Allgeyer v. Louisiana
Liberty To Contract
By a unanimous decision, the Court reversed the Louisiana Supreme Court's decision and ruled Act No. 66 unconstitutional. With various rulings already addressing the Fourteenth Amendment's meaning of liberty, Justice Peckham, writing for the Court, extended the meaning of liberty to include
the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation; and for that purpose to enter into all contracts which may be proper, necessary, and essential.
Peckham relied on a precedent recently set in Hooper v. State of California (1895). Hooper recognized that states had legal authority to prohibit out-of-state insurance companies from doing business within their borders. It also held that citizens had rights under the Fourteenth Amendment to contract with anyone they chose for insurance. States could not deprive a citizen that right to contract. The key difference between Hooper and Allgeyer's situation was that a contract had been signed in the state of California with a company not licensed to do business in that state. Peckham found that Allgeyer had only sent a notification in the mail to Atlantic Mutual. The actual business transaction of signing a open contract had occurred earlier in New York. As written, Peckham observed that Allgeyer did violate Louisiana's Act No. 66. However, the Louisiana law inappropriately interfered with Allgeyer's liberty by restricting their right to purchase insurance for property with whom they chose. Neither Allgeyer nor Atlantic Mutual were in violation of the Louisiana constitution since Atlantic Mutual was not conducting business in the state.
Peckham, in discussing the Fourteenth Amendment, explained,
The `liberty' mentioned in that amendment means, not only the right of the citizen to be free from the mere physical restraint of his person, as by incarceration, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation; and for that purpose to enter into all contracts which may be proper, necessary, and essential to his carrying out to a successful conclusion the purposes above mentioned.Peckham struck down Act No. 66 as unconstitutional and concluded Allgeyer was free to contract with Atlantic Mutual.
- Allgeyer v. Louisiana - Impact
- Allgeyer v. Louisiana - The Regulation Of Business
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