Under New Jersey law, commissions on the sale of fire insurance policies were required to be “reasonable.” The O’Gorman firm sold Hartford Fire Insurance policies. Their contract provided that the commissions would be priced at “what such services were reasonably worth.” O’Gorman asserted that its commission was “reasonably worth” 25 percent of the insurance premiums. Hartford, however, only paid a 20 percent commission. O’Gorman filed suit for breach of contract. The trial court found that under New Jersey law, a 25 percent commission was unreason- able and could not be paid.
O’Gorman appealed the case to the Supreme Court. The firm argued that the regulation deprived the company of property—that is, the extra commission— without the due process of law.