FEDERAL JUDICIAL POWER AND FEDERAL EQUITY WITHOUT FEDERAL EQUITY POWERS.

AuthorHarrison, John

INTRODUCTION

The federal courts have judicial power, and with it administer the written and unwritten law of equitable remedies. In that sense, they have equity powers. But in another important sense the federal courts do not have equity powers under the Constitution. The Constitution docs not itself adopt, incorporate, or receive principles of equity in a way that would limit Congress's power to alter those principles. Nor does the Constitution confer on the federal courts an authority to recognize or develop the principles of equity that resembles an independent grant of law-making power. Unwritten principles of equity are law that is external to the courts and the judicial power, and is as external and binding on them as is written law like statutes.

This Article sets out and defends the understanding of the relation between the federal courts and the law of equitable remedies just described. That understanding has important implications for the relevance of Framing-era equity practice to the Article III jurisdiction, for the limits on Congress's power to alter federal equitable remedies law, and for the limits on the courts' authority to innovate with respect to the unwritten law of equitable remedies. Those implications follow from the status of the law of equitable remedies as a body of sub-constitutional principles that the courts find and that they make only in a limited sense, a sense that brings with it important restrictions.

Section I elaborates on the basic thesis of the Article. That Section briefly describes the argument about equity powers that I reject, then shows why equitable remedies are the subject of a body of law that the courts apply, as they apply other bodies of law. As I also explain, the reference to equity in Article III is consistent with equity's status as external, sub-constitutional law.

Section II turns to a topic of longstanding and current interest: the significance for constitutional purposes of equity practice from the time the Constitution was adopted. Because the Constitution itself does not incorporate principles of equity, those principles are not fixed as of the time of the Framing. Framing-era equity practice is nevertheless important because it provides substantial information about Framing-era understanding of cases and controversies and judicial power.

Section III addresses Congress's authority' to make and change the law of equitable remedies. That authority is limited, but the limits do not come from separation of power. When Congress adopts a new rule about equitable remedies, it is not invading the judicial power. The federal courts do not have equity powers that resist invasion the way the President's pardon power resists invasion by Congress, for example. Limits arise because some of Congress's powers extend to remedies but not to the primary rule that remedies enforce. When Congress exercises one of those powers, it is limited by the principle that power over a remedy is not power over the rule being enforced. Congress must respect that principle when it enforces the constitutional amendments that confer enforcement powers, and when it provides the federal courts with remedial principles that the courts apply to primary law that Congress does not make.

Section IV discusses the extent to which the federal courts may permissibly innovate in the field of equitable remedies. Although courts do not make or alter the unwritten law through legislative-type acts, they do make and alter it in the process of developing it and applying it to new circumstances. In order to supply an improved understanding of the Supreme Court's practice of innovation, and the steps that are acceptably limited as opposed to those that are controversially large, I examine several leading twentieth-century Supreme Court cases that are landmarks in federal equity. To sharpen the analysis, I identify three fundamental aspects of cases involving equitable remedies: the configuration of parties and interests, the interest that supports that plaintiff's claim to relief, and the discretion courts exercise in formulating decrees, especially decrees that control the conduct of the government. I argue that most of the innovations found in those important cases were comparatively modest. The three largest changes, I suggest, remain somewhat controversial and so give some indication of the limits of acceptable change by the judiciary. That examination of practice helps prick out the line between the relatively small steps that courts may take and larger steps that must be left for legislative action.

  1. How ARTICLE III COURTS ADMINISTER EQU?Y WITHOUT HAVING EQUITY POWERS

    This Part argues that Article III courts do not have equity powers, with equity powers defined in a way set out in Section A. Section B then explains why the federal courts lack such powers but administer federal equity by treating it as a source of binding norms that are external to them in the same way the Constitution and statutes are. Section B elaborates on the conception of courts as transparent to external law, including remedies law; shows how the Constitution adopts that conception for the federal courts; and explains that the references to equity in the Constitution do not undermine that conclusion. Section B concludes by assembling the components set out previously into a brief statement of the relation between judicial power and equity powers, and the way in which federal courts do and do not have the latter because they have the former.

    1. Equity Powers and the Possibility That Equity Is Adopted by Article III or Generated by Judicial Acts of Legislation

      This Article rejects one view of federal equity and federal equity powers. According to that view, the source of the equitable principles that federal courts apply is ultimately the Constitution. Either the Constitution itself adopts principles of equity, or it empowers the courts to adopt them much as Congress makes statutes.

      Those two possible sources are familiar from debates over the federal common law. In the Founding-era debate on that subject, the theory that the Constitution itself received the common law was raised but rejected. (1) Much more recently, the idea that the common law is the product of judicial legislation that is much like legislative legislation has become widespread. (2) The common-law powers of the federal courts have been debated in those terms, and thus on the assumption that the federal courts have or might have the authority to generate common law as a legislature generates statutes. (3) That way of thinking about the common law can be applied to equity.

    2. The Federal Courts as Transparent to Principles of Equity That They Find but Do Not Make

      This Section shows that the Constitution assumes that equity is a body of legal norms that is external to the courts the way statutes are. The federal courts administer the principles of equitable remedies and, insofar as those principles remain unwritten, contribute to the principles' development by their decisions. Article III does not contain those principles, and the courts it creates do not make the principles of equity the way a legislature makes statutory law.

      1. The Relations Between Courts and Legal Principles That Are External to Them

        This Article explicates a familiar, perhaps seemingly simple-minded, understanding of the relationship between the courts and the law. According to that understanding, the law is external to the courts. Courts take legal rules as inputs in performing their function and are in a sense transparent to the law. That relationship is easiest to grasp with respect to legal rules that directly govern the rights, duties, and other relations of private people. Promisors on contracts have obligations to perform and promisees have correlative rights to performance. That relationship is created by the law and exists whether or not any court has reason to inquire into it. When they decide contract cases, courts identify the parties' preexisting relations and decide accordingly.

        Just as rules of primary law can be external to the courts, so can the law of remedies. The connection between courts and remedies law is perhaps closer than that between courts and primary law, so it is important to see how remedies law too can be given to, not created by, the courts.

        A remedy is a legally binding step taken by the court that is designed to bring the parties' actual positions into conformity with the requirements of the law. A damages judgment is designed to restore the wealth of the plaintiff that was lost by the wrongdoing of the defendant. A preventive injunction against a tort is designed to keep the tort from happening and thereby keep the defendant from moving the plaintiff away from the plaintiffs rightful position. Rightful positions are determined by the primary legal rules, which directly govern the parties, not the courts. Contract damages and specific performance serve to restore or maintain the promisee's rightful position as defined by the contract, which itself is primary law. (4)

        When a court gives a remedy, it exercises legal power. Damages judgments and injunctions create new obligations for the defendant. Creating an obligation is an exercise of power. (5) Statutes that impose duties of conduct do so through exercises of legislative power. When courts issue injunctions, they too create duties concerning conduct and do so by exercising power. Courts do not have legislative power, so their ability to bring about a change in parties' legal positions requires the exercise of some other power. The ability to bring about a change by giving a remedy is remedial power. The power conferred by Article III is the judicial power, which enables courts to give remedies. (6)

        When courts give remedies, they implement the law of remedies. Remedies law, like the primary law of contract, is abstract, although a remedy in a case is concrete. The principle that specific...

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