I almost passed over this article about HB 543 in today’s Herald-Leader because it was hiding back inside the City/Region section on page 2. It should be on the very first page because whenever legislators are thinking about stomping around on the U.S. Constitution, it should get a LOT of attention.
Article I Section 10 of the U.S. Constitution says:
No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.
HB 543 is threatening to take contracts between powerful companies and landholders and impair the obligations of those contracts in the powerful gas companies favor. I wonder who donates to the campaign fund of the sponsor of this bill?
I apologize for not doing a recent review of the Supreme Court decisions regarding this contract clause, but what I do recall from Professor Paul Salamanca at law school is that the prohibition on states passing such laws is not absolute, but they must pass a three-part test (the Supremes love 3 part tests by the way):
1. Is there a substantial impairment worked by the statute? If yes then go on to next question. To determine if substantial:
a) Parties expectations in contract
b) Centrality of affected part to whole contract.
c) Economic consequences to the party harmed
d) Extent the subject matter of contract is already subject to regulation.
2. Does the impairment serve a significant (broad) and legitimate state interest? That is, does it address a broad social/economic issue?
3. Is the impairment based on reasonable conditions of a character appropriate to the problem addressed? (495 U.S. 400)
In my opinion, rewriting contracts so that landholders get messed over is a substantial impairment in that it affects the very heart of the deal. Proponents will argue that it serves a legitimate state interest simply because gas prices are high and keeping them lower will help the war on terror, etc. This is certainly a stretch. The real interest is keeping the gas companies profit margins high. Lastly, stealing from the poorer and giving to the richer is not appropriate answer to the problem of skyrocketing gas prices.
Please contact your legislators and ask them to vote against HB 543.