Budd v. New York
Budd v. New York is a significant Supreme Court case from 1888 that examined the balance between state regulation of businesses and individual rights. The case arose after the New York legislature enacted a statute that set maximum rates for grain elevators, aiming to regulate a crucial sector of the economy. The Supreme Court ruled in a 6-3 decision that state legislatures had the authority to determine the fairness of these rates without requiring judicial review, thus affirming the power of states to impose regulations on businesses for the public good.
Dissenting justices argued that such a law infringed upon property and liberty rights as protected by the Fourteenth Amendment's due process clause. The ruling reflected broader themes of government regulation versus private enterprise during a period when the role of state intervention in economic matters was evolving. Although the Court initially interpreted the precedents of Munn v. Illinois and Budd v. New York narrowly in the early 20th century, the New Deal era later saw a resurgence of legislative discretion in regulating businesses. This case remains a pivotal reference point in discussions about regulatory authority and economic rights in American jurisprudence.
Budd v. New York
Date: February 29, 1892
Citation: 143 U.S. 517
Issue: Regulation of private businesses
Significance: The Supreme Court reaffirmed that state legislatures had great discretion in regulating businesses “affected with a public interest.”
In 1888 the New York legislature passed a statute establishing maximum rates that grain elevators might charge. The Supreme Court had approved similar regulations of large and strategic businesses in Munn v. Illinois (1877), but it had ruled that rates of regulatory commissions were subject to judicial review in Chicago, Milwaukee, and St. Paul Railway Co. v. Minnesota (1890).
In Budd, the justices voted six to three to approve the New York law. State legislatures, in contrast to regulatory commissions, had the authority to decide on the fairness of rates without judicial review. The dissenters argued that the law violated the rights to property and liberty protected by the due process clause of the Fourteenth Amendment. The Court read Munn and Budd narrowly early in the twentieth century, but legislative discretion was restored during the New Deal period.