In 1890 Congress passed the Sherman Antitrust Act which made it illegal for businesses to contract, combine, or conspire to create a trust or monopoly for the purpose of restraining free trade and monopolizing interstate or foreign commerce. The American Sugar Refining Company, which already controlled a majority of the sugar-refining companies in the U. S., purchased stock in and sought to control four other companies, including E. C. Knight. As a result, the American Sugar Refining Company would then control over 98 % of the nation’s sugar refining. The U. S. Department of Justice sought a court order forbidding the sale as a violation of the Sherman Antitrust Act. A lower federal court denied the Justice Department’s request. The lower court held that the companies were engaged in manufacturing, not interstate commerce, and thus were not subject to the Sherman Antitrust Act.

By an 8-1 vote, with only Justice John Marshall Harlan I dissenting, the Supreme Court, while conceding that this was a monopoly, ruled that Congress had exceeded its power under the commerce clause. The Court held that the manufacture of an item was done entirely within a state and therefore was properly a matter of intrastate commerce. While the sugar was intended eventually to move in interstate commerce, until it did so the power to regulate its manufacture was within the state’s police power. The majority held that any effect on interstate commerce was “indirect” and Congress could only regulate those activities that had a “direct effect” on interstate commerce.

In 1890, the Louisiana legislature passed the Separate Car Act which required railroads “to provide equal but separate accommodations for the white and colored races” in order to protect the safety and comfort of all passengers. In 1891, a group of African Americans and Creoles formed the “Citizens Committee to Test the Constitutionality of the Separate Car Law.” The Committee chose Homer Plessy, who was one-eighth African American, to test the law by violating it. He bought a first-class ticket on the East Louisiana Railway that traveled from New Orleans to Covington, Louisiana. He boarded the train, walked past the coach clearly marked “For Coloreds Only,” and took a seat in the coach clearly marked “For Whites Only.” When the train conductor asked Plessy to move to the other coach, he refused, was arrested, and charged with violation of the Separate Car Act. Tried in a Orleans Parish court, Plessy was found guilty and sentenced to jail. After his conviction was upheld by the Louisiana Supreme Court, he appealed to the U. S. Supreme Court.

By a 7-1 vote, with only Justice John Marshall Harlan I dissenting, the Supreme Court upheld the Louisiana law and Plessy’s conviction. The majority concluded that the Louisiana law requiring “separate but equal” facilities for African Americans and whites did not violate either the Privileges and Immunities Clause or the Equal Protection of the laws Clause of the Fourteenth Amendment. The law mandating racial segregation, the majority reasoned, was in line with “the established usages, customs and traditions of the people, and with a view to the promotion of their comfort, and the preservation of the public peace and good order.” In his powerful solo dissent, Justice Harlan I wrote: “In view of the Constitution, in the eye of the law, there is in this country no superior, dominant, ruling class of citizens. There is no caste here. Our Constitution is color-blind, and neither knows nor tolerates classes among citizens.”

The Supreme Court’s decision in Plessy v Ferguson upholding racial segregation by law under the so-called “separate but equal rule” led more states to enact such laws. Plessy remained the law until the Supreme Court overruled the decision in 1954 in the case of Brown v Board of Education.

Scholars who have written about the so-called Insular Cases identify between three and thirty-five Supreme Court decisions between 1901 and 1922. The cases developed after the United States acquired certain territory as a result of the outcome of the Spanish-American War. Three important questions involving the U. S. Constitution and laws of Congress were involved in these cases: (1) Can the government of the U. S. acquire territory by treaty? (2) Do certain congressional laws apply to American territories? and (3) Does the Bill of Rights apply to U. S. territories? or, put another way, Does “the Constitution follow the flag”?

The Supreme Court in 1901 in one of the earliest Insular Cases ruled that the U. S. did have the power to acquire territory by treaty. In other Insular Cases, a very divided Supreme Court ruled that American territories were of two types: “incorporated” and “unincorporated.” “Incorporated” territories were those which were supposedly destined for eventual statehood while “unincorporated” territories were those which were not destined for statehood. A majority of the Court determined that in the so-called “incorporated” territories, all the rights and privileges of the Constitution apply except those clearly available only to state citizens. In the so-called “unincorporated” territories, on the other hand, a majority of the Court concluded that only certain “fundamental” rights are guaranteed. Since Congress’ admission of Alaska and Hawaii to the union as states in the 1950s, there are no “incorporated” territories.

By the end of the nineteenth century, the Supreme Court had begun to provide some support for enforcement of the Sherman Antitrust Act of 1890. However, it was not until President Theodore Roosevelt sought to use the law to break up the Northern Securities Company that the question arose whether the law reached stock ownership. The Northern Securities Company had acquired the stock of three major railroads: the Great Northern Railway, the Northern Pacific Railway, and the Burlington Railroad. This gave Northern Securities a monopoly over the routes that the three had previously competed for as separate companies. At Roosevelt’s urging, the U. S. government sought to prevent the merger by invoking the Sherman Antitrust Act. The Act forbids actions that will result in a loss of competition. In a victory for the government and Congress’ 1890 Sherman Antitrust Act, the Court held that the merger did result in a restraint of trade in violation of the Act. The Court’s decision in the Northern Securities case breathed new life into the Sherman Antitrust Act. Prior to this case, the government had not enthusiastically enforced the law, and when the government had attempted to do so, the Supreme Court had not provided great support for the government’s action.

In 1895 the New York legislature passed the Bakeshop Act that limited the number of hours bakers could work to 10 per day and 60 per week. The law was championed as a health measure because breathing flour dust for long periods of time could result in numerous lung-related diseases. Joseph Lochner owned a bakeshop in Utica, New York. He was charged by the state with having allowed an employee to work more than 60 hours per week, tried, convicted, and fined $50. He appealed to higher New York state courts which upheld his conviction, and he then appealed to the U. S. Supreme Court. Lochner challenged the constitutionality of the law by asserting that it violated the due process of law clause of the Fourteenth Amendment in that it infringed upon the “liberty of contract.” In essence, Lochner argued that the law infringed upon the right of both the employer and the employee to negotiate the terms of the latter’s employment. Lochner’s position was based on the premise that employer and employee were “equals” in the negotiation of hours and wages. By a 5-4 vote, the Supreme Court struck down the New York law and thus ruled in Lochner’s favor. The Court’s decision was widely criticized for creating a “substantive” right to contract when no such right to contract exists in the Constitution. It was also seen as a setback for progressive labor laws that tried to protect the rights of workers.

In 1903, the state legislature of Oregon passed a law limiting to a maximum of ten hours per day that women could work in factories and laundries in the state. Curt Muller’s Grand Laundry in Portland, Oregon, required a female employee to work more than ten hours. Previously, in 1905 in Lochner v. New York, the Supreme Court had ruled that a state law restricting the number of hours bakers could be employed per day and per week was an unconstitutional violation of the “liberty of contract” of the due process of law clause of the Fourteenth Amendment. In Lochner the Supreme Court reasoned that employers and employees should be free to contract for wages and labor free of state interference. However, in Muller v Oregon, the Court unanimously upheld the Oregon law. The Court reasoned that women were not as capable of negotiating terms of employment as were men and that the state had a valid interest in protecting women from harsh labor conditions. The Court’s decision was an example of the patronizing attitude which courts had at this time toward women.

Apparently of great influence on the Court’s decision in Muller was a brief filed by a well-known attorney (and future Supreme Court justice) named Louis Brandeis who argued the case for Oregon before the Supreme Court. Brandeis utilized a very innovative strategy that became known as “the Brandeis Brief” and led to significant changes in future legal analysis and Supreme Court litigation. Brandeis devoted only two pages to his discussion of the legal issues. In the over one-hundred pages of the remainder of his brief, Brandeis presented evidence of the harmful effects of long hours of labor on the health, safety, morals, and welfare of women. He included evidence from a great variety of sources such as medical reports, psychological and sociological writings, and statistical reports which he used to show that there was basis for the Oregon law.