The Great Yazoo Lands Sale: The Case of Fletcher v. Peck by Charles F. Hobson (review)

Hobson tells us that his decision to write about Fletcher v. Peck (1810) reflects its “landmark status as the first case to expound the contract clause and as the first application of judicial review to a state law” (xii). He is correct on both counts. The Georgia legislature’s 1795 sale of its western lands to four private land companies initially seemed unremarkable. Georgia had significant financial problems, and the sales secured needed revenue. Land speculation, in turn, was rampant and opportunities for investment and profit fit nicely within the entrepreneurial spirit of a rapidly developing nation. But after pervasive corruption was uncovered, the state passed a measure in 1796 to rescind the sales, memorialized by “a public burning of the notorious act and accompanying records,” a graphic and “singular act of purgation” (54).

The individuals who purchased the land in good faith were neither impressed nor amused. They initiated a series of legal actions culminating in Fletcher, in which the Court applied Article I, § 10, cl.1, which declared that “No State shall . . . pass any . . . law impairing the obligation of contracts,” thus rendering the rescinding act null and void. Hobson draws from his deep knowledge of the period to provide a detailed and highly readable account of the individuals, events, and contexts within which these disputes unfolded. In particular, he places the Supreme Court and Chief Justice John Marshall, its leader, at the heart of a process through which the Court assumed its rightful place at the constitutional table. As Hobson notes, Marshall arrived at the Court only in the wake of John Jay’s refusal to undertake a second stint as its Chief. Hobson does not acknowledge Jay’s condemnation of the Court as an institution that lacked “the public confidence and respect . . . it should possess,” but he does correctly identify Fletcher and the contract clause as major elements in the Marshall Court’s quest to “protect . . . the people from the acts of their state governments” and “become the means by which the Constitution could operate effectively as a ‘bill of rights for the people of each state’” (178).

Hobson is also right when he describes the diminishing importance of the contract clause over time, especially evident in a decision that he notes but does not name, Home Building & Loan Association v. Blaisdell (1934) (198). His history is accurate and articulate. It is also potentially misleading. The due-process clause of the Fourteenth Amendment, for example, may have provided a potentially important weapon against local abuses (198), though today it lacks the power of a robust contract clause, given the Court’s use of “rational basis review” to assess such claims (a standard that sustains virtually all economic and social legislation if the enacting body has a “reason” for its actions, no matter how implausible or silly that “rational” basis might be). Another factor in the diminished role of the contract clause that Hobson does not mention came in the wake of Cooley v. Board of Wardens of the Port of Philadelphia (1852)—the emergence of the “dormant” or “negative implications” of the commerce clause, which can be invoked as a limit on state authority when state actions discriminate against, or unduly burden, interstate commerce.

The notion that the Commerce Clause can be used in this manner has its critics—the late Justice Antonin Scalia and Justice Clarence Thomas, his fellow “originalist,” among them. They believe that the Constitution must be given the meaning and effect intended by the individuals who wrote or ratified, a notion that is especially telling for the contract clause. The departure from what Marshall described as the “great principle, that contracts should be inviolable” came in Blaisdell. Writing for the Court, Chief Justice Charles Evans Hughes took a lenient view, believing that the framers could not have intended to deny states the ability to deal with unanticipated, severe problems (“emergencies”) by placing...