General Jackson's arrival in New Orleans in 1814 was preceded by weeks of urgent correspondence from Governor William C. C. Claiborne questioning the loyalty of Louisianans to the United States. After having read a proclamation to the "Natives of Louisiana" from a British officer and seeing firsthand the panic and disorder preceding the British landing, Jackson declared martial law on December 16, 1814, suspending the free movement of citizens and placing everyone under his military authority. It was an unprecedented move for an American general, one that would have lasting ramifications for Jackson and the country at large.

Soon after the decisive defeat of the British army at Chalmette and the subsequent departure of its surviving troops, locals implored Jackson to heed reports of a peace treaty and lift the military curfews and restrictions that had become a hardship. Jackson would not do so while the British army remained in the Gulf region and without official word from Washington. When a newspaper editorial criticized the general's heavy-handedness with the local French population, Jackson had the writer, a state senator, arrested for inciting mutiny. A federal judge who attempted to intervene was also arrested and subsequently banished from Jackson's military jurisdiction. Official news of the war's end reached Jackson’s headquarters in mid-March, and he immediately lifted martial law. Within days he received a summons from the judge he had arrested, Dominick A. Hall of the District Court of Louisiana. Hall ultimately fined the general $1,000 for contempt of court. Jackson quietly paid the hefty fine before his departure, but he also obtained statements from fellow officers in support of his use of martial law during the crisis. 

In the elections of 1824 and 1828, Jackson’s political opponents lambasted his trampling of the Constitution, but Jackson never apologized for his decision, stating that he would "under similar circumstances not refrain from a course equally bold." After Jackson's retirement from the presidency, his friends mounted a campaign to have the 1815 fine refunded to the general, with interest. A heated national debate in the early 1840s led to resolutions supporting Jackson in various state legislatures. Early in 1844, President John Tyler signed the joint congressional resolution refunding the fine with interest. Even so, because of its constitutional implications, the episode remains controversial to this day. As the historian James Parton observed, "the maintaining of martial law in New Orleans two months too long, we may condemn, and, I think, should condemn; yet most of the citizens of the United States will concur in the wish, that when next a [foreign] army lands upon American soil, there may be a Jackson to meet them at the landing-place."