FERGUSON v SKRUPA 872 US 726, 10 L ed 2d 93, 83 S Ct 1028, 95 ALR2₫ 1"}, APPEARANCES OF COUNSEL William M. Ferguson argued the cause for appellants. Lawrence Weigand argued the cause for appellee. Briefs of Counsel, p. 1113, infra. OPINION OF THE COURT Mr. Justice Black delivered the opinion of the Court. Keadnote 1 In this case, properly here on appeal under 28 USC § 1253, we are asked to review the judgment of a three-judge District Court enjoining, as being in violation of the Due Process Clause of the Fourteenth Amendment, a Kansas statute making it a misdemeanor for any person to engage "in the business of debt ad* [372 US 727] justing" except as an incident to "the lawful practice of law in this state." The statute defines "debt adjusting" as "the making of a contract, express, or implied with a particular debtor whereby the debtor agrees to pay a certain amount of money periodically to the person engaged in the debt adjusting business who shall for a consideration distribute the same among certain specified creditors in accordance with a plan agreed upon.” The complaint, filed by appellee Skrupa doing business as "Credit Advisors," alleged that Skrupa was engaged in the business of "debt adjusting" as defined by the statute, 1. Kan Gen Stat (Supp 1961) § 21-2464. 2. Twelve other States have outlawed the business of debt adjusting. Fla Stat Ann (1962) §§ 559.10-559.13; Ga Code Ann (Supp 1961) §§ 84-3601 to 84-3603; Me Rev Stat Ann (Supp 1961) c. 137, SS 51-53; Mass Gen Laws Ann (1958) c. 221, § 46C; NJ Stat Ann (Supp 1962) 2A:99A-1 to 2A:99A-4; NY Penal Law (Supp 1962) §§ 410-412; Ohio Rev Code Ann (1962 Supp) S$ 4710.01-4710.99; Okla Stat Ann (Supp 1962) Tit 24, §§ 1518; Pa Stat Ann (Supp 1961) Tit 18, § 4899; Va Code Ann (1958) § 54-44.1; W Va Code Ann (1961) § 6112(4); Wyo Stat Ann (1957) §§ 33-190 to 33-192. 95 gether." The court found that Skrupa's business did fall within the Act's proscription and concluded, one judge dissenting, that the Act was prohibitory, not regulatory, but that even if construed in part as regulatory it was an unreasonable regulation of a "lawful business," which the court held amounted to a violation of the Due Process Clause of the Fourteenth Amendment. The court Seven other States regulate debt adjusting. Cal Fin Code Ann (1955 and Supp 1962) §§ 12200-12331; Ill Stat Ann (Supp 1962) c. 16, §§ 251-272; Mich Stat Ann (Supp 1961) § 23.630 (1)-23.630(18); Minn Stat Ann (1947 and 1962 Supp) §§ 332.04332.11; Ore Rev Stat (1961) §§ 697.610697.992; RI Gen Laws (Supp 1962) §§ 542-1 to 5-42-9; Wis Stat Ann (1957) § 218.02. The courts of New Jersey have upheld a New Jersey statute like the Kansas statute here in question. American Budget Corp. v Furman, 67 NJ Super 134, 170 A2d 63, affd per curiam, 36 NJ 129, 175 A2d 622 (1961). 96 U. S. SUPREME COURT REPORTS accordingly enjoined enforcement of the statute.3 The only case discussed by the court below as support for its invalidation of the statute was Commonwealth v Stone, 191 Pa Super 117, 155 A2d 453 (1959), in which the Superior Court of Pennsylvania struck down a statute almost identical to the Kansas act involved here. In Stone the Pennsylvania court held that the State could regulate, but could not prohibit, a "legitimate" business. Finding debt adjusting, called "budget planning" in the Pennsylvania statute, not to be "against the public interest" and concluding that it could "see no jus tification for such interference" with this business, the Pennsylvania court ruled that State's statute to be un constitutional. In doing so, the Pennsylvania court relied heavily on Adams v Tanner, 244 US 590, 61 Led 1336, 37 S Ct 662, LRA1917F 1163 (1917), which held that the Due Process Clause forbids a State to prohibit a business which is "useful" and not "inherently immoral or dangerous to public welfare." Both the District Court in the present case and the Pennsylvania court in Stone adopted the philosophy of Adams v Tanner, and cases like it, that it is the province of courts to draw on their own views as 10 L cd 2d to legislatures, not courts, to decide on the wisdom and utility of legislation. There was a time when the Due Process Clause was used by this Court to strike down laws which unwise or incompatible with some were thought unreasonable, that is, ophy. In this manner the Due Procparticular economic or social philosess Clause was used, for example, to nullify laws prescribing maximum hours for work in bakeries, Lochner 937, 25 S Ct 539 (1905), outlawing v New York, 198 US 45, 49 L ed "yellow dog" contracts, Coppage v Kansas, 236 US 1, 59 L ed 441, 35 S Ct 240, LRA1915C 960 (1915), setting minimum wages for women, Adkins v Children's Hospital, 261 US 525, 67 L ed 785, 43 S Ct 394, 24 ALR 1238 (1923), and fixing the weight of loaves of bread, Jay Burns Baking Co. v Bryan, 264 US 504, 68 L ed 813, 44 S Ct 412, 32 ALR 661 (1924). This intrusion by the judiciary into the realm of legislative value judgments was strongly objected to at the time, particularly by Mr. Justice Holmes and Mr. Justice Brandeis. Dissenting from the Court's invalidating a state statute which regulated the resale price of theatre and other tickets, Mr. Justice Holmes said, "I think the proper course is to recognize that a state legislature can do whatever it sees fit to do unless it is restrained by some express prohibition in the Constitution of the United States or of the State, and that Courts should be careful not to extend such prohibitions beyond their obvious meaning by reading into them conceptions of public policy that the particular Court may happen to entertain." Mr. Justice Brandeis joined in this dissent, and Mr. Justice Stone dissented in an opinion joined by Mr. Justice Holmes and Mr. Justice Brandeis. Mr. Justice Sanford disscnted separately. DEBT ADJUSTING BUSINESS FERGUSON v SKRUPA 372 US 726, 10 L ed 2d 93, 83 S Ct 1028, 95 ALR2d 1317 Mr. Justice Harlan concurs in the judgment on the ground that this state measure bears a rational relation to a constitutionally permis 99 sible objective. See Williamson v (The prepared statement of Mr. Rabinowitch follows:) My name is Morris Rabinowitch, of California, representing the American Association of Credit Counselors and speaking to the two bills, HR8929 and HR9806, which are now before this Committee. It is my intention, on behalf of the members of the Association and affiliated members throughout the United States to clarify our position in the current discussions regarding credit counselling and financial management. Neither I nor the Association has nor do we at any time intend to defend, excuse or alibi for any abuses that may have occurred, whether it be in the District of Columbia or any other community. Our purpose in being here today is to request strict regulatory legislation and enforcement thereof in the field of credit counselling for the protection and benefit of the consumer. While we in the field of credit counselling are no more anxious than any other business or service to have government regulation, we have long recognized the necessity for such regulation. We know that, acting as fiduciaries as we do, we must have regulation and enforcement beyond that which the industry itself can provide. It is for this reason that the American Association of Credit Counsellors has, openly, actively and continuously, worked for such legislation and the enforcement thereof. As far back as the early 1950's, a number of us who had pioneered in the field became alarmed at certain abuses, of the kind that have been alleged in the District of Columbia. We recognized the need for fixed standards of professional conduct in the interest of the consumer and the creditor. Although at the time we were well aware that adverse publicity would reflect on the innocent as well as the guilty, nevertheless, in strategic areas across the country, we set about to bring offences to light, to expose them to the glare of publicity, and to use the resultant publicity in our efforts to obtain regulatory legislation. In Chicago, where abuses to consumers were extreme, Mr. Price Patton headed a campaign to unearth instances of malpractice, bring them to the attention of civic leaders and public officials and, eventually, to sponsor and finally obtain regulatory legislation in Illinois. We are proud that the administrative body of the State of Illinois adopted a code for acceptance or rejection of advertising which was developed by our Association, in conjunction with the Better Business Bureau of Chicago. In June of 1967, a survey made by the Illinois Advisory Board on Financial Planning showed not only that the results of financial counselling services were beneficial, but that in communities where no such service was in existence, it is actively needed and desired. Copies of this survey are here provided. In the State of Oregon, prior to the enactment of regulatory legislation, there was a serious case of defalcation by one individual. Again, it was a member of the Association, Mr. Lewis Finney, who came forward to lead the fight for constructive legislation. Since the enactment of this legislation in the state of Oregon, we have been unable to find any instances of abuses in that state. In Michigan, Mr. Morris Purdy, one of our senior members, together with others in the American Association of Credit Counsellors, was finally successful in his efforts to obtain regulatory legislation which has since worked effectively in the interest of the consumer. I am very proud of the results we have had in California, where in 1957 legislation was enacted that has served as a model for other states. Since the enactment of this legislation, not one instance of malpractice has been proved in California. To substantiate this, I am providing copies of my wire to the California Better Business Bureaus in the major population centers and the replies thereto. I would like to point out the unanimity of the replies in stating that there have been no reports of abuses. I would also like to quote two paragraphs from one letter of reply which points up the difference regulation makes by 98 U. S. SUPREME COURT REPORTS Headnote 10 10 Led 2d of the laws to nonlawyers. Statutes create classifications many which do not deny equal protection; it is only "invidious discrimination" which offends the Constitution.15 The business of debt adjusting gives rise to a relationship the Kansas Legislature was free lawyers a denial of equal protection to decide for itself that Headnote 7 legislation was needed to deal with the business of debt adjusting. Unquestionably, there are arguments showing that the business of debt adjusting has social utility, but such arguments are properly addressed to the legislature, not to us. We refuse to sit as a "superlegislature to weigh the wisdom of legislation,"11 and we emphatically refuse to go back to the time when courts used the Due Process Clause "to strike down state laws, regulatory of business and industrial conditions, because they *[372 US 732] may be unwise, improvident, or out willing to draw lines by Headnote 8 calling a law "prohibiHeadnote 9 tory" or "regulatory." Whether the legislature takes for its textbook Adam Smith, Herbert Spencer, Lord Keynes, or some other is no concern of ours.13 The Kansas debt adjusting statute may be wise or unwise. But relief, if any be needed, lies not with us but with the body constituted to pass laws for the State of Kansas.14 Nor is the statute's exception of 85 Led 1305, 61 S Ct 862, 133-ALR 1500 (1941). Ten years later, in Breard v Alexandria, 341 US 622, 631, 632, 95 L ed 1233, 1242, 71 S Ct 920, 35 ALR2d 335 (1951), this Court again commented on the infirmity of Adams. 11. Day-Brite Lighting, Inc. v Missouri, 342 US 421, 423, 96 L ed 469, 472, 72 S Ct 405 (1952). 12. Williamson v Lee Optical of Okla., Inc. 348 US 483, 488, 99 L ed 563, 572, 75 S Ct 461 (1955). 13. "The Fourteenth Amendment does not enact Mr. Herbert Spencer's Social Statics." Lochner v New York, 198 US 45, 74, 75, 49 L ed 937, 948, 949, 25 S Ct 539 (1905) (Holmes, J., dissenting). 14. See Daniel v Family Secur. Life Ins. of trust in which the debt Headnote 12 adjuster will, in a situa tion of insolvency, be marshalling assets in the manner of a proceeding in bankruptcy. The debt adjuster's client may need advice as to the legality of the various claims against him, remedies existing under state laws governing debtor-creditor relationships, or provisions of the Bankruptcy Actadvice which a nonlawyer cannot lawfully give him. If the State of Kansas wants to limit debt adjusting to lawyers, 16 the Equal Protection *[372 US 733] *Clause does not forbid it. We also find no merit in the conHeadnote 13 tention that the Four teenth Amendment is violated by the failure of the Kansas statute's title to be as specific as appellee thinks it ought to be under the Kansas Constitution. Reversed. Co. 336 US 220, 224, 93 L ed 632, 636. 69 15. See Williamson v Lee Optical of Okla., Inc. 348 US 483, 488, 489, 99 Led 563, 572, 573, 75 S Ct 461 (1955); Lindsley v Natural Carbonic Gas Co. 220 US 61, 78, 79, 55 L ed 369, 377, 31 S Ct 337 (1911). 16. Massachusetts and Virginia prohibit debt pooling by laymen by declaring it to constitute the practice of law. Mass Gen Laws Ann (1958) c. 221, § 46C; Va Code Ann (1958) § 54-44.1. The Massachusetts statute was upheld in Home Budget Service, Inc. v Boston Bar Asso. 335 Mass 228, 139 NE2d 387 (1957). [10 Led 2d] FERGUSON v SKRUPA 372 US 726, 10 L ed 2d 93, 83 S Ct 1028, 95 ALR2d 1347 Mr. Justice Harlan concurs in the judgment on the ground that this state measure bears a rational relation to a constitutionally permis sible objective. See Williamson v Lee Optical of Okla., Inc. 348 US 483, 491, 99 L ed 563, 574, 75 S Ct 461. (The prepared statement of Mr. Rabinowitch follows:) Congressman Sisk, Members of the Committee My name is Morris Rabinowitch, of California, representing the American Association of Credit Counselors and speaking to the two bills, HR8929 and HR9806, which are now before this Committee. It is my intention, on behalf of the members of the Association and affiliated members throughout the United States to clarify our position in the current discussions regarding credit counselling and financial management. Neither I nor the Association has nor do we at any time intend to defend, excuse or alibi for any abuses that may have occurred, whether it be in the District of Columbia or any other community. Our purpose in being here today is to request strict regulatory legislation and enforcement thereof in the field of credit counselling for the protection and benefit of the consumer. While we in the field of credit counselling are no more anxious than any other business or service to have government regulation, we have long recognized the necessity for such regulation. We know that, acting as fiduciaries as we do, we must have regulation and enforcement beyond that which the industry itself can provide. It is for this reason that the American Association of Credit Counsellors has, openly, actively and continuously, worked for such legislation and the enforcement thereof. As far back as the early 1950's, a number of us who had pioneered in the field became alarmed at certain abuses, of the kind that have been alleged in the District of Columbia. We recognized the need for fixed standards of professional conduct in the interest of the consumer and the creditor. Although at the time we were well aware that adverse publicity would reflect on the innocent as well as the guilty, nevertheless, in strategic areas across the country, we set about to bring offences to light, to expose them to the glare of publicity, and to use the resultant publicity in our efforts to obtain regulatory legislation. In Chicago, where abuses to consumers were extreme, Mr. Price Patton headed a campaign to unearth instances of malpractice, bring them to the attention of civic leaders and public officials and, eventually, to sponsor and finally obtain regulatory legislation in Illinois. We are proud that the administrative body of the State of Illinois adopted a code for acceptance or rejection of advertising which was developed by our Association, in conjunction with the Better Business Bureau of Chicago. In June of 1967, a survey made by the Illinois Advisory Board on Financial Planning showed not only that the results of financial counselling services were beneficial, but that in communities where no such service was in existence, it is actively needed and desired. Copies of this survey are here provided. In the State of Oregon, prior to the enactment of regulatory legislation, there was a serious case of defalcation by one individual. Again, it was a member of the Association, Mr. Lewis Finney, who came forward to lead the fight for constructive legislation. Since the enactment of this legislation in the state of Oregon, we have been unable to find any instances of abuses in that state. In Michigan, Mr. Morris Purdy, one of our senior members, together with others in the American Association of Credit Counsellors, was finally successful in his efforts to obtain regulatory legislation which has since worked effectively in the interest of the consumer. I am very proud of the results we have had in California, where in 1957 legislation was enacted that has served as a model for other states. Since the enactment of this legislation, not one instance of malpractice has been proved in California. To substantiate this, I am providing copies of my wire to the California Better Business Bureaus in the major population centers and the replies thereto. I would like to point out the unanimity of the replies in stating that there have been no reports of abuses. I would also like to quote two paragraphs from one letter of reply which points up the difference regulation makes by |