Allgeyer v. Louisiana

Facts of the Case

Provided by Oyez

A Louisiana statute prohibited foreign (out-of-state) insurance corporations from conducting business in Louisiana without maintaining at least one place of business and an authorized agent in the State. Louisiana implemented the statute as an exercise of its police powers, intending to protect its citizens from deceitful insurance companies. Allgeyer & Company violated this statute by purchasing insurance from a firm based in the State of New York.

The state trial court ruled for Allgeyer, finding the law violated the Due Process Clause of the Fourteenth Amendment.

Questions

Does a Louisiana law prohibiting out-of-state insurance corporations from conducting business in the state without maintaining at least one place of business and an authorized agent in the state violate the Fourteenth Amendment's Due Process Clause, which protects companies’ liberty to enter into contracts with businesses of their choice?

Conclusions

In a unanimous decision, the Court found that the Louisiana statute deprived Allgeyer & Company of its liberty without due process under the Fourteenth Amendment. Agreeing with the trial court, the Court found that the Fourteenth Amendment extends broadly to protect individuals from restrictions on their freedom to contract in pursuit of one’s livelihood or vocation. The Court noted that each potential deprivation of liberty by the state needed to be evaluated on a case-by-case basis.

Later cases allowed states greater authority to place restrictions on the freedom to contract.

Aug 2 2021