A state law may be retrospective in its character, and may divest vested rights; and yet not violate the constitution of the United States, unless it also impairs the obligation of a contract.
Plaintiffs brought suit alleging that the act of incorporating defendants' new bridge impaired the obligation of the contract with plaintiffs, who were the proprietors of an old bridge across the same river. The proprietors of the Charles River Bridge filed a bill in the Supreme Judicial Court of Massachusetts against the proprietors of the Warren Bridge, first for an injunction to prevent the erection of the bridge, and afterwards for general relief; stating that the act of the Legislature of Massachusetts authorizing the building of the Warren Bridge was an act impairing the obligations of a contract, and therefore repugnant to the Constitution of the United States. The state supreme court dismissed plaintiffs' bill. Plaintiffs appealed. The judgment dismissing plaintiffs' bill was affirmed. The Court held that there was no obligation under the contract with plaintiffs that prevented the incorporation of a new bridge over the same river as plaintiffs' bridge.
Did the lower courts err in dismissing the bill?
The United States Supreme Court stated that a state law could be retrospective in its character and could divest vested rights and yet not violate the United States Constitution unless it also impaired the obligation of a contract. Therefore, the Court found that in order to recover, plaintiffs had to have shown that the title they claimed was acquired by contract, and that the terms of that contract were violated by the charter to the new bridge. The Court found that the rights of plaintiffs were derived entirely from the act of the legislature under which plaintiffs were incorporated and the act did not give plaintiffs exclusive privilege to the waters of the river. Therefore, the Court held that plaintiffs' bill had properly been dismissed.