Substantive Law Study Support

Questions for Review and Answers

1. Which provisions of the Constitution protect property rights and economic interests? Briefly describe the protections granted by each provision. Property rights and economic interests are protected by the Fifth and Fourteenth Amendments. The Due Process Clauses in these amendments prevent government
from taking property without Due Process; the Fifth Amendment Takings Clause also applies, requiring that just compensation be paid for taking any private property; Article 1 §10 protects contracts by prohibiting states from passing any law impairing the obligation of contracts.

2. How does substantive due process protect property interests?

States must have a legitimate state interest in enacting laws that take away property, and laws must not be arbitrary.

3. How has the Supreme Court used the Due Process Clause to strike down labor laws and business regulations?
At one time, the Court stated that such laws violated liberty of contract under the Fifth and Fourteenth Amendments. Today, it upholds such laws as lawful exercises of state power.

4. Compare and contrast the taking of property through the power of eminent domain with regulatory taking of property.
Eminent domain involves the physical taking of property that will then be used for some public use (road, park, etc.). Regulatory taking results from laws such as zoning or landmark ordinances. It does not involve a physical taking but interferes with the owner’s free use of property.

5. What factors or criteria does the Supreme Court use to determine if a law or regulation results in a taking for Fifth Amendment purposes?
The Court considers the character of the governmental action, the economic impact, and the interference with reasonable investment-backed expectations.

6. What are some examples of laws or regulations that resulted in a taking for Fifth Amendment purposes?
Unless there is a physical taking, the Court requires a complete loss of use of the property before it results in a taking. In one case, a total ban on building resulted in a taking.

7. What is the difference between a taking and a forfeiture?

Taking is for a public purpose and does not involve a wrong done by the property owner. Forfeiture is a penalty for the commission of some offense; although not necessarily by the property owner. It could be someone simply in lawful possession of the property. No compensation is required for forfeiture.

8. What types of law come under the provisions of the Contract Clause?

Legislative acts come under the provisions of the Contract Clause, not case law.

9. What is meant by the obligation of contracts?

Obligation of contract means the duty to perform.

10. How does state police power affect the Contract Clause?

The Contract Clause is not an absolute prohibition on laws that impair obligations of contract. With the proper use of state police powers, states can enact laws that impair contractual obligations. The state needs a legitimate interest in order to use state police powers.