For more than a quarter century, Justice Clarence Thomas served as the Supreme Court’s daft old uncle. Under Thomas’ reading of the Constitution, federal laws ranging from child labor laws, to minimum wage laws, to the ban on whites-only lunch counters are all unconstitutional. Thomas once argued that the First Amendment does not apply to high school students because eighteenth century fathers behaved like petty tyrants.
But Thomas may have just been dethroned. Dissenting in Sveen v. Melin, Neil Gorsuch tells Thomas to hold his beer.
Sveen is the sort of routine clean-up case that the justices often hand down after a lower court goes too far out on a limb and needs to be reined in. It involves a Minnesota law that, among other things, governs how life insurance policies should handle divorces.
If one spouse lists the other as the beneficiary on their insurance policy, and then the couple divorces, Minnesota law automatically revokes that designation. The theory is that “the average Joe does not want his ex inheriting what he leaves behind,” but in practice, many forget to fill out the paperwork to remove their spouse as a beneficiary. Minnesota law does not forbid someone from designating their ex-husband or ex-wife as an insurance beneficiary, but it does require them to refile the paperwork to do so after the divorce.
There is a robust policy debate among states about whether this sort of automatic revocation is a good idea, but, as Justice Elena Kagan explains on behalf of every member of the Court who doesn’t occupy a seat that was held open for a year until Donald Trump could fill it, Minnesota’s law is clearly constitutional.
There is a long line of precedents, stretching back to the English common law, providing that when someone’s marital status changes, the law should automatically update who benefits if that person dies. Writing only for himself, however, Gorsuch claims that Minnesota’s law violates the Constitution because life insurance agreements are a form of contract.
Obligations of contract
The original Constitution forbids states from enacting a “law impairing the obligation of contracts.” According to Gorsuch’s lone dissent, this means that any law that prevents an already-existing contract from being enforced is invalid. Gorsuch’s rule, moreover, is quite unforgiving — “any legislative deviation from a contract’s obligations, ‘however minute, or apparently immaterial,’ violates the Constitution.”
Were this rule to become the law, it would have staggering consequences across many areas of the law. Suppose that Joe agrees to pay Ali $10 an hour to work in Joe’s factory. Now suppose that the state legislature passes a law increasing the minimum wage to $12 dollars an hour. Under Gorsuch’s rule, Joe and Ali’s employment contract preceded the state minimum wage law, so the minimum wage law could not, in this instance, apply to Ali.
Or imagine that a power plant, which uses an extraordinary dirty method to produce power, contracts with a power company to provide a certain amount of energy to the power company’s customers. Then imagine that a state passes a law banning this very dirty form of energy production, effectively requiring power plants to adopt less polluting technology. Under Gorsuch’s rule, that state law would impair an existing contract, and thus would be unconstitutional as applied to this power plant.
Or imagine that a crop-duster contracts with a local farmer to spray a highly toxic pesticide on the farmer’s crops. After several scientific studies reveal that even trace amounts of this pesticide cause severe brain damage in children, the state bans the use of the pesticide. Under Gorsuch’s rule, this state law would impair the existing contract between the farmer and the crop duster, and thus the farmer could continue to poison nearby children.
Indeed, there are few instances in which changes to state law, or new such laws, wouldn’t impose some burdens on, at least, some existing contracts. A new speed limit might prevent truckers from delivering their loads on time, despite the fact that they contracted to do so. A law requiring doctors to have medical degrees could invalidate employment contracts between hospitals and quacks. Gorsuch’s hyper-rigid reading of the Contracts Clause could render governance nearly impossible.
Which is why, as far back as 1830, the Supreme Court recognized that such a hyper-rigid interpretation of the Constitution is not workable. As the Supreme Court explained in Jackson v. Lamphire, a law that imposes incidental burdens on a contract may still be valid if it were enacted for “reasons of sound policy” that are not “so unreasonable as to amount to a denial of a right.”
More recent cases fleshed out this doctrine considerably. Under the Supreme Court’s decision in Energy Reserves Group, Inc. v. Kansas Power & Light Co, a state law does not violate the Contracts Clause if it does not operate “as a substantial impairment of a contractual relationship,” or if the state has a “significant and legitimate public purpose behind the regulation, such as the remedying of a broad and general social or economic problem.”
Gorsuch’s Sveen dissent, moreover, suggests that the judge has an especially radical agenda when it is read alongside of Gorsuch’s recent majority opinion in Epic Systems v. Morris.
Epic Systems involved employment contracts that forced workers to sign away many of their rights to sue their employer, often under penalty of termination. Yet Gorsuch’s opinion rested on the fiction that these coerced agreements were voluntary contracts.
Indeed, Gorsuch’s willful blindness to the power differential between workers and their employers closely resembles the logic of one of the Supreme Court’s most infamous decisions, Lochner v. New York, which struck down a New York law prohibiting bakery owners from overworking their workers.
These workers often labored for 13 hours a day or more, in squalid conditions, for meager weekly pay. Nevertheless, the Court held in Lochner that the state could not intervene to give such workers a more humane workload because “there is no contention that” bakery workers were unable “to assert their rights and care for themselves without the protecting arm of the State.”
The fact that Gorsuch’s Epic Systems opinion was joined by four justices is a worrying sign that the Court’s present majority no longer recoils against Lochnerian ignorance of how the workplace functions. Gorsuch’s Sveen opinion is worrying for a different reason. It suggests that Gorsuch is eager to implement an anti-government agenda that would even make Justice Thomas cringe.