Constitutional Liquidation.

• Author: Baude, William
• Position: Introduction through II. Understanding Liquidation, p. 1-34

Part 1 of 2

Table of Contents Introduction I. Rediscovering Liquidation II. Understanding Liquidation A. Groundwork B. Theory 1. Indeterminacy 2. Course of deliberate practice 3. Settlement C. Examining Examples 1. The bank 2. Federal spending D. Beyond Madison? III. Grounding Liquidation A. Departmentalism B. Precedent 1. Founding-era precedent 2. Modern stare decisis 3. Implications C. Tradition D. Possible Shortcomings IV. Liquidating Liquidation? (Harder Questions) A. What Kinds of Provisions Can Be Liquidated? B. What Does Liquidation Decide? C. Is Liquidation Necessarily Permanent? D. Is Early Practice Privileged? E. Is Liquidation Meaningfully Distinct? F. How Is Indeterminancy Determined? Conclusion Methodological Appendix Introduction

Today's constitutional law looks to the past. The central document, of course, is an old one whose age and origins cause constitutional debate. And day-to-day judicial adjudication is often dominated by precedent, the examination of past court decisions. But precedent and originalism do not exhaust the role of historical argument in constitutional law. Constitutional law is also rife with claims of authority by historical practice. Historical practice is not quite the same as precedent, because it expands well beyond judicial opinions. Historical practice is not quite the same as originalism, either, because it frequently looks to what has happened in the generations after a text was originally written.

Yet theories of how exactly such practice works as a source of constitutional meaning are surprisingly scant, giving rise to the recent allegation that "there has been little sustained academic attention to the proper role of historical practice in the context of separation of powers" (1) and to the response that "[h]istorical practice is a slippery, unhelpfully capacious notion masquerading as a mid-twentieth-century neutral principle." (2)

Meanwhile, the history of constitutional law has also looked to the future. Over decades, James Madison carefully revised his notes from the Constitutional Convention with an eye to eventual public consumption. (3) After the Convention, Madison warned his new colleagues in Congress of the importance of their constitutional debates: "The decision that is at this time made will become the permanent exposition of the constitution; and on a permanent exposition of the constitution will depend the genius and character of the whole government." (4) He returned to these themes throughout his career, ever attentive to how political practice would set a precedent for tomorrow's constitutional law.

This Article attempts to unite that past and present. It reconstructs James Madison's theory of postenactment historical practice, sometimes called "liquidation," as in: "All new laws ... are considered as more or less obscure and equivocal, until their meaning be liquidated and ascertained by a series of particular discussions and adjudications." (5) Liquidation was a specific way of looking at post-Founding practice to settle constitutional disputes, and it can be used today to make historical practice in constitutional law less slippery, less capacious, and more precise.

The problems of how to reconcile text and precedent, of how to mediate between fixation and contestation, of how to be an originalist in a fallen world--none of these are new. And none of them were lost on Madison. His articulation of liquidation over the course of his life can be seen as an attempt to solve these problems--to explain the role of precedent in a system of text, to allow stability without forfeiting constitutional faith, to allow constitutional updating while adhering to original meaning.

This focus on Madison is expository and conceptual, not dictated either by history or constitutional law. Madison was not the only one to use the specific term liquidation, nor to avail himself of the general framework of settlement through constitutional practice. (6) And constitutional law, even on originalist premises, is not limited to the views of James Madison. Rather, this Article examines the concept of liquidation through Madison because Madison had an unusually extensive, thorough, and systematic discussion of it. Having his theory of it in hand will let us decide whether it is normatively desirable and help us explore whether it was a widespread part of the law at the Founding, issues this Article will also begin to sketch out. But before we can proceed to those questions, we must know what liquidation is.

This Article presents that concept of liquidation. Part I discusses modern attention to the concept. Part II breaks down the precise mechanics of Madison's concept of liquidation, synthesizing Madison's thought over the course of his career. Part III shows how liquidation is grounded in certain widely shared constitutional values. Part IV then attempts to work out some more detailed issues with liquidation on which Madison's own views may sometimes appear ambiguous or incomplete.

1. Rediscovering Liquidation

   Every time one turns around, a new law or official act is being assailed on grounds of being "unprecedented." Perhaps it is a new comprehensive health care reform (7) or the structure of a new independent agency. (8) Perhaps it is the Senate's failure to confirm (or even vote on) a Supreme Court nominee. (9) Perhaps it is the rumored possibility that the President might pardon himself. (10) The charge is supposed to sound not just in political norms but in constitutional law--to carry "a distinct whiff of impermissibility." (11)

   And on the other hand, in recent years longstanding practices have been charged with constitutional invalidity. Look, for instance, at Congress's powers of contempt, (12) the appointment of civil service officials, (13) national injunctions by the federal courts, (14) the civil forfeiture of tainted assets, (15) or the designation of an "acting" cabinet official without Senate confirmation. (16) Here, too, history has sometimes been said to sustain these practices.

   But history, it has been wisely observed, is neither self-interpreting nor self-enforcing. (17) Rather, constructing precedents and principles out of historical events requires a framework to tell us which events are relevant and why. (18) In the context of judicial precedent, such frameworks are ubiquitous, widely taught, and widely studied. But what about the less familiar genre of precedent and practice outside of the courts?

   It turns out that at the Founding, there was such a framework, one developed with remarkable depth and theoretical insight by none other than James Madison: that of liquidation. The idea has made mysterious cameo appearances in recent cases and scholarship, but without full explanation, pedigree, or justification.

   The U.S. Supreme Court reintroduced the concept a few years ago in its opinion in NLRB v. Noel Canning, which interpreted the Recess Appointments Clause of the Constitution for the first time. (19) The strongest arguments in the case boiled down to a clash between apparent longstanding practice and interpretive first principles such as original meaning and structure. (20) The case therefore became a battleground for recurring methodological questions: When should the Court invalidate longstanding practices in the political branches? Can subsequent practice trump the original meaning of the text? Indeed, at oral argument Justice Scalia and Solicitor General Don Verrilli sparred over this very point. (21)

   While eventually finding the appointments invalid for other reasons, a majority of the Court nonetheless sided with the authority of historical practice over the challengers' argument from text and original meaning. (22)

   "[T]he longstanding 'practice of the government,'" the Court wrote, "can inform our determination of 'what the law is.'" (23) It continued:

   That principle is neither new nor controversial. As James Madison wrote, it "was foreseen at the birth of the Constitution, that difficulties and differences of opinion might occasionally arise in expounding terms & phrases necessarily used in such a charter ... and that it might require a regular course of practice to liquidate & settle the meaning of some of them." And our cases have continually confirmed Madison's view. (24) This passage marked the first time that this use of "liquidate" had appeared in the body of a Supreme Court opinion. (25)

   In this sense the Court was riding an early trend. "Liquidation" was also a foreign word to most legal scholars until Caleb Nelson introduced it in an article eighteen years ago. (26) Since then, liquidation has been invoked occasionally by a small corner of historical scholarship, (27) but it basically remains a piece of obscure jargon.

   Yet as liquidation starts to creep into the legal lexicon, its underdevelopment has begun to raise questions and challenges. Michael Rappaport has called the permissibility of liquidation "a complicated question" and "sometimes controversial." (28) Richard Fallon has observed that "the idea of 'liquidation' through practice--despite its Madisonian provenance--remains obscure in some respects." (29) Aziz Huq has suggested that "neither Madison nor other Framers were pellucid as to who would do this liquidating." (30) Curt Bradley and Neil Siegel have stated that "Madison never presented a detailed explanation of the idea, and it has received only limited attention in the academic literature." (31) And Jack Rakove, writing about Madison's discussion of linguistic instability in Federalist No. 37, has declared that "much more work needs to be done on the entire concept of political language as such." (32) In short, liquidation has lacked any systematic exploration. This Article provides one.

2. Understanding Liquidation

   So what was James Madison's understanding of liquidation, and how did it work? We now turn to these questions.

   1. Groundwork

      Madison expounded the idea of liquidation over the course of...