"A SWORD IN THE BED": BRINGING AN END TO THE FUSION OF LAW AND EQUITY.

• Author: Chupp, Brooks M.

The procedural distinction between law and equity in the United States is largely a historical footnote in the present day. David Dudley Field, the notorious lawyer who advocated for the end to the distinction between law and equity, believed that there was no true substantive difference between the two disciplines beyond the different remedies that each could offer. (1) But equity has not gone gentle into that good night. For example, federal courts have recently struggled with the scope of injunctive relief, a traditional equitable remedy. (2) At present, the law grants to United States courts that hear cases in equity only the authority of "the English Court of Chancery at the time of the separation of the two countries [i.e., England and the United States]." (3) Further, the law dictates that equitable remedies must be granted according to "traditional principles of equity jurisdiction." (4) Regardless of whether Field's view that equity and law are functionally no different is correct, the principles behind the ancient system of equity still govern federal law today.

Equity has been a controversial area of the law for ages. Charles Dickens' novel Bleak House lampoons the system by depicting a case in chancery that goes on for generations, consuming several people's lives and livelihoods in the process. (5) The Antifederalist author Brutus complained of federal judges sitting in equity that "in their decisions they will not confine themselves to any fixed or established rules, but will determine, according to what appears to them." (6) Even Joseph Story, the famed jurist and scholar of equity, thought that equity powers lent themselves easily to abuse. (7) Story did not think that this was inevitable, however, writing that "discretion is a science, not to act arbitrarily, according to men's wills and private affections; so that discretion which is executed here is to be governed by the rules of law and equity." (8) But reformers rejected this viewpoint. They did not agree that "discretion [was] a science," thinking instead that law and equity were "simply two sets of remedies, with no natural or necessary relationship between remedies and substantive rules or doctrines." (9) This misconception underlying the merger of law and equity has led judges and lawyers alike to misunderstand equity as either unfettered discretion to correct injustice or nothing more than a set of remedies available at law. Neither of these viewpoints is correct. Story refuted the former, and the Supreme Court refuted the latter in Grupo Mexicano:

This expansive view of equity [i.e., that equity allows courts the power to provide any remedy not available at law] must be rejected. Joseph Story's famous treatise reflects what we consider the proper rule, both with regard to the general role of equity in our "government of laws, not of men," and with regard to its application in the very case before us.... "'It is said,' [Blackstone] remarks, 'that it is the business of a Court of Equity, in England, to abate the rigor of the common law. But no such power is contended for.'" (10) Because the merger of law and equity papered over the important, if subtle, rules of equity, it created a serious concern that went largely unconsidered by early proponents of merger: if lawyers and judges are trained to think of equity as no different from law, what will happen to the guardrails created to prevent the abuse of equitable powers? Equity is a massive and powerful field of law that dates back to the 1300s; (11) to ask judges, who are already legal generalists, to become intimately familiar with such an intricate system is to court disaster.

Those who called for the fusion of law and equity have, throughout the years, argued that the existence of a parallel court system for equity would be inefficient and confusing for parties. (12) While there is limited merit to this viewpoint, the United States has been willing to create courts of limited jurisdiction to hear cases of a highly specialized or technical nature in other areas of the law (for example, tax and bankruptcy). This Note argues that the specialized-courts approach is viable as it relates to equity and that it is, in fact, preferable to the current system. This Note will also serve as a valuable resource for future scholars of equity. Despite a recent groundswell of academic interest in equity, no work has conducted a fifty-state survey on the history of state equity courts, nor has any work collected sources about these courts. This Note will provide a collection of such sources and will feature brief discussions of certain states' approaches to equity. Part I will provide a collection of arguments for and against equity courts throughout the history of the United States. Part II will provide technical details of state equity jurisdictions throughout American history and will demonstrate (1) that total merger is less common that is commonly thought, and (2) that states that have rejected total merger have managed to do so in a way that has been tenable for parties. Part III will argue that the costs imposed by merger are substantial enough to justify incurring the costs needed to undo it.

1. AMERICAN DEBATES ON EQUITY

   Americans have feuded over equity since well before the Declaration of Independence, and they show no signs of stopping. Prominent statesmen, scholars, and lawyers have appeared on both sides of the divide. The Antifederalists, David Dudley Field, and Roscoe Pound opposed equity as a distinct field of law; Alexander Hamilton, Antonin Scalia, and Henry Smith were in favor of it. As one might suspect of a debate that has been around for over three hundred years, the debate over equity has not always been over the same issues. Broadly speaking, it can be broken up into three historical periods, within which the debate had a relatively uniform character: early America, where the debate centered around connections to the tyranny of the British crown; the merger era, where the debate centered around the necessity--or lack thereof--of keeping law and equity separate; and the present, where the debate focuses on whether the fact that equity is antiquated is a benefit or a drawback.

   Early American criticisms of equity focused on its undemocratic nature. The colonists resented colonial chancery courts because the chancellor was frequently also the royal governor, who sometimes ran afoul of colonial sensibilities by abusing his discretion. (13) The colonists were also concerned that the chancery could enable royal infringement on their rights as Englishmen. (14) It is little wonder why the colonists, when establishing their own judiciary systems, came to prefer unitary courts of law and equity overseen by the legislatures. (15)

   Around the time of the passage of the Constitution, the Federalists and Antifederalists took up the issue of federal equity jurisdiction. The Antifederalists picked up where the pre-Revolution colonists had left off, contending that equity lent itself all to easily to abuse, that giving the federal judiciary a general power to hear cases in equity would upset the bounds of federalism, and further, that equity itself was inherently unconfinable by any sort of principles. (16) Alexander Hamilton, speaking for the Federalists, disagreed. He analyzed the ways in which local court systems handled jury trials and equity, and concluded that they were so disparate as to make the Antifederalists concerns irrelevant as they related to federal courts:

   [I]t appears that there is a material diversity, as well in the modification as in the extent of the institution of trial by jury in civil cases, in the several States; and from this fact these obvious reflections flow: first, that no general rule could have been fixed upon by the convention which would have corresponded with the circumstances of all the States; and secondly, that more or at least as much might have been hazarded by taking the system of any one State for a standard, as by omitting a provision altogether and leaving the matter, as it has been left, to legislative regulation. (17) Hamilton also addressed the older concerns about courts of equity, admitting that a court of equity could easily "permit the extension of its jurisdiction to matters of law," but arguing that attempting to subsume equity into law would be "unproductive of the advantages which may be derived from courts of chancery" and would "undermine the trial by jury, by introducing questions too complicated for a decision in that mode." (18)

   As time moved onward toward 1848, proponents of the fusion of law and equity changed direction: the issue wasn't that equity was inherently dangerous, it was that equity was inherently no different from law. (19) Interestingly, those fusionists argued that even if equity was created distinct from law, it "had become indistinguishable from law in its precedent-bound jurisprudence." (20) Some fusionists even argued that a separate equity jurisdiction was not just unnecessary, but constituted an active encroachment on the law; indeed, at the Field Code debates conducted in the New York legislature, New York fusionist Charles O'Conor argued that "[t]here was not at present any such thing recognized in jurisprudence... which the law did not define and declare."' (21) The fusionists had a powerful ally in their fight: Blackstone, who wrote that, however law and equity may have been created, both "are now equally artificial systems, founded in the same principles of justice and positive law; but varied by different usages in the forms and mode[s] of their proceedings." (22)

   However, as more and more states fused law and equity, opponents of fusion began to appear. Some argued that the fusion of law and equity was unconstitutional, including both the legislature of Iowa (23) and the New York Court of Appeals. (24) Judge Selden expressed the argument succinctly in Reubens v. Joel:

   It is, in my judgment...