This story begins with how many of us got to know Federal Appeals Court Judge Neil Gorsuch. It was a -27F degree night on a desolate road in rural Illinois with truck driver Alphonse Maddin stranded with a disabled 50ft trailer and a cab nearly out of fuel. Alphonse radioed for help but after several hours none came and he started to turn blue and numb with hypothermia. Fearing making his only child an orphan, Alphonse unhitched the cab from the trailer and drove to a gas station to refuel. Alphonse was back to the trailer in less than 30 min, the trailer repairman had arrived and repaired the trailer (brakes) and the load was SUCCESSFULLY delivered.
Aren’t “everyone wins” stories like this great? Not in the world of today’s Republican. Instead of TransAm Trucking apologizing to Alphonse for putting his life at risk because of the repair delays, they FIRED him for making the choice to leave his truck load in order to literally remain alive. Alphonse sued under a law protecting drivers from being forced to operate vehicles in unsafe conditions. Seven years and many appeals later, the case ends up before three judges on the United States Court of Appeals for the Tenth Circuit. In what SHOULD have been a slam dunk ruling, Alphonse thankfully prevailed 2 to 1. The disgusting dissent would later catch the eye of Republican scum in their next act in subverting President Obama’s Constitutional duty to appoint justices filing Supreme Court vacancies. It was penned by Neil Gorsuch.
Fast forward to yesterday (11 June 2018) and a case before the Supreme Court dealing with the Constitutional Contract Clause – Article I, Section 10, Clause 1:
No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
The Contracts Clause prohibits states from enacting any law that retroactively impairs contract rights. The Contracts Clause applies only to state legislation, not federal legislation or court decisions. The Framers of the Constitution added this clause in response to the fear that states would continue a practice that had been widespread under the Articles of Confederation — that of granting “private relief.” Legislatures would pass bills relieving particular persons (predictably, influential persons) of their obligation to pay their debts. It was this phenomenon that also prompted the framers to make bankruptcy law the province of the federal government. In a nutshell, this really says states can’t retroactively pass laws that essentially prevent the proper execution of an existing business contract between two parties. As with most things in the Constitution, the INTERPRETATION of such a clause is everything. For example, WHAT defines “impairing?” Or, and the part that Republicans really hate, what if the existing contract creates concern for the public good that needs to be rectified with legislation?
Yesterday (11 June 2018) the Supreme Court ruled on a case challenging a Minnesota law, passed in 2002, that automatically eliminates a spouse designated as the beneficiary of a life insurance policy in the case of a divorce. Say a man takes out an insurance policy and designates his wife as the beneficiary in the event of his death. The Minnesota law states that in the event of a divorce, the FORMER wife is no longer a beneficiary of the policy, the new beneficiary being the estate of the husband that established the policy. The legal intent here is that this result would tend to be what a policy holder would want — for the policy to protect his current family (or kids). Of course the law simply specifies what is to occur by default in the event of a divorce. The policy holder may simply tell the insurance company to keep the current beneficiary if so desired.
The ruling came in the case of Ashley and Antone Sveen, whose father Mark married Kaye Melin in 1997. After 10 years of marriage, the couple divorced – but Mark did not change his designation of Kaye as the primary beneficiary of his life-insurance policy before he died. Pointing to the 2002 law, Ashley and Antone claimed that they should receive the money, but a federal appeals court ruled for Kaye, on the ground that applying the law to a policy that was in effect before the law was enacted would violate the contracts clause.
Today [11 June 2018] the Supreme Court, in an opinion by Justice Elena Kagan, reversed [the lower court ruling]. Kagan began by conceding that the contracts clause limits the states’ power to pass laws that interfere with pre-existing contracts, but she stressed that such restrictions are not absolute. To determine when a law “crosses the constitutional line,” she explained, the court first examines whether the law substantially impairs the relationship created by the contract.
Here, Kagan concluded, the Minnesota law does not – and therefore passes muster. First, Kagan acknowledged that the law does change the beneficiary designated by the policyholder. But, she stressed, legislators passed the law because they wanted to take into account what the policyholder would have wanted. And although “there are exceptions,” she posited, most people who get divorced don’t want their money to go to their former spouses; they simply forget to change their beneficiary designations.
Now, much of this sounds like a bunch of contractual gobbledygook without many implications but that would miss the enormous implications of having a justice on the Court that could possibly rule that the Minnesota legislature can’t pass this insurance beneficiary rule. WHY.
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.
Think of the consequences Gorsuch is OK with:
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.
Oh, and remember that potential “public good” necessity?
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
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.
The Gorsuch “opinion” in this case basically says that BUSINESS contracts can take precedence over a public’s right to use its OWN elected legislators to protect itself from the HARM resulting from such contracts. It’s a safe bet there will be many more right wing requests making it before the Court, pleading the case for absolute private business rule over public good, before Gorsuch is off the Court. These may be more subtle but potentially very destructive to worker and public well being. This is less about the particulars of the Sveen case here and more about the frightening picture forming of what Republicans are doing to our government. How frightening? Frightening enough to give Justice Clarence Thomas some pause.