My job is to help state attorneys general in the United States Supreme Court. I am happy to say that the states won thirteen cases and lost seven cases of those that attorney general offices argued this term, so, from my perspective, it was a pretty good year for federalism. That said, two of the most notable cases this term were also the most disappointing. In Nevada v. Hibbs, the Court engaged in some creative reasoning and opened states up to Family Medical Leave Act litigation. While the case contains a sensible approach to Congress’s Fourteenth Amendment power-one that accommodates competing federalism and separation of powers concerns-there is a lot to be said for Justice Anthony Kennedy‘s dissent in terms of its analysis of actual congressional intent. In the second opinion, Franchise Tax Board v. Hyatt, the Court shied away from a robust sovereign immunity jurisprudence. It also signaled a discouraging lack of interest in the Constitution’s full faith and credit guarantee.

The common perception of this term is that the federalist revolution of the Rehnquist Court has petered out. It appears to me, though, that this is the wrong understanding of what the federalist majority was trying to accomplish. In actuality, this was a significant term for federalism. Recent decisions are best understood as an attempt to consolidate existing federalism jurisprudence. Successful revolutionaries must be wary of overreach. Because they also gain from placating the losing side, it is in their interest to accept the new regime. This is what Rehnquist and his allies had in mind this term.

To accomplish this consolidation of its gains, the Rehnquist majority showed its willingness to validate some dubious statutes. The radical federalist would advocate immediate invalidation of as many regulations as possible. Sometimes, though, taking less than one can is the best strategy. This more moderate approach serves two purposes: It makes it easier to invalidate future statutes that are clearly on the wrong side of federalism and, more importantly, it lowers the costs of acquiescence for the other justices. Thus, what I believe we are seeing this term is not federalism fading away, but rather the majority working to stabilize and entrench its past gains. The federalists on the Court are willing to accept a few defeats right now to ensure the long-term strength of federalism.

With the conclusion of the Supreme Court’s 2002 term, it is clear that the Rehnquist Court’s federalism revolution has played itself out. In fact, its commitment to federalism has become something of a menace. Justices are supposed to protect federalism in two ways: by policing national incursions into state power and by policing state incursions against each other. The justices’ commitment to the former has reached its outer limit. Recent decisions are encouraging the latter.

What explains this turn away from federalism? In terms of national incursions against states, "states’ rights" doctrines have reached their outer limits. The justices are unwilling to push federalism where it threatens highly valued rights (whether or not they are constitutionally protected) or where it interferes, in any serious way, with Congress’s regulatory power. As for policing state-to-state behavior, the justices are disinterested or lack theoretical coherence. In a few cases this term, the Court used preemption doctrines or the dormant Commerce Clause to discourage state-to-state exploitation. There were a number of decisions, however, where preemption was erroneously rejected.

An odd voting bloc has formed in these horizontal federalism cases. The hard Right of justices Thomas and Scalia has paired with the hard Left of justices Ginsburg and Stevens (with the occasional inclusion of the other liberal justices) to dissent in pro-preemption cases. Why this coalition? Justice Ginsburg and Justice Stevens have rarely met a trial lawyer they did not like, and so they vote against federal power. Justice Thomas and Justice Scalia, on the other hand, vote in line with their constitutional and pro-federalist principles-even if a vote against preemption is a boon for trial lawyers.

I predict that the center, that is, Justices Rehnquist, Kennedy and O’Connor, cannot hold-partly because the center will retire sooner or later and partly because the center lacks credible constitutional arguments. It will crumble under the force of the Court’s own federalism rhetoric. "Federalism" will increasingly serve to expand states’ rights to exploit each others’ citizens and businesses-through liability lawsuits that redistribute wealth from out-of-state defendants to in-state plaintiffs; through settlements among attorneys general that have the same logic and effect; and through taxing and regulating transactions in other states. The recent term suggests that the Court is already moving in this unpalatable direction.

There were many poorly reasoned cases this term, including Lawrence v. Texas and the Holocaust Victims Insurance Act decision. The affirmative action cases merit extra attention, though, because of their broad implications.

The Court struck down the undergraduate point system in Gratz, but upheld the law school‘s more holistic approach in Grutter. The central holding of these cases is that the benefits of diversity in higher education are a compelling government interest. This is quite remarkable: outside of the remedies context, there are now only two areas where race can be a compelling government interest. The first and only other one was the internment of Japanese Americans during World War II. Keep in mind that the Korematsu decision, upholding this internment, has been heavily criticized.

One problem with the Court‘s decision is that it does not adequately explain why race is important in university admissions. There is no explanation of why the use of race here is as important as the use of race when one is defending the country from attack. It would seem to me that those are two very different kinds of government interests.

The Court says that there are many positive benefits associated with the use of racial preferences in higher education. Cross-racial understanding would grow and a breaking down of racial stereotypes would arise from having a critical mass of minorities in higher education-although the Court did not define what a critical mass is or even what the definition of diversity might be. How does a school know that it has enough diversity? The case gives no guidance. In fact, it states that universities cannot consider the percentage of the racial groups in society or in the applicant pool. The opinion does not actually explain what diversity is and how much of it there should be. This lack of a clear definition is going to lead to much uncertainty in the future.

On the other hand, there may be something positive about these cases. One could say they suggest a pro-federalist orientation. Grutter did not say that affirmative action is a required remedy for previous racial discrimination. Instead, the Court said that diversity through affirmative action is a policy goal that can be compelling, but that is also a choice for each state to make. This is preferable to the Court imposing a uniform rule upon every state. Coming from California, I never thought that Proposition 209 would actually protect my state from the Supreme Court, but it has had that effect. Proposition 209 means that California probably has the most race-neutral admissions policy of all the schools in the country. I am sure many states will start changing their laws to look like California’s. This decision allows states to make a decision on whether to have affirmative action or not. That may be a small, yet promising, thing to come out of this opinion.