Judicial Procedures Reform Bill of 1937 - The New Deal Goes To Court

The New Deal Goes To Court

Roosevelt was wary of the Supreme Court early in his first term, and his administration was slow to bring constitutional challenges of New Deal legislation before the court. However, early wins for New Deal supporters came in Home Building & Loan Association v. Blaisdell and Nebbia v. New York at the start of 1934. At issue in each case were state laws relating to economic regulation. Blaisdell concerned the temporary suspension of creditor's remedies by Minnesota in order to combat mortgage foreclosures, finding that temporal relief did not, in fact, impair the obligation of a contract. Nebbia held that New York could implement price controls on milk, in accordance with the state's police power. While not tests of New Deal legislation themselves, the cases gave cause for relief of administration concerns about Associate Justice Owen Roberts, who voted with the majority in both cases. Roberts's opinion for the court in Nebbia was also encouraging for the administration:

his court from the early days affirmed that the power to promote the general welfare is inherent in government.

Nebbia also holds a particular significance: it was the one case in which the Court abandoned its jurisprudential distinction between the "public" and "private" spheres of economic activity, an essential distinction in the court's analysis of state police power. The effect of this decision radiated outward, affecting other doctrinal methods of analysis in wage regulation, labor, and the power of the U.S. Congress to regulate commerce.