The Permanent Seat of Government: An Unintended Consequence of Heightened Scrutiny Under the Contract Clause

Abstract

This article evaluates the contract clause’s limitations on state legislation that impairs public contracts. After the adoption of the Constitution, Virginia and Maryland agreed to grant land to Congress on the condition that it would be used as the permanent seat of government of the United States. This agreement, entered into among Maryland, Virginia, and the United States, resulted in the creation of the District of Columbia. During the sectional disputes leading up to the Civil War, a small group of merchants lobbied Virginia to retrocede, or take back, the land it originally granted to Congress. Virginia, abrogating its previous promise to “forever cede and relinquish” its portion of the District for use as the permanent seat of government, enacted its Act of Retrocesion in 1846.

The Permanent Seat of Government evaluates whether Virginia’s Act of Retrocession violated the contract clause, which prohibits states from passing any law “impairing the Obligation of Contracts.” After decades of deference to state legislatures, the Court has recently revitalized the contract clause, holding that a state’s impairment of its own contractual obligations is valid only under narrow circumstances. After evaluating the constitutionality of the Retrocession in light of the Court’s new contract clause jurisprudence, I conclude that Virginia’s Act of Retrocession would not survive a constitutional challenge brought under the contract clause. Finally, I consider whether the Court's contract clause jurisprudence can be justified despite the harsh criticism that scholars have levied against it. I conclude that this jurisprudence is consistent with the Constitution’s other limitations on legislation that singles out individuals or groups for special treatment.

Keywords: Contract Clause, Public Law, Retrocession, Public Contracts, Legislation