Home Building & Loan Ass'n v. Blaisdell

Home Building & Loan Association v. Blaisdell, 290 U.S. 398 (1934), was a decision of the United States Supreme Court holding that Minnesota's suspension of creditors' remedies was not in violation of the United States Constitution.[1] Blaisdell was decided during the depth of the Great Depression and has been criticized by modern conservative and libertarian commentators.[2][3][4]

Home Bldg. & Loan Ass'n v. Blaisdell
Argued November 8–9, 1933
Decided January 8, 1934
Full case nameHome Building & Loan Association v. Blaisdell, et ux.
Citations290 U.S. 398 (more)
54 S. Ct. 231, 78 L. Ed. 413, 1934 U.S. LEXIS 958; 88 A.L.R. 1481
Case history
PriorAppeal from the Supreme Court of the State of Minnesota.
Holding
Minnesota's suspension of creditor's remedies was not in violation of the U.S. Constitution. Minnesota Mortgage Moratorium Act upheld.
Court membership
Chief Justice
Charles E. Hughes
Associate Justices
Willis Van Devanter · James C. McReynolds
Louis Brandeis · George Sutherland
Pierce Butler · Harlan F. Stone
Owen Roberts · Benjamin N. Cardozo
Case opinions
MajorityHughes, joined by Brandeis, Stone, Roberts, Cardozo
DissentSutherland, joined by Van Devanter, McReynolds, Butler

Background and decision

In 1933, in response to a large number of home foreclosures, Minnesota, like many other states at the time,[5] extended the time available for mortgagors to redeem their mortgages from foreclosure. The extension had the effect of enlarging the mortgagor's estate contrary to the terms of the contract.

The Supreme Court upheld the statute, reasoning that the emergency conditions created by the Great Depression "may justify the exercise of [the State's] continuing and dominant protective power notwithstanding interference with contracts."[6] Blaisdell was the first time the court extended the emergency exception to purely economic emergencies.

While the Blaisdell judgment itself might have been held to apply only in limited instances of economic emergency, by the late 1930s the emergency exception doctrine had expanded dramatically.[7]

Criticism

Adherents of the Chicago school of economics have characterized Blaisdell among the Court precedents that have diminished constitutional protection of individual property rights. Richard Epstein's (the Laurence A. Tisch Professor of Law at the New York University School of Law and Adjunct Scholar at the American libertarian think tank Cato Institute) criticisms have been some of the most vocal:

Blaisdell trumpeted a false liberation from the constitutional text that has paved the way for massive government intervention that undermines the security of private transactions. Today the police power exception has come to eviscerate the contracts clause.[2]

See also

References
  1. Home Building & Loan Ass'n v. Blaisdell, 290 U.S. 398 (1934).
  2. Epstein, Richard A. (1984). "Toward a Revitalization of the Contract Clause". University of Chicago Law Review. The University of Chicago Law Review, Vol. 51, No. 3. 51 (3): 703–751. doi:10.2307/1599484. JSTOR 1599484.
  3. Burch, Alan R. (1999). "Purchasing the Right to Govern: Winstar and the Need to Reconceptualize the Law of Regulatory Agreements". Kentucky Law Journal. 88: 245, 279. ISSN 0023-026X.
  4. Arkes, Hadley (1999). "On the Novelties of an Old Constitution: Settled Principles and Unsettling Surprises". American Journal of Jurisprudence. 44: 15–42. doi:10.1093/ajj/44.1.15. ISSN 0065-8995.
  5. Wright, Fred (2005). "The Effect of New Deal Real Estate Residential Finance and Foreclosure Policies Made in Response to the Real Estate Conditions of the Great Depression". Alabama Law Review. 57: 231, 240–241. ISSN 0002-4279.
  6. Blaisdell, 290 U.S. 398, at 437.
  7. Butler, Henry N.; Ribstein, Larry E. (1999). "Regulating Corporate Takeovers: State Anti-takeover Statutes and the Contract Clause". University of Cincinnati Law Review. 57: 611, 627. ISSN 0009-6881.

Further reading
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