A high-stakes game: Will the Supreme Court change its constitutional direction after the next election?

Richard A. Epstein is the Laurence A. Tisch Professor of Law, New York University School of Law, the Peter and Kirsten Bedford Senior Fellow, The Hoover Institution, and the James Parker Hall Distinguished Service Professor of Law and Senior Lecturer, the University of Chicago.  

The recent announcement that Republican presidential nominee has tapped Republican Congressman Paul Ryan of Wisconsin as his vice-presidential running mate is widely noted for its short-term political implications: Mitt Romney has not decided to drift back to the center on economic, fiscal, and budgetary matters.  Instead in choosing Paul Ryan he has signaled that he plans to continue on the limited government approach that stresses dollars-and-cents issues over the social issues – think abortion and gay rights – that have for so long divided the social conservatives from the more libertarian wing of the Republican Party.

As might be suggested, this choice hints that Romney, if elected president, might well choose judges, and particularly Justices of the Supreme Court, who tend to hew to his vision of the world. In so doing, he has created a clear demarcation from Obama, whose own two nominees Sonia Sotomayor and Elena Kagan have proved reliable supporters of Obama’s Progressive agenda, most notably during the recent battles over the Affordable Care Act.

It takes little persuasion that the biggest difference between the left and the right is over these issues, and it is on these that I shall focus, putting to one side important issues that deal with other areas like the death penalty or the legality of searches and seizures.   It also takes little imagination to perceive that the reelection of Barack Obama in 2012 will solidify his hand in getting the Supreme Court to go along with his general position, which means that the major function of the court will be to insulate large economic reforms from judicial nullification.

But the question is how to think about the conservative wing of the court. In dealing with the split between the Court’s Progressives and Conservatives, the issue has often been cast in the somewhat misleading terms of judicial restraint.  The progressive Justices will give a pass to virtually any major form of economic regulation, while the Conservatives will engage the question of whether either the structural or individual rights provisions of the Constitution impose some discernable limitations on the exercise of federal (and in some instances) on state power.

These differences are real enough to matter.  In general, the progressive Justices (often joined by some conservative Justices) will give both the federal and state government carte blanche on general economic regulation.  In the field of individual rights that attitude is captured in the generous rendering of public use which was endorsed unanimously in Hawaiian Housing Authority v. Midkiff, decided in 1984, written by then-Justice Sandra Day O’Connor.  It is a measure of the modest shift in sands that the 2005 decision in Kelo v. City of New London generated four dissents, including one by Justice O’Connor that indicated her clear change of heart from what went before, even though she distanced herself from her earlier Midkiff opinion without disavowing it.  Similar attitudes can be found in some of the takings cases such as Nollan v. California Coastal Commission (1987) and Dolan v. City of Tigard (1994), where five-four decisions sustained challenges against various forms of land-use regulations that conditioned the granting of development permits on surrendering to the state easements that allowed for general public use over formerly private land.

Alas, on these issues, it is important to understand just how little separates the two sides on property issues, for the conservatives will not raise so much as a peep about such manifest disregard of property rights that are embodied into most (but not all) zoning ordinances, and in the various rent control schemes that still are in place in such cities as Escondido, Santa Barbara, and Goleta, and of course New York City, with its rent stabilization program that has weathered many a judicial challenge.

The willingness of all judges to find a categorical distinction between physical entries and regulatory takings makes it crystal clear that the Supreme Court as a unit does not think that the ordinary laws of property still apply.  Tenants are now allowed repeatedly to hold over against their landlords at the expiration of a lease, at rents set well below market value.  The law of nuisance does not provide any limitation on the ability to zone, for it is commonplace that towns can protect their “character” and their “views” without compensating the individuals who are asked to bear the special burdens in the form of stringent building restrictions and exactions. Keep within this framework and local governments can tie up land use tighter than a drum.

The same level of judicial nonengagement of the conservative Justices with fundamental principles applies to governance structure in the administrative state.  Just this issue was raised in Free Enterprise Fund v. Public Company Accounting Oversight Board (2010). There the conservative Justices struck down a statute that insulated members of the PCAOB by two levels of delegation, first by the President to the Securities and Exchange Commission, and by the SEC to the PCAOB. But that constitutional intervention was only interstitial.  So long as the President cannot remove members of the SEC except for cause, narrowly defined, the PCAOB is insulated from presidential oversight 99.9 percent of the time, even though it has vast powers to investigate and charge the firms within its oversight jurisdiction.

This modest slap on the wrist is strong evidence that the current conservative Justices will not take on the constitutional status of independent agencies, which were accepted in Humphrey’s Executor v, United States (1935), even though these could be challenged on the ground that the so-called “fourth branch” of government does not fit into the tripartite constitutional structure with its legislative, executive, and judicial branches.

In dealing with the Commerce Clause they are willing to entertain, as they did in NFIB v. Sebelius (2012), the view that Congress does not have the power to force people to enter into a line of business so that they can then regulate it.  But at the same time, they did not express the slightest uneasiness about upholding the expansive view of the commerce power in Wickard v. Filburn (1942), which held that substantial indirect effects from local activities in agriculture, mining, and manufacturing offered a sufficient warrant for federal regulation.

Finally, in dealing with the powers to tax and spend, all Justices on both sides of the political spectrum thought that the power to tax for the “general welfare” gave the federal government “broad discretion” in the nature and objects of taxation. None of them were prepared to even consider the possibility that the “general welfare of the United States” was in fact intended to limit the use of taxes to secure transfer payments that could give voice to the powerful factions that a sensible federal government should start to limit.

In dealing with these issues, the current conservative passivity is a combination of two different sources. The first is the shrug of resignation that comes from being beaten down on these issues consistently for a period of close to seventy-five years.  No point for the faint-hearted originalist in trying to fight the inevitable when all the political forces are so clearly aligned against it.  The second, however, is a belated assertion that a richer sense of constitutional interpretation – what Jack Balkin calls Living Originalism – shows that the Wickard decision was consistent with the original meaning of the Constitution after all, even though there is not so much as a glimmer of support for that position in any of the decided cases from Gibbons v. Ogden (1824) on forward.

The implications of these two positions are vastly different.  If the first one is correct, it is always open for someone to challenge the status quo in two ways.  First, it is now respectable to say that this (as I call it) “prescriptive constitution” should not be extended beyond the scope of its current use.  That position follows from the usual rules of prescriptive easements that allow long usage to protect only the rights used (e.g., walking over another’s land) and not other uses (e.g., driving trucks over it) that were not so protected.  Second, if the rule is prescriptive only, it is fair game to ask whether long usage has had such a deleterious effect on the overall system that it makes good sense to edge back to the original position by the usual, if messy, common law method of incremental interpretive adjustments, which could well include overruling cases that some regard as landmarks in the law.

I do not think that this second option should be regarded as off the table. The current economic situation in the United States is recognized on all sides to be grim, and not getting better any time soon.  The only question is whether the current institutions lead to economic stagnation or contraction.  Many people think, wrongly, that greater expansion of government power can cure the current malaise, which is largely attributable to the expansion of government power. Have a large government and all resources are now put into public solution, where political pressures can lead to their major reassignment.  There is in practice no upper bound on the ability to shift property rights through regulation of urban land and open spaces. Nor is there any limitation on the differential taxes that can be imposed on some activities relative to others.  That vast political discretion results in a massive shift from the use of taxation and regulation to create public goods that benefit all in roughly even measure, to a world in which political majorities are at liberty to raise their taxes on the top one percent to whatever level they see, as has been done.

It is for this reason that the nomination of Paul Ryan is instructive for the long-term political dynamic.  He is clearly someone who, on at least some issues, is willing to think out of the box.  He is not one, or at least has not revealed himself as someone, who thinks that it is possible to make major reforms without trenching on some vested rights.  But it looks as though he is prepared to make some of those painful political choices.  In the short term, the likely approach is to attack some of the privileges that come from this rapacious use of state power within the political framework.  But the appointment of Justices who are sensitive to these issues in the next four years could lead to an instructive break from the cautious conservatism on the Court today, to a more full-throated classical liberal view that does nothing to deny the need for the state to supply defense and infrastructure, but looks with disdain on the raft of transfer programs that today sap the strength of a nation.

What will the future bring?  My hope is that the Republicans will run a principled campaign that stresses the need for sustainable social institutions, so that the task of national repair can take place not only on the executive and legislative fronts, but on the judicial front as well. There are many domestic issues that command attention but none is more important than the simple question of how big a government? And for what ends?  Much of the blame for the current economic impasse comes from the Supreme Court’s penchant to defer to the political branches when they hatch their multiple schemes of special taxation and special subsidy.  Change that attitude and over time a profound reorientation of our constitutional culture might help the United States get out of its current economic and social malaise. Do business as usual and there will be economic stagnation – the new normal – stretching into the indefinite future.