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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The threshold inquiry is whether the state law has operated " 'as a substantial impairment of a contractual relationship.' " Id. at 704-05, quoting Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244, 98 S.Ct. 2716, 2722, 57 L.Ed.2d 727 (1978).8 If the state law is found to be a "substantial impairment," then a second inquiry is required: "the State, in justification, must have a significant and legitimate public purpose behind the regulation ... such as the remedying of a broad and general social or economic problem." Id. 103 S.Ct. at 705. Finally, if such a legitimate public purpose is identified, a third query is posed: "the next inquiry is whether the adjustment of 'the rights and responsibilities of contracting parties [is based] upon reasonable conditions and [is] of a character appropriate to the public purpose justifying [the legislation's] adoption.' " Id., quoting United States Trust Co., 431 U.S. at 22, 97 S.Ct. at 1517. It is at this third stage that the distinction introduced in United States Trust enters:

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