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Brandeis, Erie, and the New Deal "Constitutional Revolution" - Edward A. Purcell, Jr.
Considered as an historical artifact, Justice Louis D. Brandeis's opinion in Erie Railroad Co. v. Tompkins is an American cornucopia. It pours forth an abundance of fascinating issues that range from the Olympian heights of legal philosophy and constitutional theory through the tangled jungles of political, economic, and social conflict, to the street-smart litigation practices of forum shopping and ambulance chasing. From the variety of issues it raises, I would like to consider one that I noted but did not address in my book, the relationship between Brandeis's opinion in Erie and what is commonly called the New Deal "constitutional revolution."
Scholars disagree, of course, about when, why, and even whether a "constitutional revolution" occurred, about its nature and significance, and about its causal connection with the New Deal itself. Regardless of the disagreements, however, few question the basic proposition that between approximately 1937 and 1943 the Supreme Court made substantial changes in American constitutional law. Those changes included increasing the power of government at all levels, vastly expanding the authority of Congress and the President, and narrowing the role of the federal judiciary in supervising the actions of other branches of state and federal governments.
Erie came down in 1938, in the midst of those changes, and overruled Justice Joseph Story's ninety-six-year-old decision in Swift v. Tyson. There, Story had ruled that the federal courts, in cases presenting questions of "general" common law, were not bound to follow the decisions of state courts. Rather, in such cases the federal courts could make their own "independent judgment" as to the proper common law rule to be applied.
Erie changed matters drastically. First, it terminated the power of the federal courts to lay down their own "independent" rules of "general" common law and required them, instead, to follow the decisions of state courts in common law matters. Second, it subordinated the federal judiciary to the lawmaking primacy of Congress. It held that the federal courts could not make non-constitutional rules of law in areas where Congress lacked power to act and, further, at least suggested that they should not make law in areas where Congress did have the power to act but had chosen not to do so. Finally, Erie not only condemned Swift for bringing "injustice and confusion" to the law, but it also leveled the stunning charge that its doctrine violated the Constitution of the United States.
While great variety exists among scholarly views concerning both Erie and the New Deal, it is probably fair to say that those who believe that there was a New Deal "constitutional revolution" are more likely to call attention to Erie and to see it as further evidence of drastic change. Conversely, those who stress continuities with earlier and later periods are more likely to ignore Erie or discount it as an arcane outlier.
My purpose here is not to consider the nature and scope of the "constitutional revolution" itself. I use the term only for convenience, to refer to the series of decisions the Court made after the spring of 1937 that upheld the constitutionality of critical New Deal measures and helped bring major changes to American constitutional law. Rather, I wish to consider the relationship between those changes and Brandeis's opinion in Erie.
At first glance, Erie seems to fit comfortably within the "constitutional revolution." It came down during the crucial years from 1937 to 1943, and--by overruling a ninety-six year old precedent--surely appeared "revolutionary." The alignment of the eight sitting justices, moreover, confirmed its New Deal orientation. All of the "progressive" and "swing" justices voted to overturn Swift, while the only dissenters were the two remaining holdovers from the legendary anti-New Deal "Four Horsemen." Further, the Court's opinion expressly relied on the positivist jurisprudence of Justice Oliver Wendell Holmes, Jr., a hero to most New Dealers and the fountainhead of reformist "legal realism." Similarly, Brandeis, the opinion's author, was a nationally-known "progressive" who had for more than twenty years defended regulatory and reform measures that came before the Court. Finally, in political and social terms, Erie extinguished the pro-corporate federal common law and placed new limits on the lawmaking authority of the "conservative" federal judiciary. Thus, it promised to benefit progressive causes and assist social groups associated with the New Deal.
Further reflection, however, suggests three reasons to question that preliminary conclusion. One focuses on statements in Brandeis's opinion that appear to impose limits on the powers of Congress. That language seems directly contrary to two major themes of the "constitutional revolution": its expansion of legislative and executive powers and its embrace of "judicial restraint," a broad deference to the actions of those other branches of government.
A second doubt arises from the fact that Erie required the federal courts to follow state common law and, consequently, transferred lawmaking power from the national government to the states. Such a devolution of power seems inconsistent with the centralizing drive of the New Deal and the expansion of national power that marked the "constitutional revolution."
The third doubt emerges from the fact that Erie limited the federal judicial power at exactly the same time that the Supreme Court was expanding that power in certain selected areas. The New Deal "constitutional revolution" involved not only the expansion of national power and a new "judicial restraint" but also the articulation, and sometimes enforcement, of doctrines that authorized the federal courts to give "stricter scrutiny" to government acts that impinged on certain favored non-economic rights. In the late 1930s, as the Court abolished the doctrine of "liberty of contract" and expanded congressional power, it also advanced the idea that certain individual rights--such as those specified in the Bill of Rights--held a "preferred" position that required the judiciary to protect them with special vigilance and vigor. Erie's limitation on federal judicial power seems inconsistent with this other aspect of the "constitutional revolution." Careful consideration, I submit, dispels each of these doubts. The "congressional power" doubt misunderstands Brandeis and Erie, while the "decentralization" doubt misunderstands Erie and the New Deal. The last, the "stricter scrutiny" doubt, presents a more complex question and requires a more extended analysis. Ultimately, however, it, too, misconceives both Brandeis and his opinion.
The "congressional power" doubt rests on the fact that Brandeis's opinion contains language that appears to set limits on the powers of Congress. Erie stated that "Congress has no power to declare substantive rules of common law," and it seemed to invoke the Tenth Amendment, declaring Swift unconstitutional because it allowed the federal courts to invade "rights which in our opinion are reserved by the Constitution to the several States."
Brandeis, however, was neither placing limits on the power of Congress nor relying on a substantive Tenth Amendment. Rather, the constitutional theory he advanced was based on two other and quite different propositions, neither of which mandated any particular limit on congressional powers. The first was what Brandeis viewed as a fundamental constitutional principle: that the powers of the legislative and judicial branches of the federal government are "coextensive." The second was Brandeis's factual minor premise: that Swift v. Tyson allowed the federal courts to declare common law rules "which Congress was confessedly without power to enact as statutes." And on that factual point, Brandeis was surely right: under Swift the federal judiciary made common law rules controlling insurance contracts and determining legal rights in disputes between states, two areas over which the Court had held that Congress lacked legislative authority.
Thus, in Erie Brandeis did not hold that there was any new or particular limit on congressional authority. His opinion limited the lawmaking power of the federal courts, not that of Congress. The statement that "Congress has no power to declare substantive rules of common law" meant only that Congress had no "general" lawmaking authority over common law matters independent of its constitutionally delegated powers. As a consequence, under the axiom of coextensive powers, the federal courts were equally limited and could, therefore, claim no "common law" power to make "general" law.
Given that constitutional theory, the Tenth Amendment in Erie necessarily played only a derivative role. Swift's fatal flaw was not that it transgressed a substantive limit on federal power created by the Tenth Amendment. Rather, its flaw was that it allowed federal judicial lawmaking in areas that were considered--as of 1938--beyond the lawmaking power conferred on Congress. Accordingly, and solely as a corollary, such judicial lawmaking also transgressed the Tenth Amendment.
That Brandeis did not intend to rely on a substantive Tenth Amendment seems clear. First, he favored recognition of broad federal legislative powers and repeatedly rejected the Tenth Amendment as an independent limit on those powers. Second, in the formative drafts of his opinion, where he developed and articulated Erie's constitutional theory, he ignored the amendment, framing his constitutional argument without reference to it. Third, even when, in response to comments from Chief Justice Hughes and Justice Butler, he added apparent references to the amendment late in the drafting process, he still carefully denied it explicit recognition. He refused to identify it by name, to cite it formally, or to place any of the words of his opinion in quotation marks. Finally, Brandeis's purpose in Erie was not limit the powers of Congress but, rather, to limit the powers of the federal courts. The "congressional power" doubt, thus, is easily resolved.
The second doubt about Erie's congruence with the "constitutional revolution"--the "decentralization" doubt--rests on the fact that Brandeis's decision transferred lawmaking power from the national government to the states. Thus, it suggests that Erie was inconsistent with the dominant thread of New Deal constitutionalism, the expansion of national power. This doubt, however, also proves insubstantial for two distinct, if related, reasons.
First, the "decentralization doubt" fails to distinguish between progressive and New Deal attitudes toward the different branches of the federal government. The New Deal expanded national legislative, executive, and administrative power, but not national judicial power. Indeed, national judicial power it sought to limit.
For more than half a century Populists, progressives, and New Dealers had criticized the federal courts as protectors of private property and major obstacles to essential social and economic reforms. Repeatedly, they had tried to limit the power of the federal courts, and Brandeis had frequently supported their efforts. Legal progressives fastened their hopes for social and economic progress on far-reaching and expertly designed programs of legislative reform, and they cast wary eyes on the ill-informed and "conservative" courts. Erie was entirely consistent with those views and with the long political campaign of Populists, progressives, and New Dealers to limit the "conservative" federal courts.
Brandeis's opinion did not limit the powers of Congress but, rather, used the given scope of congressional power to reign in and discipline the federal courts. Indeed, Brandeis implied, federal judicial lawmaking power was limited not only to those areas over which Congress had constitutional authority but also to those areas in which Congress had chosen to act. State law controlled, Erie declared, "[e]xcept in matters governed by the Federal Constitution or by Acts of Congress." Erie, then, stood for the proposition that Congress--not the federal judiciary--was the primary lawmaking agency of the national government. Aside from enforcing independent constitutional mandates, the federal courts should defer to Congress both when it asserted national authority and when it decided that national authority should not be asserted in a specific area.
The second reason why the "decentralization" doubt lacks substance is that it is based on an erroneous factual premise. It assumes that increasing national power was the sole thrust of the New Deal and its "constitutional revolution" and that expanding federal power inevitably meant a lessening of state power. Enlarged national power was essential, but the New Deal supported the extension of governmental power at all levels. The desire to regulate economic behavior and to ameliorate the harsh consequences of the Great Depression led New Dealers to favor the expanded use of legislative and administrative powers at the state and local level as well as at the national level. The New Deal, moreover, changed substantially over time. While much of its early thrust emphasized national planning and the power of federal government to direct and control economic behavior, by 1938 it had largely abandoned that approach. After the middle of 1937, in fact, the New Deal moved toward more indirect regulatory approaches that left more authority with both private enterprise and state and local governments.
Similarly, the "constitutional revolution" involved more than merely expanding national power. In repudiating the doctrine of "liberty of contract," for example, the Court freed state legislatures from judicial constraints every bit as much as it freed Congress. Similarly, while it expanded congressional power under the Commerce Clause, it also expanded state legislative power under the same constitutional provision by narrowing the constraints imposed on local regulations by the "dormant" Commerce Clause.
In expanding the regulatory powers of both state and national governments, the "constitutional revolution" followed an approach that Brandeis had long advocated. "My own opinion," he explained during his early years on the Court, "has been that it was wise (1) to treat the constitutional power of interstate Com. as very broad & (2) to treat acts of Congress as not invading State power unless it clearly appeared that the federal power was intended to be exercised exclusively." Brandeis's goal, in other words, was to see an expansive use of both state and federal powers to address the nation's social and economic problems. The "recognition of Federal powers," he insisted, "does not mean denial of State powers."
Thus, while Erie did shift lawmaking power to the states, that result was not inconsistent with the "constitutional revolution." The "decentralization" doubt lacks substance, then, for two equally compelling reasons. It fails to distinguish between attitudes toward judicial and legislative power, and it overlooks the fact that the New Deal "constitutional revolution" expanded governmental powers at all levels and assumed that those expanded powers would complement one another.
That brings us to the third--and, by far, most intriguing--doubt about Erie's congruence with the New Deal "constitutional revolution," the "stricter scrutiny" doubt. Indeed, given the arguments I have already made, Erie seems quite inconsistent with this other aspect of the "constitutional revolution." Put most bluntly, if Erie limited federal judicial power, proclaimed the lawmaking primacy of Congress, and transferred judicial power from federal to state courts, was it not inconsistent with the idea of a "stricter scrutiny" standard that would enhance federal judicial power?
That question, of course, implicates what has arguably been the central issue in American constitutional law since the New Deal: the development of different levels of judicial review--minimal scrutiny for government actions dealing with "economic" activities and "stricter scrutiny" for government actions touching special "non-economic" rights. My concern here is with but one part of that overarching issue. It is not a normative concern with the justifications for using different levels of scrutiny, but an empirical concern about a specific historical relationship: Was Brandeis's opinion in Erie consistent, or inconsistent, with ideas of "stricter scrutiny" that emerged during the New Deal "constitutional revolution"?
The answer, I suggest, is that Erie and the "stricter scrutiny" idea were not only consistent, but mutually reinforcing. Understanding why that is so illuminates key elements of Brandeis's constitutional jurisprudence, highlights some of the distinctive characteristics of the "constitutional revolution," and helps us understand the ways in which the federal courts--and our ideas about the federal courts--have changed over the course of the twentieth century.
The historical congruence between Erie and the "stricter scrutiny" approach holds on three separate levels: political, theoretical, and institutional.
The first connection between Erie and the "stricter scrutiny" idea lay in the political and social sympathies they shared. Erie was rooted in Brandeis' suspicion of large corporations, his conviction that those corporations often abused their power, and his concern for the plight of ordinary human beings forced to litigate against such overpowering foes. The "general" federal common law under Swift was widely regarded as favoring corporate defendants, and diversity removal jurisdiction allowed those corporate defendants to take their cases from state to federal courts and thereby gain access to Swift's more favorable federal common law. Thus, in abolishing the Swift doctrine, Erie promised to deprive those corporations of a substantial advantage and to assist ordinary individuals in enforcing their legal rights against their much stronger adversaries.
The doctrine of Swift v. Tyson, Brandeis charged, "rendered impossible equal protection of the law." Because the Equal Protection Clause of the Fourteenth Amendment applied only to the states, while Erie condemned the "course pursued" by the United States courts, Brandeis's invocation of "equal protection" seemed to have no clear or even intelligible doctrinal meaning. To Brandeis, however, his statement had a meaning that was both clear and compelling. It identified not the legal basis of his decision but rather a factual predicate. Paired with diversity removal jurisdiction, Swift's "general" federal common law gave corporate defendants the invaluable advantage of being able to choose not only between different courts but also between different bodies of substantive law. That, Brandeis declared, constituted a systemic "injustice." Swift was responsible for a "discrimination" that was "far-reaching," one that "in practice" disadvantaged ordinary citizens who sought to enforce their legal rights against national corporations.
Thus, Erie's social and political sympathies were attuned to the systemic exploitation of weak and disadvantaged individuals by large, organized, and well-financed adversaries. Those sympathies were characteristic of Brandeis's jurisprudence, and they helped shape the New Deal "constitutional revolution" as well. More to the point, those sympathies paralleled the intuitive sympathies that helped inspire, and justify, the emerging idea of "stricter scrutiny."
Indeed, a decade before the New Deal came to power, the Court had begun--albeit cautiously and sporadically--to expand the protections of the First and Fourteenth Amendments. Reacting in part to progressive charges that it was biased in favor of wealth and property, the Court began to expand the scope of the "liberty" it protected and to show a new sensitivity to certain types of social and political abuses. Between 1923 and 1937 it issued a scattering of path-breaking decisions that protected certain non-economic individual rights: the speech rights of unpopular political dissidents, the educational and child-rearing rights of religious and ethnic minorities, the voting rights of African-Americans in the South, and for criminal defendants--who, in most of the Court's major decisions, were, in fact, outrageously abused Southern blacks--the right to a fair trial free from intimidation, coercion, and torture.
These diverse lines of cases shared two striking characteristics. One was their willingness to intervene in legislative and executive matters to enforce judicially-defined standards of fairness and legal integrity. The other was their willingness to enforce those new standards on behalf of relatively weak, scorned, and politically oppressed groups and individuals.
From the beginning, Brandeis supported the Court's tentative new direction in all four of these lines of decisions. In the free speech cases, in particular, he took an advanced and aggressive position--usually, during the 1920s, in dissent. In his famous 1927 concurrence in Whitney v. California, for example, he maintained that the nation's founders had placed their faith "in the power of reason as applied through public discussion" and had made that belief "a fundamental principle of the American government." To encourage judicial enforcement of that principle, Brandeis reshaped the "clear and present danger" idea into an elaborate and highly speech-protective limitation on government action. A state could not "ordinarily" prohibit political speech, he insisted, even when "a vast majority of its citizens" regarded the speech as "false and fraught with evil consequence."
In the 1930s, while the Court continued hesitantly to expand the protections it offered, world events combined to magnify the importance of its new decisions and to strengthen the idea that the federal judiciary was an essential guardian of the civil rights and liberties of disfavored groups and individuals. Looking abroad, Americans witnessed the spread of "totalitarian" movements in Europe and, in 1933, the shocking triumph of Nazism in Germany. Increasingly, they worried about the possibility that the United States might be vulnerable to some similar home-grown movement, and opponents of the New Deal warned that the increasing centralization and expanded executive authority of the federal government threatened to introduce a presidential dictatorship. Many Americans--supporters as well as opponents of the New Deal--responded by embracing the ideal of the "rule of law" as the nation's fundamental bulwark against such radical dangers. Central to that ideal was the conviction that courts should be independent of government and, when necessary, willing and able to compel government officials to answer at the bar of justice.
At the same time, looking inward during the Great Depression, many Americans also began to recognize that certain domestic groups had been particularly disadvantaged by a variety of social and political forces, often including the prejudices of government agencies and even of the courts themselves. African-Americans, Jews, Catholics, organized labor, diverse immigrant groups, and various radical factions drew increasing sympathy as they began raising the banner of constitutional right to protect their interests and activities. During the 1930s, moreover, the political visibility and influence of those outsider groups grew substantially, and with Roosevelt's triumphant reelection in 1936 they established themselves as major components of a newly dominant national Democratic coalition.
Given those dramatic domestic and international challenges, and Brandeis's own abiding commitment to the value of personal privacy and the importance of governmental integrity, it is not surprising that he would look favorably on efforts to generalize the Court's scattered new civil liberties decisions into a broader and more coherent doctrine of constitutional "stricter scrutiny." Nor, to the present point, is it surprising that the progressive justice who sought to expand federal judicial power in Whitney's context would seek to restrict it in Erie's.
Although the Court's civil liberties decisions involved widely different issues than those Erie presented, Erie and the civil liberties decisions showed one paramount similarity: in each, the Court found grounds to intervene on behalf of the weak confronted by the strong. Limiting federal judicial power in Erie led to the same generic consequence that expanding the federal judicial power brought in the civil liberties cases. The result in each was that those who lacked influence and resources would receive from the courts some increased protection against those who held and exploited society's multiform levers of power.
The second connection between Erie and the "stricter scrutiny" idea was doctrinal and theoretical. Brandeis's decision came down the same day the Court announced its path-breaking opinion in United States v. Carolene Products Co., the fountainhead of "stricter scrutiny" theory. Carolene Products was written by Justice Harlan F. Stone, a member of the Court's "progressive" wing who had worked closely with Brandeis for more than a decade. Stone was one of the justices who joined to give Brandeis his bare majority in Erie, and in Carolene Products Brandeis did the same for Stone, casting the vote that gave Stone a bare majority for his tentative new proposals about "stricter scrutiny."
Carolene Products is recognized as a seminal case for two reasons. One is that it explicitly articulated for the first time the flaccid "rational basis" test that the Court would subsequently use to review "regulatory legislation affecting ordinary commercial transactions." That test represented the Court's highly deferential "New Deal" attitude toward the regulation of commercial activities, and it promised vast discretion to state and federal legislatures. Needless to say, Carolene Products' highly deferential standard of review fit quite snugly with Erie's premise of legislative primacy. On that point, the two cases, quite obviously, were one.
But Carolene Products did something else, of course, something that proved far more provocative than its "rational basis" test. Carolene Products contained a footnote, numbered four, commonly called the most famous footnote in Supreme Court history. In it, Stone suggested that legislation might be required to show more than a mere "rational basis" in three special situations: first, when it impinged upon rights expressly protected by the Constitution (such as those in the Bill of Rights); second, when it restricted normal democratic "political processes" through which people could "ordinarily" protect themselves (as did statutes that deprived citizens on racial grounds of the right to vote); and, third, when it operated against "discrete and insular minorities" (such as disfavored racial or religious groups) which might be prevented by "prejudice" from protecting themselves through the democratic "political processes" that people could "ordinarily" rely upon.
In retrospect, then, Carolene Products seems a critical transition point. Stone's opinion expressly embraced a sweeping judicial deference toward economic regulation while at the same time beginning to explore the theoretical bases for a limited new judicial activism that would provide special protection for non-economic civil rights and liberties.
When Stone proposed in Carolene Products that the courts give "more exacting judicial scrutiny" to legislation that interfered with normal political processes, he was extending an idea that Brandeis himself had tried to make central to First Amendment jurisprudence since 1920. Freedom of speech deserved special protection, Brandeis had repeatedly argued, not just because it was an individual right but because it was a social good, a necessary instrument of intelligent democratic government. In his Carolene Products footnote Stone cited Brandeis's concurrence in Whitney, where Brandeis had elaborated that exact point. The founders embraced freedom of speech, Brandeis had there maintained, because they had "confidence in the power of free and fearless reasoning applied through the processes of popular government." Thus, proposing that the courts should intervene to preserve the open processes of democratic government, Stone's Carolene Products footnote generalized Brandeis's own distinctive First Amendment jurisprudence.
In terms of formal doctrine, of course, Carolene Products addressed issues that were entirely unrelated to those raised in Erie. Across widely separated constitutional fields, nonetheless, the two opinions blended in giving voice to similar constitutional values and similar institutional prescriptions. The fundamental congruence between the two opinions held on two distinct levels.
The first centers on the core idea in Stone's footnote, that the judiciary should give more searching scrutiny to government actions when they either blocked, or resulted from blockage in, "those political processes" which "ordinarily" operated to prevent the passage of "undesirable legislation." In such special cases, Stone reasoned, judicial intervention might be necessary to open up and protect the operation of normal democratic processes. That proposition paralleled the progressive theory that underlay Erie. Swift's fatal constitutional flaw, after all, was that it allowed non-constitutional federal judicial lawmaking in areas where Congress could not act. By prohibiting judicial lawmaking in those areas, Erie ensured that--absent a constitutional bar--Congress would be able to alter or abolish any federal judge-made rule of law. Thus, in Erie, Brandeis acted, as Carolene Products suggested was proper, to eliminate a long-standing legal rule that blocked up normal democratic lawmaking processes.
The second parallel between Erie and Carolene Products centered on Stone's idea that "discrete and insular minorities" might suffer from disabilities that prevented them from protecting themselves through ordinary political processes. To recognize the parallel between Erie and Carolene Products on this level, we must backtrack a bit.
Two months before Erie and Carolene Products came down, Stone wrote for the Court in South Carolina State Highway Department v. Barnwell Brothers, Inc. In Carolene Products Stone cited his Barnwell Brothers opinion in support of his proposition about "discrete and insular minorities." In Barnwell, the Court heard a challenge to a state statute that prohibited trucks from using the state's highways unless they conformed to certain size and weight limits. Reviewing the statute under the "dormant" Commerce Clause, Stone suggested that the Court's jurisprudence in the area rested, in significant part, on an underlying "thought" that he traced back to the Marshall Court and the constitutional convention.
That "thought" was that the residents of a state could use their local political power to enact commercial regulations that discriminated against non-residents because those non-residents were not represented in the enacting state's political process, and, hence, could not defend their interests in that process. As a result, Stone reasoned, when states passed legislation that unfairly favored the interests of their own residents or unfairly burdened the interests of non-residents, judicial intervention voiding the statutes was proper because such statutes had not been enacted subject to the "political restraints" of democratic representation which "normally" operate to ensure fairness and balance in the legislative process.
The "thought" that Stone advanced in Barnwell echoed in both Carolene Products and Erie. In Carolene Products, Stone gave the Barnwell "thought" a broad and theoretical form, generalizing it to state a fundamental principle. Legislative action required "more searching judicial inquiry," Carolene Products proposed, when it disadvantaged identifiable groups which could not protect themselves in the ordinary democratic political process. In Erie, Brandeis gave the Barnwell "thought" a different form, specific and quite practical. He used it to underwrite Erie's particular finding that federal law created a "far-reaching" discrimination that denied "equal protection" to an identifiable class of persons.
While Stone's application of Barnwell's "thought" in Carolene Products appears obvious, Brandeis's use of it in Erie is not as readily apparent. The key to understanding the unity of the three opinions lies in recognizing the ways in which Brandeis had to recast Barnwell's "thought" to adapt it to the different situation that Erie presented.
First, the law of diversity jurisdiction involved in Erie--unlike the "dormant" Commerce Clause analysis in Barnwell--was framed not in terms of "residents" and "non-residents" but in terms of "citizens" and "non-citizens." Thus, Brandeis had to translate Barnwell's distinction into the appropriate cognate distinction: "residents" became "citizens," and "non-residents" became "non-citizens." Then, Brandeis had to relate the distinction, as Stone had done in Barnwell, to an identifiable and unfair "discrimination." For more than half a century Populists and progressives had condemned Swift and diversity jurisdiction for unfairly benefitting national corporations and heavily burdening ordinary citizens who sought to sue them. Brandeis shared that view, and in Erie he gave voice to that progressive critique in the form of his "citizen/non-citizen" distinction. "Swift v. Tyson," Brandeis declared, "introduced grave discrimination by non-citizens against citizens."
Second, and less obvious, the "discrimination" Brandeis identified in Erie was structurally the obverse of the discrimination at issue in Barnwell. Thus, Brandeis had to invert Barnwell's reasoning. While Barnwell addressed the situation where local law favored local residents over out of staters, Erie addressed the reverse situation where national law favored national actors--that is, "non-citizen" corporations operating in interstate commerce--over local residents. Instead of local residents using local law to disadvantage non-residents, as in Barnwell, Erie presented the situation where national actors used national law to disadvantage local actors. In diversity litigation it was congressional jurisdictional statutes and Supreme Court rulings under Swift--national policy determinations--that combined to aid outsider "non-citizens" and to disadvantage local "citizens." And on such national policy issues, Brandeis believed, it was those "non-citizen" foreign corporations which had enjoyed the only effective voice in the relevant "ordinary" political process--that of national politics.
Revealingly, Brandeis's opinion specifically pointed to the fact that national "legislative relief has been proposed" to remedy the discrimination against "citizens," and he cited a number of unsuccessful bills that had been introduced in Congress over the years to limit or abolish diversity jurisdiction and to overturn Swift. All of those legislative efforts had failed, and Brandeis's references to them consequently seemed puzzling. As a matter of formal legal analysis, they had neither weight nor meaning. With the Barnwell/Carolene Products "thought" in mind, however, Brandeis's statements about the long and futile efforts to obtain "legislative relief" become both understandable and salient: the unsuccessful bills evidenced the inability of local "citizens" to protect themselves against "non-citizens" in the "ordinary" national political process.
Thus, Erie shared not only the distinctive democratic fairness values of Barnwell and Carolene Products but also a similar theory of judicial intervention. All three opinions sought to recognize the primacy of the legislature, while making room for special situations where the courts--still remaining true to democratic ideals--might act more vigorously and independently. Tentatively and with great caution, the three opinions suggested the same fundamental guiding principle: When ordinary democratic political processes were blocked up, or when they were used in systematic ways to exploit the weak and disadvantaged, the courts might properly intervene to provide relief.
The third connection between Erie and the "stricter scrutiny" approach was less direct and, to some extent at least, unintended. It was, nonetheless, important and, in the long run perhaps, of greatest significance. That third connection lay in the way that Brandeis and Erie helped to reshape the very idea of the federal judiciary as an institution of American government.
Brandeis was a sophisticated and broad-visioned judge, and his jurisprudence was complex and ambitious. As much as he believed in social justice and legislative primacy, he believed equally in the need for systematization and efficiency. Beyond his immediate political and social goals, Brandeis designed Erie to help structure an integrated judicial "system" in the United States, to rationalize the relationship between federal and state courts, and to bring greater order and efficiency to their work.
In the years after the First World War, Brandeis had grown increasingly concerned over the proliferation of elaborate, exploitative, and sometimes unethical litigation practices. Since the late nineteenth century corporations operating in interstate commerce had regularly--and in Brandeis's mind quite unfairly--exploited diversity removal jurisdiction to impose heavy legal and extra-legal burdens on individuals who sued them. In response to that practice, an emerging urban personal injury bar had gradually developed a variety of countertactics to defeat corporate removal practices. As a result, by the 1890s large and increasing amounts of federal litigation centered on jurisdictional disputes that were generated by the struggle over removal. Then, in the years after 1910, plaintiffs' attorneys escalated their tactical warfare by widening the range of procedural devices they used to disadvantage corporate defendants and by shopping their cases interstate in search of particularly hospitable forums. Minnesota, for example, became a particular favorite. The state's pro-plaintiff procedures, and liberal juries with well-deserved reputations for largesse, attracted tort plaintiffs like a big, legal "blue light special." Corporate counsel reacted with their own tactical innovations. They counterattacked by forcing claimants into costly multiple litigations, developing new theories to expand corporate access to federal courts, using equity to defeat claimants' forum choices and deny them trials by jury, and--after passage of the federal Declaratory Judgment Act in 1934--initiating suits in the federal courts for preemptive judgments of non-liability under the Swift doctrine.
Disturbed by the mushrooming tactical escalation, and the compounding waste of social resources, Brandeis began exploring ways to impose greater order and efficiency on litigation practice. He experimented with the Commerce Clause, the Full Faith and Credit Clause, and even the politically dangerous Due Process Clause as devices to minimize incentives for interstate forum shopping. Erie was a part of his overall campaign. Abolishing the "general" federal common law would eliminate a major incentive for intra-state forum shopping and reduce the utility of a variety of popular manipulative tactics. That achievement, in turn, would mean that courts and litigants could concentrate their efforts on addressing the substantive merits of disputes. The result would be to simplify litigation practice, conserve social resources, and rationally order the overall business of the nation's judicial system.
In attempting to systematize the work of the courts, Erie pulled two related ideas in its wake. One was relatively obvious, and surely one that Brandeis intended. Systematizing the judicial system implied specialization, and Erie identified the special roles that state and federal courts should play in an integrated national judicial system. Erie expressly held that state courts were properly the authoritative exponents of state law. It directed state-law issues to the state-law experts, the state judges who were most familiar with local rules and local policies. Erie did not prescribe the role of the federal courts so explicitly, but it implied that they--as the courts of the nation sitting in every state in the Union--should specialize in issues of national significance and serve as comparable experts on questions of national law. That, indeed, was Brandeis's belief, and he worked to spread that idea on and off the bench.
The second idea that trailed in Erie's wake was not clearly stated, and it was not a logically necessary implication of Brandeis's opinion. Indeed, as the law would subsequently develop, Brandeis might well have qualified or even rejected it. Nonetheless, implicit in Erie was a parallel idea: if state courts were the authoritative voices of state law, then the federal courts were the authoritative voice of federal law. That idea contained two related elements. One was that it was the federal judiciary as an integrated institution--not just the Supreme Court, but the lower courts as well--that constituted the authoritative voice of federal law. The other was that when the federal judiciary ruled on issues of federal law its decisions constituted truly "federal" law; that is, they carried the mandate of the Supremacy Clause and hence compelled obedience from the states and their courts.
The latter element was especially important. Under Swift, the federal courts had made what was called "federal" common law, but established doctrine--and the jurisprudential theory that underlay Swift--defined their decisions as merely "independent judgments" as to what was properly "state" law. Consequently, issues arising under Swift's federal common law did not present "federal questions" that conferred either original jurisdiction on the lower federal courts or appellate jurisdiction on the United States Supreme Court. Even more important, because decisions under Swift did not constitute truly "federal" law, they were not binding on the states under the Supremacy Clause.
In its fundamental institutional significance, then, Swift had been quite equivocal. It did give the national courts power of a kind, but in other ways--less obvious but ultimately more important--it squandered their power and dissipated their influence. Swift placed the federal courts in a position of ambiguous equality with state courts, and it obscured the extent to which they could create judge-made rules that would have the full force of the Supremacy Clause behind them.
Thus, Erie advanced--albeit with different degrees of directness and intent--three powerful and interrelated ideas about the nature of the federal courts and their proper role in American government: first, that they constituted a special national system of courts; second, that they properly specialized in--and were the experts on--issues of national law; and third, that they were the authoritative institutional voice of national legal supremacy. Brandeis's opinion, then, did not simply limit federal judicial power. Rather, it refocused and redefined that power. It is doubtful that Brandeis either saw or intended all of the implications and consequences that would eventually flow from these ideas, but flow they would.
Indeed, if timing is all, then Erie's timing, in this regard, was critical. The broader ideas that were implicit in Brandeis's opinion resonated deeply with the nation's experiences and felt needs in the late 1930s and early 1940s. The New Deal's innovative and far-reaching social welfare and economic regulatory programs, and the massive social and institutional demands of World War II, combined to expand drastically the scope of federal law and to extend it into all aspects of American life. Ironically, in fact, Erie's axiom of coextensive powers--announced at a time when congressional authority was being expanded substantially--had the logical consequence of expanding equally the power of the federal judiciary. To identify state courts with state law, while implicitly granting the federal courts a special portfolio for federal law, at just such a time, was in fact to confer on the national judiciary immense new powers, a clearer institutional identity, and a potentially commanding new status.
Strengthening those jurisprudential and institutional developments, the late 1930s and early 1940s witnessed an unusual convergence of political forces in favor of expanding the role of the federal courts and continuing their institutional reorientation that had begun in the late nineteenth century. Political conservatives, long enamored of the federal courts as the guardians of economic liberty and private property, became even more intensely committed to them and to the idea that they played a special role in American government. Their passionate campaign to defeat Roosevelt's Court-packing plan in 1937 elevated the federal judiciary to an almost sacred position. Moreover, in their efforts to portray the Supreme Court as the great bulwark of American constitutional rights, they sought to broaden the Court's appeal by proclaiming it the essential safeguard not just of private property but of a much wider set of individual rights and freedoms--as not merely the protector of the wealth that the few enjoyed but, far more broadly, the protector of the fundamental liberties that all Americans shared. Further, political conservatives were determined to constrain and control the New Deal's activist regulatory agencies, and the federal courts readily appeared as their most promising instrument. Accordingly, they fought persistently to establish new procedures that would allow or require more extensive and exacting federal judicial review of the actions of those agencies. Throughout the 1940s the need to defend and expand the role of the national judiciary remained an article of conservative faith.
At the same time, political liberals were beginning to view the federal courts far more favorably than their progressive forbears had done. By the early 1940s, in fact, Roosevelt's judicial appointments had transformed both the political orientation and public image of the national courts. As the ideology of late New Deal liberalism coalesced and spread, encouraging activist government and increased federal involvement in social and economic matters of national concern, its values began gradually to seep into thinking about the proper role of the federal courts. Liberals, moreover, were beginning to force new issues to the center of American politics. Increasingly, they decried the evils of racial discrimination and urged vigorous federal action to combat segregation and remedy other racial abuses in the South. Similarly, they gave new emphasis to the importance of protecting individual civil rights and liberties, and they called for severe limitations on administrative discretion in regulating intellectual and cultural activities of First Amendment concern. One after another, the new liberal issues suggested ever more persuasively the need for a more active and exacting federal judiciary.
Thus, in the decade after Erie, a pivotal, if largely unarticulated, consensus began to form. The federal judiciary appeared as an attractive and preferred institution for many groups--liberal and conservative alike--with important political and social interests that stood in need of special protection.
Recognizing Erie's broader institutional implications, then, and understanding the particular resonance those implications had in the decade after 1938, we are in a position to identify more precisely the third and final connection--indirect and subtle, but nevertheless powerful and pervasive--between Brandeis's decision and the emerging "stricter scrutiny" idea. Erie advanced ideas of federal judicial systematization, specialization, and supremacy, and those ideas combined--in the context of a tumultuous period of foreign crises and domestic transformations--to help inspire and spread a compelling belief, among a broad range of Americans, that the federal courts were the chosen and essential institutional vindicators of certain fundamental individual federal constitutional rights. As that idea crystallized and spread, normative theories of "stricter scrutiny" began to emerge and compel attention. When fundamental federal constitutional rights were at stake, the new special role of the federal courts required the use of some type of "stricter scrutiny."
Understood in their historical context, then, Erie and the "stricter scrutiny" idea were not only compatible but mutually reinforcing. In spite of differences between widely varying doctrinal areas, and in spite of complexities in a period of sweeping historical change, Erie and the "stricter scrutiny" idea were united by three fundamental and overriding characteristics: first, a political and social sympathy with the weak and disadvantaged; second, a theoretical congruence in seeking the grounds on which the judiciary, in a democratic society, may properly act to make new law and, if necessary, counter the decisions of the legislative and executive branches; and, third, an institutional assumption that the federal courts have a special role in developing federal law, vindicating federal rights, and protecting the Constitution's great principles of procedural fairness, personal freedom, and popular representative government.
With the force of the three doubts dissipated, Erie stands as an easily recognizable element of the New Deal "constitutional revolution." Brandeis's opinion shared the characteristic social, economic, political, and intellectual sympathies that informed the New Deal Court's distinctive jurisprudence that developed in the critical years after 1937.
This is not to say, of course, that either the New Deal or the "constitutional revolution" was simple, unified, unchanging, wholly new, or fully coherent. Quite the opposite. They were both complex, multi-faceted, continuously evolving, and marked by inconsistencies and incompletions. That, however, has been the nature of America's democratic government and, for better or worse, the nature of its constitutional law as well.