Today in Supreme Court History: January 5, 1931

1/5/1931: O'Gorman & Young, Inc. v. Hartford Fire Insurance Co. decided.

 

Comments

[JoeFromtheBronx]

Dan's summary:

O’Gorman & Young, Inc. v. Hartford Fire Ins. Co., 282 U.S. 251 (decided January 5, 1931): upholding New Jersey statute requiring insurance agents not be paid above prevailing rates, as valid use of police power (“The business of insurance is so far affected with a public interest that the state may regulate the rates”); 5 - 4 decision, with the “Four Horsemen” dissenting (though they weren’t called that yet)

https://www.captcrisis.com/post/today-in-supreme-court-history-january-5-2

He also cites United States v. Di Re (1948) where Justice Jackson ends on this note:

We meet in this case, as in many, the appeal to necessity. It is said that, if such arrests and searches cannot be made, law enforcement will be more difficult and uncertain. But the forefathers, after consulting the lessons of history, designed our Constitution to place obstacles in the way of a too permeating police surveillance, which they seemed to think was a greater danger to a free people than the escape of some criminals from punishment. Taking the law as it has been given to us, this arrest and search were beyond the lawful authority of those who executed them. The conviction based on evidence so obtained cannot stand.

[F.D. Wolf]

“The business of insurance is so far affected with a public interest that the state may regulate the rates”

Yet, the statute in question did not directly regulate insurance rates, but regulated salesmen's commissions. The majority pointed out that the amount of the commission would affect the insurance rates, as higher commissions would lead to higher rates. Perhaps, responded the dissent, but so does every other expense paid by the company, from the price of pencils to employee salaries. Are we next going to let the government regulate those too? ("Yes" would be the Court's answer five years later.)

It's notable that the dissent in O'Gorman was a joint dissent, ascribed not to one justice but to all four. Joint opinions occur for various reasons and are relatively rare. Here, the reason seems to be to make a point, a sort of "Valediction of the Horsemen". They could sense which way the judicial winds were blowing. Soon enough, the government wouldn't have to bother showing an economic regulation was critical to the "public interest" rather than a (theretofore unconstitutional) regulation of an essentially private contract.