Congressional silence and the statutory interpretation game.

• Author: Stancil, Paul
• Position: Introduction through II. Expanding the Model to Two Dimensions B. Transaction Costs in Two Dimensions, p. 1251-1289

TABLE OF CONTENTS INTRODUCTION I. A UNIDIMENSIONAL MODEL OF STATUTORY INTERPRETATION A. Introduction B. The Single-Dimension Model 1 The Set-Up a. No Transaction Costs b. With Transaction Costs c. The Shape of the Override 2. Federalizing the Problem a. The Players b. A World Without Transaction Costs c. A World with Transaction Costs i. An Untenable Interpretation ii. A Safe Interpretation iii. An Indeterminate Interpretation? iv. The Problem of Political Promise Keeping d. On the Importance of Backward Induction II. EXPANDING THE MODEL TO TWO DIMENSIONS A. Introduction by Way of a Charter School's Backstory B. Transaction Costs in Two Dimensions 1. The Circular Inaction Zone 2. Measuring Costs and Benefits in a Two-Dimensional World C. A Special Feature of Two Dimensions 1. Introduction 2. Three Differently Identical Interpretations a. An Unworkable Interpretation b. A Safe Interpretation c. An Indeterminate Interpretation? i. On Bargaining Power Alone ii. The Problem of Political Promise Keeping Revisited III. AMPLIFICATIOINS AND APPLICATIONS A. Categorizing Response Costs 1. Process Costs 2. Search and Specificity Costs 3. Opportunity Costs B. The Influence of Interest Groups C. Applying the Model to Three Real-World Contexts 1. Federal Civil Pleading Standards After Ashcroft v. Iqbal a. Case Background b. Applying the Model 2. Bailing Out of the Voting Rights Act After NAMUDNO v. Holder a. Case Background b. Applying the Model 3. A Low-Cost Counterexample: The Lilly Ledbetter Override a. Case Background b. Applying the Model CONCLUSION: AMBITION, MODESTY, AND AMBITION "Congress has not amended the statute to reject our construction, nor have any such amendments even been proposed, and we therefore may assume that our interpretation was correct." (1)

"[Transactions] are often extremely costly, sufficiently costly at any rate to prevent many transactions that would be carried out in a world in which the pricing system worked without cost." (2)

INTRODUCTION

In January 2009, the Democratic Party controlled both chambers of Congress decisively; it also held the White House. (3) And at least twice during that two-year period, a conservative Supreme Court issued statutory interpretation opinions deeply unpopular with rank-and-file congressional Democrats and the President. In Northwest Austin Municipal Utility District Number One v. Holder (NAMUDNO), the Court ruled that a Texas municipal utility district could "bail out" of the preclearance requirements of the Voting Rights Act despite the state's history of discrimination against minority voters. (4) In Ashcroft v. Iqbal, the Court expanded and cemented the holding of a revolutionary 2007 case, (5) finding that the "short and plain statement" pleading standard of Rule 8(a)(2) of the Federal Rules of Civil Procedure requires all civil plaintiffs to demonstrate that their factual contentions are "plausible" in order to survive a motion to dismiss. (6)

Both NAMUDNO and Iqbal represent conservative interpretations very likely at odds with the preferences of the 111th Congress; both opinions are also arguably deeply inconsistent with congressional preferences at the times the relevant statutory provisions were enacted or reauthorized. (7) Moreover, NAMUDNO and Iqbal were both publicly salient cases; the New York Times published editorials on both decisions, and members of Congress were obviously aware of the opinions. (8) But by the time the Democrat-dominated 111th Congress gave way to the politically divided 112th Congress in January 2011, the only political response to these decisions was silence.

This silence raises a larger question: when the Supreme Court interprets a statute, to what extent does subsequent congressional inaction really represent political agreement with, or acquiescence to, that interpretation? This is a difficult question to answer conclusively. The complex internal, intertemporal, and interdependent dynamics of our political process are such that it is remarkably hard to pin down "congressional intent" at the time a statute was passed, at the time the Court issued its initial interpretation, or at any point in the future. (9)

In this Article, I approach the old puzzle of congressional silence in a new way. In particular, I explore the economics of congressional overrides in a spatial model that sheds more and better light on the conditions under which the political branches may not be able to respond to an undesirable judicial interpretation. My approach is grounded in public choice and positive political theory, but this Article represents a significant extension of my earlier work, (10) incorporating transaction cost economics concepts to further refine our understanding of the relationship between the political branches and the judiciary.

Other scholars have used the insights of public choice theory (11) to generate a variety of normative approaches to the problems of statutory interpretation and judicial review more generally. (12) For the most part, this work assumes that self-interest ends at the foot of the judge's bench; these authors are primarily concerned with telling judges how they should interpret statutes in light of the interest group dynamics that public choice theory sees as defining the content of enacted legislation. (13) They therefore tend to take judicial fidelity to some form of legislative intent as a given. Nonetheless, telling judges how they should act does not say all that much about how they will act, and we cannot assume that judges will always interpret statutes consistently with either original legislative intent or the current political climate.

A second, somewhat less-developed vein of scholarship does attempt to account for potential divergence between judicial and political policy preferences, incorporating those differences into preliminary positive models of judicial behavior. Pablo Spiller and his coauthors offer the purest examples of the genre, though their work both builds upon and complements work by numerous others, all of whom employ positive political theory/pivotal politics models (14) to analyze interactions between the executive, legislatures, courts, and administrative agencies. (15) Spiller in particular takes an important first step in explaining judicial discretion in economic terms, describing various features of the relationship between courts, legislatures, and the executive in game theoretical terms that expressly account for diverging policy preferences among the President, House, Senate, and Supreme Court. (16)

This earlier work is deliberately preliminary in one critical way: none of the preexisting models incorporate the transaction costs associated with political responses to judicial missteps. This omission, although understandable and intentional, is nonetheless significant.

As commentators dating back to Hart and Sacks have recognized, it is costly to draft and pass legislation overriding an undesirable judicial interpretation. (17) Moreover, it is particularly difficult for the political branches to control the courts by other means. They cannot effectively fire, suspend, or chastise Article III judges for failing to effectuate congressional desires, (18) Sitting at the apex of a coequal branch of government, Justices of the Supreme Court are even less subject to effective direct control than Article III judges generally. (19) The costs associated with an affirmative legislative response to mistaken statutory interpretation thus take on outsized importance because alternative mechanisms of control are functionally unavailable. (20)

In this Article, I elaborate a more robust economic model of legislation and statutory interpretation in which Justices interact with the Executive and the Legislature to shape public policy. More formally, I incorporate regulatory transaction costs into a model (21) that predicts specific statutory interpretation policy outcomes in the context of a single interaction between the Court and the political branches. The result depends upon both the parties' ex ante preferences and the transaction costs those parties face when responding to a judicial interpretation inconsistent with those preferences. (22)

I do not purport to explain judicial behavior completely, of course. Despite the constant drumbeat of popular criticism, many judges-even Supreme Court Justices--often do their best to interpret statutes in good faith, regardless of their abstract policy preferences on the issue under consideration. (23) Moreover, the repeat player nature of the relationships between Congress, the President, the Court, and various interest groups is likely to exercise some mitigating influence upon judicial behavior, as will courts' independent incentives to enforce original statutory bargains. (24) Even assuming that the various players (25) do act to maximize the realization of their own preferences in any given interaction, a simplifled, stylized model of the sort I present cannot hope to capture every nuance of the complicated regulatory dance. In particular, the introduction of uncertainty would likely affect outcomes dramatically, relative to a model assuming perfect and complete knowledge of each player's preferences. (26) At the same time, however, a single-iteration model assuming that judges are motivated by base self-interest helps identify the specific contexts in which courts have space to move policy away from the nominal political consensus without the threat of legislative override. (27)

This Article has three parts. In Part I, I present a unidimensional version of the model, exploring the issue in the context of a hypothetical debate over federal policy regarding the appropriate number of charter schools. Specifically, a hypothetically selfinterested Supreme Court has granted certiorari on a case requiring it to interpret a preexisting charter schools statute; its interpretation will fix policy somewhere along a continuum from...