This speech was given at the AEI Chairman's Dinner on December 6, 2007.

John G. Searle Scholar Michael S. Greve

Chris [DeMuth] has asked me to talk about the direction of the Supreme Court, and about what the upcoming elections might mean for the Court. Before I begin, I should like to say a few words about Dan Searle. It still seems strange to say "the late Dan Searle"--he was so much larger than life.

I was enormously fond of Dan. Obviously, I would not stand before you today without his exceptional generosity to me, both at AEI and, as Chris mentioned, in my earlier career. But I admired Dan for many other things.

Dan reposed great confidence in the people he had decided to support--even when their projects did not turn out exactly as originally envisioned. I myself am a good example. The original plan was for me to study the basic institutions of a free society, about which Dan cared deeply. Six months into my AEI appointment, I went off and studied--state attorneys general. (Next in the study of free institutions: the Tonton Macoutes.) Even so, Dan continued to trust my judgment. His confidence was not only a cause for gratitude but also a constant source of inspiration and dedication.

Every now and then, I would send Dan a brief report on my recent activities. I always received the same letter in reply: "Dear Mike, It looks like you have been productive. I'm not sure I fully understand all of your points, but I sure don't understand your optimism. From where I sit, it looks like the country is going to pot. Best, Dan." I always wrote the same reply: "Dear Dan, The thought that the country is going down the tubes has occurred to me, too. But then, if either of us really believed it, neither of us would be doing what we are doing."

I do not know whether Dan was really as gloomy as all that. But if he was, he had an astounding ability to shake it off and, with redoubled energy, to find people and projects that just might turn the tide.

I have many fond memories of Dan, and I miss the great man terribly. I am proud, and honored, and grateful to stand here tonight as the occupant of the AEI Chair that bears the Searle name.

***

Discussions of the Supreme Court's future tend to fit a pattern. Journalists, pundits, and advocates study actuarial charts and speculate about the health and longevity of the nine members of the Supreme Court, with the same morbid curiosity that the ancient Romans brought to bear on the study of chicken entrails. Those chickens, mind you, were already dead. In our modern re-enactment, the soothsaying consists of pronouncements that X number of justices will surely die over the next four or eight years. Lo, the country's future hangs on the next judicial nominees. Presidential contenders and political parties seize on the issue to mobilize their bases. Ideologues on all sides extract the candidates' pre-commitments to nominate the "right" justices.

No doubt, the coming year will bring much agitation along these lines. Tonight, though, I invite you to contemplate a different proposition: in many ways, the next Justice Department may be as important in the direction of the law as the next justice. In large part, that has to do with the types of cases and issues that I expect to preoccupy the Court over the coming years. In particular, business cases have become much more prominent on the Court's docket, and there are good reasons to hope that that trend will continue. To that extent, the justices' ideological orientation will matter less. Conversely, the Justice Department will matter more--more, I should say, than most people, including the present occupants of the Justice Department, appear to realize.

To ease into the subject, let me divide the Supreme Court's docket into three baskets: a social basket, a terror basket, and a business basket. The "social basket" contains the high-voltage cases about abortion, affirmative action, the death penalty, and the "mystery of the universe" clause in Article VIII of the Constitution. This basket defines journalists' and hence the public's perception of the Supreme Court. The Court is, and will continue to be, closely and intensely divided, along ideological lines, over those issues. Justice Kennedy, very self-consciously, is holding the balance. And the political branches play a marginal role. In part, that is because the Court's social agenda is to make renegade states comply with the evolving standards of a decent society; thus, the national government is on the sidelines (except for harrumphing over corrective constitutional amendments that are going nowhere). In other part, the Supreme Court, or at any rate a majority of justices, has come think of the meaning of life and the mystery of the universe as a judicial monopoly. The role of the Executive and Congress is limited to deciding what justices get to exercise that monopoly. That is why the political debate focuses so centrally on judicial nominations. Unfortunately, none of this is about to change.

The second, "terror basket" contains the post-9/11 issues: Presidential powers. Domestic surveillance. Detention. Habeas corpus. And objects of liberal shock and dismay: Waterboarding! Windsurfing! At least two more terror cases will be decided this Term. But I expect the terror basket to recede in importance in coming years. Historically, every war has thrown up new legal issues that force the branches to re-think and adjust their roles and relations. In this latest iteration, none of the branches has in my judgment covered itself in glory. But while there is more than enough blame to go around, the Congress, the Executive, and the Court will find some rough modus vivendi.

I exempt from that prediction one set of cases--those involving the question of international law in U.S. courts. The legal establishment, and many justices, believe that international "law"--especially "customary international law" as opposed to treaties that the United States has signed and ratified--should play a very prominent role in our courts. I believe that this is wrong. The right principle, I think, is that no international treaty, convention, or ruling--much less "custom"--can trump our constitutional arrangements, from federalism to the First Amendment. But it is far easier to state that principle than to protect it in politics, and that observation bears on my theme--the importance of the Justice Department. A Democratic administration would surely act on internationalist nostrums, in the judicial arena as elsewhere. But even a Republican administration may not always protect constitutional ground. Like football, this is a game of inches, and under diplomatic, political, or bureaucratic pressure, "bend, don't break" may sometimes look like good advice. But if the Justice Department bends, the justices will bend. Not that some of them need that encouragement.

I have a lot more to say on this subject. So does Justice Scalia. But if either of us said it, we'd still be here by midnight. Let me move on, then, to the third basket--the Supreme Court's business docket. It comprises a wide range of cases over a heterogeneous set of legal questions, from antitrust law to patents to civil procedure to the federal preemption of state law, especially state tort law. But all the cases are of vital importance to corporate America and, more broadly, to a functioning American economy.

Two things are of note here. First, the business cases are far more numerous than they were ten or even five years ago. Over a third of the Supreme Court's docket, and (obviously) an even bigger proportion of its civil docket, is now composed of business cases. Second, the vast majority of those cases have produced what legal journalists invariably call "pro-business" results. What they mean is that the Roberts Court has been trying to re-establish sensible, predictable rules-of-the-road for economic actors.

Predictably, the legal commentariat that translates the Supreme Court's decisions for the unwashed has proclaimed those developments part of the Court's ideological "lurch to the right." I say "predictably" because journalists and, sadly, many law professors view the Court's entire docket through the prism of the social cases. But even a casual glance shows this to be mistaken.

First, over the past two Terms, a majority of the fifty-plus business cases have been decided unanimously or with only one or two dissenting votes. In other words, the Supreme Court is not divided over business cases but very nearly of one mind. Second, even when the justices have split, the divide has almost never followed the ideological line that runs through the social cases. And third, the opinions in the cases don't fit an ideological pattern, either. In one case, Justice Ginsburg very nearly declared the Robinson-Patman Act--a proud accomplishment of the New Deal--unenforceable. In another case, Justice Souter made it much easier for corporate defendants to have antitrust and other cases dismissed at an early stage, without expensive discovery and, hence, without extortionate settlements for the trial lawyers. Perhaps, Justice Ginsburg and Justice Souter have belatedly enrolled in my campaign to re-construct a pre-New Deal "Constitution in Exile." I wish that were so, but it probably isn't. On the other hand, there are cases--I'll discuss one of them in short order--where Justice Scalia voted "against" insurers and banks. Perhaps, per Linda Greenhouse & Company, he really has it in for finance capitalism. But then, it's odd that he should hang with AEI, or we with him. A better explanation is that ideology doesn't matter much in these cases. So what does matter?

For one thing, law matters. The social cases are about "law" in the same way in which L.A. Law is about law--mostly, an occasion for grandstanding. In the business cases, in contrast, law counts. Over all the fireworks that go off in abortion or gay rights cases, it is easy to forget that as a group of lawyers, this Court is one of the very best that we have had in American history. That's one reason for the high degree of consensus in business cases. Legal canons and craft break down in the social cases. But they are much more robust, and much less arbitrary, than those cases suggest, and they hold up very well--and they show the justices in their best light--in the business cases.

The other factor that matters more in the business cases is the Justice Department and especially the Solicitor General.

At one level, that observation is obvious. Many business cases involve federal statutes and regulations, so the federal government will be involved either as a party or as the most important amicus. And while there is some dispute as to how much deference the Court should give to the government's position in certain cases, no one doubts that those views generally matter a great deal. Of course, the Justice Department recognizes that role and responsibility. But there is another, less obvious institutional role.

As I said, the Supreme Court has made a promising start in restoring some order and predictability to the legal environment in which economic actors operate. But a whole lot more remains to be done. Class action rules. Pleading standards. Workable rules for deciding when federal law preempts state law and for choosing among conflicting state laws. In all these and many other arcane areas, the law is in disarray. The questions all involve many billions of dollars, and the rules are subject to a constant tug of war among contending interests. In this environment, the Court--which by institutional design operates at some remove from practical commerce--needs help. I don't mean that the justices need help with the strictly legal analysis. Quite the contrary: as I just said, they are very good lawyers. If the right case comes to them in the right posture and presentation, they are going to get it right. But those are very big "ifs." Over 9,000 cert petitions are filed each year. To deal with the information overload, the Court has to rely on cues or signals with respect to the relative importance of the issues, the real-world context, and the general direction of the law.

Now it comes: in the business and regulatory context, nobody can provide those signals except the Justice Department and the SG. The responsibilities here have to do with the coordination of Supreme Court litigation, with the articulation of sound legal principles, and with legal strategy, as opposed to the tactical exercise of counting to five justices in the next case. That responsibility, the Department hasn't always recognized--or if it has, it hasn't always acted on it. Let me illustrate the salience of this point by way of contrast, with an example of successful legal coordination and strategy, not involving DoJ, and involving not business but the religion clauses.

Once upon a time, the Supreme Court insisted that a "wall of separation" barred government assistance to religious groups. Over the past two decades, however, the Court has moved from a "no aid to religion" rule to a religious neutrality rule. That rule holds that government may not exclude religious groups and citizens from public benefit programs that are otherwise open to all comers. Neutrality in that sense is the right rule (though not a complete theory), and it is now firmly established.

In moving from the "wall of separation" to non-discrimination, the sequence of cases mattered big time. First came cases over the use of public facilities (such as school rooms) by religious groups. Then came a case--as it were, bearing my own fine fingerprints--over a cash transfer to a religious publication (a student newspaper at the University of Virginia), which for some justices was a harder case. And only after these and several other cases did the really big question, the inclusion of religious schools in school choice plans, arrive at the Supreme Court. Cleveland's school choice plan passed muster--because it had been carefully designed in reliance on the Court's precedents.

There was no grand master plan behind this sequence. There is simply too much contingency in the ebb and flow of litigation, and too much competition among litigation groups, to permit that. What did exist, however, was a policy community with a shared sense of the landscape, a shared investment in precedent, and well-respected intellectual leadership. In that environment, cases that might turn counterproductive usually drop out, and there is some general direction to the litigation.

None of this is true, and none of it can be true, of business litigation. There is no policy community, only a collection of self-interested actors who spend much of the time litigating or lobbying against each other. There is no investment in precedent, only a desire to win this case for this client. And there is no intellectual leadership--only a bunch of legal prima donnas trolling for clients. There is much benefit and even glory in that system. But it vitiates legal strategy and coordination.

Again, an example: Watters v. Wachovia--the case, decided a little over a year ago, where Justice Scalia supposedly tried to destroy the banking industry. The question was whether the National Bank Act, which protects nationally chartered financial institutions against state regulation of banking transactions, also protects the banks' operating subsidiaries. "No preemption" in Watters means that those outfits may be "visited"--which is legalese for "persecuted"--by state attorneys general. Which I suppose is fair. Henry Paulson, Hillary Clinton, Barney Frank, everyone in Washington has brilliant ideas on how to fix the lending crisis. Why shouldn't state AGs implement their ideas too?

So how do the banks coordinate their response to this menace? They all have a huge stake in the case and want to be, and are, in on the conference calls where the lawyers map strategy and coordinate amicus briefs. Every lawyer's billable hours clock is ticking; and every lawyer feels compelled to demonstrate to his client on the call that he is really on top of things and, moreover, smarter than all the other lawyers. And so the conference calls consume hours. Times 50-plus lawyers, times $800 per hour. You do the math.

Everyone on those calls expected the case to be very close. (As indeed it turned out: 5-3 in favor of preemption. Justice Ginsburg wrote the majority opinion. Justice Thomas was recused. Justice Stevens, the Chief, and you-know-who dissented.) And yet: while the conference calls droned on, and while the briefs were being written, one of the banks filed a cert petition in a separate case, arguing that the National Bank Act preempts not only state regulation of banking transactions but also--get this--state sexual harassment laws. I have no idea what the theory was. Perhaps, it was that the Comptroller of the Currency keeps a keen eye on all illicit activities in bank vaults. If I were angling for Justice Ginsburg's needed vote in a preemption case, that's just what I would argue.

In the end, it mercifully did not matter. But the point is this: while corporations spend millions of dollars on "coordination," they can't accomplish the bare minimum of concerted action, which is to keep bad cases out of the Supreme Court. If I weren't so happy with my AEI job, I might try a career writing commercials for corporate America. Tag line: "American business. If we weren't so stupid, we'd be scary." But of course, businesses and their lawyers aren't stupid. They simply have no way of overcoming the massive collective action and coordination problems that characterize business litigation.

To grasp the full scope of those problems, look at the same scenario from the other side--through the eyes of a law clerk in the Supreme Court's cert pool. To that poor twenty-something, the hundreds of petitions in business cases all look equally confounding, unimportant, and unrewarding. (What young husband or wife wants to come home at 10 or 11 and shout "Honey--I'm home! Sorry I'm late but guess what: I wrote a terrific cert memo on section 360(k) of the Medical Device Act!" No one. Somebody give the poor soul a gay rights case.)

This--to get to my long-delayed point--is where the Department of Justice and the Solicitor General come in. Of course, they cannot order business litigants to drop cert petitions, or cram cases into the Court that the justices do not wish to hear. But they can signal to the Supreme Court which cases and arguments should matter. And that function can and should be coordinated with private litigants.

To be sure, the SG does quite a bit of that--either entirely sua sponte, or at the prompting of private litigants, or because the Supreme Court has asked for the SG's views. But the office has handled these matters on a retail basis--case by case, with a lot of tactical cleverness but little overarching strategic sense. Again, I'll give you an example--the federal preemption of state tort law. (I harp on that issue because federal preemption is one of only two ways to stop the trial lawyers. The other strategy is to throw them all in jail. It's currently going a lot better than preemption.)

In a case called Geier v. Honda Motor Company in 2000, the Supreme Court dealt with the national Motor Vehicle Safety Act. Pursuant to that Act, the Department of Transportation had decided to phase in airbag requirements, such that manufacturers had to put airbags, first in 20 percent of the new car fleet, then in 40 percent the next model year, and so on. The question in Geier was whether someone who suffered an injury in a non-airbag car sold under this scheme could recover under state tort law on the theory that the car was "defectively designed," or whether the federal phase-in preempted such lawsuits. In a 5-4 decision, the Court held the tort suits to be preempted. The federal scheme, Justice Breyer's opinion said, wasn't a minimum requirement but an attempted optimum or "golden mean" of safety. State tort law would disrupt that balance and was therefore preempted by implication. And that preemptive effect extends to the decision to not require airbags in X percent of the car fleet.

So far, so good. But Geier is only a warm-up for the real act--the federal Boat Safety Act, enacted in 1971. Of course, this is why you support AEI. You've all spent a hundred sleepless nights over the Boat Safety Act. So let me explain it: under the Act, it is clear that no state may maintain a boat safety requirement at variance with federal standards. But suppose someone falls overboard, gets fatally hit by an outboard propeller, and his estate then sues the manufacturer on the grounds that the propeller should have had a safety guard. The federal government--the Coast Guard--had studied the question and decided not to require propeller guards, substantially because they might do more harm than good (for example, because they might strike someone whom a propeller might miss). Does that affirmative decision not to regulate bar the state law cases, on the principle of Geier? Or can the design-defect case go forward, in the tender care of some Illinois jury?

In Sprietsma v. Mercury Marine, the Supreme Court decided that those lawsuits are not preempted. The vote was nine to zero. What had changed since Geier? Two things. First, the outcome depends on what the meaning of the word "a" is. The Motor Vehicle Safety Act in Geier spoke of preempting state law, which could be read to include state tort law. The Boat Safety Act, in dramatic contrast, spoke of preempting a state law, and the "a" (the Supreme Court said) must mean a state statute or regulation, as opposed to, and to the exclusion of, state common law crafted by the courts.

Second, and more important, the Solicitor General's position differed in the two cases. In Geier, the federal government insisted on its preemptive authority. In Sprietsma, in contrast, the SG averred that the federal government had never viewed its decisions not to regulate as preemptive.

With that averment, the case was over. I have actually studied what happens in Supreme Court cases where the SG says that there is no preemption: when the SG is a Republican, no Supreme Court case over the past fifty years has held that a federal statute nonetheless preempted state law. Reasonably enough, the justices interpret the SG's stance as a signal. If the federal government itself, under a nominally business-friendly administration, declines preemption, that has to be the right view of the law. There can't be any other reason for the SG's position.

Now, the thought that the SG's position would matter had occurred to the defense lawyers. Once the Court had granted cert, they trooped to the SG and asked him to support preemption. This corporate campaign, for a change, was not a train wreck in the making. The delegation included some of the best lawyers in the country. They did not plead for special favors. They pled for good sense. How?

"Suppose," they said, "there is no preemption under the Boat Safety Act. Then, if we don't put propeller guards on the boats, we'll be sued for compensation and for punitive damages. (Keeping a defective design in operation is a definite no-no.) On the other hand, if we do implement propeller guards and something bad happens, we will also be sued for punitive damages. And Exhibit A in the plaintiff's case will be that Coast Guard study, showing that propeller guards may do more harm than good. We are damned if we do, and damned if we don't. The only 'safety' result is that the world will be safe for trial lawyers. In all other respects, the world would be safer without the Boat Safety Act. And that result, Mr. Olson, is that your best reading of the Boat Safety Act?"

The answer was: "Yes. That is our reading." And down went the case.

I am not going to tell you that an alternative stance by the SG would certainly have produced a better outcome; the sheer force of an indefinite article--"a"--may be too much to overcome. My point is the SG's and AG's crabbed view of their institutional and, indeed, their constitutional role. It is often said that the SG's Office thinks of itself as the "Tenth Justice." But that isn't quite right. A Tenth Justice would have an independent view of the law. But in Sprietsma and, I submit, in countless other cases, the SG hasn't tried to articulate any such view. It has simply tried to predict what the justices will in fact do, as opposed to what they ought to do or on what grounds they ought to do it. Instead of a Tenth Justice, the SG's Office has come to think of itself as the 37th law clerk. Instead of articulating a coherent view of the legal landscape--which may or may not coincide with the Supreme Court's decisions in this or that area--the SG obsesses over its win-loss ratio as if that alone were the measure of sound law. It isn't.

The same law clerk-ish attitude, it bears mention, has informed the SG's approach to constitutional questions that arise over federal statutes. The Office will at all times defend the constitutionality of federal statutes even if there is very serious doubt about the matter. Among the more egregious examples is the McCain-Feingold campaign finance law, which this administration defended in the Supreme Court, even after the President had expressed doubts about the law's constitutionality when he signed it. Why? So long as the SG's Office acts as Congress's mouthpiece, the theory goes, it will remain impartial and free from "politics." But that is a weird way of mobilizing legalism against constitutionalism. The occupants of the Office haven't sworn allegiance to a congressional subcommittee; they have sworn an oath on the Constitution, and they serve at the pleasure of a President whose only essential oath is to protect and defend the Constitution. It seems to me that especially if you believe in an independent Executive, you ought to insist on your own constitutional views.

***

Let me end with a bit of history and, I think, a powerful illustration of what is at stake. In 1935, the New Deal was on the constitutional ropes. Most dramatically, in the Schechter case, the Supreme Court had held that the federal government could not regulate the practices of a kosher chicken business in Brooklyn, because that was not "interstate commerce." Then as now, the cry was "We need new justices!" Then as now, there was impotent talk of constitutional amendments. The standard story is that FDR's "Court Packing Plan" two years later prompted the Court to back down. But most historians now regard that story as largely a myth. For starters, the government had lost Schechter nine to zero, not five to four, and "court-packing" could not fix that problem. What actually happened, Peter Irons has shown in a wonderful book on The New Deal Lawyers, was that the Schechter debacle at long last prompted FDR to put the Justice Department, the SG's Office, and the National Labor Relations Board in the hands of competent lawyers--not ideologues, not glorified law clerks, but legal strategists. Instead of predicting the next case, those guys set out to create it. They told the NLRB to stay away from chickens and barbershops and instead to produce cases against interstate carriers, like Greyhound Bus Lines; and against big, national corporations with a long history of labor strife and strikes that had shut down the entire economy. The New Deal lawyers dragged those companies, including the Jones & Laughlin Steel Company, first into carefully chosen appellate courts and then into the Supreme Court. And by 1937, they had the case and the legal theory to persuade the justices that the regulation of labor relations could after all constitute a necessary and proper regulation to protect interstate commerce, Schechter notwithstanding. The true story isn't the ham-fisted and failed court packing plan; it is the lawyers' sophisticated, strategic, and highly successful litigation campaign.

Like all historical parallels, this one is a bit off. You may not like the New Dealers' take on the Commerce Clause. But I think you can still admire the lawyers' work and learn from it. You may also think that we are not now confronting a constitutional crisis and conflict of that magnitude. Fair enough. But a lot of law is in disrepair, and fixing it cannot be a judicial monopoly. Business, the Court, all of us: we need a Justice Department with a constitutional playbook.

Michael S. Greve is the John G. Searle Scholar at AEI.