Whenever I teach Shelley v. Kramer in Property, I always make a point of talking about Buchanan v. Warley (1917). In short, the Court held that due to the doctrine of liberty of contract, the City of Louisville could not impose a law that effectively segregated where blacks and whites lived. This case isn’t even mentioned in my textbook, and I doubt most include it. The biggest champion of Buchanan is David Bernstein, who discusses it at length in Rehabilitating Lochner and Only One Place of Redress. David argues that Buchanan is evidence of how liberty of contract was wielded as a tool to fight against discrimination when Plessy was the prevailing law, long before the Equal Protection Clause had any teeth.
A new note in the Texas Law Review by Brent Rubin, titled “Buchanan v. Warley and the Limits of Substantive Due Process as Antidiscrimination Law” challenges Bernstein’s narrative. Here is the abstract:
In Buchanan v. Warley, the Supreme Court struck down a Louisville, Kentucky ordinance mandating residential segregation in the heart of the Lochner era. Rather than rely on the Equal Protection Clause, as our modern antidiscrimination jurisprudence most often does, the Court employed substantive due process and found that the ordinance violated both African-Americans’ and whites’ right to own, use, and dispose of property.
Mr. Rubin begins by briefly reviewing the relevant libertarian and segregationist jurisprudence that came into conflict in Buchanan and outlining the history of residential segregation ordinances from their inception in Baltimore to the Supreme Court’s decision in Buchanan. Mr. Rubin continues by examining several scholars’ perspectives on Buchanan. Next, he presents his criticism on substantive due process as antidiscrimination law by arguing that while the libertarian thrust of the theory proved helpful in combatting discrimination via statute, its emphasis on contractual freedom advanced the restrictive covenants that perpetuated residential segregation. Further, doctrinal weaknesses in substantive due process aided cities that enacted segregation ordinances after Buchanan. Finally, Mr. Rubin attempts to sketch the foundations of a social history of Buchanan that examines its impact on and the role of socioeconomic class within the contemporary African-American community. He argues that Buchanan and its emphasis on property rights dovetailed with certain African-American social institutions and forces, such that all but the direst legal needs of working-class blacks were left unattended. In contrast, the legal and economic needs of middle- and upper-class blacks received a relatively greater deal of attention during this era. Thus, Mr. Rubin concludes that the events following Buchanan show that while substantive due process can, in some cases, provide relief from discriminatory legislation, the doctrine as a whole has significant weaknesses as antidiscrimination law.
Here, in part is Rubin’s response to Bernstein:
Bernstein has grappled with some of the consequences of substantive due process as antidiscrimination law in his more recent work.153 His response to the consequences helps to better sketch the contours of a world where substantive due process, particularly of the economic variety, functions as antidiscrimination law. It’s a world that looks different from our own and highlights both the practical and normative concerns of employing substantive due process to combat discrimination. …
. Second, the authors fail to consider the role that Buchanan’s substantive due process foundations might have played in the direct defiance of the decision. Higginbotham correctly notes that post-Buchanan residential segregation ordinances ultimately fell under Buchanan’s holding.156 However, I argue that two features of Lochner-era substantive due process contributed to the resistance. The broad principles of “liberty” and “freedom of contract” it announces and uses in efforts to combat discrimination are the target of a rhetorically effective attack by critics, which afforded racist lawmakers a certain degree of cover to continue to enact the ordinances. Further, despite contentions that substantive due process afforded both economic and personal liberties, it in fact failed to protect the personal liberties of African-Americans. The doctrine produced a set of rights that can be described as jagged, if not fundamentally inconsistent. Thus, efforts to segregate that appeared to encroach upon Buchanan’s holding via restricting personal liberties occupied a legal gray area. I argue that these problems, caused by substantive due process, illustrate important weaknesses of using the doctrine as antidiscrimination law.
In other words, liberty of contract gave way to even more discrimination. In a sense, the homeowners seeking to enforce the restrictive covenant in Shelley v. Krame were fighting for their liberty of contract, and agreement to make and enforce covenants (a form of contract).
Rubin offers this response to Bernstein on Shelley:
Bernstein himself, with the benefit of more than sixty years of hindsight, has articulated half-hearted support for the holding in Shelley— outside the fora where he has sung Buchanan’s praises. Writing for a publication of the libertarian-leaning Cato Institute, he agrees that the Court got it right in Shelley on the limited question of enforcement of restrictive covenants but believes that generally, courts should enforce discriminatory provisions in contracts.186 Bernstein believes Shelley was correctly decided for two reasons: First, Shelley involved two contracts—the contract for the actual sale of the property between a willing buyer and a willing seller and the covenant that Shelley’s and Kraemer’s properties were subject to— allowing for additional “public policy” considerations to enter the Court’s calculus.187 Second, he agrees with an arguably ancillary point made by the Shelley Court: that state enforcement of the covenants wasn’t truly “racially neutral”188 as the parties were unable to direct the Court to a case where a court had enforced a covenant against white ownership or occupancy.189 In further support of this point, because states already had official or unofficial policies supporting residential segregation, state action wasn’t “sui generis contract enforcement” but truly part of a larger governmental policy favoring segregation.190 Thus, Bernstein argues that so long as courts do it “even-handedly,” they should enforce discriminatory contractual provisions.191
Why make such a fuss about restrictive covenants when considering Buchanan? We should be celebrating the triumph over Plessy-like ordinances and finding some merit—merit that Americans can all agree upon today—in Lochner’s otherwise controversial laissez-faire constitutionalism. Right?
If we want to look at Buchanan as a triumphalist account—illustrating a degree of black agency in an otherwise painful time—or as a way to highlight that Lochner-era progressives harbored racist sentiments, then perhaps we would be fine to not consider restrictive covenants. But if Buchanan stands for more than this, if it is presented as a doctrine that purports to combat discrimination, as Bernstein (and to a lesser extent Higginbotham) in fact claim,192 then it deserves a more in-depth consideration. This doctrine must be normatively satisfying.193 Thus, restrictive covenants put laissez-faire constitutionalism to an important test.
As Lochner and Buchanan’s biggest modern apologist, Bernstein is wise enough to not follow the path of hard laissez-faire constitutionalists. However, a robust reading of Shelley, where courts are loath to enforce discriminatory contractual provisions, troubles him. He thus tries to bound the “court enforcement as state action” doctrine in the two ways mentioned above,194 which each have serious consequences for his project of using laissez-faire constitutionalism as antidiscrimination law. Hence, I call his position “softer laissez-faire constitutionalism.”
Therefore, I argue that while Buchanan’s use of substantive due process ostensibly brought an end to residential segregation ordinances, substantive due process allowed the ordinances last gasps at life for two reasons: first, judges found the most basic tenets of substantive due process easy to assail; second, Buchanan’s substantive due process holding was narrow in scope, giving lawmakers an ostensible avenue to skirt Buchanan by making an ordinance appear to primarily be racial regulation with secondary effects on property rights.
A lot of food for thought there. I will consider this next time I teach Shelley and Buchanan.
As a side, I do find it interesting Rubin noted that Randy Barnett does not include it in his textbook.
Most surprisingly, Randy Barnett, a prominent libertarian professor, omits Buchanan from his casebook. See RANDY E. BARNETT, CONSTITUTIONAL LAW: CASES IN CONTEXT 1337 (2008) (omitting Buchanan from the Table of Cases).