The First Federal Case Holding a State Statute Unconstitutional

In Empire of Liberty Gordon S. Wood identifies a 1792 decision of the United States Circuit Court for Rhode Island, Alexander Champion and Thomas Dickason v. Silas Casey, as the first case in which a federal court held a state statute unconstitutional. I had never heard of the case, so I thought I'd do a little digging to see what I could find about it.

The case points up the fact that federal judicial review of state statutes under the Constitution was an extremely early development. Congress passed the first Judiciary Act, establishing the United States Supreme Court and lower federal courts, on September 24, 1789.

As might be expected, it was some time before judges were appointed and the courts opened for business. The District of Rhode Island, for example, was not established until June 23, 1790, and Henry Marchant was not confirmed as its first District Judge until July 3, 1790. The first session of the Circuit Court for Rhode Island convened on Saturday December 4, 1790 and met for a total of three days, adjourning on Tuesday December 7, 1890. Thereafter it convened every six months, in early June and early December. The sessions continued to be brief. For example, the December 1791 term lasted a total of four days, from December 7 to December 10. The June 1792 term opened June 7 and adjourned June 14.

And yet, within a year and half of its opening for business, that court became, it appears, the first federal court to strike down a state statute as unconstitutional.

Silas Casey was a prominent Rhode Island merchant who had suffered business reversals during the Revolution. In February 1791, Casey used his influence to persuade the Rhode Island legislature to pass a private act “giving him an extension period of three years to settle his accounts with British creditors, during which time he would be exempt from all arrests and attachments.”

Presumably recognizing that Rhode Island state courts would enforce the stay statute, two of Casey's British creditors, Alexander Champion and Thomas Dickason, sued him in the United States Circuit Court for Rhode Island to recover debts of almost $20,000. Casey, naturally, moved to dismiss the case based on the stay statute. Champion and Dickason moved to strike the defense, arguing that the state act violated the Contract Clause of Article I, Section 10, which provided that “No State shall . . . pass any . . . Law impairing the Obligation of Contracts . . .. “

In June 1792, the Circuit Court for Rhode Island, consisting of Chief Justice John Jay, Associate Justice William Cushing, and District Judge Marchant, sitting at Newport, granted the creditors' motion. The decision was not officially reported, but it was widely reported in the press. James W. Ely Jr. quotes the June 14, 1792 edition of the United States Chronicle as follows:

The Judges were unanimously of Opinion, that, as by the Constitution of the United States, the individual states are prohibited from making laws which shall impair the Obligation of Contracts, and the resolution in question, if operative would impair the Obligation of the Contract in Question, therefore it could not be admitted to bar the action.

The aftermath is equally interesting. Rhode Island acquiesced in and apparently endorsed the result. According to Prof. Ely, “Not only did the decision arouse no opposition, but the Rhode Island legislature adopted a resolution that it would not grant any individuals exemptions for private debts.”

For you Civil War buffs, a question. I'm wondering whether Silas Casey the defendant was related to – perhaps the grandfather of – Civil War General Silas Casey, born in East Greenwich, Rhode Island in 1807. Anyone know the answer?

UPDATE (of a sort):

By sheer coincidence, I just ran across a new article that Prof. Ely has posted on the Contract Clause: James W. Ely Jr., Whatever Happened to the Contract Clause? Here's the abstract:

This paper examines the decline of the contract clause in constitutional jurisprudence. Although the contract clause occupied a key and much-litigated place in constitutional law during the nineteenth century, the Supreme Court never read the clause with literal exactness. Over time the Court began to limit the reach of the contract clause in a number of ways. It early distinguished between contractual rights and the remedy available to enforce such rights. States retained some room to modify enforcement procedures. Thereafter the Court insisted upon strictly construing legislative grants and recognized an inalienable police power to protect the health, safety, and morals of the public. Moreover, the Supreme Court upheld rent control laws and mortgage moratorium measures as valid legislative responses to emergency conditions which trumpted contracts between individuals. In short, the Supreme Court recognized so many exceptions to the contract clause as to virtually read it out of the Constitution. The advent of New Deal constitutionalism in the late 1930s, which downplayed economic rights and affirmed broad regulatory authority, completed the effective destruction of the contract clause. Despite some fleeting interest in revitalizing the clause, and a few decisions enforcing contract clauses in state constitutions, this once-powerful provision remains at the fringe of modern constitutional law. The paper contends that the decline of the contract clause likely reflects a diminished faith in contractual bargaining and competitive markets.