Federalism Through a Global Lens: A Call for Deferential Judicial Review

This article examines the effects of judicial review in federalism cases on governmental flexibility and creativity at the national level. It argues that the global era in which we now live and the New Deal of the 1930s and beyond have at least one thing in common, and that is a need for creative approaches at the federal level to perceived societal problems. New regulatory approaches often take the form of new mixtures of federal and state power, as well as new public and private partnerships. While it may seem ironic, some of the deferential constitutional interpretive approaches forged by the Supreme Court during the New Deal may be best suited for the political experimentation now necessary, if various levels of government and nonstate actors are to adapt successfully to the realities and demands of a global economy.

During the New Deal, we were coming to grips as a nation with the realities and societal needs of a national economy. Communications had become national, as had our transportation needs and capabilities. Commerce was now national, as were the markets for securities, labor, energy, and natural resources. The Supreme Court initially struck down federal legislation seeking to regulate aspects of these national markets, as if any changes that were to occur had to conform to a vision of the economy formulated in terms of nineteenth century ideologies and technologies. Eventually, with what we have come to refer to as the “switch in time that saved nine,” an overreaching Supreme Court learned to respect the political experimentation that a majority of Congress believed was necessary. When it came to judicial review of the economic legislation of the New Deal, the Court developed an appropriately deferential rational basis test that it applied to these statutes. New Deal legislation easily survived such review. As a result of the application of this new deferential standard of judicial review, the Court essentially stayed out of the economic politics of the New Deal.

Today, we are still learning how best to live with and, if possible, govern a global economy. A variety of questions confront us. How do we govern globalization? And what exactly is globalization? Is it a set of neoliberal socioeconomic processes that know few limits or boundaries and, like the markets that drive them, simply extend, in an inevitably linear fashion, over, through, and beyond the governmental structures of nation states? Or are these global processes capable of transformation or resistance at the national and local levels? Can citizens at the domestic level of governance not only resist these forces but transform them as well, by taking into account noneconomic values and concerns, such as those traditionally associated with the New Deal’s social safety net—welfare, social security, health care, etc? How are the voices of citizens who favor such views to be heard, especially if these issues are increasingly left to the private sector?

Globalization can mean many things—from pure laissez-faire markets to the regulatory demands of the World Trade Organization (WTO). The kind of global perspective that lawmakers adopt will affect how they choose to resist or facilitate the changes that globalization appears to promote. It also will affect the way they use distinctions that once helped us to allocate power and sort out the responsibility for its exercise. Given the de-centered nature of the global state, however, and the ways in which the global economy now integrates itself throughout national economies, distinctions developed in the context of a national economy, distinctions such as public and private, state and federal, national and international, domestic and foreign, or local and global, no longer accurately capture or reflect the new power relationships to which these distinctions once applied. There is a tendency on the part of courts to treat changes in the allocation of what is public or what is private, or what is federal and what is state, as if they all involved zero- sum shifts of power; however, globalization does more that reallocate power among pre-existing categories. It changes the power relationships within those categories, requiring a reinvention, if you will, of the very meaning of those terms.

The role that courts are playing and will play in the future in this process of reinvention is crucial and can have long-run significance; however, this role is usually indirect. The reforms that produce the litigation coming before the courts are not labeled “The Global Deal.” Rather, the cases tend to involve the increasing use of hybrid public/private arrangements where private enterprise now provides services once handled exclusively by the state. Citizens are now, for example, increasingly described as consumers or clients in such privatized arrangements. Courts are asked to determine, for example, the liability of private prison guards who negligently handcuffed a prisoner assigned to a private facility. Are privatized prisons private in the sense we might use the word when referring, perhaps, to IBM, or is this a new way for the public to carry out its collective responsibilities? What once was public is now private. Or courts may find themselves involved in cases involving federal statutes that regulate what we expect states to do—for example, tend to local crime issues such as the possession of guns on school grounds or end domestic violence directed against women. What once was traditionally a state concern is now addressed at the federal level. Questions involving safety and various forms of violence increasingly are viewed as national in scope. What is really going on here and what are domestic courts to do? To paraphrase Justice Oliver Wendell Holmes, it is my hope that domestic courts will see the global in the particular, and rule accordingly. But short of that, at least in the constitutional realm, it is crucial for courts to recognize that this is a time for experimentation and politics at all levels of government, not the imposition of nineteenth century concepts of sovereignty that so often form the basis of Supreme Court decisions involving federalism concerns.

Globalization, as I use the term, refers primarily to processes that have denationalizing effects on the states. Devolution, quite literally, fragments social issues by denationalizing solutions and, inevitably, the nature of the problems involved as well. Devolving welfare responsibility or housing for the poor to the state level means individual states can and will vary not only in their approaches to such issues, but in the priority they give to them. As states compete for investment and the retention of taxpayers, they have distinct incentives to minimize the costs of redistributive programs such as welfare, Medicaid, or poverty programs in general. Yet, these were precisely the kinds of programs that Congress tried to (and to a large extent did) send back to the states in the 1990s. The agenda was, if not the elimination of such federally supported programs, their minimization in terms of importance and costs at the federal and national level. Though the theory of devolution is that it increases democracy by bringing decisions closer to those directly affected by them, it is, in certain contexts, actually more likely to narrow the range and effectiveness of democratic participants by minimizing the political strength of groups whose members are more effective and whose numbers are more impressive on a national level than on a local level.

The turn toward devolution in Congress and the revival of doctrines of federalism in the courts can have untoward effects on politics and policy makers at all levels of government, particularly when the changes involved are premised on a conception of the state that predates the global economy as we know it today. The politics giving rise to such reforms in Congress can, of course, change; however, constitutional decisions by the courts are more lasting. They also, inevitably, have a way of framing the political debates that should go on in the legislative and executive branches of government. This article looks at federalism through a global lens, and argues that the analytic tools the Supreme Court has used in recent federalism opinions are inappropriate for the nature of government and governance today. The article concludes with a plea for judicial restraint and a doctrinal approach to such power allocation issues not unlike that used by the courts during the New Deal. The similarity in deferential approaches to judicial review should not, however, be associated with retaining or returning to an earlier time, as far as the substance and methods of regulation are concerned. Rather, deference is to ensure that there can be a maximum of innovation and creativity between and among various levels of government and nonstate actors as well, when it comes to coping with societal problems that are global in scope today.