Troy Ltd. v. Renna, 727 F.2d 287 (1984)

Citation: Troy Ltd. v. Renna, 727 F.2d 287 (1984)
Parent Document: Troy Ltd. v. Renna, 727 F.2d 287 (1984)
Jurisdiction: United States (federal)
Effective Date: 1984-01-30
Original Source: https://www.courtlistener.com/opinion/431015/troy-ltd-v-renna/ ↗

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In 1977, the Court completed the inversion begun in Blaisdell of its analyses of public and private contracts. In United States Trust Co. v. New Jersey, 431 U.S. 1, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977), the Supreme Court struck down state legislation repealing a covenant between the state of New Jersey and its bondholders pledging to limit mass transit deficits to a percentage of cash reserves and revenues of the transit authority. United States Trust was thus one of the long line of cases stretching back to Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 3 L.Ed. 162 (1810), addressing efforts by the states to repudiate by subsequent legislation their own contractual undertakings. Despite early deference to such legislation, the Supreme Court in United States Trust applied a higher standard of scrutiny to state abrogations of their own contractual arrangements than to state efforts to modify purely private agreements. The Court reasoned that when the state is a party to the contract, "complete deference to a legislative assessment of reasonableness and necessity is not appropriate because the State's self-interest is at stake." 431 U.S. at 26, 97 S.Ct. at 1519. In these cases, the Court held, it would apply a more exacting standard of scrutiny, examining whether "a less drastic modification would have" sufficed and whether the modification was reasonable in light of changed circumstances. Id. at 30-32, 97 S.Ct. at 1521-1522.

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