State Con Law Case of the Week: Economic Liberty in New Jersey?

Anthony Sanders · March 11, 2022

Rightly or not, the Garden State is most definitely not known for a limited government that leaves an individual alone “to determine how best to pursue her personal and financial affairs.” Yet that value is exactly what its Supreme Court upheld this week in Moynihan v. Lynch. The case is a marvelous tribute to individual rights and personal responsibility. For someone like me who has read a lot of terrible economic liberty cases where courts have found much sillier laws perfectly constitutional, it leaves you wondering “is this for real?” If we take the court’s opinion at face value, though, that seems to be true.

How’s that Palimony Feeling?

Do you know what “palimony” is? That’s ok, I frankly had no idea until I read this case. Rhyming with “alimony,” palimony is basically the same thing but for a couple who weren’t actually married. Sometimes when an unmarried couple separate, or contemplate separation, they make an agreement of how one will support the other after the relationship ends. The case involved a couple who had been together for over a dozen years and had kind of (?) (as one would expect in these matters, the facts are disputed and a bit hazy) jointly purchased a house together. At one point when they were still a couple, the man drafted a contract that stated what he would do for her if they separated. They even signed it and had it notarized. She relied on the contract and continued to make payments on the house. A couple years or so later, however, the relationship ended. And not for the first time in human history, the man did not follow through with his promises.

The woman sued, asking for enforcement of the contract. But there was a problem. They hadn’t consulted a lawyer.

What have lawyers got to do with this (well, other than litigating the case)? In 2010 the New Jersey legislature adopted legislation that, among other things, required the parties to a palimony agreement, and only a palimony agreement, to separately consult with a lawyer before entering into it. The change was an overreaction to concerns of oral palimony agreements being made where one party takes advantage of another. Instead of simply requiring a written and signed document, like is the case for a lot of contracts, the legislature threw in the need for each side to get a lawyer. The only other contract in New Jersey that requires a signor to get legal advice is the one state lottery players have to agree to when collecting their winnings.

The man argued the contract violated the 2010 law and was therefore unenforceable. In response, the woman argued the law was unconstitutional. Her primary thrust seems to have been that it violated the federal and New Jersey Contract Clauses. This was a problem, however, because ever since the U.S. Supreme Court ruled in Ogden v. Saunders (1827), the federal Contracts Clause has been interpreted to only apply retroactively, to contracts already entered into when the offending law is passed. (Chief Justice Marshall thought otherwise and dissented—the one dissent in a constitutional case he ever issued.) And New Jersey courts interpret the state constitution’s Contract Clause in the same way.

Personal Autonomy to Contract

But the New Jersey Supreme Court raised a different clause in the New Jersey Constitution. Article I, Section 1 is what Professor Steven Calabresi calls a “Lockean Natural Rights Guarantee.” It states

All persons are by nature free and independent, and have certain natural and unalienable rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing, and protecting property, and of pursuing and obtaining safety and happiness.

The Moynihan court explained that “The right to ‘personal liberty’ guaranteed in Article I, Paragraph 1 of our State Constitution protects against the government arbitrarily interfering with the right to individual ‘autonomy.’” Further, this autonomy is broad and important: “The right to personal autonomy plays a preeminent role in our constitutional system – ‘competent people ordinarily can choose what they want.’” And in the circumstances of the case this right to autonomy means that “[a]n individual has the ‘right to determine how best to pursue her personal and financial affairs’ without the interference of an attorney.”

Those are some highfalutin words. Many public interest attorneys would crawl over broken glass to get a judge to use that language. When prose like that comes out things generally don’t go well for the government. Further, it indicates there’s a bigger impact coming than just the specific facts of the case.

The court then described the right at issue as specifically the right to represent oneself instead of retaining a lawyer. The right to represent oneself, often called representing oneself pro se, is a long-recognized right both in criminal and civil cases, extending far back into English common law. Fans of history will enjoy the court’s discussion of pro se litigants in the provinces of “West New Jersey” and “East New Jersey” (yes, there were once two New Jersey’s!) in the seventeenth century. Going forward in time, the court explained that denials of pro se representation are absent from later cases and legislation. Today a married couple can enter into an agreement about post-separation support or even child custody without a lawyer, but an unmarried couple cannot. And, again, two parties can do so in any other contract, other than when the state lottery (which, after all, is the state’s money) is handing someone a big check.

Scrutiny? What’s Scrutiny?

With the right, and the unusual nature of the restriction on the right, sorted out the court then applied a three-part test to see if the law is constitutional under Article I, Section 1: (1) the nature of the right, the extent of the restriction, (3) and the public need for the restriction. It concluded the law fails and is therefore unconstitutional.

But here’s the curious thing from my perspective, and I suspect the perspective of public interest attorneys and constitutional scholars: The court never discusses what scrutiny applies. Generally in modern constitutional law, whether under the U.S. Constitution or a state constitution, a court will first decide whether the right at issue is “fundamental” or not. And often this is through the Glucksberg two-step,” where the court asks if the right is “narrowly defined” and “deeply rooted” in our history. Based on the diagnosis the court then applies one of various levels of scrutiny. Usually this means “fundamental” equals strict scrutiny, where the law usually fails, and “nonfundamental” equals rational basis, where the law usually is constitutional. Moynihan, however, never applies these terms in that context. There’s no fundamental/nonfundamental distinction and no scrutiny. Just that three-part test which, if anything, seems like some kind of intermediate scrutiny, if you can even put a label on it.

What’s going on here? On one read the court is applying a form of intermediate scrutiny to the right to contract. Sure, it’s a contract about family law issues, and laws involving the family are an area where modern courts have felt more comfortable applying higher levels of scrutiny (such as in some right to privacy cases). But the court doesn’t say that. It simply says it’s a contract related to representing oneself and that is an important right because of “personal autonomy.” But lots of things we contract for relate to personal autonomy. The right to earn a living (something we constantly are litigating at IJ, including recently in New Jersey) is central to how we define ourselves and how we provide for our families. The right to use our property—whether to rent out a room, to run a home business, to build the house of our dreams, or innumerable other actions—is as well. Indeed, these are all part-and-parcel of the text of Article I, Section 1: “of enjoying and defending life and liberty, of acquiring, possessing, and protecting property, and of pursuing and obtaining safety and happiness.” Does this mean the court’s three-part test now applies generally to “personal autonomy” covered by this language, including economic liberty and property rights?

On another read, however, one could argue the opinion only concerns the right to not use a lawyer. I’m absolutely positive this is what New Jersey government lawyers will argue in the future. And the court does discuss the right at issue in those terms, including its history. But if the court wanted to do that it wouldn’t have had to speak generally about “personal autonomy.” If could simply have gone down the Glucksberg two-step route and said this is a rare case where the right actually passes that malleable standard. Indeed, the New Jersey Supreme Court has applied Glucksberg before, even in interpreting Article I, Section 1. But the court purposely didn’t do that. Instead it did something more expansive. And this expansive holding opens many opportunities for people defending their liberties, whether those are “personal,” “economic,” or whatever you want to call them.

Substantive Rights, No Due Process Needed

Finally, although it doesn’t have an impact on the outcome, there’s a weird thing the court does with Article I, Section 1 that I should note. As we’ve seen, that provision protects all kinds of rights in very broad language. As Steven Calabresi’s article explains, the clause descends from George Mason’s first draft (not later drafts that tried to accommodate the interests of slave owners) of the Virginia Declaration of Rights. It specifically mentions liberty and property but in general terms, essentially covering any right where a person just wants the government to leave them alone.

But instead of relying on the text of the provision, the court says it “incorporates the principle of substantive due process” and then asks whether “substantive due process” makes the law unconstitutional. As students of constitutional law will know, “substantive due process” means a substantive, as apposed to a procedural, protection afforded by a “due process of law clause.” Those clauses are found in the Fifth and Fourteenth Amendments to the U.S. Constitution and in many state constitutions as well. Some states don’t have “due process” in their constitutions but their identical twin, a ”law of the land clause,” is often, and properly, used as a “due process of law clause.”

Many scholars and judges have decried “substantive due process” over the years as a contradiction in terms. That’s not fair, as we at IJ have demonstrated and many others have as well. Understanding “due process of law” to provide what we today would call “substantive” protections has deep historical roots and is a proper way to protect our liberties.

And if there were a “due process clause” or “law of the land clause” in the New Jersey Constitution and the court was interpreting it this nomenclature would be perfectly fine. But that’s not what the court did! It was applying a clause that specifically protects the rights “of enjoying and defending life and liberty, of acquiring, possessing, and protecting property, and of pursuing and obtaining safety and happiness.” The right to enter into a palimony agreement without hiring a lawyer can fit into that language in all kinds of ways. You don’t need “substantive due process,” the words are right there! For example, the woman in the case was, of course, “pursuing and obtaining safety and happiness” by securing financial support should her tenuous relationship fall apart. The court could have easily just interpreted that text. Instead it had to import “substantive due process” into the analysis, unnecessarily using a doctrine that really isn’t in the state constitution instead of just applying its actual language.

This tick of labeling any kind of broad protection of substantive liberties “substantive due process” is frankly a little baffling. I’m guessing the justices on the court didn’t even think about how odd it sounds when you take a step back. To be fair to those in the Moynihan case, they were following what the court has done in the past. But going forward it would be a good idea, in New Jersey and elsewhere, to pay closer attention to what the constitution says. After all, that text is pretty amazing when it comes to protecting our liberties. As Professor Randy Barnett explains about the Ninth Amendment, it means what it says.

Anthony Sanders is the director of IJ’s Center for Judicial Engagement.