An annotated list of federal cases important to the study of the history of American business.
Limited the extent to which the federal government could protect the rights of workers.
Struck down a minimum-wage law in a prime example of the Court’s commitment to the freedom of contract doctrine and laissez-faire principles.
Eighth Circuit Court of Appeals case dealing with whether public employees had a right to join a labor union. The court held that they did and that employees could not be fired for joining a labor union.
Used the freedom of contract doctrine to overturn a state law as unconstitutional.
Held that federal law, if it set up only a general standard of gross negligence, did not eliminate state laws that set a higher standard but only those laws with a lower standard. Federal common law was held to not apply in this case because Congress found it inapplicable when setting up the law and federal interests must be threatened before state laws are trumped in the absence of specific federal law.
Held that a bank was not responsible when an official in another bank used normal banking practices to steal, an act that would not have been detected without extraordinary monitoring efforts.
Held that companies cannot use sex-based qualifications in a workplace to protect a fetus unless those qualifications are part of a bona fide occupational requirement. Mere possible protection of the fetus is not enough.
Held that Congress could not use its taxing power to impose regulations on production, which were powers reserved to the states by the Tenth Amendment.
Dealt with whether a corporation (the Bank of the United States) could sue in federal court under diversity of citizenship jurisdiction. The Court held that a corporation was a citizen for the purpose of diversity jurisdiction, but the location of its citizenship depended on the citizenship of its shareholders.
Held that banks were to be able to sell insurance despite a local law prohibiting banks from doing so. A federal law had specifically allowed banks to sell insurance, and the Court held that this law preempted the state ban.
Held that the federal National Labor Relations Act trumped state law in the area of supervisors. Even though federal law was applied, the company was still allowed to fire the supervisors.
Dealt with the level of supervision needed by a board of directors of a company. It held that directors were responsible for exercising a normal level of care, but that directors did not ensure the performance of those below them. It also held that unforeseeable risks and dangers that directors had no chance to see because of circumstances were not the fault of the directors.
Dealt with the exact meaning of the Fifth Amendment’s takings (eminent domain) clause. The Court held that private property could be taken for a public purpose, not just for public use, under the takings clause of the Fifth Amendment.
Held that courts could issue injunctions against sit-down strikes, despite federal anti-injunction laws.
Overturned a 1935 coal act that set up local boards to regulate coal prices and to help workers negotiate wages and hours. The Court held that only the states had the right to regulate coal mining.
Upheld a federal statute that prohibited the transportation of lottery tickets in interstate commerce, thereby defining commerce broadly and authorizing the development of a federal police power.
Held that only clear and explicit terms of contracts were legally binding. The Court’s narrow interpretation of the charter granted to the Charles River Bridge Company increased the power of state legislatures to regulate private corporations.
Held that the due process clause of the Fourteenth Amendment applied to the states and that, therefore, a state needed to compensate a railroad adequately when it seized the railroad’s assets.
Held that the courts had the power to review utility rates and incorporated part of the due process clause of the Fourteenth Amendment and applied it to the states.
Held that a city could not ban all yard and window signs, as this would violate the First Amendment.
Held that states could tax deposits in banks and that this taxation did not violate federal law, which prohibited discrimination against interstate banks. The ruling also stipulated that banks could also be ordered or allowed to collect the taxes.
Held that a state tax on the use of safety deposit boxes was allowable and that the banks could collect the taxes.
Held that when the federal government is a party to a commercial transaction, it incurs all the responsibilities of a private person in the same circumstances.
Held that the terms of a will need to be carefully followed and that failure to act within the time limits specified by the will makes the actions improper.
In a ruling deciding that a state charter of a private institution was protected by the contracts clause of the U.S. Constitution, the Court enhanced protection of corporate property and contracts in general.
Held that federal law trumped state law when a bank became insolvent, thereby changing how banks were regulated.
Dealt with government contracts that were canceled on the eve of World War I. It held that the government must pay the value of the contract, not the value plus whatever profit was to be made. Eminent domain allowed the government to cancel the contracts.
Held that the government may not attach conditions to building permits that result in the taking of private property without just compensation, in violation of the Fifth Amendment.
Held that injunctions against organized labor were still allowed, in spite of clear language seeming to say the opposite in the Clayton Act of 1914. The Court held that “illegal” activities on the part of the union removed it from the protection of the Clayton Act.
Held that federal courts cannot create a common law, or judge-made law, when dealing with diversity cases (in which the parties are from different states). Thus, in cases that arise under state law and are argued in federal court because the plaintiffs are of two different states, the court follows the law of the state that has jurisdiction rather than a law created by the federal court.
Held that state laws about interest, but not those about usury, could still apply to banks chartered nationally. Thus, federal law did not wholly exempt banks from state laws.
Held that the published regulations were binding, regardless of whether the insurance agent was verbally informed of conditions violating those regulations. In short, if the agent exceeded the authority granted in making a contract, the government did not have to honor it.
Held that the Federal Deposit Insurance Corporation could be sued and was not covered by sovereign immunity. However, actions could not be implied, especially when suits for direct actions are available.
Held that state laws cannot tax shares of national banks at a higher rate than the rate at which they tax local bank shares. The purpose of the legislation in question was held to be irrelevant.
Upheld a policy of preventing one bank from loaning its shares to another bank. This policy was put in place by the National Banking Act and helped banks be solvent.
Held that nationally chartered banks were still subject to state banking laws, as long as those laws did not conflict with specific federal laws. Specifically, it held that controls on branches were valid state laws.
Held that banks were generally not allowed to buy and sell stocks, but they could buy stocks in a general commercial transaction in the hope of reselling them and losing less than they would have earlier in the transaction.
Held that state law governing how and when bank branches could be established is also binding on nationally chartered banks. In this area, state-chartered and federally chartered banks were judged to be equal.
Enhanced protection for businesses from legislative interference for vested rights in private property through a broad interpretation of the contracts clause. Also held a state law to be unconstitutional.
Held that regulations banning banks from using the term “savings” in their name were unconstitutional. The decision stated that as savings was a part of banking business, banks could use that term in their names and advertising.
Using the commerce clause, removed almost all limitations on Congress’s power to regulate the states and held that the Fair Labor Standards Act could be imposed on municipalities.
Supported the federal license of a steamboat operator over a state monopoly license holder, thus expanding federal control through the commerce clause.
Upheld the right of Congress to set monetary policy even if it appeared that contracts calling for payment in gold would be negated by devalued money repayment.
Interpreted Title VII of the 1964 Civil Rights Act to mean that if employment practices and tests have an adverse effect on minorities or women, employers are required to show that the tests and practices are necessary for the job.
Held that the state could, by virtue of its police power, declare something to be a nuisance and could ban a business previously held to be acceptable. It also held that the state could ban a business in one part of the city and not another and not run afoul of the equal protection clause of the Fourteenth Amendment.
Struck down an ordinance that prohibited meeting without a permit and distributing literature. That ordinance had been used against the Congress of Industrial Organizations, an umbrella labor organization. The individual members’ rights, including freedom of speech and assembly, not those of the organization, were held to have been violated.
While striking down federal restrictions on child labor, held that Congress could regulate only interstate commerce, not the manufacturing of goods destined for such commerce.
Dealt with when a court could issue a stay and when it could recall that stay of its original order. The ruling gives relatively broad authority, particularly when that authority maintains the status quo during an appeal.
Dealt with the 1964 Civil Rights Act, which declared that there should be equal accommodations in motels, restaurants, and other public places regardless of race and which also barred discrimination on the basis of race in employment. The Court upheld the public accommodations sections of the 1964 act and enjoined an Atlanta motel from refusing to serve African Americans.
Affirmed the constitutionality of the Social Security Act of 1935, adding a tax for business to pay.
Held that illegal immigrants are not entitled to the protections of the National Labor Relations Board. Companies can still be penalized for the National Labor Relations Board violations, but the undocumented workers cannot be awarded back pay or any other benefits.
Recognized that a state, under its police power, could place some restrictions on freedom of contract.
Dealt with a Great Depression-era law that increased the amount of time a person had to repay a loan. The companies argued that this law impaired a contract, which states are not allowed to do, but the Court held that this was allowable as states need to protect the people and the general welfare, rather than businesses.
Struck down a North Carolina law requiring the use of only national apple grades, rather than also allowing state apple grades that exceed the national standards. This move gave local growers advantages and gained the consumer little, and so was struck down by the court as discriminatory.
Dealt with an injunction issued against Eugene V. Debs, leader of the American Railway Union, who led a strike against the Pullman Palace Car Company. The injunction ordered Debs to cease the strike, and when he refused, he was imprisoned. The Court upheld the injunction, issued theoretically because the U.S. mail was on the same trains as the Pullman cars that Debs’s union refused to handle.
Upheld a law banning a bank from being involved in the investment fund industry, even though the involvement had been approved by a government official.
Dealt with the legal force of a public proclamation and held that courts had to listen to the proclamations of the president as well as pay attention to the acts signed. This increased regulations, or possible regulations, over corporations.
Held that Native Americans could sell their land to only the federal government and that Native Americans did not have traditional ownership rights to the land, as they did not view land rights in the same way as Europeans did.
Upheld a county’s adoption of a sex-based affirmative action program to remedy past policies that had resulted in the concentration of women in lower-paying jobs. No quotas were used, but sex was taken into account when two applicants ranked close to each other applied for the same job.
Upheld regulations ordering an end to racial discrimination in restaurants. Although the restaurant involved was small and privately owned, it served interstate travelers and obtained foodstuffs out of state. Therefore, the Court held that the commerce clause prohibited the restaurant from discriminating against minorities.
Held that a state could take private land through the eminent domain power, even where that land was taken for a private company’s use, as long as the private development benefited the general public and as long as the state had not specifically banned such a seizing.
Held that a regulation limiting coal mining and forcing coal mines to leave a certain amount of coal under a structure was legal. The Court held that the regulation did not destroy the mineral value of the land and so was not a taking (use of eminent domain), which would have been illegal without compensation under the Fifth Amendment.
Created a distinction between manufacturing and commerce that survived many years but was later invalidated.
Held that courts were allowed to issue injunctions against unfair unions and employers, but they must limit those injunctions to only illegal activities and must first make findings of fact.
Clearly established the right of the U.S. government to pay its debts in paper money.
Held that the federal government, not the states, had the right to regulate alcohol placed into interstate commerce and that an individual state could not ban the sale of alcohol in one state when the item was manufactured in another. This ruling was made moot by the passage of the Eighteenth Amendment.
Held that a law banning all out-of-state chartered banks from owning investment companies and another law allowing local banks to own investment companies were not legal, as they served to burden interstate commerce, which is unconstitutional.
Held that an ordinance banning “for sale” signs within a town was unconstitutional as it was a content-related ban, which is generally prohibited, and that even though it affected commercial speech, commercial speech still had some First Amendment rights.
Most famous case in which the Court used the doctrine of substantive due process to overturn a statute regulating labor conditions.
Also known as Danbury Hatters’ case, held that a boycott against a manufacturer of hats, initiated in an attempt to force unionization, was an illegal restraint of trade.
Held that when land is permanently occupied by the government, it is a taking (under eminent domain), regardless of the importance of the function achieved.
Held that when land-use and environmental regulations deprive property owners of the total value of their land, the owners have a takings clause claim unless the use is harmful or noxious.
Established that the federal tax power could be used to regulate commerce.
Ruled that Maryland could not tax the Bank of the United States and established the basic outlines of the relationship between the federal government and the states.
Narrow interpretation of the Constitution’s commerce clause allowing a local regulation that affected commerce because it served a worthwhile local need that could not be served any other way.
Ruled that corporations were liable for the actions of their employees, even if the actions were not specifically authorized, when the actions taken were fairly similar to normal and authorized actions taken in the past. This ruling gave banks the power to certify checks.
By deciding that sexual harassment is a form of gender discrimination, cleared the way for employees, usually women, to sue employers for sexual harassment under Title VII of the 1964 Civil Rights Act.
Ruled that the owner of a brokerage, absent a showing of responsibility or error, is not liable for the actions of one of the brokerage’s employees. However, if that employee can be shown to have violated the Fair Housing Act, that broker would be liable and the brokerage itself might be liable.
These two cases, decided the same day, were ruled on quite differently because of their notable differences. In the first case, acts of violence accompanied the picketing by milk wagon drivers, and the Court ruled that state courts could issue injunctions to stop picketing when violence occurs. In the case involving the American Federation of Labor, no violence occurred, and a picket line had been established, even though there was not a strike (or a union) at the affected company, and the Court disallowed the injunction against this strike.
Held that national banks were not allowed to act as holders of land, but that they could perform usual and necessary acts in order to collect on debts.
Ruled that the Interstate Commerce Commission could regulate intrastate railroad rates that discriminated against interstate rates.
Unpopular decision that overturned 1930’s minimum-wage legislation.
Used a broad interpretation of the commerce clause to uphold the constitutionality of the Agricultural Adjustment Act of 1938.
Held that states were allowed to tax national banks and to collect the tax from the bank rather than individual shareholders as long as the tax imposed was not higher than it would be on a state bank similarly chartered.
This decision by the Third Circuit Court of Appeals held that unions cannot picket companies where union elections either have not been held or are not scheduled to be held.
Held that the sit-down strike was generally not supported by the National Labor Relations Act and therefore was illegal.
In upholding the National Labor Relations Act, departed from its precedents of prohibiting governmental interference with freedom of contract and also allowed the government the right to regulate business elements, including manufacturing and some employment conditions.
Held that professors at a private university are managerial employees and so are not eligible for unionization under the National Labor Relations Act.
Resurrected and expanded the concept of state sovereignty under the Tenth Amendment when it held that Congress had no authority to require state and local governments to pay their workers minimum wages.
Held that banks were able to sell life insurance annuities, increasing the range of services banks can perform (a move opposed by life insurance companies).
Reversing several Court precedents, held that the Fourteenth Amendment did not prohibit the states from regulating most aspects of any business open to the public.
Held that a city must prove that the general health and safety of an area was promoted by a zoning change to have that change become effective. In other words, it held that cities must prove an advantage from proposed zoning rather than just enacting it.
Expanded a property owner’s rights in eminent domain cases by requiring that the state show a substantial connection between the harm asserted by the state and its regulation. It held that the state cannot force a landowner to lose rights without compensation in the absence of that substantial connection.
Held that a state may partially lift a ban on out-of-state bank holding companies acquiring branches in the home state without totally lifting the ban.
Found that a large holding company was an unlawful combination within the meaning of the Sherman Antitrust Act of 1890.
Established bankruptcy as an area in which both states and the federal government can exercise jurisdiction. Also held that the states could act within their own borders in areas in which the federal government has not acted but cannot act in ways affecting citizens of other states.
Continuation of the case of McCulloch v. Maryland upholding the right of the United States to establish a bank. General legal procedures and suits were allowed with an eye toward enabling the bank to stay operational. States were again held not to be able to tax the Bank of the United States.
Held that the method by which savings depositors were repaid was not the controlling fact determining whether an enterprise was a bank, but rather whether the bank aimed to make a profit and pay that money to its shareholders.
Held that even if a regulation has somewhat decreased the value of land held, it is not a total taking if the parcel still has significant value and that allegations that different parts of a parcel should be considered separately must be made early in the proceeding.
Established several important principles governing the takings (eminent domain) impact of regulations. It generally ruled in favor of city regulations, limiting what would be considered a taking.
Held that a state cannot ban coal mining without that ban being a taking (an exercise of the government’s right of eminent domain), if the ban on coal mining removes significant value of the land.
Held that a state ban on tractor-trailers longer than a certain length constituted a restriction on interstate commerce and that there was no proof that these regulations helped safety. For these two reasons, it overturned the law.
Ruled that corporations were “persons” within the meaning of the Fourteenth Amendment. This allowed corporations to sue and seek protections.
One of three Supreme Court cases voiding vague delegations of power to executive branch agencies, this decision ruled against the constitutionality of the National Industrial Recovery Act of 1933.
Ruled that because the law permits banks to buy closely related companies, a bank is allowed to acquire a securities company when that company is limited to buying and selling of securities. Buying and selling of securities was held to be closely related, while the offering of investment advice in securities was judged not to be as related.
Held that private covenants placed into deeds could not be enforced if those covenants were racially discriminatory. If the court enforced one of these provisions, it would create discrimination, and the court’s action would be “state action,” which is banned under the Fourteenth Amendment.
Railroad cases that strengthened the powers of the Interstate Commerce Commission.@LAW =Slaughterhouse Cases
Upholding a lower court’s decree to break up the Standard Oil Company, this ruling concluded that the Sherman Antitrust Act of 1890 forbade only unreasonable combinations or agreements in restraint of trade.
Held that a union agreement that did not represent some workers because of their race could not be enforced because the federal act allowing such contracts required that all people under them be treated without discrimination.
A government lottery was allowed to operate one year and then outlawed the next. Those running the lottery claimed that the revocation was illegal as it violated the charter they had been granted, which allowed the lottery. This ruling held that states could revoke previous acts and charters by their own legislatures as long as that revocation was based on the police power to protect the public’s health, welfare, and morals.
Held that the National Labor Relations Act applied to illegal aliens as well and that they could not be targeted for union activities, regardless of their immigration status. This limited the power of businesses to discharge workers for union activities. However, how much back pay they might receive was affected.
Held that federal courts could independently judge principles of general commercial law, even if their decisions were inconsistent with those of state courts. Under the ruling, a bill of exchange between parties from different states that could have been voided by a state court was held to be valid and payable under the rules of interstate commerce.
Adopted the stream of commerce doctrine and held that antitrust laws could be constitutionally applied to stockyard transactions.
Ruled that conduct that is sexual harassment does not have to rise to the level of creating serious damage to a psyche in order for a person to sue under Title VII. Instead, all a person has to do is prove a hostile or abusive work environment.
Overturned a labor leader’s conviction for peaceful picketing. The Court also declared the underlying statute to be invalid. The statute in question dealt only with picketing against companies and was held to interfere with the freedom of speech.
Held that when state banks were limited to a certain rate of interest, but people in general were allowed to charge more, national banks were allowed to charge more than the state banks.
Held that all people affected by racial discrimination in housing can sue, not just those who are denied housing by the discrimination but also those who are already in the housing area and lose the benefits of racial diversity.
Struck down a state law protecting strikers against injunctions.
Struck down the regulatory features of the Agricultural Adjustment Act of 1933 as inconsistent with the Tenth Amendment, but it also interpreted the general welfare clause as giving Congress the power to spend public money for public purposes.
Using a broad interpretation of the commerce clause, upheld a federal law mandating minimum wages and maximum hours for employees producing goods for interstate commerce.
Ruling about the constitutionality of a federal revenue act that made it illegal to sell a certain type of illuminating oil that held control over the possession and sale of any item within the states is not a power held by Congress.
First Supreme Court ruling on the Sherman Antitrust Act of 1890; it found the framers of the act had not intended it to apply to manufacturing processes.
Held that the government may not pass laws regulating things not directly affecting interstate commerce. It was the first ruling in nearly sixty years that limited Congress’s interstate commerce power.
Upheld a plan by the Alabama Department of Public Safety to reserve half of the appointments for African Americans because the Alabama Department of Public Safety in the past had systematically excluded African Americans from the department and had not, in spite of hiring African Americans for several years, promoted a significant number of them to higher positions.
Dealt with the merger of two banks, holding that the relevant geographical area to be considered when looking at the merger’s effect on competitiveness was the local area in which the banks operated. It also held that the type of banking (in this case, commercial rather than savings) conducted by the banks needed to be considered.
Held that an apartment’s practice of holding certain apartments for one race and other apartments for another was discriminatory as it violated the Fourteenth Amendment.
Case involving miners being ordered back to work after the president seized the coal mines that held the 1932 Norris-LaGuardia Act, which prohibited the federal courts from issuing injunctions, did not apply when the government was in effect the employer.
Upheld a state law breaking part of a public bond contract and held that such breaking of contracts is allowed when the breaking serves a “an important public purpose.” Thus, contracts are allowed to be broken under some circumstances.
Held that it was okay for a company to use race as a factor in selecting trainees for a program in order to reverse past discrimination.
Held that a tax of a certain percentage on banks’ notes was not a direct tax on a state agency, although Veazie Bank was chartered by Maine. This ruling upheld Congress’s right to tax bank notes issued by a state-chartered bank.
Ruled that an ordinance defining what a family was in order to set limits on single-family housing was constitutional as it did not discriminate against any group protected under federal law.
Upheld a zoning ordinance, holding that the ordinance was not arbitrary, but was reasonable and did not destroy value, and thus was constitutional. This allowed zoning practices to continue.
Struck down a state law regulating railroad pricing policies, encouraging Congress to enact national standards. This decision brought about the creation of the Interstate Commerce Commission and increased regulation of railroad corporations.
Held that regulations on noise could be adopted as long as they were aimed at the time, place, and manner of the noise and were neutral as to content.
Allowed states great discretion in regulating working conditions and protecting the rights of workers in a decision in which the Court abandoned its longstanding freedom of contract doctrine.
Broadened the definition of interstate commerce to justify regulations established to support New Deal legislation.
Taking a broad view of economic freedom, placed the majority of businesses outside the reach of state regulations.
Awarded federal courts general jurisdiction over a case dealing with a national bank, its liabilities, and its stockholders.
Disallowed the president’s right to invoke emergency powers to seize and operate private businesses without prior congressional approval.