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INTERNAL PROTOTYPE — NOT LEGAL ADVICE — DO NOT SEND

Troy Ltd. v. Renna, 727 F.2d 287 (1984)

Citation
Troy Ltd. v. Renna, 727 F.2d 287 (1984)
Parent Document
Troy Ltd. v. Renna, 727 F.2d 287 (1984)
Effective Date
1984-01-30

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In contrast, laws alleged to impair the obligations of contracts between private parties were for many years scrutinized far more rigorously. These cases arose principally out of state efforts to provide relief for impecunious debtors. The Court consistently held that any state law retroactively modifying the obligations of debtors violated article I, section 10. See, e.g., Ogden v. Saunders, 25 U.S. (12 Wheat.) 212, 261-70, 6 L.Ed. 606 (1827) (Washington, J.); id. at 295 (Thompson, J.); id. at 326-27 (Trimble, J.); Green v. Biddle, 21 U.S. (8 Wheat.) 1, 84-85, 5 L.Ed. 547 (1823) ("[a]ny deviation from its terms ... however minute, or apparently immaterial ... impairs its obligation"); Sturges v. Crowninshield, 17 U.S. (4 Wheat.) 122, 207, 4 L.Ed. 529 (1819). The Court's doctrine that changes in the law of remedies could amount to an impairment of private contractual obligations placed fairly tight limits on the authority of states to grant relief to debtors by the manipulation of state remedial laws. See, e.g., Green v. Biddle, 21 U.S. (8 Wheat.) at 83-85, 5 L.Ed. 547 (lien on land for value of improvements impairs obligation of contract). In this sense, the Supreme Court treated the impairment of contract clause as the obverse of the grant of congressional authority in article I, section 8 of the Constitution to establish uniform laws on the subject of bankruptcies. U.S. Const. art. I, Sec. 8, cl. 4. Congress could, but the states could not, impair the obligation of undertakings by debtors. See Hanover National Bank v. Moyses, 186 U.S. 181, 188, 22 S.Ct. 857, 860, 46 L.Ed. 1113 (1902) ("The [Bankruptcy] grant to Congress involves the power to impair the obligation of contracts, and this the States were forbidden to do.").