In the years between 1897 and 1936, the United States Supreme Court was in its so-called Lochner era. Named for the most famous case of the period, Lochner v. New York, 198 U.S. 45 (1905), this era of Supreme Court jurisprudence was characterized by the Court striking down various laws and regulations on the basis of substantive due process. Many such laws were economic regulations aimed at regulating wages or workers’ conditions.
The first case of the era, Allgeyer v. Louisiana, 165 U.S. 578 (1897), involved a Louisiana law that barred Louisiana corporations from doing business with marine insurance companies that did not comply with state insurance regulations.
E. Allgeyer & Co., a cotton exporter, contracted with Atlantic Mutual Insurance Company of New York to insure cotton bales shipped from New Orleans to Europe and the United Kingdom. Atlantic Mutual had no agent in Louisiana and did not comply with the state’s insurance laws.
As a result, Louisiana fined Allgeyer. Allgeyer challenged the law, and the Supreme Court took up the case to consider the limits of a state’s authority to regulate out-of-state contracts.
The Court struck down the law on the ground that it interfered with the freedom of contract protected by the Due Process Clause of the Fourteenth Amendment. In doing so, the Court kicked off the Lochner era.
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