Allgeyer v. Louisiana - Significance

The ruling established that states cannot enact laws depriving citizens of their Fourteenth Amendment due process and equal protection rights. Expanding the interpretation of "liberty," the Court held that the term includes the right to enter into any contracts considered proper, necessary, and essential among other rights not identified before. The decision greatly expanded the concept of substantive due process and restricted state powers to regulate business activities for the next 40 years.

Ratification of the Fourteenth Amendment in 1868 guaranteed due process protection from state laws. The amendment reads in part that no state "shall . . . deprive any person of life, liberty, or property without due process of law." The meaning of "liberty" and "property" in the Due Process Clause became the subject of later Supreme Court rulings. Under due process, the Court generally assessed whether procedures required by state laws were reasonable and not arbitrary. This line of inquiry focused solely on the way laws were applied, not so much the subject of the laws themselves. However, the intent of state laws began to attract attention as well, as demonstrated in Butchers' Union Co. v. Crescent City Co. (1884). In that case, the Court ruled that a person had liberty to freely choose an occupation.