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to be valid, must be accepted in writing by the employer, consented to by the assignors, and filed in public office. Such a requirement deprives neither the borrower nor the lender of his property without due process of law. 243 Insurance.—Those engaged in the insurance business 244 as well as the business itself have been peculiarly subject to supervision and control. 245 Even during the Lochner era the Court recognized that government may fix insurance rates and regulate the compensation of insurance agents, 246 and over the years the Court has upheld a wide variety of regulation. For instance, a state may impose a fine on ‘‘any person ‘who shall act in any manner in the negotiation or transaction of unlawful insurance . . . with a foreign insurance company not admitted to do business [within said State].’’’ 247 Or, a state may forbid life insurance companies and their agents to engage in the undertaking business and undertakers to serve as life insurance agents. 248 Further, foreign casualty and surety insurers were not deprived of due process by a Virginia law which prohibited the making of contracts of casualty or surety insurance except through registered agents, which required that such contracts applicable to persons or property in the State be countersigned by a registered local agent, and which prohibited such agents from sharing more than 50% of a commission VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00050 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 AMENDMENT 14—RIGHTS GUARANTEED 1721 249 Osborn v. Ozlin, 310 U.S. 53, 68–69 (1940). Dissenting from the conclusion, Justice Roberts declared that the plain effect of the Virginia law is to compel a nonresident to pay a Virginia resident for services which the latter does not in fact render. 250 California Auto. Ass’n v. Maloney, 341 U.S. 105 (1951). 251 Allgeyer v. Louisiana, 165 U.S. 578 (1897). 252 New York Life Ins. Co. v. Dodge, 246 U.S. 357 (1918). 253 National Ins. Co. v. Wanberg, 260 U.S. 71 (1922). 254 Hartford Accident Co. v. Nelson Co., 291 U.S. 352 (1934). 255 Merchants Liability Co. v. Smart, 267 U.S. 126 (1925). with a nonresident broker. 249 And just as all banks may be required to contribute to a depositors’ guaranty fund, so may automobile liability insurers be required to submit to the equitable apportionment among them of applicants who are in good faith entitled to, but are financially unable to, procure such insurance through ordinary methods. 250 However, the Court has discerned some limitations to such regulations. A statute which prohibited the insured from contracting directly with a marine insurance company outside the State for coverage of property within the State was held invalid as a deprivation of liberty without due process of law. 251 For the same reason, the Court held, a State may not prevent a citizen from concluding a policy loan agreement with a foreign life insurance company at its home office whereby the policy on his life is pledged as collateral security for a cash loan to become due upon default in payment of premiums, in which case the entire policy reserve might be applied to discharge the indebtedness. Authority to subject such an agreement to the conflicting provisions of domestic law is not deducible from the power of a State to license a foreign insurance company as a condition of its doing business therein. 252 A stipulation that policies of hail insurance shall take effect and become binding twenty-four hours after the hour in which an application is taken and further requiring notice by telegram of rejection of an application was upheld. 253 No unconstitutional restraint was imposed upon the liberty of contract of surety companies by a statute providing that, after enactment, any bond executed for the faithful performance of a building contract shall inure to the benefit of material men and laborers, notwithstanding any provision of the bond to the contrary. 254 Likewise constitutional was a law requiring that a motor vehicle liability policy shall provide that bankruptcy of the insured does not release the insurer from liability to an injured person. 255 There also is no denial of due process for a state to require that casualty companies, in case of total loss, pay the total amount for which the property was insured, less depreciation between the time of issuing the policy and the VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00051 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 1722 AMENDMENT 14—RIGHTS GUARANTEED 256 Orient Ins. Co. v. Daggs, 172 U.S. 577 (1899) (the statute was in effect when the contract at issue was signed). 257 Hooperston Co. v. Cullen, 318 U.S. 313 (1943). 258 German Alliance Ins. Co. v. Hale, 219 U.S. 307 (1911). See also Carroll v. Greenwich Ins. Co., 199 U.S.401 (1905). 259 Life & Casualty Co. v. McCray, 291 U.S. 566 (1934). 260 Northwestern Life Ins. Co. v. Riggs, 203 U.S. 243 (1906). 261 Whitfield v. Aetna Life Ins. Co., 205 U.S. 489 (1907). 262 Polk v. Mutual Reserve Fund, 207 U.S. 310 (1907). 263 Neblett v. Carpenter, 305 U.S. 297 (1938). time of the loss, rather than the actual cash value of the property at the time of loss. 256 Moreover, even though it had its attorney-in-fact located in Illinois, signed all its contracts there, and forwarded therefrom all checks in payment of losses, a reciprocal insurance association covering real property located in New York could be compelled to comply with New York regulations which required maintenance of an office in that State and the countersigning of policies by an agent resident therein. 257 Also, to discourage monopolies and to encourage rate competition, a State constitutionally may impose on all fire insurance companies connected with a tariff association fixing rates a liability or penalty to be collected by the insured of 25% in excess of actual loss or damage, stipulations in the insurance contract to the contrary notwithstanding. 258 A state statute by which a life insurance company, if it fails to pay upon demand the amount due under a policy after death of the insured, is made liable in addition for fixed damages, reasonable in amount, and for a reasonable attorney’s fee is not unconstitutional even though payment is resisted in good faith and upon reasonable grounds. 259 It is also proper by law to cut off a defense by a life insurance company based on false and fraudulent statements in the application, unless the matter misrepresented actually contributed to the death of the insured. 260 A provision that suicide, unless contemplated when the application for a policy was made, shall be no defense is equally valid. 261 When a cooperative life insurance association is reorganized so as to permit it to do a life insurance business of every kind, policyholders are not deprived of their property without due process of law. 262 Similarly, when the method of liquidation provided by a plan of rehabilitation of a mutual life insurance company is as favorable to dissenting policyholders as would have been the sale of assets and pro rata distribution to all creditors, the dissenters are unable to show any taking without due process. Dissenting policyholders have no constitutional right to a particular form of remedy. 263 Miscellaneous Businesses and Professions.—The practice of medicine, using this word in its most general sense, has long VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00052 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 AMENDMENT 14—RIGHTS GUARANTEED 1723 264 McNaughton v. Johnson, 242 U.S. 344, 349 (1917). See Dent v. West Virginia, 129 U.S. 114 (1889); Hawker v. New York, 170 U.S. 189 (1898); Reetz v. Michigan, 188 U.S. 505 (1903); Watson v. Maryland, 218 U.S. 173 (1910); See also Barsky v. Board of Regents, 347 U.S. 442 (1954) sustaining a New York law authorizing suspension for six months of the license of a physician who had been convicted of crime in any jurisdiction, in this instance, contempt of Congress under 2 U.S.C. § 192. Three Justices, Black, Douglas, and Frankfurter, dissented. 265 Collins v. Texas, 223 U.S. 288 (1912); Hayman v. Galveston, 273 U.S. 414 (1927). 266 Semler v. Dental Examiners, 294 U.S. 608, 611 (1935). See also Douglas v. Noble, 261 U.S. 165 (1923); Graves v. Minnesota, 272 U.S. 425, 427 (1926). 267 North Dakota State Bd. of Pharmacy v. Snyder’s Drug Stores, 414 U.S. 156 (1973). In the course of the decision, the Court overruled Liggett Co. v. Baldridge, 278 U.S. 105 (1928), in which it had voided a law forbidding a corporation to own any drug store, unless all its stockholders were licensed pharmacists, as applied to a foreign corporation, all of whose stockholders were not pharmacists, which sought to extend its business in the State by acquiring and operating therein two additional stores. 268 Olsen v. Smith, 195 U.S. 332 (1904). 269 Nashville, C. & St. L. R.R. v. Alabama, 128 U.S. 96 (1888). 270 Smith v. Texas, 233 U.S. 630 (1914). See DeVeau v. Braisted, 363 U.S. 144, 157–60 (1960), sustaining New York law barring from office in longshoremen’s union persons convicted of felony and not thereafter pardoned or granted a good conduct certificate from a parole board. 271 Brazee v. Michigan, 241 U.S. 340 (1916). With four Justices dissenting, the Court in Adams v. Tanner, 244 U.S. 590 (1917), struck down a state law absolutely prohibiting maintenance of private employment agencies. Commenting on the ‘‘conbeen the subject of regulation. 264 A State may exclude osteopathic physicians from hospitals maintained by it or its municipalities, 265 or may regulate the practice of dentistry by prescribing qualifications that are reasonably necessary, requiring licenses, establishing a supervisory administrative board, and prohibiting certain advertising regardless of its truthfulness. 266 The Court has sustained a law establishing as a qualification for obtaining or retaining a pharmacy operating permit that one either be a registered pharmacist in good standing or that the corporation or association have a majority of its stock owned by registered pharmacists in good standing who were actively and regularly employed in and responsible for the management, supervision, and operation of such pharmacy. 267 While statutes requiring pilots to be licensed 268 and setting reasonable competency standards (e.g., that railroad engineers pass color blindness tests) have been sustained, 269 an act making it a misdemeanor for a person to act as a railway passenger conductor without having had two years’ experience as a freight conductor or brakeman was invalidated as not rationally distinguishing between those competent and those not competent to serve as conductor. 270 An act imposing license fees for operating employment agencies and prohibiting them from sending applicants to an employer who has not applied for labor does not deny due process of law. 271 Also, VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00053 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 1724 AMENDMENT 14—RIGHTS GUARANTEED stitutional philosophy’’ thereof in Lincoln Federal Labor Union v. Northwestern Iron & Metal Co., 335 U.S. 525, 535 (1949), Justice Black stated that Olsen v. Nebraska, 313 U.S. 236 (1941), ‘‘clearly undermined Adams v. Tanner.’’ 272 Ferguson v. Skrupa, 372 U.S. 726 (1963). 273 Western Turf Ass’n v. Greenberg, 204 U.S. 359 (1907). 274 W.W. Cargill Co. v. Minnesota, 180 U.S. 452 (1901). 275 Lehon v. Atlanta, 242 U.S. 53 (1916). 276 Gundling v. Chicago, 177 U.S. 183, 185 (1900). 277 Bourjois, Inc. v. Chapman, 301 U.S. 183 (1937). 278 Weller v. New York, 268 U.S. 319 (1925). 279 Packer Corp. v. Utah, 285 U.S. 105 (1932). 280 Halter v. Nebraska, 205 U.S. 34 (1907). 281 McCloskey v. Tobin, 252 U.S. 107 (1920). 282 Natal v. Louisiana, 139 U.S. 621 (1891). 283 Murphy v. California, 225 U.S. 623 (1912). 284 Rosenthal v. New York, 226 U.S. 260 (1912). The Court also upheld a state law forbidding (1) solicitation of the sale of frames, mountings, or other optical appliances, (2) solicitation of the sale of eyeglasses, lenses, or prisms by use of advertising media, (3) retailers from leasing, or otherwise permitting anyone purporting to do eye examinations or visual care to occupy space in a retail store, and (4) anyone, such as an optician, to fit lenses, or replace lenses or other optical appliances, except upon written prescription of an optometrist or opthalmologist licensed in the State is not invalid. A State may treat all who deal with the human eye as members of a profession that should refrain from merchandising methods to obtain customers, and that should choose locations that reduce the temptations of commercialism; a state may also conclude that eye examinations are so critical that every change in frame and duplication of a lens should be accompanied by a prescription. Williamson v. Lee Optical Co., 348 U.S. 483 (1955). 285 Cities Service Co. v. Peerless Co., 340 U.S. 179 (1950) (sustaining orders of the Oklahoma Corporation Commission fixing a minimum price for gas and requiring one producer to buy gas from another producer in the same field at a dictated a state law prohibiting operation of a ‘‘debt pooling’’ or a ‘‘debt adjustment’’ business except as an incident to the legitimate practice of law is a valid exercise of legislative discretion. 272 The Court has also upheld a variety of other licensing or regulatory legislation applicable to places of amusement, 273 grain elevators, 274 detective agencies, 275 the sale of cigarettes 276 or cosmetics, 277 and the resale of theatre tickets. 278 Restrictions on advertising have also been upheld, including absolute bans on the advertising of cigarettes 279 or the use of a representation of the United States flag on an advertising medium. 280 Similarly constitutional were prohibitions on the solicitation by a layman of the business of collecting and adjusting claims, 281 the keeping of private markets within six squares of a public market, 282 the keeping of billiard halls except in hotels, 283 or the purchase by junk dealers of wire, copper, and other items, without ascertaining the seller’s right to sell. 284 Protection of State Resources Oil and Gas.—A state may prohibit conduct that leads to the waste of natural resources without violating due process. 285 Thus, VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00054 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 AMENDMENT 14—RIGHTS GUARANTEED 1725 price, based on a finding that low field prices for natural gas were resulting in economic and physical waste); Phillips Petroleum Co. v. Oklahoma, 340 U.S. 190 (1950). 286 This can be done regardless of whether the benefit is to the owners of oil and gas in a common reservoir or because of the public interests involved. Thompson v. Consolidated Gas Co., 300 U.S. 55, 76–77 (1937) (citing Ohio Oil Co. v. Indiana (No. 1), 177 U.S. 190 (1900)); Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61 (1911); Oklahoma v. Kansas Natural Gas Co., 221 U.S. 229 (1911). Thus, the Court upheld against due process challenge a statute which defined waste as including, in addition to its ordinary meaning, economic waste, surface waste, and production in excess of transportation or marketing facilities or reasonable market demands, and which limited each producer’s share to a prorated portion of the total production that can be taken from the common source without waste. Champlin Ref. Co. v. Corporation Comm’n, 286 U.S. 210 (1932). 287 Railroad Comm’n v. Rowan & Nichols Oil Co., 310 U.S. 573 (1940) (evaluating whether proration based on hourly potential is as fair as one based upon estimated recoverable reserves or some other combination of factors). See also Railroad Comm’n v. Rowan & Nichols Oil Co., 311 U.S. 570 (1941); Railroad Comm’n v. Humble Oil & Ref. Co., 311 U.S. 578 (1941). 288 Thompson v. Consolidated Gas Co., 300 U.S. 55 (1937). 289 Walls v. Midland Carbon Co., 254 U.S. 300 (1920). See also Henderson Co. v. Thompson, 300 U.S. 258 (1937). 290 Bandini Co. v. Superior Court, 284 U.S. 8 (1931). for instance, where there is a limited market for natural gas acquired attendant to oil production or where the pumping of oil and gas from one location may limit the ability of others to recover oil from a large reserve, a state may require that production of oil be limited or prorated among producers. 286 Generally, whether a system of proration is fair is a question for administrative and not judicial judgment. 287 On the other hand, where the evidence showed that an order prorating allowed production among several wells was actually intended to compel pipeline owners to furnish a market to those who had no pipeline connections, the order was held void as a taking of private property for private benefit. 288 A state may act to conserve resources even if it works to the economic detriment of the producer. Thus, a State may forbid certain uses of natural gas, such as the production of carbon black, where the gas is burned without fully utilizing the heat therein for other manufacturing or domestic purposes. Such regulations were sustained even where the carbon black was more valuable than the gas from which it was extracted, and notwithstanding the fact that the producer had made significant investment in a plant for the manufacture of carbon black. 289 Likewise, for the purpose of regulating and adjusting coexisting rights of surface owners to underlying oil and gas, it is within the power of a State to prohibit the operators of wells from allowing natural gas, not conveniently necessary for other purposes, to come to the surface unless its lifting power was utilized to produce the greatest proportional quantity of oil. 290 VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00055 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 1726 AMENDMENT 14—RIGHTS GUARANTEED 291 Gant v. Oklahoma City, 289 U.S. 98 (1933) (statute requiring bond of $200,000 per well-head, such bond to be executed, not by personal sureties, but by authorized bonding company). 292 260 U.S. 393 (1922). 293 The ‘‘taking’’ jurisprudence that has stemmed from the Pennsylvania Coal Co. v. Mahon is discussed, supra, at ‘‘Regulatory Takings,’’ under the Fifth Amendment . 294 Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 488 (1987). The Court in Pennsylvania Coal had viewed that case as relating to a ‘‘a single private house.’’ 260 U.S. at 413. Also distinguished from Pennsylvania Coal was a challenge to an ordinance prohibiting sand and gravel excavation near the water table and imposing a duty to refill any existing excavation below that level. The ordinance was upheld; the fact that it prohibited a business that had been conducted for over 30 years did not give rise to a taking in the absence of proof that the land could not be used for other legitimate purposes. Goldblatt v. Town of Hempstead, 369 U.S. 590 (1962). 295 Miller v. Schoene, 276 U.S. 272, 277, 279 (1928). 296 Sligh v. Kirkwood, 237 U.S. 52 (1915). Protection of Property and Agricultural Crops.—Special precautions may be required to avoid or compensate for harm caused by extraction of natural resources. Thus, a state may require the filing of a bond to secure payment for damages to any persons or property resulting from an oil and gas drilling or production operation. 291 On the other hand, in Pennsylvania Coal Co. v. Mahon, 292 a Pennsylvania statute which forbade the mining of coal under private dwellings or streets of cities by a grantor that had reserved the right to mine was viewed as too restrictive on the use of private property and hence a denial of due process and a ‘‘taking’’ without compensation. 293 Years later, however, a quite similar Pennsylvania statute was upheld, the Court finding that the new law no longer involved merely a balancing of private economic interests, but instead promoted such ‘‘important public interests’’ as conservation, protection of water supplies, and preservation of land values for taxation. 294 A statute requiring the destruction of cedar trees within two miles of apple orchards in order to prevent damage to the orchards caused by cedar rust was upheld as not unreasonable even in the absence of compensation. Apple growing being one of the principal agricultural pursuits in Virginia and the value of cedar trees throughout the State being small as compared with that of apple orchards, the State was constitutionally competent to require the destruction of one class of property in order to save another which, in the judgment of its legislature, was of greater value to the public. 295 Similarly, Florida was held to possess constitutional authority to protect the reputation of one of its major industries by penalizing the delivery for shipment in interstate commerce of citrus fruits so immature as to be unfit for consumption. 296 VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00056 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 AMENDMENT 14—RIGHTS GUARANTEED 1727 297 Hudson Water Co. v. McCarter, 209 U.S. 349, 356–57 (1908). 298 Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982). See also City of Altus v. Carr, 255 F. Supp. 828 (W.D. Tex.), aff’d per curiam, 385 U.S. 35 (1966). 299 See, e.g., Perley v. North Carolina, 249 U.S. 510 (1919) (upholding law requiring the removal of timber refuse from the vicinity of a watershed to prevent the spread of fire and consequent damage to such watershed). 300 Bayside Fish Co. v. Gentry, 297 U.S. 422, 426 (1936). 301 Manchester v. Massachusetts, 139 U.S. 240 (1891); Geer v. Connecticut, 161 U.S. 519 (1896). 302 Miller v. McLaughlin, 281 U.S. 261, 264 (1930). 303 Bayside Fish Co. v. Gentry, 297 U.S. 422 (1936). See also New York ex rel. Silz v. Hesterberg, 211 U.S. 31 (1908) (upholding law proscribing possession during the closed season of game imported from abroad). 304 See, e.g., Foster-Fountain Packing Co. v. Haydel, 278 U.S. 1 (1928) (invalidating Louisiana statute prohibiting transportation outside the state of shrimp taken in state waters, unless the head and shell had first been removed); Toomer v. Witsell, 334 U.S. 385 (1948) (invalidating law discriminating against out-of-state commercial fishermen); Douglas v. Seacoast Products, 431 U.S. 265, 284 (1977) (state could not discriminate in favor of its residents against out-of-state fishermen in federally licensed ships). 305 441 U.S. 322 (1979) (formally overruling Geer). Water, Fish and Game.—A statute making it unlawful for a riparian owner to divert water into another State was held not to deprive the property owner of due process. ‘‘The constitutional power of the State to insist that its natural advantages shall remain unimpaired by its citizens is not dependent upon any nice estimate of the extent of present use or speculation as to future needs. . . . What it has it may keep and give no one a reason for its will.’’ 297 This holding has since been disapproved, but on interstate commerce rather than due process grounds. 298 States may, however, enact and enforce a variety of conservation measures for the protection of watersheds. 299 Similarly, a State has sufficient control over fish and wild game found within its boundaries 300 so that it may regulate or prohibit fishing and hunting. 301 For the effective enforcement of such restrictions, a state may also forbid the possession within its borders of special instruments of violations, such as nets, traps, and seines, regardless of the time of acquisition or the protestations of lawful intentions on the part of a particular possessor. 302 The Court has also upheld a state law restricting a commercial reduction plant from accepting more fish than it could process without spoilage in order to conserve fish found within its waters, even allowing the application of such restriction to fish imported into the State from adjacent international waters. 303 The Court’s early decisions rested on the legal fiction that the states owned the fish and wild game within their borders, and thus could reserve these possessions for use by their own citizens. The Court soon backed away from the ownership fiction, 304 and in Hughes v. Oklahoma 305 it formally overruled prior case law, indi- VerDate Jul<13>2004 05:44 Jul 13, 2004 Jkt 000000 PO 00000 Frm 00057 Fmt 8222 Sfmt 8222 \\GSDDPC41\YOURS-AND-MINE\CON046.SGM CON046 1728 AMENDMENT 14—RIGHTS GUARANTEED 306 441 U.S. at 336, 338-39. 307 Baldwin v. Montana Fish and Game Comm’n, 436 U.S. 371 (1978). 308 Reinman v. City of Little Rock, 237 U.S. 171 (1915) (location of a livery stable within a thickly populated city ‘‘is well within the range of the power of the state to legislate for the health and general welfare’’). See also Fischer v. St. Louis, 194 U.S. 361 (1904) (upholding restriction on location of dairy cow stables); Bacon v. Walker, 204 U.S. 311 (1907) (upholding restriction on grazing of sheep near habitations). 309 Northwestern Laundry v. Des Moines, 239 U.S. 486 (1916). For a case embracing a rather special set of facts, see Dobbins v. Los Angeles, 195 U.S. 223 (1904). 310 Hadacheck v. Sebastian, 239 U.S. 394 (1915). cating that state conservation measures discriminating against outof- state persons were to be measured under the commerce clause. Although a state’s ‘‘concerns for conservation and protection of wild animals’’ were still a ‘‘legitimate’’ basis for regulation, these concerns could not justify disproportionate burdens on interstate commerce. 306 More recently still, in the context of recreational rather than commercial activity, the Court reached a result more deferential to state authority, holding that access to recreational big game hunting is not within the category of rights protected by the Privileges or Immunities Clause, and that consequently a state could charge out-of-staters significantly more than in-staters for a hunting license. 307 Suffice it to say that similar cases involving a state’s efforts to reserve its fish and game for its own inhabitants are likely to be challenged under

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