Indiana ex rel. Anderson v. Brand

Supreme Court of the United States · 1938 · Federal Courts

Federal CourtsContract ClauseSupreme Court review of state-court judgmentsContract ClauseArt. I, Section 10state-created contractteachers tenureindefinite contract

Facts

The petitioner was a duly licensed teacher who began teaching in township schools in 1924 and taught continuously through the 1932-1933 school year under successive written contracts. Her contracts for 1931-1932 and 1932-1933 expressly stated that all provisions of the Teachers' Tenure Law of 1927 would be in full force and effect in the contract. She alleged that by virtue of that Act she had an indefinite contract terminable only for statutory causes and by statutory procedures, but that after proceedings in 1933 and despite being allowed to teach during 1933-1934, the trustee threatened to terminate her employment at the end of that year. Indiana's 1933 amendment omitted township school corporations from the tenure act, and the state supreme court treated that amendment as repealing tenure protection for township teachers.

Issue

Whether the 1927 Indiana Teachers' Tenure Act created a binding contractual right to continued employment for a permanent township teacher such that the 1933 repeal as to township schools impaired the obligation of contract in violation of Article I, Section 10. Also, whether the Supreme Court had jurisdiction where the state court actually decided that federal contract-clause question.

Rule

When a claim is made that a statute embodies a policy to bind the state or its instrumentalities by contract, the cardinal inquiry is the statute's terms. A legislative enactment may create a contract protected by the Contract Clause if, when accepted as the basis of action by individuals, its language and structure show an intent to establish binding contractual rights; and the Supreme Court will independently determine whether such a contract exists and whether later legislation impairs it. The Court may review a final state-court judgment where the state court actually entertained and decided the federal question adversely to the asserted federal right and did not rest its judgment on an independent and adequate nonfederal ground.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Ohio, a 2018 statute provided that any county library employee who completed six consecutive years of service and then signed another written employment agreement would become a permanent employee. The statute stated that the written agreement "shall continue in effect for an indefinite period" and could be ended only for listed causes after notice and a hearing. In 2024, Ohio repealed the statute for rural county libraries only, and Maple Grove Library declined to renew Dana Kline's position at the end of the year without invoking any statutory cause.

If Dana claims the repeal impaired her contract in violation of Article I, Section 10, what is the strongest argument in her favor?

Explanation. The majority held that the key inquiry is the statute's terms. A statute may create a contract protected by the Contract Clause when its language and structure show intent to bind the state or its instrumentalities by contract. Language providing that a written contract continues indefinitely and may be cancelled only in specified ways strongly indicates a binding contract, not a mere revocable policy.