The case of Mugler against Kansas of 1887 saw the Supreme Court extending the doctrine of the protection of the right of economic due process by creating a substantive interpretation of the due process clause to safeguard fundamental property rights. this could lead the foundation to the doctrine of economic due process. Although the court sustained a statute from a state prohibiting the manufacture and sale of alcoholic beverages as a valid use of the police power to protect health and morals, Justice Harlan emphasised that courts could scrutinise the purpose behind state regulation as well is the means employed to achieve the stated in its. Moreover, this judge insisted that there were limits beyond which legislation cannot rightfully go.
Economic due process soon became most important judicial instrument safeguarding property rights and indicating the principles of Luz a fair constitutionalism. In the 1890s, the court ruled that utilities were constitutionally entitled to charge reasonable rates and that the determination reasonableness of the judicial question. This line of development, naked in the case of Smyth against aims of 1898 in which the court unanimously held that a utility must be allowed a fair return upon the value of our which employs the public convenience. This case had a formula which required that rates are based on the company’s present value and promulgated complex texts to ascertain such value.
In a case involving a state of Louisiana heard in 1897, the Supreme Court also developed important corollary of economic due process, the liberty of contract doctrine. The core reason the liberty is protected by the 14th amendment encompass the right to enter into all contracts which may be proper to pursue an occupation require property. States could not interfere with his contractual freedom, position the cast a deep shadow over legislative attempts to regulate the terms of employment. Although Lars a fair constitutionalism became predominant in the 1890s, the court also recognise that states could lawfully restrict property and contractual rights inappropriate situations under the police power. The justices were usually sympathetic to laws are protected the health and safety and morals of society. For instance, in the case of Holden against Hardy of 1898 the Supreme Court by voters 7 to 2 upheld the Utah statute limiting working mines to 8 hours a day. Rejecting a challenge based on the liberty of contract doctrine, the court stressed the unhealthy conditions of mine work a noted that miners and their employees did not have equal bargaining power.