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Opinion of the Court
tion, putting employers who had coordinated benefits for previously disabled workers in the same position as those who had not. House Legislative Analysis of Senate Bill 67, p. 2 (May 7, 1987). The amended Senate bill passed into law on May 14, 1987. 1987 Mich. Pub. Acts No. 28.
As a result of the 1987 statute, petitioners were ordered to refund nearly $25 million to disabled employees. They protested that the provision requiring reimbursement of benefits withheld was unfairly retroactive and violated the Contract Clause and the Due Process Clause. The Michigan Supreme Court upheld the statute against these challenges, on the ground that the employers had no vested rights in coordination for Contract Clause purposes, and that the retroactive provisions furthered a rational legislative purpose. 436 Mich. 515, 462 N. W. 2d 555 (1990). We granted certiorari, 500 U. S. 915 (1991), and now affirm.
II
Article I, § 10, of the Constitution provides: "No State shall . . . pass any . . . Law impairing the Obligation of Contracts." Petitioners claim that the 1987 statute requiring reimbursement of benefits withheld in reliance on the 1981 coordination provisions substantially impaired the obligation of the contracts with their employees.
Generally, we first ask whether the change in state law has "operated as a substantial impairment of a contractual relationship." Allied Structural Steel Co. v. Spannaus, 438 U. S. 234, 244 (1978); Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U. S. 400, 411 (1983). This inquiry has three components: whether there is a contractual relationship, whether a change in law impairs that contractual relationship, and whether the impairment is substantial. Normally, the first two are unproblematic, and we need address only the third. In this case, however, we need not reach the questions of impairment, as we hold that there was no
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