Home Building & Loan Association v. Blaisdell

Blaisdell is important not just because it upheld a significant Depression-era law modeled on the New Deal, but because the close vote in the case illustrates the deep schism between those who endorsed a radically progressive approach to the nation's woes and those who wanted to perpetuate the Court's laissez-faire attitude towards economic matters.

In 1933, in the midst of the Great Depression, Minnesota passed the Mortgage Moratorium Law. The law was modeled on President Franklin D. Roosevelt's New Deal program for national economic relief and attempted to provide protection to farmers and other property owners against mortgage foreclosure "during the continuance of the emergency and in no event beyond 1 May 1935." It authorized the Minnesota state courts to consider exempting troubled mortgagors from foreclosure if the mortgagors requested such judicial consideration.

Mr. and Mrs. John H. Blaisdell owned a house and a parcel of land in Hennepin County, Minnesota, for which the Home Building & Loan Association held the mortgage. When the Blaisdells defaulted on their loan payments, the mortgage lender prepared to foreclose on their home. Unable to obtain a new loan, the Blaisdells applied in state district court for an extension of the mortgage redemption period to enable them to find another lender or otherwise raise the needed money.

The court decided in the Blaisdells' favor, and the decision was upheld by the Supreme Court of Minnesota. The lender then appealed this decision to the U.S. Supreme Court, claiming that the Minnesota Mortgage Moratorium Law violated the Contract Clause of Article I of the Constitution, which provides that "No State shall enter into any . . . law impairing the Obligation of Contracts."