Some Thoughts on "Substantive Due Process"
If any law passed by any legislature, state or federal, presumed to set rates or prices on goods or services provided by a company, or to establish wages the company must pay to its workers, it could be invalidated. The Courts would usually rule that the difference between the price the company could get in a free market and the price the law allowed would be a loss of the companys property without due process of law. The Vth Amendment governed the U. S. Congress, and the XIVth Amendment governed the state legislatures.
The Traditional View of "Due Process."
Amendment V: " No personal shall . . . be deprived of life, liberty, or property without due process of law" was always thought to prohibit the execution, jailing, or fining of a human being by the federal government unless that human had first been tried in a court of law, before a judge and jury, represented by counsel, and permitted to confront hostile witnesses, among other procedural rules guaranteed by Amendments IV through VIII. Barron v. Baltimore, 7 Peters 243 (1833).
Amendment XIV: ". . . nor shall any state deprive any person of life, liberty, or property, without due process of law" was thought to limit the state governments in the same way, particularly in regards to the newly freed Negroes in the former Confederacy.
The New Idea and How It Developed.
In fact, almost no whites really cared about the newly freed Negroes. But beginning in the 1870s, industrial and corporate Americans found useful a new interpretation of due process. Up until that time, the Courts had allowed the state and national governments a lot of leeway in their regulation of business matters.
"Substantive Due Process" had been suggested in 1870 in the quickly-reversed Hepburn v. Griswold decision on legal-tender greenbacks. In 1873, though, it was fully articulated by Counsel John Campbell in the Slaughterhouse cases. The majority of the Court could not go along with such a radical new concept. But Associate Justice Stephen J. Field, who had already been on the Court a decade and had a quarter-century more to serve, agreed with Campbell in his dissent in Slaughterhouse. For a long time thereafter, he never stopped arguing "substantive due process" until the majority finally agreed.
In Munn v. Illinois (1877), having heard the substantive due process argument several times already (McCloskey, 123, gives a few such instances), the court still upheld regulation of grain elevator prices, in the name of "significant public interest." In Wabash, St. Louis, and Pacific Railway v. Illinois (1886), the Court overturned state regulation of railroads, but only on the grounds that interstate commerce was under the authority of Congress (I, 8:3), not on substantive due process. That same year, however, in Santa Clara Country v. Southern Pacific Railroad, the Court ruled that a corporation was a "person" in the meaning of the Vth and XIVth Amendments. But it was still not ready to agree to substantive due process.
Finally, after seventeen years of dissenting, Field had the satisfaction of seeing the court majority accept the doctrine in Chicago, Milwaukee and St. Paul Railway v. Minnesota (1890). Here the state had created a commission with rate-setting powers over a railroad which operated only within the state. But the law did not allow railroads access to the state courts if they disagreed with the commissions decisions. The Supreme Court ruled that such a law violated the due process clause of the XIVth Amendment.
After 1890, the Court used "substantive due process" in Cincinnati, New Orleans and Texas Pacific Railroad v. ICC (1895). Here, even though Congress was doing only what the Court said in Wabash that Congress must do, the Court ruled that Congress and the ICC could not regulate railroads because of "substantive due process." In Smyth v. Ames (1896) the Court ruled that since rate setting was a due process matter, only the courts could rule on which rates were reasonable and which were not.
After 1900, the line of decisions was confusing, partly because Field had died in 1897. But the Court was always ready and able to fall back upon substantive due process whenever it saw fit. Only in 1937 did the Court abandon the doctrine and give to governments a generally unrestricted right to regulate and control prices and wages in the name of the "general welfare," I,8:1.
Last revised: March 30, 2004