The number of United States Supreme Court cases whose names have crossed over into becoming widespread epithets is relatively few, but the leading contender from this group that also has contract-law implications is surely Lochner v. New York. Indeed, in a fit Harry Potter-inspired analysis a few years ago (which you can read here if you are so inclined), I actually had the chance to write:
“Lochner!” cried Voldemort, striking the bakery workers with a bolt of green light. . . . Harry had seen Professor Moody demonstrate the Unforgivable Doctrines, but nothing in the classroom prepared him to see substantive due process used on human beings.
More recently and more seriously, however, Hila Keren at Southwestern Law School has raised the possibility of “neoliberal-Lochnerism” at the intersection of the doctrines of arbitration and freedom of contract. She suggests that the result can be unjust in the same vein as were the much castigated doctrines of the early twentieth century. Here is her abstract:
This article explores a crucial moment in American legal history, known as the Lochner era, in which the rise of freedom of contract was sharp enough to defeat equity concerns, and then argues that a second rise of the freedom of contract has recently been developed by the Supreme Court in the domain of arbitration agreements. It contends that this second rise is not only a revival of Lochnerism but also, and more so, what the article names “neoliberal-Lochnerism”: a process of legal dissemination of neoliberal common sense outside of the world of contracts. Via close reading of leading recent cases, the article demonstrates that the genus of arbitration agreements now allowed by the US Supreme Court represents an assault on fairness, morality, and justice that is larger than the eye can see at first glance. The result, it is argued, is “law without equity”, a form of neoliberal jurisprudence that allows, and even incentivizes, humans who have accumulated enough power to act opportunistically. Without equity’s restraining power, the article concludes, those possessing a combination of economic means, political influence, and intellectual sophistication can and will exploit the legal rules to undermine justice.
Professor Keren’s article, “Undermining Justice: The Two Rises of Freedom of Contract and the Fall of Equity,” has been published in the Canadian Journal of Comparative and Contemporary Law and is available for SSRN download here.
