Indiana ex rel. Anderson v. Brand
Citation and Court
303 U.S. 95 (1938) — Supreme Court of the United States
Facts
Harriet Brand was a teacher employed under an Indiana statute that gave teachers with five or more years of service continuing contract rights that could be terminated only for cause. Indiana subsequently amended the statute to remove tenure protections for township school teachers. Brand sued, arguing the repeal impaired her contractual rights in violation of the Contracts Clause of Article I, § 10.
Issue
Whether Indiana’s repeal of teacher tenure protections impaired a contractual obligation in violation of the Contracts Clause of the United States Constitution.
Holding
Yes. The Indiana tenure statute created a contract between the state and qualifying teachers, and the subsequent repeal of that statute substantially impaired that contract in violation of the Contracts Clause.
Rule / Doctrine
A state may create contractual obligations through legislation. When a state statute is intended to create binding contractual rights — not merely set policy — subsequent repeal or modification of those rights constitutes impairment of contract prohibited by Article I, § 10. Whether a statute creates a contract is a question of state law, but whether the Contracts Clause is violated is a federal question.
Significance
Brand illustrates how the Contracts Clause applies when the state itself is a party to the contract it later seeks to impair, a situation distinct from laws impairing private contracts. It also demonstrates the Supreme Court’s authority to review state court judgments on federal constitutional grounds even where the lower court resolved a question of state law — a federal question remains.