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A Louisiana statute prohibited foreign (out-of-state) insurance corporations from conducting business in Louisiana without maintaining at least one place of business and an authorized agent in the State. Louisiana implemented the statute as an exercise of its police powers, intending to protect its citizens from deceitful insurance companies. Allgeyer and Company violated this statute by purchasing insurance from a firm based in the State of New York which did not meet the requirements of the Louisiana law.

Does the Louisiana law violate the Fourteenth Amendment's due process clause which, according to Allegyer and Company, protects its liberty to enter into contracts with businesses of its choice?

Yes. In a unanimous decision, the Court found that the Louisiana statute deprived Allgeyer and Company of its liberty without due process of law as protected by the Constitution's Fourteenth Amendment. The Court reasoned that even though the Atlantic Mutual Insurance Company of New York did not maintain an office or agent in Louisiana, Allgeyer and Company could still, as it did, enter into a contract with Atlantic Mutual in the state of New York to insure its Louisiana property. Justice Peckham's opinion makes clear the linkage between an individual's economic liberty and the due process clause.