Essay by J. Michael Veron
In each of its last two Terms, the United States Supreme Court has invalidated state laws on the ground that they operated impermissibly to impair the obligations of contracts. Because it had been nearly four decades since the Court last invoked the contracts clause to annul a state law, these two decisions suggest that the modern understanding of that constitutional provision be reexamined.
What is most intriguing about these recent developments is that they present that rare occasion in our constitutional history when our theory of precedent is severely tested. The importance of precedent is that, if nothing else, it enhances certainty in the law by predicting subsequent outcomes of cases similar to that which settled the precedent. When, as in the recent contracts clause decisions, precedent does not reliably predict subsequent outcomes, it is important to discover why.
Where the Court's resort to a particular constitutional provision as an adequate ground to annul a state law is frequent (as in the Court's decisions invoking the due process and equal protection guarantees of the fourteenth amendment), the advantages for doctrinal development of precedent are obvious. Even the most awkward precedent can be refined and adapted to changes in perspective by a resourceful Court, given adequate opportunity. Moreover, frequent resort in this context allows frequent interpretation by a Court composed largely of the same members acting in the same social setting. The varying circumstances presented by each case call for the logical extension of each doctrinal advance until, in a concrete setting, the Court can mark its outer limits.
Where resort to a particular constitutional provision as a rule of decision is infrequent, opportunities for the doctrinal development of precedent are correspondingly reduced. Our theory of precedent requires, to at least some degree, that the Court obey prior decisions on the same issue. There is no formal exception made for decisions rendered in another age; the Court is technically bound to follow whatever precedent exists. Yet there is obvious danger in telescoping constitutional theory across historical periods without its gradual revision and adaptation by frequent interpretation during periods of change.
Fortunately, the Court has rarely had to rely upon dated precedent to decide a case without the benefit of intervening decisions. Where a substantial gap has existed, such as in the cases concerning executive privilege, the tenth amendment, or the privileges and immunities clause, either the provision had never been the subject of frequent interpretation or the nature of its subject matter left it largely free of the social and economic trappings of the past. What makes the recent contracts clause decisions unusual is that, after approximately a century and a half of frequent adjudication, the provision had fallen into desuetude for nearly forty years. During that time, the social and economic conditions of this country were radically transformed, and the conventional social and economic wisdom of the earlier era, which had formed an integral part of the interpretation of the contracts clause, became obsolete. The revitalization of a constitutional guarantee under such circumstances is perhaps unprecedented.
As the title of this essay suggests, the aim here is to explore the interplay between precedent and practice, or law and politics, in contracts clause cases. To that end, this essay presents an historical review of the conflict between legal theory and political ends in those cases coming before the Supreme Court requiring the interpretation of the contracts clause.
Judged solely by precedent, the history of the contracts clause is full of surprises. Certainly, hardly anyone anticipated the results reached in the recent cases, United States Trust Co. v. New Jersey and Allied Structural Steel Co. v. Spannaus. Thus, the value of precedent as a prediction of outcomes in contracts clause cases is questionable. The account that follows will explain how that unfortunate circumstance arose.
Essentially, this essay will demonstrate that conflicts between law and politics have frequently dominated the Court's contracts clause jurisprudence. As a result, the Court's recent treatment of precedent that masks the political choices of another time is misleading and confusing. To a substantial degree, the confusion was the inexorable result of a narrow view of precedent held by the Court. This essay will suggest a theory of precedent that would have allowed the Court to identify and discount the primacy of politics in its contracts clause precedents and to render a more contemporary treatment of the issues that would have supported the result reached in each case.
About the Author
J. Michael Veron. B.A. 1972, J.D. 1974, Tulane University; LL.M. 1976, Harvard University. Member, Louisiana Bar.
Citation
54 Tul. L. Rev. 117 (1979)