Judicial Review as Moral Hazard for Legislators and Citizens

Most people think of judicial review in the way that Justice Owen Roberts described it in a 1935 Supreme Court decision:

The Constitution is the supreme law of the land ordained and established by the people. All legislation must conform to the principles it lays down. When an act of Congress is appropriately challenged in the courts as not conforming to the constitutional mandate, the judicial branch of the Government has only one duty — to lay the article of the Constitution which is invoked beside the statute which is challenged and to decide whether the latter squares with the former. All the court does, or can do, is to announce its considered judgment upon the question.

It seems straightforward. A judge takes a law, sets it next to the Constitution, and determines whether the “latter squares with the former.”

There is a long tradition, however, arguing that this view, while straightforward, accords judges too much power over legislatures. Harvard law Professor James Bradley Thayer, whose views influenced the “Harvard justices” notably Oliver Wendell Holmes, Felix Frankfurter, and Louis Brandeis, argued that judicial review does not invite straightforward application of a judge’s own determination whether a law squares with the Constitution. Rather, he argued, judicial judgments of constitutionality should be decisions whether a legislator could have had a reasonable (or rational) basis for thinking that a law was in fact constitutional.

The judicial determination, as it were, is at one remove from a direct determination of whether a law coheres with the Constitution. This may seem like a lawyerly distinction, but most people are familiar with something like this distinction in everyday life. We make this distinction when we say something like, “I see your point of view, even though I disagree with it.”

For example, say you and your spouse or friend are driving to dinner. There are many routes from your house to the restaurant. Most are irrational (for example, driving 100 miles out of your way to reach the restaurant). But there are two routes, route A and route B that are, as it were, in the game. You personally think that route A is the best route; your spouse or friend thinks that route B is the best route. Even though you disagree as to the best route, you recognize that your spouse’s or friend’s belief is based on differing, but reasonable, assessments of the underlying facts, such as traffic at that time of day, and the timing of traffic lights. Whoever drives gets to choose the route, and the other person doesn’t press the matter. The passenger shows proper respect for the driver’s judgment, aside, perhaps, from noting the disagreement, at least as long as the driver is selecting one of the “rational” or reasonable routes from home to the restaurant.

So, too, with judicial review according to Thayer. In his 1893 monograph, The Origin and Scope of the American Doctrine of Constitutional Review, Thayer cites Judge Thomas M. Cooley’s remark of a legislator who votes against a measure in the legislature on the grounds of it being unconstitutional, is subsequently appointed to the bench “when this measure, having been passed by the legislature in spite of his opposition, comes before him judicially, may there find it his duty, although he has in no degree changed his opinion, to declare it constitutional.” One’s “considered judgment” (in Justice Roberts’ language) could be that the law is unconstitutional, while one also concedes that the law could be constitutional in another’s considered judgment. In which case, Thayer would have a judge uphold the law as constitutional.

Thayer does not use the phrase “judicial activism.” In the context of his article, however, we might define Thayerian judicial activism as judges who review legislation with any more rigorous rule, in theory or in practice, than one upholding a law unless there is “no reasonable doubt” as to its unconstitutionality.

Thayer develops several lines of argument for his view, mainly relating to the respect courts owe the legislature as a coordinate branch of government in separation-of-power systems. Thayer pushes against the view that judges are uniquely qualified or empowered to pass on the constitutionality of legislation relative to legislators (or, presumably, executives).

At the very end of the essay Thayer gets to the “so what” question. In addition to a few other arguments, Thayer articulates what today might be termed a “moral hazard” rationale for opposing judicial activism, that is, for opposing anything but deferential judicial review.

“Moral hazard” is a phrase originating with the insurance industry. It refers to the possibility that insuring against costly outcomes actually increases the reckless behavior creating the need for insurance in the first place. For example, insuring against automobile accidents might induce some drivers to drive more recklessly because, with the insurance, drivers no longer pay the full cost of the accidents they’re in.

Judicial review can be thought of as a form of insurance for legislatures enacting constitutionally-questionable statutes. The result of judicially insuring against unconstitutionality, for Thayer, is that it invites legislatures to increase their constitutional recklessness relative to their behavior without judicial review. He notes the irony that “It has been often remarked that private rights are more respected by legislatures of some countries which have no written constitution, than by ours.”

The irony for Thayer is that judicial enforcement of rights might actually decrease their overall security relative to systems of legislative supremacy.

Thayer more generally suggests that judicial protection of rights undermines the prerequisites of republican responsibility for legislators and for ordinary citizens. “[Legislators] and the people whom they represent, not being thrown back on themselves, on the responsible exercise of their own prudence, moral sense, and honor, lose much of what is best in the political experience of any nation; and they are belittled, as well as demoralized.”

Because citizens and legislators are not “thrown back on themselves” by being responsible for protecting their own constitutional rights, they fail to develop into mature republican citizens. Judicial review instead undermines incentives citizens have to mature politically because it fosters a false sense of security for the rights of the people. Conversely, if ironically, decreasing judicial protection would increase and broaden republican virtue:

If what I have been saying is true, the safe and permanent road towards reform is that of impressing upon our people a far stronger sense than they have of the great range of possible mischief that our system leaves open, and must leave open, to the legislatures, and of the clear limits of judicial power; so that responsibility may be brought sharply home where it belongs.

When discussing Federalist #51 in American politics classes, or at the start of constitutional law courses, I sometimes ask students who or what, according to Madison, is the first and primary guarantor of rights in American political system. I’ll even warn them that it’s a trick question (which I tell them is a question that means the first, most-obvious answer that pops into their heads is almost certainly the wrong answer). Despite the reading, and the warning, almost to a person, students will answer that “courts” are the first and primary guarantors of rights in the American political system. I tell them that Madison would be sorely disappointed at their answer. Thayer would also be disappointed, but think their answers entirely understandable given judicial practice in the U.S.

To be sure, there are many empirical claims and behavioral assumptions in Thayer’s argument. Simply because Thayer claimed something doesn’t make it true. And I’d want more than anecdotal evidence from my students before concluding that the type of judicial review we have in the U.S. today is a net loss for republican liberty. Additionally, there is arguably less scope for judicial review today than there was a century ago. With the demise of economic substantive due process in the 1940s and 1950s, Courts, at least at the national level, have largely, although not entirely, evacuated the realm of actively protecting economic or contractual rights.

I do wonder, however, whether today’s “two-tiered” judicial review, where courts review economic regulations (very) deferentially while subsets of rights judges designate as fundamental (such as speech or privacy) continue to be protected rigorously, might be worse overall for protecting liberty against legislative encroachment than consistency at one extreme or the other. That is, seamlessly deferential or seamlessly non-deferential judicial review might be better overall than the mixed system we have. Two-tiered review could, at the popular level, induce the perception among ordinary citizens that courts provide more protection for rights overall than they do in fact.

In that sense, two-tiered review might be the worst approach to protecting liberty in a republican separation-of-power system: It deters the full development of republican maturity among citizens, so they do not check legislative overreach electorally, yet, at the same time, judges also ignore legislative overreach in broad swaths of policy because of their doctrinal commitments. In both cases it would be “lose-lose” for constitutional liberty.