Article I, section 10, clause 1 of the Constitution introduces a litany of limitations on state power. States cannot, inter alia, “grant Letters of Marque and Reprisal,” “pass any Bill of Attainder,” or “grant any Title of Nobility.”1 On first read, the clause seems little more than a constitutional relic, chronicling a forgone past of state-sanctioned princes2 and pirates.3 But another provision — the Contract Clause — is as historically significant as it is linguistically broad: “No State shall . . . pass any . . . Law impairing the Obligation of Contracts.”4 The Supreme Court’s early history featured Contract Clause litigation in nearly forty percent of all cases challenging state legislation and nearly fifty percent of successful challenges (amounting to seventy-five decisions) before 1889.5 Despite its broad scope and historical preeminence, the clause has fallen into desuetude. Due to the development of a contextual “reasonableness” test,6 successful Contract Clause challenges are few and far between. The Supreme Court has not invoked the clause to invalidate a state law for over forty years.7 Scholars have thus concluded that the Contract Clause “is no longer with us,”8 “a dead letter,”9 and “a shadow of its former self.”10
Even so, the Contract Clause and its broad language remain a topic of litigation today, especially in the context of the COVID-19 pandemic. Litigants protesting against eviction moratoria and other rent assistance,11 recall ordinances,12 and even vaccine mandates13 have looked to the Contract Clause for relief. Few have succeeded, but those recent triumphs may augur a reevaluation of the Contract Clause. If even COVID-19 failed to justify state governments’ exercise of police power,14 the clause may furnish even more successful challenges in a postpandemic world.
Such a reevaluation may invite the imposition of laissez-faire ideas of economic liberty under the guise of constitutional interpretation. Indeed, this has happened before. In the early twentieth century, the Supreme Court interpreted the Due Process Clause of the Fourteenth Amendment to “routinely invalidate[] state social and economic legislation”15 based on “notions of liberty and property characteristic of laissez-faire economics.”16 Reviving a literalist interpretation of the Contract Clause would permit the irony of a textually grounded Lochnerism — broad judicial control of “economic liberty,” but without the anticanonical,17 extraconstitutional18 reasoning of the Supreme Court in Lochner v. New York.19
This Note examines two live issues surrounding the Contract Clause. First, the extraordinary measures state governments undertook to combat the COVID-19 pandemic provided an opportunity to relitigate the balancing test traditionally used to evaluate Contract Clause claims. To curb the spread of COVID-19, state laws and executive orders necessarily altered contractual obligations, thus introducing a new chapter to the clause’s history book. Second, this Note explores the circuit split regarding whether Contract Clause claims may be actionable under 42 U.S.C. § 1983 in the first place. While § 1983 is not the sole cause of action through which Contract Clause claims are asserted, its presumed availability for Contract Clause claims (often because litigants do not raise the issue) has allowed for resurgent doctrinal development.
Part I charts the history of Contract Clause jurisprudence at its height in the early nineteenth century, with attention to how the Framers and early American courts distilled a natural right to contract from the broad framing of the clause. It then fast-forwards to the twentieth century, identifying how the Lochner-era doctrine of economic due process developed and departed alongside the Contract Clause’s protections of economic liberty. Part II identifies cases within the past two years raising Contract Clause challenges to various governmental responses to the COVID-19 pandemic, taking stock of the natural law legacy remaining after the clause’s storied history. Part III tracks the current circuit split regarding whether 42 U.S.C. § 1983 furnishes a private cause of action for Contract Clause claims. This Note thus concludes that the Contract Clause, though dormant, is far from dead.
I. The Contract Clause’s Origins and Expansion
“What’s past is prologue”20 — and the Contract Clause is no exception. An understanding of the varied interpretations of such a broad constitutional clause requires an examination of its history. Yet not much recorded history exists for the Contract Clause. Discarded at the Constitutional Convention but salvaged by a style committee, the clause boasts an early history rife with references to a natural right to contract, one that early state courts and the Marshall Court embraced. That natural right presaged a more aggressive invocation of a “right to contract” made famous in Lochner — indeed, the Contract Clause and Lochnerism both fell victim to increasing deference to states’ police power.
A. Authorship and Ratification
Only one recorded discussion from the Constitutional Convention pertained to the clause. On August 28, 1787, Rufus King proposed including “a prohibition on the States to interfere in private contracts.”21 James Madison responded that the proposed prohibition on ex post facto laws would already forbid such interferences.22 The convention thus voted 7–3 to insert only “bills of attainder” and “ex post facto laws” into the text.23 But a month later, the five-member Committee of Style and Arrangement refurbished and reinserted the clause, which now barred states from “altering or impairing the obligation of contracts.”24 Without further recorded discussion, the phrase “altering or” was dropped, and the Contract Clause as we know it today was enshrined in Article I.25
Absent any cues from its drafting, the clause became a vehicle for natural economic rights as the Framers championed the principle of the right to contract. Amid a depressed economy, many viewed the clause as a cure to retrospective debtor-relief state laws of the time.26 Roger Sherman and future Chief Justice Oliver Ellsworth expressed that the clause was “thought necessary as a security to commerce, in which the interests of foreigners, as well as of the citizens of different states, may be affected.”27 Despite his initial misgivings, Madison declared in the Federalist Papers that “laws impairing the obligation of contracts are contrary to the first principles of the social compact and to every principle of sound legislation.”28 Likewise, Alexander Hamilton viewed “[l]aws in violation of private contracts” as a potential source of interstate conflict that a strong federal government would remedy, “as they amount to aggressions on the rights of those States whose citizens are injured by them.”29 And Charles Pinckney celebrated the rights of citizens to “trade with each other without fear of tender-laws or laws impairing the nature of contracts.”30 Already the language of rights, counterbalanced against states’ legislative power, was prevalent in discourse surrounding the Contract Clause, presaging its intersection with the “freedom of contract” championed in Lochner.31
A few Antifederalists fired back. Luther Martin argued against adopting the clause, contending to the Maryland state legislature that “there might be times of such great public calamities and distress, and of such extreme scarcity of specie, as should render it the duty of a government . . . in some measure to interfere in their favor.”32 Patrick Henry likewise noted that the Contract Clause would leave states powerless to intervene against speculators and debt collectors.33 Yet most Antifederalists focused their attention on other limitations on state power in Article I, conceding that “the states had often acted irresponsibly regarding contracts.”34
Already, however, the Contract Clause’s early history envisioned some limitation to the clause’s reach. The context of state debt-relief laws suggests that the primary intent of the clause was to prevent debt forgiveness, rather than to bar any regulation touching on contracts, as the Marshall Court would later recognize.35 And the text, though capacious, comports with this understanding. Founding-era dictionaries defined “impair” as “to lessen, diminish, injure, [or] hurt.”36 Yet the word “alter,” rejected from the Contract Clause’s text,37 would have broadened this understanding to any change: “[T]o make otherwise than it is.”38 While some scholars have elided this distinction by reference to the Northwest Ordinance’s broad language, from which the Contract Clause was likely patterned,39 the clause’s text explicitly departed from the ordinance’s more expansive reach. Though sweeping on its face, the Contract Clause features built-in textual and contextual limits to its scope. The indeterminacy of these limitations, however, set the stage for early American courts to exercise judicial review in full force.
B. Judicial Expansion
The entrenchment of a natural right to contract began with early judicial interpretations of the Contract Clause, creating a legacy of natural economic freedom that many courts cite today to justify expanding the Contract Clause’s modern reach.40 The federal Contract Clause was the weapon of choice for state and federal courts alike to strike down laws as unconstitutional in the nineteenth century.41 From land grants to corporate charters to insolvency laws, the Supreme Court construed a limitation on state power as a wellspring of the natural right to contract.42 And the Court was not first in this regard.43
Leveraging the vocabulary of natural law, state high courts and federal circuit courts struck down legislation deemed inimical to the freedom of contract. These courts faulted state laws not for contravening the text, as it were, but rather for violating the principle of contractual freedom that the clause enshrined. Riding circuit, Justice Paterson declared in 1795 that “the right of acquiring, possessing, and protecting property is natural, inherent, and unalienable” when he found a Pennsylvania statute unconstitutional for quieting title to settlers’ land claims.44 State high courts soon followed suit, including those of Massachusetts45 and Virginia.46 And even the Supreme Court, albeit in seriatim opinions, engaged in such natural lawmaking in conversation with the Contract Clause.47 This natural law tradition first articulated the freedom of contract that gained momentum in early Supreme Court jurisprudence and that would reappear in the infamous Lochner era.
Such principles informed the Supreme Court’s first examination of the Contract Clause’s text. In 1795, Georgia sold public lands in present-day Alabama and Mississippi, but allegations of bribery led the state legislature to later rescind the grants.48 In Fletcher v. Peck,49 the Court determined that the Contract Clause rendered the law rescinding these land grants void, allowing the sale to remain binding.50 Like the Federalist Framers, Chief Justice Marshall employed the language of rights to describe the Contract Clause’s function, concluding that “when absolute rights have vested under that contract, a repeal of the law cannot devest those rights.”51 Considering whether a public grant qualified as a contract, Chief Justice Marshall again relied on how rights inured similarly between grants and contracts: “A grant, in its own nature, amounts to an extinguishment of the right of the grantor, and implies a contract not to reassert that right.”52 Declaring that the clause was “applicable to contracts of every description,”53 public and private, the Chief Justice filled the gap the Framers had left in drafting the Contract Clause. In doing so, he deferred to “a power applicable to the case of every individual in the community” to enforce such rights in defense of the freedom to contract.54 Fletcher thus employed a natural rights–based perspective to distill from the Contract Clause an economic right to contract, free from retrospective impairment.
In addition to state grants, the Supreme Court included corporate charters and bankruptcy laws within its interpretive scope, again relying on a natural rights–based perspective of the Contract Clause’s reach. In Trustees of Dartmouth College v. Woodward,55 the New Hampshire act at issue would have made the college a public institution, even though it was originally chartered to private trustees by King George III.56 While Fletcher featured wholesale voidance of land grants, Dartmouth College involved a (perhaps drastic) change to a corporate charter. But because the case featured retrospective contractual impairment, the Chief Justice concluded that the act violated the Contract Clause.57 He seemed to “interpret[] the word ‘impair’ in the Contract Clause as equivalent to ‘alter’”58 by rejecting the argument that the state legislature’s alteration of the charter did not impair it, despite the clause’s drafting history.59 In doing so, Chief Justice Marshall again relied on a natural rights–based framework, this time distinguishing a corporation as an artificial instrument from its trustees enjoying contracting rights as “natural person[s].”60 By invoking this natural law tradition in tandem with a broad textual interpretation, the Marshall Court further entrenched an individualized freedom to contract within a structural state limitation.
Yet Chief Justice Marshall did not always succeed in his efforts to expand the clause’s meaning. When he did not, debate on the limits of the natural right to contract erupted. In Ogden v. Saunders,61 a debtor used an 1801 New York bankruptcy law as a defense against an action in assumpsit for a contract drawn up in 1806.62 The majority concluded that a law prospectively affecting contracts — that is, a statute impacting those contracts formed after it goes into effect — did not violate the Constitution.63 Justice Johnson curbed what had been the trend of granting vast constitutional protections to contracts, concluding that “to assign to contracts, universally, a literal purport, and to exact for them a rigid literal fulfilment, could not have been the intent of the constitution.”64 He even discussed how slavery once fit into the rights-based perspective Chief Justice Marshall had employed in previous Contract Clause cases, stating: “There was a time when a different idea prevailed, and then it was supposed that the rights of the creditor required the sale of the debtor, and his family.”65
Dissenting, Chief Justice Marshall66 asserted that the clause, “taken in [its] natural and obvious sense, admit[s] of a prospective, as well as of a retrospective operation.”67 He thus resisted the idea that states could enact such legislation by simply specifying prospective application, which in time, he believed, would “make this provision of the [C]onstitution so far useless.”68 And as in previous cases, the Chief Justice emphasized the right to contract, which “do[es] not derive from government” but rather “is intrinsic, and is conferred by the act of the parties.”69
These cases showcase the entrenchment of the right to contract within the Marshall Court’s interpretation of the Contract Clause. Courts converted a structural limitation on state power into a source of a natural and individual right to contract. This fusion presaged what the Lochner Court would term “freedom of contract”70: “The doctrine that people have the right to enter into binding private agreements with others; a judicial concept that contracts are based on mutual agreement and free choice, and thus should not be hampered by undue external control such as governmental interference.”71 And the tension between the Contract Clause as a source of individual rights and as an allocation of authority between federal and state sovereignties typifies the current circuit split on federal private rights of action under the clause.72 Though the Contract Clause’s bright-line language provided textualist support for the Marshall Court’s interpretation, the Court’s natural law reasoning connects the clause to the lessons of the Lochner era and to its potential revitalization today.
C. The Decline of the Contract Clause and the Ascendancy of Economic Due Process
Despite its ambitious beginnings, Contract Clause jurisprudence would eventually decline from its once-lofty status. While employing the same rights-based language that the Marshall Court used in describing the value of the Contract Clause,73 the Taney Court began limiting the reach of the clause,74 which nevertheless remained broad until the Gilded Age.75 The Court soon recognized that “the legislature cannot bargain away the police power of a State.”76 But the emergence of economic due process carried on the principle of the freedom to contract, which — like the Contract Clause — fell to a renewed understanding of state police power.
The Lochner-era Court’s articulation of the freedom to contract under the Fourteenth Amendment’s Due Process Clause mirrored that of the Marshall Court under the Contract Clause. In 1897, the Supreme Court first articulated that the due process guarantee to “liberty” included “enter[ing] into all contracts which may be proper, necessary, and essential” to enjoy “all [a citizen’s] faculties.”77 In 1905, the Court issued its infamous Lochner decision, striking down a New York law establishing a maximum sixty-hour workweek for bakers.78 Despite the Contract Clause’s prominence over the past century, it never came up once in the Lochner decision, due to Ogden’s restriction to only retrospective claims. Rather, the natural rights of contracting articulated in Lochner depended on a prospective view of the freedom to contract.79
Like the Ogden majority, Justices Holmes’s and Harlan’s dissents in Lochner rebelled against a natural rights–driven conception of a limitless freedom to contract. With special significance in today’s context, Justice Holmes referred to the Court’s earlier decision upholding Massachusetts’s compulsory vaccine law as proof that states are able to implement certain restrictions to liberty for the common good without violating the Constitution.80 And Justice Harlan catalogued a variety of previous Supreme Court cases standing for the proposition that “the right of contract was not ‘absolute . . . but may be subjected to the restraints demanded by the safety and welfare of the State.’”81 The Lochner Court’s language of economic rights in majority and dissent mirrored that of early Contract Clause jurisprudence, confirming the common basis behind the jurisprudence of the two clauses.
Just as the Contract Clause and the Lochner era shared a nexus of laissez-faire economic rights, they also experienced a shared decline based on the notion of the states’ police power. The Supreme Court decided Home Building & Loan Association v. Blaisdell82 and West Coast Hotel Co. v. Parrish83 within three years of each other, dismantling in two fell swoops the expansive interpretation of the Contract Clause and economic due process, respectively. As states sought to alleviate the immense economic distress incurred during the Great Depression, the pedestal upon which the Contract Clause rested soon toppled.
First in 1934, the Supreme Court implemented a balancing test in Blaisdell that defanged the Contract Clause, in a now-complete reversal of its nineteenth-century sharpness. In Blaisdell, the Court rejected a Contract Clause challenge to a Great Depression–era Minnesota law suspending foreclosures.84 Writing for the majority, Chief Justice Hughes recognized “a growing appreciation of public needs and of the necessity of finding ground for a rational compromise between individual rights and public welfare.”85 While acknowledging that existing laws were read into contracts to define obligations between parties, so too were “the preëxisting and higher authority of the laws of nature, of nations or of the community to which the parties belong.”86 Such a move was equal yet opposite to the Marshallian tradition. Whereas Chief Justice Marshall relied upon the natural rights of individuals to contract to broaden the Contract Clause’s reach, Chief Justice Hughes deferred to the natural powers of the state to regulate health, safety, and welfare to narrow it. He established five criteria that demonstrated the validity of the state’s mortgage moratorium to impair contracts, including adequate basis, legitimate end, appropriate relation to the emergency, reasonability, and temporariness.87
The Court would repeat this process to undo Lochner in West Coast Hotel, further demonstrating the doctrines’ shared paths. In distinguishing the “qualified” rather than “absolute” freedom of contract, the West Coast Hotel Court underscored how “[t]he guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards.”88 Both Blaisdell and West Coast Hotel thus relied on an understanding of the importance of state police power to alleviate economic distress, regardless of precedent advocating for nonimpairment of contracts or economic due process. As Professor Cass Sunstein notes, “the [Blaisdell] Court read the police power very broadly — thus replicating the outcome in West Coast Hotel and rendering the contracts clause functionally identical to the due process clause.”89
The last Supreme Court case striking down a state law under the Contract Clause was Allied Structural Steel Co. v. Spannaus,90 a 1978 case in which the Court declared that the Contract Clause “is not a dead letter”91 and struck down a Minnesota pension law.92 But the Spannaus Court’s reformulation of the Blaisdell factors only “assigned different weights to the factors to be balanced,”93 and did little to rejuvenate the Contract Clause. And the Court’s most recent consideration in Sveen v. Melin94 straightforwardly applied Spannaus to reject a Contract Clause challenge,95 with Justice Gorsuch’s lone dissent advocating for “a thoughtful reply” to critics of the provision’s decline.96
These doctrines are, of course, different. Scholars have made a sharp distinction between Contract Clause and economic due process jurisprudence, rightly distinguishing the Contract Clause’s retrospectivity from economic due process’s prospectivity. While the Contract Clause “was concerned with the stability of existing agreements and barred retroactive abridgment of contracts[,] . . . the liberty of contract doctrine was concerned with the right to make future contracts without state oversight.”97 But the doctrines are two sides of the same coin. If Chief Justice Marshall had his way in Ogden, the Contract Clause and the economic due process of the Lochner era would achieve precisely the same outcome.98 The prospective-retrospective distinction between the Contract Clause and the Due Process Clause is no doubt important, but the upshot of the clauses’ twin histories is that judges could (and with the former, perhaps still can) secure a laissez-faire vision of contractual rights by striking down state legislation they deem inimical to it.
To sequester the Contract Clause’s historical development from the brief but groundbreaking Lochner era thus artificially hides one judicial expression of economic liberty from the other. What was foreclosed from the Contract Clause in Ogden — proactivity — was rediscovered in the Due Process Clause in Lochner, and both doctrines met similar ends in Blaisdell and West Coast Hotel. The fundamental idea of freedom of contract underlies both doctrines, which matters a great deal when one epitomizes anticanonical judicial interventionism and the other survives, albeit sidelined, in the text of the Constitution.
And although Lochner has been relegated to the anticanon, the Contract Clause remains waiting in the rafters. Though it applies only retrospectively,99 the Contract Clause “offers a plausible textual basis for judicial intervention that apparently reconciles economic rights with principles of judicial restraint.”100 Despite the provision’s spotty drafting history, the Contract Clause “had been construed almost from the beginning as a potent limitation on state economic regulation.”101 As Professor Richard E. Levy notes, the Supreme Court has followed a “pattern of reinvigoration and retreat”102 with regard to championing economic rights in its Contract Clause jurisprudence.103 With the clause remaining “absolute in its field” as sanctified constitutional text,104 reinvigoration may be near.
II. A Substantive Redux: The Contract Clause and the Pandemic
Indeed, reinvigoration of the Contract Clause may already be here. The severity of the COVID-19 pandemic, one of the deadliest in history,105 resulted in widespread state government intervention to stem the spread of the virus. Contract Clause challenges ensued, and many failed. Yet the ones that succeeded defy expectations: the imperative of the pandemic plus the low Blaisdell standard should equal dismissal. That the Contract Clause has operated against state governments attempting to secure public health disputes its supposed dormancy.
A. Unsuccessful Pandemic Suits
Though the Contract Clause has undergone no jurisprudential shift, the COVID-19 pandemic pushed the reasonableness tests of Blaisdell and Spannaus quite far, perhaps to their limits. Yet many Contract Clause cases regarding the pandemic are not difficult to resolve under the Supreme Court’s modern two-step test: first, whether state law has substantially impaired a contractual relationship; and second, whether it did so for a legitimate public purpose.106 Analyzed through this framework, many case outcomes seem obvious. Stemming the spread of a virus that has claimed over one million American lives107 would outweigh most impairments of the obligation of contracts.
But these recent cases demonstrate a context in which a constitutional clause is rendered almost wholly inoperative. As Justice Harlan, a Lochner dissenter, once espoused, “[t]he Constitution is not to be obeyed or disobeyed as the circumstances of a particular crisis in our history may suggest the one or the other course to be pursued.”108 For advocates of a more muscular Contract Clause, the pandemic could demonstrate that reinvigoration is in order.
The Ninth Circuit demonstrated flexibility in interpreting the Contract Clause when it upheld California’s eviction moratorium in August 2021. As the first federal court of appeals to address a Contract Clause challenge to a COVID-19-related eviction moratorium, the Ninth Circuit first indicated that “the eviction moratorium curtail[ed] the rights of residential landlords in various ways.”109 These rights included evicting tenants for nonpayment of rent due to the pandemic or for a “no-fault reason,” such as when an owner intends to occupy the property; withdraws, demolishes, or remodels the property; complies with laws requiring vacating the property; or seeks to evict on the basis of unauthorized occupants or pets.110 However, the Ninth Circuit considered “the challenges that COVID-19 presents” to almost automatically compel the conclusion that “the moratorium’s provisions constitute an ‘appropriate and reasonable way to advance a significant and legitimate public purpose.’”111 By its own admission, the court did not even need to decide the substantiality of the contract impairment because of the sheer enormity of the pandemic.112
Worthy of emphasis is the correctness of the Ninth Circuit’s decision under Blaisdell — the public purpose of preventing more coronavirus infections and deaths by reducing evictions substantially outweighs any impairment of apartment leases. But also worth emphasizing are the implications of such decisions: When would the impairment of a mere contract outweigh the public purpose in combatting a pandemic? Could it ever? Beyond eviction moratoria, the U.S. District Court for the Southern District of California adopted the Ninth Circuit’s reasoning wholesale in rejecting state and federal Contract Clause challenges to mandatory rehiring ordinances.113
District courts have followed suit in relying on the crisis of the pandemic to overwhelmingly satisfy the public-purpose factor. In Jevons v. Inslee,114 the U.S. District Court for the Eastern District of Washington rejected a Contract Clause challenge to Washington’s eviction moratorium at summary judgment.115 The court remarked that “[i]t cannot seriously be argued” that the objectives of curtailing viral transmission and its economic consequences “do not serve the public and that they do not constitute significant and legitimate purposes of the state.”116 And the court expressly “decline[d] to second-guess the expertise of the state in formulating an appropriate response to the present public health emergency, which is fraught with medical and scientific uncertainties.”117 As a result of the pandemic, the permissiveness of the Blaisdell test defers to the states in such public-health matters, despite the Contract Clause’s framing as a limitation on state power.
Other lower courts have taken an alternate approach to the Ninth Circuit in deciding substantial impairment before public purpose, yet the result remains the same. In Johnson v. Murphy,118 New Jersey Governor Phil Murphy’s executive order allowing security deposits to apply to past-due rents resisted a Contract Clause challenge in the U.S. District Court for the District of New Jersey, which concluded that the residential landlord challengers failed to state a claim.119 Citing Third Circuit precedent, the district court emphasized that the extent to which an industry is regulated is “[a]n important factor in determining the substantiality of any contractual impairment.”120 Because the executive order modifying a statutory scheme “should have come as . . . no surprise” to the already heavily regulated plaintiffs,121 resulting in no substantial impairment, the court did not address the public-purpose prong of the test.122 Challengers had no luck in state court either — the New Jersey Superior Court adopted much of the same reasoning as in Johnson to reject a challenge to the same executive order under the state constitution’s contract clause.123 In these cases, the pandemic seems peripheral; heavily regulated industries seem incapable of making even a prima facie showing of a Contract Clause claim.
B. Successful Pandemic Suits
Yet not all Contract Clause litigation in the pandemic has failed. In Melendez v. City of New York,124 the Second Circuit reversed the dismissal of landlords’ Contract Clause challenge to the state’s “Guaranty Law.”125 The law “render[ed] permanently unenforceable personal liability guaranties on certain commercial leases for any rent obligations arising during a specified pandemic period.”126 Judge Raggi extensively surveyed the history of the Contract Clause and first concluded that, under the “initial strict textual understanding” of the clause, the Guaranty Law would be unconstitutional.127 But even under the more deferential modern standard, Judge Raggi came to a similar conclusion, as the law substantially impaired landlords’ guaranty rights and was not “reasonable and appropriate.”128 Judge Raggi listed five reasons for her latter conclusion: that the law was not temporary,129 was not appropriately crafted to achieve its purpose,130 allocated economic burden solely to commercial landlords,131 was not conditioned on need,132 and did not compensate landlords’ losses.133
In another demonstration of the laissez-faire link between the Contract Clause and economic due process, Judge Carney, dissenting in part, warned of the Lochnerian overtone of the majority’s heightened standard of review. She stated that the majority failed to accord the “substantial deference” legislatures traditionally receive under the modern interpretation of the Contract Clause.134 Judge Carney suggested that “‘heightened scrutiny under the Contracts Clause [is a] backdoor to Lochner-type jurisprudence’ that ‘has long since been discarded.’”135 The majority’s approach was all the more concerning, according to Judge Carney, because the legislature’s police power “is at its apex” during a pandemic.136 She thus asserted that the majority essentially adopted a strict scrutiny standard for the Contract Clause.137
The Eighth Circuit’s approach in Heights Apartments, LLC v. Walz138 mirrored Melendez in reversing a dismissal of a Contract Clause challenge to Minnesota’s eviction moratorium. When Governor Tim Walz issued various executive orders that permitted evictions only for safety concerns or illicit activity, apartment associations challenged the orders as repugnant to the Contract Clause among other federal and state constitutional provisions.139 In reversing the lower court’s dismissal, the Eighth Circuit found that the moratorium’s indefinite end date and non-pandemic-related block on evictions strained reasonability.140 The court explicitly parted from the Ninth Circuit, citing intervening Supreme Court precedent141 and differing procedural posture.142
The Melendez and Heights decisions thus provide a glimmer of what the pandemic could imply for the police-power balancing test outlined in Blaisdell. While most federal and state courts have found the public purpose of legislative interferences with contracts more than sufficient, the Second Circuit emphasized “centuries-old case law” to rebalance the scales of the Blaisdell test.143 The Eighth Circuit came to the same result, even though it cited modern Contract Clause jurisprudence. The thrust of the Marshall Court’s natural law understanding of the Contract Clause, even in the face of the most pressing government concerns in the twenty-first century, persists today.
III. A Procedural Stopgap: The Contract Clause and § 1983
Even outside of the substance of such claims, procedural issues in litigating the Contract Clause remain unresolved. One that directly implicates the economic rights rooted in the Contract Clause’s history is whether 42 U.S.C. § 1983 furnishes a cause of action for Contract Clause violations. Resolving this question would alter the incentives of litigating Contract Clause claims, as § 1983 allows for the collection of attorneys’ fees, the availability of federal court jurisdiction, and the avoidance of state law obstacles.144 Federal courts of appeals are split on this issue, and the Supreme Court’s potential resolution of it may shed further light on the enforceability of a constitutional right to contract.
A. The Legislative History of §1983
Like the Contract Clause, § 1983 has a murky yet pertinent history. It originated from the Civil Rights Act of 1866,145 which criminalized the deprivation of various rights secured by the Act.146 Among them (indeed, the first listed) is the right “to make and enforce contracts.”147 The Civil Rights Act of 1871148 expanded this legislation to provide a private cause of action for “the deprivation of any rights, privileges, or immunities secured by the Constitution.”149 Upon Congress’s reorganization of provisions of federal law in 1874, the Act expanded to include rights “secured by the Constitution and laws,”150 becoming substantially identical to the § 1983 of today.151
First “languish[ing] in relative obscurity until 1961,”152 § 1983 has expanded to include a compendium of constitutional claims. Initially, the Supreme Court construed the Act to exclude conduct that transgressed officials’ authority.153 But nearly a century later, the Court reversed course. After reexamining the Act’s legislative history, the Court concluded that § 1983 “afford[ed] a federal right in federal courts because, by reason of prejudice, passion, neglect, intolerance or otherwise, state laws might not be enforced.”154 Time and again, the Court has emphasized that § 1983 is to be construed liberally due to its broad language and remedial purpose.155
Now, claims of constitutional and statutory violations are subject to a two-part test to qualify under § 1983’s private right of action. First, “the plaintiff must assert the violation of a federal right,” one in which the provision at issue creates binding obligations upon the government rather than express a congressional preference.156 And second, “the defendant may show that Congress ‘specifically foreclosed a remedy under § 1983’ by providing a ‘comprehensive enforcement mechanis[m] for protection of a federal right.’”157
B. Section 1983 Claims of Contract Clause Violations: Resolving the Tension Between Carter and Dennis
Yet even before the Court reinvigorated the Civil Rights Act, a Reconstruction-era case seemed to foreclose Contract Clause claims under § 1983. The trouble began with taxes. In Carter v. Greenhow,158 a Virginia property owner attempted to pay his real estate taxes with “coupons cut from bonds issued by the state of Virginia.”159 But Virginia forbade payment via coupon,160 levying the owner’s property to collect his tax debts.161 When the property owner invoked the Civil Rights Act of 1871 (the predecessor statute of § 1983) to challenge the Virginia law, the Court denied his challenge.162 Suggesting that the lone potential source of federal law to support the challenge was the Contract Clause, the Carter Court explained that the clause, “so far as it can be said to confer upon, or secure to, any person, any individual rights, does so only indirectly and incidentally.”163 Rather than secure a private cause of action, the Contract Clause functions only to nullify state laws that would impair contractual enforcement in judicial proceedings.164
A similarly situated Commerce Clause case would cast doubt on Carter a century later. Dennis v. Higgins165 featured a successful § 1983 challenge to “retaliatory” taxes on motor vehicles operated in Nebraska but registered in other states.166 The Court recognized its common practice of describing the right to participate in interstate commerce throughout its Commerce Clause jurisprudence, finding such a claim captured under § 1983.167 In dissent, Justice Kennedy emphasized Carter to suggest that the limitations placed on states in Article I grant no individual rights cognizable under § 1983.168 In a footnote, the majority responded that Carter had been interpreted to be a deficiency in pleading rather than an assessment of whether § 1983 could provide redress for Contract Clause violations.169
From this footnote followed an as-of-yet unresolved circuit split. Whereas the Ninth Circuit pointed to the Dennis Court’s narrow reading of Carter to recognize Contract Clause claims under § 1983,170 other circuits have parted company. The Fourth Circuit understood Dennis to only distinguish Carter from the Commerce Clause framework, not to overrule it in its precise context.171 More recently, the Sixth Circuit has agreed, adding that only the Supreme Court could overrule its precedent to resolve such tension.172 Other circuits have punted on the question, but often due to litigants failing to raise the issue.173
The rights-based jurisprudence of the Contract Clause in its heyday might suggest a similar result as in Dennis should the Supreme Court reconsider Carter. Just as the Court “often described the Commerce Clause as conferring a ‘right’ to engage in interstate trade free from restrictive state regulation,”174 it has also frequently invoked the right to contract in its Contract Clause jurisprudence. As discussed above, Chief Justice Marshall spared little ink in championing the individual rights that the Contract Clause secured.175 And even after the clause declined in force, the Court has continued to enshrine the individual right to contract within its tempered Contract Clause jurisprudence.176
Yet given the limited remedial landscape of constitutional contract law, Carter may retain vitality. Despite Elbridge Gerry’s best efforts,177 the Contract Clause limits only state power, exempting the federal government from its strictures.178 And so far as state government contracts are concerned, the remedies available are slim to (likely) none. Courts have refused to equate a state government’s breach of contract with a Contract Clause violation.179 Specific performance and payments from state treasuries are forbidden remedies as well.180 Even for private contract impairments, a § 1983 cause of action may be unnecessary — plaintiffs in breach of contract suits may always invoke the Contract Clause to rebut statutory defenses.181 The lack of constitutional remedies for breaches of public contracts, coupled with the availability of constitutional replies against breaches of private contracts, leaves little room for Contract Clause claims under § 1983. On this understanding, Carter remains correct.
The right of action that § 1983 secures is far from the only mechanism in which Contract Clause claims may arise. For instance, breach of contract suits between private parties may feature Contract Clause claims as a reply to defenses that state laws have altered contractual obligations. Yet the successful pandemic suits discussed above have arisen uniformly through § 1983.182 Determining whether § 1983 furnishes a private right of action for Contract Clause claims thus directly impacts the future doctrinal development of the Contract Clause.
Conclusion
Though probably the most textually linked to economic liberty, the Contract Clause is certainly not the only constitutional provision capable of resurrecting Lochnerism. Litigants have employed other provisions of the Constitution to attempt to thwart government responses to the pandemic, such as the Commerce Clause,183 the Free Exercise Clause,184 and the Due Process Clause.185 Similarly, the Supreme Court and lower federal courts are not the only judicial institutions capable of executing the Contract Clause. State courts may take more expansive interpretations of parallel state constitutional contract clauses.186
But if state governments, in the course of navigating a debilitating pandemic, cannot sideline other provisions of the Constitution,187 Blaisdell’s justification for state impairments of contractual obligations suggests the opposite for the Contract Clause. Such a “boundless” police power could substantiate claims that the Contract Clause really is a dead letter that ought to return to its former laissez-faire glory.
As state government mandates wane with the pandemic’s severity, mootness doctrine may prevent these issues from metamorphosing into full-blown challenges to the Blaisdell test, as in Johnson.188 But the exigency of the pandemic resulted in an already permissive grant of police power to the states expanding even further beyond the ambit of the Contract Clause, exacerbating the criticism that the clause’s modern jurisprudence has faced. Additionally, the recent emergence of coronavirus variants,189 insofar as they inspire a revival of state government mandates and moratoria, could encourage a new wave of lawsuits. Though Justice Gorsuch is the only current Supreme Court Justice on record to advocate for a more expansionist interpretation of the Contract Clause, federal courts of appeals and state supreme courts wield the power to return, albeit incrementally, to the Marshallian view of the provision.
For the past fifty years, as it pertains to the Contract Clause, “the law hath not been dead, but it hath slept.”190 Yet so long as the provision’s broad language remains enshrined within Article I, along with a patchy (and thus malleable) drafting history and an ambitious (if abandoned) jurisprudence, it remains capable of awakening. Understanding the clause’s text, history, and development — especially in its relation to the Lochner era — is thus vital to comprehending a potential reinvigoration in the midst of unprecedented emergencies.