A majority of five judges held that a New York law requiring that bakery employee hours had to be under 10 hours a day and 60 hours a week violated the due process clause, which in their view contained a right of "freedom of contract." They said there was "unreasonable, unnecessary and arbitrary interference with the right and liberty of the individual to contract." Four dissenting judges rejected this view, and Oliver Wendell Holmes's dissent in particular became one of the most famous opinions in US legal history.
Lochner is one of the most controversial decisions in the Supreme Court's history, giving its name to what is known as the Lochner era. During this time, the Supreme Court issued several decisions invalidating federal and state statutes that sought to regulate working conditions during the Progressive Era and the Great Depression. This period ended with West Coast Hotel Co. v. Parrish (1937), in which the Supreme Court upheld the constitutionality of minimum wage legislation enacted by the State of Washington.
Joseph Lochner, who owned Lochner's Home Bakery in Utica, claimed that the New York Legislature's Bakeshop Act of 1895 was unconstitutional. The Bakeshop Act regulated health conditions in bakeries and prohibited employees from working in bakeries for more than 10 hours per day or 60 hours per week. In 1899, Lochner was indicted on a charge that he violated Section 110 of Article 8, Chapter 415, of the Laws of 1897, as he had wrongfully and unlawfully permitted an employee working for him to work more than 60 hours in one week. He was fined $25 (equivalent to $700 in 2017). For a second offense in 1901, Lochner drew a fine of $50 (equivalent to $1,500 in 2017) from the Oneida County Court. Lochner appealed his second conviction. However, the conviction was upheld, 3–2, by the Appellate Division of the New York Supreme Court. He appealed again to the New York Court of Appeals, New York's highest court, where he lost, 4–3. He then took his case to the Supreme Court of the United States.
Lochner's appeal was based on the Fourteenth Amendment to the US Constitution: "... nor shall any State deprive any person of life, liberty, or property, without due process of law." In a series of cases starting with Dred Scott v. Sandford (1857), the Supreme Court established that the Due Process Clause (found in both the Fifth and Fourteenth Amendments) is not only a procedural guarantee, but also a substantive limitation on the type of control that the government may exercise over individuals. Although that interpretation of the due process clause is a controversial one (see substantive due process), it had become firmly embedded in American jurisprudence by the end of the 19th century. Lochner argued that the right to contract freely was one of the rights encompassed by substantive due process.
Scholars have noted that when the Fourteenth Amendment was adopted in 1868, 27 out of 37 state constitutions had Lockean Provisos, which typically said: "All men are by nature free and independent, and have certain inalienable rights, among which are those of enjoying and defending life and liberty, acquiring and possessing and protecting property: and pursuing and obtaining safety and happiness." As such clauses were "deeply rooted in American history and tradition," they likely informed the original meaning of the scope and nature of the fundamental rights protected by the Fourteenth Amendment in the eyes of Lochner-era justices.
The Supreme Court had accepted the argument that the due process clause protected the right to contract seven years earlier, in Allgeyer v. Louisiana (1897). However, the Court had acknowledged that the right was not absolute, but subject to the police power of the states. For example, in Holden v. Hardy (1898), the Supreme Court upheld a Utah law setting an eight-hour work day for miners. In Holden, Justice Henry Brown wrote that while "the police power cannot be put forward as an excuse for oppressive and unjust legislation, it may be lawfully resorted to for the purpose of preserving the public health, safety, or morals." The issue facing the Supreme Court in Lochner was whether the Bakeshop Act represented a reasonable exercise of the state's police power.
Lochner's case was argued by Henry Weismann, who had been one of the foremost advocates of the Bakeshop Act when he was Secretary of the Journeymen Bakers' Union. In his brief, Weismann decried the idea that "the treasured freedom of the individual ... should be swept away under the guise of the police power of the State." He denied New York's argument that the Bakeshop Act was a necessary health measure by claiming that the "average bakery of the present day is well ventilated, comfortable both summer and winter, and always sweet smelling." Weismann's brief contained an appendix providing statistics showing that bakers' mortality rates were comparable to that of white-collar professionals.