Home Building & Loan Association v. Blaisdell
Summary
In a 5-4 decision authored by Chief Justice Hughes, the Supreme Court held that Minnesota’s Mortgage Moratorium Law, which allowed modification of terms for foreclosure and redemption of defaulted mortgages during the Great Depression, did not violate the Contract Clause, which states that “no state shall…pass any…law impairing the obligation of contracts.” The Court reasoned that the emergency conditions of the Great Depression justified the exercise of the State’s “continuing and dominant protective power notwithstanding interference with contracts.” Chief Justice Hughes explained that, because the Contract Clause “is not to be applied with literal exactness,” economic conditions may arise in which a temporary restraint of enforcement of contracts will be consistent with the spirit and purpose of the Contract Clause.
Analysis
This case is activist because the Court contorts the text of the Constitution, nullifying a right enforced by prohibition explicitly written in the Constitution. Contrary to the view of the Court, the minimum requirements of the Contract Clause cannot change in meaning depending on the times and circumstances. If a statute violates the Clause during ordinary times, it must also be in violation of the Clause during harder times. The Founders understood emergencies and economic hardship, having lived through them, and therefore drafted a Constitution to safeguard rights even in these situations. If exigent circumstances are used to create exceptions to that instrument, then a vital purpose of constitutional government is undermined. To relax the requirements of the Constitution in times of emergency, as the Court did here, sets a dangerous precedent and threatens the stability of our nation and its system of limited government.
Case Basics
date01/08/1934
Court & Reporter NumberSupreme Court, 290 U.S. 398
Type(s) of Activism
- Contorting Text
- Nullifying Rights
Opinion(s)
Majority
- Louis Dembitz Brandeis
- Pierce Butler
- Benjamin Nathan Cardozo
- Charles Evans Hughes
- James Clark McReynolds
- Owen Josephus Roberts
- Harlan Fiske Stone
- Willis Van Devanter