A LA law required foreign insurance companies doing business in the state of LA to have an agent in the state.
Procedural History:
SCOTUS held unconstitutional.
Issues:
May a state pass legislation which restricts its constituents' freedom of contract?
Holding/Rule:
Legislation which restricts freedom of contract violates the Due Process Clause of the 14th Amendment.
Reasoning:
This statute is a violation of the 14th Amendment in that it deprives constituents of their liberty without due process of the law.
The liberty mentioned in that amendment means, not only the right of the citizen to be free from the mere physical restraint of his person, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties.
To be free to use them in all lawful ways.
To live and work where he will.
To earn his livelihood by any lawful calling.
And for that purpose to enter into all contracts which may be proper, necessary, and essential to his carrying out to a successful conclusion the purposes mentioned above.
This does not interfere in any way with the acknowledged right of the state to enact such legislation in the legitimate exercise of its police or other powers as to it may seem proper.
In the exercise of this power, however, care must be taken not to infringe upon those other rights of the citizen which are protected by the federal constitution.
Dissent:
None.
Notes:
First time the Court articulated economic substantive due process.
