The Constitutional Revolution of 1937

Mar 10, 2023

Today marks the 86th anniversary of one of the most consequential events of American history that very few people have even heard of, and that significantly less people properly understand.

This is the anniversary of Franklin Delano Roosevelt’s ‘Fireside Chat’ to pitch the American people on his plan to pack the Supreme Court with new Justices who would owe their position and their loyalty to Franklin Delano Roosevelt, personally.

Why? Well, because FDR was sick and tired of the Court fulfilling it’s constitutional role to act as a distinctly non-political body. He needed an openly politically motivated court that would stop striking down his unconstitutional New Deal legislation on the grounds that it was unconstitutional.

The Supreme Court’s supposed response to this threat would become known as The switch in time that saved nine. Because it’s commonly believed the Court’s ruling in Parrish v West Coast Hotel (1937) that upheld a minimum wage law as being constitutional was the Court making a political, not a legal, decision. The effect this had on people’s perception of the Supreme Court ever since has been so influential that this event has come to be known as The Constitutional Revolution of 1937.

In February 1930 chief justice Taft resign from the Supreme Court due to illness. One month later Justice Sanford suddenly passed away. President Herbert Hoover nominated Charles Evan Hughes and Owen Roberts to fill the two vacancies. Though a republican Hoover was a political progressive his two appointments began to shift the court to the left.

Franklin D Roosevelt was elected president in 1932. His new deal policies aimed to reform the entire American economy. During Roosevelt's first and second terms in office the Supreme Court radically altered how it reviewed regulations of economic liberty. However even to this day many lawyers and legal scholars do not know why and when this change occurred.

O'Gorman & Young vs Hartford Fire Insurance Company (1931)

Justice Roberts made an immediate impact on the court in O'Gorman & Young v. Hartford Fire Insurance Company. Under New Jersey law commissions on the sale of fire insurance policies are required to be reasonable. The O’Gorman firm sold Hartford fire insurance policies. Their contract provided that the commissions would be priced at what such services were reasonably worth. O'Gorman asserted that its commission was reasonably worth 25% of the insurance premiums. Hartford however only paid a 20% commission. O'Gorman filed suit for breach of contract. The trial court found that under New Jersey law a 25% commission was unreasonable and could not be paid.

O'Gorman appealed the case to the Supreme Court. The firm argued that the regulation deprive the company of property that is the extra commission without the due process of law. In April 1930 the court heard oral arguments. At the time they were only eight justices on the bench. Apparently the court split 4-4 on whether the regulation was constitutional. Three weeks later Justice Owen Roberts was confirmed. O'Gorman was re-argued the following term. At that time Justice Roberts cast the fifth and deciding vote to uphold the statute.

The Supreme Court precedent, which included Lochner, recognize that the fourteenth amendment protected the liberty of contract. That right generally prohibited price regulations. But there was an exception to the general rule legislators could set prices for a business affected with a public interest. Originally this category was limited to businesses with some kind of monopoly market power. Eventually the Supreme Court expanded the category to include any business the state wanted to regulate.

Justice Louis Brandeis wrote the majority opinion in O'Gorman. He found that the business of insurance is so far affected with a public interest that the state may regulate the rate. To avoid the evils of an unreasonably high rate level the state may limit commissions. Therefore the New Jersey statute is clearly within the scope of the police power. Second Justice Brandeis explained that courts must presume the law is constitutional unless there is a factual foundation that the provision was not an appropriate remedy for the evils in the insurance industry. Hence the court applied a presumption of constitutionality. Nothing on the face of the New Jersey statute or the facts of which the court must take judicial notice he wrote could rebut this presumption of constitutionality. Therefor the regulation was reasonable.

Justice Van Deventer wrote a dissent. He was joined by justices Sutherland Butler and McReynolds. While the majority presumed the law was constitutional the dissent required the government to justify why the law is necessary. Justice van Devanter’s dissent offered the following test: the state could deny O'Gorman the right to make private contracts only if some special circumstances exist that are sufficient to indicate the necessity of a statute to eliminate evils in the marketplace. The key word is necessity.

Nebbia v. New York (1934)

Three years after O'Gorman was decided the court considered another economic liberty case Nebbia v. New York. The state fixed the price of milk at 9 cents per quart. This law which was designed to help dairy Farmers raised milk prices for everyone including the poor.

The biggest beneficiaries of the law however we're large firms that delivered milk directly to homes. Their prices could be undercut by small mom-and-pop stores that did not incur delivery cost. In this way the minimum price for milk protected the profits of large milk distributors.

Grocer Leo Nebbia offers its customers a special deal to get around the New York law. If a customer bought 2 quarts of milk at the regulated price of $0.09 each for a total of $0.18 Nebbia would throw in a free loaf of Italian bread which was worth $0.05. With this deal customers received $0.23 of groceries for only $0.18. New York charged Nebbia with violating the price control law. He was convicted of offering his customers a discount and was sentenced to pay a criminal fine.

Nebbia argued that the law deprived him of liberty and property without the due process of law. These Supreme Court rejected his argument by a 5-4 vote. Once again Justice Roberts was the swing vote. This time he authored the majority opinion. First Justice Roberts wrote “That states can regulate businesses affected with a public interest”. That category now included even the corner grocery store. As a result the states have the police power to fix the prices to be charged for the products or commodities that the store sells.

Second the court reviewed the New York law with the presumption of constitutionality that was articulated in O'Gorman. Under this approach the state was free to adopt whatever policy may reasonably be deemed to promote public welfare. The requirements of due process were satisfied Justice Roberts observed if the law had a reasonable relation to a proper legislative purpose and was neither arbitrary nor discriminatory. It was not the courts rule to determine if the rule was unwise.

Third, the court considered how the law accomplishes its purpose; that is the relationship between the means and the end. What evils was the government trying to address ruthless competition from destroying the wholesale price structure on which the farmer depends for his livelihood? The court concluded that the price control law was not unreasonable or arbitrary and it had a relation to this purpose. Therefore Nebbia's conviction was proper.

As they had in O'Gorman Justices Van Deventer Sutherland Butler and McReynolds dissented together. This quartet also rejected the presumption of constitutionality. In his dissent Justice McReynolds observed that the stated purpose of the New York law was to increase milk prices at the farm. Yet the milk distributors were not required to share their increased revenue with dairy farmers. For this reason he questioned whether the means adopted being the price controls bore a reasonable relation to the stated purpose of assisting dairy farmers. Justice McReynolds did not assess the legislator’s motives directly. Instead he concluded that the law is arbitrary because the means adopted did not fit the purported ends of the legislation. In other words the law seemed to be designed to protect large milk distributors from competition rather than to help farmers.

Between 1931 and 1937 Justices Van Devanter, Sutherland, Butler and McReynolds consistently voted as a block to declare unconstitutional all such progressive federal and state legislation. This conservative quartet was dubbed by their critics as The Four Horsemen. A reference to the four horsemen of the Apocalypse from the New Testament book of Revelation. During the same, Justice Roberts was often the swing vote. In some cases he would join the four horsemen to give the conservatives a majority and in other cases like O'Gorman and Nebbia Justice Roberts voted to uphold progressive legislation. In our next case West Coast Hotel v. Parish, Justice Roberts would once again join the liberal bloc.

West Coast Hotel v. Parish (1937)

Washington State imposed a minimum wage for women and children but not for men. Elsie Parish worked as a chambermaid at the West Coast Hotel in Wenatchee, Washington. Her employer failed to pay her the minimum wage and she filed suit to recover back pay. The hotel's owner argue that the labor regulation deprived him of the liberty of contract without due process of law.

Over the previous three decades the Supreme Court had decided several cases concerning economic liberty for women. In Muller vs. Oregon (1908) the Court upheld a law that limited the hour’s women could work. The law was deemed reasonable because of the physical differences between men and women. However 15 years later in Adkins v. Children's Hospital (1923) the court declared unconstitutional a minimum wage law for women. The federal statute violated the liberty of contract protected by the Fifth Amendment’s due process clause. Thirteen years later in Moorhead v. New York (1936) the court reaffirmed Adkins. The 5-4 decision found that New York minimum wage law for women was unconstitutional. In that case Justice Roberts joined the four horsemen. Critically however in Moorhead the court was not asked to overrule Adkins. This point is crucial and often overlooked. Because the Court can only rule on the facts which they have taken judicial notice of. Meaning, if an issue wasn’t raised by either party, or by the various amici briefs, it’s beyond the Court’s purview to act.

But in West Coast Hotel v. Parish ask the court to expressly overrule Adkins. By a 5-4 vote the court did exactly that. Justice Roberts once again cast the deciding vote. Chief justice Hughes and other Hoover appointee wrote the majority opinion. He explained that Adkins decided only 13 years earlier was a departure from the true application of the principles governing the regulations by the state of the relation of employer and employee. Furthermore cases decided since Adkins including O'Gorman and Nebbia applied those principles properly through the presumption of constitutionality. Chief justice Hughes could not reconcile Adkins with O’Gorman and Nebbia and therefore the court overruled Adkins.

With Adkins out of the way it was easy for the court to uphold the Washington minimum wage law. If the protection of women is a legitimate end of the exercise of state power Chief Justice Hughes asked how can it be said that the requirement of the payment of a minimum wage yearly fixed in order to meet the very necessities of existence is not an admissible means to that end? He added, even if the wisdom of the policy be regarded as debatable and its effects uncertain still the legislature is entitled to its judgment. This deference is especially appropriate the court noted in light of the unparalleled demand for relief which arose during the recent period of depression. Therefore the law did not violate the 14th amendment.

For one of the last times the four horsemen dissented together. Justice Sutherland who wrote the Atkins majority opinion also wrote the West Coast dissent. Here, he questioned the presumption of constitutionality. The dissent explained that a judge has an independent duty to make up his own mind and judge accordingly whether a law is constitutional. A differential judge who automatically accept the views of others he lamented has surrendered his deliberate judgment.

Justin Sutherland further contended that the court should not base its ruling on the exigencies of the great depression. The meaning of the Constitution as stated does not change with the ebb and flow of economic events. Rather he added the words of the Constitution must mean today what they meant when written. A contrary rule would Rob that instrument of the essential element which continues it in force.

Finally Justice Sutherland attacked the law because we impose a minimum wage for women but not for men. As a Senator, Sutherland had supported the nineteenth amendment and women's suffrage. In his dissent he stated: Women today stand upon a legal and political equality with men, therefor differences of sex is no reasonable ground for making a restriction applicable to the wage contract of all working women from which like contracts of all working men are left free.

On March 29th 1937 Justice Roberts join the majority opinion in West Coast Hotel which overruled Adkins. However only nine months earlier in Morehead, Justice Roberts agreed with the four horsemen the New York's minimum wage law for women was unconstitutional in light of Adkins. How can we explain his change in position?

Four generations of students have learned that Justice Roberts changed his vote in response to President Franklin Roosevelt's proposal to expand the size of the Supreme Court. On March 9th 1937, three weeks before the decision in West Coast Hotel was announced, President Roosevelt released his so-called court-packing plan he explained:

"Whenever a judge or justice of any federal court has reached the age of 70 and does not avail himself of the opportunity to retire on a pension a new member should be appointed by the president then in office with the approval as required by the Constitution of the Senate of the United States."

The size of the Supreme Court is not specified in the Constitution. It has always been set by Congress. The number of justices has varied from as few as six, to as many as ten. President Roosevelt was not concerned with the age or the workload of the Court; rather he was frustrated that conservative justices had declared unconstitutional federal and state progressive legislation. President Roosevelt called upon Congress to change the size of the court for a very specific purpose of appointing new justices who were more amenable to his new deal policy agenda and his vision of the Constitution.

On March 29^th, three weeks after the president's announcement West Coast Hotel was decided & Justice Roberts was in the majority. His apparent reversal from Morehead created the appearance that the court-packing proposal influenced his decision. According to what has been the conventional narrative Justice Roberts voted to uphold the Washington minimum wage law in order to remove the incentives for President Roosevelt to pack the Supreme Court. Since that day Justice Roberts vote has been hailed as the so-called Switch in time that saved nine - A play on the folksy aphorism that a stitch in time saves nine. In other words if you mend a hole now you won't need to mend a bigger hole later.

However the conventional narrative that Justice Roberts changed his vote in response to the court-packing plan has been called into question. In 1936 several of the justices recorded the votes cast at a private conference based upon the records in the docket books we know that Justice Roberts voted to uphold the Washington law in December of 1936 nearly three months before President Roosevelt announced his court-packing plan.

There is a far more mundane explanation for justice Roberts switch. In Moorhead the court had not been asked to overrule Adkins. However Elsie Parrish did ask the court to overrule Adkins. And so it did, relying on prior decisions Roberts had joined: including O'Gorman and Nebbia.

Why does this history matter?

According to the conventional narrative Justice Roberts changed course for political reasons. Therefore the argument goes the Supreme Court is an inherently political institution. And because the conventional narrative applauds the switch in time, a political Supreme Court is seen as a good thing; the actual history however revealed politics played a different, more subtle role.

President Herbert Hoover a political progressive appointed two progressives: Chief Justice Hughes and Justice Roberts. These appointments unsurprisingly move the court in a progressive direction. Hughes & Roberts simply had different judicial philosophies about the Constitution than those held by the more conservative justices who comprised the four horsemen; who were appointed by more conservative presidents.

In this way popular elections, not intimidation by political actors changed the constitutional balance of the Supreme Court. The political process by which justices are selected allows for a Justice with one principal vision of the Constitution to be replaced by a Justice holding a different vision. West Coast Hotel was a byproduct of Herbert Hoover progressive appointments in 1931. Not President Roosevelt’s partisan tactics in 1937.

West Coast Hotel marked the commencement of what is sometimes called the Constitutional Revolution of 1937. Whenever and however it happened there is no dispute that a constitutional sea change did occur. Recall that during the same period the Supreme Court also approved a vast expansion of Congress's powers under the Commerce Clause and Necessary and Proper Clause.

Three months after West Coast Hotel was decided the Four Horsemen disbanded. In June of 1937 Justice Van Devanter retired, in January 1938 Justice Sutherland retired, Justice Butler would step down the following year in November 1939 and 13 months later in January 1941, Justice McReynolds left the court.

During his 12 years in office President Roosevelt made nine Supreme Court nominations. By 1943 during Roosevelt's unprecedented fourth term in office he had replaced all members of the once conservative court from the progressive era. Throughout the New Deal, starting with O’Gorman in 1931, a constitutional sea change had occurred. Soon even more radical changes would come.

Throughout the New Deal the Presumption of Constitutionality doctrine adopted in O’Gorman, Nebbia and West Coast Hotel was considered a rebuttable doctrine. It was still feasible for petitioners to challenge the constitutionality of a law that restricted economic liberty. They could present evidence showing that the restriction was arbitrary. Eventually however, the Warren Court would make the presumption of constitutionality entirely irrefutable. When this came in Williamson v. Lee Optical (1955)- The Constitutional revolution was complete.

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