Common Law and Federalism in the Age of the Regulatory State

• Author: Alexandra B. Klass
• Position: Associate Professor of Law, University of Minnesota Law School
• Pages: 547-600

Associate Professor of Law, University of Minnesota Law School. Thanks to David E. Adelman, Curtis Bridgeman, Daniel A. Farber, Bradley C. Karkkainen, J.B. Ruhl, Wayne A. Logan, and Robert V. Percival for valuable suggestions on earlier versions of this Article. I also benefited immensely from comments received at workshops at Florida State University Law School and William Mitchell College of Law. Samuel J. Edmunds and Steven L. Hennessy provided valuable research assistance.

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I Introduction

The tension between common law and statutory law has existed in this country for over a century. Who decides what the law is? Is it something that is "discovered" or made? To what extent can the courts use the common law to create more tailored legal rights and protections where the legislature has spoken on the general issue? Exploring the relationship between common law and statutory law shows that something has been lost in the recent explosion of statutes and regulations. That something is an appreciation of the power of state common law and its ability to propel progressive legal change.

This Article first observes that along with the growth of federal statutes and the rise of the regulatory state has come a weakening and displacement of state common law even in the absence of express or implied preemption. Rather than viewing this phenomenon as a natural or necessary development as the law matures, however, this Article argues that statutes, regulations, and the data they generate should be used to inform and develop state common law. Moreover, in this current age of the "new federalism," where the Supreme Court has cut back on Congress's ability to regulate broadly in the areas of health, safety, and the environment, such progressive common law development at the state level is particularly timely.

This Article uses the evolution of environmental law from its common law beginnings, to the flurry of federal statutes and regulations beginning in the early 1970s, to present-day state and local environmental-protection initiatives, to argue for a new emphasis on state common law in environmental-protection efforts. The thesis proposes that we should place more emphasis on state common law and explores the extent to which state common law courts can use federal and state statutes, regulations, and scientific developments since the 1970s to strengthen the common law as a means of environmental protection. This integration can bring a new coherence to environmental law. This thesis cuts against the grain of the majority of scholarship since the explosion of federal environmental statutes that began thirty years ago. However, the challenges facing today's efforts to enact and enforce federal law addressing current environmental issues such as global warming, water pollution, and air toxins make a renewed focus on state common law both timely and fruitful.

Part II of this Article introduces some of the key ideas underlying the jurisprudence of the common law and its relationship to statutory law. Part III explores how these ideas developed in the courts from the 1970s through the present day. This Part focuses first on federal common law despite the fact that the role for federal common law in our legal system today is much narrower than that for state common law. Nevertheless, the most robust discussion of the extent to which statutes can play a role in developing the common law occurred in the context of federal common law in the 1970sPage 548 and 1980s, precisely when Congress was in the throes of enacting far-reaching environmental statutes. How federal courts grappled with integrating these statutory developments remains instructive for developing state common law today.

Part IV uses the evolution of environmental law during this same time period to illustrate how state common law was often neglected during the rise of the federal environmental-regulatory regime. This Part also discusses the rise of the "new federalism," which has called into question Congress's ability under the Commerce Clause to govern many environmental concerns. Part V draws on federal and state environmental statutes, regulations, and data to provide a new direction for state common law development that allows it to play a more important role in environmental protection. This Part places special emphasis on recent efforts by plaintiffs, particularly state and local government plaintiffs, to push state common law to address modern concerns and compensate for perceived failures by the federal executive and legislative branches in environmental protection. This Part concludes that it is both allowable and desirable to develop a new state common law that incorporates data, standards, and policy principles obtained in the statutory era to provide increased protection for human health and the environment. Such integration will not only enhance environmental-protection efforts but bring a new coherence to the field.

II Theoretical Beginnings

Since the creation of our legal system, we have been a nation of both statutes and common law.¹ How these two forms of lawmaking should influence each other, if at all, began to receive significant treatment in the early twentieth century among major judges and scholars, including Oliver Wendell Holmes, Roscoe Pound, James McCauley Landis, and Benjamin Cardozo.² Since then, statutes and regulations in major areas such as criminal law, commercial law, labor relations, and corporate law have significantly or almost completely eclipsed common law.³ Today, because ofPage 549 the prominence of statutory law in these and many other areas, statutes and common law often seem to be separate islands of the law. However, a rich tradition of legal theory supports the idea that statutes should inform common law. This tradition is discussed below, with a focus on how this scholarship supports developing a common law informed by statutes in the environmental-protection area.

A From Common Law to Statutory Law

This Section highlights the writings of the early legal scholars and judges who first grappled with the need to integrate developments in statutory law and social policy into common law. While these writers often had distinct and conflicting theoretical views and practical agendas, they all played important roles in focusing on the development of common law during the rise of the regulatory state.⁴ This theoretical foundation provides initial support for relying on statutory and policy developments in environmental law to expand common law.

In the early part of the twentieth century, Justice Oliver Wendell Holmes argued forcefully that the law was not a neutral set of principles to be discovered.⁵ Rather, the law is a product of judges balancing policies with a goal of achieving a pragmatic and utilitarian solution.⁶ Holmes rejected the idea that certain principles were valid in all times and circumstances, set apart from politics and social reality.⁷ Instead, the judge's role was to enforce positive law, not existing and fixed "natural law."⁸ In his well-known book, The Common Law, Holmes declared that although judges rarely acknowledge it expressly, the growth of law is primarily legislative in nature and draws from all aspects of life and the community.⁹ Consistent with this, Justice Holmes urged judges to take a broad view of the law and consider whetherPage 550 past reasons for a particular rule were still valid and, if necessary, revise the law to maintain continuous growth.¹⁰

Justice Holmes's ideas stood in marked contrast to the prevailing idea at the time, expressed by William Blackstone and others, that judges do not "make" law but simply "declare" existing, objective law that does not favor one group or person over another.¹¹ In other words, judges are simply applying rules and principles of the natural order when they decide cases. Under this legal theory, statutes should not be used to formulate common law rules.¹² Statutes are political and ad hoc, while common law is based on the discovery of pre-existing legal principles developed gradually.¹³

Whether and how to incorporate legislative policies and regulatory expertise into common law decisionmaking was debated in the Supreme Court in the years surrounding the Court's decision in Lochner v. United States.¹⁴ Lochner was one of many cases the Court decided between the late 1880s and the 1930s in which the Court used the Due Process Clause of the U.S. Constitution to scrutinize and often invalidate state and federal economic legislation.¹⁵ In Lochner, the Court rejected New York's claim that its sixty-hour limit on the work week of bakery employees was reasonably related to the promotion of employee health.¹⁶ The Court invalidated the regulation as an interference with the contractual rights of employers and workers.¹⁷ This substantive due-process approach was...