by Lauren K. Saunders, Directing Attorney, Herbert Semmel Federal Rights Project
[Ed's note: this article was originally produced by the National Senior Citizens Law Center. The original version, which includes footnotes and citations, is available at this link]
California Supreme Court Justice and D.C. Circuit nominee Janice Rogers Brown has criticized the Supreme Court decisions of 1937 as the "Revolution of 1937" and "the triumph of our own Socialist Revolution." Most people, however, know little about what happened that year. At best, they are aware that it was the year of the "switch in time that saved nine" (and the New Deal), but are unfamiliar with the legal doctrines that were rejected or the implications for reviving them.
Below is a look at the three significant developments of 1937 and what they say about Brown's likely approach to the issues she might face as a federal judge. First, the Court ended the Lochner era's strict scrutiny of economic and social legislation under the doctrine of substantive due process with its inviolate "liberty of contract." Second, the Court upheld legislation establishing the Social Security and unemployment insurance programs. Third, the Court abandoned its restrictive view of Congress's powers under the Commerce Clause, giving Congress greater latitude to enact legislation in a wide variety of areas. In short, Brown's aggressive anti-government philosophy and her willingness to strike down popular legislation protecting individuals is exactly what the Court rejected in 1937.
Adopting Brown's pre-1937 views could threaten federal and state statutes in innumerable areas: many federal criminal statutes, including those against the production or possession of drugs or child pornography; the Civil Rights Act of 1964 and other anti-discrimination statutes; highway speed limits; the national drinking age of 21; the Occupational Safety and Health Act; environmental laws like those regulating clean water, clean air, safe drinking water, toxic waste sites, endangered species, and air pollution; minimum wage, maximum hour, and child labor laws; federal and state laws protecting peaceful labor activities and collective bargaining; the Employee Retirement Income Security Act; Americans with Disabilities Act; Age Discrimination in Employment Act; Family and Medical Leave Act; Fair Labor Standards Act; Coal Industry Retiree Health Benefit Act and other pension protection statutes; Food Drug and Cosmetic Act; Federal Trade Commission Act; the Sherman Act; Federal Educational Records Privacy Act; local rent and eviction control statutes; state and federal Medicare and Medicaid statutes limiting the rates hospitals, doctors, nursing homes can charge patients; laws promoting affordable prescription drugs; fees funding lead paint remediation or health and safety inspections of rental housing; laws prohibiting violence against abortion clinics; the Religious Land Use and Institutionalized Persons Act, and perhaps even the taxes funding the new Medicare prescription drug benefit and proposed Social Security personal accounts.
Even if many statutes would survive a pre-1937 scrutiny of legislative means and ends, federal, state and local governments would suffer an explosion of costly litigation. Those statutes that the Court upheld in the early part of this century often did so because government attorneys compiled "Brandeis briefs" with extensive documentation to justify the choices made by legislators. Reviving courts as superlegislatures would impose enormous burdens on both litigants and the courts.
Just last month, the U.S. Supreme Court unanimously rejected heightened scrutiny of government regulations, reversing a district court that adopted an approach virtually identical to Brown's. The Court found the "proceedings below remarkable, to say the least, given that we have long eschewed such heightened scrutiny when addressing substantive due process challenges to government regulation.... The reasons for deference to legislative judgments about the need for, and likely effectiveness of, regulatory actions are by now well established ...." Below is a brief history lesson to remind us why.
I. Background: The Lochner Era
The Lochner era, named after Lochner v. New York, is generally considered to be the period between 1897 and 1937, when an activist conservative Supreme Court struck down nearly 200 laws, mostly social and economic legislation. In Lochner itself, the Court struck down a New York law setting a maximum 60 hour work week and a 10 hour day for bakers on the grounds that the law interfered with the "freedom of contract" implicit in the Fourteenth Amendment's Due Process Clause.
Lochner is one of the most uniformly reviled decisions in Supreme Court history. Robert Bork has called it an "abomination" that "lives in the law as the symbol, indeed the quintessence of judicial usurpation of power." In the words of Edwin Meese, "the Court in the Lochner era ignored the limitations of the Constitution and blatantly usurped legislative authority."
The Lochner era was at its zenith just as the New Deal legislation was reaching the Court. In 1935 and 1936, the Court struck down minimum wage and maximum hour laws under the National Industrial Recovery Act, pension benefits under the Railroad Retirement Act, and controls on agricultural production under the Agricultural Adjustment Act, leading President Roosevelt to propose his Court packing plan. That is where things stood in 1937.
II. West Coast Parish and the End of Substantive Due Process
A. The Decision
The case most prominently identified with 1937 is West Coast Hotel v. Parrish, 300 U.S. 379 (1937) -- "the switch in time that saved nine." In that case, Justice Roberts switched his allegiance from the block of four activist conservative justices and voted instead with Justices Brandeis, Cardozo, Stone and Hughes to create a new 5-4 majority that upheld a Washington State law setting minimum wages for women and children. Although West Coast Hotel involved a state law, from that point forward the Court quickly upheld several important pieces of New Deal legislation.
West Coast Hotel ended the Lochner era and the use of substantive due process to apply strict scrutiny to legislation that infringed on the supposed constitutional liberty of contract:
What is this freedom? The Constitution does not speak of freedom of contract. It speaks of liberty and prohibits the deprivation of liberty without due process of law. In prohibiting that deprivation, the Constitution does not recognize an absolute and uncontrollable liberty. Liberty ... requires the protection of law against the evils which menace the health, safety, morals, and welfare of the people..... [R]egulation which is reasonable in relation to its subject and is adopted in the interests of the community is due process.
The Court noted that employers and employees did not have equivalent freedom of contract, and legislatures were permitted to balance the liberties of each:
The Legislature was entitled to adopt measures to reduce the evils of the 'sweating system,' the exploiting of workers at wages so low as to be insufficient to meet the bare cost of living, thus making their very helplessness the occasion of a most injurious competition.... Even if the wisdom of the policy be regarded as debatable and its effects uncertain, still the Legislature is entitled to its judgment.
The dissenters saw things differently:
"T]he employer and the employee have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land." In the Adkins Case we [said]...that the power to abridge that freedom could only be justified by the existence of exceptional circumstances.
Thus, the West Coast Hotel decision contained two important principles. First, there is no inviolate constitutional freedom of contract that cannot be touched by legislation. Second, as long as legislative decisions were rational, the Court would not superimpose its own judgment on that of legislatures about the need for protective legislation or the wisdom or effectiveness of the methods chosen. Taken together, this was the end of substantive due process. West Coast Hotel invalidated the theory behind the Lochner case itself and similar decisions relying on the freedom of contract to strike down both state and federal legislation.
B. Relationship to Brown's Views
Brown's derogatory references to the "Revolution of 1937" clearly encompass the West Coast Hotel decision - the case most dramatically illustrating the Court's about face that year. Brown has also directly criticized the decision, arguing that it "doctrinal underpinnings of West Coast Hotel" eventually consumed "much of the classical conception of the Constitution." Brown has argued that the New Deal was "fundamentally incompatible with the vision that undergirded this country's founding." As a result,
The Constitution itself was transmuted into a significantly different document. In his famous, all too famous, dissent in Lochner, Justice Holmes wrote that the "constitution is not intended to embody a particular economic theory, whether of paternalism and the organic relation of the citizen to the State or of laissez faire." Yes, one of the greatest (certainly one of the most quotable) jurists this nation has ever produced; but in this case, he was simply wrong. That Lochner dissent has troubled me - has annoyed me - for a long time and finally I understand why. It's because the framers did draft the Constitution with a surrounding sense of a particular polity in mind.
That is, Brown believes that the laissez faire "liberty of contract" embodied by Lochner and rejected by West Coast Hotel is part of the Constitution.
Brown has advocated "the promising possibility of a revival of what might be called Lochnerism-lite" under the Takings Clause. She has attacked judicial deference to economic legislation and has called for heightened scrutiny of laws affect property values - broadly construed -- because "the free use of property is just as important as the rights [of] speech, the press, or the free exercise of religion." Her approach includes rigorous scrutiny of legislative means and ends, invalidating any measure that helps one group while burdening another.
Although she has grounded her opinions in the Takings Clause of the Fifth Amendment rather than the freedom of contract, the result is essentially the same. After all, a law imposing a minimum wage could be seen both as an infringement on the freedom of contract and as a regulation that reduces the value of a business and thus "takes" property from employers without compensation and gives it to employees.
Brown has also embraced the judicial activism represented by Lochner and rejected by West Coast Hotel. She argues that conservatives should not "dread" judicial activism: it "dawned on me that the problem may not be judicial activism. The problem may be the world view -amounting to altered political and social consciousness - out of which judges now fashion their judicial decisions." It is for this reason that even many conservatives find her problematic.
The overruling of substantive due process in West Coast Hotel permitted a wide variety of legislation that had previously been struck down, including minimum wages, maximum hours, and child labor laws. Similarly, it was only Judge Roberts' switch that enabled the Court in 1937 to uphold a Wisconsin law protecting peaceful picketing and publicity in labor disputes. These laws could all be under siege if Brown were able to revive strict scrutiny of economic legislation, whether under the guise of substantive due process, takings, or some other theory.
A whole host of more modern legislation could also be at risk. The Employee Retirement Income Security Act ("ERISA"), the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the Coal Industry Retiree Health Benefit Act, and other pension protection statutes, among others, all restrict employers' "liberty of contract" and impose costs on businesses that could be viewed as a taking.
Brown has voted to strike down local rent control statutes that protect low-income individuals and seniors not only from exorbitant rent increases, but also from retaliation when tenants complain about hazardous conditions. These laws, too, affect private contracts and landlords' property values.
Legislation adopted under federal or state spending powers, like the Nursing Home Reform Act, could also be under attack if the courts were to return to strict scrutiny of legislative means and ends under statutes that regulate businesses. The Nursing Home Reform Act, passed in response to congressional concern about the scandalous conditions in some nursing homes, applies to all nursing homes that receive federal funds, but regulates the conditions in those homes for all patients, whether under Medicaid or private insurance. Thus, the NHRA certainly regulates the terms of private contracts and imposes costs on the nursing home industry. The same is true of state statutes that regulate the nursing home rates for all residents in homes that receive Medicaid. A revival of strict scrutiny could invalidate these protections for many vulnerable seniors.
Provisions of the Medicare and Medicaid statutes limiting the amounts that hospitals and doctors can charge to patients beyond the insurance reimbursement rates have also survived past "takings" challenges, and could also be susceptible if courts were to adopt a reinvigorated takings or substance due process.
The list goes on and on. The end of the Lochner era has been universally applauded on both the left and the right due to the recognition that strict judicial scrutiny of legislative means and ends is an invitation for courts to substitute their own personal judgments for that of democratically elected legislators. Most every statute can be viewed as affecting one's liberty or property. A return to the Lochner era would expose federal, state and local governments to almost endless litigation at every turn.
III. Steward/Helvering/Carmichael: Social Security and Unemployment Insurance
A. The Decisions
Another major development of 1937 was the Court's decisions upholding the new Social Security and unemployment insurance programs. In three decisions issued the same day, Steward Mach. Co. v. Davis, Helvering v. Davis, and Carmichael v. Southern Coal & Coke Co., the Court upheld the Social Security payroll tax and the federal and state sides of the unemployment insurance tax. These taxes, and the idea of government benefits for retirement, disability, and unemployment, were new. There was considerable fear that the Court would strike them down.
The dissenters argued that the Social Security and unemployment insurance programs violated the Tenth Amendment, which provides that the powers not delegated to the federal government by the Constitution are reserved to the states or the people. Both programs were said not to fall within Congress's Article I power to provide for "the general welfare."
The majority rejected this narrow view of Congress's power. Reciting statistics about the toil of the Great Depression, the Court commented: "It is too late today for the argument to be heard with tolerance that in a crisis so extreme the use of the moneys of the nation to relieve the unemployed and their dependents is a use of any purpose narrower than the promotion of the general welfare."
The dissenters also attacked the mechanism Congress chose to fund the unemployment insurance program, in which a federal tax was imposed on employers but the bulk of the tax was returned to the states if they adopted an unemployment compensation program complying with federal requirements. The majority rejected the idea that the statute's "dominant end and aim is to drive the state Legislature under the whip of economic pressure into the enactment of unemployment compensation laws at the bidding of the central government." Rather, "to hold that motive or temptation is equivalent to coercion is to plunge the law in endless difficulties."
The majority also rejected arguments that the taxes were not excises listed in Constitution's tally of taxes or within the definition of "taxes" from a 1788 dictionary.
B. Relationship to Brown's Views
The Social Security program and unemployment insurance program are certainly what Brown had in mind when she attacked 1937 as "our Socialist Revolution." In this, she echoes the critics who saw the programs as a symptom of a coercive "central government." Brown has argued: "My grandparents' generation thought being onthe government dole was disgraceful, a blight on the family's honor. Today's senior citizens blithely cannibalize their grandchildren because they have a right to get as much 'free' stuff as the political system will permit them to extract." In another speech, she proclaimed that big government is the "drug of choice for ... militant senior citizens."
Like the dissenters in Steward, Helvering and Carmichael, Brown has been eager to find a theory to invalidate any tax or fee on businesses that comes before her. She has voted in dissent, or has issued an opinion reversed on appeal, to strike down fees on paint companies used to fund childhood lead poisoning program; fees on landlords (which could be passed on to tenants) funding a health and safety inspection program for rental housing; and development fees used to promote affordable housing.
The Social Security and unemployment insurance programs are so well entrenched that it is difficult to imagine even someone as radical as Brown overturning them. However, other taxes or programs might not fare so well.
Stuart Taylor of Legal Times, a widely respected non-partisan legal analyst, was on the mark when he wrote that Brown's theories "might well (as I read them) doom Bush's own signature Medicare prescription drug benefit and proposed Social Security 'personal accounts,' along with the rest of the Medicare and Social Security program ...." Congress will be considering changes in the Social Security and Medicare programs to preserve the benefits on which seniors and individuals with disabilities have come to rely. Legal issues may arise about the validity of new funding structures. Having those issues decided by a judge who holds such antipathy to government benefit programs and to taxes and fees would be of serious concern to seniors.
The 1937 charge that Congress unconstitutionally coerced the states into adopting unemployment compensation programs also is strikingly familiar to complaints by some about Congress's present use of its Spending Clause authority. Some courts have raised the question whether the states' dependence on federal money has changed funding conditions from permissible inducements to unconstitutional compulsion.
Justice Thomas has called for heightened scrutiny of federal spending conditions, a view that the eight other justices have rejected. Brown's hostility toward government spending and call for heightened scrutiny of other legislation make it exceedingly likely that she would join that call.
Congress's ability to protect the elderly and individuals with disabilities, and indeed its power to adopt a wide range of other measures, could be seriously in jeopardy if federal funding conditions on states were viewed as unconstitutional compulsion or subject to intense scrutiny. The Rehnquist Court has dramatically restricted Congress's authority under the Fourteenth Amendment, but that limitation has been dampened somewhat by Congress's ability to use its Spending Clause authority. For example, although the Court held that the Congress cannot directly hold states liable for violating the Age Discrimination in Employment Act or the employment provisions of the Americans with Disabilities Act, Congress can require federally funded programs to comply with the requirements of those statutes and other anti-discrimination measures. Those requirements could be in jeopardy.
Similarly, although the Court struck down a statute enacted under the Fourteenth Amendment protecting religious practices burdened by neutral government laws, Congress has been able to revive those protections for individuals in prisons, nursing homes, and other institutions through conditions on federal funding. Justice Thomas has indicated his view that those conditions are unconstitutional because they do not bear a direct connection to the object of the funding, a view Brown would undoubtedly share.
A number of other prohibitions on discrimination are also imposed on states through funding conditions. The Nursing Home Reform Act, the Federal Educational Records Privacy Act, highway speed limits and the national drinking age of 21 are among numerous measures that could be at risk if the dissenters' position in Steward Machine were applied to modern Spending Clause statutes.
IV. Jones & Laughlin: Expansion of the Commerce Power
A. The Decisions
In a series of decisions issued the same day beginning with N.L.R.B. v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937), the Court upheld the National Labor Relations Act and abandoned the view that federal power to regulate commerce is limited to actual interstate trade and does not extend to manufacturing, production or other activities having a substantial affect on commerce. In all of these decisions, Justice Roberts stuck with his "switch" and joined a new 5-4 majority. These decisions had incredible importance, not simply for the protection of workers, but also for the scope of congressional power in general.
In Jones & Laughlin and the related cases, the same 5-4 Court upheld National Labor Relations Board orders against employers who fired, retaliated against, coerced or intimated employees who joined unions or engaged in union activities. The Court found that a large steel producer, a trailer manufacturer, a clothing manufacturer, and a news gathering service, respectively, were all engaged in activities affecting interstate commerce and Congress therefore had the authority to require them to comply with the NLRA. "Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control."
The four dissenters relied on the decision the previous year in Carter v. Carter Coal Company: "The employment of men, the fixing of their wages, hours of labor, and working conditions, the bargaining in respect of these things--whether carried on separately or collectively--each and all constitute intercourse for the purposes of production, not of trade."
These activities, according to the dissenters, were outside of Congress's authority, even in the case of the large, vertically integrated steel producer that had mining, production, distribution and sales operations in several states:
"That the employer has a very large business, ...and that in consequence of such strike production might be stopped and interstate commerce in the products affected, does not make the regulation of the relation justified under the commerce power of Congress, because the possible effect on interstate commerce is too remote to warrant Federal invasion of the state's right to regulate the employer-employee relation. Nor is it important that the employer imports part of his raw materials in interstate commerce and sells and exports a large part of his product in interstate commerce, which imports and exports would possibly be stopped by a possible strike."
Although the dissenters' position was purportedly based on the "Federal invasion of the state's right to regulate the employer-employee relation," it is important to note that the same four justices also dissented from an opinion the same year upholding a Wisconsin statute protecting peaceful picketing and publicity in labor disputes. Therefore, their view of the Commerce Clause was clearly shaped more by their personal laissez faire views than by respect for the constitutional design.
B. Relationship to Brown's Views
Jones & Laughlin and the Court's rejection of rigid limits on Congress's Commerce Clause authority are among the most important developments of 1937 and are certainly part of the "revolution" condemned by Brown. Her vehement anti-government views are completely in line with dissenters' efforts to restrict the powers of the federal government to enact social legislation.
Brown views government as a "leviathan" that is "crushing everything in its path." "Where government moves in," she charges, "community retreats, civil society disintegrates, and our ability to control our own destiny atrophies." In her view, big government is the "drug of choice for multinational corporations and single moms; for regulated industries and rugged Midwestern farmers and militant senior citizens."
Although the scope of Congress's Commerce Clause power was settled for nearly 60 years following Jones & Laughlin, it is once again a subject of litigation. In United States v. Lopez and United States v. Morrison , a 5-4 Supreme Court struck down the Gun-Free School Zone Act and the Violence Against Women Act, respectively, the only federal statutes invalidated under the Commerce Clause since 1936. Since those decisions, parties subject to a wide variety of federal statutes have tried to escape them on Commerce Clause grounds, and those cases are frequently brought in the D.C. Circuit. Those challenges have largely failed, as most courts view Lopez and Morrison as not making dramatic changes to the post-1937 Commerce Clause jurisprudence, and even dissenters have not advocated returning to the manufacturing v. trade distinction of Carter Coal Company. The notable exception is Justice Clarence Thomas. He wrote separately in Lopez to suggest that the Constitution gave Congress only the power to regulate interstate trade, not manufacturing or agriculture, and "does not support the proposition that Congress has authority over all activities that 'substantially affect' interstate commerce." Brown would undoubtedly be a vocal lower court supporter of that view.
Returning to the pre-1937 rigid trade/manufacturing distinction would threaten the legality of innumerable modern federal statutes across the spectrum. Most obviously, the federal government's ability to promote a peaceful system of collective bargaining and to establish minimum wages and maximum hours would fail. The NRLA and the Fair Labor Standards Act would likely be unconstitutional. But the ramifications go far beyond labor law.
Ironically, the Commerce Clause, not the 14th Amendment or the Bill of Rights, is probably the most important source of Congress's power to protect individuals. Congress does not have the power under the 14th Amendment to protect individuals in private settings, even to address racial discrimination. In 1875 in United States v. Cruikshank, the Court held that Congress cannot prohibit private racial violence even when it is committed for the purpose of depriving individuals of constitutional rights such as the right to vote or to assemble. In The Civil Rights Cases, the Court relied on Cruikshank to strike down the Civil Rights Act of 1875, which prohibited racial discrimination in public accommodations like hotels, railroads and theatres.
Nearly a century later, the Supreme Court was able to uphold the ban on racial discrimination in employment, restaurants and hotels under the Civil Rights Act of 1964 by justifying the Act as a regulation of interstate commerce. The Court did not reverse The Civil Rights Cases or Cruikshank, but instead sidestepped them. In Heart of Atlanta Motel, Inc. v. United States, the Court found that discrimination by hotels and motels substantially affects interstate travel, regardless how local their operations might be. In Katzenbach. v. McClung, the Court held that racial discrimination at restaurants that received a substantial portion of food from out of state had a direct and adverse effect on interstate commerce. Both of these cases would have come out the other way under the rationale of the dissenters in Jones & Laughlin.
Congress's power to protect civil rights in private settings still depends on the post-1937 conception of the commerce power. The Civil Rights Cases and Cruikshank and their restrictive interpretation of Congress's power under the Fourteenth Amendment remain good law. Justice Rehnquist relied on them in Morrison to justify striking down the Violence Against Women Act.
Statutes that protect seniors and individuals with disabilities from discrimination, that give employees the right to take unpaid sick or family leave, that prohibit violence against abortion clinics, and that provide uniform minimum wages and maximum hours all rest on the commerce power and would be vulnerable, at least in many applications, if that power were restricted to direct interstate trade.
Congress also relied on the modern view of the commerce power when it enacted the Religious Land Use and Institutionalized Persons Act. Congress initially passed an earlier statute, the Religious Freedom Restoration Act, out of concern that some facially neutral state or local laws were imposing in unjustified burden on religious practices. The Supreme Court, found that RFRA exceeded Congress's power under the Fourteenth Amendment. Congress then passed RLUIPA, which applies to land use decisions that "affect commerce." Since land use decisions are certainly not interstate trade, however, RLUIPA would likely fail under a restrictive view of the commerce power.
A whole host of other federal statutes would also likely fail. Most applications of federal criminal statutes, such as those prohibiting local production of child pornography using materials that have moved in interstate commerce, would be unconstitutional. So would the government's ability to assure the safety of workplaces under the Occupational Safety and Hazards Act. The federal government would likely not even have the ability to criminalize the production or possession of drugs under the Controlled Substances Act. Activities by nonprofit organizations would be completely untouchable. Modern environmental laws - including those regulating clean drinking water, toxic waste sites, endangered species, and air pollution -- would be beyond Congress's reach.
After seeing the Great Depression spread from state to state, a rigid, compartmentalized view of "commerce" no longer made sense in 1937. Legislation protecting individuals often had to be adopted at the federal level because states "held back through alarm lest in laying such a toll upon their industries, they would place themselves in a position of economic disadvantage as compared with neighbors or competitors." Given our complicated, interwoven economy, a return to the pre-1937 view of Commerce makes even less sense in the 21st Century.
In many senses, the year 1937 was a revolution. Although the legal doctrines that were rejected did not generally have deep roots, the suddenness of the Court's new direction, like Roosevelt's New Deal legislation, was a dramatic change. Yet most Americans and most lawyers, liberal or conservative, view that "revolution" as a positive development. And at this point in our history, nearly 70 years later, it is ancient history.
Today, adopting the 1937 dissenters' view is what would be revolutionary - indeed, reactionary. Brown's views are so extreme, so out of the mainstream, that all nine current Supreme Court justices view the Lochner era as something the Court "has long eschewed" for reasons that "are by now well established." Apparently, not well established enough for Janice Rogers Brown.