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Rethinking Blaisdell: State Debt Relief and the Limits of Constitutional Doctrine
Published online by Cambridge University Press: 28 February 2020
Abstract
In the landmark case Home Building & Loan Association v. Blaisdell (1934), the Supreme Court of the United States upheld a state-level debt relief statute that was quite similar to those it had long deemed to violate the Contracts Clause. The dissent even argued that the Contracts Clause was written precisely to prohibit this type of state legislation. Rather than seeking to understand or characterize this doctrinal shift, as most work on Blaisdell has done, this article argues that Contracts Clause doctrine had never actually eradicated the state practice of intervening in contracts. The article both highlights and explains the long-standing mismatch between Contracts Clause doctrine and state legislative practice that preceded this ruling. Whatever Blaisdell meant as a matter of doctrine, it should also be understood as evidence of a durable state-level commitment to protecting debtors from the potentially ruinous consequences of private economic bargains.
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