Recently, I was a guest on Jay Fidell’s ThinkTech program on Hawaii Public Radio, talking about legal issues that may arise when legislation is targeted at specific individuals or companies (what I refer to as “single victim legislation”).
The issue raised its head when the Hawaii Legislature seemed ready to consider a proposal requiring one company — and one company only — to undertake an environmental impact statement before beginning its interisland ferry service. Further background here and here.
In short, whenever the government attempts to change the ground rules mid-stream, it raises several concerns:
- Contracts Clause – the US Constitution prohibits a state from enacting a law “impairing the Obligation of Contracts.” This prohibits a state legislature from altering the terms of a contract existing at the time of the law’s passage, especially when directed at specific parties. A law is even more suspect when a state is impairing its own contractual obligations by legislation.
- Vested rights and equitable estoppel – if the government has provided “official assurances” and a party has relied, it is unfair and unconstitutional for the government to change the applicable rules.
- Equal protection – people in similar circumstances should be treated the same, so legislatures cannot discriminate without compelling reasons.
- Due process – laws should be fundamentally fair and reasonable, particularly if they change long-standing rules, broadly applicable.
The podcast of these comments is posted here.