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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.

Reader Discussion

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on November 01, 2016 at 11:09:09 am

Let’s look at the outcome of Thayer’s deference to congress by one of (as you say) his biggest proponents Oliver Wendell Holmes. Justice Holmes deferred to the legislature when it decided that “Three generations of imbeciles are enough” in Buck v. Bell. It deferred to congress and the President when they decided that the Japanese-Americans need to be put in internment camps in Korematsu v. United States. It deferred to the legislature on the constitutionality of separate but equal in Plessy v. Ferguson. It decided to defer to congress in expanding its commerce clause powers to almost unlimited proportions in Wickard v. Filburn. I could go on for hours citing cases like this, but in short deference to the legislature has been the foundation of almost every major failure of our judicial system.

As to the example given of the person who truly believes the statute is unconstitutional and yet as a judge “declare it constitutional” I have another way of describing this situation: They have violated their oath of office, and impeachable offense and should be removed from the bench. A legislator is free to oppose legislation because he thinks it’s a bad idea, but as a judge acknowledge its constitutionality. I think this is the highest of judicial callings. You are likely on good legal ground if you think the policy is bad, but constitutional or that the policy is good but unconstitutional. Its when your legal opinion matches your policy opinion that you must watch out for bias. But a person cannot believe that it is constitutional and that it is unconstitutional at the same time, and a judge who claims a law is constitutional publicly while really believing that it is not has violated the trust put in them by the people to decide the case as they believed it to be without bias. Same as a judge who declares a statute unconstitutional while really believing it to be constitutional, that judge has also violated their oath of office.

As to the moral hazard, judges refusing their duty to defend the constitution doesn’t increase the moral hazard of legislating, it just encourages legislatures to ignore the constitution. You would then have legislatures saying it is for the courts to decide if the statute is constitutional and judges deferring to the legislature as to the constitutionally and both groups not even looking at the constitution. No, the right way to understand it is that BOTH judges and legislatures have a duty to oppose any statute they believe is unconstitutional and deference to the other by either branch is a violation of their oath of office. And you want to talk about “moral hazard,” how about the moral hazard in allowing congress to decide the limits of its own powers, such a rule makes no sense for any idea of limited government.

You talk about the courts being a “co-equal branch” with the legislature, but then if deference is to be granted to the legislature by the courts, why shouldn’t (under your view) the legislature differ to the co-equal branch of the courts on their opinion of the constitutionality? In reality the co-equal branches each have the equal opportunity to decide that something is unconstitutional. As Thomas Jefferson said:
“My construction of the constitution . . . is that each department is truly independent of the others, and has an equal right to decide for itself what is the meaning of the constitution in the cases submitted to its action; and especially, where it is to act ultimately and without appeal.”
http://press-pubs.uchicago.edu/founders/documents/a1_8_18s16.html

The legislature can decide something is unconstitutional and repeal the statute (overriding a veto if necessary), the executive can refuse to enforce a statute that is unconstitutional (as Thomas Jefferson did for the Alien and Sedition Acts), or the judiciary can refuse to enforce a statute that it believes is unconstitutional. That is how they are co-equal, each branch has the opportunity to stop unconstitutional acts.

And, I ask, where in the text of the constitution do you derive this supposed requirement of deference by the judiciary? I sure don’t see it in article III where you would expect it to believe if the Founders believe as you do. Instead, my belief is based on the oath clause, actual text in the constitution requiring each and every legislator, executive or judge to defend the constitution as they believe it means.

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Devin Watkins
on November 01, 2016 at 11:51:36 am

This is a well crafted argument; the characterization of the lassitude of the American citizen as the result of "moral hazard" is, I think, correct.

I have asserted before that American political culture / practice was far healthier when the overwhelming majority of citizens could not name a single Supreme court Justice. Regrettably, we all now seem to wait anxiously for the latest oracular pronouncements from the Black Robes - as they (will?) are seen as our ultimate defenders.

Yet, it is far worse than simple moral hazard for the electorate. Does not this same "hazard" operate to the detriment of the Legislature AND the Executive? and does not the passivity of the Legislature, in the face of adverse Judicial determinations, invite further encroachments upon the liberties of our citizens by both the Judiciary and the Executive. Neither the "people" nor the Legislative have made any sincere attempt to alter, in fact to even question, this notion of a two-tiered catalog of *rights* contrived by a New Deal Court more intent on preserving its role in the Madisonian structure than in protecting the liberties of the citizen.
Further, the passivity of the Legislature, along with an eagle-eye vision for avoiding unpopular voting stances, encourages the growth of a massive Executive Branch which is now afforded, by the Court, deference based upon *rational basis* tests (and all manner of variants -scrutiny (high, low, in-between, etc), all while the Executive now ENCROACHES upon those very same "fundamental" rights that the Court had previously deemed so important as to require special protection.

(Hmmmm! - odd thought - Can it be said that the Court is also a victim of moral hazard vis a vis the Executive Agencies in that the Court has, in effect, and via Chevron (and other) deference determined that the Agencies will, and are in fact capable of, exercising "rational" constitutional judgement?)

Then again, for moral hazard to be operative, one need first be possessed of a firm moral ground, Ultimately, moral hazard works to the detriment of civic morality.

PS: Would like to hear Devin Watkins and others take on the above essay. Will "engagement" counter this? or would engagement, just as surely as deference / activism ALSO work "moral hazard" to our detriment.

Anyway, great first essay - look forward to more!

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gabe
on November 01, 2016 at 12:02:59 pm

Devin:

I guess I had a different take on Rogers' essay and instead focused on the moral hazard issue - which I think is sound. I did not see in it a call for judicial deference - so did i miss something? Also, I think the "moral hazard" issue speaks against deference ( also against activism) or against any state of affairs that encourages the people to look to someone or something other than themselves to protect their liberties.

Question for you:

Would you say that "engagement" is as likely, less likely or more likely to contribute to the problem of "moral hazard."

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gabe
on November 01, 2016 at 12:39:39 pm

So the question of moral hazard is about changes in behavior having unintended side-effects. So it is true that if you have very strong judicial review that everyone trusts is correct that you might have legislatures be more likely to pass legislation that is in a legal "grey" area and just let the courts strike it down if they think it is wrong (in essence deferring to the court's opinion on the constitutionality).

But it is also possible if you have lower judicial review, that the legislature may not worry about their "great" legislation being struct down that they will write legislation that is far more clearly unconstitutional. For instance, back when you had stronger review of the commerce clause many pieces of legislation has so called "jurisdictional hooks" that required the item in question having been involved in "commerce among the states." Such jurisdictional hooks at least arguably turned a clearly unconstitutional law into a plausibly constitutional law. Today, deference on the commerce clause is so great that much legislation doesnt even include these minimial jurisdictional hooks under the belief that it doesn't matter because the court's wont care.

Secondly, if you are differing to the legislature to determine the limits of their own power, the moral hazard of that is HUGE. The same is true for deferring to an agencies interpretation of its own power (ie City of Arlington v. FCC). People who have power are FAR more likely to interpret everything in favor of themselves having more power. That is why our Founders understood that and as James Madision said in Federalist #51:

Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.

In short, the mild forms of moral hazard exist in both directions, but the huge moral hazard of a body of men deciding the limits of their own powers clearly points for stronger judicial review.

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Devin Watkins
on November 02, 2016 at 14:54:20 pm

Agreement. Very good essay. I never considered the moral hazard aspect of government. Veddy intedesting ...

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Scott Amorian

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