The federalism decisions of Justices Rehnquist and O'Connor: is half a loaf enough?

• Author: Epstein, Richard A.
• Position: Looking Backward, Looking Forward: The Legacy of Chief Justice Rehnquist and Justice O'Connor

INTRODUCTION: FROM THE OLD TO THE NEW SYNTHESIS I. THE BASIC SCOPE OF THE COMMERCE CLAUSE II. DUAL SOVEREIGNTY AND THE TENTH AMENDMENT III. STATE SOVEREIGN IMMUNITY A. Background B. The Eleventh Amendment C. The Bill of Rights and the Fourteenth Amendment 1. The Takings and Equal Protection Clauses as limitations on state sovereign immunity 2. Recent cases CONCLUSION INTRODUCTION: FROM THE OLD TO THE NEW SYNTHESIS

In many ways the basic structure of constitutional law circa 2006--which features a strong national government of unlimited authority and weak protection of economic liberties and property rights--derives from the New Deal synthesis circa 1937. That synthesis insists that an extensive national role in the regulation of economic affairs is an indispensable tool for social progress. For the better part of fifty years that synthesis dominated both judicial and academic writing on American federalism. One of the great transformations that took place during the critical Chief Justiceship of William H. Rehnquist involved a systematic and prolonged challenge of that worldview. I have little doubt that many contributors to this Symposium will be critical of the efforts of Chief Justice Rehnquist and Justice O'Connor to "turn back the clock" on this critical question of federalism. My thesis is the precise opposite. I praise the two Justices for breaking the intellectual logjam on so critical an issue. Yet, at the same time, I take the view that on many key questions of federalism they should have pushed harder and moved farther than they ultimately did. I defend that thesis with respect to three critical areas of law: the scope of the Commerce Clause, dual sovereignty and the Tenth Amendment, and the doctrine of sovereign immunity.

To set the stage ever so briefly, during the first third of the twentieth century, members of the American left wing--then represented by the Progressive movement--were outsiders to American constitutional law, looking in. (1) Its intellectual leaders, such as Louis Brandeis and Felix Frankfurter, railed against the Old Court for its retrograde resistance to modern social legislation, chiefly (but not exclusively) as it related to big business and the labor markets. (2) Their intellectual and political campaign met with continuing success, culminating in a major shift in judicial worldview during the 1936-1937 Term on two recurrent and interlocking constitutional issues: the structural questions of federalism and the protection of economic liberties and private property. After the campaign's brief hiatus during the Vinson Court (1946-1953), the Warren Court (1953-1969) did much to consolidate and expand the early New Deal victories. Its work was carried forward in relative quiet through much of the Burger Court (1969-1986)--a Court which proved more innovative on other fronts. (3) The Rehnquist Court (1986-2005), which has now drawn to a close, made inroads on the New Deal synthesis on both federalism and property rights. On the federalism side, it helped make debate over the scope of the commerce power a live issue, and it sought to breathe new life into the Tenth Amendment and the doctrine of sovereign immunity. On questions of property rights, Chief Justice Rehnquist, Justice O'Connor, and other members of the conservative bloc questioned the view that the Takings Clause of the Constitution places no barriers to the ability of either Congress or the states to impose whatever forms of regulation on land use development that public officials see fit. (4)

In this Article I shall only address the federalism issues, but my silence on economic liberties issues should not be read as agreement with the 1937 revolution or with the Court's subsequent treatment of property rights.

It is important to recall that the great achievement of the Progressives and their followers was to sweep away all constitutional obstacles to the implementation of their political and social agenda--an agenda which championed comprehensive regulation of business and property at both the federal and state levels. One key component of the Progressive campaign involved an expansive reading of the Commerce Clause--"The Congress shall have Power ... to regulate commerce with foreign Nations, and among the several States, and with the Indian Tribes." (5) The Commerce Clause was defined by the Court's decisions in two key cases: National Labor Relations Board v. Jones & Laughlin Steel Corp., (6) which upheld the National Labor Relations Act as it applied to local businesses (i.e., those outside the fields of transportation and communication); and Wiekard v. Filburn, (7) which ratified the new constitutional order by sustaining the Agricultural Adjustment Act insofar as it applied to household consumption of grain in violation of a national quota system.

The conventional wisdom that emerged from these cases was that it took only a bit of verbal ingenuity to insulate any congressional legislation from challenges that the legislation fell outside Congress's power under the Commerce Clause. Congress--if it chose--was free to regulate any local activity in order to prevent the destructive competition that it believed would otherwise take place across state lines. The Fair Labor Standards Act (FLSA), which imposed federal minimum wage and maximum hour laws, was sustained in large measure in the belief that enlightened federal regulation was indispensable to countering the inherent abuses in competitive labor markets. (8) Apart from the Bill of Rights, the only limits on national power that remained were prudential, not legal. (9)

This increased scope of federal power is well illustrated by the judicial response to the Civil Rights Act of 1964, passed at the height of the Warren Court. Quite simply, the Civil Rights Act of 1964 could not have been sustained in anything like its original form if matters internal to the states were outside the scope of Congress's power under the Commerce Clause. (10) But cases like Jones & Laughlin Steel Corp. and Wickard transformed the constitutional landscape, so it was no surprise that the Commerce Clause challenges to the 1964 Act were blown aside in the litigation that followed its passage. (11)

The march toward increased federal power was not, of course, limited to the federal regulation of private, local activities. It also extended to the federal regulation of ongoing administrative and business activities of the states, notwithstanding claims that as independent and coequal sovereigns, states could not be subject to federal regulations that interfered with the discharge of their governmental functions. (12) The new Commerce Clause jurisprudence not only played havoc with earlier views on enumerated powers but also removed the protection of state sovereignty embodied in the Tenth Amendment. (13) In subsequent years, the Supreme Court has had to face the question of whether an expansive Commerce Clause sweeps away all obstacles to the assertion of federal power in connection with the two issues discussed in Parts II and III--the scope of reserved powers under the Tenth Amendment and the extent to which any grant of Congressional power under Article I, Section 8 is sufficient to overcome the traditional doctrine of state sovereign immunity.

There is little question then that by the end of the Warren Court the basic dominance of federal over state power had solidified. The rock-solid nature of this synthesis was attributable in large measure to the utter absence of any serious intellectual counterforces. As a matter of dominant political philosophy, the governing elites within and near the legal profession were serenely content with the status quo. Their model of governance involved the cooperative interaction of state and market. They were confident that the federal government had the political wisdom to decide how far the state should go and why. (14) The great transformation wrought in part by Chief Justice Rehnquist and Justice O'Connor--and, of course, in different measures by Justices Scalia, Kennedy, and Thomas--was to upset that cozy consensus by turning constitutional law on these issues into a dialogue in which the forces backing the New Deal synthesis now met a considered intellectual opposition.

The achievement of the Rehnquist/O'Connor alliance is significant because neither Justice showed any affection for the large-scale speculation that holds such great appeal to academic writers but which is death to any Supreme Court nominee who is promptly tagged with having an ideological agenda. Rehnquist's and O'Connor's willingness first to question and then to resist the dominant political doctrines of their time rested on a keen sense of constitutional incrementalism--a characteristic of common law decisions that often redirect established legal authority without waging a frontal assault on established doctrine. (15) It is only when we put the full picture together that we see that several increments count as real steps, so the constitutional landscape is quite different now than it was before they arrived--then-Justice Rehnquist in 1972 and Justice O'Connor in 1981. Working within a set of realistic institutional constraints, each worked to reshape the dominant doctrine. It is easy to point out the differences between them: Justice O'Connor was happier to balance, while Chief Justice Rehnquist was more inclined to opt for legal rules than general standards. Justice O'Connor was closer to the center; Justice Rehnquist--especially before he became Chief Justice--was more rigorously conservative. But these differences are less significant than their shared uneasiness with (which is not hostility to) the legacy of the New Deal and the Warren Court.

There is, of course, much to praise in both the Rehnquist and O'Connor styles of incrementalism--at least if one agrees with their overall direction, as I do. But by the same token, it is easy to conclude that at times...