 244 U.S. 590 (1917), struck
down a state law absolutely prohibiting maintenance of private
employment agencies. Commenting on the ``constitutional philosophy''
thereof in Lincoln Federal Labor Union v. Northwestern Iron & Metal Co.,
335 U.S. 525, 535 (1949), Justice Black stated that Olsen v. Nebraska,
313 U.S. 236 (1941), ``clearly undermined Adams v. Tanner.''
\58\Ferguson v. Skrupa, 372 U.S. 726 (1963).
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The Court has sustained a law establishing as a qualification
for obtaining or retaining a pharmacy operating permit that one either
be a registered pharmacist in good standing or that the corporation or
association have a majority of its stock owned by registered pharmacists
in good standing who were actively and regularly employed in and
responsible for the management, supervision, and operation of such
pharmacy.\59\ The Court also upheld a state law forbidding (1)
solicitation of the sale of frames, mountings, or other optical
appliances, (2) solicitation of the sale of eyeglasses, lenses, or
prisms by use of advertising media, (3) retailers from leasing, or
otherwise permitting anyone purporting to do eye examinations or visual
care to occupy space in a retail store, and (4) anyone, such as an
optician, to fit lenses, or replace lenses or other optical appliances,
except upon written prescription of an optometrist or opthalmologist
licensed in the State is not invalid. A State may treat all who deal
with the human eye as members of a profession that should refrain from
merchandising methods to ob
[[Page 1623]]
tain customers, and that should choose locations that reduce the
temptations of commercialism; a state may also conclude that eye
examinations are so critical that every change in frame and duplication
of a lens should be accompanied by a prescription.\60\
\59\North Dakota State Bd. of Pharmacy v. Snyder's Drug Stores,
414 U.S. 156 (1973). In the course of the decision, the Court overruled
Liggett Co. v. Baldridge, 278 U.S. 105 (1928), in which it had voided a
law forbidding a corporation to own any drug store, unless all its
stockholders were licensed pharmacists, as applied to a foreign
corporation, all of whose stockholders were not pharmacists, which
sought to extend its business in the State by acquiring and operating
therein two additional stores.
\60\Williamson v. Lee Optical Co., 348 U.S. 483 (1955).
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The practice of medicine, using this word in its most general
sense, has long been the subject of regulation.\61\ A State may exclude
osteopathic physicians from hospitals maintained by it or its
municipalities,\62\ may regulate the practice of dentistry by
prescribing qualifications that are reasonably necessary, requiring
licenses, establishing a supervisory administrative board, and
prohibiting certain advertising regardless of its truthfulness.\63\ But
while statutes requiring pilots to be licensed\64\ and setting
reasonable competency standards (e.g., that railroad engineers pass
color blindness tests) have been sustained,\65\ an act making it a
misdemeanor for a person to act as a railway passenger conductor without
having had two years' experience as a freight conductor or brakeman was
invalidated as not rationally distinguishing between those competent and
those not competent to serve as conductor.\66\
\61\McNaughton v. Johnson, 242 U.S. 344, 349 (1917). See also
Dent v. West Virginia, 129 U.S. 114 (1889); Hawker v. New York, 170 U.S.
189 (1898); Reetz v. Michigan, 188 U.S. 505 (1903); Watson v. Maryland,
218 U.S. 173 (1910); Barsky v. Board of Regents, 347 U.S. 442 (1954)
sustaining a New York law authorizing suspension for six months of the
license of a physician who had been convicted of crime in any
jurisdiction, in this instance, contempt of Congress under 2 U.S.C.
Sec. 192. Three Justices, Black, Douglas, and Frankfurter, dissented.
\62\Collins v. Texas, 223 U.S. 288 (1912); Hayman v. Galveston,
273 U.S. 414 (1927).
\63\Semler v. Dental Examiners, 294 U.S. 608, 611 (1935). See
also Douglas v. Noble, 261 U.S. 165 (1923); Graves v. Minnesota, 272
U.S. 425, 427 (1926).
\64\Olsen v. Smith, 195 U.S. 332 (1904).
\65\Nashville, C. & St. L. R.R. v. Alabama, 128 U.S. 96 (1888).
\66\Smith v. Texas, 233 U.S. 630 (1914). See DeVeau v. Braisted,
363 U.S. 144, 157-60 (1960), sustaining New York law barring from office
in longshoremen's union persons convicted of felony and not thereafter
pardoned or granted a good conduct certificate from a parole board.
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The Court has also upheld a variety of other licensing or
regulatory legislation applicable to places of amusement,\67\ grain
elevators,\68\ detective agencies,\69\ the sale of cigarettes\70\ or
cosmetics,\71\ and the resale of theatre tickets.\72\ Restrictions on
advertising have also been upheld, including absolute bans on the
advertising of cigarettes,\73\ or the use of a representation of the
United
[[Page 1624]]
States flag on an advertising medium.\74\ Similarly constitutional were
prohibitions on the solicitation by a layman of the business of
collecting and adjusting claims,\75\ the keeping of private markets
within six squares of a public market,\76\ the keeping of billiard halls
except in hotels,\77\ or the purchase by junk dealers of wire, copper,
and other items, without ascertaining the seller's right to sell.\78\
\67\Western Turf Ass'n v. Greenberg, 204 U.S. 359 (1907).
\68\W.W. Cargill Co. v. Minnesota, 180 U.S. 452 (1901).
\69\Lehon v. Atlanta, 242 U.S. 53 (1916).
\70\Gundling v. Chicago, 177 U.S. 183, 185 (1900).
\71\Bourjois, Inc. v. Chapman, 301 U.S. 183 (1937).
\72\Weller v. New York, 268 U.S. 319 (1925).
\73\Packer Corp. v. Utah, 285 U.S. 105 (1932).
\74\Halter v. Nebraska, 205 U.S. 34 (1907).
\75\McCloskey v. Tobin, 252 U.S. 107 (1920).
\76\Natal v. Louisiana, 139 U.S. 621 (1891).
\77\Murphy v. California, 225 U.S. 623 (1912).
\78\Rosenthal v. New York, 226 U.S. 260 (1912).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Protection of State Resources
Oil and Gas.--To prevent waste, production of oil and gas may be
prorated; the prohibition of wasteful conduct, whether primarily in
behalf of the owners of oil and gas in a common reservoir or because of
the public interests involved, is consistent with the Constitution.\79\
Thus, the Court upheld against due process challenge a statute which
defined waste as including, in addition to its ordinary meaning,
economic waste, surface waste, and production in excess of
transportation or marketing facilities or reasonable market demands, and
which limited each producer's share to a prorated portion of the total
production that can be taken from the common source without waste.\80\
Whether a system of proration based on hourly potential is as fair as
one based upon estimated recoverable reserves or some other combination
of factors is a question for administrative and not judicial judgment.
In a domain of knowledge still shifting and growing, it has been held to
be presumptuous for courts, on the basis of conflicting expert
testimony, to invalidate an oil proration order, promulgated by an
administrative commission in execution of a regulatory scheme intended
to conserve a State's oil resources.\81\ On the other hand, where the
evidence showed that an order, purporting to limit daily total
production of a gas field and to prorate the allowed production among
several wells, had for its real purpose, not the prevention of waste nor
the undue drainage from the reserves of other well owners, but rather
the compelling of pipeline owners to furnish a market to those who had
no pipeline connections, the order was held void as
[[Page 1625]]
a taking of private property for private benefit.\82\ Also sustained as
conservation measures were orders of the Oklahoma Corporation
Commission, premised on a finding that existing low field prices for
natural gas were resulting in economic and physical waste, fixing a
minimum price for gas and requiring one producer to take gas ratably
from another producer in the same field at the dictated price.\83\
\79\Thompson v. Consolidated Gas Co., 300 U.S. 55, 76-77 (1937)
(citing Ohio Oil Co. v. Indiana (No. 1), 177 U.S. 190 (1900)); Lindsley
v. Natural Carbonic Gas Co., 220 U.S. 61 (1911); Oklahoma v. Kansas
Natural Gas Co., 221 U.S. 229 (1911).
\80\Champlin Ref. Co. v. Corporation Comm'n, 286 U.S. 210
(1932).
\81\Railroad Comm'n v. Rowan & Nichols Oil Co., 310 U.S. 573
(1940). See also Railroad Comm'n v. Rowan & Nichols Oil Co., 311 U.S.
570 (1941); Railroad Comm'n v. Humble Oil & Ref. Co., 311 U.S. 578
(1941).
\82\Thompson v. Consolidated Gas Co., 300 U.S. 55 (1937).
\83\Cities Service Co. v. Peerless Co., 340 U.S. 179 (1950);
Phillips Petroleum Co. v. Oklahoma, 340 U.S. 190 (1950).
---------------------------------------------------------------------------
Even though carbon black is more valuable than the gas from
which it is extracted, and notwithstanding a resulting loss of
investment in a plant for the manufacture of carbon black, a State, in
the exercise of its police power, may forbid the use of natural gas for
products, such as carbon black, in the production of which such gas is
burned without fully utilizing for other manufacturing or domestic
purposes the heat therein contained.\84\ Likewise, for the purpose of
regulating and adjusting coexisting rights of surface owners to
underlying oil and gas, it is within the power of a State to prohibit
the operators of wells from allowing natural gas, not conveniently
necessary for other purposes, to come to the surface without the lifting
power having been utilized to produce the greatest quality of oil in
proportion.\85\
\84\Walls v. Midland Carbon Co., 254 U.S. 300 (1920). See also
Henderson Co. v. Thompson, 300 U.S. 258 (1937).
\85\Bandini Co. v. Superior Court, 284 U.S. 8 (1931).
---------------------------------------------------------------------------
Protection of Property and Agricultural Crops.--An ordinance
conditioning the right to drill for oil and gas within the city limits
upon the filing of a bond in the sum of $200,000 for each well, to
secure payment of damages from injuries to any persons or property
resulting from the drilling operation, or maintenance of any well or
structure appurtenant thereto, is consistent with due process of law and
is not rendered unreasonable by the requirement that the bond be
executed, not by personal sureties, but by a bonding company authorized
to do business in the State.\86\ On the other hand, a Pennsylvania
statute, which forbade the mining of coal under private dwellings or
streets of cities by a grantor that had reserved the right to mine, was
viewed as restricting the use of private property too much and hence as
a denial of due process and a ``taking'' without compensation.\87\ Years
later, however, a quite similar Pennsylvania statute was upheld, the
Court finding that the new law no longer involved merely a balancing of
private
[[Page 1626]]
economic interests, but instead promoted such ``important public
interests'' as conservation, protection of water supplies, and
preservation of land values for taxation.\88\ Also distinguished from
Pennsylvania Coal was a challenge to an ordinance prohibiting sand and
gravel excavation near the water table and imposing a duty to refill any
existing excavation below that level. The ordinance was upheld; the fact
that it prohibited a business that had been conducted for over 30 years
did not give rise to a taking in the absence of proof that the land
could not be used for other legitimate purposes.\89\
\86\Gant v. Oklahoma City, 289 U.S. 98 (1933).
\87\Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922). On the
``taking'' jurisprudence that has stemmed from this case, see supra, pp.
1382-84.
\88\Keystone Bituminous Coal Ass'n v. DeBenedictis, 480 U.S.
470, 488 (1987). The Court in Pennsylvania Coal had viewed that case as
one of ``a single private house.'' 260 U.S. at 413.
\89\Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962).
---------------------------------------------------------------------------
A statute requiring the destruction of cedar trees within two
miles of apple orchards in order to prevent damage to the orchards
caused by cedar rust was upheld as not unreasonable even in the absence
of compensation. Apple growing being one of the principal agricultural
pursuits in Virginia and the value of cedar trees throughout the State
being small as compared with that of apple orchards, the State was
constitutionally competent to require the destruction of one class of
property in order to save another which, in the judgment of its
legislature, was of greater value to the public.\90\ Similarly, Florida
was held to possess constitutional authority to protect the reputation
of one of its major industries by penalizing the delivery for shipment
in interstate commerce of citrus fruits so immature as to be unfit for
consumption.\91\
\90\Miller v. Schoene, 276 U.S. 272, 277, 279 (1928).
\91\Sligh v. Kirkwood, 237 U.S. 52 (1915).
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Water.--A statute making it unlawful for a riparian owner to
divert water into another State was held not to deprive the owner of
property without due process of law. ``The constitutional power of the
State to insist that its natural advantages shall remain unimpaired by
its citizens is not dependent upon any nice estimate of the extent of
present use or speculation as to future needs. . . . What it has it may
keep and give no one a reason for its will.''\92\ This holding has since
been disapproved, but on interstate commerce rather than due process
grounds.\93\ States may, however, enact and enforce a variety of
conservation measures for the protection of watersheds.\94\
\92\Hudson Water Co. v. McCarter, 209 U.S. 349, 356-57 (1908).
\93\Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982).
See also City of Altus v. Carr, 255 F. Supp. 828 (W.D. Tex.), aff'd per
curiam, 385 U.S. 35 (1966).
\94\See, e.g., Perley v. North Carolina, 249 U.S. 510 (1919)
(upholding law requiring the removal of timber refuse from the vicinity
of a watershed to prevent the spread of fire and consequent damage to
such watershed).
[[Page 1627]]
Fish and Game.--A State has sufficient control over fish and
wild game found within its boundaries\95\ that it may regulate or
prohibit fishing and hunting.\96\ For the effective enforcement of such
restrictions, a state may also forbid the possession within its borders
of special instruments of violations, such as nets, traps, and seines,
regardless of the time of acquisition or the protestations of lawful
intentions on the part of a particular possessor.\97\ The Court also
upheld a state law, designed to conserve for food fish found within its
waters, restricting a commercial reduction plant from accepting more
fish than it could process without deterioration, waste, or spoilage,
and applying such restriction to fish imported into the State.\98\
\95\Bayside Fish Co. v. Gentry, 297 U.S. 422, 426 (1936).
\96\Manchester v. Massachusetts, 139 U.S. 240 (1891); Geer v.
Connecticut, 161 U.S. 519 (1896).
\97\Miller v. McLaughlin, 281 U.S. 261, 264 (1930).
\98\Bayside Fish Co. v. Gentry, 297 U.S. 422 (1936). See also
New York ex rel. Silz v. Hesterberg, 211 U.S. 31 (1908) (upholding law
proscribing possession during the closed season of game imported from
abroad).
---------------------------------------------------------------------------
The Court's early decisions rested on the legal fiction that
states owned the fish and wild game within their borders, hence could
reserve these possessions solely for use by their own citizens. The
Court soon backed away from the ownership fiction,\99\ and in Hughes v.
Oklahoma\100\ overruled Geer v. Connecticut, indicating instead that
state conservation measures discriminating against out-of-state persons
were to be measured under the commerce clause. Although a state's
``concerns for conservation and protection of wild animals'' were still
a ``legitimate'' basis for regulation, these concerns could not justify
disproportionate burdens on interstate commerce.\101\ More recently
still, in the context of recreational rather than commercial activity,
the Court reached a result more deferential to state authority, holding
that access to recreational big game hunting is not within the category
of rights protected by the Privileges and Immunitites Clause, and that
consequently a state could without differential cost justification
charge out-of-staters significantly more than in-staters for a hunting
license.\102\ Suffice it to say that similar cases involving a state's
efforts to reserve its fish and game for its own inhabitants are likely
to be
[[Page 1628]]
challenged under commerce or privileges and immunities principles,
rather than under substantive due process.
\99\See, e.g., Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1
(1928) (invalidating Louisiana statute prohibiting transportation
outside the state of shrimp taken in state waters, unless the head and
shell had first been removed); Toomer v. Witsell, 334 U.S. 385 (1948)
(invalidating law discriminating against out-of-state commercial
fishermen); Douglas v. Seacoast Products, 431 U.S. 265, 284 (1977)
(state could not discriminate in favor of its residents against out-of-
state fishermen in federally licensed ships).
\100\441 U.S. 322 (1979) (formally overruling Geer).
\101\Id. at 336, 338-39.
\102\Baldwin v. Montana Fish and Game Comm'n, 436 U.S. 371
(1978).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Ownership of Real Property: Limitations, Rights
Zoning and Similar Actions.--That states and municipal
subdivisions may zone land for designated uses is now a well established
aspect of the police power. Zoning authority gained judicial recognition
early in the 20th century. Initially, analogy was drawn to public
nuisance law, the Court recognizing that States and their municipal
subdivisions may declare that in particular circumstances and in
particular localities specific businesses, which are not nuisances per
se, are to be deemed nuisances in fact and in law.\103\ Thus, a State
may declare the emission of dense smoke in populous areas a nuisance and
restrain it; regulations to that effect are not invalid even though they
affect the use of property or subject the owner to the expense of
complying with their terms.\104\ So too, the Court upheld an ordinance
that prohibited brickmaking in a designated area, even though the land
contained valuable clay deposits which could not profitably be removed
for processing elsewhere, was far more valuable for brickmaking than for
any other purpose, had been acquired before it was annexed to the
municipality, and had long been used as a brickyard.\105\
\103\Reinman v. City of Little Rock, 237 U.S. 171 (1915)
(location of a livery stable within a thickly populated city ``is well
within the range of the power of the state to legislate for the health
and general welfare''). See also Fischer v. St. Louis, 194 U.S. 361
(1904) (upholding restriction on location of dairy cow stables); Bacon
v. Walker, 204 U.S. 311 (1907) (upholding restriction on grazing of
sheep near habitations).
\104\Northwestern Laundry v. Des Moines, 239 U.S. 486 (1916).
For a case embracing a rather special set of facts, see Dobbins v. Los
Angeles, 195 U.S. 223 (1904).
\105\Hadacheck v. Sebastian, 239 U.S. 394 (1915).
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With increasing urbanization and consequent broadening of the
philosophy of regulation of land use to protect not only health and
safety but also the amenities of modern living,\106\ the Court has
recognized the discretion of government, within the loose confines of
the due process clause, to zone in many ways and for many purposes. The
Court will uphold a challengened land-use plan unless it determines that
the plan is clearly arbitrary and unreasonable and has no substantial
relation to the public health, safety, or general welfare,\107\ or
unless the plan as applied amounts to a tak
[[Page 1629]]
ing of property without just compensation.\108\ Applying these
principles, the Court has held that the creation of a residential
district in a village and the exclusion therefrom of apartment houses,
retail stores, and billboards is a permissible exercise of municipal
power.\109\ So too, a municipality restricting housing in a community to
one-family dwellings, in which any number of persons related by blood,
adoption, or marriage could occupy a house but only two unrelated
persons could do so, was sustained in the absence of any showing that it
was aimed at the deprivation of a ``fundamental interest.''\110\ Such a
fundamental interest was found impaired by a zoning ordinance in Moore
v. City of East Cleveland,\111\ which restricted housing occupancy to a
single family but so defined ``family'' that a grandmother who had been
living with her two grandsons of different children was in violation of
the ordinance. Similarly, black persons cannot be forbidden to occupy
houses in blocks where the greater number of houses are occupied by
white persons, or vice versa.\112\ But aside from such basic
constraints, a wide range of regulation is permissible. Government may
regulate the height of buildings\113\ and establish building setback
requirements.\114\ The preservation of open spaces, through density
controls and restrictions on the numbers of houses,\115\ and the
preservation of historic structures\116\ are also permissible
utilizations of the zoning power.
\106\Cf. Developments in the Law-Zoning, 91 Harv. L. Rev. 1427
(1978).
\107\Village of Euclid v. Ambler Realty Co., 272 U.S. 365
(1926); Zahn v. Board of Pub. Works, 274 U.S. 325 (1927); Nectow v. City
of Cambridge, 277 U.S. 183 (1928); Cusack Co. v. City of Chicago, 242
U.S. 526 (1917); St. Louis Poster Adv. Co. v. City of St. Louis, 249
U.S. 269 (1919).
\108\See, e.g., Lucas v. South Carolina Coastal Council, 112 S.
Ct. 2886 (1992), and discussion of the Fifth Amendment's eminent domain
power, supra pp. 1382-95.
\109\Village of Euclid v. Ambler Realty Co., 272 U.S. 365
(1926).
\110\Village of Belle Terre v. Boraas, 416 U.S. 1 (1974).
\111\431 U.S. 494 (1977). A plurality of the Court struck down
the ordinance as a violation of substantive due process, an infringment
of family living arrangements which are a protected liberty interest,
id. at 498-506, while Justice Stevens concurred on the ground that the
ordinance was arbitrary and unreasonable. Id. at 513. Four Justices
dissented. Id. at 521, 531, 541.
\112\Buchanan v. Warley, 245 U.S. 60 (1917).
\113\Welch v. Swasey, 214 U.S. 91 (1909).
\114\Gorieb v. Fox, 274 U.S. 603 (1927).
\115\Agins v. City of Tiburon, 447 U.S. 255 (1980).
\116\Penn Central Transp. Co. v. City of New York, 438 U.S. 104
(1978).
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In one aspect of zoning--the degree to which such decisions may
be delegated to private persons--the Court has not attained consistency.
Thus, it invalidated a city ordinance which conferred the power to
establish building setback lines upon the owners of two thirds of the
property abutting any street,\117\ and, subsequently, it struck down an
ordinance which permitted the establishment of philanthropic homes for
the aged in residential areas but only upon the written consent of the
owners of two-thirds of
[[Page 1630]]
the property within 400 feet of the proposed facility.\118\ In a
decision falling chronologically between these two, it sustained an
ordinance which permitted property owners to waive a municipal
restriction prohibiting the construction of billboards.\119\ In its most
recent decision, upholding a city charter provision permitting the
petitioning to citywide referendum of zoning changes and variances by
the city planning commission and necessitating a 55% approval vote in
the referendum to sustain the commission's decision, the Court
distinguished between delegating to a small group of affected landowners
such a decision relating to other people and the people's retention of
the ultimate legislative power in themselves which for convenience they
had delegated to a legislative body.\120\ The zoning power may not be
delegated to a church, the Court invalidating under the Establishment
Clause a state law permitting any church to block issuance of a liquor
license for a facility to be operated within 500 feet of the
church.\121\
\117\Eubank v. City of Richmond, 226 U.S. 137 (1912).
\118\Washington ex rel. Seattle Title Trust Co. v. Roberge, 278
U.S. 116 (1928).
\119\Thomas Cusack Co. v. City of Chicago, 242 U.S. 526 (1917).
The Court thought the case different from Eubank, because in that case
the ordinance established no rule but gave to decision of a narrow
segment of the community the force of law, whereas in Cusack the
ordinance barred the erection of any billboards but permitted the
prohibition to be modified by the persons most affected. Id. at 531.
\120\City of Eastlake v. Forest City Enterprises, 426 U.S. 668
(1976). Such referenda do, however, raise equal protection problems. See
infra, p.1858.
\121\Larkin v. Grendel's Den, 459 U.S. 116 (1982).
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Estates, Succession, Abandoned Property.--The Court upheld a New
York Decedent Estate Law that granted to a surviving spouse a right of
election to take as in intestacy, as applied to a widow who, before
enactment of the law, had waived any right to her husband's estate.
Impairment of the widow's waiver by subsequent legislation did not
deprive the husband's estate of property without due process of law.
Because rights of succession to property are of statutory creation, the
Court explained, New York could have conditioned any further exercise of
testamentary power upon the giving of right of election to the surviving
spouse regardless of any waiver however formally executed.\122\
\122\Irving Trust Co. v. Day, 314 U.S. 556, 564 (1942).
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Even after the creation of a testamentary trust, a State retains
the power to devise new and reasonable directions to the trustee to meet
new conditions arising during its administration, especially such as the
Depression presented to trusts containing mortgages. Accordingly, no
constitutional right is violated by the retroactive application to an
estate on which administration had already begun of a statute which had
the effect of taking away a remainderman's right to judicial examination
of the trustee's computation of income. Under the peculiar facts of the
case, however, the remainderman's
[[Page 1631]]
right had been created by judicial rules promulgated after the death of
the decedent, so the case is not precedent for a broad rule of
retroactivity.\123\
\123\Demorest v. City Bank Co., 321 U.S. 36, 47-48 (1944).
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States have several jurisdictional bases for application of
escheat and abandoned property laws to out-of-state corporations.
Application of New York's Abandoned Property Law to insurance policies
on the lives of New York residents issued by foreign corporations did
not deprive such companies of property without due process, where the
insured persons had continued to be New York residents and the
beneficiaries were resident at the maturity date of the policies. The
relationship between New York and its residents who abandon claims
against foreign insurance companies, and between New York and foreign
insurance companies doing business therein, is sufficiently close to
give New York jurisdiction.\124\ In Standard Oil Co. v. New Jersey,\125\
a divided Court held that due process is not violated by a statute
escheating to the State shares of stock in a domestic corporation and
unpaid dividends declared thereon, even though the last known owners
were nonresidents and the stock was issued and the dividends were held
in another State. The State's power over the debtor corporation gives it
power to seize the debts or demands represented by the stock and
dividends.
\124\Connecticut Ins. Co. v. Moore, 333 U.S. 541 (1948).
Justices Jackson and Douglas dissented on the ground that New York was
attempting to escheat unclaimed funds not actually or constructively
located in New York, and which were the property of beneficiaries who
may never have been citizens or residents of New York.
\125\341 U.S. 428 (1951).
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The large discretion the States possess to define abandoned
property and to provide for its disposition is revealed in Texaco v.
Short.\126\ There upheld was an Indiana statute which terminated
interests in coal, oil, gas, or other minerals which have not been used
for twenty years and which provided for reversion to the owner of the
interest out of which the mining interests had been carved. With respect
to interests existing at the time of enactment, the statute provided a
two-year grace period in which owners of mineral interests that were
then unused and subject to lapse could preserve those interests by
filing a claim in the recorder's office. The ``use'' of a mineral
interest which could prevent its extinction included the actual or
attempted extraction of minerals, the payment of rents or royalties, and
any payment of taxes. Merely filing a claim with the local recorder
would preserve the interest. The statute provided no notice, save for
its own publication, to owners
[[Page 1632]]
of interests, nor did it require surface owners to notify owners of
mineral interests that the interests were about to expire. By a narrow
margin, the Court sustained the statute, holding that the State's
interest in encouraging production, securing timely notices of property
ownership, and settling property titles provided a basis for enactment,
and finding that due process did not require any actual notice to
holders of unused mineral interests. Property owners are charged with
maintaining knowledge of the legal conditions of property ownership. The
act provided a grace period and specified several actions which were
sufficient to avoid extinguishment. The State ``may impose on an owner
of a mineral interest the burden of using that interest or filing a
current statement of interests'' and it may similarly ``impose on him
the lesser burden of keeping informed of the use or nonuse of his own
property.''\127\
\126\454 U.S. 516 (1982).
\127\Id. at 538. The four dissenters thought that some specific
notice was required for persons holding before enactment. Id. at 540.
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Health, Safety, and Morals
Even under the narrowest concept of the police power as limited
by substantive due process, it was generally conceded that states could
exercise the power to protect the public health, safety, and
morals.\128\ Illustrative cases are noted below.
\128\See, e.g., Mugler v. Kansas, 123 U.S. 623, 661 (1887), and
discussion supra p.1575.
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Safety Regulations.--A variety of measures designed to reduce
fire hazards have been upheld. These include municipal ordinances that
prohibit the storage of gasoline within 300 feet of any dwelling,\129\
or require that all tanks with a capacity of more than ten gallons, used
for the storage of gasoline, be buried at least three feet under
ground,\130\ or which prohibit washing and ironing in public laundries
and wash houses, within defined territorial limits from 10 p.m. to 6
a.m.\131\ Equally sanctioned by the Fourteenth Amendment is the
demolition and removal by cities of wooden buildings erected within
defined fire limits contrary to regulations in force at the time.\132\
Construction of property in full compliance with existing laws, however,
does not confer upon the owner an immunity against exercise of the
police power. Thus, a 1944 amendment to a Multiple Dwelling Law,
requiring installation of automatic sprinklers in lodginghouses of non-
fireproof construction erected prior to said enactment, does not, as
applied to a lodginghouse constructed in 1940 in conformity with all
laws then
[[Page 1633]]
applicable, deprive the owner of due process, even though compliance
entails an expenditure of $7,500 on a property worth only $25,000.\133\
\129\Pierce Oil Corp. v. Hope, 248 U.S. 498 (1919).
\130\Standard Oil Co. v. Marysville, 279 U.S. 582 (1929).
\131\Barbier v. Connolly, 113 U.S. 27 (1885); Soon Hing v.
Crowley, 113 U.S. 703 (1885).
\132\Maguire v. Reardon, 225 U.S. 271 (1921).
\133\Queenside Hills Co. v. Saxl, 328 U.S. 80 (1946).
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Sanitation.--An ordinance for incineration of garbage and refuse
at a designated place as a means of protecting public health is not
taking of private property without just compensation even though such
garbage and refuse may have some elements of value for certain
purposes.\134\ Compelling property owners to connect with a publicly
maintained system of sewers and enforcing that duty by criminal
penalties does not violate the due process clause.\135\
\134\California Reduction Co. v. Sanitary Works, 199 U.S. 306
(1905).
\135\Hutchinson v. City of Valdosta, 227 U.S. 303 (1913).
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Food, Drugs, Milk.--``The power of the State to . . . prevent
the production within its borders of impure foods, unfit for use, and
such articles as would spread disease and pestilence, is well
established.''\136\ Statutes forbidding or regulating the manufacture of
oleomargarine have been upheld as a valid exercise of such power.\137\
For the same reasons, statutes ordering the destruction of unsafe and
unwholesome food,\138\ and prohibiting the sale and authorizing
confiscation of impure milk\139\ have been sustained, notwithstanding
that such articles had a value for purposes other than food. There also
can be no question of the authority of the State, in the interest of
public health and welfare, to forbid the sale of drugs by itinerant
vendors\140\ or the sale of spectacles by an establishment not in charge
of a physician or optometrist.\141\ Nor is it any longer possible to
doubt the validity of state regulations pertaining to the
administration, sale, prescription, and use of dangerous and habit-
forming drugs.\142\
\136\Sligh v. Kirkwood, 237 U.S. 52, 59-60 (1915).
\137\Powell v. Pennsylvania, 127 U.S. 678 (1888); Magnano v.
Hamilton, 292 U.S. 40 (1934).
\138\North American Storage Co. v. City of Chicago, 211 U.S. 306
(1908).
\139\Adams v. City of Milwaukee, 228 U.S. 572 (1913).
\140\Baccus v. Louisiana, 232 U.S. 334 (1914).
\141\Roschen v. Ward, 279 U.S. 337 (1929).
\142\Minnesota ex rel. Whipple v. Martinson, 256 U.S. 41, 45
(1921).
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Equally valid as police power regulations are laws forbidding
the sale of ice cream not containing a reasonable proportion of butter
fat\143\ or of condensed milk made from skimmed milk rather than whole
milk\144\ or of food preservatives containing boric acid.\145\
Similarly, a statute which prohibits the sale of milk to which has been
added any fat or oil other than a milk fat, and
[[Page 1634]]
which has, as one of its purposes, the prevention of fraud and deception
in the sale of milk products, does not, when applied to ``filled milk''
having the taste, consistency, and appearance of whole milk products,
violate the due process clause. Filled milk is inferior to whole milk in
its nutritional content and cannot be served to children as a substitute
for whole milk without producing a dietary deficiency.\146\ However, a
statute forbidding the sale of bedding made with shoddy, even when
sterilized and therefore harmless to health, was held to be arbitrary
and therefore invalid.\147\
\143\Hutchinson Ice Cream Co. v. Iowa, 242 U.S. 153 (1916).
\144\Hebe Co. v. Shaw, 248 U.S. 297 (1919).
\145\Price v. Illinois, 238 U.S. 446 (1915).
\146\Sage Stores Co. v. Kansas, 323 U.S. 32 (1944).
\147\Weaver v. Palmer Bros. Co., 270 U.S. 402 (1926).
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Intoxicating Liquor.--``[O]n account of their well-known noxious
qualities and the extraordinary evils shown by experience to be
consequent upon their use, a State . . . [is competent] to prohibit
[absolutely the] manufacture, gift, purchase, sale, or transportation of
intoxicating liquors within its borders. . . .''\148\ And to implement
such prohibition, a State has the power to declare that places where
liquor is manufactured or kept shall be deemed common nuisances,\149\
and even to subject an innocent owner to the forfeiture of his property
for the acts of a wrongdoer.\150\
\148\Beer Co. v. Massachusetts, 97 U.S. 25, 33 (1878); Mugler v.
Kansas, 123 U.S. 623 (1887); Kidd v. Pearson, 128 U.S. 1 (1888); Purity
Extract Co. v. Lynch, 226 U.S. 192 (1912); Clark Distilling Co. v.
Western Md. Ry., 242 U.S. 311 (1917); Barbour v. Georgia, 249 U.S. 454
(1919).
\149\Mugler v. Kansas, 123 U.S. 623, 671 (1887).
\150\Hawes v. Georgia, 258 U.S. 1 (1922); Van Oster v. Kansas,
272 U.S. 465 (1926).
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Regulation of Motor Vehicles and Carriers.--The highways of a
State are public property, the primary and preferred use of which is for
private purposes; their uses for purposes of gain may generally be
prohibited by the legislature or conditioned as it sees fit.\151\ In
limiting the use of its highways for intrastate transportation for hire,
a State reasonably may provide that carriers who have furnished
adequate, responsible, and continuous service over a given route from a
specified data in the past shall be entitled to licenses as a matter of
right but that the licensing of those whose service over the route began
later than the date specified shall depend upon public convenience and
necessity.\152\ To require private contract carriers for hire to obtain
a certificate of convenience and necessity, which is not granted if the
service of common carriers is impaired thereby, and to fix minimum rates
applicable thereto, which are not less than those prescribed for common
carriers, is valid as a means of conserving highways,\153\ but any
attempt to
[[Page 1635]]
convert private carriers into common carriers,\154\ or to subject them
to the burdens and regulations of common carriers, without expressly
declaring them to be common carriers, is violative of due process.\155\
In the absence of legislation by Congress, a State may, in protection of
the public safety, deny an interstate motor carrier the use of an
already congested highway.\156\
\151\Stephenson v. Binford, 287 U.S. 251 (1932).
\152\Stanley v. Public Utilities Comm'n, 295 U.S. 76 (1935).
\153\Stephenson v. Binford, 287 U.S. 251 (1932).
\154\Michigan Pub. Utils. Comm'n v. Duke, 266 U.S. 570 (1925).
\155\Frost Trucking v. Railroad Comm'n, 271 U.S. 583 (1926);
Smith v. Cahoon, 283 U.S. 553 (1931).
\156\Bradley v. Public Utils. Comm'n, 289 U.S. 92 (1933).
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In exercising its authority over its highways, on the other
hand, a State is not limited merely to the raising of revenue for
maintenance and reconstruction or to regulating the manner in which
vehicles shall be operated, but may also prevent the wear and hazards
due to excessive size of vehicles and weight of load. Accordingly, a
statute limiting to 7,000 pounds the net load permissible for trucks is
not unreasonable.\157\ No less constitutional is a municipal traffic
regulation which forbids the operation in the streets of any advertising
vehicle, excepting vehicles displaying business notices or
advertisements of the products of the owner and not used mainly for
advertising; and such regulation may be validly enforced to prevent an
express company from selling advertising space on the outside of its
trucks. Inasmuch as it is the judgment of local authorities that such
advertising affects public safety by distracting drivers and
pedestrians, courts are unable to hold otherwise in the absence of
evidence refuting that conclusion.\158\
\157\Sproles v. Binford, 286 U.S. 374 (1932).
\158\Railway Express Agency v. New York, 336 U.S. 106 (1949).
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Any appropriate means adopted to insure compliance and care on
the part of licensees and to protect other highway users being consonant
with due process, a State may also provide that a driver who fails to
pay a judgment for negligent operation shall have his license and
registration suspended for three years, unless, in the meantime, the
judgment is satisfied or discharged.\159\ Compulsory automobile
insurance is so plainly valid as to present no federal constitutional
question.\160\
\159\Reitz v. Mealey, 314 U.S. 33 (1941); Kesler v. Department
of Pub. Safety, 369 U.S. 153 (1962). But see Perez v. Campbell, 402 U.S.
637 (1971). Procedural due process must, of course be observed. Bell v.
Burson, 402 U.S. 535 (1971). A nonresident owner who loans his
automobile in another state, by the law of which he is immune from
liability for the borrower's negligence and who was not in the state at
the time of the accident, is not subjected to any unconstitutional
deprivation by a law thereof, imposing liability on the owner for the
negligence of one driving the car with the owner's permission. Young v.
Masci, 289 U.S. 253 (1933).
\160\Ex parte Poresky, 290 U.S. 30 (1933). See also Packard v.
Banton, 264 U.S. 140 (1924); Sprout v. South Bend, 277 U.S. 163 (1928);
Hodge Co. v. Cincinnati, 284 U.S. 335 (1932); Continental Baking Co. v.
Woodring, 286 U.S. 352 (1932).
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[[Page 1636]]
Protecting Morality.--Unless effecting a clear, unmistakable
infringement of rights secured by fundamental law, legislation
suppressing prostitution\161\ or gambling will be upheld by the Court as
concededly within the police power of a State.\162\ Accordingly, a state
statute may provide that, in the event a judgment is obtained against a
party winning money, a lien may be had on the property of the owner of
the building where the gambling transaction was conducted when the owner
knowingly consented to the gambling.\163\ For the same reason,
lotteries, including those operated under a legislative grant, may be
forbidden, irrespective of any particular equities.\164\
\161\L'Hote v. New Orleans, 177 U.S. 587 (1900).
\162\Ah Sin v. Wittman, 198 U.S. 500 (1905).
\163\Marvin v. Trout, 199 U.S. 212 (1905).
\164\Stone v. Mississippi, 101 U.S. 814 (1880); Douglas v.
Kentucky, 168 U.S. 488 (1897).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Vested Rights, Remedial Rights, Political Candidacy
Inasmuch as the Due Process Clause protects against arbitrary
deprivation of ``property,'' privileges not constituting property are
not entitled to protection.\165\ Because an existing right of action to
recover damages for an injury is property, that right of action is
protected by the clause.\166\ Thus, the retroactive repeal of a
provision which made directors liable for moneys embezzled by corporate
officers, by preventing enforcement of a liability which already had
arisen, deprived certain creditors of their property without due process
of law.\167\ But while a vested cause of action is property, a person
has no constitutionally protected property interest in any particular
form of remedy and is guaranteed only the preservation of a substantial
right to redress by any effective procedure.\168\ Accordingly, a statute
creating an additional remedy for enforcing stockholders' liability is
not, as applied to stockholders then holding stock, violative of due
process.\169\ Nor is a law which lifts a statute of limitations and
makes possible a suit, theretofore barred,
[[Page 1637]]
for the value of certain securities. ``The Fourteenth Amendment does not
make an act of state legislation void merely because it has some
retrospective operation. . . . Some rules of law probably could not be
changed retroactively without hardship and oppression . . . . Assuming
that statutes of limitation, like other types of legislation, could be
so manipulated that their retroactive effects would offend the
constitution, certainly it cannot be said that lifting the bar of a
statute of limitation so as to restore a remedy lost through mere lapse
of time is per se an offense against the Fourteenth Amendment.''\170\
\165\See, e.g., Snowden v. Hughes, 321 U.S. 1 (1944) (right to
become a candidate for state office is a privilege only, hence an
unlawful denial of such right is not a denial of a right of
``property''). Cases under the equal protection clause now mandate a
different result. See Holt Civic Club v. City of Tuscaloosa, 439 U.S.
60, 75 (1978) (seeming to conflate due process and equal protection
standards in political rights cases).
\166\Angle v. Chicago, St. Paul, M. & D. Ry., 151 U.S. 1 (1894).
\167\Coombes v. Getz, 285 U.S. 434, 442, 448 (1932).
\168\Gibbes v. Zimmerman, 290 U.S. 326, 332 (1933). See Duke
Power Co. v. Carolina Envtl. Study Group, 438 U.S. 59 (1978) (limitation
of common-law liability of private industry nuclear accidents in order
to encourage development of energy a rational action, especially when
combined with congressional pledge to take necessary action in event of
accident; whether limitation would have been of questionable validity in
absence of pledge uncertain but unlikely).
\169\Shriver v. Woodbine Bank, 285 U.S. 467 (1932).
\170\Chase Securities Corp. v. Donaldson, 325 U.S. 304, 315-16
(1945).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Control of Local Units of Government
The Fourteenth Amendment does not deprive a State of the power
to determine what duties may be performed by local officers, and whether
they shall be appointed or popularly elected.\171\ Thus, a statute
requiring cities to indemnify owners of property damaged by mobs or
during riots effects no unconstitutional deprivation of the property
even in circumstances when the city could not have prevented the
violence.\172\ Likewise, a person obtaining a judgment against a
municipality for damages resulting from a riot is not deprived of
property without due process of law by an act which so limits the
municipality's taxing power as to prevent collection of funds adequate
to pay it. As long as the judgment continues as an existing liability no
unconstitutional deprivation is experienced.\173\
\171\Soliah v. Heskin, 222 U.S. 522 (1912); City of Trenton v.
New Jersey, 262 U.S. 182 (1923). The equal protection clause has been
employed, however, to limit a State's discretion with regard to certain
matters. Infra, pp. 1892-1911.
\172\City of Chicago v. Sturges, 222 U.S. 313 (1911).
\173\Louisiana ex rel. Folsom v. Mayor of New Orleans, 109 U.S.
285, 289 (1883).
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Local units of government obliged to surrender property to other
units newly created out of the territory of the former cannot
successfully invoke the due process clause,\174\ nor may taxpayers
allege any unconstitutional deprivation as a result of changes in their
tax burden attendant upon the consolidation of contiguous
municipalities.\175\ Nor is a statute requiring counties to reimburse
cities of the first class but not other classes for rebates allowed for
prompt payment of taxes in conflict with the due process clause.\176\
\174\Michigan ex rel. Kies v. Lowrey, 199 U.S. 233 (1905).
\175\Hunter v. Pittsburgh, 207 U.S. 161 (1907).
\176\Stewart v. Kansas City, 239 U.S. 14 (1915).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Taxing Power
Generally.--It was not contemplated that the adoption of the
Fourteenth Amendment would restrain or cripple the taxing power
[[Page 1638]]
of the States.\1\ Rather, the purpose of the amendment was to extend to
the residents of the States the same protection against arbitrary state
legislation affecting life, liberty, and property as was afforded
against Congress by the Fifth Amendment.\2\
\1\Tonawanda v. Lyon, 181 U.S. 389 (1901); Cass Farm Co. v.
Detroit, 181 U.S. 396 (1901).
\2\Southwestern Oil Co. v. Texas, 217 U.S. 114, 119 (1910).
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Public Purpose.--As a general matter, public moneys cannot be
expended for other than public purposes. Some early cases applied this
principle by invalidating taxes judged to be imposed to raise money for
purely private rather than public purposes.\3\ However, modern notions
of public purpose have expanded to the point where the limitation has
little practical import. Whether a use is public or private, while it is
ultimately a judicial question, ``is a practical question addressed to
the law-making department, and it would require a plain case of
departure from every public purpose which could reasonably be conceived
to justify the intervention of a court.''\4\ Taxes levied for each of
the following purposes have been held to be for a public use: a city
coal and fuel yard,\5\ a state bank, a warehouse, an elevator, a
flourmill system, homebuilding projects,\6\ a society for preventing
cruelty to animals (dog license tax),\7\ a railroad tunnel,\8\ books for
school children attending private as well as public schools,\9\ and
relief of unemployment.\10\
\3\Loan Association v. City of Topeka, 87 U.S. (20 Wall.) 655
(1875) (voiding tax employed by city to make a substantial grant to a
bridge manufacturing company to induce it to locate its factory in the
city). See also City of Parkersburg v. Brown, 106 U.S. 487 (1882)
(private purpose bonds not authorized by state constitution).
\4\Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 515
(1937). In applying the Fifth Amendment Due Process Clause the Court has
said that discretion as to what is a public purpose ``belongs to
Congress, unless the choice is clearly wrong, a display of arbitrary
power, not an exercise of judgment.'' Helvering v. Davis, 301 U.S. 619,
640 (1937); United States v. Butler, 297 U.S. 1, 67 (1936). That payment
may be made to private individuals is now irrelevant. Carmichael, supra,
at 518. Cf. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1 (1976)
(sustaining tax imposed on mine companies to compensate workers for
black lung disabilities, including those contracting disease before
enactment of tax, as way of spreading cost of employee liabilities).
\5\Jones v. City of Portland, 245 U.S. 217 (1917).
\6\Green v. Frazier, 253 U.S. 233 (1920).
\7\Nicchia v. New York, 254 U.S. 228 (1920).
\8\Milheim v. Moffat Tunnel Dist., 262 U.S. 710 (1923).
\9\Cochran v. Board of Education, 281 U.S. 370 (1930).
\10\Carmichael v. Southern Coal & Coke Co., 300 U.S. 644 (1937).
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Other Considerations Affecting Validity: Excessive Burden; Ratio
of Amount of Benefit Received.--When the power to tax exists, the extent
of the burden is a matter for the discretion of the lawmakers,\11\ and
the Court will refrain from condemning a
[[Page 1639]]
tax solely on the ground that it is excessive.\12\ Nor can the
constitutionality of taxation be made to depend upon the taxpayer's
enjoyment of any special benefits from use of the funds raised by
taxation.\13\
\11\Fox v. Standard Oil Co., 294 U.S. 87, 99 (1935).
\12\Stewart Dry Goods Co. v. Lewis, 294 U.S. 550 (1935). See
also Kelly v. City of Pittsburgh, 104 U.S. 78 (1881); Chapman v.
Zobelein, 237 U.S. 135 (1915); Alaska Fish Salting & By-Products Co. v.
Smith, 255 U.S. 44 (1921); Magnano Co. v. Hamilton, 292 U.S. 40 (1934);
City of Pittsburgh v. Alco Parking Corp., 417 U.S. 369 (1974).
\13\Nashville, C. & St. L. Ry. v. Wallace, 288 U.S. 249 (1933);
Carmichael v. Southern Coal & Coke Co., 301 U.S. 495 (1937). A taxpayer
therefore cannot contest the imposition of an income tax on the ground
that, in operation, it returns to his town less income tax than he and
its other inhabitants pay. Dane v. Jackson, 256 U.S. 589 (1921).
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Estate, Gift, and Inheritance Taxes.--The power of testamentary
disposition and the privilege of inheritance being legitimate subjects
of taxation, a State may apply its inheritance tax to either the
transmission, or the exercise of the legal power of transmission, of
property by will or descent, or to the legal privilege of taking
property by devise or descent.\14\ Accordingly, an inheritance tax law,
enacted after the death of a testator but before the distribution of his
estate, constitutionally may be imposed on the shares of legatees,
notwithstanding that under the law of the State in effect on the date of
such enactment, ownership of the property passed to the legatees upon
the testator's death.\15\ Equally consistent with due process is a tax
on an inter vivos transfer of property by deed intended to take effect
upon the death of the grantor.\16\
\14\Stebbins v. Riley, 268 U.S. 137, 140, 141 (1925).
\15\Cahen v. Brewster, 203 U.S. 543 (1906).
\16\Keeney v. New York, 222 U.S. 525 (1912).
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When remainders indisputably vest at the time of the creation of
a trust and a succession tax is enacted thereafter, the imposition of
the tax on the transfer of such remainder is unconstitutional.\17\ But
where the remaindermen's interests are contingent and do not vest until
the donor's death subsequent to the adoption of the statute, the tax is
valid.\18\
\17\Coolidge v. Long, 282 U.S. 582 (1931).
\18\Binney v. Long, 299 U.S. 280 (1936); Nickel v. Cole, 256
U.S. 222 (1921). See also Salomon v. State Tax Comm'n, 278 U.S. 484
(1929) (contingent remainder); and Orr v. Gilman, 183 U.S. 278 (1902)
(power of appointment).
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The Court has noted that insofar as retroactive taxation of
vested gifts has been voided, the justification therefor has been that
``the nature or amount of the tax could not reasonably have been
anticipated by the taxpayer at the time of the particular voluntary act
which the [retroactive] statute later made the taxable event. . . .
Taxation . . . of a gift which . . . [the donor] might well
[[Page 1640]]
have refrained from making had he anticipated the tax . . . [is] thought
to be so arbitrary . . . as to be a denial of due process.''\19\
\19\Welch v. Henry, 305 U.S. 134, 147 (1938).
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Income Taxes.--The authority of states to tax income is
``universally recognized.''\20\ Years ago the Court explained that
``[e]njoyment of the privileges of residence in the state and the
attendant right to invoke the protection of its laws are inseparable
from responsibility for sharing the costs of government. . . . A tax
measured by the net income of residents is an equitable method of
distributing the burdens of government among those who are privileged to
enjoy its benefits.''\21\ Also, a tax on income is not constitutionally
suspect because retroactive. The routine practice of making taxes
retroactive for the entire year of the legislative session in which the
tax is enacted has long been upheld,\22\ and there are also situations
in which courts have upheld retroactive application to the preceding
year or two.\23\
\20\New York ex rel. Cohn v. Graves, 300 U.S. 308, 313 (1937).
\21\Id. See also Shaffer v. Carter, 252 U.S. 37, 49-52 (1920);
and Travis v. Yale & Towne Mfg. Co., 252 U.S. 60 (1920) (states may tax
the income of nonresidents derived from property or activity within the
state).
\22\See, e.g., Stockdale v. Insurance Companies, 87 U.S. (20
Wall.) 323 (1874); United States v. Hudson, 299 U.S. 498 (1937); United
States v. Darusmont, 449 U.S. 292 (1981).
\23\Welch v. Henry, 305 U.S. 134 (1938) (upholding imposition in
1935 of tax liability for 1933 tax year; due to the scheduling of
legislative sessions, this was the legislature's first opportunity to
adjust revenues after obtaining information of the nature and amount of
the income generated by the original tax). Since ``[t]axation is neither
a penalty imposed on the taxpayer nor a liability which he assumes by
contract,'' the Court explained, ``its retroactive imposition does not
necessarily infringe due process.'' Id. at 146-47.
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Franchise Taxes.--A city ordinance imposing annual license taxes
on light and power companies is not violative of the due process clause
merely because the city has entered the power business in competition
with such companies.\24\ Nor does a municipal charter authorizing the
imposition upon a local telegraph company of a tax upon the lines of the
company within its limits at the rate at which other property is taxed
but upon an arbitrary valuation per mile, deprive the company of its
property without due process of law, inasmuch as the tax is a mere
franchise or privilege tax.\25\
\24\Puget Sound Co. v. Seattle, 291 U.S. 619 (1934).
\25\New York Tel. Co. v. Dolan, 265 U.S. 96 (1924).
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Severance Taxes.--A state excise tax on the production of oil
which extends to the royalty interest of the lessor as well as to the
interest of the lessee engaged in the active work of production, the tax
being apportioned between these parties according to their respective
interest in the common venture, is not arbitrary as applied to the
lessor, but consistent with due process.\26\
\26\Barwise v. Sheppard, 299 U.S. 33 (1936).
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[[Page 1641]]
Real Property Taxes.--The maintenance of a high assessment in
the face of declining value is merely another way of achieving an
increase in the rate of property tax. Hence, an overassessment
constitutes no deprivation of property without due process of law.\27\
Likewise, land subject to mortgage may be taxed for its full value
without deduction of the mortgage debt from the valuation.\28\
\27\Nashville, C. & St. L. Ry. v. Browning, 310 U.S. 362 (1940).
\28\Paddell v. City of New York, 211 U.S. 446 (1908).
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A State may defray the entire expense of creating, developing,
and improving a political subdivision either from funds raised by
general taxation or by apportioning the burden among the municipalities
in which the improvements are made or by creating, or authorizing the
creation of, tax districts to meet sanctioned outlays.\29\ Where a state
statute authorizes municipal authorities to define the district to be
benefited by a street improvement and to assess the cost of the
improvement upon the property within the district in proportion to
benefits, their action in establishing the district and in fixing the
assessments on included property, after due hearing of the owners as
required by the statute cannot, when not arbitrary or fradulent, be
reviewed under the Fourteenth Amendment upon the ground that other
property benefited by the improvement was not included.\30\
\29\Hagar v. Reclamation Dist., 111 U.S. 701 (1884).
\30\Butters v. City of Oakland, 263 U.S. 162 (1923).
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It is also proper to impose a special assessment for the
preliminary expenses of an abandoned road improvement, even though the
assessment exceeds the amount of the benefit which the assessors
estimated the property would receive from the completed work.\31\
Likewise a levy upon all lands within a drainage district of a tax of
twenty-five cents per acre to defray preliminary expenses does not
unconstitutionally take the property of landowners within that district
who may not be benefited by the completed drainage plans.\32\ On the
other hand, when the benefit to be derived by a railroad from the
construction of a highway will be largely offset by the loss of local
freight and passenger traffic, an assessment upon such railroad is
violative of due process,\33\ whereas any gains from increased traffic
reasonably expected to result from a road improvement will suffice to
sustain an assessment thereon.\34\ Also the
[[Page 1642]]
fact that the only use made of a lot abutting on a street improvement is
for a railway right of way does not make invalid, for lack of benefits,
an assessment thereon for grading, curbing, and paving.\35\ However,
when a high and dry island was included within the boundaries of a
drainage district from which it could not be benefitted directly or
indirectly, a tax imposed on the island land by the district was held to
be a deprivation of property without due process of law.\36\ Finally, a
State may levy an assessment for special benefits resulting from an
improvement already made\37\ and may validate an assessment previously
held void for want of authority.\38\
\31\Missouri Pac. R.R. v. Road District, 266 U.S. 187 (1924).
See also Roberts v. Irrigation Dist., 289 U.S. 71 (1933), in which it
was also stated that an assessment to pay the general indebtedness of an
irrigation district is valid, even though in excess of the benefits
received.
\32\Houck v. Little River Dist., 239 U.S. 254 (1915).
\33\Road Dist. v. Missouri Pac. R.R., 274 U.S. 188 (1927).
\34\Kansas City Ry. v. Road Dist., 266 U.S. 379 (1924).
\35\Louisville & Nashville R.R. v. Barber Asphalt Co., 197 U.S.
430 (1905).
\36\Myles Salt Co. v. Iberia Drainage Dist., 239 U.S. 478
(1916).
\37\Wagner v. Baltimore, 239 U.S. 207 (1915).
\38\Charlotte Harbor Ry. v. Welles, 260 U.S. 8 (1922).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Jurisdiction to Tax
The operation of the Due Process Clause as a limitation on the
taxing power of the states has been an issue in a variety of different
contexts, but most involve one of the other of two basic issues, first,
the relationship between the state exercising taxing power and the
object of that exercise of power, and second, whether the degree of
contact is sufficient to justify the state's imposition of a particular
obligation. Often these issues arise in conjunction with claims that the
state's actions are also violative of the Commerce Clause. Illustrative
of the factual settings in which such issues arise are 1), determining
the scope of the business activity of a multijurisdictional entity that
is subject to a state's taxing power, 2) application of wealth transfer
taxes to gifts or bequests of nonresidents, 3) allocation of the income
of multijurisdictional entities for tax purposes, 4) the scope of state
authority to tax the income of nonresidents, and 5) collection of state
use taxes.
The Court's opinions in these cases have often discussed due
process and Commerce Clause issues as if they were indistinguishable.
The recent decision in Quill Corp. v. North Dakota,\39\ however,
utilized a two-tier analysis that found sufficient contact to satisfy
due process but not Commerce Clause requirements. Quill may be read as
implying that the more stringent Commerce Clause standard subsumes due
process jurisdictional issues, and that consequently these due process
issues need no longer be separately considered. This interpretation has
yet to be confirmed, however, and a detailed review of due process
precedents may prove useful.
\39\112 S. Ct. 1904 (1992).
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[[Page 1643]]
Sales/Use Taxes.--In Quill Corp. v. North Dakota,\40\ the Court
struck down a state statute requiring an out-of-state mail order company
with neither outlets nor sales representatives in the state to collect
and transmit use taxes on sales to state residents, but did so on
Commerce Clause rather than due process grounds. Taxation of an
interstate business does not offend due process, the Court held, if that
business ``purposefully avails itself of the benefits of an economic
market in the [taxing] State . . . even if it has no physical presence
in the State.''\41\ A physical presence within the state is necessary,
however, under Commerce Clause analysis applicable to taxation of mail
order sales.\42\
\40\112 S. Ct. 1904 (1992).
\41\The Court had previously held that the requirement in terms
of a benefit is minimal. Commonwealth Edison Co. v. Montana, 453 U.S.
609, 622-23 (1982), (quoting Carmichael v. Southern Coal & Coke Co., 301
U.S. 495, 521-23 (1937)). It is satisfied by a ``minimal connection''
between the interstate activities and the taxing State and a rational
relationship between the income attributed to the State and the
intrastate values of the enterprise. Mobil Oil Corp. v. Commissioner of
Taxes, 445 U.S. 425, 436-37 (1980); Moorman Mfg. Co. v. Bair, 437 U.S.
267, 272-73 (1978). See especially Standard Pressed Steel Co. v.
Department of Revenue, 419 U.S. 560, 562 (1975); National Geographic
Society v. California Bd. of Equalization, 430 U.S. 551 (1977).
\42\Quill Corp. v. North Dakota, 112 S. Ct. at 1911-16 (refusing
to overrule the Commerce Clause ruling in National Bellas Hess v.
Department of Revenue, 386 U.S. 753, 756 (1967)). See also Trinova Corp.
v. Michigan Dep't of Treasury, 498 U.S. 358 (1991) (neither the Commerce
Clause nor the Due Process Clause is violated by application of a
business tax, measured on a value added basis, to a company that
manufactures goods in another state, but that operates a sales office
and conducts sales within state).
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Land.--Even prior to the ratification of the Fourteenth
Amendment, it was a settled principle that a State could not tax land
situated beyond its limits; subsequently elaborating upon that principle
the Court has said that, ``we know of no case where a legislature has
assumed to impose a tax upon land within the jurisdiction of another
State, much less where such action has been defended by a court.''\43\
Insofar as a tax payment may be viewed as an exaction for the
maintenance of government in consideration of protection afforded, the
logic sustaining this rule is self-evident.
\43\Union Transit Co. v. Kentucky, 199 U.S. 194, 204 (1905). See
also Louisville & Jeffersonville Ferry Co. v. Kentucky, 188 U.S. 385
(1903).
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Tangible Personalty.--As long as tangible personal property has
a situs within its borders, a State validly may tax the same, whether
directly through an ad valorem tax or indirectly through death taxes,
irrespective of the residence of the owner.\44\ By the same token, if
tangible personal property makes only occasional incursions into other
States, its permanent situs remains in the State
[[Page 1644]]
of origin, and, subject to certain exceptions, is taxable only by the
latter.\45\ The ancient maxim, mobilia sequuntur personam, which had its
origin when personal property consisted in the main of articles
appertaining to the person of the owner, yielded in modern times to the
``law of the place where the property is kept and used.'' The tendency
has been to treat tangible personal property as ``having a situs of its
own for the purpose of taxation, and correlatively to . . . exempt [it]
at the domicile of its owner.''\46\ When rolling stock is permanently
located and employed in the prosecution of a business outside the
boundaries of a domiciliary State, the latter has no jurisdiction to tax
it.\47\ Vessels, however, inasmuch as they merely touch briefly at
numerous ports, never acquire a taxable situs at any one of them, and
are taxable by the domicile of their owners or not at all,\48\ unless of
course, the ships operate wholly on the waters within one State, in
which event they are taxable there and not at the domicile of the
owners.\49\ Airplanes have been treated in a similar manner for tax
purposes. Noting that the entire fleet of airplanes of an interstate
carrier were ``never continuously without the [domiciliary] State during
the whole tax year,'' that such airplanes also had their ``home port''
in the domiciliary State, and that the company maintained its principal
office therein, the Court sustained a personal property tax applied by
the domiciliary State to all the airplanes owned by the taxpayer. No
other State was deemed able to accord the same protection and benefits
as the taxing State in which the taxpayer had both its domicile and its
business situs; the doctrines of Union Transit Co. v. Kentucky,\50\ as
to the taxability of permanently located tangibles, and that of
[[Page 1645]]
apportionment, for instrumentalities engaged in interstate commerce\51\
were held to be inapplicable.\52\
\44\Carstairs v. Cochran, 193 U.S. 10 (1904); Hannis Distilling
Co. v. Baltimore, 216 U.S. 285 (1910); Frick v. Pennsylvania, 268 U.S.
473 (1925); Blodgett v. Silberman, 277 U.S. 1 (1928).
\45\New York ex rel. New York Cent. R.R. v. Miller, 202 U.S. 584
(1906). As to the competence of States to tax equipment of foreign
carriers which enter their jurisdiction intermittently, see supra, pp.
227-33.
\46\Wheeling Steel Corp. v. Fox, 298 U.S. 193, 209-10 (1936);
Union Transit Co. v. Kentucky, 199 U.S. 194, 207 (1905); Johnson Oil Co.
v. Oklahoma, 290 U.S. 158 (1933).
\47\Union Transit Co. v. Kentucky, 199 U.S. 194 (1905). Justice
Black, in Central R.R. v. Pennsylvania, 370 U.S. 607, 619-21 (1962), had
his ``doubts about the use of the Due Process Clause to . . .
[invalidate State taxes]. The modern use of due process to invalidate
State taxes rests on two doctrines: (1) that a State is without
`jurisdiction to tax' property beyond its boundaries, and (2) that
multiple taxation of the same property by different States is
prohibited. Nothing in the language or the history of the Fourteenth
Amendment, however, indicates any intention to establish either of these
two doctrines . . . And in the first case [Railroad Co. v. Jackson, 74
U.S. (7 Wall.) 262 (1869)] striking down a State tax for lack of
judisdiction to tax after the passage of that Amendment, neither the
Amendment nor its Due Process Clause . . . was ever mentioned.'' He also
maintained that Justice Holmes shared this view in Union Transit Co. v.
Kentucky, supra, at 211.
\48\Southern Pacific Co. v. Kentucky, 222 U.S. 63 (1911).
\49\Old Dominion Steamship Co. v. Virginia, 198 U.S. 299 (1905).
\50\199 U.S. 194 (1905). See also Central R.R. v. Pennsylvania,
370 U.S. 607, 611-17 (1962).
\51\Pullman's Car Co. v. Pennsylvania, 141 U.S. 18 (1891).
\52\Northwest Airlines v. Minnesota, 322 U.S. 292, 294-97, 307
(1944). The case was said to be governed by New York ex rel. New York
Cent. R.R. v. Miller, 202 U.S. 584, 596 (1906). As to the problem of
multiple taxation of such airplanes, which had in fact been taxed
proportionately by other States, the Court declared that the
``taxability of any part of this fleet by any other State, than
Minnesota, in view of the taxability of the entire fleet by that State,
is not now before us.'' Justice Jackson, in a concurring opinion, would
treat Minnesota's right to tax as exclusively of any similar right
elsewhere.
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Conversely, a nondomiciliary State, although it may not tax
property belonging to a foreign corporation which has never come within
its borders, may levy on movables which are regularly and habitually
used and employed therein. Thus, while the fact that cars are loaded and
reloaded at a refinery in a State outside the owner's domicile does not
fix the situs of the entire fleet in that State, the latter may
nevertheless tax the number of cars which on the average are found to be
present within its borders.\53\ Moreover, in assessing that part of a
railroad within its limits, a State need not treat it as an independent
line, disconnected from the part without, and place upon the property
within the State only a value which could be given to it if operated
separately from the balance of the road. The State may ascertain the
value of the whole line as a single property and then determine the
value of the part within on a mileage basis, unless there be special
circumstances which distinguish between conditions in the several
States.\54\ But no property of an interstate carrier can be taken into
account unless it can be seen in some plain and fairly intelligible way
that it adds to the value of the road and the rights exercised in the
State.\55\ Also, a state property tax on railroads, which is measured by
gross earnings apportioned to mileage, is not unconstitutional in the
absence of proof that it exceeds what would be legitimate as an ordinary
tax on the property valued as part of a going concern or that it is
relatively higher than taxes on other kinds of property.\56\ The tax
reaches only revenues derived from local operations, and the fact that
the apportionment formula does not result in mathematical exactitude is
not a constitutional defect.\57\
\53\Johnson Oil Co. v. Oklahoma, 290 U.S. 158 (1933).
\54\Pittsburgh C.C. & St. L. Ry. v. Backus, 154 U.S. 421 (1894).
\55\Wallace v. Hines, 253 U.S. 66 (1920). For example, the ratio
of track mileage within the taxing State to total track mileage cannot
be employed in evaluating that portion of total railway property found
in the State when the cost of the lines in the taxing State was much
less than in other States and the most valuable terminals of the
railroad were located in other States. See also Fargo v. Hart, 193 U.S.
490 (1904); Union Tank Line Co. v. Wright, 249 U.S. 275 (1919).
\56\Great Northern Ry. v. Minnesota, 278 U.S. 503 (1929).
\57\Illinois Cent. R.R. v. Minnesota, 309 U.S. 157 (1940).
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[[Page 1646]]
Intangible Personalty.--To determine whether a State, or States,
may tax intangible personal property, the Court has applied the fiction,
mobilia sequuntur personam and has also recognized that such property
may acquire, for tax purposes, a business or commercial situs where
permanently located, but it has never clearly disposed of the issue
whether multiple personal property taxation of intangibles is consistent
with due process. In the case of corporate stock, however, the Court has
obliquely acknowledged that the owner thereof may be taxed at his own
domicile, at the commercial situs of the issuing corporation, and at the
latter's domicile; constitutional lawyers speculated whether the Court
would sustain a tax by all three jurisdictions, or by only two of them,
and, if the latter, which two, the State of the commercial situs and of
the issuing corporation's domicile, or the State of the owner's domicile
and that of the commercial situs.\58\
\58\Howard, State Jurisdiction to Tax Intangibles: A Twelve Year
Cycle, 8 Mo. L. Rev. 155, 160-62 (1943); Rawlins, State Jurisdiction to
Tax Intangibles: Some Modern Aspects, 18 Tex. L. Rev. 196, 314-15
(1940).
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Thus far, the Court has sustained the following personal
property taxes on intangibles:
(1) A debt held by a resident against a nonresident, evidenced
by a bond of the debtor and secured by a mortgage on real estate in the
State of the debtor's residence.\59\
\59\Kirtland v. Hotchkiss, 100 U.S. 491, 498 (1879).
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(2) A mortgage owned and kept outside the State by a nonresident
but on land within the State.\60\
\60\Savings Society v. Multnomah County, 169 U.S. 421 (1898).
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(3) Investments, in the form of loans to a resident, made by a
resident agent of a nonresident creditor, are taxable to the nonresident
creditor.\61\
\61\Bristol v. Washington County, 177 U.S. 133, 141 (1900).
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(4) Deposits of a resident in a bank in another State, where he
carries on a business and from which these deposits are derived, but
belonging absolutely to him and not used in the business, are subject to
a personal property tax in the city of his residence, whether or not
they are subject to tax in the State where the business is carried on.
The tax is imposed for the general advantage of living within the
jurisdiction (benefit-protection theory), and may be measured by
reference to the riches of the person taxed.\62\
\62\Fidelity & Columbia Trust Co. v. Louisville, 245 U.S. 54
(1917).
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(5) Membership owned by a nonresident in a domestic exchange,
known as a chamber of commerce.\63\
\63\Rogers v. Hennepin County, 240 U.S. 184 (1916).
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[[Page 1647]]
(6) Membership by a resident in a stock exchange located in
another State. ``Double taxation'' the Court observed ``by one and the
same State is not'' prohibited ``by the Fourteenth Amendment; much less
is taxation by two States upon identical or closely related property
interest falling within the jurisdiction of both, forbidden.''\64\
\64\Citizens National Bank v. Durr, 257 U.S. 99, 109 (1921).
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(7) A resident owner may be taxed on stock held in a foreign
corporation that does no business and has no property within the taxing
State. The Court also added that ``undoubtedly the State in which a
corporation is organized may . . . [tax] all of its shares whether owned
by residents or nonresidents.''\65\
\65\Hawley v. Malden, 232 U.S. 1, 12 (1914).
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(8) Stock in a foreign corporation owned by another foreign
corporation transacting its business within the taxing State. The Court
attached no importance to the fact that the shares were already taxed by
the State in which the issuing corporation was domiciled and might also
be taxed by the State in which the stock owner was domiciled, or at any
rate did not find it necessary to pass upon the validity of the latter
two taxes. The present levy was deemed to be tenable on the basis of the
benefit-protection theory, namely, ``the economic advantages realized
through the protection at the place . . . [of business situs] of the
ownership of rights in intangibles. . . .''\66\
\66\First Bank Corp. v. Minnesota, 301 U.S. 234, 241 (1937).
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(9) Shares owned by nonresident shareholders in a domestic
corporation, the tax being assessed on the basis of corporate assets and
payable by the corporation either out of its general fund or by
collection from the shareholder. The shares represent an aliquot portion
of the whole corporate assets, and the property right so represented
arises where the corporation has its home, and is therefore within the
taxing jurisdiction of the State, notwithstanding that ownership of the
stock may also be a taxable subject in another State.\67\
\67\Schuylkill Trust Co. v. Pennsylvania, 302 U.S. 506 (1938).
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(10) A tax on the dividends of a corporation may be distributed
ratably among stockholders regardless of their residence outside the
State, the stockholders being the ultimate beneficiaries of the
corporation's activities within the taxing State and protected by the
latter and subject to its jurisdiction.\68\ This tax, though collected
by the corporation, is on the transfer to a stockholder of his share of
[[Page 1648]]
corporate dividends within the taxing State and is deducted from said
dividend payments.\69\
\68\International Harvester Co. v. Department of Taxation, 322
U.S. 435 (1944).
\69\Wisconsin Gas Co. v. United States, 322 U.S. 526 (1944).
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(11) Stamp taxes on the transfer within the taxing State by one
nonresident to another of stock certificates issued by a foreign
corporation,\70\ and upon promissory notes executed by a domestic
corporation, although payable to banks in other States.\71\ These taxes,
however, were deemed to have been laid, not on the property, but upon an
event, the transfer in one instance, and execution in the latter which
took place in the taxing State.
\70\New York ex rel. Hatch v. Reardon, 204 U.S. 152 (1907).
\71\Graniteville Mfg. Co. v. Query, 283 U.S. 376 (1931).
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The following personal property taxes on intangibles have been
invalidated:
(1) Debts evidenced by notes in safekeeping within the taxing
State, but made and payable and secured by property in a second State
and owned by a resident of a third State.\72\
\72\Buck v. Beach, 206 U.S. 392 (1907).
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(2) A property tax sought to be collected from a life
beneficiary on the corpus of a trust composed of property located in
another State and as to which the beneficiary had neither control nor
possession, apart from the receipt of income therefrom.\73\ However, a
personal property tax may be collected on one-half of the value of the
corpus of a trust from a resident who is one of the two trustees
thereof, not withstanding that the trust was created by the will of a
resident of another State in respect of intangible property located in
the latter State, at least where it does not appear that the trustee is
exposed to the danger of other ad valorem taxes in another State.\74\
The first case, Brooke v. Norfolk,\75\ is distinguishable by virture of
the fact that the property tax therein voided was levied upon a resident
beneficiary rather than upon a resident trustee in control of
nonresident intangibles. Different too is Safe Deposit & T. Co. v.
Virginia,\76\ where a property tax was unsuccessfully demanded of a
nonresident trustee with respect to nonresident intangibles under its
control.
\73\Brooke v. City of Norfolk, 277 U.S. 27 (1928).
\74\Greenough v. Tax Assessors, 331 U.S. 486, 496-97 (1947).
\75\277 U.S. 27 (1928).
\76\280 U.S. 83 (1929).
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(3) A tax, measured by income, levied on trust certificates held
by a resident, representing interests in various parcels of land (some
inside the State and some outside), the holder of the certificates,
though without a voice in the management of the property,
[[Page 1649]]
being entitled to a share in the net income and, upon sale of the
property, to the proceeds of the sale.\77\
\77\Senior v. Braden, 295 U.S. 422 (1935).
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A State in which a foreign corporation has acquired a commercial
domicile and in which it maintains its general business offices may tax
the latter's bank deposits and accounts receivable even though the
deposits are outside the State and the accounts receivable arise from
manufacturing activities in another State.\78\ Similarly, a
nondomiciliary State in which a foreign corporation did business can tax
the ``corporate excess'' arising from property employed and business
done in the taxing State.\79\ On the other hand, when the foreign
corporation transacts only interstate commerce within a State, any
excise tax on such excess is void, irrespective of the amount of the
tax.\80\ A domiciliary State, however, may tax the excess of market
value of outstanding capital stock over the value of real and personal
property and certain indebtedness of a domestic corporation even though
this ``corporate excess'' arose from property located and business done
in another State and was there taxable. Moreover, this result follows
whether the tax is considered as one on property or on the
franchise.\81\ Also a domiciliary State, which imposes no franchise tax
on a stock fire insurance corporation, validly may assess a tax on the
full amount of its paid-in capital stock and surplus, less deductions
for liabilities, notwithstanding that such domestic corporation
concentrates its executive, accounting, and other business offices in
New York, and maintains in the domiciliary State only a required
registered office at which local claims are handled. Despite ``the
vicissitudes which the so-called `jurisdiction-to-tax' doctrine has
encountered . . . ,'' the presumption persists that intangible property
is taxable by the State of origin.\82\ But a property tax on the capital
stock of a domestic company which includes in the appraisal thereof the
value of coal mined in the taxing State but located in another State
awaiting sale deprives the corporation of its property without due
process of
[[Page 1650]]
law.\83\ Also void for the same reason is a state tax on the franchise
of a domestic ferry company which includes in the valuation thereof the
worth of a franchise granted to the said company by another State.\84\
\78\Wheeling Steel Corp v. Fox, 298 U.S. 193 (1936). See also
Memphis Gas Co. v. Beeler, 315 U.S. 649, 652 (1942).
\79\Adams Express Co. v. Ohio, 165 U.S. 194 (1897).
\80\Alpha Cement Co. v. Massachusetts, 268 U.S. 203 (1925).
\81\Cream of Wheat Co. v. County of Grand Forks, 253 U.S. 325
(1920).
\82\Newark Fire Ins. Co. v. State Board, 307 U.S. 313, 318, 324
(1939). Although the eight Justices affirming this tax were not in
agreement as to the reasons to be assigned in justification of this
result, the holding appears to be in line with the dictum uttered by
Chief Justice Stone in Curry v. McCanless, 307 U.S. 357, 368 (1939), to
the effect that the taxation of a corporation by a State where it does
business, measured by the value of the intangibles used in its business
there, does not preclude the State of incorporation from imposing a tax
measured by all its intangibles.
\83\Delaware, L. & W.P.R.R. v. Pennsylvania, 198 U.S. 341
(1905).
\84\Louisville & Jeffersonville Ferry Co. v. Kentucky, 188 U.S.
385 (1903).
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Transfer (Inheritance, Estate, Gift) Taxes.--Being competent to
regulate exercise of the power of testamentary disposition and the
privilege of inheritance, a State may base its succession taxes upon
either the transmission or an exercise of the legal power of
transmission, of property by will or by descent, or the enjoyment of the
legal privilege of taking property by devise or descent.\85\ But
whatever may be the justification of their power to levy such taxes,
States have consistently found themselves restricted by the rule,
established as to property taxes in 1905 in Union Transit Co. v.
Kentucky,\86\ and subsequently reiterated in Frick v. Pennsylvania\87\
in 1925, which precludes imposition of transfer taxes upon tangible
personal property by any State other than the one in which such
tangibles are permanently located or have an actual situs. In the case
of intangibles, however, the Court has oscillated in upholding, then
rejecting, and again currently sustaining the levy by more than one
State of death taxes upon intangibles comprising the estate of a
decedent.
\85\Stebbins v. Riley, 268 U.S. 137, 140-41 (1925).
\86\199 U.S. 194 (1905). In dissenting in State Tax Comm'n v.
Aldrich, 316 U.S. 174, 185 (1942), Justice Jackson asserted that a
reconsideration of this principle had become timely.
\87\268 U.S. 473 (1925). See also Treichler v. Wisconsin, 338
U.S. 251 (1949); City Bank Co. v. Schnader, 293 U.S. 112 (1934).
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Until 1930, transfer taxes upon intangibles levied by both the
domiciliary as well as nondomiciliary, or situs State, were with rare
exceptions approved. Thus, in Bullen v. Wisconsin,\88\ the domiciliary
State of the creator of a trust was held competent to levy an
inheritance tax, upon the death of the settlor, on his trust fund
consisting of stocks, bonds, and notes kept and administered in another
State and as to which the settlor reserved the right to control
disposition and to direct payment of income for life, such reserved
powers being equivalent to a fee. Cognizance was taken of the fact that
the State in which these intangibles had their situs had also
[[Page 1651]]
taxed the trust. Levy of an inheritance tax by a nondomiciliary State
was sustained on similar grounds in Wheeler v. New York, wherein it was
held that the presence of a negotiable instrument was sufficient to
confer jurisdiction upon the State seeking to tax its transfer.\89\ On
the other hand, the mere ownership by a foreign corporation of property
in a nondomiciliary State was held insufficient to support a tax by that
State on the succession to shares of stock in that corporation owned by
a nonresident decedent.\90\ Also against the trend was Blodgett v.
Silberman,\91\ wherein the Court defeated collection of a transfer tax
by the domiciliary State by treating coins and bank notes deposited by a
decedent in a safe deposit box in another State as tangible property,
albeit it conceded that the domiciliary State could tax the transfer of
books and certificates of indebtness found in that safe deposit box as
well as the decedent's interest in a foreign partnership.
\88\240 U.S. 635, 631 (1916). A decision rendered in 1926 which
is seemingly in conflict was Wachovia Bank & Trust Co. v. Doughton, 272
U.S. 567 (1926), in which North Carolina was prevented from taxing the
exercise of a power of appointment through a will executed therein by a
resident, when the property was a trust fund in Massachusetts created by
the will of a resident of the latter State. One of the reasons assigned
for this result was that by the law of Massachusetts the property
involved was treated as passing from the original donor to the
appointee. However, this holding was overruled in Graves v. Schmidlapp,
315 U.S. 657 (1942).
\89\233 U.S. 434 (1914).
\90\Rhode Island Trust Co. v. Doughton, 270 U.S. 69 (1926).
\91\277 U.S. 1 (1928).
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In the course of about two years following the Depression, the
Court handed down a group of four decisions which placed the stamp of
disapproval upon multiple transfer and--by inference--other multiple
taxation of intangibles.\92\ Asserting, as it did in one of these cases,
that ``practical considerations of wisdom, convenience and justice alike
dictate the desirability of a uniform rule confining the jurisdiction to
impose death transfer taxes as to intangibles to the State of the
[owner's] domicile,''\93\ the Court, through consistent application of
the maxim, mobilia sequuntur personam, proceeded to deny the right of
nondomiciliary States to tax and to reject as inadequate jurisdictional
claims of the latter founded upon such bases as control, benefit, and
protection or situs. During this interval, 1930-1932, multiple transfer
taxation of intangibles came to be viewed, not merely as undesirable,
but as so arbitrary and unreasonable as to be prohibited by the due
process clause.
\92\First Nat'l Bank v. Maine, 284 U.S. 312 (1932); Beidler v.
South Carolina Tax Comm'n, 282 U.S. 1 (1930); Baldwin v. Missouri, 281
U.S. 586 (1930); Farmer's Loan Co. v. Minnesota, 280 U.S. 204 (1930).
\93\First National Bank v. Maine, 284 U.S. 312, 330-31 (1932).
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While the Court expressly overruled only one of these four
decisions condemning multiple succession taxation of intangibles,
beginning with Curry v. McCanless\94\ in 1939, it announced a departure
from the ``doctrine, of recent origin, that the Fourteenth Amendment
precludes the taxation of any interest in the same intangible in more
than one State. . . .'' Taking cognizance of the fact
[[Page 1652]]
that this doctrine had never been extended to the field of income
taxation or consistently applied in the field of property taxation, the
Court declared that a correct interpretation of constitutional
requirements would dictate the following conclusions: ``From the
beginning of our constitutional system control over the person at the
place of his domicile and his duty there, common to all citizens, to
contribute to the support of government have been deemed to afford an
adequate constitutional basis for imposing on him a tax on the use and
enjoyment of rights in intangibles measured by their value. . . . But
when the taxpayer extends his activities with respect to his
intangibles, so as to avail himself of the protection and benefit of the
laws of another State, in such a way as to bring his person or . . .
[his intangibles] within the reach of the tax gatherer there, the reason
for a single place of taxation no longer obtains, . . . [However], the
State of domicile is not deprived, by the taxpayer's activities,
elsewhere, of its constitutional jurisdiction to tax.'' In accordance
with this line of reasoning, Tennessee, where a decedent died domiciled,
and Alabama, where a trustee, by conveyance from said decedent, held
securities on specific trusts, were both deemed competent to impose a
tax on the transfer of these securities passing under the will of the
decedent. ``In effecting her purposes,'' the testatrix was viewed as
having ``brought some of the legal interests which she created within
the control of one State by selecting a trustee there, and others within
the control of the other State, by making her domicile there.'' She had
found it necessary to invoke ``the aid of the law of both States and her
legatees'' were subject to the same necessity.
\94\307 U.S. 357, 363, 366-68, 372 (1939).
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These statements represented a belated adoption of the views
advanced by Chief Justice Stone in dissenting or concurring opinions
which he filed in three of the four decisions during 1930-1932. By the
line of reasoning taken in these opinions, if protection or control was
extended to, or exercised over, intangibles or the person of their
owner, then as many States as afforded such protection or were capable
of exerting such dominion should be privileged to tax the transfer of
such property. On this basis, the domiciliary State would invariably
qualify as a State competent to tax as would a nondomiciliary State, so
far as it could legitimately exercise control or could be shown to have
afforded a measure of protection that was not trivial or insubstantial.
On the authority of Curry v. McCanless, the Court, in Pearson v.
McGraw,\95\ also sustained the application of an Oregon transfer tax to
intangibles handled by an Illinois trust company and never
[[Page 1653]]
physically present in Oregon. Jurisdiction to tax was viewed as
dependent, not on the location of the property in the State, but on
control over the owner who was a resident of Oregon. In Graves v.
Elliott,\96\ the Court upheld the power of New York, in computing its
estate tax, to include in the gross estate of a domiciled decedent the
value of a trust of bonds managed in Colorado by a Colorado trust
company and already taxed on its transfer by Colorado, which trust the
decedent had established while in Colorado and concerning which he had
never exercised any of his reserved powers of revocation or change of
beneficiaries. It was observed that ``the power of disposition of
property is the equivalent of ownership, . . . and its exercise in the
case of intangibles is . . . [an] appropriate subject of taxation at the
place of the domicile of the owner of the power. Relinquishment at
death, in consequence of the nonexercise in life, of a power to revoke a
trust created by a decedent is likewise an appropriate subject of
taxation.''\97\ Consistent application of the principle enunciated in
Curry v. McCanless is also discernible in two later cases in which the
Court sustained the right of a domiciliary State to tax the transfer of
intangibles kept outside its boundaries, notwithstanding that ``in some
instances they may be subject to taxation in other jurisdictions, to
whose control they are subject and whose legal protection they
enjoyed.'' In Graves v. Schmidlapp,\98\ an estate tax was levied upon
the value of the subject of a general testamentary power of appointment
effectively exercised by a resident donee over intangibles held by
trustees under the will of a nonresident donor of the power. Viewing the
transfer of interest in the intangibles by exercise of the power of
appointment as the equivalent of ownership, the Court quoted from
McCulloch v. Maryland\99\ to the effect that the power to tax ```is an
incident of sovereignty, and is coextensive with that to which it is an
incident.''' Again, in Central Hanover Bank Co. v. Kelly,\100\ the Court
approved a New Jersey transfer tax imposed on the occasion of the death
of a New Jersey grantor of an irrevocable trust executed, and consisting
of securities located in New York, and providing for the disposition of
the corpus to two nonresident sons.
\95\308 U.S. 313 (1939).
\96\307 U.S. 383 (1939).
\97\Id. at 386.
\98\315 U.S. 657, 660, 661 (1942).
\99\17 U.S. (4 Wheat.) 316, 429 (1819).
\100\319 U.S. 94 (1943).
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The costliness of multiple taxation of estates comprising
intangibles is appreciably aggravated when each of several States founds
its tax not upon different events or property rights but upon an
identical basis, namely that the decedent died domiciled within its
[[Page 1654]]
borders. Not only is an estate then threatened with excessive
contraction but the contesting States may discover that the assets of
the estate are insufficient to satisfy their claims. Thus, in Texas v.
Florida,\101\ the State of Texas filed an original petition in the
Supreme Court, in which it asserted that its claim, together with those
of three other States, exceeded the value of the estate, that the
portion of the estate within Texas alone would not suffice to discharge
its own tax, and that its efforts to collect its tax might be defeated
by adjudications of domicile by the other States. The Supreme Court
disposed of this controversy by sustaining a finding that the decedent
had been domiciled in Massachusetts, but intimated that thereafter it
would take jurisdiction in like situations only in the event that an
estate did not exceed in value the total of the conflicting demands of
several States and that the latter were confronted with a prospective
inability to collect.
\101\306 U.S. 398 (1939). Resort to the Supreme Court's original
jurisdiction was necessary because in Worcester County Trust Co. v.
Riley, 302 U.S. 292 (1937), the Court, proceeding on the basis that
inconsistent determinations by the courts of two States as to the
domicile of a taxpayer do not raise a substantial federal constitutional
question, held that the Eleventh Amendment precluded a suit by the
estate of the decedent to establish the correct State of domicile. In
California v. Texas, 437 U.S. 601 (1978), a case on all points with
Texas v. Florida, the Court denied leave to file an original action to
adjudicate a dispute between the two States about the actual domicile of
Howard Hughes, a number of Justices suggesting that Worcester County no
longer was good law. Subsequently, the Court reaffirmed Worcester
County, Cory v. White, 457 U.S. 85 (1982), and then permitted an
original action to proceed, California v. Texas, 457 U.S. 164 (1982),
several Justices taking the position that neither Worcester County nor
Texas v. Florida was any longer viable.
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Corporate Privilege Taxes.--Since the tax is levied not on
property but on the privilege of doing business in corporate form, a
domestic corporation may be subjected to a privilege tax graduated
according to paid-up capital stock, even though the latter represents
capital not subject to the taxing power of the State.\102\ By the same
token, the validity of a franchise tax, imposed on a domestic
corporation engaged in foreign maritime commerce and assessed upon a
proportion of the total franchise value equal to the ratio of local
business done to total business, is not impaired by the fact that the
total value of the franchise was enhanced by property and operations
carried on beyond the limits of the State.\103\ However, a State, under
the guise of taxing the privilege of doing an intrastate business,
cannot levy on property beyond its borders; therefore, as applied to
foreign corporations, a license tax based on
[[Page 1655]]
authorized capital stock is void,\104\ even though there be a maximum to
the fee,\105\ unless apportioned according to some method, as, for
example, a franchise tax based on such proportion of outstanding capital
stock as it represented by property owned and used in business
transacted in the taxing State.\106\ An entrance fee, on the other hand,
collected only once as the price of admission to do an intrastate
business, is distinguishable from a tax and accordingly may be levied on
a foreign corporation on the basis of a sum fixed in relation to the
amount of authorized capital stock (in this instance, a $5,000 fee on an
authorized capital of $100,000,000).\107\
\102\Kansas City Ry. v. Kansas, 240 U.S. 227 (1916); Kansas
City, M. & B. R.R. v. Stiles, 242 U.S. 111 (1916).
\103\Schwab v. Richardson, 263 U.S. 88 (1923).
\104\Western Union Tel. Co. v. Kansas, 216 U.S. 1 (1910);
Pullman Co. v. Kansas, 216 U.S. 56 (1910); Looney v. Crane Co., 245 U.S.
178 (1917); International Paper Co. v. Massachusetts, 246 U.S. 135
(1918).
\105\Cudahy Co. v. Hinkle, 278 U.S. 460 (1929).
\106\St. Louis S. W. Ry. v. Arkansas, 235 U.S. 350 (1914).
\107\Atlantic Refining Co. v. Virginia, 302 U.S. 22 (1937).
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A municipal license tax imposed as a percentage of the receipts
of a foreign corporation derived from the sales within and without the
State of goods manufactured in the city is not a tax on business
transactions or property outside the city and therefore does not violate
the due process clause.\108\ But a State lacks jurisdiction to extend
its privilege tax to the gross receipts of a foreign contracting
corporation for work done outside the taxing State in fabricating
equipment later installed in the taxing State. Unless the activities
which are the subject of the tax are carried on within its territorial
limits, a State is not competent to impose such a privilege tax.\109\
\108\American Mfg. Co. v. St. Louis, 250 U.S. 459 (1919). Nor
does a state license tax on the production of electricity violate the
due process clause because it may be necessary, to ascertain, as an
element in its computation, the amounts delivered in another
jurisdiction. Utah Power & Light Co. v. Pfost, 286 U.S. 165 (1932).
\109\James v. Dravo Contracting Co., 302 U.S. 134 (1937).
---------------------------------------------------------------------------
A tax on chain stores, at a rate per store determined by the
number of stores both within and without the State is not
unconstitutional as a tax in part upon things beyond the jurisdiction of
the State.\110\
\110\Great Atlantic & Pacific Tea Co. v. Grosjean, 301 U.S. 412
(1937).
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Individual Income Taxes.--Consistent with due process of law, a
State annually may tax the entire net income of resident individuals
from whatever source received,\111\ and that portion of a nonresident's
net income derived from property owned, and from any business, trade, or
profession carried on, by him within its borders.\112\ Jurisdiction, in
the case of residents, is founded upon the rights and privileges
incident to domicile, and, in the case of non
[[Page 1656]]
residents, upon dominion over either the receiver of the income or the
property or activity from which it is derived and upon the obligation to
contribute to the support of a government which renders secure the
collection of such income. Accordingly, a State may tax residents on
income from rents of land located outside the State and from interest on
bonds physically without the State and secured by mortgage upon lands
similarly situated\113\ and from a trust created and administered in
another State, and not directly taxable to the trustee.\114\ The fact
that another State has lawfully taxed identical income in the hands of
trustees operating therein does not necessarily destroy a domiciliary
State's right to tax the receipt of income by a resident beneficiary.
``The taxing power of a state is restricted to her confines and may not
be exercised in respect of subjects beyond them.''\115\ Likewise, even
though a nonresident does no business within a State, the latter may tax
the profits realized by the nonresident upon his sale of a right
appurtenant to membership in a stock exchange within its borders.\116\
\111\Lawrence v. State Tax Comm'n, 286 U.S. 276 (1932).
\112\Shaffer v. Carter, 252 U.S. 37 (1920); Travis v. Yale &
Towne Mfg. Co., 252 U.S. 60 (1920).
\113\New York ex rel. Cohn v. Graves, 300 U.S. 308 (1937).
\114\Maguire v. Trefy, 253 U.S. 12 (1920).
\115\Guaranty Trust Co. v. Virginia, 305 U.S. 19, 23 (1938).
\116\New York ex. rel. Whitney v. Graves, 299 U.S. 366 (1937).
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Corporate Income Taxes: Foreign Corporations.--A tax based on
the income of a foreign corporation may be determined by allocating to
the State a proportion of the total.\117\ However, such a basis may work
an unconstitutional result if the income thus attributed to the State is
out of all appropriate proportion to the business there transacted by
the corporation. Evidence may always be submitted which tends to show
that a State has applied a method which, albeit fair on its face,
operates so as to reach profits which are in no sense attributable to
transactions within its jurisdication.\118\ Nevertheless, a foreign
corporation is in error when it contends that due process is denied by a
franchise tax measured by income, which is levied, not upon net income
from intrastate business alone, but on net income justly attributable to
all classes of business done within the State, interstate and foreign,
[[Page 1657]]
as well as intrastate business.\119\ Inasmuch as the privilege granted
by a State to a foreign corporation of carrying on local business
supports a tax by that State on the income derived from that business,
it follows that the Wisconsin privilege dividend tax, consistent with
the due process clause, may be applied to a Delaware corporation, having
its principal offices in New York, holding its meetings and voting its
dividends in New York, and drawing its dividend checks on New York bank
accounts. The tax is imposed on the ``privilege of declaring and
receiving dividends'' out of income derived from property located and
business transacted in the State, equal to a specified percentage of
such dividends, the corporation being required to deduct the tax from
dividends payable to resident and nonresident shareholders and pay it
over to the State.\120\
\117\Underwood Typewriter Co. v. Chamberlain, 254 U.S. 113
(1920); Bass, Ratcliff & Gretton Ltd. v. Tax Comm'n 266 U.S. 271 (1924).
The Court has recently considered and expanded the ability of the States
to use apportionment formulae to allocate to each State for taxing
purposes a fraction of the income earned by an integrated business
conducted in several States as well as abroad. Moorman Mfg. Co. v. Bair,
437 U.S. 267 (1978); Mobil Oil Corp. v. Commissioner of Taxes, 445 U.S.
425 (1980); Exxon Corp. v. Department of Revenue, 447 U.S. 207 (1980).
Exxon refused to permit a unitary business to use separate accounting
techniques that divided its profits among its various functional
departments to demonstrate that a State's formulary apportionment taxes
extraterritorial income improperly. Bair, supra, at 276-80, implied that
a showing of actual multiple taxation was a necessary predicate to a due
process challenge but might not be sufficient.
\118\Hans Rees' Sons v. North Carolina, 283 U.S. 123 (1931).
\119\Matson Nav. Co. v. State Board, 297 U.S. 441 (1936).
\120\Wisconsin v. J.C. Penney Co., 311 U.S. 435, 448-49 (1940).
Dissenting, Justice Roberts, along with Chief Justice Hughes and
Justices McReynolds and Reed, stressed the fact that the use and
disbursement by the corporation at its home office of income derived
from operations in many States does not depend on and cannot be
controlled by, any law of Wisconsin. The act of disbursing such income
as dividends, he contended is ``one wholly beyond the reach of
Wisconsin's sovereign power, one which it cannot effectively command, or
prohibit or condition.'' The assumption that a proportion of the
dividends distributed is paid out of earnings in Wisconsin for the year
immediately preceding payment is arbitrary and not borne out by the
facts. Accordingly, ``if the exaction is an income tax in any sense it
is such upon the stockholders (many of whom are nonresidents) and is
obviously bad.'' See also Wisconsin v. Minnesota Mining Co., 311 U.S 452
(1940).
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Insurance Company Taxes.--A privilege tax on the gross premiums
received by a foreign life insurance company at its home office for
business written in the State does not deprive the company of property
without due process,\121\ but a tax is bad when the company has
withdrawn all its agents from the State and has ceased to do business,
merely continuing to be bound to policyholders resident therein and
receiving at its home office the renewal premiums.\122\ Also violative
of due process is a state gross premium tax imposed on a nonresident
firm, doing business in the taxing jurisdiction, which purchased
coverage of property located therein from an unlicensed out-of-state
insurer which consummated the contract, serviced the policy, and
collected the premiums outside that taxing jurisdiction.\123\
Distinguishable therefrom is the following tax which was construed as
having been levied, not upon annual premiums nor upon the privilege
merely of doing business during the period that the company actually was
within the State, but upon the privilege of entering and engaging in
business, the percentage ``on the annual premiums to be paid
[[Page 1658]]
throughout the life of the policies issued.'' By reason of this
difference a State may continue to collect such tax even after the
company's withdrawal from the State.\124\
\121\Equitable Life Soc'y v. Pennsylvania, 238 U.S. 143 (1915).
\122\Provident Savings Ass'n v. Kentucky, 239 U.S. 103 (1915).
\123\State Bd. of Ins. v. Todd Shipyards, 370 U.S. 451 (1962).
\124\Continental Co. v. Tennessee, 311 U.S. 5, 6 (1940)
(emphasis added).
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A State which taxes the insuring of property within its limits
may lawfully extend its tax to a foreign insurance company which
contracts with an automobile sales corporation in a third State to
insure its customers against loss of cars purchased through it, so far
as the cars go into possession of a purchaser within the taxing
State.\125\ On the other hand, a foreign corporation admitted to do a
local business, which insures its property with insurers in other States
who are not authorized to do business in the taxing State, cannot
constitutionally be subjected to a 5% tax on the amount of premiums paid
for such coverage.\126\ Likewise a Connecticut life insurance
corporation, licensed to do business in California, which negotiated
reinsurance contracts in Connecticut, received payment of premiums
thereon in Connecticut, and was there liable for payment of losses
claimed thereunder, cannot be subjected by California to a privilege tax
measured by gross premiums derived from such contracts, notwithstanding
that the contracts reinsured other insurers authorized to do business in
California and protected policies effected in California on the lives of
residents therein. The tax cannot be sustained whether as laid on
property, business done, or transactions carried on, within California,
or as a tax on a privilege granted by that State.\127\
\125\Palmetto Ins. Co. v. Connecticut, 272 U.S. 295 (1926).
\126\St. Louis Compress Co. v. Arkansas, 260 U.S. 346 (1922).
\127\Connecticut General Co. v. Johnson, 303 U.S. 77 (1938).
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When policy loans to residents are made by a local agent of a
foreign insurance company, in the servicing of which notes are signed,
security taken, interest collected, and debts are paid within the State,
such credits are taxable to the company, notwithstanding that the
promissory notes evidencing such credits are kept at the home office of
the insurer.\128\ But when a resident policyholder's loan is merely
charged against the reserve value of his policy, under an arrangement
for extinguishing the debt and interest thereon by deduction from any
claim under the policy, such credit is not taxable to the foreign
insurance company.\129\ Premiums due from residents on which an
extension has been granted by foreign companies also are credits on
which the latter may be taxed by the State of the debtor's
domicile;\130\ the mere fact that the insurers
[[Page 1659]]
charge these premiums to local agents and give no credit directly to
policyholders does not enable them to escape this tax.\131\
\128\Metropolitan Life Ins. Co. v. City of New Orleans, 205 U.S.
395 (1907).
\129\Orleans Parish v. New York Life Ins. Co., 216 U.S 517
(1910).
\130\Liverpool & L. & G. Ins. Co. v. Orleans Assessors, 221 U.S.
346 (1911).
\131\Orient Ins. Co. v. Assessors of Orleans, 221 U.S. 358
(1911).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Procedure in Taxation
Generally.--Exactly what due process requires in the assessment
and collection of general taxes has never been decided by the Supreme
Court. While it was held that ``notice to the owner at some stage of the
proceedings, as well as an opportunity to defend, is essential'' for
imposition of special taxes, it has also ruled that laws for assessment
and collection of general taxes stand upon a different footing and are
to be construed with the utmost liberality, even to the extent of
acknowledging that no notice whatever is necessary.\132\ Due process of
law as applied to taxation does not mean judicial process;\133\ neither
does it require the same kind of notice as is required in a suit at law,
or even in proceedings for taking private property under the power of
eminent domain.\134\ If a taxpayer is given an opportunity to test the
validity of a tax at any time before it is final, whether the
proceedings for review take place before a board having a quasi-judicial
character, or before a tribunal provided by the State for the propose of
determining such questions, due process of law is not denied.\135\
\132\Turpin v. Lemon, 187 U.S. 51, 58 (1902); Glidden v.
Harrington, 189 U.S. 255 (1903).
\133\McMillen v. Anderson, 95 U.S. 37, 42 (1877).
\134\Bell's Gap R.R. v. Pennsylvania, 134 U.S. 232, 239 (1890).
\135\Hodge v. Muscatine County, 196 U.S. 276 (1905).
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Notice and Hearing in Relation to Taxes.--``Of the different
kinds of taxes which the State may impose, there is a vast number of
which, from their nature, no notice can be given to the taxpayer, nor
would notice be of any possible advantage to him, such as poll taxes,
license taxes (not dependent upon the extent of his business), and
generally, specific taxes on things, or persons, or occupations. In such
cases the legislature, in authorizing the tax, fixes its amount, and
that is the end of the matter. If the tax be not paid, the property of
the delinquent may be sold, and he be thus deprived of his property. Yet
there can be no question that the proceeding is due process of law, as
there is no inquiry into the weight of evidence, or other element of a
judicial nature, and nothing could be changed by hearing the taxpayer.
No right of his is, therefore, invaded. Thus, if the tax on animals be a
fixed sum per head, or on articles a fixed sum per yard, or bushel, or
gallon, there is nothing the owner can do which can affect the amount to
be collected from him. So, if a person wishes a license to do business
of a particular kind, or at a particular place, such as keeping a hotel
[[Page 1660]]
or a restaurant, or selling liquors, or cigars, or clothes, he has only
to pay the amount required by law and go into the business. There is no
need in such cases for notice or hearing. So, also, if taxes are imposed
in the shape of licenses for privileges, such as those on foreign
corporations for doing business in the State, or on domestic
corporations for franchises, if the parties desire the privilege, they
have only to pay the amount required. In such cases there is no
necessity for notice or hearing. The amount of the tax would not be
changed by it.''\136\
\136\Hagar v. Reclamation Dist., 111 U.S. 701, 709-10 (1884).
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Notice and Hearing in Relation to Assessments.--``But where a
tax is levied on property not specifically, but according to its value,
to be ascertained by assessors appointed for that purpose upon such
evidence as they may obtain, a different principle comes in. The
officers in estimating the value act judicially; and in most of the
States provision is made for the correction of errors committed by them,
through boards of revision or equalization, sitting at designated
periods provided by law to hear complaints respecting the justice of the
assessments. The law in prescribing the time when such complaints will
be heard, gives all the notice required, and the proceedings by which
the valuation is determined, though it may be followed, if the tax be
not paid, by a sale of the delinquent's property, is due process of
law.''\137\
\137\Id. at 710.
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Nevertheless, it has never been considered necessary to the
validity of a tax that the party charged shall have been present, or had
an opportunity to be present, in some tribunal when he was
assessed.\138\ Where a tax board has its time of sitting fixed by law
and where its sessions are not secret, no obstacle prevents the
appearance of any one before it to assert a right or redress a wrong and
in the business of assessing taxes, this is all that can be reasonably
asked.\139\ Nor is there any constitutional command that notice of an
assessment as well as an opportunity to contest it be given in advance
of the assesment. It is enough that all available defenses may be
presented to a competent tribunal during a suit to collect the tax and
before the demand of the State for remittance becomes final.\140\ A
hearing before judgment, with full opportunity to submit evidence and
arguments being all that can be adjudged vital, it follows that
rehearings and new trials are not essential to due process of law.\141\
One hearing is sufficient to constitute due
[[Page 1661]]
process,\142\ and the requirements of due process are also met if a
taxpayer, who had no notice of a hearing, does receive notice of the
decision reached there and is privileged to appeal it and, on appeal, to
present evidence and be heard on the valuation of his property.\143\
\138\McMillen v. Anderson, 95 U.S. 37, 42 (1877).
\139\State Railroad Tax Cases, 92 U.S. 575, 610 (1876).
\140\Nickey v. Mississippi, 292 U.S. 393, 396 (1934). See also
Clement Nat'l Bank v. Vermont, 231 U.S. 120 (1913).
\141\Pittsburgh C. C. & St. L. Ry. v. Backus, 154 U.S. 421
(1894).
\142\Michigan Central R.R. v. Powers, 201 U.S. 245, 302 (1906).
\143\Pittsburgh C. C. & St. L. Ry. v. Board of Pub. Works, 172
U.S. 32, 45 (1898).
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However, when special assessments are made by a political
subdivision, a taxing board or court, according to special benefits, the
property owner is entitled to be heard as to the amount of his
assessments and upon all questions properly entering into that
determination.\144\ The hearing need not amount to a judicial
inquiry,\145\ but a mere opportunity to submit objections in writing,
without the right of personal appearance, is not sufficient.\146\ If an
assessment for a local improvement is made in accordance with a fixed
rule prescribed by legislative act, the property owner is not entitled
to be heard in advance on the question of benefits.\147\ On the other
hand, if the area of the assessment district was not determined by the
legislature, a landowner does have the right to be heard respecting
benefits to his property before it can be included in the improvement
district and assessed, but due process is not denied if, in the absence
of actual fraud or bad faith, the decision of the agency vested with the
initial determination of benefits is made final.\148\ The owner has no
constitutional right to be heard in opposition to the launching of a
project which may end in assessment, and once his land has been duly
included within a benefit district, the only privilege which he
thereafter enjoys is to a hearing upon the apportionment, that is, the
amount of the tax which he has to pay.\149\ Nor can he rightfully
complain because the statute renders conclusive, after a hearing, the
determination as to apportionment by the same body which levied the
assessment.\150\
\144\St. Louis Land Co. v. Kansas City, 241 U.S. 419, 430
(1916); Paulsen v. Portland, 149 U.S. 30, 41 (1893); Bauman v. Ross, 167
U.S. 548, 590 (1897).
\145\Tonawanda v. Lyon, 181 U.S. 389, 391 (1901).
\146\Londoner v. Denver, 210 U.S. 373 (1908).
\147\Withnell v. Ruecking Constr. Co., 249 U.S. 63, 68 (1919);
Browning v. Hooper, 269 U.S. 396, 405 (1926). Likewise, the committing
to a board of county supervisors of authority to determine, without
notice or hearing, when repairs to an existing drainage system are
necessary cannot be said to deny due process of law to landowners in the
district, who, by statutory requirement, are assessed for the cost
thereof in proportion to the original assessment. Breiholz v. Board of
Supervisors, 257 U.S. 118 (1921).
\148\Fallbrook Irrigation Dist. v. Bradley, 164 U.S. 112, 168,
175 (1896); Browning v. Hooper, 269 U.S. 396, 405 (1926).
\149\Utley v. Petersburg, 292 U.S. 106, 109 (1934); French v.
Barber Asphalt Paving Co., 181 U.S. 324, 341 (1901). See also Soliah v.
Heskin, 222 U.S. 522 (1912).
\150\Hibben v. Smith, 191 U.S. 310, 321 (1903).
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[[Page 1662]]
More specifically, where the mode of assessment resolves itself
into a mere mathematical calculation, there is no necessity for a
hearing.\151\ Statutes and ordinances providing for the paving and
grading of streets, the cost thereof to be assessed on the front foot
rule, do not, by their failure to provide for a hearing or review of
assessments, generally deprive a complaining owner of property without
due process of law.\152\ In contrast, when an attempt is made to cast
upon particular property a certain proportion of the construction cost
of a sewer not calculated by any mathematical formula, the taxpayer has
a right to be heard.\153\
\151\Hancock v. Muskogee, 250 U.S. 454, 458 (1919). Likewise, a
taxpayer does not have a right to a hearing before a state board of
equalization preliminary to issuance by it of an order increasing the
valuation of all property in a city by 40%. Bi-Metallic Co. v. Colorado,
239 U.S. 441 (1915).
\152\City of Detroit v. Parker, 181 U.S. 399 (1901).
\153\Paulsen v. Portland, 149 U.S. 30, 38 (1893).
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Collection of Taxes.--To reach property which has escaped
taxation, a State may tax estates of decedents for a period prior to
death and grant proportionate deductions for all prior taxes which the
personal representative can prove to have been paid.\154\ Collection of
an inheritance tax also may be expedited by a statute requiring the
sealing of safe deposit boxes for at least ten days after the death of
the renter and obliging the lessor to retain assets found therein
sufficient to pay the tax that may be due the State.\155\ Moreover, with
a view to achieving a like result in the case of gasoline taxes, a State
may compel retailers to collect such taxes from consumers and, under
penalty of a fine for delinquency, to remit monthly the amounts thus
collected.\156\ Likewise, a tax on the tangible personal property of a
nonresident owner may be collected from the custodian or possessor of
such property, and the latter, as an assurance of reimbursement, may be
granted a lien on such property.\157\ In collecting personal income
taxes, however, most States require employers to deduct and withhold the
tax from the wages of employees, but the duty thereby imposed on the
employer has never been viewed as depriving him of property without due
process of law, nor has the adjustment of his system of accounting and
paying salaries which withholding entails been viewed as an unreasonable
regulation of the conduct of his business.\158\
\154\Bankers Trust Co. v. Blodgett, 260 U.S. 647 (1923).
\155\National Safe Deposit Co. v. Stead, 232 U.S. 58 (1914).
\156\Pierce Oil Corp. v. Hopkins, 264 U.S. 137 (1924).
\157\Carstairs v. Cochran, 193 U.S. 10 (1904); Hannis Distilling
Co. v. Baltimore, 216 U.S. 285 (1910).
\158\Travis v. Yale & Towne Mfg. Co., 252 U.S. 60, 75, 76
(1920).
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[[Page 1663]]
Moreover, no unconstitutional deprivation of the property rights
of vendors of trucks, sold under conditional sales contract to a
carrier, results when a State asserts against such trucks a prior lien
for highway use taxes levied against the carrier and (1) accruing from
the operation by the carrier of trucks, other than those sold by the
vendors, either before or during the time the carrier operated the
vendors' trucks, or (2) arising from assessments against the carrier,
after vendors repossessed their trucks, and based upon the carrier's
operations preceding such repossession. A vendor is not privileged to
contend that the lien asserted must be limited to taxes attributable
solely to operation of its own trucks; for the wear on the highways
occasioned by the carrier's operation is in no way altered by the
vendor's retention of title.\159\
\159\International Harvester Corp. v. Goodrich, 350 U.S. 537
(1956).
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As a State may provide in advance that taxes shall bear interest
from the time they become due, it may with equal validity stipulate that
taxes which have become delinquent shall bear interest from the time the
delinquency commenced. A State may adopt new remedies for the collection
of taxes and apply these remedies to taxes already delinquent.\160\
After liability of a taxpayer has been fixed by appropriate procedure,
collection of a tax by distress and seizure of his person does not
deprive him of liberty without due process of law.\161\ Nor is a foreign
insurance company denied due process of law when its personal property
is distrained to satisfy unpaid taxes.\162\
\160\League v. Texas, 184 U.S. 156 (1902).
\161\Palmer v. McMahon, 133 U.S. 660, 669 (1890).
\162\Scottish Union & Nat'l Ins. Co. v. Bowland, 196 U.S. 611
(1905).
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The requirements of due process are fulfilled by a statute
which, in conjunction with affording an opportunity to be heard,
provides for the forfeiture of titles to land for failure to list and
pay taxes thereon for certain specified years.\163\ No less
constitutional, as a means of facilitating collection, is an in rem
proceeding, to which the land alone is made a party, whereby tax liens
on land are foreclosed and all preexisting rights or liens are
eliminated by a sale under a decree.\164\ On the other hand, while the
conversion of an unpaid special assessment into both a personal judgment
against the owner as well as a charge on the land is consistent with the
Fourteenth Amendment,\165\ a judgment imposing personal liability
against a nonresident taxpayer over whom the state court acquired no
jurisdiction is void.\166\ Apart from such restraints,
[[Page 1664]]
however, a State is free to adopt new remedies for the collection of
taxes and even to apply new remedies to taxes already delinquent.\167\
\163\King v. Mullins, 171 U.S. 404 (1898); Chapman v. Zobelein,
237 U.S. 135 (1915).
\164\Leigh v. Green, 193 U.S. 79 (1904).
\165\Davidson v. City of New Orleans, 96 U.S. 97, 107 (1878).
\166\Dewey v. Des Moines, 173 U.S. 193 (1899).
\167\League v. Texas, 184 U.S. 156, 158 (1902). See also Straus
v. Foxworth, 231 U.S. 162 (1913).
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Sufficiency and Manner of Giving Notice.--Notice, insofar as it
is required, may be either personal, or by publication, or by statute
fixing the time and place of hearing.\168\ A state statute, consistent
with due process, may designate a corporation as the agent of a
nonresident stockholder to receive notice and to represent him in
proceedings for correcting assessment.\169\ Also ``where the State . . .
[desires] to sell land for taxes upon proceedings to enforce a lien for
the payment thereof, it may proceed directly against the land within the
jurisdiction of the court, and a notice which permits all interested,
who are `so minded,' to ascertain that it is to be subjected to sale to
answer for taxes, and to appear and be heard, whether to be found within
the jurisdiction or not, is due process of law within the Fourteenth
Amendment. . .''\170\ A description, even though it not be technically
correct, which identifies the land will sustain an assessment for taxes
and a notice of sale therefor when delinquent. If the owner knows that
the property so described is his, he is not, by reason of the
insufficient description, deprived of his property without due process.
Where tax proceedings are in rem, owners are bound to take notice
thereof, and to pay taxes on their property, even if assessed to unknown
or other persons, and if an owner stands by and sees his property sold
for delinquent taxes, he is not thereby wrongfully deprived of his
property.\171\
\168\Londoner v. Denver, 210 U.S. 373 (1908). See also Kentucky
Railroad Tax Cases, 115 U.S. 321, 331 (1885); Winona & St. Peter Land
Co. v. Minnesota, 159 U.S. 526, 537 (1895); Merchants Bank v.
Pennsylvania, 167 U.S. 461, 466 (1897); Glidden v. Harrington, 189 U.S.
255 (1903).
\169\Corry v. Baltimore, 196 U.S. 466, 478 (1905).
\170\Leigh v. Green, 193 U.S. 79, 92-93 (1904).
\171\Ontario Land Co. v. Yordy, 212 U.S. 152 (1909). See also
Longyear v. Toolan, 209 U.S. 414 (1908).
---------------------------------------------------------------------------
However, due process was deemed not to have been accorded an
incompetent taxpayer, for whom a guardian had not yet been appointed,
but who was well known to town officials to be financially responsible,
when, in accordance with statutory procedure, notice of a real property
tax delinquency was mailed to her and published in local papers as well
as posted in the town post office, and thereafter, without appearance on
her part, the property was foreclosed and deeded to the town.\172\ On
the other hand, due process was not denied to appellants when, through
dereliction of their
[[Page 1665]]
bookkeeper, they were not apprised of the receipt of mailed notices, and
thus were unable to avert foreclosure of liens for unpaid water charges
outstanding against two parcels of land held by them in trust; this
conclusion is unaffected by the disparity between the value of the land
taken and the amount owed nor by the fact that the city, in one
instance, retained the proceeds of sale after lapse of time to redeem.
Having issued appropriate notices, the city cannot be held responsible
for the negligence of the bookkeeper and the managing trustee in
overlooking arrearages on tax bills, nor is it obligated to inquire why
appellants regularly paid real estate taxes on their property.\173\
\172\Covey v. Town of Somers, 351 U.S. 141 (1956).
\173\Nelson v. New York City, 352 U.S. 103 (1956).
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Sufficiency of Remedy.--When no other remedy is available, due
process is denied by a judgment of a state court withholding a decree in
equity to enjoin collection of a discriminatory tax.\174\ Requirements
of due process are similarly violated by a statute which limits a
taxpayer's right to challenge an assessment to cases of fraud or
corruption,\175\ and by a state tribunal which prevents a recovery of
taxes imposed in violation of the Constitution and laws of the United
States by invoking a state law limiting suits to recover taxes alleged
to have been assessed illegally to taxes paid at the time and in the
manner provided by said law.\176\ In this as in other areas, the state
must provide procedural safeguards against imposition of an
unconstitutional tax. These procedures need not apply predeprivation,
but a state that denies predeprivation remedy by requiring that tax
payments be made before objections are heard must provide a
postdeprivation remedy.\177\ In the case of a tax held unconstitutional
as a discrimination against interstate commerce and not invalidated in
its entirety, the state has several alternatives for equalizing
incidence of the tax: it may pay a refund equal to the difference
between the tax paid and the tax that would have been due under rates
afforded to in-state competitors; it may assess and collect back taxes
from those competitors; or it may combine the two approaches.\178\
\174\Brinkerhoff-Faris Co. v. Hill, 281 U.S. 673 (1930).
\175\Central of Georgia Ry. v. Wright, 207 U.S. 127 (1907).
\176\Carpenter v. Shaw, 280 U.S. 363 (1930). See also Ward v.
Love County, 253 U.S. 17 (1920).
\177\McKesson Corp. v. Florida Alcohol & Tobacco Div., 496 U.S.
18 (1990).
\178\Id.
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Laches.--Persons failing to avail themselves of an opportunity
to object and be heard cannot thereafter complain of assessments as
arbitrary and unconstitutional.\179\ Likewise a car company, which
failed to report its gross receipts as required by statute, has
[[Page 1666]]
no further right to contest the state comptroller's estimate of those
receipts and his adding thereto the 10 percent penalty permitted by
law.\180\
\179\Farncomb v. Denver, 252 U.S. 7 (1920).
\180\Pullman Co. v. Knott, 235 U.S. 23 (1914).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Eminent Domain
The due process clause of the Fourteenth Amendment has been held
to require that when a state or local governmental body, or a private
body exercising delegated power, takes private property it must provide
just compensation and take only for a public purpose. Applicable
principles are discussed under the Fifth Amendment.\181\
\181\For analysis of the law of eminent domain, see supra, pp.
1369-95.
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
DUE PROCESS OF LAW
Substantive Due Process and Noneconomic Liberty
At the heyday of economic substantive due process, the Court
ruled in two cases which, while they also involved property, promised
substantially to extend judicial supervision of the reasonableness of
legislation. This promise was not realized, but later cases brought
forth an avalanche of exposition. In Meyer v. Nebraska,\182\ the Court
struck down a state law forbidding the teaching in any school in the
State, public or private, of any modern foreign language, other than
English, to any child who had not successfully finished the eighth
grade; in Pierce v. Society of Sisters,\183\ it declared
unconstitutional a state law which required public school education of
children aged eight to sixteen. Both cases involved, as noted, property
rights which the Court asserted were protected; the statute in Meyer
interfered with the occupation of a teacher of German who had been
convicted of teaching that language, while the private school plaintiffs
in Pierce were threatened with destruction of their businesses and the
values of their properties.\184\ Yet in both cases the Court also
permitted these persons adversely affected in their property interests
to represent the interests of parents and children in the assertion of
other aspects of ``liberty'' of which they could not be denied.
\182\262 U.S. 390 (1923). Justices Holmes and Sutherland entered
a dissent, applicable to Meyer, in Bartels v. Iowa, 262 U.S. 404, 412
(1923).
\183\268 U.S. 510 (1925).
\184\Meyer v. Nebraska, 262 U.S. 390, 400 (1923); Pierce v.
Society of Sisters, 268 U.S. 510, 531, 533, 534 (1928).
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``Without doubt,'' Justice McReynolds said, liberty ``denotes
not merely freedom from bodily restraint but also the right of the
individual to contract, to engage in any of the common occupations of
life, to acquire useful knowledge, to marry, establish a home and bring
up children, to worship God according to the dictates of his
[[Page 1667]]
own conscience, and generally to enjoy those privileges long recognized
at common law as essential to the orderly pursuit of happiness by free
men.''\185\ The right of the parents to have their children instructed
in a foreign language was ``within the liberty of the [Fourteenth]
Amendment.''\186\ Meyer was relied on in Pierce by the Court in
asserting that the statute there ``unreasonably interferes with the
liberty of parents and guardians to direct the upbringing and education
of children under their control. . . . The child is not the mere
creature of the State; those who nurture him and direct his destiny have
the right, coupled with the high duty, to recognize and prepare him for
additional obligations.''\187\
\185\262 U.S. at 399.
\186\Id. at 400.
\187\268 U.S. at 534-35.
---------------------------------------------------------------------------
Other assertions of the liberty to be free from compulsory state
provisions proved unsuccessful,\188\ although dicta in these cases
continued to broadly define liberty.\189\ And in Loving v.
Virginia,\190\ a statute prohibiting interracial marriage was held to
deny due process. Marriage was termed ``one of the `basic civil rights
of man''' and a ``fundamental freedom.'' ``The freedom to marry has long
been recognized as one of the vital personal rights essential to the
orderly pursuit of happiness by free men.'' The classification of
marriage rights on a racial basis was ``unsupportable.'' But the
expansion of the Bill of Rights to restrict state action, especially the
religion and free expression provisions of the First Amendment, afforded
the Court an opportunity to base certain decisions voiding state
policies on these grounds rather than on due process.\191\
\188\E.g., Jacobson v. Massachusetts, 197 U.S. 11 (1905); Zucht
v. King, 260 U.S. 174 (1922) (compulsory vaccination); Buck v. Bell, 274
U.S. 200 (1927) (sexual sterilization of inmates of state institutions
found to be afflicted with hereditary forms of insanity or imbecility);
Minnesota v. Probate Court ex rel. Pearson, 309 U.S. 270 (1940)
(institutionalization of habitual sexual offenders as psychopathic
personalities).
\189\See also Skinner v. Oklahoma, 316 U.S. 535, 541 (1942)
(marriage and procreation are among ``the basic civil rights of man'');
Prince v. Massachusetts, 321 U.S. 158, 166 (1944) (care and nurture of
children by the family are within ``the private realm of family life
which the state cannot enter'').
\190\388 U.S. 1, 12 (1967).
\191\Indeed, in Griswold v. Connecticut, 381 U.S. 479, 482
(1965), Justice Douglas reinterpreted Meyer and Pierce as having been
based on the First Amendment. Note that in Epperson v. Arkansas, 393
U.S. 97, 105 (1968), and Tinker v. Des Moines School District, 393 U.S.
503, 506-07 (1969), Justice Fortas for the Court approvingly noted the
due process basis of Meyer and Pierce while deciding both cases on First
Amendment grounds.
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In Poe v. Ullman,\192\ Justice Harlan advocated the application
of a due process standard of reasonableness--the same standard he
[[Page 1668]]
would have applied to test economic legislation--to a Connecticut
statute banning the use of contraceptives, even by married couples.
According to the Justice, due process is limited neither to procedural
guarantees nor restricted to the rights enumerated in the first eight
Amendments of the Bill of Rights, but is rather ``a discrete concept
which subsists as an independent guaranty of liberty and procedural
fairness, more general and inclusive than the specific prohibitions.''
The liberty protected by the clause ``is a rational continuum which,
broadly speaking, includes a freedom from all substantial arbitrary
impositions and purposeless restraints . . . and which also recognizes,
what a reasonable and sensitive judgment must, that certain interests
require particularly careful scrutiny of the state needs asserted to
justify their abridgment.'' Applying a lengthy analysis, he concluded
that the statute infringed upon a fundamental liberty without the
showing of a justification which would support the intrusion. Yet, when
the same issue returned to the Court, a majority of the Justices,
rejecting reliance on substantive due process,\193\ decided it on the
basis of the statute's invasion of privacy, a ``penumbral'' right
protected by a matrix of constitutional provisions.\194\ The analysis,
however, approached the matter in terms, and in reliance on cases,
reminiscent of substantive due process, although the separate
concurrences of Justices Harlan and White specifically based on
substantive due process,\195\ indicates that the majority's position was
at least definitionally different. Subsequent cases, functionally
grounded in equal protection analysis, relied in great degree upon a
view of rationality and reasonableness not too different from Justice
Harlan's dissent in Poe v. Ullman.\196\
\192\367 U.S. 497, 522, 539-45 (1961). Justice Douglas, also
dissenting, relied on a due process analysis, which began with the texts
of the first eight Amendments as the basis of fundamental due process
and continued into the ``emanations'' from this as also protected. Id.
at 509.
\193\``We do not sit as a super-legislature to determine the
wisdom, need, and propriety of laws that touch economic problems,
business affairs, or social conditions.'' Griswold v. Connecticut, 381
U.S. 479, 482 (1965) (opinion of Court by Justice Douglas).
\194\Supra, pp. 1504-05.
\195\381 U.S. at 499, 502.
\196\Eisenstadt v. Baird, 405 U.S. 438 (1972), is the principal
case. See also Stanley v. Illinois, 405 U.S. 645 (1972).
---------------------------------------------------------------------------
The Court remains divided over how broadly to define a liberty
interest. In Bowers v. Hardwick,\197\ for example, the Court majority
found no right to engage in homosexual sodomy, and rejected the
dissent's suggestion that focus should instead be placed on a right to
privacy and autonomy in matters of sexual intimacy. Similar disagreement
over the appropriate level of generality for definition of a liberty
interest was evident in Michael H. v. Gerald D.,
[[Page 1669]]
involving the rights of an adulterous biological father to establish
paternity and to associate with his child.\198\ Justice Scalia, joined
only by Chief Justice Rehnquist in this part of the plurality decision,
argued for ``the most specific level at which a relevant tradition
protecting, or denying protection to, the asserted right can be
identified.''\199\ Dissenting Justice Brennan, joined by two others,
rejected the emphasis on tradition, and argued instead that the Court
should ``ask whether the specific parent-child relationship under
consideration is close enough to the interests that we already have
protected [as] an aspect of `liberty.'''\200\ The resurgence of
substantive due process reasoning became evident upon the Court's
confrontation with cases raising the constitutionality of laws
proscribing or limiting abortions.
\197\478 U.S. 186 (1986).
\198\491 U.S. 110 (1989). Five Justices agreed that a liberty
interest was implicated, but the Court ruled that California's
procedures for establishing paternity did not unconstitutionally impinge
on that interest.
\199\Id. at 128 n.6.
\200\Id. at 142.
---------------------------------------------------------------------------
Abortion.--Laws limiting or prohibiting abortions in practically
all the States, the District of Columbia, and the territories were
invalidated by a ruling recognizing a right of personal privacy
protected by the due process clause that included a qualified right of a
woman to determine whether or not to bear a child. On the basis of its
analysis of the competing individual rights and state interests, the
Court in Roe v. Wade\201\ discerned a three-stage balancing of rights
and interests extending over the full nine-month term of pregnancy.
\201\Roe v. Wade, 410 U.S. 113 (1973). A companion case was Doe
v. Bolton, 410 U.S. 179 (1973). The opinion by Justice Blackman was
concurred in by Justices Douglas, Brennan, Stewart, Marshall, and
Powell, and Chief Justice Burger. Justices White and Rehnquist
dissented, id. at 171, 221, arguing that the Court should follow the
traditional due process test of determining whether a law has a rational
relation to a valid state objective and that so judged the statute was
valid. Justice Rehnquist was willing to consider an absolute ban on
abortions even when the mother's life is in jeopardy to be a denial of
due process, id. at 173, while Justice White left the issue open. Id. at
223.
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``(a) For the stage prior to approximately the end of the first
trimester, the abortion decision and its effectuation must be left to
the medical judgment of the pregnant woman's attending physician.
``(b) For the stage subsequent to approximately the end of the
first trimester, the State, in promoting its interest in the health of
the mother, may, if it chooses, regulate the abortion procedure in ways
that are reasonably related to maternal health.
``(c) For the stage subsequent to viability, the State in
promoting its interest in the potentiality of human life may, if it
chooses,
[[Page 1670]]
regulate, and even proscribe, abortion except where it is necessary, in
appropriate medical judgment, for the preservation of the life or health
of the mother.''\202\
\202\Roe v. Wade, 410 U.S. 113, 164-65 (1973).
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A lengthy history of the medical and legal views of abortion
apparently convinced the Court that the prohibition of abortion lacked
the solid foundation necessary to preserve such prohibitions from
constitutional review.\203\ Similarly, a review of the concept of
``person'' as protected in the due process clause and in other
provisions of the Constitution established to the Court's satisfaction
that the word ``person'' did not include the unborn, and therefore that
the unborn lacked federal constitutional protection.\204\ Without
treating the question in more than summary fashion, the Court announced
that ``a right of personal privacy, or a guarantee of certain areas or
zones of privacy, does exist in the Constitution'' and that it is
``founded in the Fourteenth Amendment's concept of personal liberty and
restrictions upon state action.''\205\ ``This right of privacy . . . is
broad enough to encompass a woman's decision whether or not to terminate
her pregnancy.''\206\ Moreover, this right of privacy is ``fundamental''
and, drawing upon the strict standard of review in equal protection
litigation, the Court held that the due process clause required that the
regulations limiting this fundamental right may be justified only by a
``compelling state interest'' and must be narrowly drawn to express only
the legitimate state interests at stake.\207\ Assessing the possible
interests of the States, the Court rejected as unsupported in the record
and ill-served by the laws in question justifications relating to the
promotion of morality and the protection of women from the medical
hazards of abortions. The state interest in protecting the life of the
fetus was held to be limited by the lack of a social consensus with
regard to the issue when life begins. Two valid state interests were
recognized, however. ``[T]he State does have an important and legitimate
interest in preserving and protecting the health of the pregnant woman
. . . [and] it has still another important and legitimate interest in
protecting the potentiality of human life. These interests are separate
and distinct. Each grows in substantiality as the woman approaches term
and, at a point during pregnancy, each becomes `compelling.'''\208\
\203\Id. at 129-47.
\204\Id. at 156-59.
\205\Id. at 152-53.
\206\Id.
\207\Id. at 152, 155-56. The ``compelling state interest'' test
in equal protection cases is reviewed infra, pp. 1809-14.
\208\410 U.S. at 147-52, 159-63.
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[[Page 1671]]
This approach led to the three-stage concept quoted above.
Because medical data indicated that abortion prior to the end of the
first trimester is relatively safe, the mortality rate being lower than
the rates for normal childbirth, and because the fetus has no capability
of meaningful life outside the mother's womb, the State has no
``compelling interest'' in the first trimester and ``the attending
physician, in consultation with his patient, is free to determine,
without regulation by the State, that, in his medical judgment, the
patient's pregnancy should be terminated.''\209\ In the intermediate
trimester, the danger to the woman increases and the State may therefore
regulate the abortion procedure ``to the extent that the regulation
reasonably relates to the preservation and protection of maternal
health,'' but the fetus is still not able to survive outside the womb,
and consequently the actual decision to have an abortion cannot be
otherwise impeded.\210\ ``With respect to the State's important and
legitimate interest in potential life, the `compelling' point is at
viability. This is so because the fetus then presumably has the
capability of meaningful life outside the mother's womb. State
regulation protective of fetal life after viability thus has both
logical and biological justifications. If the State is interested in
protecting fetal life after viability, it may go so far as to proscribe
abortion during that period, except when it is necessary to preserve the
life or health of the mother.''\211\
\209\Id. at 163.
\210\Id.
\211\Id. at 163-164. A fetus becomes ``viable'' when it is
``potentially able to live outside the mother's womb, albeit with
artificial aid. Viability is usually placed at about seven months (28
weeks) but may occur earlier, even at 24 weeks.'' Id. at 160 (footnotes
omitted).
---------------------------------------------------------------------------
In a companion case, the Court struck down three procedural
provisions of a permissive state abortion statute.\212\ These required
that the abortion be performed in a hospital accredited by a private
accrediting organization, that the operation be approved by the hospital
staff abortion committee, and that the performing physician's judgment
be confirmed by the independent examination of the patient by two other
licensed physicians. These provisions were held not to be justified by
the State's interest in maternal health because they were not reasonably
related to that interest.\213\ And a residency provision was struck down
as violating the privileges and immunities clause.\214\ But a clause
making the performance of an abortion a crime except when it is based
upon the doctor's ``best clinical judgment that an abortion is
necessary'' was upheld against vagueness attack and was further held to
benefit women seeking
[[Page 1672]]
abortions inasmuch as the doctor could utilize his best clinical
judgment in light of all the attendant circumstances.\215\
\212\Doe v. Bolton, 410 U.S. 179 (1973).
\213\Id. at 192-200.
\214\Id. at 200. The clause is Article IV, Sec. 2. See supra,
pp. 867-77.
\215\410 U.S. at 191-92. ``[T]he medical judgment may be
exercised in the light of all factors--physical, emotional,
psychological, familial, and the woman's age--relevant to the well-being
of the patient. All these factors may relate to health.'' Id. at 192.
Presumably this discussion applies to the Court's ruling in Roe holding
that even in the third trimester the woman may not be forbidden to have
an abortion if it is necessary to preserve her health as well as her
life, 410 U.S. at 163-64, a holding which is unelaborated in the
opinion. See also United States v. Vuitch, 402 U.S. 62 (1971).
---------------------------------------------------------------------------
These decisions were reaffirmed and extended when the Court was
faced with a restrictive state statute enacted after Roe making access
to abortions contingent upon spousal or parental consent and imposing
restraints upon methods.\216\ Striking down all the substantial
limitations, the Court held (1) that the spousal consent provision was
an attempt by the State to delegate a veto power over the decision of
the woman and her doctor that the State itself could not exercise,\217\
(2) that no significant state interests justified the imposition of a
blanket parental consent requirement as a condition of the obtaining of
an abortion by an unmarried minor during the first 12 weeks of
pregnancy,\218\ and (3) that a criminal pro
[[Page 1673]]
vision requiring the attending physician to exercise all care and
diligence to preserve the life and health of the fetus without regard to
the stage of viability was inconsistent with Roe.\219\ Sustained were
provisions that required the woman's written consent to an abortion with
assurances that it is informed and freely given, and provisions
mandating reporting and recordkeeping for public health purposes with
adequate assurances of confidentiality. A provision that barred the use
of the most commonly used method of abortion after the first 12 weeks of
pregnancy was declared unconstitutional since in the absence of another
comparably safe technique it did not qualify as a reasonble protection
of maternal health and it instead operated to deny the vast majority of
abortions after the first 12 weeks.\220\
\216\Planned Parenthood v. Danforth, 428 U.S. 52 (1976). See
also Bellotti v. Baird, 443 U.S. 622 (1979) (parental consent to minor's
abortion); Colautti v. Franklin, 439 U.S. 379 (1979) (imposition on
doctor determination of viability of fetus and obligation to take life-
saving steps); Singleton v. Wulff, 428 U.S. 106 (1976) (standing of
doctors to litigate right of patients to Medicaid-financed abortions);
Bigelow v. Virginia, 421 U.S. 809 (1975) (ban on newspaper ads for
abortions); Connecticut v. Menillo, 423 U.S. 9 (1975) (state ban on
performance of abortion by ``any person'' may constitutionally be
applied to prosecute nonphysicians performing abortions).
\217\Planned Parenthood v. Danforth, 428 U.S. 52, 67-72 (1976).
The Court recognized the husband's interests and the state interest in
promoting marital harmony. But the latter was deemed not served by the
requirement, and, since when the spouses disagree on the abortion
decision one has to prevail, the Court thought the person who bears the
child and who is the more directly affected should be the one to
prevail. Justices White and Rehnquist and Chief Justice Burger
dissented. Id. at 92.
\218\Id. at 72-75. Minors have rights protected by the
Constitution, but the States have broader authority to regulate their
activities than those of adults. Here, the Court perceived no state
interest served by the requirement that overcomes the woman's right to
make her own decision; it emphasized that it was not holding that every
minor, regardless of age or maturity, could give effective consent for
an abortion. Justice Stevens joined the other dissenters on this part of
the holding. Id. at 101. In Bellotti v. Baird, 443 U.S. 622 (1979),
eight Justices agreed that a parental consent law, applied to a mature
minor, found to be capable of making, and having made, an informed and
reasonable decision to have an abortion, was void but split on the
reasoning. Four Justices would hold that neither parents nor a court
could be given an absolute veto over a mature minor's decision, while
four others would hold that if parental consent is required the State
must afford an expeditious access to court to review the parental
determination and set it aside in appropriate cases. In H. L. v.
Matheson, 450 U.S. 398 (1981), the Court upheld, as applied to an
unemancipated minor living at home and dependent on her parents, a
statute requiring a physician, ``if possible,'' to notify the parents or
guardians of a minor seeking an abortion. The decisions leave open a
variety of questions, addressed by some concurring and dissenting
Justices, dealing with when it would not be in the minor's best interest
to avoid notifying her parents and with the alternatives to parental
notification and consent. In two 1983 cases the Court applied the
Bellotti v. Baird standard for determining whether judicial substitutes
for parental consent requirements permit a pregnant minor to demonstrate
that she is sufficiently mature to make her own decision on abortion.
Compare City of Akron v. Akron Center for Reproductive Health, 462 U.S.
416 (1983) (no opportunity for case-by-case determinations); with
Planned Parenthood Ass'n v. Ashcroft, 462 U.S. 476 (1983) (adequate
individualized consideration).
\219\Planned Parenthood v. Danforth, 428 U.S. 52, 81-84 (1976).
A law requiring a doctor, subject to penal sanction, to determine if a
fetus is viable or may be viable and to take steps to preserve the life
and health of viable fetuses was held to be unconstitutionally vague.
Colautti v. Franklin, 439 U.S. 379 (1979).
\220\Planned Parenthood v. Danforth, 428 U.S. 52, 75-79 (1976).
---------------------------------------------------------------------------
In other rulings applying Roe, the Court struck down some
requirements and upheld others. A requirement that all abortions
performed after the first trimester be performed in a hospital was
invalidated as imposing ``a heavy, and unnecessary, burden on women's
access to a relatively inexpensive, otherwise accessible, and [at least
during the first few weeks of the second trimester] safe abortion
procedure.''\221\ A state may, however, require that abortions be
performed in hospitals or licensed outpatient clinics, as long as
licensing standards do not ``depart from accepted medical
practice.''\222\ Various ``informed consent'' requirements were struck
down as intruding upon the discretion of the physician, and as being
aimed at discouraging abortions rather than at informing the pregnant
woman's decision;\223\ while the state has a legitimate in
[[Page 1674]]
terest in ensuring that the woman's consent is informed, the Court
explained, it may not demand of the physician ``a recitation of an
inflexible list of information'' unrelated to the particular patient's
health, and, for that matter, may not demand that the physician rather
than some other qualified person render the counseling.\224\ The Court
also invalidated a 24-hour waiting period following a woman's written,
informed consent.\225\ On the other hand, the Court upheld a requirement
that tissue removed in clinic abortions be submitted to a pathologist
for examination, since the same requirements were imposed for in-
hospital abortions and for almost all other in-hospital surgery.\226\
Also, the Court upheld a requirement that a second physician be present
at abortions performed after viability in order to assist in saving the
life of the fetus.\227\
\221\City of Akron v. Akron Center for Reproductive Health, 462
U.S. 416, 438 (1983); Accord, Planned Parenthood Ass'n v. Ashcroft, 462
U.S. 476 (1983). The Court in Akron relied on evidence that ``dilation
and evacuation'' (D&E) abortions performed in clinics cost less than
half as much as hospital abortions, and that common use of the D&E
procedure had ``increased dramatically'' the safety of second trimester
abortions in the 10 years since Roe v. Wade. 462 U.S. at 435-36.
\222\Simopoulos v. Virginia, 462 U.S. 506, 516 (1983).
\223\City of Akron v. Akron Center for Reproductive Health, 462
U.S. 416, 444-45 (1983); Thornburgh v. American College of Obstetricians
and Gynecologists, 476 U.S. 747 (1986).
\224\City of Akron, 462 U.S. 416, 448-49 (1983).
\225\City of Akron v. Akron Center for Reproductive Health, 462
U.S. 416, 450-51 (1983). But see Hodgson v. Minnesota, 497 U.S. 417
(1990) (upholding a 48-hour waiting period following notification of
parents by a minor).
\226\Planned Parenthood Ass'n v. Ashcroft, 462 U.S. 476, 486-90
(1983).
\227\Id. at 482-86, 505.
---------------------------------------------------------------------------
The Court refused to extend Roe to the area of public funding to
pay for abortions for the pregnant indigent, holding that neither due
process nor equal protection requires government to use public funds for
this purpose.\228\ Due process, the Court held, does not obligate the
States to pay the pregnancy-related medical expenses of indigent women,
even though both abortion and the right to bear the child to birth are
``fundamental'' rights.\229\ But the more critical question was the
equal protection restraint imposed when government does provide public
funds for medical care to indigents; may it accord differential
treatment to abortion and childbirth and prefer the latter? The States
may do so, the Court continued, because it is rationally related to a
lawful purpose to encourage normal childbirth. The use of the rational
basis test required a rejection of the compelling state interest test in
the following manner. First, the more severe test was not activated by a
classification impacting on a suspect class, neither wealth nor
indigency being such a class. Second, and most significant for abortion
adjudication, the Court held that state refusal to pay for abortions did
not impinge upon a fundamental right. Prior state restrictions which had
been invalidated, the Court continued, had created absolute obstacles to
the
[[Page 1675]]
obtaining of an abortion. While a state-created obstacle need not be
absolute to be impermissible, it must at a minimum ``unduly burden'' the
right to terminate a pregnancy. To allocate public funds so as to
further a state interest in normal childbirth does not create an
absolute obstacle to obtaining an abortion nor does it unduly burden the
right. The condition--indigency--that is the barrier to getting an
abortion was not created by government nor does the State add to the
burden that exists already. ``An indigent woman who desires an abortion
suffers no disadvantage as a consequence of Connecticut's decision to
fund childbirth; she continues as before to be dependent on private
sources for the services she desires. The State may have made childbirth
a more attractive alternative, thereby influencing the woman's decision,
but it has imposed no restriction on access to abortions that was not
already there.''\230\ Applying the same principles, the Court held that
a municipal hospital could constitutionally provide hospital services
for indigent women for childbirth but deny services for abortion.\231\
\228\Maher v. Roe, 432 U.S. 464 (1977); Harris v. McRae, 448
U.S. 297 (1980). See also Beal v. Doe, 432 U.S. 438 (1977) (states are
not required by federal law to fund abortions); Harris v. McRae, supra,
at 306-11 (same). The state restriction in Maher supra at 466, applied
to nontheraputic abortions, whereas the federal law barred funding for
most medically necessary abortions as well, a distinction the Court
deemed irrelevant, Harris, at supra, 323, although it provided Justice
Stevens with the basis for reaching different results. Id. at 349
(dissenting).
\229\Maher, 432 U.S. at 469 & n.5; Harris, 448 U.S. at 312-18.
\230\Maher, 432 U.S. at 469-74 (the quoted sentence is at 474);
Harris, 448 U.S. at 321-26. Justices Brennan, Marshall, and Blackmun
dissented in both cases and Justice Stevens joined them in Harris.
\231\Poelker v. Doe, 432 U.S. 519 (1977).
---------------------------------------------------------------------------
In 1983 the Court expressly reaffirmed Roe v. Wade,\232\ and
continued to apply its principles to a variety of state statutes
attempting to regulate the circumstances of abortions. The Court's 1989
decision in Webster v. Reproductive Health Services,\233\ however,
signalled a break with the past even though Roe v. Wade was not
overruled.
\232\City of Akron v. Akron Center for Reproductive Health, 462
U.S. 416, 419-20 (1983). In refusing to overrule Roe v. Wade, the Court
merely cited the principle of stare decisis. Justice Powell's opinion of
the Court was joined by Chief Justice Burger, and by Justices Brennan,
Marshall, Blackmun, and Stevens. Justice O'Connor, joined by Justices
White and Rehnquist, dissented, voicing disagreement with the trimester
approach and suggesting instead that throughout pregnancy the test
should be the same: whether state regulation constitutes ``unduly
burdensome interference with [a woman's] freedom to decide whether to
terminate her pregnancy.'' 462 U.S. at 452, 461. In the 1986 case of
Thornburgh v. American College of Obstetricians and Gynecologists, 476
U.S. 747 (1986), Justice White, joined by Justice Rehnquist, advocated
overruling of Roe v. Wade, Chief Justice Burger thought Roe v. Wade had
been extended to the point where it should be reexamined, and Justice
O'Connor repeated misgivings expressed in her Akron dissent.
\233\492 U.S. 490 (1989).
---------------------------------------------------------------------------
Webster upheld two aspects of Missouri's statute regulating
abortions: a prohibition on the use of public facilities and employees
to perform abortions not necessary to save the life of the mother; and a
requirement that a physician, before performing an abortion on a fetus
she has reason to believe has reached a gestational
[[Page 1676]]
age of 20 weeks, make an actual viability determination.\234\ In two
1990 cases the Court then upheld parental notification requirements.
Ohio's requirement that one parent be notified of a minor's intent to
obtain an abortion, or that the minor use a judicial bypass procedure to
obtain the approval of a juvenile court, was approved.\235\ And, while
the Court ruled that Minnesota's requirement that both parents be
notified was invalid standing alone, the statute was saved by a judicial
bypass alternative.\236\
\234\The Court declined to rule on several other aspects of
Missouri's law, including a preamble stating that life begins at
conception, and a prohibition on the use of public funds to encourage or
counsel a woman to have a nontherapeutic abortion.
\235\Ohio v. Akron Center for Reproductive Health, 497 U.S. 502
(1990).
\236\Hodgson v. Minnesota, 497 U.S. 417 (1990).
---------------------------------------------------------------------------
The Webster Court was split in its approach to Missouri's
viability determination requirement, and in its approach to Roe v. Wade.
The plurality opinion by Chief Justice Rehnquist, joined in that part by
Justices White and Kennedy, was highly critical of Roe, but found no
occasion to overrule it. Instead, the plurality's approach would water
down Roe by applying a less stringent standard of review. The viability
testing requirement is valid, the plurality contended, because it
``permissibly furthers the State's interest in protecting potential
human life.''\237\ Justice O'Connor concurred in the result because in
her view the requirement did not impose ``an undue burden'' on a woman's
right to an abortion, and Justice Scalia concurred in the result while
urging that Roe be overruled outright. That Webster may have changed the
focus of debate was illustrated by the Court's approach to the parental
notification issue. A Court majority in Hodgson invalidated Minnesota's
alternative procedure requiring notification of both parents without
judicial bypass, not because it burdened a fundamental right, but
because it did ``not reasonably further any legitimate state
interest.''\238\
\237\492 U.S. at 519-20. Dissenting Justice Blackmun, joined by
Justices Brennan and Marshall, argued that this ``permissibly furthers''
standard ``completely disregards the irreducible minimum of Roe . . .
that a woman has a limited fundamental constitutional right to decide
whether to terminate a pregnancy,'' and instead balances ``a lead
weight'' (the State's interest in fetal life) against a ``feather'' (a
woman's liberty interest). Id. at 555, 556 n.11.
\238\497 U.S. at 450.
---------------------------------------------------------------------------
Roe was not confronted more directly in Webster because the
viability testing requirement, as characterized by the plurality, merely
asserted a state interest in protecting potential human life from the
point of viability, and hence did not challenge Roe's trimester
framework.\239\ Nonetheless, a majority of Justices appeared
[[Page 1677]]
ready to reject a strict trimester approach. The plurality asserted a
compelling state interest in protecting human life throughout pregnancy,
rejecting the notion that the state interest ``should come into
existence only at the point of viability;''\240\ Justice O'Connor
repeated her view that the trimester approach is ``problematic;''\241\
and, as mentioned, Justice Scalia would do away with Roe altogether.
\239\492 U.S. at 521. Concurring Justice O'Connor agreed that
``no decision of this Court has held that the State may not directly
promote its interest in potential life when viability is possible.'' Id.
at 528.
\240\Id. at 519.
\241\Id. at 529. Previously, dissenting in City of Akron v.
Akron Center for Reproductive Health, 462 U.S. 416, 458 (1983), Justice
O'Connor had suggested that the Roe trimester framework ``is clearly on
a collision course with itself. As the medical risks of various abortion
procedures decrease, the point at which the State may regulate for
reasons of maternal health is moved further forward to actual
childbirth. As medical science becomes better able to provide for the
separate existence of the fetus, the point of viability is moved further
back toward conception.''
---------------------------------------------------------------------------
Three years later the Court, invoking principles of stare
decisis, reaffirmed Roe's ``essential holding,'' but restated that
holding in terms of undue burden and also abandoned Roe's reliance on
the trimester approach. Roe's ``essential holding,'' said the Court in
Planned Parenthood of Southeastern Pennsylvania v. Casey,\242\ has three
parts. ``First is a recognition of the right of a woman to choose to
have an abortion before viability and to obtain it without undue
interference from the State. Before viability, the State's interests are
not strong enough to support a prohibition of abortion or the imposition
of a substantial obstacle to the woman's effective right to elect the
procedure. Second is a confirmation of the State's power to restrict
abortions after fetal viability, if the law contains exceptions for
pregnancies which endanger a woman's life or health. And third is the
principle that the State has legitimate interests from the outset of the
pregnancy in protecting the health of the woman and the life of the
fetus that may become a child.''
\242\112 S. Ct. 2791, 2804 (1992).
---------------------------------------------------------------------------
This restatement of Roe's essentials, recognizing a legitimate
state interest in protecting fetal life throughout pregnancy,
necessarily eliminated the rigid trimester analysis permitting almost no
regulation in the first trimester. Viability still marked ``the earliest
point at which the State's interest in fetal life is constitutionally
adequate to justify a legislative ban on nontherapeutic
abortions,''\243\ but less burdensome regulations could be applied
before viability. ``What is at stake,'' the three-Justice plurality
asserted, ``is the woman's right to make the ultimate decision, not a
right to be insulated from all others in doing so. Regulations which do
no more than create a structural mechanism by which the State . . . may
express profound respect for the life of the unborn are permitted, if
they are not a substantial obstacle to the woman's ex
[[Page 1678]]
ercise of the right to choose.'' Thus, unless an undue burden is
imposed, states may adopt measures ``designed to persuade [a woman] to
choose childbirth over abortion.''\244\
\243\Id. at 2811.
\244\Id. at 2821.
---------------------------------------------------------------------------
Application of these principles led the Court to uphold several
aspects of Pennslyvania's abortion control law, in the process
overruling precedent, but to invalidate what was arguably the most
restrictive provision. Four challenged provisions of the law were
upheld: a definition of ``medical emergency'' controlling exemptions
from the Act's other limitations; recordkeeping and reporting
requirements imposed on facilities that perform abortions; an informed
consent and 24-hour waiting period requirement; and a parental consent
requirment, with possibility for judicial bypass, applicable to minors.
Invalidated as an undue burden on a woman's right to an abortion was a
spousal notification requirement.
It was a new alignment of Justices that restated and preserved
Roe. Joining Justice O'Connor in a jointly authored opinion adopting and
applying Justice O'Connor's ``undue burden'' analysis were Justices
Kennedy and Souter. Justices Blackmun and Stevens joined parts of the
plurality opinion, but dissented from other parts. Justice Stevens would
not have abandoned trimester analysis, and would have invalidated the
24-hour waiting period and aspects of the informed consent requirement.
Justice Blackmun, author of the Court's opinion in Roe, asserted that
``the right to reproductive choice is entitled to the full protection
afforded by this Court before Webster,''\245\ and would have invalidated
all of the challenged provisions. Chief Justice Rehnquist, joined by
Justices White, Scalia, and Thomas, would have overruled Roe and upheld
all challenged aspects of the Pennsylvania law.
\245\Id. at 2844.
---------------------------------------------------------------------------
Overruled in Casey were earlier decisions that had struck down
informed consent and 24-hour waiting periods.\246\ Given the state's
legitimate interests in protecting the life of the unborn and the health
of the potential mother, and applying ``undue burden'' analysis, the
three-Justice plurality found these requirements permissible. Requiring
informed consent for medical procedures is both commonplace and
reasonable, and, in the absence of any evidence of burden, the state
could require that information relevant to informed consent be provided
by a physician rather than an assistant. The 24-hour waiting period was
approved both in theory (it
[[Page 1679]]
being reasonable to assume ``that important decisions will be more
informed and deliberate if they follow some period of reflection'') and
in practice (in spite of ``troubling'' findings of increased burdens on
poorer women who must travel significant distances to obtain abortions,
and on all women who must twice rather than once brave harassment by
anti-abortion protesters).\247\ The Court also upheld application of an
additional requirement that women under age 18 obtain the consent of one
parent or avail themselves of a judicial bypass alternative.
\246\City of Akron v. Akron Center for Reproductive Health, 462
U.S. 416 (1983) (invalidating ``informed consent'' and 24-hour waiting
period); Thornburgh v. American College of Obstetricians and
Gynecologists, 476 U.S. 747 (1986) (invalidating informed consent
requirement).
\247\112 S. Ct. at 2835.
---------------------------------------------------------------------------
On the other hand, the Court\248\ distinguished Pennsylvania's
spousal notification provision as constituting an undue burden on a
woman's right to choose an abortion. ``A State may not give to a man the
kind of dominion over his wife that parents exercise over their
children'' (and that men exercised over their wives at common law).\249\
Although there was an exception for a woman who believed that notifying
her husband would subject her to bodily injury, this exception was not
broad enough to cover other forms of abusive retaliation, e.g.,
psychological intimidation, bodily harm to children, or financial
deprivation. To require a wife to notify her husband in spite of her
fear of such abuse would unduly burden the wife's liberty interest as an
individual to decide whether to bear a child.
\248\The plurality Justices were joined in this part of their
opinion by Justices Blackmun and Stevens.
\249\Id. at 2831.
---------------------------------------------------------------------------
Privacy: Its Constitutional Dimensions.--Roe v. Wade and its
progeny could have had significant effect outside the abortion area in
the general area of personal liberties, inasmuch as the revitalization
of substantive due process in the noneconomic regulation area, overlaid
with the compelling state interest test, could call into question many
governmental restraints upon the person. Roe's emphasis upon the privacy
rationale seemed to presage an active judicial role in defining and
protecting the interests of persons ``to be let alone.'' Those
developments have not occurred, however, and the cases reflect the
intention of the Court to curb the expansion of any doctrinal
ramifications flowing beyond the abortion cases.
Privacy has in a number of cases been identified as a core value
of the Bill of Rights,\250\ but it was not until Griswold v.
Connecticut\251\ that an independent right of privacy, derived from the
confluence of several provisions of the Bill of Rights or discovered in
the ``penumbras'' of these provisions, was expounded by the
[[Page 1680]]
Court and actually used to strike down a governmental restraint. The
abortion cases extended Griswold many degrees in several respects.
First, the cases removed any lingering possibility that the right is a
marital one that depends upon that relationship.\252\ Second, the right
of privacy was denominated a liberty which found its source and its
protection in the due process clause of the Fourteenth Amendment.\253\
Third, by designating the right as a ``fundamental'' right, the Court
required a governmental restraint to be justified by a ``compelling
state interest.'' Necessary to assessment of the effect of this
development is a close analysis of the limits of the right thus
protected as well as of its contents.
\250\E.g., the Fourth Amendment.
\251\381 U.S. 479 (1965).
\252\In Eisenstadt v. Baird, 405 U.S. 438 (1972), the court had
declined to extend the Griswold principle to the unmarried on privacy
grounds, relying on an equal protection analysis instead.
\253\Roe v. Wade, 410 U.S. 113, 153 (1973). See id. at 167-71
(Justice Stewart concurring). Justice Douglas continued to deny that
substantive due process is the basis of the decisions. Doe v. Bolton,
410 U.S. 179, 209, 212 n.4 (1973) (concurring).
---------------------------------------------------------------------------
``The Constitution does not explicitly mention any right of
privacy. In a line of decisions, however, . . . the Court has recognized
that a right of personal privacy, or a guarantee of certain areas or
zones of privacy, does exist under the Constitution. . . . These
decisions make it clear that only personal rights that can be deemed
`fundamental' or `implicit in the concept of ordered liberty,' Palko v.
Connecticut, 302 U.S. 319, 325 (1937), are included in this guarantee of
personal privacy. They also make it clear that the right has some
extension to activities relating to marriage, Loving v. Virginia, 388
U.S. 1, 12 (1967); procreation, Skinner v. Oklahoma, 316 U.S. 535, 541-
42 (1942); contraception, Eisenstadt v. Baird, 405 U.S. at 453-54; id.
at 460, 463-65 (White, J., concurring in result); family relationships,
Prince v. Massachusetts, 321 U.S. 158, 166 (1944); and child rearing and
education, Pierce v. Society of Sisters, 268 U.S. 510, 535 (1925), Meyer
v. Nebraska, supra.''\254\ In the pornography cases decided later in the
same Term, the Court denied the existence of any privacy right of
customers to view unprotected material in commercial establishments,
repeating the above descriptive language from Roe, and saying further:
``the constitutionally protected privacy of family, marriage,
motherhood, procreation, and child rearing is not just concerned with a
particular place, but with a protected intimate relationship. Such
protected privacy extends to the doctor's office, the hospital, the
hotel room, or as otherwise required to safeguard the right to intimacy
involved.''\255\
\254\Roe v. Wade, 410 U.S. 113, 152 (1973).
\255\Paris Adult Theatre v. Slaton, 413 U.S. 49, 66 n.13 (1973).
---------------------------------------------------------------------------
[[Page 1681]]
What is apparent from the Court's approach in these cases is
that its concept of privacy is descriptive rather than analytical,
making difficult an assessment of the potential of the doctrine. Privacy
as a concept appears to encompass at least two different but related
aspects. First, it relates to the right or the ability of individuals to
determine how much and what information about themselves is to be
revealed to others. Second, it relates to the idea of autonomy, the
freedom of individuals to perform or not perform certain acts or subject
themselves to certain experiences.\256\ Governmental commands to do or
not to do something may well implicate one or the other or both of these
aspects, and judicial decision about the validity of such governmental
commands must necessarily be informed by use of an analytical framework
balancing the governmental interests against the individual interests in
maintaining freedom in one or both aspects of privacy. That framework
cannot now be constructed on the basis of the Court's decided cases.
\256\Whalen v. Roe, 429 U.S. 589, 598-600 (1977).
---------------------------------------------------------------------------
Griswold v. Connecticut,\257\ voiding a state statute
proscribing the use of contraceptives, seems primarily to be based upon
a judicial concept of privacy flowing from the first aspect of privacy
described above. That is, the predominant concern flowing through the
several opinions is the threat of forced disclosure about the private
and intimate lives of persons through the pervasive surveillance and
investigative efforts that would be needed to enforce such a law;
moreover, the concern was not limited to the outward pressures upon the
confines of such provisions as the Fourth Amendment's search and seizure
clause, but extended to techniques that would have been within the range
of permissible investigation. Subsequent cases, however, have returned
to Fourth and Fifth Amendment principles to regulate official invasions
of privacy.\258\
\257\381 U.S. 479 (1965).
\258\E.g., California Bankers Ass'n v. Schultz, 416 U.S. 21
(1974). See also Laird v. Tatum, 408 U.S. 1 (1972); United States v.
United States District Court, 407 U.S. 297 (1972); United States v.
Dionisio, 410 U.S. 1 (1973); Zurcher v. Stanford Daily, 436 U.S. 547
(1978).
---------------------------------------------------------------------------
For example, in United States v. Miller,\259\ the Court
evaluated in Fourth Amendment terms the right of privacy of depositors
in restricting Government access to their cancelled checks maintained by
the bank as required by the Bank Secrecy Act. The cancelled checks, the
Court held, were business records of the bank in which the depositors
had no expectation of privacy and therefore no
[[Page 1682]]
Fourth Amendment standing to challenge government legal process directed
to the bank, and this status was unchanged by the fact that the banks
kept the records under government mandate in the first place. And in
Fisher v. United States,\260\ the Court denied that the Fifth
Amendment's self-incrimination clause operated in any way to prevent the
IRS from obtaining by summons income tax records prepared by accountants
and in the hands of either the taxpayer or his attorney, no matter how
incriminating, because the Amendment only protects against compelled
testimonial self-incrimination. ``[T]he Court has never suggested that
every invasion of privacy violates the privilege. Within the limits
imposed by the language of the Fifth Amendment, which we necessarily
observe, the privilege truly serves privacy interests; but the Court has
never on any ground, personal privacy included, applied the Fifth
Amendment to prevent the otherwise proper acquisition or use of evidence
which, in the Court's view, did not involve compelled testimonial self-
incrimination of some sort.''\261\ Further, ``[w]e cannot cut the Fifth
Amendment completely loose from the moorings of its language, and make
it serve as a general protector of privacy--a word not mentioned in its
text and a concept directly addressed in the Fourth Amendment.''\262\
The First Amendment itself affords some limitation upon governmental
acquisition of information but here again the gravamen is a violation of
speech or association or the like concomitant with exposure of personal
information, and not exposure itself.\263\
\259\425 U.S. 435 (1976). See also Fisher v. United States, 425
U.S. 391, 401 (1976); Paul v. Davis, 424 U.S. 693, 712-13 (1976); United
States v. Bisceglia, 420 U.S. 141 (1975).
\260\425 U.S. 391 (1976).
\261\Id. at 399.
\262\Id. at 401.
\263\See Buckley v. Valeo, 424 U.S. 1, 60-82 (1976); Whalen v.
Roe, 429 U.S. 589, 601 n.27, 604 n.32 (1977); United States v. Miller,
425 U.S. 435, 444 n.6 (1976). The Court continues to reserve the
question of the ``[s]pecial problems of privacy which might be presented
by subpoena of a personal diary.'' Fisher v. United States, 425 U.S.
391, 401 n.7 (1976).
---------------------------------------------------------------------------
A cryptic opinion in Whalen v. Roe\264\ may indicate the Court's
willingness to recognize privacy interests as independent constitutional
rights. At issue was a state's pervasive regulation of prescription
drugs that could be abused, and the centralized recordkeeping through
computers of all such prescriptions identifying the patients. The scheme
was attacked on the basis that it invaded privacy interests against
disclosure and privacy interests involving autonomy of persons in
choosing whether to have the medication. The Court appeared to agree
that both interests are protected, but because the scheme was surrounded
with extensive security protection against disclosure beyond that
necessary to achieve the purposes of the program it was not thought to
``pose a sufficiently
[[Page 1683]]
grievous threat to either interest to establish a constitutional
violation.''\265\
\264\429 U.S. 589 (1977).
\265\Id. at 598-604. The Court cautioned that it had decided
nothing about the privacy implications of the accumulation and
disclosure of vast amounts of information in data banks. Safeguarding
such information from disclosure ``arguably has its roots in the
Constitution,'' at least ``in some circumstances,'' the Court seemed to
indicate. Id. at 605. Compare id. at 606 (Justice Brennan concurring).
What the Court's careful circumscription of the privacy issue through
balancing does to the concept is unclear after Nixon v. Administrator of
General Services, 433 U.S. 425, 455-65 (1977), but note the dissents.
Id. at 504, 525-36 (Chief Justice Burger), and 545 n.1 (Justice
Rehnquist).
---------------------------------------------------------------------------
Not the method of enforcement but the fact of enforcement was
the issue in Roe and Doe. That is, the power of the State to deny women
all access to abortions, the power to proscribe effectuation of the will
and desire of women to terminate pregnancy, was at issue. Because the
Court determined that the will and desire constituted a protected
``liberty,'' the State was required to justify its proscription by a
compelling interest. Once the question of the personhood of the fetus
was resolved, the Court confronted in effect only two asserted state
interests. Protecting the health of the mother was recognized as a valid
interest, the Court thereby departing from a laissez faire ``free will''
approach to individual autonomy. A state interest in morality was
mentioned by the Court, not because the State had raised it, but simply
to defer deciding it; however, the noted morality issue involved not the
morality of abortion, but instead the promotion of sexual morality
through making abortion unavailable.\266\
\266\Roe v. Wade, 410 U.S. 113, 148 (1972). Additionally, if the
purpose of the statute was to deter illicit sexual conduct, the law was
overbroad since it included both unmarried and married women. This
morality rationale also fell afoul of overinclusion and underinclusion
in Eisenstadt v. Baird, 405 U.S. 438, 477-50 (1972).
---------------------------------------------------------------------------
Stanley v. Georgia,\267\ holding that government may not make
private possession of obscene materials for private use a crime,
approached a judicial recognition of the autonomy aspect of privacy.
True it is that the possession there was in Stanley's home, a fact
heavily relied on by the Court, but the police had lawfully invaded his
privacy upon the authority of a valid warrant and a subsidiary Fourth
Amendment issue that was available for decision was passed over in favor
of a broader resolution. Inasmuch as the materials were obscene, they
were outside the scope of First Amendment protection. But the Court
premised its decision upon one's protected right to receive what
information and ideas he wished and upon one's protected ``right to be
free, except in very limited circumstances, from unwanted governmental
intrusions into one's
[[Page 1684]]
privacy.''\268\ These rights were held superior to the interests Georgia
asserted to override them. That is, first, the State was held to have no
authority to protect an individual's mind from the effects of obscenity,
to promote the moral content of one's thoughts. Second, the State's
assertion that exposure to obscenity may lead to deviant sexual behavior
was rejected on the basis of a lack of empirical support and, more
important, on the basis that less intrusive deterrents were available.
Thus, a right to be free of governmental regulation in this area was
clearly recognized.
\267\394 U.S. 557 (1969).
\268\Id. at 564-65.
---------------------------------------------------------------------------
Stanley was quickly restricted to its facts, to possession of
pornography in the home.\269\ But in its important reconsideration of
and reaffirmation of governmental interests in the control of
pornography, the Court went beyond this restriction and recognized
governmental interests that included the promotion of public morality,
protection of the individual's psychological health, and improving the
quality of life. ``It is argued that individual `free will' must govern,
even in activities beyond the protection of the First Amendment and
other constitutional guarantees of privacy, and that government cannot
legitimately impede an individual's desire to see or acquire obscene
plays, movies, and books. We do indeed base our society on certain
assumptions that people have the capacity for free choice. Most
exercises of individual free choice--those in politics, religion, and
expression of ideas--are explicitly protected by the Constitution.
Totally unlimited play for free will, however, is not allowed in our or
any other society. . . . [Many laws are enacted] to protect the weak,
the uninformed, the unsuspecting, and the gullible from the exercise of
their own volition.'' Furthermore, continued the Court: ``Our
Constitution establishes a broad range of conditions on the exercise of
power by the States, but for us to say that our Constitution
incorporates the proposition that conduct involving consenting adults is
always beyond state regulation is a step we are unable to take. . . .
The issue in this context goes beyond whether someone, or even the
majority, considers the conduct depicted as `wrong' or `sinful.' The
States have the power to make a morally neutral judgment that public
exhibition of obscene material, or commerce in such material, has a
tendency to injure the community as a whole, to endanger the public
safety, or to jeopardize . . . the States' `right . . . to maintain a
decent society.'''\270\
\269\United States v. Reidel, 402 U.S. 351, 354-56 (1971);
United States v. Thirty-seven Photographs, 402 U.S. 363, 375-76 (1971).
\270\Paris Adult Theatre v. Slaton, 413 U.S. 49, 57-63, 63-64,
68-69 (1973); and see id. at 68 n.15.
---------------------------------------------------------------------------
[[Page 1685]]
Stanley was further distinguished in Bowers v. Hardwick as being
``firmly grounded in the First Amendment.''\271\ Thus, the Court held in
Bowers, there is no protected right to engage in homosexual sodomy in
the privacy of the home, and Stanley did not implicitly create
protection for ``voluntary sexual conduct [in the home] between
consenting adults.''\272\
\271\478 U.S. 186, 195 (1986).
\272\478 U.S. at 195-96. Dissenting Justice Blackmun challenged
the Court's characterization of Stanley, suggesting that it had rested
as much on the Fourth as on the First Amendment, and that ``the right of
an individual to conduct intimate relationships in . . . his or her own
home [is] at the heart of the Constitution's protection of privacy.''
Id. at at 207-08.
---------------------------------------------------------------------------
Evidently, then, the fundamental right of privacy that is
protected by the due process clause is one functionally related to
``family, marriage, motherhood, procreation, and child rearing.''\273\
Even so limited, the concept can have numerous significant aspects
occasioning major constitutional decisions. Thus, in Carey v. Population
Services International,\274\ the Griswold-Baird line of cases was
significantly extended so as to make the ``decision whether or not to
beget or bear a child'' a ``constitutionally protected right of
privacy'' interest that government may not forbid or burden without
justifying the limitation by a compelling state interest and by a
regulation narrowly drawn to express only that interest or interests.
This ``constitutional protection of individual autonomy in matters of
childbearing'' led the Court to invalidate a state statute that banned
the distribution of contraceptives to adults except by licensed
pharmacists and that forbade any person to sell or distribute
contraceptives to a minor under 16.\275\ The limitation of the number of
outlets to adults ``imposes a significant burden on the right of the
individuals to use contraceptives if they choose to do so'' and was
unjustified by any interest put forward by the State. The prohibition on
sale to minors was judged not by the compelling state interest test, but
instead by inquiring whether the restrictions serve ``any significant
state interest . . . that is not present in the case of an adult.'' This
test is ``apparently less rigorous'' than the test used with adults, a
distinction justified by the greater governmental latitude in regulating
the conduct of children and the lesser capability of children in making
important decisions. The at
[[Page 1686]]
tempted justification for the ban was rejected. Doubting the
permissibility of a ban on access to contraceptives to deter minors'
sexual activity, the Court even more doubted, because the State
presented no evidence, that limiting access would deter minors from
engaging in sexual activity.\276\
\273\Id. at 66 n.13. See also Paul v. Davis, 424 U.S. 693, 713
(1976).
\274\431 U.S. 678 (1977).
\275\Id. at 684-91. The opinion of the Court on the general
principles drew the support of Justices Brennan, Stewart, Marshall,
Blackmun, and Stevens. Justice White concurred in the result in the
voiding of the ban on access to adults while not expressing an opinion
on the Court's general principles. Id. at 702. Justice Powell agreed the
ban on access to adults was void but concurred in an opinion
significantly more restrained than the opinion of the Court. Id. at 703.
Chief Justice Burger, id. at 702, and Justice Rehnquist, id. at 717,
dissented.
\276\Id. at 691-99. This portion of the opinion was supported by
only Justices Brennan, Stewart, Marshall, and Blackmun. Justices White,
Powell, and Stevens concurred in the result, id. at 702, 703, 712, each
on more narrow grounds than the plurality. Again, Chief Justice Burger
and Justice Rehnquist dissented. Id. at 702, 717.
---------------------------------------------------------------------------
In Bowers v. Hardwick,\277\ the Court by 5-4 vote roundly
rejected the suggestion that the privacy cases protecting ``family,
marriage, or procreation'' extend any protection for private consensual
homosexual sodomy,\278\ and also rejected the more comprehensive claim
that the cases ``stand for the proposition that any kind of private
sexual conduct between consenting adults is constitutionally insulated
from state proscription.''\279\ Moreover, the Court refused to create
any such fundamental right. Justice White's opinion for the Court in
Hardwick sounded the same opposition to ``announcing rights not readily
identifiable in the Constitution's text'' that underlay his dissents in
the abortion cases.\280\ In addition, the Court concluded that
rationales relied upon in the earlier privacy cases do not extend ``a
fundamental right to homosexuals to engage in acts of consensual
sodomy.''\281\ Heavy reliance was placed on the fact that prohibitions
on sodomy have ``ancient roots,'' and on the fact that half of the
states still prohibit the practices.\282\ The privacy of the home does
not immunize all behavior from state regulation, and the Court was
``unwilling to start down [the] road'' of im
[[Page 1687]]
munizing ``voluntary sexual conduct between consenting adults.''\283\
Justice Blackmun's dissent was critical of the Court's phrasing of the
issue as one of homosexual sodomy,\284\ and asserted that the basic
issue was the individual's privacy right ``to be let alone.'' The
privacy cases are not limited to protection of the family and the right
to procreation, he asserted, but instead stand for the broader principle
of individual autonomy and choice in matters of sexual intimacy.\285\
\277\478 U.S. 186 (1986). The Court's opinion was written by
Justice White, and joined by Chief Justice Burger and by Justices
Powell, Rehnquist, and O'Connor. The Chief Justice and Justice Powell
added brief concurring opinions. Justice Blackmun dissented, joined by
Justices Brennan, Marshall, and Stevens, and Justice Stevens, joined by
Justices Brennan and Marshall, added a separate dissenting opinion.
\278\``[N]one of the rights announced in those cases bears any
resemblance to the claimed constitutional right of homosexuals to engage
in acts of sodomy.'' 478 U.S. at 190-91.
\279\Id. at 191. The Court asserted that Carey v. Population
Services Int'l, 431 U.S. 678, 694 n.17 (1977), which had reserved
decision on the issue, had established that the privacy right ``did not
reach so far.''
\280\478 U.S. at 191.
\281\In the Court's view, homosexual sodomy is neither a
fundamental liberty ``implicit in the concept of ordered liberty'' nor
is it ``deeply rooted in this Nation's history and tradition.'' Id. at
at 191-92.
\282\Id. Chief Justice Burger's brief concurring opinion
amplified on this theme, concluding that constitutional protection for
``the act of homosexual sodomy . . . would . . . cast aside millennia of
moral teaching.'' Id. at at 197. Justice Powell cautioned that Eighth
Amendment proportionality principles might limit the severity with which
states can punish the practices (Hardwick had been charged but not
prosecuted, and had initiated the action to have the statute under which
he had been charged declared unconstitutional). Id.
\283\The Court voiced concern that ``it would be difficult . . .
to limit the claimed right to homosexual conduct while leaving exposed
to prosecution adultery, incest, and other sexual crimes even though
they are committed in the home.'' Id. at 195-96. Dissenting Justices
Blackmun (id. at 209 n.4) and Stevens (id. at 217-18) suggested that
these crimes are readily distinguishable.
\284\Id. at 199. The Georgia statute at issue, like most sodomy
statutes, prohibits the practices regardless of the sex or marital
status of the participants. See Id. at 188 n.1. Justice Stevens too
focused on this aspect, suggesting that the earlier privacy cases
clearly bar a state from prohibiting sodomous acts by married couples,
and that Georgia had not justified selective application to homosexuals.
Id. at 219.
\285\Id. at 204-06.
---------------------------------------------------------------------------
Similarly, the extent to which governmental regulation of the
sexual activities of minors is subject to constitutional scrutiny is of
great and continuing importance.\286\ Analysis of these questions is
hampered because the Court has not told us what about the particular
facets of human relationships--marriage, family, procreation--gives rise
to a protected liberty and what does not, and how indeed these factors
vary significantly enough from other human relationships to result in
differing constitutional treatment. The Court's observation in the
abortion cases ``that only personal rights that can be deemed
`fundamental' are included in this guarantee of personal privacy,''
occasioning justification by a ``compelling'' interest,\287\ little
elucidates the answers inasmuch as in the same Term the Court
significantly restricted its equal protection doctrine of
``fundamental'' interests--``compelling'' interest justification by
holding that the ``key'' to discovering whether an interest or a
relationship is a ``fundamental'' one is whether it is ``explicitly or
implicitly guaranteed by the Constitution.''\288\
\286\The Court reserved this question in Carey, 431 U.S., 694
n.17 (plurality opinion), although Justices White, Powell, and Stevens
in concurrence seemed to see no barrier to state prohibition of sexual
relations by minors. Id. at 702, 703, 712.
\287\Roe v. Wade, 410 U.S. 113, 152 (1973). The language is
quoted in full in Carey, supra, 431 U.S. 684-85.
\288\San Antonio School District v. Rodriguez, 411 U.S. 1, 33-34
(1973). That this restriction is not holding with respect to equal
protection analysis or due process analysis can be discerned easily.
Compare Zablocki v. Redhail, 434 U.S. 374 (1978) (opinion of Court),
with id. at 391 (Justice Stewart concurring), and id. at 396 (Justice
Powell concurring).
---------------------------------------------------------------------------
Whether an independent, discrete concept of privacy, in either
of its major aspects, emerges from developing judicial doctrines is
largely problematical. There appears to be a tendency to designate
[[Page 1688]]
as a right of privacy a right or interest which extensions of precedent
or applications of logical analysis have led the Court to conclude to
protect. Because this protection is now settled to be a ``liberty''
which the due process clause includes, the analytical validity of
denominating the particular right or interest as an element of privacy
rather than as an element of ``liberty'' seems open to question.
Family Relationships.--While the ``privacy'' basis of autonomy
seems to be definitionally based, the Court's drawing on the line of
cases since Meyer and Pierce\289\ has ``established that the
Constitution protects the sanctity of the family precisely because the
institution of the family is deeply rooted in this Nation's history and
tradition.''\290\ Recognition of the protected ``liberty'' of the
familial relationship affords the Court a principled and doctrinal basis
of review of governmental regulations that adversely impact upon the
ability to enter into the relationship, to maintain it, to terminate it,
and to resolve conflicts within the relationship. This liberty, unlike
the interest in property which has its source in statutory law, springs
from the base of ``intrinsic human rights, as they have been understood
in `this Nation's history and tradition.'''\291\ Being of fundamental
importance, the familial relationship is ordinarily subject only to
regulation that can survive rigorous judicial scrutiny, although
``reasonable regulations that do not significantly interfere with
decisions to enter into the marital relationship may legitimately be
imposed.''\292\ Recent decisions cast light in all areas of the family
relationship.
\289\Meyer v. Nebraska, 262 U.S. 390 (1923); Pierce v. Society
of Sisters, 268 U.S. 510 (1928).
\290\Moore v. City of East Cleveland, 431 U.S. 494, 503 (1977)
(plurality). Continuing the limitation of the right of privacy to
family-related activities is Bowers v. Hardwick, 478 U.S. 186 (1986).
\291\Smith v. Organization of Foster Families, 431 U.S. 816, 845
(1977).
\292\Zablocki v. Redhail, 434 U.S. 374, 386 (1978).
---------------------------------------------------------------------------
Because the right to marry is a fundamental right protected by
the due process clause,\293\ a state may not deny the right to marry to
someone who has failed to meet a child support obligation, there being
no legitimate state interest compelling enough to justify the
prohibition.\294\ There is a constitutional right to live together as a
[[Page 1689]]
family,\295\ one not limited to the nuclear family. Thus, a city
ordinance which zoned for single family occupancy and so defined
``family'' as to bar extended family relationships was found to violate
the due process clause as applied to prevent a grandmother from having
in her household two grandchildren of different children.\296\ And the
concept of ``family'' may extend beyond the biological, blood
relationship of extended families to the situation of foster families,
although the Court has acknowledged that such a claim to
constitutionally protected liberty interests raises complex and novel
questions.\297\ In the conflict between natural and foster families,
other difficult questions inhere and it may well be that a properly
constituted process under state law of determining the best interests of
the child will be deferred to.\298\ On the other hand, the Court has
held, the presumption of legitimacy accorded to a child born to a
married woman living with her husband is valid even to defeat the right
of the child's biological father to establish paternity and visitation
rights.\299\
\293\Loving v. Virginia, 388 U.S. 1, 12 (1967); Griswold v.
Connecticut, 381 U.S. 479, 486 (1965); Cleveland Bd. of Education v.
LaFleur, 414 U.S. 632, 639-40 (1974); Zablocki v. Redhail, 434 U.S. 374,
383-87 (1978).
\294\Zablocki v. Redhail, 434 U.S. 374 (1978). The majority of
the Court deemed the statute to fail under equal protection, whereas
Justices Stewart and Powell found the due process clause to be violated.
Id. at 391, 396. Compare Califano v. Jobst, 434 U.S. 47 (1977).
\295\``If a State were to attempt to force the breakup of a
natural family, over the objections of the parents and their children,
without some showing of unfitness and for the sole reason that to do so
was thought to be in the children's best interest, I should have little
doubt that the State would have intruded impermissibly on `the private
realm of family life which the state cannot enter.''' Smith v.
Organization of Foster Families, 431 U.S. 816, 862-63 (1977) (Justice
Stewart concurring), cited with approval in Quilloin v. Walcott, 434
U.S. 246, 255 (1978).
\296\Moore v. City of East Cleveland, 431 U.S. 494 (1977)
(plurality opinion). The fifth vote, decisive to the invalidity of the
ordinance, was on other grounds. Id. at 513.
\297\Smith v. Organization of Foster Families, 431 U.S. 816
(1977). The natural family, the Court observed, did not have its source
in statutory law, whereas the ties that develop between foster parent
and foster child have their origins in an arrangement which the State
brought about. But some liberty interests do arise from positive law,
although the expectations and entitlements are thereby limited as well
by state law. And such a liberty interest may not be recognized without
derogating from the substantive liberty interests of the natural
parents. Thus, the interest of foster parents must be quite limited and
attenuated, but Smith does not define what it is. Id. at 842-47.
\298\See Quilloin v. Walcott, 434 U.S. 246 (1978).
\299\Michael H. v. Gerald D., 491 U.S. 110 (1989). There was no
opinion of the Court. A majority of Justices (Brennan, Marshall,
Blackmun, Stevens, White) was willing to recognize that the biological
father has a liberty interest in a relationship with his child, but
Justice Stevens voted with the plurality (Scalia, Rehnquist, O'Connor,
Kennedy) because he believed that the statute at issue adequately
protected that interest.
---------------------------------------------------------------------------
The Court has merely touched upon but not dealt definitively
with the complex and novel questions raised by possible conflicts
between parental rights and children's rights.\300\
\300\The clearest conflict presented to date raised the issue of
giving a veto to parents over their minor children's right to have an
abortion. Planned Parenthood v. Danforth, 428 U.S. 52 (1976); Planned
Parenthood v. Casey, 112 S. Ct. 2791 (1992). See also Parham v. J. R.,
442 U.S. 584 (1979) (parental role in commitment of child for treatment
of mental illness).
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[[Page 1690]]
Liberty Interests of Retarded and Mentally Ill: Commitment and
Treatment.--Potentially a major development in substantive due process
is the formulation of a liberty right of those retarded or handicapped
individuals who are involuntarily committed or who voluntarily seek
commitment to public institutions. The States pursuant to their parens
patriae power have a substantial interest in institutionalizing persons
in need of care, both for their own protection and for the protection of
others.\301\ Each individual, on the other hand, has a due process
protected interest in freedom from confinement and personal restraint;
an interest in reducing the degree of confinement continues even for
those individuals who are properly committed.\302\ Little controversy
has attended the gradual accretion of case law, now confirmed by the
Supreme Court, that due process guarantees freedom from undue physical
restraint and from unsafe conditions of confinement.\303\ Whether it
also guarantees a considerable right to treatment, to
``habilitation,''\304\ is the focus of the cases now being litigated,
and while the right has been strongly recognized by a number of
influential lower court decisions\305\ its treatment in the Supreme
Court is as yet tentative. Thus, Youngberg v. Romeo recognized a liberty
right to ``minimally adequate or reasonable training to ensure safety
and
[[Page 1691]]
freedom from undue restraint.''\306\ While the lower court had passed
upon and agreed with plaintiff's theory of entitlement to ``such
treatment as will afford a reasonable opportunity to acquire and
maintain those life skills necessary to cope as effectively as [his]
capacities permit,''\307\ the Supreme Court thought that before it
plaintiff had reduced his theory to one of ``training related to safety
and freedom from restraint.''\308\ But the Court's concern for
federalism, its reluctance to approve judicial activism in supervising
institutions, its recognition that budgetary constraints interfered with
state provision of services caused it to require the lower federal
courts to defer to professional decisionmaking in determining what care
was adequate. Professional decisions are presumptively valid and
liability can be imposed ``only when the decision by the professional is
such a substantial departure from accepted professional judgment,
practice, or standards as to demonstrate that the person responsible
actually did not base the decision on such a judgment.''\309\
Presumably, however, the difference between liability for damages and
injunctive relief will still afford federal courts considerable latitude
in enjoining institutions to better their services in the future, even
if they cannot award damages for past failures.\310\
\301\These principles have no application to persons not held in
custody by the state. DeShaney v. Winnebago County Social Servs. Dep't,
489 U.S. 189 (1989) (no Due Process violation for failure of state to
protect an abused child from his parent, even when the social service
agency had been notified of possible abuse, and possibility had been
substantiated through visits by social worker).
\302\Youngberg v. Romeo, 457 U.S. 307, 314-16 (1982). See
Jackson v. Indiana, 406 U.S. 715 (1972); O'Connor v. Donaldson, 422 U.S.
563 (1975); Vitek v. Jones, 445 U.S. 480, 491-94 (1980).
\303\Youngberg v. Romeo, 457 U.S. 307, 314-316 (1982). Thus,
personal security constitutes a ``historic liberty interest'' protected
substantively by the due process clause. Ingraham v. Wright, 430 U.S.
651, 673 (1977) (liberty interest in being free from undeserved corporal
punishment in school); Greenholtz v. Nebraska Penal Inmates, 442 U.S. 1,
18 (1979) (Justice Powell concurring) (``Liberty from bodily restraint
always has been recognized as the core of the liberty protected by the
Due Process Clause from arbitrary governmental actions'').
\304\``The word `habilitation' is commonly used to refer to
programs for the mentally retarded because mental retardation is . . . a
learning disability and training impairment rather than an illness.
[T]he principal focus of habilitation is upon training and development
of needed skills.'' Youngberg v. Romeo, 457 U.S. 307, 309 n.1 (1982)
(quoting amicus brief for American Psychiatric Association).
\305\In Jackson v. Indiana, 406 U.S. 715, 738 (1972), the Court
had said that ``due process requires that the nature and duration of
commitment bear some reasonable relation to the purpose for which the
individual is committed.'' Reasoning that if commitment is for treatment
and betterment of individuals, it must be accompanied by adequate
treatment, several lower courts recognized a due process right. E.g.,
Wyatt v. Stickney, 325 F. Supp. 781 (M.D.Ala), enforced, 334 F. Supp.
1341 (1971), supplemented, 334 F. Supp. 373 and 344 F. Supp. 387
(M.D.Ala. 1972), aff'd in part, reserved in part, and remanded, sub nom.
Wyatt v. Aderholt, 503 F.2d 1305 (5th Cir. 1974); Donaldson v. O'Connor,
493 F.2d 507 (5th Cir. 1974), vacated on other grounds, 432 U.S. 563
(1975).
\306\Youngberg v. Romeo, 457 U.S. 307, 319 (1982).
\307\Id. at 318 n.23.
\308\Id. at 317-18. Concurring, Justices Blackmun, Brennan, and
O'Connor, argued that due process guaranteed patients at least that
training necessary to prevent them from losing the skills they entered
the institution with and probably more. Id. at 325. Chief Justice Burger
rejected any protected interest in training. Id. at 329. The Court had
also avoided a decision on a right to treatment in O'Connor v.
Donaldson, 422 U.S. 563, 573 (1975), vacating and remanding a decision
recognizing the right and thus depriving the decision of precedential
value. Chief Justice Burger expressly rejected the right there also. Id.
at 578. But just four days later the Court denied certiorari to another
panel decision from the same circuit relying on its Donaldson decision
to establish such a right, leaving the principle alive in that circuit.
Burnham v. Department of Public Health, 503 F.2d 1319 (5th Cir. 1974),
cert. denied, 422 U.S. 1057 (1975). See also Allen v. Illinois, 478 U.S.
364, 373 (1986) (dictum that person civilly committed as ``sexually
dangerous person'' might be entitled to protection under the self-
incrimination clause if he could show that his confinement ``is
essentially identical to that imposed upon felons with no need for
psychiatric care'').
\309\Id. at 323.
\310\E.g., Ohlinger v. Watson, 652 F. 2d 775, 779 (9th Cir.
1980); Welsch v. Likins, 550 F.2d 1122, 1132 (8th Cir. 1977). Of course,
lack of funding will create problems with respect to injunctive relief
as well. Cf. New York State Ass'n for Retarded Children v. Carey, 631
F.2d 162, 163 (2d Cir. 1980). It should be noted that the Supreme Court
has limited the injunctive powers of the federal courts in similar
situations also.
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Still other issues await plumbing. The whole area of the rights
of committed individuals will likely be explored under a sub
[[Page 1692]]
stantive and procedural due process analysis.\311\ Additionally, federal
legislation is becoming extensive,\312\ and state legislative and
judicial development of law is highly important because the Supreme
Court looks to this law as one source of the interests which the due
process clause protects.\313\
\311\See Developments in the Law--Civil Commitment of the
Mentally Ill, 87 Harv. L. Rev. 1190 (1974). In Mills v. Rogers, 457 U.S.
291 (1982), the Court had before it the issue of the due process right
of committed mental patients at state hospitals to refuse administration
of antipsychotic drugs. An intervening decision of the State's highest
court had measurably strengthened the patients' rights under both state
and federal law and the Court remanded for reconsideration in light of
the state court decision. See also Rennie v. Klein, 653 F.2d 836 (3d
Cir. 1981).
\312\Developmentally Disabled Assistance and Bill of Rights Act
of 1975, Pub. L. No. 94-103, 89 Stat. 486, as amended, 42 U.S.C.
Sec. Sec. 6000 et seq., as to which see Pennhurst State School & Hosp.
v. Halderman, 451 U.S. 1 (1981); Mental Health Systems Act, 94 Stat.
1565, 42 U.S.C. Sec. 9401 et seq.
\313\See, e.g., Mills v. Rogers, 457 U.S. 291, 299-300 (1982).
And see infra, pp. 1723-32 (procedural due process).
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``Right to Die''.--In Cruzan v. Director, Missouri Dep't of
Health,\314\ the Court upheld Missouri's requirement that, before
nutrition and hydration may be withdrawn from a person in a persistent
vegetative state, it must be demonstrated by ``clear and convincing
evidence'' that such action is consistent with the patient's previously
manifested wishes. The Due Process Clause does not require that the
state rely on the judgment of the family, the guardian, or ``anyone but
the patient herself'' in making this decision, the Court concluded.\315\
Thus, in the absence of clear and convincing evidence that the patient
herself had expressed an interest not to be sustained in a persistent
vegetative state, or that she had expressed a desire to have a surrogate
make such a decision for her, the state may refuse to allow withdrawal
of nutrition and hydration. ``A State is entitled to guard against
potential abuses'' that can occur if family members do not protect a
patient's best interests, and ``may properly decline to make judgments
about the `quality' of life that a particular individual may enjoy, and
[instead] simply assert an unqualified interest in the preservation of
human life to be weighed against the . . . interests of the
individual.''\316\
\314\497 U.S. 261 (1990).
\315\Id. at 286.
\316\Id. at 281-82.
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The Court's opinion in Cruzan ``assume[d]'' that a competent
person has a constitutionally protected right to refuse lifesaving
hydration and nutrition.\317\ More important, however, a majority of
Justices separately declared that such a liberty interest exists.\318\
Thus, the Court appears committed to the position that the right
[[Page 1693]]
to refuse nutrition and hydration is subsumed in the broader right to
refuse medical treatment. Also blurred in the Court's analysis was any
distinction between terminally ill patients and those whose condition
has stabilized; there was testimony that the patient in Cruzan could be
kept ``alive'' for about 30 years if nutrition and hydration were
continued.
\317\Id. at 279.
\318\See 497 U.S. at 287 (O'Connor, concurring); id. at 304-05
(Brennan, joined by Marshall and Blackmun, dissenting); id. at 331
(Stevens, dissenting).
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FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED:
PROCEDURAL DUE PROCESS--CIVIL
Some General Criteria
What due process of law means in the procedural context depends
on the circumstances. It varies with the subject matter and the
necessities of the situation. Due process of law is a process which,
following the forms of law, is appropriate to the case and just to the
parties affected. It must be pursued in the ordinary mode prescribed by
law; it must be adapted to the end to be attained; and whenever
necessary to the protection of the parties, it must give them an
opportunity to be heard respecting the justice of the judgment sought.
Any legal proceeding enforced by public authority, whether sanctioned by
age or custom or newly devised in the discretion of the legislative
power, which regards and preserves these principles of liberty and
justice, must be held to be due process of law.\1\
\1\Hagar v. Reclamation Dist., 111 U.S. 701, 708 (1884); Hurtado
v. California, 110 U.S. 516, 537 (1884).
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Ancient Use and Uniformity.--The requirements of due process may
be ascertained in part by an examination of those settled usages and
modes of proceedings existing in the common and statutory law of England
during colonial times, and not unsuited to the civil and political
conditions in this country. A process of law not otherwise forbidden may
be taken to be due process of law if it has been sanctioned by settled
usage both in England and in this country. In other words, the antiquity
of a procedure is a fact of weight in its behalf. However, it does not
follow that a procedure settled in English law and adopted in this
country is, or remains, an essential element of due process of law. If
that were so, the procedure of the first half of the seventeenth century
would be fastened upon American jurisprudence like a strait jacket, only
to be unloosed by constitutional amendment. Fortunately, the States are
not tied down by any provision of the Constitution to the practice and
procedure which existed at the common law, but may avail
[[Page 1694]]
themselves of the wisdom gathered by the experience of the country to
make changes deemed to be necessary.\2\
\2\Brown v. New Jersey, 175 U.S. 172, 175 (1899); Hurtado v.
California, 110 U.S. 516, 529 (1884); Twining v. New Jersey, 211 U.S.
78, 101 (1908); Anderson Nat'l Bank v. Luckett, 321 U.S. 233, 244
(1944).
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Equality.--If due process is to be secured, the laws must
operate alike upon all and not subject the individual to the arbitrary
exercise of governmental power unrestrained by established principles of
private rights and distributive justice. Where a litigant has the
benefit of a full and fair trial in the state courts, and his rights are
measured, not by laws made to affect him individually, but by general
provisions of law applicable to all those in like condition, he is not
deprived of property without due process of law, even if he can be
regarded as deprived of his property by an adverse result.\3\
\3\Marchant v. Pennsylvania R.R., 153 U.S. 380, 386 (1894).
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Due Process, Judicial Process, and Separation of Powers.--Due
process of law does not always mean a proceeding in court.\4\
Proceedings to raise revenue by levying and collecting taxes are not
necessarily judicial, nor are administrative and executive proceedings,
yet their validity is not thereby impaired.\5\ Moreover, the due process
clause does not require de novo judicial review of the factual
conclusions of state regulatory agencies.\6\
\4\Ballard v. Hunter, 204 U.S. 241, 255 (1907); Palmer v.
McMahon, 133 U.S. 660, 668 (1890).
\5\McMillen v. Anderson, 95 U.S. 37, 41 (1877).
\6\Railroad Comm'n v. Rowan & Nichols Oil Co., 311 U.S. 570
(1941) (oil field proration order). See also Railroad Comm'n v. Rowan &
Nichols Oil Co., 310 U.S. 573 (1940) (courts should not second-guess
regulatory commissions in evaluating expert testimony).
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Nor does the Fourteenth Amendment prohibit a State from
conferring upon nonjudicial bodies certain functions that may be called
judicial, or from delegating to a court powers that are legislative in
nature. For example, state statutes vesting in a parole board certain
judicial functions,\7\ or conferring discretionary power upon
administrative boards to grant or withhold permission to carry on a
trade,\8\ or vesting in a probate court authority to appoint park
commissioners and establish park districts\9\ are not in conflict with
the due process clause and present no federal question. Whether
legislative, executive, and judicial powers of a State shall be kept
altogether distinct and separate, or whether they should in some
particulars be merged, is for the determination of the State.\10\
\7\Dreyer v. Illinois, 187 U.S. 71, 83-84 (1902).
\8\New York ex rel. Lieberman v. Van De Carr, 199 U.S. 552, 562,
(1905).
\9\Ohio ex rel. Bryant v. Akron Park Dist., 281 U.S. 74, 79
(1930).
\10\Carfer v. Caldwell, 200 U.S. 293, 297 (1906).
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[[Page 1695]]
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
PROCEDURAL DUE PROCESS: CIVIL
Power of the States to Regulate Procedure
Generally.--The due process clause of the Fourteenth Amendment
does not control mere forms of procedure in state courts or regulate
practice therein.\11\ A State ``is free to regulate procedure of its
courts in accordance with it own conception of policy and fairness
unless in so doing it offends some principle of justice so rooted in the
traditions and conscience of our people as to be ranked as
fundamental.''\12\ Pursuant to such power, the States have regulated the
manner in which rights may be enforced and wrongs remedied,\13\ and in
connection therewith have created courts and endowed them with such
jurisdiction as, in the judgment of their legislatures, seemed
appropriate.\14\ Whether legislative action in such matters is deemed to
be wise or proves efficient, whether it works a particular hardship on a
particular litigant, or perpetuates or supplants ancient forms of
procedure, are issues which can ordinarily give rise to no conflict with
the Fourteenth Amendment, inasmuch as its function is negative rather
than affirmative and in no way obligates the States to adopt specific
measures of reform.\15\ More recent decisions, however, have imposed
some restrictions on state procedures that require substantial
reorientation of process.\16\
\11\Holmes v. Conway, 241 U.S. 624, 631 (1916); Louisville &
Nashville R.R. v. Schmidt, 177 U.S. 230, 236 (1900).
\12\Snyder v. Massachusetts, 291 U.S. 97, 105 (1934); West v.
Louisiana, 194 U.S. 258, 263 (1904); Chicago, B. & Q. R.R. v. Chicago,
166 U.S. 226 (1897); Jordan v. Massachusetts, 225 U.S. 167, 176 (1912).
See Boddie v. Connecticut, 401 U.S. 371 (1971), for one recent
limitation. The power of a State to determine the limits of the
jurisdiction of its courts and the character of the controversies which
shall be heard in them and to deny access to its courts is also subject
to restrictions imposed by the contract, full faith and credit, and
privileges and immunities clauses of the Constitution. Angel v.
Bullington, 330 U.S. 183 (1947).
\13\Insurance Co. v. Glidden Co., 284 U.S. 151, 158 (1931); Iowa
Central Ry. v. Iowa, 160 U.S. 389, 393 (1896): Honeyman v. Hanan, 302
U.S. 375 (1937). See also Lindsey v. Normet, 405 U.S. 56 (1972).
\14\Cincinnati Street Ry. v. Snell, 193 U.S. 30, 36 (1904).
\15\Ownbey v. Morgan, 256 U.S. 94, 112 (1921). Thus the
Fourteenth Amendment does not constrain the States to accept modern
doctrines of equity, or adopt a combined system of law and equity
procedure, or dispense with all necessity for form and method in
pleading, or give untrammelled liberty to amend pleadings. Note that the
Supreme Court did once grant review to determine whether due process
required the States to provide some form of post-conviction remedy to
assert federal constitutional violations, a review which was mooted when
the State enacted such a process. Case v. Nebraska, 381 U.S. 336 (1965).
When a State, however, through its legal system exerts a monopoly over
the pacific settlement of private disputes, as with the dissolution of
marriage, due process may well impose affirmative obligations on that
State. Boddie v. Connecticut, 401 U.S. 371, 374-77 (1971).
\16\While this statement is more generally true in the context
of criminal cases, in which the appellate process and post-conviction
remedial process have been subject to considerable revision in the
treatment of indigents, some requirements have also been imposed in
civil cases. Boddie v. Connecticut, 401 U.S. 371 (1971); Lindsey v.
Normet, 405 U.S. 56, 74-79 (1972); Santosky v. Kramer, 455 U.S. 745
(1982). Review has, however, been restrained with regard to details.
See, e.g., Lindsey v. Normet, supra, 64-69.
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[[Page 1696]]
Commencement of Actions.--A state may impose certain conditions
on the right to institute litigation. Access to the courts has been
denied to persons instituting stockholders' derivative actions unless
reasonable security for the costs and fees incurred by the corporation
is first tendered.\17\ But, at least in those situations in which the
State has monopolized the avenues of settlement of disputes between
persons by prescribing judicial resolution, and where the dispute
involves such a fundamental interest as marriage and its dissolution, no
State may deny to those persons unable to pay its fees access to those
judicial avenues.\18\ It must be considered, then, that foreclosure of
all access to the courts, at least through financial barriers and
perhaps through other means as well, is subject to federal
constitutional scrutiny and must be justified by reference to a state
interest of suitable importance. In older cases, not questioned by the
more recent ones, it was held that a State, as the price of opening its
tribunals to a nonresident plaintiff, may exact the condition that the
nonresident stand ready to answer all cross actions filed and accept any
in personam judgments obtained by a resident defendant through service
of process or appropriate pleading upon the plaintiff's attorney of
record.\19\ and for similar reasons, a requirement, without excluding
other evidence, of a chemical analysis as a condition precedent to a
suit to recover for damages resulting to crops from allegedly deficient
fertilizers is not deemed to be arbitrary or unreasonable.\20\
\17\Cohen v. Beneficial Loan Corp., 337 U.S. 541 (1949). Nor was
the retroactive application of this statutory requirement to actions
pending at the time of its adoption violative of due process as long as
no new liability for expenses incurred before enactment was imposed
thereby and the only effect thereof was to stay such proceedings until
the security was furnished.
\18\Boddie v. Connecticut, 401 U.S. 371 (1971). See also Little
v. Streater, 452 U.S. 1 (1981) (state-mandated paternity suit); Lassiter
v. Department of Social Services, 452 U.S. 18 (1981) (parental status
termination proceeding); Santosky v. Kramer, 455 U.S. 745 (1982)
(permanent termination of parental custody).
\19\Young Co. v. McNeal-Edwards Co., 283 U.S. 398 (1931); Adam
v. Saenger, 303 U.S. 59 (1938).
\20\Jones v. Union Guano Co., 264 U.S. 171 (1924).
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Pleas in Abatement.--State legislation which forbids a defendant
to come into court and challenge the validity of service upon him in a
personal action without thereby surrendering himself to the jurisdiction
of the court, but which does not restrain him from protecting his
substantive rights against enforcement of a judgment rendered without
service of process is constitutional and does not deprive him of
property without due process of law. Such a defendant, if he pleases,
may ignore the proceedings as wholly ineffective, and set up the
invalidity of the judgment if and when an
[[Page 1697]]
attempt is made to take his property thereunder. However, if he desires
to contest the validity of the proceedings in the court in which it is
instituted, so as to avoid even a semblance of a judgment against him,
it is within the power of a State to declare that he shall do this
subject to the risk of being obliged to submit to the jurisdiction of
the court to hear and determine the merits, if the objection raised by
him as to its jurisdiction over his person shall be overruled.\21\
\21\York v. Texas, 137 U.S. 15 (1890); Kauffman v. Wootters, 138
U.S. 285, 287 (1891).
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Defenses.--Just as a State may condition the right to institute
litigation, so may it establish terms for the interposition of certain
defenses. It may validly provide that one sued in a possessory action
cannot bring an action to try title until after judgment is rendered and
after he has paid that judgment, if it so provides.\22\ A State may
limit the defense in an action to evict tenants for nonpayment of rent
to the issue of payment and leave the tenants to other remedial actions
at law on a claim that the landlord had failed to maintain the
premises.\23\ A State may also provide that the doctrines of
contributory negligence, assumption of risk, and fellow servant do not
bar recovery in certain employment-related accidents. No person has a
vested right in such defenses.\24\
\22\Grant Timber & Mfg. Co. v. Gray, 236 U.S. 133 (1915).
\23\Lindsey v. Normet, 405 U.S. 56, 64-69 (1972). See also
Bianchi v. Morales, 262 U.S. 170 (1923) (upholding mortgage law
providing for summary foreclosure of a mortgage without allowing any
defense except payment).
\24\Bowersock v. Smith, 243 U.S. 29, 34, (1917); Chicago, R.I. &
P. Ry. v. Cole, 251 U.S. 54, 55 (1919); Herron v. Southern Pacific Co.,
283 U.S. 91 (1931). See also Martinez v. California, 444 U.S. 277, 280-
83 (1980) (State interest in fashioning its own tort law permits it to
provide immunity defenses for its employees and thus defeat recovery).
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Similarly, a nonresident defendant in a suit begun by foreign
attachment, even though he has no resources or credit other than the
property attached, cannot challenge the validity of a statute which
requires him to give bail or security for the discharge of the seized
property before permitting him an opportunity to appear and defend.\25\
\25\Ownbey v. Morgan, 256 U.S. 94 (1921).
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Amendments and Continuances.--Amendment of pleadings is largely
within the discretion of the trial court, and unless a gross abuse of
discretion is shown, there is no ground for reversal. Accordingly, where
the defense sought to be interposed is without merit, a claim that due
process would be denied by rendition of a foreclosure decree without
leave to file a supplementary answer is utterly without foundation.\26\
\26\Sawyer v. Piper, 189 U.S. 154 (1903).
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[[Page 1698]]
Costs, Damages, and Penalties.--What costs are allowed by law is
for the court to determine; an erroneous judgment of what the law allows
does not deprive a party of his property without due process of law.\27\
Nor does a statute providing for the recovery of reasonable attorney's
fees in actions on small claims subject unsuccessful defendants to any
unconstitutional deprivation.\28\ Congress may severely restrict
attorney's fees in an effort to keep an administrative claims proceeding
informal.\29\ Equally consistent with the requirements of due process is
a statutory procedure whereby a prosecutor of a case is adjudged liable
for costs, and committed to jail in default of payment thereof, whenever
the court or jury, after according him an opportunity to present
evidence of good faith, finds that he instituted the prosecution without
probable cause and from malicious motives.\30\ Also, as a reasonable
incentive for prompt settlement without suit of just demands of a class
receiving special legislative treatment, such as common carriers and
insurance companies together with their patrons, a State may permit
harassed litigants to recover penalties in the form of attorney's fees
or damages.\31\ To deter careless destruction of human life, a State by
law may allow punitive damages to be assessed in actions against
employers for deaths caused by the negligence of their employees,\32\
and may also allow punitive damages for fraud perpetrated by
employees.\33\ Also constitutional is the traditional common law
approach for measuring punitive damages, granting the jury wide but not
unlimited discretion to consider the gravity of the offense and the need
to deter similar offenses.\34\
\27\Ballard v. Hunter, 204 U.S. 241, 259 (1907).
\28\Missouri, Kansas & Texas Ry. v. Cade, 233 U.S. 642, 650
(1914).
\29\Walters v. National Ass'n of Radiation Survivors, 473 U.S.
305 (1985) (limitation of attorneys' fees to $10 in veterans benefit
proceedings does not violate claimants' Fifth Amendment due process
rights absent a showing of probability of error in the proceedings that
presence of attorneys would sharply diminish). See also United States
Dep't of Labor v. Triplett, 494 U.S. 715 (1990) (upholding regulations
under the Black Lung Benefits Act prohibiting contractual fee
arrangements).
\30\Lowe v. Kansas, 163 U.S. 81 (1896). Consider, however, the
possible bearing of Giaccio v. Pennsylvania, 382 U.S. 399 (1966)
(statute allowing jury to impose costs on acquitted defendant, but
containing no standards to guide discretion, violates due process).
\31\Yazoo & Miss. R.R. v. Jackson Vinegar Co., 226 U.S. 217
(1912); Chicago & Northwestern Ry. v. Nye Schneider Fowler Co., 260 U.S.
35, 43-44 (1922); Hartford Life Ins. Co. v. Blincoe, 255 U.S. 129, 139
(1921); Life & Casualty Co. v. McCray, 291 U.S. 566 (1934).
\32\Pizitz Co. v. Yeldell, 274 U.S. 112, 114 (1927).
\33\Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991).
\34\Id. (finding sufficient constraints on jury discretion in
jury instructions and in post-verdict review).
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By virtue of its plenary power to prescribe the character of the
sentence which shall be awarded against those found guilty of crime, a
State may provide that a public officer embezzling public
[[Page 1699]]
money shall, notwithstanding that he has made restitution, suffer not
only imprisonment but also pay a fine equal to double the amount
embezzled, which shall operate as a judgment for the use of persons
whose money was embezzled. Whatever this fine is called, whether a
penalty, or punishment, or civil judgment, it comes to the convict as
the result of his crime.\35\ On the other hand, when appellant, by its
refusal to surrender certain assets, was adjudged in contempt for
frustrating enforcement of a judgment obtained against it, dismissal of
its appeal from the first judgment was not a penalty imposed for the
contempt, but merely a reasonable method for sustaining the
effectiveness of the State's judicial process.\36\
\35\Coffey v. Harlan County, 204 U.S. 659, 663, 665 (1907).
\36\National Union v. Arnold, 348 U.S. 37 (1954) (the judgment
debtor had refused to post a supersedeas bond or to comply with
reasonable orders designed to safeguard the value of the judgment
pending decision on appeal).
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Statutes of Limitation.--A statute of limitations does not
deprive one of property without due process of law, unless, in its
application to an existing right of action, it unreasonably limits the
opportunity to enforce the right by suit. By the same token, a State may
shorten an existing period of limitation, provided a reasonable time is
allowed for bringing an action after the passage of the statute and
before the bar takes effect. What is a reasonable period, however, is
dependent on the nature of the right and particular circumstances.\37\
\37\Wheeler v. Jackson, 137 U.S. 245, 258 (1890); Kentucky Union
Co. v. Kentucky, 219 U.S. 140, 156 (1911). Cf. Logan v. Zimmerman Brush
Co., 455 U.S. 422, 437 (1982) (discussing discretion of States in
erecting reasonable procedural requirements for triggering or
foreclosing the right to an adjudication).
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Thus, an interval of only one year is not so unreasonable as to
be wanting in due process when applied to bar actions relative to the
property of an absentee in instances when the receiver for such property
has not been appointed until 13 years after the former's
disappearance.\38\ When a State, by law, suddenly prohibits, unless
brought within six months after its passage, all actions to contest tax
deeds which have been of record for two years, no unconstitutional
deprivation is effected.\39\ No less valid is a statute, applicable to
wild lands, which provides that when a person has been in possession
under a recorded deed continuously for 20 years and had paid taxes
thereon during the same, the former owner in that interval paying
nothing, no action to recover such land shall be entertained unless
commenced within 20 years, or before the expiration of five years
following enactment of said provi
[[Page 1700]]
sion.\40\ Similarly, an amendment to a workmen's compensation act,
limiting to three years the time within which a case may be reopened for
readjustment of compensation on account of aggravation of a disability,
does not deny due process to one who sustained his injury at a time when
the statute contained no limitation. A limitation is deemed to affect
the remedy only, and the period of its operation in this instance was
viewed as neither arbitrary nor oppressive.\41\
\38\Blinn v. Nelson, 222 U.S. 1 (1911).
\39\Turner v. New York, 168 U.S. 90, 94 (1897).
\40\Soper v. Lawrence Brothers, 201 U.S. 359 (1906). Nor is a
former owner who had not been in possession for five years after and
fifteen years before said enactment thereby deprived of any property
without due process.
\41\Mattson v. Department of Labor, 293 U.S. 151, 154 (1934).
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Moreover, as long as no agreement of the parties is violated, a
State may extend as well as shorten the time in which suits may be
brought in its courts and may even entirely remove a statutory bar to
the commencement of litigation. As applied to actions for personal
debts, a repeal or extension of a statute of limitations affects no
unconstitutional deprivation of property of a debtor-defendant in whose
favor such statute had already become a defense. ``A right to defeat a
just debt by the statute of limitation . . . [not being] a vested
right,'' such as is protected by the Constitution, accordingly no
offense against the Fourteenth Amendment is committed by revival,
through an extension or repeal, of an action on an implied obligation to
pay a child for the use of her property,\42\ or a suit to recover the
purchase price of securities sold in violation of a Blue Sky Law,\43\ or
a right of an employee to seek, on account of the aggravation of a
former injury, an additional award out of a state-administered fund.\44\
However, as respects suits to recover real and personal property, when
the right of action has been barred by a statute of limitations and
title as well as real ownership have become vested in the defendant, any
later act removing or repealing the bar would be void as attempting an
arbitrary transfer of title.\45\ Also unconstitutional is the
application of a statute of limitation to extend a period that parties
to a contract have agreed should limit their right to remedies under the
contract. ``When the parties to a contract have expressly agreed upon a
time limit on their obligation, a statute which invalidates . . . [said]
agreement and directs enforcement of the contract after . . . [the
agreed] time has expired'' unconstitutionally imposes a burden in excess
of that contracted.\46\
\42\Campbell v. Holt, 115 U.S. 620, 623, 628 (1885).
\43\Chase Securities Corp. v. Donaldson, 325 U.S. 304 (1945).
\44\Gange Lumber Co. v. Rowley, 326 U.S. 295 (1945).
\45\Campbell v. Holt, 115 U.S. 620, 623 (1885). See also Stewart
v. Keyes, 295 U.S. 403, 417 (1935).
\46\Home Ins. Co. v. Dick, 281 U.S. 397, 398 (1930).
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[[Page 1701]]
Evidence and Presumptions.--The establishment of presumptions
and rules respecting the burden of proof is clearly within the domain of
the legislative branch of government.\47\ Nonetheless, the due process
clause does impose limitations upon the power to provide for the
deprivation of liberty or property by a standard of proof too lax to
make reasonable assurance of accurate factfinding. Thus, ``[t]he
function of a standard of proof, as that concept is embodied in the Due
Process Clause and in the realm of factfinding, is to `instruct the
factfinder concerning the degree of confidence our society thinks he
should have in the correctness of factual conclusions for a particular
type of adjudication.'''\48\ Applying the formula it has worked out for
determining what process is due in a particular situation,\49\ the Court
has held that in a civil proceeding to commit an individual
involuntarily to a state mental hospital for an indefinite period, a
standard at least as stringent as clear and convincing evidence is
required.\50\ Because the interest of parents in retaining custody of
their children is fundamental, the State may not terminate parental
rights through reliance on a standard of preponderance of the evidence--
the proof necessary to award money damages in an ordinary civil action--
but must prove by clear and convincing evidence that the parents are
unfit.\51\ Unfitness of a parent may not simply be presumed because of
some purported assumption about general characteristics, but must be
established.\52\
\47\Hawkins v. Bleakly, 243 U.S. 210, 214 (1917); James-
Dickinson Co. v. Harry, 273 U.S. 119, 124 (1927). Congress' power to
provide rules of evidence and standards of proof in the federal courts
stems from its power to create such courts. Vance v. Terrazas, 444 U.S.
252, 264-67 (1980); Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 31
(1976). In the absence of congressional guidance, the Court has
determined the evidentiary standard in certain statutory actions.
Nishikawa v. Dulles, 356 U.S. 129 (1958); Woodby v. INS, 385 U.S. 276
(1966).
\48\Addington v. Texas, 441 U.S. 418, 423 (1979) (quoting In re
Winship, 397 U.S. 358, 370 (1970) (Justice Harlan concurring)).
\49\Mathews v. Eldridge, 424 U.S. 319 (1976).
\50\Addington v. Texas, 441 U.S. 418 (1979).
\51\Santosky v. Kramer, 455 U.S. 745 (1982). Four Justices
dissented, arguing that considered as a whole the statutory scheme
comported with due process. Id. at 770 (Justices Rehnquist, White,
O'Connor, and Chief Justice Burger). Application of the traditional
preponderance of the evidence standard is permissible in paternity
actions. Rivera v. Minnich, 483 U.S. 574 (1987).
\52\Stanley v. Illinois, 405 U.S. 645 (1972) (presumption that
unwed fathers are unfit parents). But see Michael H. v. Gerald D., 491
U.S. 110 (1989) (statutory presumption of legitimacy accorded to a child
born to a married woman living with her husband defeats the right of the
child's biological father to establish paternity and visitation rights).
---------------------------------------------------------------------------
As long as a presumption is not unreasonable and is not
conclusive of the rights of the person against whom raised, however, it
does not violate the due process clause. Legislative fiat may not take
the place of fact, though, in the determination of issues involv
[[Page 1702]]
ing life, liberty, or property, and a statute creating a presumption
which is entirely arbitrary and which operates to deny a fair
opportunity to repel it or to present facts pertinent to one's defense
is void.\53\ On the other hand, if there is a rational connection
between what is proved and what is inferred, legislation declaring that
the proof of one fact or group of facts shall constitute prima facie
evidence of a main or ultimate fact will be sustained.\54\
\53\Presumptions were voided in Bailey v. Alabama, 219 U.S. 219
(1911) (anyone breaching personal services contract guilty of fraud);
Manley v. Georgia, 279 U.S. 1 (1929) (every bank insolvency deemed
fraudulent); Western & Atlantic R.R. v. Henderson, 279 U.S. 639 (1929)
(collision between train and auto at grade crossing constitutes
negligence by railway company); Carella v. California, 491 U.S. 263
(1989) (conclusive presumption of theft and embezzlement upon proof of
failure to return a rental vehicle).
\54\Presumptions sustained include Hawker v. New York, 170 U.S.
189 (1898) (person convicted of felony unfit to practice medicine);
Hawes v. Georgia, 258 U.S. 1 (1922) (person occupying property presumed
to have knowledge of still found on property); Bandini Co. v. Superior
Court, 284 U.S. 8 (1931) (release of natural gas into the air from well
presumed wasteful); Atlantic Coast Line R.R. v. Ford, 287 U.S. 502
(1933) (rebuttable presumption of railroad negligence for accident at
grade crossing). See also Morrison v. California, 291 U.S. 82 (1934).
---------------------------------------------------------------------------
For a brief period, the Court utilized what it called the
``irrebuttable presumption doctrine'' to curb the legislative tendency
to confer a benefit or to impose a detriment, depending for its
application upon the establishment of certain characteristics from which
the existence of other characteristics are presumed.\55\ Thus, as noted,
in Stanley v. Illinois,\56\ the Court found invalid a construction of
the state statute that presumed illegitimate fathers to be unfit parents
and that prevented them from objecting to state wardship. Mandatory
maternity leave rules of school boards requiring pregnant teachers to
take unpaid maternity leave five and four months respectively prior to
the date of the expected births of their babies were voided as creating
a conclusive presumption that every pregnant teacher who reaches a
particular point of pregnancy becomes physically incapable of
teaching.\57\ Major controversy developed over application of the
doctrine in benefits cases. Thus, while a State may require that
nonresidents must pay higher tuition charges at state colleges than
residents, and while the Court assumed that a durational residency
requirement would be permissible as a prerequisite to qualify for the
lower tuition, it was held impermissible for the State to presume
conclusively that because
[[Page 1703]]
the legal address of a student was outside the State at the time of
application or at some point during the preceding year he was a
nonresident as long as he remained a student. The due process clause
required that the student be afforded the opportunity to show that he is
or has become a bona fide resident entitled to the lower tuition.\58\
\55\The approach was not unprecedented, some older cases having
voided tax legislation that presumed conclusively an ultimate fact.
Schlesinger v. Wisconsin, 270 U.S. 230 (1926) (deeming any gift made by
decedent within six years of death to be a part of estate denies
estate's right to prove gift was not made in contemplation of death);
Heiner v. Donnan, 285 U.S. 312 (1932); Hoeper v. Tax Comm'n, 284 U.S.
206 (1931).
\56\405 U.S. 645 (1972).
\57\Cleveland Bd. of Educ. v. LaFleur, 414 U.S. 632 (1974).
\58\Vlandis v. Kline, 412 U.S. 441 (1973).
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Moreover, a food stamp program provision making ineligible any
household that contained a member age 18 or over who was claimed as a
dependent for federal income tax purposes the prior tax year by a person
not himself eligible for stamps was voided on the ground that it created
a conclusive presumption that fairly often could be shown to be false if
evidence could be presented.\59\ The rule which emerged for subjecting
persons to detriment or qualifying them for benefits was that the
legislature may not presume the existence of the decisive characteristic
upon a given set of facts, unless it can be shown that the defined
characteristics do in fact encompass all persons and only those persons
that it was the purpose of the legislature to reach. The doctrine in
effect afforded the Court the opportunity to choose between resort to
the equal protection clause or to the due process clause in judging the
validity of certain classifications,\60\ and it precluded Congress and
legislatures from making general classifications that avoided the
administrative costs of individualization in many areas.
\59\Department of Agriculture v. Murry, 413 U.S. 508 (1973).
\60\Thus, on the some day Murry was decided, a similar food
stamp qualification was struck down on equal protection grounds.
Department of Agriculture v. Moreno, 413 U.S. 528 (1973).
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Utilization of the doctrine was curbed, if not halted, in
Weinberger v. Salfi,\61\ in which the Court upheld the validity of a
Social Security provision requiring as a qualification of receipt of
benefits as a spouse of a covered wage earner that one must have been
married to the wage earner for at least nine months prior to his death.
Purporting to approve but to distinguish the prior cases in the
line,\62\ the Court rather imported traditional equal protection
analysis into considerations of due process challenges to statutory
classifications.\63\ ``Extensions'' of the prior cases to government
entitlement classifications, such as the Social Security Act
qualification
[[Page 1704]]
standard before it, would, said the Court, ``turn the doctrine of those
cases into a virtual engine of destruction for countless legislative
judgments which have heretofore been thought wholly consistent with the
Fifth and Fourteenth Amendments to the Constitution.''\64\ Whether the
Court will now limit the doctrine to the detriment area only, exclusive
of benefit programs, whether it will limit it to those areas which
involve fundamental rights or suspect classifications, in the equal
protection sense of those expressions,\65\ or whether it will simply
permit the doctrine to pass from the scene remains unsettled, but it is
noteworthy that it now rarely appears on the Court's docket.\66\
\61\422 U.S. 749 (1975).
\62\Stanley and LaFleur were distinguished as involving
fundamental rights of family and childbearing, id. at 771, and Murry was
distinguished as involving an irrational classification. Id. at 772.
Vlandis, said Justice Rehnquist for the Court, meant no more than that
when a State fixes residency as the qualification it may not deny to one
meeting the test of residency the opportunity so to establish it. Id. at
771. But see id. at 802-03 (Justice Brennan dissenting).
\63\Id. at 768-70, 775-77, 785 (utilizing Dandridge v. Williams,
397 U.S. 471 (1970), Richardson v. Belcher, 404 U.S. 78 (1971), and
similar cases).
\64\Weinberger v. Salfi, 422 U.S. 749, 772 (1975).
\65\Vlandis, which was approved but distinguished, is only
marginally in this doctrinal area, involving as it does a right to
travel feature, but it is like Salfi and Murry in its benefit context
and order of presumption. The Court has avoided deciding whether to
overrule, retain, or further limit Vlandis. Elkins v. Moreno, 435 U.S.
647, 658-62 (1978).
\66\In Turner v. Department of Employment Security, 423 U.S. 44
(1975), decided after Salfi, the Court voided under the doctrine a
statute making pregnant women ineligible for unemployment compensation
for a period extending from 12 weeks before the expected birth until six
weeks after childbirth. But see Usery v. Turner Elkhorn Mining Co., 428
U.S. 1 (1977) (provision granting benefits to miners ``irrebuttably
presumed'' to be disabled is merely a way of giving benefits to all
those with the condition triggering the presumption); Califano v. Boles,
443 U.S. 282, 284-85 (1979) (Congress must fix general categorization;
case-by-case determination would be prohibitively costly).
---------------------------------------------------------------------------
Jury Trials.--Trial by jury in civil trials, unlike the case in
criminal trials, has not been deemed essential to due process, and the
Fourteenth Amendment has not been held to restrain the States in
retaining or abolishing civil juries.\67\ Thus, abolition of juries in
proceedings to enforce liens,\68\ mandamus\69\ and quo warranto\70\
actions, and in eminent domain\71\ and equity\72\ proceedings has been
approved. States are free to adopt innovations respecting selection and
number of jurors. Verdicts rendered by ten out of twelve jurors may be
substituted for the requirement of unanimity,\73\ and petit juries
containing eight rather than the conventional number of twelve members
may be established.\74\
\67\Walker v. Sauvinet, 92 U.S. 90 (1876); New York Central R.R.
v. White, 243 U.S. 188, 208 (1917).
\68\Marvin v. Trout, 199 U.S. 212, 226 (1905).
\69\In re Delgado, 140 U.S. 586, 588 (1891).
\70\Wilson v. North Carolina, 169 U.S. 586 (1898); Foster v.
Kansas, 112 U.S. 201, 206 (1884).
\71\Long Island Water Supply Co. v. Brooklyn, 166 U.S. 685, 694
(1897).
\72\Montana Co. v. St. Louis M. & M. Co., 152 U.S. 160, 171
(1894).
\73\See Jordan v. Massachusetts, 225 U.S. 167, 176 (1912).
\74\See Maxwell v. Dow, 176 U.S. 581, 602 (1900).
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Appeals.--If a full and fair trial on the merits is provided,
due process does not require a State to provide appellate review.\75\
But
[[Page 1705]]
if an appeal is afforded, the State must not so structure it as to
arbitrarily deny to some persons the right or privilege available to
others.\76\
\75\Lindsey v. Normet, 405 U.S. 56, 77 (1972) (citing cases).
\76\Id. at 74-79 (conditioning appeal in eviction action upon
tenant posting bond, with two sureties, in twice the amount of rent
expected to accrue pending appeal, is invalid when no similar provision
is applied to other cases). Cf. Bankers Life & Casualty Co. v. Crenshaw,
486 U.S. 71 (1988) (assessment of 15% penalty on party who
unsuccessfully appeals from money judgment meets rational basis test
under equal protection challenge, since it applies to plaintiffs and
defendants alike and does not single out one class of appellants).
---------------------------------------------------------------------------
FOURTEENTH AMENDMENT
SECTION 1. RIGHTS GUARANTEED
PROCEDURAL DUE PROCESS: CIVIL
Jurisdiction
Generally.--Jurisdiction may be defined as the power to create
legal interests. In the famous case of Pennoyer v. Neff,\77\ the Court
enunciated two principles of jurisdiction respecting the States in a
federal system. First, ``every State possesses exclusive jurisdiction
and sovereignty over persons and property within its territory,'' and,
second, ``no State can exercise direct jurisdiction and authority over
persons or property without its territory.''\78\ Although these two
principles were drawn from the writings of Joseph Story refining the
theories of continental jurists,\79\ the constitutional basis for them
was deemed to be in the due process clause of the Fourteenth
Amendment.\80\ From these beginnings, the Court developed a complex set
of rules defining when jurisdiction--physical power--could be exerted
over persons through in personam actions and over things, generally,
through actions in rem.\81\
\77\95 U.S. 714 (1878).
\78\Id. at 722.
\79\Hazard, A General Theory of State-Court Jurisdiction, 1965
Sup. Ct. Rev. 241, 252-62.
\80\Pennoyer v. Neff, 95 U.S. 714, 733-35 (1878). The due
process clause and the remainder of the Fourteenth Amendment had not
been ratified at the time of the entry of the state-court judgment
giving rise to the case. This inconvenient fact does not detract from
the subsequent settled utilization of this constitutional foundation.
Pennoyer denied full faith and credit to the judgment because the state
lacked jurisdiction.
\81\Pennoyer v. Neff, 95 U.S. 714, 733 (1878); Scott v. McNeal,
154 U.S. 34, 64 (1894).
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In proceedings in personam to determine liability of a
defendant, no property having been subjected by such litigation to the
control of the court, jurisdiction over the defendant's person is a
condition prerequisite to the rendering of any effective decree.\82\
That condition is fulfilled, that is, a State is deemed capable of
exerting jurisdiction over an individual if he is physically present
within the territory of the State, if he is domiciled in the State
although temporarily absent therefrom, or if he has consented to the
[[Page 1706]]
exercise of jurisdiction over him. In actions in rem, however, a State
could validly proceed to settle controversies with regard to rights or
claims against property within its borders, notwithstanding that control
of the defendant was never obtained. Accordingly, by reason of its
inherent authority over titles to land within its territorial confines,
a State could proceed through its courts to judgment respecting the
ownership of such property, even though it lacked a constitutional
competence to reach claimants of title who resided beyond its
borders.\83\ By the same token, probate\84\ and garnishment of foreign
attachment\85\ proceedings, being in the nature of in rem actions for
the disposition of property, or quasi in rem, might be prosecuted to
conclusion without requiring the presence of all parties in
interest.\86\
\82\National Exchange Bank v. Wiley, 195 U.S. 257, 270 (1904);
Iron Cliffs Co. v. Negaunee Iron Co., 197 U.S. 463, 471 (1905).
\83\Arndt v. Griggs, 134 U.S. 316, 321 (1890); Grannis v.
Ordean, 234 U.S. 385 (1914); Pennington v. Fourth Nat'l Bank, 243 U.S.
269, 271 (1917).
\84\Goodrich v. Ferris, 214 U.S. 71, 80 (1909).
\85\Pennington v. Fourth Nat'l Bank, 243 U.S. 269, 271 (1917);
Harris v. Balk, 198 U.S. 215 (1905).
\86\The jurisdictional requirements for rendering a valid
divorce decree are considered under the full faith and credit clause.
Supra, pp. 840-50.
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Over a long period of time, the mobility of American society and
the increasing complexity of commerce led to attenuation of the second
principle of Pennoyer,\87\ and beginning with International Shoe Co. v.
Washington,\88\ the Court established the modern standard of obtaining
in personam jurisdiction based upon the nature and the quality of
contacts that individuals and corporations have with a State; this
``minimum contacts'' test permits the courts of a State through process
to obtain power over out-of-state defendants. In recent cases, the
``minimum contacts'' test has been held applicable to all assertions of
jurisdiction, so that in rem and quasi-in-rem proceedings must now be
evaluated in the context of the defendant's relationship to the State in
which the suit is being brought.\89\
\87\The first principle, that a State may assert jurisdiction
over anyone or anything physically within its borders, no matter how
briefly there--the so-called ``transient'' rule of jurisdiction--
McDonald v. Mabee, 243 U.S. 90, 91 (1917), remains valid, although in
Shaffer v. Heitner, 433 U.S. 186, 204 (1977), the Court's dicta appeared
to assume it is not.
\88\326 U.S. 310 (1945). As the Court explained in McGee v.
International Life Ins. Co., 355 U.S. 220, 223 (1957), ``[w]ith this
increasing nationalization of commerce has come a great increase in the
amount of business conducted by mail across state lines. At the same
time modern transportation and communication have made it much less
burdensome for a party sued to defend himself in a State where he
engages in economic activity.'' See World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 293 (1980).
\89\Shaffer v. Heitner, 433 U.S. 186 (1977); World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980); Rush v. Savchuk, 444
U.S. 320 (1980); Kulko v. Superior Court, 436 U.S. 84 (1978).
---------------------------------------------------------------------------
[[Page 1707]]
Basis for the territorial concept of jurisdiction promulgated in
Pennoyer and modified over the years is a two-fold construction of due
process: a concern for ``fair play and substantial justice'' involved in
requiring defendants to litigate cases against them far from their
``home'' or place of business\90\ and, more important, a concern for the
preservation of federalism.\91\ The Framers, the Court has asserted,
while intending to tie the States together into a Nation, ``also
intended that the States retain many essential attributes of
sovereignty, including, in particular, the sovereign power to try causes
in their courts. The sovereignty of each State, in turn, implied a
limitation on the sovereignty of all its sister States--a limitation
express or implicit in both the original scheme of the Constitution and
the Fourteenth Amendment.''\92\ Thus, the federalism principle is
preeminent. ``[T]he Due Process Clause `does not contemplate that a
state may make binding a judgment in personam against an individual or
corporate defendant with which the state has no contacts, ties, or
relations.' . . . Even if the defendant would suffer minimal or no
inconvenience from being forced to litigate before the tribunals of
another State; even if the forum State has a strong interest in applying
its law to the controversy; even if the forum State is the most
convenient location for litigation, the Due Process Clause, acting as an
instrument of interstate federalism, may sometimes act to divest the
State of its power to render a valid judgment.''\93\
\90\International Shoe Co. v. Washington, 326 U.S. 310, 316, 317
(1945); Travelers Health Ass'n v. Virginia ex rel. State Corp. Comm.,
339 U.S. 643, 649 (1950); Shaffer v. Heitner, 433 U.S. 186, 204 (1977).
\91\International Shoe Co. v. Washington, 326 U.S. 310, 319
(1945); Hanson v. Denckla, 357 U.S. 235, 251 (1958).
\92\World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 293
(1980).
\93\Id. at 294 (internal quotation from International Shoe Co.
v. Washington, 326 U.S. 310, 319 (1945)).
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In Personam Proceedings Against Individuals.--As has been noted,
presence within the State with service of process is sufficient to
create personal jurisdiction over an individual.\94\ In the case of a
resident, absence alone will not defeat the processes of courts in the
State of his domicile; domicile alone is deemed to be sufficient to keep
him within reach of the state courts for purposes of a personal
judgment, whether obtained by means of appropriate, substituted service
or by actual personal service on the resident
[[Page 1708]]
outside the State.\95\ However, if the defendant, although technically
domiciled therein, has left the State with no intention to return,
service by publication, as compared to a summons left at his last and
usual place of abode where his family continued to reside, is
inadequate, inasmuch as it is not reasonably calculated to give actual
notice of the proceedings and opportunity to be heard.\96\
\94\McDonald v. Mabee, 243 U.S. 90, 91 (1917). Cf. Michigan
Trust Co. v. Ferry, 228 U.S. 346 (1913). The rule has been strongly
criticized but persists. Ehrenzweig, The Transient Rule of Personal
Jurisdiction: The ``Power'' Myth and Forum Conveniens, 65 Yale L. J. 289
(1956). But in Burnham v. Superior Court, 495 U.S. 604 (1990), the Court
held that service of process on a nonresident physically present within
the state satisfies due process regardless of the duration or purpose of
the nonresident's visit.
\95\Milliken v. Meyer, 311 U.S. 457 (1940).
\96\McDonald v. Mabee, 243 U.S. 90 (1917).
---------------------------------------------------------------------------
With respect to a nonresident, it is clearly established that no
person can be deprived of property rights by a decree in a case in which
he neither appeared nor was served or effectively made a party.\97\ The
early cases held that the process of a court of one State could not run
into another and summon a party there domiciled to respond to
proceedings against him, when neither his person nor his property was
within the jurisdiction of the court rendering the judgment.\98\ The
attenuation of the rule proceeded in steps. Consent was, of course,
sufficient to create jurisdiction, even in the absence of any other
connection between the litigation and the forum, and for example, the
appearance of the defendant for any purpose other than to challenge the
jurisdiction of the court was deemed a voluntary submission to the
court's power,\99\ and even a special appearance may be treated as
consensual submission to the court.\100\ Constructive consent,
therefore, was seized upon as a basis for obtaining jurisdiction, and,
with the advent of the automobile, States were permitted, under the
fiction of conditioning the use of their highways on receipt of consent
to be sued in state courts for accidents or other transactions arising
out of such use, to designate a state official as a proper person to
receive service of process in such litigation, provided only that the
official receiving notice is obligated to communicate it to the person
sued.\101\ Although the Court verbalized the result in consent terms,
the basis was really the State's power to regulate local acts dangerous
to life or property.\102\ This extension was necessary in order
[[Page 1709]]
to permit States to assume jurisdiction over individuals ``doing
business'' within the State, inasmuch as the State could not withhold
from nonresident individuals the right of doing business subject to
consent to be sued.\103\ Thus, the Court soon recognized that ``doing
business'' within a State was itself a sufficient basis for jurisdiction
over a nonresident individual, at least where the business done was
exceptional enough to create a strong state interest in regulation, and
service could be effectuated within the State on an agent appointed to
carry out the business.\104\
\97\Rees v. Watertown, 86 U.S. (19 Wall.) 107 (1874); Coe v.
Armour Fertilizer Works, 237 U.S. 413, 423 (1915); Griffin v. Griffin,
327 U.S. 220 (1946).
\98\Sugg v. Thornton, 132 U.S. 524 (1889); Riverside Mills v.
Menefee, 237 U.S. 189, 193 (1915); Hess v. Pawloski, 274 U.S. 352, 355
(1927). See also Harkness v. Hyde, 98 U.S. 476 (1879); Wilson v.
Seligman, 144 U.S. 41 (1892).
\99\Louisville & Nashville R.R. v. Schmidt, 177 U.S. 230 (1900);
Western Loan & Savings Co. v. Butte & Boston Min. Co., 210 U.S. 368
(1908); Houston v. Ormes, 252 U.S. 469 (1920). See also Adam v. Saenger,
303 U.S. 59 (1938) (plaintiff suing defendants deemed to have consented
to jurisdiction with respect to counterclaims asserted against him).
\100\York v. Texas, 137 U.S. 15 (1890); Kauffman v. Wootters,
138 U.S. 285 (1891); Western Indemnity Co. v. Rupp, 235 U.S. 261 (1914).
\101\Hess v. Pawloski, 274 U.S. 352 (1927): Wuchter v. Pizzutti,
276 U.S. 13 (1928); Olberding v. Illinois Central R. Co., 346 U.S. 338,
341 (1953).
\102\Hess v. Pawloski, 274 U.S. 352, 356-57 (1927).
\103\Id. at 355. See Flexner v. Farson, 248 U.S. 289, 293
(1919).
\104\Henry L. Doherty & Co. v. Goodman, 294 U.S. 623 (1935).
---------------------------------------------------------------------------
Culmination of the trend was, of course, the promulgation in
International Shoe Co. v. Washington,\105\ a corporations case, of the
``minimum contacts'' test of jurisdiction. In the context of in personam
jurisdiction over individuals, the test is illustrated by Kulko v.
Superior Court,\106\ in which the Court held that California could not
obtain personal jurisdiction over a New York resident whose sole
relevant contact with the State was to send his daughter to live with
her mother in California.\107\ ``Like any standard that requires a
determination of `reasonableness,' the `minimum contacts' test . . . is
not susceptible of mechanical application; rather, the facts of each
case must be weighed to determine whether the requisite `affiliating
circumstances' are present.''\108\ Without deciding that the standard
was relevant, the Court noted that the ``effects'' test of contacts,
that Kulko had ``caused an effect'' in the State by availing himself of
the benefits and protections of California's laws and by deriving an
economic benefit in the lessened expense of maintaining the daughter in
New York, was not applicable; it was deemed by the Court to involve
wrongful activity outside a State which causes injury within the State
or commercial activity affecting state residents, factors not present in
this case. Any economic benefit to Kulko was derived in New York and not
in California.\109\ As with many such cases, the decision was narrowly
limited to its facts and does little to clarify the standards applicable
to state jurisdiction over nonresidents.
\105\326 U.S. 310, 316 (1945).
\106\436 U.S. 84 (1978).
\107\Kulko had visited the State twice, seven and six years
respectively before initiation of the present action, his marriage
occurring in California on the second visit, but neither the visits nor
the marriage was sufficient or relevant to jurisdiction. Id. at 92-93.
\108\Id. at 92.
\109\Id. at 96-98.
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[[Page 1710]]
Suability of Foreign Corporations.--Because of the curious
status of corporations in American law,\110\ the basis of the assertion
of jurisdiction of the courts of a State over a foreign corporation has
been even more uncertain than that with respect to individuals, although
the terms have been common. First, it was asserted that inasmuch as a
corporation could not carry on business in a State without the State's
permission, the State could condition its permission upon the
corporation's consent to submit to the jurisdiction of the State's
courts, either by appointment of someone to receive process or in the
absence of such designation.\111\ Second, the corporation by doing
business in a State was deemed to be present there and thus subject to
service of process and suit because it was present.\112\ Presence
conflicted with the prevailing idea of corporations as having no
existence outside their State of incorporation, but the theory was
nonetheless accepted that a corporation ``doing business'' in a State to
a sufficient degree was ``present'' for service of process upon its
agents in the State who carried out that business.\113\ Generally, with
rare exceptions, even continuous activity of some sort by a foreign
corporation within a State did not suffice to render it amenable to
suits therein unrelated to that activity. Without the protection of such
a rule, it was maintained, foreign corporations would be exposed to the
manifest hardship and inconvenience of defending, in any State in which
they happened to be carrying on business, suits for torts wherever
committed and claims on contracts wherever made.\114\ And if the
corporation stopped doing business in the forum State before suit
against it was commenced, it might well escape jurisdiction alto
[[Page 1711]]
gether.\115\ The issue of the degree of activity required, in particular
the degree of solicitation necessary to constitute doing business by a
foreign corporation, was much disputed and led to very particularistic
holdings.\116\ In the absence of enough activity to constitute doing
business, the mere presence within its territorial limits of an agent,
officer, or stockholder, upon whom service might readily be had, was not
effective to enable a State to acquire jurisdiction over the foreign
corporation.\117\
\110\Cf. Bank of Augusta v. Earle, 38 U.S. (13 Pet.) 519, 588
(1839) (corporation has no legal existence outside the boundaries of the
State chartering it).
\111\Lafayette Ins. Co. v. French, 59 U.S. (18 How.) 404 (1855);
St. Clair v. Cox, 196 U.S. 350 (1882); Commercial Mutual Accident Co. v.
Davis, 213 U.S. 245 (1909); Simon v. Southern Ry., 236 U.S. 115 (1915);
Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S.
93 (1917).
\112\Presence was first independently used to sustain
jurisdiction in International Harvester Co. v. Kentucky, 234 U.S. 579
(1914), although the possibility was suggested as early as St. Clair v.
Cox, 106 U.S. 350 (1882). See also Philadelphia & Reading Ry. v.
McKibbin, 243 U.S. 264, 265 (1917) (Justice Brandeis for Court).
\113\E.g., Pennsylvania Fire Ins. Co. v. Gold Issue Mining &
Milling Co., 243 U.S. 93 (1917); St. Louis S. W. Ry. v. Alexander, 227
U.S. 218 (1913).
\114\E.g., Old Wayne Life Ass'n v. McDonough, 204 U.S. 8 (1907);
Simon v. Southern Railway, 236 U.S. 115, 129-130 (1915); Green v.
Chicago, B. & Q. Ry., 205 U.S. 530 (1907); Rosenberg Co. v. Curtis Brown
Co., 260 U.S. 516 (1923); Davis v. Farmers Co-operative Co., 262 U.S.
312 (1923); Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408
(1984). Continuous operations were sometimes sufficiently substantial
and of a nature to warrant assertions of jurisdiction. St. Louis S. W.
Ry. v. Alexander, 227 U.S. 218 (1913).
\115\Robert Mitchell Furn. Co. v. Selden Breck Constr. Co., 257
U.S. 213 (1921): Chipman, Ltd. v. Thomas B. Jeffery Co., 251 U.S. 373,
379 (1920). On a consent theory, jurisdiction would continue. Washington
ex rel Bond & Goodwin & Tucker v. Superior Court, 289 U.S. 361, 364
(1933).
\116\Solicitation of business alone was inadequate to constitute
``doing business,'' Green v. Chicago, B. & Q. Ry., 205 U.S. 530 (1907),
but when connected with other activities would suffice to confer
jurisdiction. International Harvester Co. v. Kentucky, 234 U.S. 579
(1914). See the survey of cases by Judge Hand in Hutchinson v. Chase and
Gilbert, 45 F.2d 139, 141-42 (2d Cir. 1930).
\117\E.g. Goldey v. Morning News, 156 U.S. 518 (1895); Conley v.
Mathieson Alkali Works, 190 U.S. 406 (1903); Riverside Mills v. Menefee,
237 U.S. 189, 195 (1915). But see Connecticut Mutual Life Ins. Co. v.
Spratley, 172 U.S. 602 (1899).
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The rationales and premises of these cases were swept away in
International Shoe Co. v. Washington,\118\ although, of course, the
results in many of them would stand on the basis of the ``minimum
contacts'' analysis there adopted. International Shoe, a foreign
corporation, had not been issued a license to do business in the State,
but it systematically and continuously employed a force of salesmen,
residents thereof, to canvass for orders therein, and was held suable in
Washington for unpaid unemployment compensation contributions in respect
to such salesmen. Service of the notice of assessment personally upon
one of its local sales solicitors plus the forwarding of a copy thereof
by registered mail to the corporation's principal office in Missouri was
deemed sufficient to apprise the corporation of the proceeding.
\118\326 U.S. 310 (1945).
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To reach this conclusion the Court not only overturned prior
holdings to the effect that mere solicitation of patronage does not
constitute doing of business in a state sufficient to subject a foreign
corporation to the jurisdiction thereof,\119\ but also rejected the
``presence'' test as begging ``the question to be decided. . . . The
terms `present' or `presence,''' according to Chief Justice Stone, ``are
used merely to symbolize those activities of the corporation's agent
within the State which courts will deem to be sufficient to satisfy the
demands of due process. . . . Those demands may be met by
[[Page 1712]]
such contacts of the corporation with the State of the forum as make it
reasonable, in the context of our federal system . . . , to require the
corporation to defend the particular suit which is brought there; [and]
. . . that the maintenance of the suit does not offend `traditional
notions of fair play and substantial justice'. . . . An `estimate of the
inconveniences' which would result to the corporation from a trial away
from its `home' or principal place of business is relevant in this
connection.''\120\ As to the scope of application to be accorded this
``fair play and substantial justice'' doctrine, the Court, at least
verbally, concluded that ``so far as . . . [corporate] obligations arise
out of or are connected with activities within the State, a procedure
which requires the corporation to respond to a suit brought to enforce
them can, in most instances, hardly be said to be undue.''\121\ Read
literally, these statements coupled with the terms of the new doctrine
lead to a reversal of former decisions which: (1) nullified the exercise
of jurisdiction by the forum State over actions arising outside the
State and brought by a resident plaintiff against a foreign corporation
doing business therein without having been legally admitted and without
having consented to service of process of a resident agent; and (2)
exempted a foreign corporation, which has been licensed by the forum
State to do business therein and has consented to the appointment of a
local agent to accept process, from suit on an action not arising in the
forum State and not related to activities pursued therein.
\119\This departure was recognized by Justice Rutledge
subsequently in Nippert v. City of Richmond, 327 U.S. 416, 422 (1946).
Inasmuch as International Shoe, in addition to having its agents solicit
orders, also permitted them to rent quarters for the display of
merchandise, the Court could have utilized International Harvester Co.
v. Kentucky, 234 U.S. 579 (1914), to find it was ``present'' in the
State.
\120\International Shoe Co. v. Washington, 326 U.S. 310, 316-17
(1945).
\121\Id. at 319.
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By an extended application of the logic of the position, a
majority of the Court ruled that, notwithstanding that it solicited
business in Virginia solely through recommendations of existing members
and was represented therein by no agents whatsoever, a foreign mail
order insurance company had through its policies developed such contacts
and ties with Virginia residents that the State, by forwarding notice to
the company by registered mail only, could institute enforcement
proceedings under its Blue Sky Law leading to a decree ordering
cessation of business pending compliance with that act.\122\ The due
process clause was declared not to ``forbid a State to protect its
citizens from such injustice'' of having to file suits on their claims
at a far distant home office of such company,
[[Page 1713]]
especially in view of the fact that such suits could be more
conveniently tried in Virginia where claims of loss could be
investigated.\123\ Likewise, under a California statute, subjecting
foreign mail order insurance companies to suit in California on
insurance contracts with residents thereof, petitioner was enabled to
obtain a valid judgment in a California court against a Texas insurer
served only by registered mail.\124\ The contract between the company
and the insured specified that Austin, Texas, was the place of
``making'' and the place where liability should be deemed to arise. The
company mailed premium notices to the insured in California, and he
mailed his premium payments to the company in Texas. Acknowledging that
the connection of the company with California was tenuous--it had no
office or agents in the State, no evidence had been presented that it
had solicited anyone other than this insured for business--the Court
sustained jurisdiction on the basis that the suit was on a contract
which had a substantial connection with California. ``The contract was
delivered in California, the premiums were mailed there and the insured
was a resident of that State when he died. It cannot be denied that
California has a manifest interest in providing effective means of
redress for its residents when their insurers refuse to pay
claims.''\125\
\122\Travelers Health Ass'n v. Virginia ex rel. State Corp.
Comm'n, 339 U.S. 643 (1950). The decision was 5-to-4 with one of the
majority Justices also contributing a concurring opinion. Id. at 651
(Justice Douglas). The possible significance of the concurrence is that
it appears to disagree with the implication of the majority opinion, id.
at 647-48, that a State's legislative jurisdiction and its judicial
jurisdiction are coextensive. Id. at 652-53 (distinguishing between the
use of the State's judicial power to enforce its legislative powers and
the judicial jurisdiction when a private party is suing). See id. at 659
(dissent).
\123\Id. at 647-49. The holding in Minnesota Commercial Men's
Ass'n v. Benn, 261 U.S. 140 (1923), that a similar mail order insurance
company could not be viewed as doing business in the forum State and
that the circumstances under which its contracts with forum State
citizens, executed and to be performed in its State of incorporation,
were consummated could not support an implication that the foreign
company had consented to be sued in the forum State, was distinguished
rather than formally overruled. 339 U.S. at 647. In any event, Benn,
although unmentioned in the opinion, could not survive McGee v.
International Life Ins. Co., 355 U.S. 220 (1957).
\124\McGee v. International Life Ins. Co., 355 U.S. 220 (1957).
\125\Id. at 223. The Court also noticed the proposition that the
insured could not bear the cost of litigation away from home as well as
the insurer. See also Perkins v. Benguet Consolidating Mining Co., 342
U.S. 437 (1952), a case too atypical on its facts to permit much
generalization but which does appear to verify the implication of
International Shoe that in personam jurisdiction may attach to a
corporation even where the cause of action does not arise out of the
business done by defendant in the forum State, as well as to state, in
dictum, that the mere presence of a corporate official within the State
on business of the corporation would suffice to create jurisdiction if
the claim arose out of that business and service were made on him within
the State. Id. at 444-45. The Court held that the State could, but was
not required to, assert jurisdiction over a corporation owning gold and
silver mines in the Philippines but temporarily (because of the Japanese
occupation) carrying on a part of its general business in the forum
State, including directors' meetings, business correspondence, banking,
and the like, although it owned no mining properties in the State.
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``Looking back over the long history of litigation a trend is
clearly discernible toward expanding the permissible scope of state
[[Page 1714]]
jurisdiction over foreign corporations and other nonresidents.''\126\
However, during the same Term, the Court found in personam jurisdiction
lacking for the first time since International Shoe, and after a long
period of declining to review the exercise of state court jurisdiction
the Court pronounced firm due process limitations. Thus, in Hanson v.
Denckla,\127\ the issue was whether Florida courts obtained through use
of ordinary mail and publication jurisdiction over corporate trustees of
property the subject of a contest over a will; the will had been entered
into and probated in Florida, the trustees were resident in Delaware and
were indispensable parties with claimants who were resident in Florida
and who had been personally served. Noting the trend in enlarging the
ability of the States to obtain in personam jurisdiction over absent
defendants, the Court denied that the States could exercise nationwide
in personam jurisdiction and said that ``it would be a mistake to assume
that this trend heralds the eventual demise of all restrictions on the
personal jurisdiction of state courts.''\128\ The Court recognized that
Florida law was the most appropriate law to be applied in determining
the validity of the will and that the corporate defendants might be
little inconvenienced by having to appear in Florida courts, but it
denied that either circumstance satisfied the due process clause. The
due process restrictions did more than guarantee immunity from
inconvenient or distant litigation. ``They are consequences of
territorial limitations on the power of the respective States. However
minimal the burden of defending in a foreign tribunal, a defendant may
not be called upon to do so unless he has the `minimum contacts' with
that State that are a prerequisite to its exercise of power over him.''
The only contacts the corporate defendants had in Florida consisted of a
relationship with the individual defendants. ``The unilateral activity
of those who claim some relationship with a nonresident defendant cannot
satisfy the requirement of contact with the forum State. The application
of that rule will vary with the quality and nature of the defendant's
activity, but it is essential in each case that there be some act by
which the defendant purposefully avails himself of the
[[Page 1715]]
privilege of conducting activities within the forum State, thus invoking
the benefits and protections of its laws. . . . The settlor's execution
in Florida of her power of appointment cannot remedy the absence of such
an act in this case.''\129\
\126\McGee v. International Life Ins. Co., 355 U.S. 220, 222
(1957). An exception exists with respect to in personam jurisdiction in
domestic relations cases, at least in some instances. E.g., Vanderbilt
v. Vanderbilt, 354 U.S. 416 (1957) (holding that sufficient contacts
afforded Nevada in personam jurisdiction over a New York resident wife
for purposes of dissolving the marriage but Nevada did not have
jurisdiction to terminate the wife's claims for support).
\127\357 U.S. 235 (1958). The decision was 5-to-4. See id. at
256 (Justice Black dissenting), 262 (Justice Douglas dissenting).
\128\Id. at 251. In dissent, Justice Black observed that ``of
course we have not reached the point where state boundaries are without
significance and I do not mean to suggest such a view here.'' Id. at
260.
\129\Id. at 251, 253-54. Justice Black argued that the
relationship of the nonresident defendants, of the subject of the
litigation to the forum State, upon an analogy of choice of law and
forum non conveniens, made Florida the natural and constitutional basis
for asserting jurisdiction. Id. at 258-59. The Court has numerous times
asserted that contacts sufficient for the purpose of designating a
particular State's law as appropriate may be insufficient for the
purpose of asserting jurisdiction. See Shaffer v. Heitner, 433 U.S. 186,
215 (1977); Kulko v. Superior Court, 436 U.S. 84, 98 (1978); World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 294-95 (1980). On the due
process limits on choice of law decisions, see Allstate Insurance Co. v.
Hague, 449 U.S. 302 (1981).
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In World-Wide Volkswagen Corp. v. Woodson,\130\ the Court
applied its ``minimum contacts'' test to preclude the assertion of
jurisdiction over two foreign corporations that did no business in the
forum State. Plaintiffs sustained personal injuries in Oklahoma in an
accident involving an alleged defect in their automobile, which they had
purchased the previous year in New York, while they were New York
residents, and which they were driving through Oklahoma on their way to
a new residence in Arizona. Defendants were the automobile retailer and
its wholesaler, New York corporations that did no business in Oklahoma.
The Court found no circumstances justifying assertion by Oklahoma courts
of jurisdiction over defendants. They (1) carried on no activity in
Oklahoma, (2) closed no sales and performed no services there, (3)
availed themselves of none of the benefits of the State's laws, (4)
solicited no business there either through salespersons or through
advertising reasonably calculated to reach the State, and (5) sold no
cars to Oklahoma residents or indirectly served or sought to serve the
Oklahoma market. The unilateral action of the purchasers in driving the
car to Oklahoma was insufficient to create the kinds of requisite
contacts. While it might have been foreseeable that the automobile would
travel to Oklahoma, foreseeability is relevant only insofar as ``the
defendant's conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there.''\131\
Further, ``whatever marginal revenues petitioners may receive by virtue
of the fact that their products are capable of use in Oklahoma is far
too attenuated a contact to justify that State's exercise of in personam
jurisdiction over them.''\132\ Thus, a defendant must, as the Court said
in Denckla, ``purposefully [avail] itself of the privilege of conducting
activities within the
[[Page 1716]]
forum State,''\133\ if not by carrying on business there within the
constitutional sense, at least by delivering ``its products into the
stream of commerce with the expectation that they will be purchased by
consumers in the forum State.''\134\
\130\444 U.S. 286 (1980).
\131\Id. at 297.
\132\Id. at 299.
\133\Hanson v. Denckla, 357 U.S. 235, 253 (1985), quoted in
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
\134\Id. at 298. Of the three dissenters, Justice Brennan argued
that the ``minimum contacts'' test was obsolete and that jurisdiction
should be predicated upon the balancing of the interests of the forum
State and plaintiffs against the actual burden imposed on defendant, id.
at 299, while Justices Marshall and Blackmun applied the test and found
jurisdiction because of the foreseeability of defendants that a
defective product of theirs might cause injury in a distant State and
because the defendants had entered into an interstate economic network.
Id. at 313. The balancing of interests test was applied in Asahi Metal
Industry Co. v. Superior Court, 480 U.S. 102 (1987), holding
unreasonable exercise of jurisdiction by a California court over an
indemnity action by a Taiwan tire manufacturer against a Japanese
manufacturer of tire valves, the underlying damage action by a
California motorist having been settled.
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The Court has applied International S |