Saturday, February 26, 2011
Federalism and Interstate Competition
This panel will assess American federalism as a competitive institution that offers a marketplace of state regulatory regimes. With the recession impacting some states more heavily than others, it is time to ask whether interstate competition is good for the nation. Should state-by-state approaches to issues such as healthcare, financial regulation, environmental protection, and same-sex marriage be encouraged? Does competition among the states lead to the best outcome or a race to the bottom? How will events such as the recent recession and healthcare reform impact the marketplace of state regulation?
Jonathan Adler, Case Western Reserve University School of Law
Clayton Gillette, New York University School of Law
John McGinnis, Northwestern University School of Law
Louis Michael Seidman, Georgetown University Law Center
Gregory G. Katsas, Jones Day
Professor Jonathon Adler
Professor Adler argued that interstate competition through federalism not only promotes markets, but also promotes better policy generally.
Our constitution, he argued, assumes a federalist system. Most issues were left in the hands of state governments with plenary police power. The constitution authorized federal intervention only in limited circumstances.
But federalism is not simply a constitutional issue; it is also good policy. The burden should be on those who want federal intervention to show its relative benefits. The benefits of decentralization are quite large:
- Possibility of exit disciplines states from taxing too much, or from regulating too little.
- Allows jurisdictions to respond to local differences; even if the harms of ozone pollution remain constant across cities, the proper way to resolve ozone pollution might vary.
- Helps to solve the knowledge problem. The knowledge problem, Professor Adler argues, is the greatest problem with federal intervention.
Professor Adler took issue with Professor Seidman's prisoner dilemma story because it assumes a static world. The world we live in, by contrast, presents jurisdictions with the ability to maximize on multiple variables - it's not a binary choice between industry and the environment, but how best to maximize both.
Professor Gillette noted that there is no reason to believe that national officials will have purer motives than the perverse motives of state officials.
Professor McGinnis argued that we might be able to constitutionally commit the federal government not to bailout the states.
He also took issue with Professor Seidman's remarks, arguing that we live in a world where individuals are quite ignorant of the consequences of their institutions. It's hard for those citizens to make progress without the required facts, and federalism does a better job of acquiring and presenting those facts than a top-down organization scheme. Federalism also allows citizens to operate without relying on their vote to get them the principle of substantive justice they want.
Professor Seidman suggested that proponents of federalism need a more concrete idea of what is and is not an externality, before using externalities to decide when federal government action is justified. He suggested that even though he lives in DC, the fact of mountaintop removal in West Virginia and banned gay marriage in Mississippi might be considered externalities to the extent they make him sad. The broader the definition of externality, he argued, the greater justification for federal control.
Professor Seidman also argued that before we talk about how to operationalize any theory, we have to talk about what we want. Different ideas of substantive justice require different methods of operationalizing. Discussions of federalism, he argued, distract from the debate. He suggested that no person agreed with the substance of the healthcare law, but also wanted to see it rejected because it was unconstitutional.
I might suggest to Professor Seidman that the reason for this is not that people who dislike the bill are using the constitution as an excuse to get rid of it, but that those who like the bill are for the same or other reasons not terribly interested in constitutional constraints. Professor Seidman himself argued that it is bizarre to suppose that the blueprint for running the country today should be based on the views or text of a document written by people then who had a different idea of substantive justice. I wonder how far he would be willing to go down that road, but I imagine that not many would follow him.
Professor McGinnis argued that the debate about whether or not we should follow a constitution is a debate for another panel, but suggested that the alternatives to constitutions (judges and legislatures) suffer from an institutional lack of information.
Friday, February 25, 2011
- Professor Lerner suggested reducing restrictions on the diversity jurisdiction.
- Professor Ely suggested that some barriers to entry might be removed. He seemed willing to accept venerable licensing (perhaps for lawyers and doctors) while arguing that floral arrangement licensing serves only to restrict entry (floral arranging not requiring laborious study of mind-numbing precedent).
- Professor Lund: Obamacare.
- Professor Lund: It's not clear to me what the problem is. Either things are constitutional, or they aren't.
- Professor Lerner: Federal courts exist to correct the problem of bias. That's why Madison had to make the arguments he did.
- Professor Lund argued that Hamilton says the diversity provisions are some of the most important in the constitution, because without them, the Privileges and Immunities Clause of Article IV would not be enforceable, and that is what holds the Union together.
- Professor White described them as "premodern." He argued that it would be restoring a practice that predated even the Marshall Court, which dispensed with seriatim and per curiam opinions. He seemed to suggest that returning to those practices might not necessarily be an improvement.
- Professor Lund: I won't accept pre-modern; I prefer reactionary.
- Professor Lund then noted two different problems with his proposal, with respect to anonymous publishing.
- First, that it will make the Court less accountable. He responded that you can't make the Court less accountable than it already is.
- Second, anonymous opinions might make them lazy, sloppy, and more irresponsible. He suggested that this might be an empirical question, and not a necessity. He argued that signed opinions on the lower courts, which hear many more and many more boring cases, are very important to control the effort the judges put in. On the other hand, the Supreme Court's docket, which is largely discretionary and therefore more interesting, might be enough to prevent the Justices from writing sloppy opinions or generally being lazy.
- Professor White noted a letter that Jefferson wrote to Justice Johnson, arguing that anonymous opinions were for the lazy, modest, and incompentent. "I'm less sanguine," he said.
Justice Holmes’ dissent in Lochner v. New York is well-known for the statement, “[A] constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State or of laissez faire.” But is this belief consistent with the original Constitution? To what extent did the ideas of thinkers such as Adam Smith shape the founders’ understanding of human nature and public virtue? In what ways do their economic and philosophical commitments continue to shape our constitutional government today? Are capitalism and a commitment to civic virtue complementary or antagonistic? Does the Constitution promote a virtuous citizenry or is it simply a set of political structures that can accommodate a pluralistic society? At a time when the virtues of capitalism are often called into question, it will be useful to examine the precise place of this theory in the foundational structures of our government.
James Ely, Vanderbilt University Law School
Renee Lettow Lerner, George Washington University Law School
Nelson Lund, George Mason University School of Law
G. Edward White, University of Virginia School of Law
Judge J. Harvie Wilkinson III, 4th U.S. Circuit Court of Appeals
In a debate that far-surpassed the already lofty expectations, Professor Randy Barnett of Georgetown Law and Professor Jeffrey Rosen of George Washington Law took competing positions on whether economic liberty is protected by the Constitution.
Professor Barnett began first and advocated for the position that the Constitution protects economic liberty, or the right to acquire, use, and possess private property. First, Professor Barnett looked to the Ninth Amendment and the text that reads enumerated rights "shall not be construed to deny or disparage the others retained by the People." Through historical evidence, Profess Barnett attempted to show that most States and American citizens at the time of the Founding understood the Ninth Amendment to embody natural rights, including life, liberty, property, pursuit of happiness, safety, among others. Next, Professor Barnett looked to the Reconstruction period and the 13th Amendment. The prohibition of slavery and involuntary servitude implied an economic liberty. The Amendment meant to protect the freedom of not only movement and self, but the right to buy, sell, and own property. However, the Supreme Court's narrow reading of this Amendment in the Slaughter-House cases and other subsequent cases wrongly ignored the economic liberty it hoped to protect. Finally, Professor Barnett looked at the history and development of the Fourteenth Amendment and the Supreme Court's "gutting" of the Privilege and Immunities Clause from the Amendment. In the Slaughter-House cases, the majority of the Court relegated the P&I Clause to a future of functional irrelevancy. Here, in this clause, Professor Barnett sees the natural rights that Congress and the Amendment meant to protect. In the end, Professor Barnett argues the natural right of economic liberty has been ignored and disparaged, but not yet repealed. It can still be found in the text and history of the Constitution and thus is relevant to modern jurisprudence.
In Professor Barnett's view the Court should force Congress and legislatures to articulate its basis for enacting laws and regulations. The 14th Amendment, the Ninth Amendment, and the Constitution as a whole meant to empower the Court to enforce economic liberty and it is the Court's role to enforce the parameters of the Constitution. It would be arbitrary and irrational to allow legislatures to act under the guise of health and safety when that is not their true aim.
Professor Rosen responded with a call to resist Professor Barnett's libertarian interpretive approach and look to the traditional conservative model of judicial deference to the political process. This model of deference resists replacing the will of the political majority (or at least the legislature) with that of the ideological preferences of the judiciary. Since judges interpret the law, rather thank make it, the Court should avoid craving out unenumerated, made-up, amorphous rights that are not articulated in the Constitution. Professor Rosen proposed a framework of three divergent "conservative" approaches to constitutional interpretation:
(1) the traditional view of judicial restraint and deference - Justices Jackson, Frankfurter, Holmes, and Scalia were discussed as models of this approach. Judge J. Harvie Wilkinson III, the moderator of our second panel, was also discussed as a model of this interpretative philosophy. (I would recommend looking to Justice Felix Frankfurter's dissent in Baker v. Carr or Professor Alexander Bickel's The Least Dangerous Branch for a more detailed discussion of this approach and skepticism of judicial review generally. Also see the works of Professors Larry Karmer, Larry Sager, Cass Sunstein, or Mark Tushnet)
(2) the libertarian view (identified with Professor Barnett) - this view sees certain natural rights of personal autonomy, property, and contract that the governemnt cannot infringe upon. This often leads to the questioning of regulatory laws, hour and wage laws, the Federal Reserve, and environmental regulation among other laws. This view often protects both economic liberties and social liberties (potentially sexual freedoms, gay marriage, abortion). See also Professor Richard Epstein and the majority opinion in Lochner v. New York.
(3) the "tea party wing" - this view shares suspicion of broad governmental power and believes in enforcing the rights of property and economic liberty, but departs with libertarians on social issues. Professor Rosen identifies Justice Thomas with this approach.
Professor Rosen doubts Professor Barnett's reading of the Thirteenth and Fourteenth Amendments. In his opinion, the 14th Amendment meant for Congress to enforce and regulate economic rights. Furthermore, the Court is unable to easily identify or define the original author's meaning of these amendments. The natural right interpretation is dubious, but regardless the public no longer accepts that approach and it would be a bold, activist move for the Court to reinsert such a view. Professor Rosen referenced the healthcare law as a battle ground for this issue in the near future. In the end, Professor Rosen aligns himself with Judge Wilkinson, Justice Frankfurter, and this vision of judicial restraint despite claiming to hold a political policy preference for many of the libertarian positions. Professor Barnett questions this fidelity to the political process.
Overall, this was a stimulating argument that opened the Symposium up on a very strong note. The debate was marked by sharp critique and dissent, but avoided ad hominem attack and both speakers maintained a strong personal affection and respect. In the end, the debate touched on a historical debate that has tremendous impact on modern jurisprudence. The Justices of the Supreme Court may very well be forced to engage in this same debate in the potential challenge to Healthcare Reform.