Williamson v. Lee Optical

At issue in Williamson was the principle of Substantive Due Process, a concept which made its first appearance in the famous Slaughterhouse Cases (1873). The latter cases challenged a state monopoly on slaughterhouses in Louisiana, and were brought by a group of butchers who argued that the policy prevented them from practicing their trade. At that time, Justice Joseph P. Bradley stated that "a law which prohibits a large class of citizens from adopting . . . or from following a lawful employment . . . does deprive them of liberty as well as property, without due process of law." The case of Munn v. Illinois (1877) was another commerce-related legal action which touched on the question of due process. Had the grain storage facilities at issue in the case not been "affected with a public interest," the Court suggested, it might have given the case closer scrutiny in light of due process.

Such scrutiny finally came, through a long series of steps, with the Court's landmark ruling in Chicago, Milwaukee and St. Paul Railway Company v. the State of Minnesota (1890). This time the Court declared a state economic law unconstitutional, and identified the courts of the land, not the state legislatures, as the bodies which should have final say in matters involving business rates. The ruling centered around the question of Due Process, which is guaranteed in Section 1 of the Fourteenth Amendment:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of 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.

The ruling in this case found that as a corporate "person," the Chicago, Milwaukee and Saint Paul Railroad was entitled to protection of its rights under the Due Process clause.

Hence in a great irony, the Fourteenth Amendment, passed by Congress following the Civil War with the aim of protecting the rights of freed slaves, instead saw its primary application in service to corporations. In a series of rulings throughout the latter part of the nineteenth century and the early part of the twentieth, the Court upheld corporations' "freedom of contract," and ruled against laws setting minimum wages or maximum daily working hours. The tide of substantive due process in favor of corporations continued for more than a generation, until it was stopped by the Depression and the New Deal programs initiated in the 1930s.

In its 1934 ruling in Nebbia v. New York, the Court began to distance itself from its earlier stance, declaring that a state could regulate milk prices whether or not the milk industry could be judged as one "affected with public interest." As for its role of protecting business from the encroachments of state government, the Court declared that it was no longer a "super-legislature." With the liberal President Franklin D. Roosevelt ascendant, the Court began going back on its earlier pro-business activism, and in 1941 Justice Douglas wrote for the unanimous Court in Olsen v. Nebraska that "We are not concerned . . . with the wisdom, need, or appropriateness" of a state law regulating employment agency fees. Such questions, Douglas wrote, "suggest a choice which should be left where . . . it was left by the Constitution--to the states and to Congress."