New State Ice Co. v. Liebmann

New State Ice Co. v. Liebmann, 285 U.S. 262 (1932), argued 19 Feb. 1932, decided 21 Mar. 1932 by vote of 6 to 2; Sutherland for the Court, Brandeis in dissent; Cardozo not participating. In New State Ice the Supreme Court demonstrated its commitment to the protection of entrepreneurial liberty under the Due Process Clause of the Fourteenth Amendment. At issue was a 1925 Oklahoma statute that declared that the manufacture and sale of ice was a public business and forbade the grant of new licenses to sell ice except upon a showing of a necessity for ice in the desired community. The practical effect of the regulation was to shut out new enterprises and thus confer a monopoly on the existing businesses. Under this statute New State Ice Company brought suit to enjoin Liebmann from selling ice in Oklahoma City without a license.

Concluding that the Oklahoma law unreasonably curtailed the common right to engage in a lawful business, Justice George Sutherland held that the license requirement violated the Due Process Clause. Sutherland insisted that a state legislature could not impose economic regulations simply by declaring that a line of ordinary business was affected with a public use. In a lengthy dissenting opinion, Justice Louis D. Brandeis argued that the need to eliminate destructive competition was primarily a matter for legislative determination. He maintained that federal and state governments must have the power “to remould, through experimentation, our economic practices and institutions to meet changing social and economic needs” (p. 311).

Although New State Ice has never been overruled, it has been effectively superseded by decisions that recognize broad legislative authority to regulate business enterprise. Some scholars, however, have defended New State Ice on grounds that the Oklahoma statute was classic special interest legislation designed to burden consumers in order to benefit established ice companies.

See also Due Process, Substantive.

Bibliography

Michael J. Phillips , The Lochner Court, Myth and Reality: Substantive Due Process from the 1890s to the 1930s (2001).

James W. Ely, Jr.