The decision marked the beginning of the Lochner era[2] during which the Supreme Court struck many state regulations for infringing on an individual's right to contract.

[3] In 1894, the Louisiana legislature passed a statute, "An act to prevent persons, corporations or firms from dealing with marine insurance companies that have not complied with law."

The ostensible purpose of the statute was to prevent fraud by requiring state citizens and corporations to abstain from business with out-of-state marine insurance companies.

On December 21, 1894, the State of Louisiana filed a petition in Orleans Parish court alleging Allgeyer had violated the statute in three counts and sought a cumulative fine of $3,000 (equivalent to $106,000 in 2023).

Instead of offering an argument of innocence, Allgeyer challenged the statute on grounds for violating the Due Process Clause of the Fourteenth Amendment of the US Constitution.