Still in Exile? The Current Status of the Contract Clause

30 Pages Posted: 22 Jan 2019 Last revised: 24 Jan 2019

See all articles by James W. Ely

James W. Ely

Vanderbilt University - Law School

Date Written: January 18, 2019

Abstract

This article examines the contemporary position of the once-potent contract clause in contemporary jurisprudence. It briefly traces the history of the provision from its adoption at the constitutional convention to its robust development by John Marshall and Roger B. Taney. The essay then treats the gradual decline of the contract clause during the late nineteenth century and the early twentieth century as an expanding understanding of the police power eclipsed the provision. The article gives attention to the controversial decision in Home Building and Loan Association v. Blaisdell (1934) upholding a mortgage foreclosure moratorium, and stresses that this ruling delivered a near-fatal blow to the efficacy of the contract clause. After decades of neglect, the Supreme Court invoked the clause in the 1970s to strike down state laws impairing contacts, but in so doing promulgated an amorphous multi-part test that did little to reinvigorate the provision. The essay probes the 2018 Supreme Court decision in Sveen v, Melin which simply applied the current test. Of particular interest was the dissenting opinion by Justice Neil Gorsuch in which he expressed a willingness to fundamentally reexamine contract clause jurisprudence. The article also looks at contract clause litigation at the state level. Lastly, the essay considers the prospects for a meaningful revival of the contract clause and offers some proposals to restore the vitality of the provision.

Keywords: Contract Clause,, Neil Gorsuch, Home Building and Loan Association v. Blaisdell, Charles Evan Hughes, Oliver Wendell Holmes, John Marshall, New Deal, Police Power, Public Employee Benefits, Rent Control, Sveen v. Melin, Roger B. Taney

Suggested Citation

Ely, James W., Still in Exile? The Current Status of the Contract Clause (January 18, 2019). Vanderbilt Law Research Paper No. 19-04. Available at SSRN: https://ssrn.com/abstract=3318590

James W. Ely (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

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