Federalism is more than states' rights

By Michael S. Greve

The Wall Street Journal, July 1, 1999

In three noteworthy decisions recently, a 5-4 majority of the Supreme Court expanded state governments’ protection against federal impositions. The decisions reaffirm the court’s increased concern for federalism, which has been evident for roughly a decade.

The nation’s governors (and this newspaper) cheered the decisions, and rightly so. That enthusiasm, though, ought to be tempered by the Supreme Court’s crabbed, statist conception of federalism. The court is concerned primarily with protecting “states’ rights,” and only incidentally and secondarily with limiting the national government to exercising only its “enumerated powers”–that is, the limited powers the Constitution grants the national government and particularly Congress. This deprives federalism of its principal virtues–a more limited government, and more open, competitive politics.

The recent cases preclude private plaintiffs from demanding monetary redress for state governments’ violations of federal entitlement statutes, such as the Fair Labor Standards Act and, in future cases, the Age Discrimination in Employment Act and the Family and Medical Leave Act. Preventing unaccountable (and creative) tort lawyers, advocacy groups, and judges from enforcing federal rules and regulations at the state’s expense is all to the good. If we must have endless federal impositions, by all means let the federal government enforce them–and take responsibility for the attendant costs.

However, the Supreme Court has tended to pursue this logic only when the issues don’t much matter. Remedies for state violations of federal employment statutes affect state employers and employees, but the issue is hardly central to American politics. The other two recent decisions affect relatively rare patent and trademark disputes between business firms and state agencies. In contrast, in the one 1999 federalism case that did implicate a salient political issue, federalism took a beating.

In Davis v. Monroe County School Board, Justice Sandra Day O’Connor joined the four liberal justices (Stephen Breyer, Ruth Bader Ginsburg, David Souter, and John Paul Stevens) in making school districts financially liable for student-on-student sexual harassment. Writing for the conservative dissenters, Justice William Kennedy observed that the Davis decision embodies an extremely expansive reading of the prohibition on sex discrimination in federally funded programs, which runs counter to the court’s federalist precedents–many of them written by Justice O’Connor. Confronted with a dilemma between federalism and a feminist shibboleth, though, Justice O’Connor opted for the latter. Justice Kennedy has in like fashion sacrificed his federalist sentiments to concerns he considers more important, such as gay rights and opposition to term limits for Congress.

It is, however, precisely on such hot-button issues that federalism would yield the greatest benefits. A social-issues federalism would permit state and local experimentation with variegated arrangements. This would diffuse national, all-or-nothing conflicts and, at the margin, allow citizens to sort themselves into the jurisdictions most to their liking.

Such a real, competitive federalism presupposes firm, judicially enforceable limits on Congress. Only when Congress is barred from imposing one-size-fits-all solutions will the states have to compete for their citizens’ business, talents, assets, and affections. Only then will state governments be disciplined as well as empowered.

Unfortunately, this crucial point often seems to escape the court’s federalist majority. Virtually all precedents, including last month’s decisions, take for granted Congress’s constitutional authority to legislate practically anything–and proceed to grant state governments exemptions from many of those laws. This approach rests on expansive interpretations of the 10th and 11th Amendments that, by the pro-federalist justices’ own admission, have nothing to do with the text of those amendments.

Meanwhile, the court has been exceedingly reluctant to limit Congress to its constitutionally enumerated powers, which actually do have a textual basis in the Constitution. In only two modern decisions–one invalidating the federal Gun Free School Zones Act; the other, the Religious Freedom Restoration Act–has the Supreme Court enforced such constraints against Congress. It has passed up several other opportunities to limit Congress–for example, to limit its authority to regulate, under the heading of “interstate commerce,” mud puddles in the Utah desert or endangered species that never leave their local habitat, never mind a state.

The only plausible justification for the behavior of the Supreme Court’s federalists is that they have been forced to act pragmatically. Since there is as yet neither a court majority nor a popular majority for a full-scale assault on congressional powers, it makes sense for now to advance federalist doctrines on relatively marginal issues and to cut back on national impositions on the states–a ready-made constituency that will eagerly protect its new-found privileges.

To leave it at that, however, is to confront American citizens with a virtually unlimited national government and with newly empowered, equally meddlesome state governments. Faced with two effectively unconstrained sovereigns, we should all move to France, which has only one.

To advance a federalism that is worth having, the Supreme Court must move from protecting the states to limiting Congress. Building on its enumerated-powers cases, the court must confront federal entitlements head-on, thereby allowing us to pick and choose among the regulatory packages the various states or localities would create in their stead. To the extent that the court follows this path, it will approximate federalism’s purpose of mimicking, in the government sector, the advantages of private markets–variety, consumer choice, and competition.

Federalism cases will be a staple of the Supreme Court’s constitutional decisions for years to come. Of these, the cases that bear watching will implicate congressional powers. They will tell whether the court’s federally minded justices are mere states’-rights sentimentalists or real, if pragmatic, federalists.