Allgeyer v. Louisiana

The Allgeyer decision marked a decrease in state powers and increased federal oversight over state activities. For the first time, the Court expanded the view of "liberty" by extending the Due Process Clause to protect businesses against state regulation. The clause, originally intended following the Civil War to protect personal rights, replaced the Commerce Clause as key in protecting commercial activity. Specifically, Allgeyer recognized the right to make contracts free of state regulation. Such an application of substantive due process concepts protected businesses from governmental intrusion into certain economic and property interests. The decision was further reinforced in Lochner v. New York (1905), striking down a New York state law setting maximum hours for bakers.

Allgeyer began a 40-year period noted for striking down as "arbitrary" various forms of state economic legislation. This trend continued until the New Deal era of the 1930s when the Court changed course again and more freely recognized reforms and regulations passed by states during the economic recovery from the Great Depression of 1929. Substantive due process later became applied to personal civil rights freedoms in the 1960s. By the 1990s, rights to privacy, marriage, and to bear children, though not mentioned in the first ten amendments to the Constitution, were identified by the courts as fundamental freedoms. The period of more limited state powers continued until the 1990s, when a swing back to strengthening states' rights occurred.