Economic Due Process Research Articles

Federalism, Mandates and Individual Liberty

This article presents the missing federalism and individual liberty portion of Chief Justice Roberts’ health care case opinion. It illuminates and reinforces the commerce power and limited and enumerated powers arguments he makes there just as the Tenth Amendment and the doctrine of federalism more generally illuminate and reinforce the commerce power and the doctrine of limited and enumerated powers in constitutional law and doctrine. It also answers and explains the claims made by the Chief Justice’s critics on and off the bench that his opinion and similar arguments made by like-thinking lower court judges and law professors use a semi-respectable cover of federalism and enumerated powers arguments to mask their real constitutional doctrine and goals — turning back commerce power doctrine to the bad old days of Hammer v. Dagenhart and economic due process doctrine to the much-maligned case of Lochner v. New York. These critics, in effect, take the Chief Justice and his supporters here to be conservative deconstructionists, intent on reversing the status and valorization of the current constitutional canon and anti-canon.The Chief Justice’s critics are right to say that his opinion is based on (largely unstated) individual liberty grounds, but they are wrong to charge that these are economic due process grounds. The unconstitutionality of individual economic mandates can be established without turning back the constitutional clock or overturning modern precedent. It can be better accomplished in a doctrine of federalism and individual liberty fully consistent with Supreme Court precedent since 1937, including the health care case. This argument brings together the doctrine of the Court’s state anti-commandeering cases and their Tenth Amendment/individual liberty decision in Bond v. United States to argue for the unconstitutionality of individual economic mandates and appeals to the spirit as well as the letter of the Constitution.These critics misperceive the differences between their constitutional vision and that of Chief Justice Roberts, taking them to involve a difference in canons, when instead they arise out of a difference in constitutional gestalts. The two sides here do not follow different cases; they only have different takes on the same cases. Chief Justice Roberts’ critics overlook the view of federalism and individual liberty here presented, mainly because there is no logical space for it in their constitutional worldview which, for example, sees the Tenth Amendment as merely a truism. For this reason, they wrongly conclude that those holding opposing views can only do so because they reject post-1937 constitutional precedent and doctrine and wish to bring back Lochner, Hammer and the constitution in exile.

Inventing the Classical Constitution

One recurring call over a century of American constitutional thought is for return to a understanding of American federal and state Constitutions. does not necessarily mean originalist or interpretivist. Some classical views, such as the attempt to revitalize Lochner-style economic due process, find little support in the text of the federal Constitution or any of the contemporary state constitutions. Rather, constitutional meaning is thought to lie in a background link between constitution formation and classical statecraft. The core theory rests on the assumption of a to which everyone in some initial position agreed. Like any contract, it would make every participant a winner. The participants have liberty and property rights antecedent to the state, but choose to give up as little of these as needed to empower government. Because insisting on either unanimous consent or individual voter participation on every issue is impractical and unwise, republican representative government comes into existence. But then it is essential that this government act consistently with the and not be captured by factions, or special interests.The result is constitutionalism that is wary of legislation as excessively vulnerable to special interest capture, suspicious of non-unanimous direct democracy tools such as initiatives and referenda because they often disrespect individual rights, and severely critical of most forms of economic regulation. With this distrust of legislation comes a reliance on judges to get the right answer, striking down statutes as unconstitutional even when the court's mandate is not explicitly stated in any constitutional language.This article argues, first, that the Constitution was not classical in its inception. Historically it was pre-classical, particularly on matters of private and property rights and government intervention in the economy. That conclusion is consistent with its text, but even clearer from contemporary perspective, as well as early court interpretation. Second, a distinctively perspective on the Constitution came later, as the influence of Adam Smith's Wealth of Nations and his English and American followers filtered through American academies. The adoption of classical views resulted from the Jacksonian movement, which began in the 1820s. It took root in federal constitutional doctrine with Jackson's appointment of Chief Justice Roger B. Taney, an economic liberal. Classical liberal views increasingly influenced both state and federal constitutional thought well into the twentieth century, although state courts interpreting their own constitutions led the way. These included a reversal of Chief Justice Marshall's broad reading of the federal commerce power, a strong antiregulatory bias favoring private markets, suspicion of monopoly, the rise of a theory of inverse takings so as to limit the government's power to engage in economic development that harmed private property, development of a technical and narrowly focused patent system as an exception to this hostility toward monopoly, legislative capture justifications for judicial review, and a strong view of liberty of contract. As these doctrines expanded, however, constitutional doctrine began to depart more significantly from constitutional texts.While constitutional classicism was liberal in its economics, it was not libertarian. Even the strongest advocates for laissez faire in constitutional economic theory also favored strong regulation of morality on fundamentally Christian grounds. These views characterized both the great Gilded Age public law treatise writers as well as the Supreme Court. Third, one defining element of classical political theory -- the social -- never captured an important following in American mainstream constitutional thought, not even during the founding and early national periods or the later heyday of constitutional classicism. While judges and constitutional writers sometimes spoke of a contract or compact, they almost always meant the text of a constitution or some other authoritative document. They rarely advocated for a doctrine that would enable them to jump off the ratified text to some unnamed fundamental principle. Even the academic and judicial architects of economic substantive due process during the Gilded Age and Progressive Era did not typically rely on the idea, and some of them forcefully rejected it. Fourth, and concluding, the idea that classical constitutional doctrine was displaced by progressive constitutionalism is also wrong, or at least wildly exaggerated. The constitutional revolution that occurred during the first four decades of the twentieth century was certainly supported by self-identified progressives. But support for change was broader and much more centrist, driven by changes in economic theory that today are accepted by liberals and conservatives alike. This makes it impossible to go back.

What the New Deal Settled

This brief essay, written in conjunction with a symposium comparing the Franklin Delano Roosevelt and Obama presidencies, explores the absence of substantive due process arguments in the Affordable Care Act litigation and attendant public discourse. I argue that a substantive due process argument against the Act's individual mandate is at least as sound doctrinally as a federalism-based argument, but to the extent such arguments have been made, they have been rejected as frivolous. I suggest that this phenomenon may result in part from political obstacles to coalescing around and funding a substantive due process argument and in part from the shadow Lochner v. New York casts over arguments that may be characterized (even inaccurately) as sounding in economic due process. The ACA litigation demonstrates one way in which Lochner's anticanonicity distorts modern legal argument.

Negative and Positive Integration in EU Economic Law: Between Strategic Denial and Cognitive Dissonance?

It is a generally held assumption that the EU economic free movement rights are tools in the creation of a European internal market; and that their main goal is the (negative) market integration of different national markets. Yet these freedoms do not determine how market integration is to proceed, or which kind of integrated European market will emerge. The resulting market may be more or less regulated, and the creation of the relevant regulatory rules may be allocated to a variety of sources. These options are reflected in the different proposed tests used to determine whether a national measure prima facie infringes one of the market freedoms. The proposed tests fall into two main categories — broad tests and narrow tests — and each type has its own implications for European integration. Broad tests, usually associated with obstacle tests or even with economic due process clauses, tend to be seen as having three main outcomes. One result of broad tests is centralization, implying that ultimate decisions concerning the legitimacy of national law rests with EU institutions, and particularly with the of Justice of the European Union (the Court or CJEU). Another outcome of broad tests is the possible harmonization of national laws through the European political process by increasing the amount of national legislation susceptible to being harmonized under Articles 114 to 118 on the Treaty on the Functioning of the European Union (TFEU). A third consequence of broad tests is deregulation through the elimination of national rules creating obstacles to trade. Alternatively, narrow approaches — usually associated with discrimination or typological tests — are usually coupled with regulatory pluralism via a greater degree of control of the harmonization competences of the EU, decentralization through the protection of a greater sphere of Member States’ autonomy, and economic agnosticism. Views on the potential outcomes of broad and narrow tests are, in turn, related to normative debates about the ideal levels of centralization, harmonization, and regulation in the internal market.

Negative and Positive Integration in EU Economic Law: Between Strategic Denial and Cognitive Dissonance?

It is a generally held assumption that the EU economic free movement rights are tools in the creation of a European internal market; and that their main goal is the (negative) market integration of different national markets. Yet these freedoms do not determine how market integration is to proceed, or which kind of integrated European market will emerge. The resulting market may be more or less regulated, and the creation of the relevant regulatory rules may be allocated to a variety of sources. These options are reflected in the different proposed tests used to determine whether a national measure prima facie infringes one of the market freedoms. The proposed tests fall into two main categories—broad tests and narrow tests—and each type has its own implications for European integration. Broad tests, usually associated with obstacle tests or even with economic due process clauses, tend to be seen as having three main outcomes. One result of broad tests is centralization, implying that ultimate decisions concerning the legitimacy of national law rests with EU institutions, and particularly with the Court of Justice of the European Union (“the Court” or “CJEU”). Another outcome of broad tests is the possible harmonization of national laws through the European political process by increasing the amount of national legislation susceptible to being harmonized under Articles 114 to 118 on the Treaty on the Functioning of the European Union (“TFEU”). A third consequence of broad tests is deregulation through the elimination of national rules creating obstacles to trade. Alternatively, narrow approaches-usually associated with discrimination or typological tests-are usually coupled with regulatory pluralism via a greater degree of control of the harmonization competences of the EU, decentralization through the protection of a greater sphere of Member States' autonomy, and economic agnosticism. Views on the potential outcomes of broad and narrow tests are, in turn, related to normative debates about the ideal levels of centralization, harmonization, and regulation in the internal market.

Exit Strategies in Constitutional Law: Lessons for Getting the Least Dangerous Branch out of the Political Thicket

This essay explores in constitutional law - ways that the Supreme Court retreats from entanglement in an area of law in which it is already involved. It offers five examples. First, the Court can announce that the difficulty that prompted intervention has been solved, thereby removing the need for further adjudication, as the Court did when it reversed National League of Cities v. Usery in Garcia v. San Antonio Metropolitan Transit Authority. Second, the Court can announce a standard that devolves responsibility onto another actor. I trace here the move from Redrupping to the Miller standard for judging obscenity. Third, the Court can announce rules that have an aura of mechanical application, thereby avoiding the appearance, if not the reality, of judicial policymaking or entanglement, as it did in the one-person, one-vote cases. Fourth, the Court can relax substantive constraints to the point at which cases disappear, because litigants lack any real incentive to bring them. This may describe the commerce clause from 1942 to 1995 and economic due process after the New Deal. Finally, a Court wary of its ability to avoid deeper immersion can announce such factbound rules that it enables future courts to scramble back to the banks. This may describe the Court's opinions in Romer v. Evans and Bush v. Gore. In addition to cataloging and comparing exit strategies, this essay considers the possible utility of each exit strategy in enabling the Court to extricate itself from the mess it has created in one particularly tangled part of the political thicket: the racial redistricting cases. From among the techniques I examine, only two seem plausible. The Court could recast the form of review in highly deferential terms, and leave enforcement of the constitutional constraint to the political branches, as it did in the areas of economic due process and the commerce clause pre-Lopez. Or it could declare victory and go home, leaving the field to the political branches, as it did in the case of the Tenth Amendment. Focusing on exit strategies as a genre can be useful. Exit and entry can be quite asymmetric: sometimes it can take decades to put up an edifice and only minutes to demolish it; other times getting in can take but an instant while divorces can drag on forever. Exit poses distinct challenges. The techniques that Alexander Bickel celebrated in his discussion of the virtues may be useful in keeping a court out of trouble in the first place without providing much of a roadmap for retreat. For example, if the Supreme Court were to refuse to hear redistricting cases (practicing the passive virtue of declining the exercise of jurisdiction which is given) but were to leave in place the existing legal rules, this would exacerbate current problems. Except for rendering a previously litigable claim nonjusticiable, exit strategies are almost bound to require some revision of substantive legal standards.

The New Deal Court in the 1940s: Its Constitutional Legacy

The New Deal Court in the 1940s: Its Constitutional Legacy David P. Currie Earlier lectures in this series have traced the ori­ gins of the New Deal crisis in tum-of-the-century decisions like UnitedStates v. E.C. Knight Co.1 and Lochnerv. NewYork,2 which limited federal and state regulatory authority; the development ofthese ideas through the Progressive era and the days of Chief Justice HowardTaft; the frustration ofthe New Deal by the “Four Horsemen” (Justices Willis Van Devanter, James C. McReynolds, George Sutherland, and Pierce Butler) and their occasional allies in such cases as Schechter Poultry Corp. v. United States2 andMorehead v. New Yorkex rel. Tipaldo? the 1937 judicial revolution, highlightedby West CoastHotel Co. v. Parrish,5 andLaborBoardv. Jones & Laughlin Steel Corp.,6 which gave the New Deal a green light; and the impact ofPresident Franklin D. Roosevelt’s Court-packing proposal in precipitating the change. My task is to discuss the immediate aftermath. What happened after the New Deal revolution? Did the Court live happily ever after? Or did new issues come along to divide the Justices once again? We know they did. What were the new issues? How did the Court react to them? And how were its reactions shaped by the events ofthe 1930s? The revolution of 1937 was one ofthe six major turning points in our constitutional history. The first, characterized by the Declaration of Independence, the Revolutionary War, and the Articles ofConfed­ eration, was the establishment ofa new nation. The second was the strengthening ofthe central govern­ ment through adoption of the Philadelphia Consti­ tution and its sympathetic interpretation by the Su­ preme Courtunder ChiefJustice John Marshall. The third was the Civil War and the consequent adop­ tion of the Thirteenth, Fourteenth, and Fifteenth Amendments, which significantly restricted state power. The fourth wasjudicial transformation ofthe FourteenthAmendment from an instrumentdesigned to promote racial equality into a tool for suppress­ ing the welfare state. The fifth —the subject ofthis series—was the abandonment both of substantive due process and of established limitations on fed­ eral authority. Forthose were the principal issues in the New Deal crisis: laissez-faire and federalism; economic due process; and the scope of congres­ sional authority. The sixth, heraldedby the Carolene Products footnote, was an increased insistence on civil rights and liberties, partly discussed in this pa­ per. In terms of constitutional jurisprudence, 1937 was the end of an era. After West Coast Hotel the 88 JOURNAL 1997, VOL. 1 Court was no longer concerned with the economic reasonableness oflaws; afterJones & Laughlin it no longer questioned Congress’s authority over the na­ tional economy. In terms ofjudicial personnel, 1937 marked the beginning ofthe end ofan era. Justice Van Devanter left the Court that year. By 1941 all four Horsemen were gone: Sutherland left in 1938, Butler in 1939, McReynolds in 1941. It was symbolic ofthe chang­ ing times that when it came time for Roosevelt to appoint a new ChiefJustice in 1941 he picked Jus­ tice Harlan Fiske Stone, who, with his articulate op­ position to the nullifying decisions of the 1930s— culminating in his electric dissent in United States v. Butler1—best personified the Court’s new ap­ proach. The only other member of the 1937 Court who remained in 1941 was Owen J. Roberts, whose famous change ofhearthad made the revolutionpos­ sible. President Roosevelt had the rare opportunity to appoint seven new Justices within five years. Un­ derstandably, they were carefully selected to be sym­ pathetic to his program: Hugo L. Black in 1937, Stanley F. Reed in 1938, Felix Frankfurter and Will­ iam O. Douglas in 1939, Frank Murphy in 1940, James F. Byrnes, Jr., and Robert H. Jackson in 1941. Wiley Rutledge replacedByrnes when the latterwent to work for Roosevelt in 1943. Thus by 1941 the Court, appropriately ensconced inits new building, boasted a new ChiefJustice, seven new members, and a new approach to constitutional interpretation. A new era had indeed begun. The Washington Postcheerily predicted “virtual unanim­ ity” on the Court “for years to come.” But it was not to be. On the old questions of the 1930s the Post was correct. The new Court carriedthe principles of 1937 to new extremes. Wickard v Filburn...

Economic regulation and the late nineteenth-century Supreme Court: An economic interpretation of the relation between police powers and substantive due process

The late nineteenth-century Supreme Court rulings on the constitutionality of state labor laws offer a fertile field for application of models of economic regulation. This study examines several key decisions, including the rulings on the famous Slaughterhouse Cases (1873) and the case of Butcher's Union Co. v. Crescent City Co. (1884), which marked out the Court's approach to the economic due process clause in the Fourteenth Amendment. The interest group model of regulation is found to be of limited value in understanding the Court's limitations on state police powers. It is argued instead that the market failure model, as interpreted in the framework of the common law's approach to economic regulation, provides a more credible explanation of the Court's opinions. They are better understood in light of the common law distinction between the legitimate and illegitimate application of regulation under state police powers.

Resurrecting Economic Rights: The Doctrine of Economic Due Process Reconsidered

Resurrecting Economic Rights: The Doctrine of Economic Due Process Reconsidered

Dimensions Underlying Economic Policymaking in the Early and Later Burger Courts

This article examines the voting behavior of the justices in nonunanimous economic cases decided during three terms of the early and three terms of the later Burger Court. After employing factor analysis, which disclosed three principal dimensions underlying the justices' voting behavior in the first court and two in the second, we carefully examined cases scoring most positively and those scoring most negatively on each of the factors and analyzed the outcomes associated with the decision of each case. The principal dimension underlying the decision of economic cases by the early Burger Court appeared to be economic liberalism-conservatism. Also implicated as lesser factors were deference to the discretion of administrative agencies and either attitude toward business or economic due process. By contrast, the justices' voting behavior in economic cases during the later Burger Court appeared to be best explained by regard for federalism and only secondarily by economic liberalism-conservatism. Only analys...

In Search of a General Approach to Legal Analysis: A Comparative Institutional Alternative

This article constructs a general approach to legal analysis. Its central thesis is that all legal decisions share a fundamental feature that should be a basic building block for any general analytic approach: they all involve a choice among imperfect alternative decision-making institutions. In all cases, legal decision makers must consider the relative merits or attributes of the alternative institutions. The analyst of legal decisions, therefore, should adopt a approach. In this Article, this comparative institutional analysis is compared and contrasted with conventional law and economics. There are two distinct problems with this prevailing approach. First, it is unclear whether the analytic concern of the conventional economic approach is with the determinants or the effects of legal decisions. This ambivalence about analytic purpose has produced sweeping claims that the common-law judiciary tends to produce results that are allocatively efficient, while the legislature does not. This distinction between legal analysis of the determinants and effects of decisions, and the problems caused by the failure of the proponents of the economic approach to limit their discussion to determinants, are discussed in Part I. Second, and most important for this Article, when those employing the conventional economic approach do search for the determinants of legal decisions, they reveal a distinct institutional myopia. The approach generally considers variation in the attributes of only one institution - the market. This approach is basically incomplete. If societal decisions are allocated to or away from the market, they are taken from or given to some other institutional alternative. A number of institutions are available and the adequacy of each of these institutions varies with the legal setting. Thus it is not enough to establish that in a given setting the market would not perform perfectly; one must also compare the market's performance with that of the available alternative decision-making institutions. Part II compares the conventional economic and comparative institutional approaches in several contexts: property rights and remedies,the role of custom and penal statutes in the determination of tort liability, and the constitutional law issue of economic due process, among others.

Economic Due Process and the Supreme Court: An Exhumation and Reburial

Economic Due Process and the Supreme Court: An Exhumation and Reburial

State Views on Economic Due Process: 1937-1953

State Views on Economic Due Process: 1937-1953