Equity's Constitutional Source.

Date01 March 2023
AuthorGallogly, Owen W.

ARTICLE CONTENTS INTRODUCTION 1217 1. PARSING ARTICLE Ill's TEXT 1224 II. THE DAYS OF THE DIVIDED BENCH: THE HISTORICAL DEVELOPMENT OF EQUITY IN ENGLAND 1231 A. Conscience-Based Equity 1233 i. Structural Underpinnings 1234 2. The Emergence of Conscience-Based Equity 1237 3. The Nature of Conscience-Based Equity 1241 B. Precedent-Based Equity 1245 1. Structural Shifts 1245 2. The Transition to Precedent-Based Equity 1250 3. The Nature of Precedent-Based Equity 1252 III. DOES ARTICLE III CONFER AN INHERENT EQUITY POWER? 1256 A. History 1258 B. Structure 1262 C. Early Judicial Practice 1267 1. Article III Cases 1270 2. Cases that Do Not Identify a Source of Equity Power 1272 3. Judiciary Act Cases 1274 D. Synthesis and Implications 1277 IV. WHAT IS THE SCOPE OF ARTICLE III EQUITY? 1281 A. History 1281 1. The Colonial Period 1282 2. The Ratification Period 1284 B. Structure 1290 C. Early Judicial Practice 1299 1. Article III Cases 1300 2. Cases that Do Not Identify a Source of Limitation 1301 3. Judiciary Act Cases 1307 4. Process Act Cases 1308 D. Synthesis and Implications 1310 CONCLUSION 1318 INTRODUCTION

Equity lives. Despite generations of academic derision, the "absurd," (1) "irrelevant," (2) and "obsolete" (3) distinction between law and equity has only grown in importance--particularly with respect to the equitable remedies available in federal court. Over the past thirty years, the Supreme Court has handed down nearly two dozen opinions shaping access to equitable relief, leading one commentator to observe that we are in the midst of "an unexpected and striking revival of equity." (4) And this trend shows no sign of abating. If anything, it is accelerating: in the last three Terms, the Court has taken multiple merits cases implicating federal equity power. (5)

A major methodological development has accompanied this revival of equity: the historical turn. When faced with questions about equitable remedies, the Court now looks to history. (6) It relies on equity practice as developed "in the days of 'the divided bench,' before law and equity merged," particularly the doctrines of the Founding-Era English Court of Chancery, to demark the scope of federal equitable remedies. (7) Under this approach, the Court considers whether the precise remedy sought was "traditionally accorded" (8) by the English Chancellor in 1789 or, more vaguely, "typically available in equity." (9) If not, the Court denies relief. Critics of this methodology have disparaged it as "frozen in time" (10) and advocated a discretionary, "dynamic equity jurisprudence." (11) Nevertheless, like the Court's revival of equity in general, its reliance on history shows no sign of abating. On the contrary, its historically inflected methodology has attracted an unusual level of support across ideological lines. (12)

The Supreme Court's focus on equity and its corresponding historical turn have sparked a robust scholarly response. (13) It is easy to see why. A judge's powers are at their apex in equity: without the constraint of a jury, she can order parties, including government officers, to take or refrain from specific action on pain of contempt. (14) Over the decades, doctrinal shifts touching on this potent fount of authority have attracted sustained attention, as scholars have clashed over labor injunctions, (15) Ex parte Young relief, (16) and structural reform injunctions. (17) Even so, the sheer volume of recent commentary on equitable remedies is remarkable. To take just one example, the debate over the permissibility of nationwide injunctions has itself become a veritable subfield of federal jurisprudence, generating reams of scholarly criticism (18) and judicial opinions. (19)

Still, there is something curious about this outpouring of interest in equity. Thus far, courts and commentators have largely overlooked the only reference to equity in the original Constitution: the provision of Article III that "extend[s]" the "judicial Power" of the United States to "Cases" in "Equity." (20) And although a few Justices have recently alluded to this provision, (21) the Court as a whole has yet to address its significance. Instead, most of the Court's so-called "new equity" cases have been framed as questions of statutory interpretation, in which the Justices closely parse the text of federal statutes to determine the equitable remedies they authorize. (22) Scholars have reacted accordingly, focusing their analyses on statutory grants of and limits on federal equity power. (23) As a result, the dimensions of the "judicial Power" in "Equity" are a mystery. Indeed, the few commentators who have discussed this constitutional reference to "Equity" have mostly expressed uncertainty about its import. (24) Recently, however, a number of critics have raised alarm that application of the Court's "equitable originalism" to Article III might endanger core tenets of modern constitutional litigation, such as the availability of injunctive relief against unconstitutional state action under Ex parte Young. (25) But they, too, have yet fully to engage the issue by analyzing the terms of Article III under the Court's historical approach.

This Article begins to fill that gap by examining Article Ill's reference to "[t]he judicial Power" in "Equity" through the lens of the historical turn. (26) It asks what application of the Court's historicist methodology to those terms might mean for the equity power of federal courts. The thesis is straightforward: as originally understood, "[t]he judicial Power" in "Equity" includes an inherent power to administer a system of equitable remedies that is coextensive with the remedial authority of the English Court of Chancery in 1789. Put differently, applying the historical turn to Article III suggests that it incorporates the system of remedies that was being administered by the Founding-Era English Chancellor as the baseline of federal equity power.

I am careful in using the term "baseline." Like nearly all inherent judicial powers, the Article III equity power vests in each federal court only when it is created and granted jurisdiction by Congress. (27) As a result, it is subject to broad congressional control. (28) In other words, Article III sets up a constitutional default rule: if Congress creates federal courts and grants them jurisdiction, those courts become possessed of the authority inherent in "[t]he judicial Power" in "Equity" unless Congress expressly limits or expands upon that baseline.

Recovering Article III as a primary source of federal equity power has potentially profound implications. For one, it suggests that courts and commentators might be missing the point by framing debates over federal equitable remedies as purely questions of statutory interpretation. Of course, some statutory basis is required for the federal courts to issue relief in equity cases, as the courts generally cannot exercise any inherent powers without a statutory grant of jurisdiction. (29) But most of the time Congress does no more than that--it simply grants federal courts jurisdiction over a class of equity cases. Only rarely does it limit, augment, or alter the set of federal equitable remedies. Rather, Congress typically leaves the constitutional default remedies in place. Thus, in the mine-run of equity cases, federal courts grant remedies pursuant not to statutory authority but to their inherent power under Article III. Attempting to demark the scope of federal equity power by interpreting statutory text is therefore almost always a futile endeavor. It is simply the wrong place to look.

The prevailing focus on statutes is also misguided in how it applies equitable originalism. As originally understood, Article III vests the federal courts with an equity power considerably different from what the Court has interpreted most federal statutes to confer. To be sure, the remedial system administered by the Founding-Era Court of Chancery was not the dynamic, flexible, and discretionary form of justice that some modern commentators have advocated. (30) But neither was it frozen in time; the Chancellor was not categorically limited to granting only those exact remedies that his forebears had issued. Reality lay somewhere between these two extremes. At the Founding, English equity adhered to a system that this Article calls "precedent-based equity." Under that system, the Chancery was governed by--and did not depart from--a core set of rules. But it could still develop, elaborate, and modestly update the law of equity by accretion of precedent-that is, by applying those core rules to new factual and legal contexts. Only avulsive changes to equity jurisprudence required legislative approval from Parliament.

This history indicates that the federal courts have greater leeway to adapt the federal system of equitable remedies than the Supreme Court's statute-based doctrine seems to permit. The determinative question is not whether a specific form of equitable relief--or a nearly identical analog--was issued by the Founding-Era Chancellor. Instead, a remedy is permissible if (1) it is not inconsistent with any settled rules of equity that obtained at the Founding and (2) one can trace its development from historical Chancery practice via the gradual accretion of precedent. Of course, this system still requires Congress to authorize any major doctrinal innovations, such as the creation of new equitable remedies or the substantial expansion of existing forms of relief. But it envisions a more meaningful role for the federal judiciary in the development of equity than do the Court's new equity cases.

Returning federal equity power to its constitutional source could thus alter the trajectory of ongoing debates over the scope of that power. At a wholesale level, this Article's thesis suggests that if the Court is committed to the historical turn, it might need to reevaluate the rigidly time-bound doctrinal framework it has...

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