Interesting Supreme Court case from the Lochner era (1917). Warley’s black and Buchanan’s white. Buchanan sold Warley property to build a house on in Louisville. Warley declined to pay on the grounds (i) that a Louisville ordinance forbade black people from living in the neighborhood and (ii) that a clause in his contract asserted that “I shall not be required to accept a deed to the above property or to pay for said property unless I have the right under the laws of the State of Kentucky and the City of Louisville to occupy said property as a residence.”
Buchanan sued for specific performance, arguing that the Louisville ordinance did not trigger the escape clause because it was contrary to the Fourteenth Amendment. Warley argued that Buchanan didn’t have standing to raise the Fourteenth Amendment (because he was white and the ordinance as applied to the case at bar didn’t disadvantage him), and, anyway, that the ordinance passed constitutional muster.
The Court held that Buchanan had standing because his economic liberty was infringed (his “right to sell his property was directly involved and necessarily impaired because it was held in effect that he could not sell the lot to a person of color who was willing and ready to acquire the property”). The Cout further held that the Louisville ordinance ran contrary to the Fourteenth Amendment’s protection of “life, liberty, and property from invasion by the States without due process of law.” It concluded:
We think this attempt [in the Louisville ordinance] to prevent the alienation of the property in question to a person of color was not a legitimate exercise of the police power of the State, and is in direct violation of the fundamental law enacted in the Fourteenth Amendment of the Constitution preventing state interference with property rights except by due process of law. That being the case the ordinance cannot stand.
The Court’s reasoning is (perhaps admirably) evasive. It acknowledges, what the jurisprudence of the time recognized, that there is a “public welfare” exception to the Fourteenth Amendment’s protection of economic liberty. (“The authority of the State to pass laws in the exercise of the police power, having for their object the promotion of the public health, safety and welfare is very broad as has been affirmed in numerous and recent decisions of this court.”) But it does not squarely address the arguments (made by a black person!) that the Louisville ordinance fell within the exception because it “prohibit[s] the amalgamation of the races,” and “promote[s] the public peace by preventing race conflicts.” The former it waives away irritably; the latter it addresses question-beggingly: “Desirable as this is, and important as is the preservation of the public peace, this aim cannot be accomplished by laws or ordinances which deny rights created or protected by the Federal Constitution.” (Thus is a “public safety” / “public peace” distinction drawn!)
Not just a quirky trip down memory lane, the pedagogical point, as Jedediah Purdy puts it, is that “freedom-of-contract principles espoused by the Lochner-era Court protect a genuine freedom,” or, at least, can be so used. If Lochner’s demise is good, it’s not because Lochner stood monolithically for the Bad Old Days.