Court Opinion

ID: 6768508
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:40:31.074228+00
Date Added: 2024-06-11T16:02:42.466934
License: Public Domain

Wright, J.,
dissenting. I am puzzled as to why the majority cites no authority for the ringing syllabus law announced today — there is, in fact, no dearth of cases inveighing against the use of the state or federal police powers to interfere with a citizen’s “right” to contract. The lead case in this area, of course, was Lochner v. New York (1905), 198 U.S. 45, 25 S.Ct. 539, 49 L.Ed. 937, in which the court, using the same general premise embraced today by my colleagues in the majority, struck down a law limiting bakers to a sixty-hour work week.
Lochner is a notorious case in American legal history. One author attributes this notoriety to “the widespread assumption that the case represents the corruption of judicial power in at least two respects. First, by invoking an ostensible right to liberty of contract to trump a maximum hours law for bakers, the majority took the unprecedented step of constitutionalizing an ethos of market freedom at a time when it was a matter of political dispute whether an unregulated market was always the best policy. Second, in announcing that laws interfering with liberty of contract would be upheld only if (in the opinion of the Court) they were ‘reasonable and appropriate’ attempts to promote ‘the morals, the health or the safety of the people,’ Justice Peckham promulgated a doctrine that illegitimately gave the justices the authority to second-guess legislative conclusions regarding effective public policy — an authority that the members of the majority exercised with a vengeance when they gave their blessing to those sections of the Bakery Act that related to the conditions of the workplace as ‘reasonable and appropriate exercises of the police power of the State’ but struck down those sections relating to working hours as merely ‘labor laws,’ unrelated to ‘the interests of the public’ and therefore ‘unnecessary and arbitrary interferences’ with personal liberty.” Gillman, The Constitution Besieged: The Rise and Demise of Lochner Era Police Powers Jurisprudence (1993) 19.
Dissenting in Lochner, Justice Oliver Wendell Holmes articulated criticisms which can just as easily be voiced against today’s decision: “It is settled by various decisions of this court that state constitutions and state laws may regulate life in many ways which we as legislators might think as injudicious or if you like as tyrannical as this, and which equally with this interfere with the liberty to contract. Sunday laws and usury laws are ancient examples. A more modern one is the prohibition of lotteries. The liberty of the citizen to do as he likes so long as he does not interfere with the liberty of others to do the same, which has been a shibboleth for some well-known writers, is interfered with by school laws, by the Post Office, by every state or municipal institution which takes his money for purposes thought desirable, whether he likes it or not.” Id., 198 U.S. at 75, 25 S.Ct. at 546, 49 L.Ed. at 949.
I could have joined the majority but for the fact that Lochner, its progeny, and the premises on which they were based were consigned to outer darkness in the *172mid- to late 1930s over the outraged cries of the last of the “Four Horsemen,” Justice James Clark McReynolds. Typical of his views was his dissent in the Gold Clause Cases.3 A McReynolds biographer explained:
“The Gold Clause Cases all involved the same basic question: could the federal government oblige creditors to accept payment in dollars rather than in gold as was specified in their contracts, notes, bonds, or other obligations? A majority of the Court answered yes. It chose to view the question before it as one of power rather than wisdom. In its judgment Congress had the power to compel acceptance of paper dollars. * * *
“The crowded courtroom had been tense before the majority delivered its opinion as those present nervously awaited announcement of the momentous decision. Justice Stone finished reading his concurring opinion at 1:40 p.m.; and the crowd, silent and tense once again, turned its attention to McReynolds, who was to read the dissent. The tall, rugged-looking Justice, appearing grimly determined, pushed aside his written dissent. His piercing blue eyes flashing, he began to speak. His voice quivered at first; but as he spoke, he gathered momentum, raising his high-pitched voice frequently to emphasize his points. He lashed out, beginning with the flat declaration that he had privately communicated to his friend weeks earlier: ‘The Constitution is gone.’ He elaborated:
“ ‘The guarantees heretofore supposed to protect against arbitrary action, have been swept away. The powers of Congress have been so enlarged that now no man can tell their limitations. Guarantees heretofore supposed to prevent arbitrary action are in the discard.’
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“ ‘In harmony with policy sanctioned for many years, individuals entered into contracts which they expected would protect them against a fluctuating currency — a depressed currency, if you will. Such currency is not new; it has been known for centuries. Nero used it. Long ago it was familiar in France.
“ ‘Many men entered into contracts, perfectly legitimate, and undertook to protect themselves. The lender against depreciated currency, the borrower possibly against an appreciated one. Under these obligations millions were loaned. Railroads, canals, many great enterprises were begun and their bonds sold throughout the world. With them went solemn promises that takers would receive in payment money like that furnished by them. Now we are told Congress can sweep all this away; declare such payments against public policy!’
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*173“Concluding at last, now more in sorrow than in anger, he could only weep: ‘Shame and humiliation are upon us. Moral and financial chaos may confidently be expected.’ ” (Footnotes omitted.) Bond, I Dissent: The Legacy of Chief Justice James Clark McReynolds (1992) 91-92.
Now there may have been something to McReynolds’s views, but, plainly speaking, his posture concerning the sanctity of contracts is now not only out of the mainstream of the law, it is on dry land. I venture to say that any law student could produce hundreds of statutes contained in our Revised Code that interfere with a citizen’s right to contract. See, e.g., R.C. Chapter 1707 (regulating securities transactions); R.C. 4111.02 (requiring and setting minimum wage); R.C. 4117.03 (providing collective bargaining rights to public employees). Until today I’ve not seen this court wander back to the Lochner era. Today’s decision should certainly send the organized Bar scrambling to use Section 28, Article II of the Ohio Constitution the next time we hear arguments concerning a securities violation or a case involving the Public Employees’ Collective Bargaining Act. Justice McReynolds would have been most pleased.
This decision hints at a return to the days of result-oriented jurisprudence hidden under the guise of a “constitutional right” to contract without government interference. It is simply not our job to decide whether a statute is, normatively, good or bad. The majority may think that R.C. 1339.63 is bad or that it is bad as applied to this case. But it should not parlay its subjective opinion into constitutional law. That is exactly what the Lochner court did and that is exactly what American judges and lawyers rejected over fifty years ago.
There is yet another major flaw in the majority opinion: Schilling’s ex-wife does not have standing to complain that her rights have been impaired. The majority reasons that because R.C. 1339.63 interferes with Schilling’s contractual rights, it ipso facto interferes with his ex-wife’s rights. That is truly an illogical leap. Prior to the effective date of R.C. 1339.63, Schilling’s ex-wife did not have more than an expectancy interest in the insurance proceeds. She did not have a contractual relationship with either Aetna Life Insurance Company or Owens-Corning Fiberglas Corporation which could have been impaired by the operation of R.C. 1339.63. Because Schilling had reserved the right to change the beneficiary of the policy, his ex-wife was not a third-party beneficiary to the insurance contract; she never had a vested interest in the insurance proceeds. See Katz v. Ohio Natl. Bank (1934), 127 Ohio St. 531, 191 N.E. 782, paragraph one of the syllabus; 4 Couch on Insurance 2d (1984), Section 27:59.
Section 28, Article II of the Ohio Constitution forbids the impairment of contract — not the impairment of expectancy. The former Mrs. Schilling did not suffer a constitutionally cognizable injury; she does not have standing to complain that her “right to contract” was impaired. Rather than dwell on this issue *174further, I refer the reader to Justice Sweeney’s analysis of this particular problem in his dissent, with which I concur.
I cannot fathom why the majority falls all over itself to protect Schilling’s ex-wife, who divorced him seventeen years ago, instead of showing some concern for his widow and the decedent’s teenage child. Finally, I must say that the majority’s holding and the rationale for its holding turn much of the law dealing with life insurance on its head.
Accordingly, I respectfully dissent.

. Norman v Baltimore & Ohio RR. Co. (1935), 294 U.S. 240, 55 S.Ct. 407, 79 L.Ed. 885; Perry v. United States (1935), 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912; Nortz v. United States (1935), 294 U.S. 317, 55 S.Ct. 428, 79 L.Ed. 907.