9.1.6 Rocky Mountains (1850-1900): Beginnings of the Regulatory State


The beginnings of the regulatory state:
  •  American states imposed few restrictions on businesses before the Civil War.  Food and product safety laws, workplace safety laws, limits on predatory business practices – all were unknown.  But the first glimmers of what would become the modern regulatory state arose shortly after the war.  
  • After the war ended, railroads rapidly extended their lines through the Rocky Mountain region.  In many parts of the region settlement followed the railroad, and the new settlers regarded the railroads with a mixture of gratitude for their work and fear that they would control the new territories as their own fiefdoms.  At the same time, railroads throughout the United States began merging into powerful regional and national rail systems.  Many shippers and passengers complained about high and often discriminatory charges.  By the early 1870s, the outcry was loud enough that legislatures in several Midwestern and Great Plains states enacted “Granger laws” creating railroad regulatory commissions.  The commissions’ powers varied:  some were authorized to limit freight and passenger rates, others were merely allowed to collect statistics and report to the legislature.  Midwestern state courts upheld the laws and in Munn v. Illinois (1876) and a series of related “Granger Cases,” the U.S. Supreme Court upheld states’ power to regulate railroads and other enterprises public in nature.   Many of the Rocky Mountain states incorporated Granger provisions in their constitutions and statutes from the beginning.

The rise of substantive due process:

  • The Granger Cases also opened the door to an ever-expanding body of laws and agencies designed to address the many problems that followed in the wake of industrialization.  After 1875, many state legislatures began to enact pure-food and public health laws; laws regulating physicians, pharmacists and other professions; laws for conservation of fish, game and soil; and laws regulating labor-management relations, unfair business practices and workplace safety. 
  • Many Rocky Mountain farmers and miners were vulnerable to natural forces – drought, hail, locusts – and market forces largely outside their control, and when those forces destroyed crops or drove prices ruinously low, they pushed their lawmakers to enact solutions, even if that meant trying radical and untested reforms.  The Populist movement gained control of governorships and legislatures in some Rocky Mountain states during the 1890s, but holdover conservative opponents prevented Populists from enacting many of the reforms they advocated.  Nevertheless the stream of laws grew steadily, reaching its peak during the Progressive era (1900-1925), any many Progressive reforms were enshrined in the new Rocky Mountain states’ constitutions.
  • Mining companies and other Rocky Mountain businesses frequently challenged such laws as unconstitutional.  They usually argued that the laws violated one or more of the following legal doctrines, collectively known as “substantive due process”: 
  • Due process and freedom of contract, because the laws deprived them of their property and contract rights to conduct their business and make bargains with others on terms of their own choosing.
  • Equal protection, because the laws unfairly singled out their businesses for regulation and thus discriminated against them.
  • The delegation doctrine:  only legislatures could create regulations, and they could not let agencies do the job for them. 
  • In the 1890s, the U.S. Supreme Court and many American state courts began examining regulatory laws critically.  The courts upheld most laws but struck down enough that reformers complained they were improperly interfering with necessary social change.  Some reformers even argued that courts should not be allowed to examine reform laws at all.  The debate was active in the Rocky Mountain states. 
 
 

Early battles:  worker safety and hours laws

Holden v. Hardy – Utah, 1896 (46 P. 756), affirmed, 169 U.S. 366 (1898); In re Morgan – Colorado, 1899 (58 P. 1071)

  • Utah lawmakers were unusually sympathetic to workers’ concerns, perhaps partly because of Mormons’ communitarian sensibilities and their experiences with Eastern hostility.  The state’s 1896 constitution enacted an eight-hour day for all government projects and required the legislature to enact mining health and safety laws.  The new state’s first legislature went a step further by extending the 8-hour day to miners; the law was promptly challenged as an infringement of mine owners’ freedom to contract. 
  • In Holden, Utah’s supreme court had no difficulty upholding the 1898 law as a legitimate exercise of the state’s police power to promote health and safety, and it criticized decisions in other states striking down hours laws (see § ___).  The court took pains to describe the dangers of working in the mines and explaining how proper rest would help miners avoid such dangers.  The court’s extra effort paid off:  the U.S. Supreme Court agreed, even at a time when it frequently held that concerns for freedom of contract outweighed safety concerns, that the balance in Holden tipped the other way.  Holden had enduring importance beyond the mines:  it provided an opening for other courts to uphold the constitutionality of hours laws and safety laws in other types of workplaces.
  • Not all states agreed with Utah.  In Morgan, decided the year after the Supreme Court decided Holden, Colorado’s supreme court stoutly defended the sanctity of freedom of contract against hours laws, and indicated it had trouble seeing how any workplace regulation could be constitutional.  The Colorado court did not directly attack Holden but suggested that case was a product of “loose reasoning.”  Just as Holden became a beacon for legal progressives, Morgan became a beacon for legal conservatives.    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
 
The effort necessary to successful mining … [w]hen so extended beneath the surface, in atmosphere laden with gas, and sometimes with smoke, away from the sunlight … might injuriously affect the health of such persons. … We cannot say that this law … is not calculated to promote health.”  Broad EP view:  “It is not necessary to extend the protection to persons engaged in other pursuits not attended with similar dangers.  To them the law would be inappropriate and idle.”  - Justice _, in Holden

 

“The business of operating smelters and working underground mines is purely a private business.  It is not affected with a public interest, or devoted to a public use. … [T]his act is an unwarrantable interference with, and infringes, the right of both the employer and employee in making contracts relating to a purely private business, in which no possible injury to the public can result.”  - Justice _, in Morgan
 
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