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Underwrites, Overrides, and Recovered Precedents

In this Comment, I examine the “underwrite,” a concept first developed by Professors Ethan Leib and James Brudney in their article, “Legislative Underwrites.” There are plenty of law review articles discussing “overrides” (when Congress rejects a court’s statutory interpretation decision). Theirs is the first article to explore the “underwrite” (when Congress approves a statutory interpretation). This comment explores the concept as it relates to overrides and calls for a major empirical study linking the two. Rejecting Leib and Brudney’s focus on interbranch cooperation, I present a different positive political story of the underwrite based on endogenous legislative incentives. No judge should worry, in my opinion, about Congress sitting around willy-nilly underwriting the latest Supreme Court case. Underwrites must compete with far more salient policy disputes important to members’ constituents. Finally, this Comment argues that textual underwrites deserve super-charged deference but raises questions about whether courts will be willing to embrace such a rule.

I. Introduction

Professors Ethan Leib and James Brudney have given us an intellectual treat.[1] There are plenty of law review articles discussing “overrides” (when Congress rejects a court’s statutory interpretation decision). Theirs is the first article to explore the “underwrite” (when Congress approves a statutory interpretation). Bravo for their discovery. The “Leib–Brudney underwrite” has been born, and, for reasons I explain, it is likely to produce a good deal of important scholarship.

Although one of the most fascinating and important parts of the Article involves interbranch dialogue in the states, I focus on the federal level. And like the authors, I concentrate on judicial statutory interpretation even if, as they recognize, underwriting of administrative agency decisions is an important topic for future inquiry. Part I explains why the underwrite concept may be more important or prevalent than Leib and Brudney suggest, based on the ties between overrides and underwrites. It is in Part II that I part company with the authors by offering a different causal theory of underwrites. No one should read Leib and Brudney and imagine that members of Congress are sitting around trying to decide whether to be helpful to the courts by underwriting the latest Supreme Court case. At the federal level, given our unique system of separated powers, underwrites are unlikely to reflect conscious or even unconscious desire for interbranch cooperation; they only exist if they serve Congress’s interests. In Part III, I tease out some problems of application that the authors themselves acknowledge, particularly when it comes to legislative evidence¾even the evidence that Leib and Brudney consider a gold standard. In Part IV, I conclude by arguing that textual underwrites may deserve judicial super-deference, albeit for reasons somewhat different from those advanced by Leib and Brudney. Nevertheless, courts will have to be convinced.

II. The Connections Between Overrides and Underwrites

Congressional override of statutory-interpretation decisions has been the subject of many fine empirical studies from the leading lights of the academy and their critics. Professor Bill Eskridge has done two comprehensive studies showing the rise and ebb of overrides over time.[2] Professor Rick Hasen has countered with his own study, rejecting some of Eskridge’s conclusions.[3] Political scientists have weighed in on the question as well.[4] Not until now, however, have legal scholars seriously attempted to study the fact that Congress supports, affirms, and underwrites judicial statutory decisions. Having seen this happen during my tenure as a Senate lawyer, it does not surprise me. What surprises me is that it took so long for legal academics (including myself) to notice. Such significant discovery in the academy is rare; this discovery delights.

To the casual reader, the underwrite might seem the opposite of the override, but that conclusion is deceptive. In the override, Congress rejects the Supreme Court’s interpretation; in the underwrite, Congress accepts the Supreme Court’s interpretation. [5] The distinction merits emphasis here because it shows the importance of their study and provides guidance for future empirical work. Consider the following scenario: In 1982, there exists Interpretation A. Ten years later in 1992, the Supreme Court substitutes Interpretation B. Twenty years later in 2012, the Congress rejects the Supreme Court’s Interpretation B because it wants to reinstate Interpretation A. If this is correct, the 2012 Congress has simultaneously overridden Interpretation B and underwritten Interpretation A. This is significant for the status of Interpretation A. Once a mere creature of the judicial branch, it is now a rule endorsed by Congress.

Consider one of Leib and Brudney’s examples of this interaction between overrides and underwrites, the Civil Rights Act of 1991.[6] That legislation included a number of overrides.[7] In one instance, Congress sought to overrule Patterson v. McLean Credit Union.[8] In Patterson, the Supreme Court held that a post–Civil War statute, 42 U.S.C. § 1981,[9]did not protect an employee from racial harassment by her employer, since the harassment occurred after the formation of the contract.[10] Congress balked. By 1991, President George H. W. Bush agreed that Patterson should be overruled.[11] In overriding Patterson, however, Congress retur- ned to preexisting law. The Patterson legislative “fix” reaffirmed a well-known earlier precedent, Runyon v. McCrary,[12] which allowed African-Americans to sue to integrate private schools under Section 1981. In Runyon, the Court rejected the argument made by the schools that the plaintiffs had to show “state action” because Section 1981 did not reach private acts of discrimination.[13] The statutory override of Patterson un- derwrote Runyon. The text of the resulting statute affirmed the principle that racial discrimination by “nongovernmental parties” is barred by 42 U.S.C. § 1981.[14]

The bottom line: overrides are not necessarily the opposite of underwrites in practice. They may go hand in hand, revealing “recovered precedents.” In the example above, Runyon is the recovered precedent, underwritten in the override of Patterson. I highlight this simple relationship for two reasons. First, Leib and Brudney’s study warrants a full-blown empirical study of underwrites. If one is going to do such a study, one should start by looking at overrides. To be sure, there may be “stand-alone” underwrites, but my suspicion is that the conjoined override–underwrite pair may well predominate. Second, the potential link between overrides and underwrites reinforces the importance of Leib and Brudney’s study. In many cases, scholarship has focused on overrides (the 1991 Civil Rights Act is a prime example), ignoring the underwriting aspects of the legislation. In some cases, these underwrites will be codified, as in the Patterson–Runyon case. But in other cases, the recovered precedent may be less obvious. That, in turn, raises theoretical questions about the scope of underwrites, since every override leaves the court back at the prior status quo. Leib and Brudney carefully limit their definition of an underwrite to those instances in which Congress has specifically embraced the decision in the text of the adopted statute or in its legislative history, but one wonders why that is always necessary, or whether one will find that there is a hierarchy of underwrites: super-underwrites (in the text of the statute), normal underwrites (in the legislative history), and the simple recovered precedent. Presumably, if Congress is willing to override a decision, it must be aware of the recovered law. Even if that law does not merit the super-deference of explicit underwrites, perhaps it deserves more weight than the average precedent. A future empirical study of the underwrite should take all these things into account.

III. Underwrites: A Different Causal Story

When and why does Congress underwrite? Leib and Brudney spend a good deal of time analyzing the virtues and vices of underwriting as an institutional matter. They note opportunity costs¾legislators might well be doing something better with their time¾and the potential for both increased legal uncertainty and policy conflict. Put another way, the fear is that there will be too much underwriting.[15] On the other hand, they explain that underwriting provides legal clarity, promotes interbranch cooperation, and reduces reading tea leaves from congressional inaction. They imagine that if underwriting becomes a more regular feature of lawmaking, it may be used more often. In other words, there exists a contrasting fear of too little underwriting.[16]

All of this may lead the reader to imagine members of Congress sitting around trying to decide whether they should underwrite Supreme Court decisions. Such a vision could cause a good many judges heartburn. One imagines the judicial mind roiled with the angry thoughts that hapless members of Congress have deemed themselves super-judges. That view is wrong, but it is important to see why. Put bluntly, Congress is not a court.[17] The incentives of members of Congress are structured by institutional realities that are entirely different from judicial incentives. Congress is a busy, sometimes chaotic institution. Its members focus on how to solve national crises, not on how to draft a legal decision, particularly a legal decision no voter has ever heard of. This explains why there are plenty of legal issues that Congress might¾and even should¾resolve, but that Congress entirely ignores, to the chagrin of law professors and judges: the status of administrative guidance,[18] crazy scrivener’s errors in evidentiary rules,[19] and problems with the habeas corpus statute,[20] to name a few. Why no congressional action? Because no one votes on those issues. Congress spends its limited time on matters important to members of Congress and their constituents. That is, after all, what the Constitution directs members of Congress to do: represent the people.[21]

All theories provide implicit causal stories. The reader might think Congress can on a whim, or at a moment’s notice, decide to underwrite any particular Supreme Court or other judicial decision. I doubt Leib and Brudney would subscribe to that causal claim. As they explain, they originally believed that the underwrite was a rather “impractical way for a legislature to spend its time.”[22] The authors’ cost–benefit analysis, however, appears to take an exogenous view¾from outside the legislative process¾to look at something that, in my opinion, is dominated by that process. They are writing as legal scholars, carefully attempting to tie the virtues and vices of their discovery to an abstract idea of interbranch cooperation. But this exogenous approach may lead to causal misunderstandings.

Underwrites are an endogenous phenomenon: they exist within and because of institutional processes and realities. Lawmaking is difficult, time-consuming, and full of partisan bickering. In such a context, there must be very strong incentives for Congress to underwrite. Where do these incentives come from? The need for action [23] and the “electoral connection.”[24] First, the need for action: in areas of complex law, Congress may choose to borrow precedents or language¾using the putatively “neutral” language of the Supreme Court¾to effect compromise and thus achieve action in an institution where action is exceedingly difficult. For example, when Senator A and Senator B cannot agree upon a standard for voting-rights cases, they pull language from a Supreme Court case,[25] using that case as a neutral arbiter that allows the Senators to agree upon statutory text (effectively punting the case back to the Supreme Court). Even if that produces congressional agreement, however, Professor Mayhew’s “electoral connection” thesis tells us that agreement must be at least neutral if not positive for members’ electoral interests—otherwise it will not happen.

If this causal story is correct, certain theoretical “costs” and “benefits” of underwrites should not worry us. For one, we should not be terribly concerned about “too many” underwrites; members of Congress simply do not have the time or inclination. Unless the underwrite is worth more than competing legislative agenda items, the underwrite will not happen. Members of Congress do not spend their days poring over SCOTUSblog wondering what kinds of cases they can underwrite. Nor should we worry about “too few” underwrites, because if underwriting helps to achieve compromise on a politically salient bill, underwrites will happen whether we like them or not. Consider the 1991 Civil Rights Act: liberal interest groups and voters were incensed at Supreme Court interpretations which they viewed as anti-African-American and anti-woman.[26] Congress responded. It is a crude heuristic, but well established within the political science literature, that Congress, as a whole, and individual legislators act according to electoral incentives.[27] In this case, those electoral incentives¾the voters¾led them to override and underwrite.

Positive political theory tells us that underwrites will exist when, to achieve action on an issue of political salience, the President and the Congress prefer the underwritten precedent to a newer precedent as a policy matter [28] By “policy” matter, I mean here what these political actors predict to be the preferences of their constituents.

As we know, courts, over the long haul, tend to be majoritarian institutions.[29] When courts deviate from that principle in ways that are politically salient, then majoritarian institutions will respond. They will respond with overrides and, potentially, underwrites.

One might argue that I have called for much further work on the underwrite only to suggest that underwrites are contingent on political incentives. The two positions are not inconsistent. The first suggests that we should take a new look at the override literature because it is likely to reveal additional underwrites, and that we should consider more thoroughly the role of recovered precedents. The second suggests that both overrides and underwrites will depend upon Congress’s political incentives. For those who worry about Congress sitting as a Supreme Court, do not fear. In their minds, members of Congress have better things to do¾their job, responding to voters, or at least what they think the voters want.

IV. Underwrites: Definitional Issues

What exactly is an underwrite? Any future empirical work must grapple with serious definitional issues, as Leib and Brudney recognize. No one is likely to quibble with the proposition that an underwrite specifically mentioned in statutory text qualifies, but this apparent agreement may well dissolve in practice: even statutory underwrites can raise questions of scope and application. More obviously, many will reject any claim that underwrites in legislative history (what I shall hereafter call “legislative evidence”) should be considered at all. Any future empirical study will have to address these problems of scope and evidence.

A. Questions of scope: facts versus principle

Leib and Brudney acknowledge that identifying an underwrite may lead to new problems. Assume that we identify the 1991 Civil Rights Act as underwriting the principle that the law bars private as well as governmental discrimination. Let us assume everyone agrees that the amended statutory text supports that proposition and amounts to an underwrite of Runyon v. McCrary. Questions may still arise about the scope of the underwrite.

In fact, this is precisely what has happened with respect to Section 1981’s application to nongovernmental actors. Section 1981 protects contracting, but it also protects against racially biased deprivations of the “equal benefit of all laws.”[30] The Circuits have split on whether the “equal benefit” clause applies in the absence of state action.[31] One could argue that the Runyon underwrite should resolve this controversy. In 1991, Congress explicitly rejected Patterson and underwrote Runyon in Subsection (c) of the statute: “The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.”[32] As a matter of textual analysis, the ordinary reader would presume that “rights protected by this section” refers to the substantive guarantees in Subsection (a). But, if there were doubt, the underwrite should reinforce the claim that Congress really meant it when it said private actions count.

Critics, however, will argue that the underwrite should be limited to its facts: both Runyon and Patterson involved classic contract situations, while the “equal benefit” cases involve different factual scenarios. The application question becomes: does the underwrite apply to the general concept (non-state action) or is it limited to the particular facts (contract claims)? Of course, this standard problem in legal interpretation does nothing to undermine the underwrite concept, but it may provide critics with a reason to cry foul. A situation like the conflict above invites more research: what did Congress say about its underwrite? That means legislative evidence. And if underwrites propel interpreters into the legislative history debate, many will balk.

B. The legislative evidence problem

Leib and Brudney know that using legislative evidence in statutory interpretation is controversial.[33] I am an arch defender. But I do not necessarily believe that committee reports are the “gold standard,” even if courts sometimes say that. Given the way that statutes are constructed over time, it is entirely possible that a committee report on Senate Bill A and House Bill A will be completely irrelevant by the time the final legislation has passed. Leib and Brudney make a passing reference to underwrites “in the air.”[34] The following is the kind of problem they may have envisioned.

Consider this scenario, increasingly true as the complexity of legislation grows: In considering a lengthy bill, a House committee decides to underwrite Case A about Title 13 of the Bankruptcy Code. On the Senate side, there is a similar desire. The committee reports are crystal clear that Case A should govern for Title 13 cases. Fast forward to bill debate. Before the bill is introduced in the Senate, the bill’s proponents will need 60 votes. To get those votes, proponents compromise significantly on the bill’s language, taking any language relating to Title 13 off the agenda and out of the bill. The resulting bill deals only with Titles 7 and 11, and has no text to which the underwrite relates at all.

Now imagine a litigant arrives in court with the committee reports in a Title 13 case. Should the court believe that Congress underwrote Case A? Congress agreed to take Title 13 off the table. Legislative evidence takes its power from the text to which it relates, and if it relates to no text, then critics are likely to balk. One of the most insistent critiques of legislative evidence is that it comes from a few committee members, not the whole of Congress.[35] This critique is wrong, in my view, and deliberately overstated: committee reports gain institutional legitimacy from the rules Congress creates to delegate authority to subgroups. Just as any corporation delegates its work to agents, so does Congress. The problem in this scenario is that there is no final product to which to tie the relevant agent’s decision. If a corporation left out any consideration of Title 13 in its 10-K, the internal documents on Title 13 are not relevant to interpreting the 10-K. The same rules should apply to Congress. Free-floating committee underwrites untied to actual legislation may bear some weight in difficult cases, but not the super-majoritarian imprimatur one might hope to give full-blown statutory underwrites.

V. Should courts pay attention to underwrites?

Having sung the praises of underwrites, I will end by saying I do not believe they should be praised for the reasons Leib and Brudney suggest¾cooperation between the departments. Based on my work on the separation of powers, my own view of our constitutional structure envisages the departments in competition for political and bureaucratic power. Siloed departments seek to advantage their own constituencies and policy space. They typically cooperate only when doing so enables them to further these interests. If this is correct, underwrites are not to be valued any more than overrides because of an imagined conversation between the branches. The point is that even without any intent to cooperate, there has been agreement between the judiciary and the Congress and that agreement merits super-deference. Underwrites gain power because they unite the Congress and the Court on a single interpretation, increasing the democratic legitimacy of interpretive rulings. Courts should give textual underwrites super-deferential weight.

When Congress and the Court agree upon a legal principle, it should have enormous weight for reasons grounded in democratic representation. Imagine that we redefine the departments not in terms of adjectives¾executive, legislative, or judicial¾but in terms of their constituencies.[36] As a relative matter, the President speaks to the nation more than the representative from the Fifth District of Texas, who will care relatively more about the voters in that district. If this is correct, even if the departments do not intend to cooperate, or are hostile to each other (because, for example, they have different dominant party affiliations), rules that have the support of a broad cross section of constituencies will be more robust and stable. The most stable rules are ones accepted by the President, the House, the Senate, and the courts. Underwrites can, in theory, represent the position of each relevant constituency¾the nation, states and localities¾plus the (more abstract) constituency of principle, the courts.

Brudney and Leib are careful to explain that different kinds of underwrites may deserve different kinds of judicial deference. The separation-of-powers analysis I have just elaborated shows, at a minimum, why a textual underwrite, like the Runyon underwrite in our Section 1981 case, deserves judicial super-deference. It is unclear, however, whether courts will be ready to accept the invitation. As I mentioned earlier, the departments compete as much as cooperate. Courts remind us regularly that they “say what the law is,” even as they know that Congress and the President say precisely the same thing. A court whose membership has shifted in policy orientation relative to a recovered precedent may balk. If, for example, the court believes we are in a post-racial society, will it have any interest in rediscovering Runyon’s earlier attempts to rectify the deep racial inequality of segregated schools? That textual underwrites may deserve super-deference does not mean that courts will, in the end, grant it.

 

[1] Ethan J. Leib & James J. Brudney, Legislative Underwrites, 103 Va. L. Rev. 1487, 1511 (2017).

[2] Matthew R. Christiansen & William N. Eskridge, Jr., Congressional Overrides of Supreme Court Statutory Interpretation Decisions, 1967–2011, 92 Tex. L. Rev. 1317 (2014); William N. Eskridge, Jr., Overriding Supreme Court Statutory Interpretation Decisions, 101 Yale L.J. 331 (1991).

[3] James Buatti & Richard L. Hasen, Response: Conscious Congressional Overriding of the Supreme Court, Gridlock, and Partisan Politics, 93 Tex. L. Rev. See Also 263 (2015).

[4] See, e.g., Beth Henschen, Statutory Interpretations of the Supreme Court: Congressional Response, 11 Am. Pol. Q. 441 (1983); Pablo T. Spiller & Emerson H. Tiller, Invitations to Override: Congressional Reversals of Supreme Court Decisions, 16 Int’l Rev. L. & Econ. 503 (1996).

[5] Leib & Brudney, supra note 1, at 1520.

[6] Pub. L. No. 102-166, 105 Stat. 1071.

[7] See Christiansen & Eskridge, supra note 2, at 1492–93 (listing twelve Supreme Court decisions, nine of which were decided between 1986 and 1991, that were overridden by the 1991 Civil Rights Act).

[8] 491 U.S. 164 (1989).

[9] Originally passed as § 1 of the Civil Rights Act of 1866 § 1981(a) reads as follows:

All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.

42 U.S.C. § 1981(a) (2012).

[10] Patterson, 491 U.S. at 179.

[11] See Steven A. Holmes, Critics of Rights Law Fear A Flood of Suits Over Jobs, N.Y. Times, May 27, 1990, at 8 (Bush administration supports reversal of Patterson v. McLean Credit Union).

[12] 427 U.S. 160, 170 (1976).

[13] Id. at 173–74.

[14] In 1991, Congress added the following two subsections to 42 U.S.C. § 1981. Note that section (c) explicitly underwrites the idea that section 1981 plaintiffs can sue private actors:

(b) For purposes of this section, the term “make and enforce contracts” includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.

(c) The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.

42 U.S.C. § 1981 (2012) (emphasis added).

[15] Leib & Brudney, supra note 1, at 1520.

[16] Id. at 1522–26.

[17] I have written an entire book to prove this rather obvious point. Victoria Nourse, Misreading Law, Misreading Democracy (2016).

[18] One of the thorniest issues in administrative law is the status of policymaking documents, typically called “guidance,” which are deemed nonlegislative rules and thus do not require notice and comment rulemaking. See, e.g., Texas v. United States, 86 F.Supp.3d 591, 671 (S.D. Tex. 2015) (striking down Obama DAPA guidance because it was a legislative rule that had to go through notice and comment rulemaking), aff’d, 809 F.3d 134 (5th Cir. 2015), aff’d by an equally divided court, United States v. Texas, 136 S.Ct. 2271 (2016) (per curiam); John Manning, Nonlegislative Rules, 72 Geo. Wash. L. Rev. 893 (2004) (highlighting judicial manageability concerns associated with nonlegislative rules).

[19] Green v. Bock Laundry, 490 U.S. 504, 511 (1989) (“[A]s far as civil trials are concerned, Rule 609(a)(1) ‘can’t mean what it says.’” (citation omitted)).

[20] On the multiple problems with the statute, passed in the crisis atmosphere of the Oklahoma City Bombing, see Carlos M. Vázquez, Habeas as Forum Allocation: A New Synthesis, 71 U. Miami L. Rev. 645 (2017); Larry W. Yackle, State Convicts and Federal Courts: Reopening the Habeas Corpus Debate, 91 Cornell L. Rev. 541 (2006).

[21] Nourse, supra note 17, at 21.

[22] Leib & Brudney, supra note 1, at 1514.

[23] See Victoria F. Nourse & Jane S. Schacter, The Politics of Legislative Drafting: A Congressional Case Study, 77 N.Y.U. L. Rev. 575, 594–95 (2002).

[24] The “electoral connection” is David Mayhew’s fine term. See David R. Mayhew, Congress: The Electoral Connection (1974).

[25] See Chisom v. Roemer, 501 U.S. 380, 398 (1991) (explaining that the 1982 amendments to the Voting Rights Act borrowed the phrase “to participate in the political process and to elect representatives of their choice” from a Supreme Court case).

[26] See Ronald D. Rotunda, Civil Rights Act of 1991: A Brief Introductory Analysis of the Congressional Response to Judicial Interpretation, 68 Notre Dame L. Rev. 923, 924–26 (1993).

[27] See generally Mayhew, supra note 24, at 11–78.

[28] On such modeling, see Daniel B. Rodriguez & Barry R. Weingast, The Positive Political Theory of Legislative History: New Perspectives on the 1964 Civil Rights Act and Its Interpretation, U. Pa. L. Rev. 1417, 1431–37 (2003).

[29] See Barry Friedman, The Will of the People 14–16 (2009) (discussing the influence of the popular will on the Supreme Court).

[30] See 42 U.S.C. § 1981(a) (2012).

[31] The Eighth and Third Circuits have held that for a plaintiff to state a claim under the “equal benefit” clause, the plaintiff must allege state action. See Elmore v. Harbor Freight Tools USA, Inc., 844 F.3d 764 (8th Cir. 2016); Bilello v. Kum & Go, LLC, 374 F.3d 656 (8th Cir. 2004); Youngblood v. Hy-Vee Food Stores, Inc., 266 F.3d 851 (8th Cir. 2001); Adams ex rel. Harris v. Boy Scouts of Am.-Chickasaw Council, 271 F.3d 769 (8th Cir. 2001); Brown v. Philip Morris Inc., 250 F.3d 789 (3d Cir. 2001). The Second and Sixth Circuits have held that such a plaintiff need not allege state action. See Chapman v. Higbee Co., 319 F.3d 825 (6th Cir. 2003) (en banc); Phillip v. Univ. of Rochester, 316 F.3d 291 (2d Cir. 2003).

[32] 42 U.S.C. § 1981(c) (2012) (emphasis added).

[33] Leib & Brudney, supra note 1, at 1497.

[34] Id. at 1515.

[35] See, e.g., Blanchard v. Bergeron, 489 U.S. 87, 98–99 (1989) (Scalia, J., concurring in part and concurring in the judgement) (criticizing the use of committee reports).

[36] Victoria Nourse, The Vertical Separation of Powers, 49 Duke L.J. 749, 751–52 (1999); Victoria F. Nourse, Toward a New Constitutional Anatomy, 56 Stan. L. Rev. 835, 850–52 (2004).

The Living Anti-Injunction Act

In the coming months, the Internal Revenue Service is likely to issue a slew of new regulations interpreting the December 2017 federal tax reform legislation. These regulations are likely to define the scope of the new deduction for pass-through entities; determine the reach of the new base erosion tax on multinational enterprises; fill in the details of the new “opportunity zone” program aimed at encouraging investment in low-income communities; and address a wide range of other important matters.[1] Inevitably, some taxpayers will object to these regulations and will seek to challenge the new rules in court. When, where, and how they can do so will depend upon the way courts construe the 150-year-old Anti-Injunction Act (AIA).

For decades, individuals and entities wishing to contest their tax liabilities have had a choice among three paths: (1) file a prepayment petition in the U.S. Tax Court; (2) pay the tax and then sue for a refund in federal district court; or (3) pay the tax and then sue for a refund in the U.S. Court of Federal Claims.[2] What they could not do is seek an injunction preventing the Internal Revenue Service from assessing or collecting the tax in question. Standing in their way would be the AIA, which provides, in relevant part, that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.”[3]

All that is now in doubt. In 2016, the U.S. Chamber of Commerce sued the IRS in the U.S. District Court for the Western District of Texas, seeking to set aside a Treasury tax regulation[4] that determines the circumstances under which a domestic entity that switches its legal domicile to a foreign country becomes subject to a special tax.[5] The IRS argued that the AIA clearly barred the chamber’s action. In a decision that surprised many observers (including me[6]), the district court said last fall that the AIA presented no barrier to the chamber’s claim for equitable relief. According to the court, the regulation “is not a tax,” but instead “determin[es] who is subject to taxation.”[7] The court then proceeded to the merits and agreed with the chamber that the regulation should be set aside.

As far as judicial decisions on matters of tax procedure go, this one was a bombshell. A headline in the trade publication Tax Notes announced that the ruling “throws [the] door open” to more challenges to IRS rules.[8] Tax scholar Andy Grewal noted that the district court’s decision “breaks from the common (though not necessarily correct) understanding” of the AIA.[9] Fellow tax scholar Bryan Camp went one step further and argued that the decision was not only a departure from precedent but also a clear misinterpretation of the AIA. In his view, “[t]his is exactly the kind of suit that the Anti-Injunction Act is supposed to stop.”[10] The IRS has appealed from the district court’s ruling to the U.S. Court of Appeals for the Fifth Circuit.[11]

With the fate of the AIA hanging in the balance, now is the perfect moment for a thoughtful and thorough treatment of the statute that traces the law’s evolution from its origins to the present day. And in Restoring the Lost Anti-Injunction Act, Professor Kristin Hickman and Gerald Kerska provide exactly that.[12] Indeed, their new article on the AIA is quite possibly the most comprehensive analysis of the Act ever written. “Timing matters,” Hickman and Kerska write in their opening sentence,[13] and while the authors are referring to the timing of judicial review, their own timing is impeccable.

Hickman and Kerska’s analysis also provides a thought-provoking counterweight to the conventional wisdom that Chamber of Commerce v. IRS marks a sharp break from the past. The narrow interpretation of the AIA adopted by the district court in the Chamber of Commerce case is, in their view, largely consistent with the “lost” history of the Act.[14] According to Hickman and Kerska, the AIA historically applied only after a taxpayer filed a return and federal tax officials began their assessment and collection efforts. Pre-enforcement judicial review of a tax regulation would, on this reading, fall outside the statute’s scope.[15]

Whether or not one ultimately agrees with Hickman and Kerska’s conclusion, their article is likely to become the jumping-off point for future debates about the AIA. I, for one, was impressed by Hickman and Kerska’s historical and doctrinal heavy lifting but was unpersuaded by their bottom line. This essay briefly summarizes Hickman and Kerska’s case for a narrower reading of the AIA and then responds with three criticisms of the authors’ argument. Specifically, I argue (1) that the history of the AIA is at best inconclusive as to whether the statute should be construed broadly or narrowly; (2) that developments in federal tax and administrative law since 1867 do not weigh decisively in favor of a narrow interpretation of the statute; and (3) that the AIA has come to play an important role—unacknowledged in Hickman and Kerska’s otherwise comprehensive analysis—in protecting an under-resourced IRS from an onslaught of administrative law challenges across a wide range of litigation forums. I end by arguing that any further narrowing of the AIA should be done by Congress—not by the courts—and should be accompanied by an increase in IRS resources and additional limits on taxpayer forum shopping.

I. Lost and Found?

Hickman and Kerska begin their argument for a narrower AIA with a deep dive into the statute’s history. As they write, “historical analysis provides a powerful tool for resolving the AIA’s meaning and scope.”[16] Yet this “powerful tool” turns out to be a double-edged sword: the lessons that the authors draw from the AIA’s history can be deployed to argue for either a narrow or expansive reading of the statute.

The story starts with the Revenue Act of 1862,[17] the first federal income tax law to take effect.[18] As Hickman and Kerska explain, this statute—enacted in the midst of the Civil War—empowered the President to divide the country into districts and to appoint “assessors” and “collectors” to administer the new tax law in each district.[19] The job of the assessors and their assistants was to receive returns, conduct investigations to determine whether taxpayers had understated their liability, publish tentative assessments, resolve appeals, and then make out a list of amounts due. Section 19 of the Revenue Act of 1862 instructed collectors to publish those lists and, if need be, seize and sell the property of tax delinquents.[20]

The AIA enters the narrative a half decade in. Styled as an amendment to be appended to Section 19, it provided (in language that has changed little in the years since) that “no suit for the purpose of restraining the assessment or collection of tax shall be maintained in any court.”[21] Neither the sponsor of the amendment, Senator William Fessenden of Maine, nor any other member of the House or Senate said anything on the record about the provision’s purpose, leading one later commentator to conclude that the Act’s “legislative history is shrouded in darkness.”[22] But according to Hickman and Kerska, “Congress did not need to be more specific about the AIA’s scope because the meaning of the new restriction on judicial review was obvious from its statutory context.”[23] As they see it, the location of the new language at the end of Section 19 meant that the AIA was intended as “a limited remedy for judicial obstruction” of the “particular procedures” for assessment and collection prescribed by that Section.[24]

In the century and a half since the statute’s passage, Congress has carved out a number of specific exceptions to the AIA’s coverage. A few of those carve-outs now allow for prepayment petitions in Tax Court;[25] innocent spouse relief;[26] and injunctions in cases where a taxpayer seeks a hearing before the IRS seizes her property[27]a preparer seeks to delay collection of penalties against her,[28] or a person other than a delinquent taxpayer seeks to block the sale of property in which she holds an interest.[29] As Hickman and Kerska observe, “the only amendments to the AIA have come when Congress wanted to expand the availability of judicial review and, correspondingly, to make clear Congress’s intention to limit the AIA’s reach.”[30] The authors appear to interpret this as an indication that Congress favors a narrower AIA.

Three further developments play an important role in Hickman and Kerska’s narrative. The first involves the Tax Injunction Act of 1937 (TIA), which provides that federal district courts “shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.”[31] In the 2015 case Direct Marketing Association v. Brohl, the Supreme Court held that the TIA does not prevent a federal court from enjoining a Colorado law requiring out-of-state retailers to share certain tax-related information with Colorado tax authorities.[32] The Supreme Court also said that it “assume[d] that words in both [the Anti-Injunction and Tax Injunction] Acts are generally used in the same way” and so would interpret the two statutes in tandem.[33] According to Hickman and Kerska, “the reasoning of Direct Marketing is different from and difficult to square with at least some of the Court’s past AIA precedents.”[34] A more circumscribed construction of the Anti-Injunction Act would “bring[] the AIA in alignment” with the post-Direct Marketing TIA.[35]

Second, Hickman and Kerska note that the Administrative Procedure Act of 1946 (APA) and the Supreme Court cases construing it have established a general presumption in favor of pre-enforcement judicial review of final agency action.[36] As the Supreme Court said in Abbott Laboratories v. Gardner, “judicial review of a final agency action by an aggrieved person will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress.”[37] Interpreting the AIA to preclude pre-enforcement review of Treasury regulations puts it in some tension with the APA’s presumption of reviewability. Hickman and Kerska seek to ease that tension with a narrower reading of the AIA.[38]

Third, the authors emphasize that the federal tax laws do much more today than they used to do.[39] Important antipoverty programs, such as the Earned Income Tax Credit[40] and the Low-Income Housing Tax Credit,[41]are run through the Internal Revenue Code. Congress also uses the tax system to subsidize—and to regulate—health insurance, retirement saving, higher education, and charitable giving, among countless other tax expenditures. Hickman and Kerska fear that a robust application of the AIA will thus interfere with judicial oversight over a wide swath of the modern administrative state.

Drawing from the “lost history” of the AIA as well as these more recent developments, Hickman and Kerska propose a new “engagement test” that would “limit the AIA’s scope to those cases in which the IRS has initiated enforcement proceedings of one manner or another against a particular taxpayer” or the taxpayer has filed a return.[42]According to Hickman and Kerska, this new test would restore the Anti-Injunction Act to its “original scope” and harmonize it with the Tax Injunction Act and Administrative Procedure Act.[43] And they add that the test would be “very easy” to apply in the “vast majority” of cases, thus bringing clarity to what is now a morass of conflicting case law.[44] While they suggest that courts can adopt the test on their own, Hickman and Kerska also urge Congress to codify their new engagement test, and they propose legislative language to that effect.[45]

II. Assessing the Engagement Test

Hickman and Kerska’s “engagement test” has undeniable appeal. It provides a plausible interpretation of the AIA’s text, and by narrowing the statute’s scope, the test would ease the discomfort that many (including me) feel when legitimate challenges to Treasury regulations are tossed aside on jurisdictional grounds. And apart from the merits of the test, there is much to admire about the enterprise in which Hickman and Kerska engage. This is the sort of “practical” legal scholarship that jurists such as Judge Harry Edwards of the D.C. Circuit have urged academics to produce more often.[46]Hickman and Kerska’s article accomplishes exactly what Judge Edwards said that practical scholarship should do: it “gives due weight to cases, statutes and other authoritative texts, but also employs theory to criticize doctrine, to resolve problems that doctrine leaves open, and to propose changes in the law.”[47] Their careful and powerful argument is likely to elicit attention from judges and their clerks who come across AIA cases on their dockets.

Yet Hickman and Kerska’s inferences from the AIA’s history are also open to question. As the authors note, “[i]n 1867, when the AIA was adopted, the only circumstances in which a taxpayer might have sought injunctive relief from assessment or collection would have occurred when revenue officials acted to enforce the tax laws against particular taxpayers.”[48] Nearly eight decades before the APA and a full century before Abbott Laboratories v. Gardner, the notion that the 1867 law later would preclude pre-enforcement challenges to Treasury regulations would have seemed foreign to the Reconstruction-era Congress.

But if members of Congress in 1867 could have peered far into the future, it is not clear whether they would have wanted the AIA to apply to pre-enforcement judicial review of Treasury regulations. In Hickman and Kerska’s view, Congress wanted the statute to apply only to injunctions against assessors and collectors who were enforcing the tax laws against particular taxpayers. Hickman and Kerska also note, though, that the statute originally “forced aggrieved taxpayers to pay their taxes as assessed and sue the government for a refund” rather than pursue alternative remedial paths.[49] The alternative of a pre-enforcement challenge to a Treasury regulation was not one that existed at the time, but if it had, perhaps Congress would have wished to cut that route off too. In other words, we know that Congress wanted aggrieved taxpayers to sue for a refund rather than to seek injunctive relief against assessors and collectors, but that tells us little about whether Congress wanted to allow other end runs around the refund remedy.

The postenactment legislative history of the AIA also is amenable to competing inferences. On the one hand, the fact that Congress has narrowed the statute’s scope again and again might suggest that it disfavors an expansive reading. On the other hand, Congress clearly knows how to cut back on the AIA when it wants to, and the fact that it has stood by as courts have construed the statute expansively might suggest that Congress acquiesces to the broader interpretation. In all likelihood, very few members of Congress in the past century and a half have arrived at any opinion whatsoever as to whether the AIA should preclude pre-enforcement judicial review of Treasury regulations. The fact that Congress has carved out a number of other exceptions to the AIA does not mean that the legislative branch favors the particular narrowing that Hickman and Kerska propose.

The Supreme Court’s interpretation of the TIA in Direct Marketing Association v. Brohl also does not yield clear lessons with respect to pre-enforcement judicial review and the AIA. The similar language in the two statutes—”restrain[] the assessment . . . or collection of any tax”[50]—demands some limiting principle; otherwise, a suit to stop the construction of a state highway could be barred by the AIA or TIA because it interferes with the ability of tax authorities to travel around and do their jobs. The Court in Direct Marketing concluded that the Colorado law, which required retailers to share tax-related information with the state but did not impose any tax on them, was too attenuated from “assessment” and “collection” for it to fall within the TIA’s protection.[51] But that does not tell us whether an order that sets aside a regulation determining actual tax liabilities operates as a “restrain[t]” on assessment and collection.

The rise of pre-enforcement judicial review under the Administrative Procedure Act fails to illuminate the Anti-Injunction Act’s scope any further. Hickman and Kerska write that “Congress, in Section 559 of the APA, expressly instructed courts to read the APA and specific statutes like the AIA so as to give maximum effect to both.”[52] But that is plainly not what the APA mandates. Section 559 says that the provisions of the APA “do not limit or repeal additional requirements imposed by statute.”[53] The AIA is one such additional requirement, instructing taxpayers as to when and where they can seek relief. Section 559 goes on to say that any “[s]ubsequent statute may not be held to supersede or modify [the APA], except to the extent that it does so expressly,”[54] but the Anti-Injunction Act, which precedes the Administrative Procedure Act by nearly eighty years, is not a “subsequent statute.”

The octopus-like extension of federal tax law’s tentacles into new areas of American life likewise tells us little about the AIA’s reach. To be sure, Congress circa 1867 could not have imagined that programs like the Earned Income Tax Credit and the Low-Income Housing Tax Credit would be run through the Internal Revenue Code. But members of Congress most certainly did know about the existence of the AIA when they first enacted the Earned Income Tax Credit in 1975[55] and the Low-Income Housing Tax Credit in 1986.[56] There are many reasons why lawmakers might have chosen to place these provisions in Title 26 and to assign administrative responsibility to the IRS, but the fact that the AIA would shield regulations under these provisions from pre-enforcement judicial review might have been one attraction. At the very least, if one believes that Congress carefully placed the AIA where it did in 1867 so as to send a signal regarding the provision’s scope, it becomes difficult to argue that Congress scattered other provisions throughout the Internal Revenue Code by sheer accident or happenstance.

None of this is to suggest that the inferences drawn above from the Anti-Injunction Act’s history, the Supreme Court’s Tax Injunction Act case law, and subsequent developments in federal administrative and tax law are more plausible than the conclusions that Hickman and Kerska reach. Rather, the point is that the materials upon which Hickman and Kerska rely are inconclusive. Neither the partisans for a broader reading of the AIA nor the proponents of a narrower interpretation can claim that the historical origins, statutory context, or subsequent developments in administrative law and Tax Injunction Act jurisprudence confirm the correctness of their position. At least as I see it, the debate over the AIA’s proper scope ultimately turns on normative arguments that are based on contemporary concerns and conditions. The AIA’s “lost history” can inform this debate but cannot resolve it.

III. A Modern Anti-Injunction Act

Against a present-day backdrop, the AIA stands out as peculiar in several respects. First, the fears that seem to have motivated the statute’s enactment appear outmoded today. In light of our modern pay-as-you-go tax system as well as the United States’ access to deep and liquid capital markets, it is hard to imagine any injunction seriously disrupting the flow of federal revenue.[57] And insofar as the law was intended to protect individual local tax collectors from vexatious litigation,[58] there is something strange about using it to shield the IRS as a whole from suit.

Meanwhile, the statute sometimes dictates not merely the time and forum of taxpayer challenges but whether such challenges will be pursued at all. Consider the inversion-related regulations at issue in Chamber of Commerce v. IRS.[59] The special tax on domestic companies leaving the country is sufficiently steep that the very possibility of having to pay it will deter many firms from moving their legal domicile abroad. The in terrorem effect of certain Treasury regulations may be so great that the rules will remain immune from challenge unless they can be contested in a pre-enforcement action. While the inversion regulations strike me as an appropriate exercise of IRS authority, there is certainly something disconcerting about the notion that the IRS could issue legally defective rules and escape judicial oversight.

Yet even if the AIA has outlived its original purpose, and even if it yields normatively unattractive consequences in certain circumstances, the statute still serves at least two useful ends. First, it relieves some of the immense pressure on the IRS’s already-strained regulatory resources. As Hickman has argued elsewhere, temporary Treasury regulations, IRS revenue rulings, and other guidance documents issued by the IRS may be vulnerable to APA challenges on the grounds that these pronouncements did not go through the notice-and-comment process required for so-called “legislative rules.”[60] Yet as Hickman also acknowledges, broad application of the notice-and-comment requirement to temporary Treasury regulations and other IRS pronouncements would make it more difficult for the agency to respond to taxpayers’ need for guidance and could at times be “ridiculously wasteful.”[61] And this is at a time when the IRS has precious few resources to waste: the agency’s workforce is only two-thirds of what it was a quarter century ago,[62] and the Trump administration’s most recent budget proposes base funding for the agency that, in real terms, is down by more than one-fifth since 2010.[63] By delaying challenges to IRS pronouncements, the AIA gives the agency additional time to complete the notice-and-comment process for final rules while also allowing it some flexibility in issuing temporary regulations and other stopgap measures.

Second, and in a similar vein, the AIA protects the IRS from forum shopping by plaintiffs who otherwise would seek a nationwide injunction in the friendliest district court that they could find. Without the AIA, sophisticated taxpayers and the interest groups that represent them would enjoy a “general hunting license” to fire at the IRS in different jurisdictions until one of their shots strikes flesh.[64] This is not a problem unique to the IRS: other commentators have noted that the increasingly widespread use of nationwide injunctions poses a growing challenge to administrative agencies of all sorts.[65] But the fact that this problem plagues other administrative agencies is not a reason to foist it upon the IRS as well. Narrowing the AIA without also reining in the practice of nationwide injunctions would make an already-significant problem that much worse.[66]

Against these benefits must be weighed the cost of delaying a day in court for taxpayers with valid grievances. But existing Supreme Court case law construing the AIA ameliorates some of the statute’s more draconian effects. The Supreme Court has held that the AIA applies “only when Congress has provided an alternative avenue for an aggrieved party to litigate its claims on its own behalf;”[67] if there is no way for a party to challenge an IRS determination in a later Tax Court proceeding or refund suit, the party can seek a pre-enforcement remedy. The Supreme Court also has carved out a limited exception allowing pre-enforcement injunctions when the challenger can show that she would suffer “irreparable injury” from a delay and that the IRS could not possibly prevail on the merits.[68] As noted above, this still deters some taxpayers from challenging certain IRS positions indefinitely. For example, a company is unlikely to undertake a merger so that it can move its legal domicile overseas unless it can be sure that it will avoid the special tax that is at issue in Chamber of Commerce.[69] But in most cases in which a taxpayer seeks a deduction or contests the inclusion of an item in income, the statutory scheme ultimately allows her a judicial hearing and the possibility of full relief.

To be sure, the AIA is a rather roundabout way of writing a statute to achieve the goals I have laid out for it. A more direct approach would be for Congress to (1) fund the IRS appropriately and (2) establish limits on forum choice that mitigate the risk of nationwide injunction shopping. The latter objective might be accomplished through a jurisdictional statute that allows pre-enforcement challenges to Treasury regulations exclusively in the U.S. District Court for the District of Columbia, with appeal to the D.C. Circuit. In contrast, a ban (with limited exceptions) on equitable actions against the IRS appears to be overbroad.

Yet in our far-from-first-best world, with a woefully underfunded IRS and few apparent limits on the ability of district courts to issue nationwide injunctions, the notion of narrowing the AIA so as to allow pre-enforcement judicial review of tax regulations seems to me like a risky gambit. Better, in my view, for courts to defer to Congress and for Congress to pair any amendment to the AIA with a boost in IRS funding and a forum provision like the one described above. To whittle down the AIA without simultaneously bolstering the IRS’s defenses would be to expose the tax authority to an onslaught that could overwhelm it.

There are commonalities between this argument and elements of Hickman and Kerska’s case for a narrower AIA. Although their title highlights their appeal to history, their analysis accounts for the more recent evolution of the federal tax system. But while they emphasize the expansiveness of the current Code, my focus is on the hollowed-out agency that has been tasked with interpreting and administering our tangle of tax statutes. To be sure, I cannot claim that my view of the AIA as a shock-absorber for the IRS is deeply rooted in the statute’s nineteenth-century history. But it is attentive to the reality of twenty-first-century tax administration.

Where does that leave us as to the AIA’s reach? In my view, the Supreme Court’s AIA case law supplies a serviceable test. First, a court considering a pre-enforcement challenge to a federal tax would ask whether the challenger would have a subsequent opportunity to litigate the claim on her own behalf in the Tax Court or in a refund suit. If no, the suit could proceed.[70] If yes, the AIA would bar relief unless the challenger could show both “irreparable injury” and “certainty of success on the merits.”[71] On this view, preemptive strikes against Treasury regulations would in most cases fail. They would succeed only when Congress has provided the challenger with no other avenue for redress or when the IRS’s action is both indefensible and irremediable.

In sum, the flurry of regulatory activity that we are likely to see soon from the IRS makes the question at the heart of Hickman and Kerska’s article—whether the AIA bars pre-enforcement judicial review of tax regulations—vitally important. But the same factor that makes their analysis so relevant should also give us pause regarding the solution that they propose—a solution that would place further stress on an IRS that already appears to be buckling under the burden of the new tax law.[72] Hopefully there will arrive a time in the not-too-distant future when resource constraints are less binding and process values can be vindicated. If at that point Congress revisits the statute, Hickman and Kerska’s “engagement test” strikes me as a viable template for an updated AIA. Again, timing is everything. And the time for the “engagement test” has yet to come.

 

 

*Assistant Professor of Law, University of Chicago Law School. For helpful comments, the author thanks Ellen Aprill, Wei Cui, Cliff Flemming, Andy Grewal, Kristin Hickman, Aaron Nielson, and Jacob Ruby. All errors are my own.

[1] See An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, Pub. L. No. 115–97, § 11011 (2017) (deduction for qualified business income of pass-thru entities); id. § 13823 (opportunity zones); id. § 14401 (base erosion minimum tax); see also David J. Kautter & William M. Paul, U.S. Dep’t of the Treasury, 2017–2018 Priority Guidance Plan (Second Quarter Update) (Feb. 7, 2018), https://perma.cc/FZF9-55LB (listing in Part 1 of the plan some of these and several other goals as “near term priorities” for the “initial implementation” of the 2017 tax law”).

[2] See, e.g., Joseph Bankman et al., Federal Income Taxation 42 (17th ed. 2017).

[3] I.R.C. § 7421(a) (2012).

[4] The IRS is an agency within the U.S. Department of the Treasury, and courts commonly refer to regulations published by the IRS as “Treasury regulations.” See, e.g., PPL Corp. v. Comm’r, 569 U.S. 329, 331 (2013).

[5] Chamber of Commerce v. IRS, No. 1:16–CV–944–LY, 2017 WL 4682050, at *1 (W.D. Tex. Sept. 29, 2017).

[6] Daniel Hemel, The Chamber of Commerce Has an Anti-Injunction Problem, Yale J. on Reg.: Notice & Comment (Aug. 6, 2016), https://perma.cc/KU4S-4GPL.

[7] Chamber of Commerce, 2017 WL 4682050, at *3.

[8] Andrew Velarde, Chamber of Commerce Throws Door Open for More Reg Challenges, Tax Notes (Oct. 3, 2017), https://perma.cc/WW73-AFE8.

[9] Andy Grewal, Loss in Anti-Inversion Case Strikes Potentially Major Blow on IRS’s Rulemaking Authority, Yale J. on Reg.: Notice & Comment (Sept. 30, 2017), https://perma.cc/V5CF-M6PE.

[10] Bryan Camp, More on the Successful Challenge to the Anti-inversion Regulations, Procedurally Taxing (Oct. 2, 2017), https://perma.cc/T9SV-PFJF.

[11] Notice of Appeal, Chamber of Commerce v. IRS, No. 17–51063 (5th Cir. filed Nov. 27, 2017), ECF No. 1.

[12] Kristin E. Hickman & Gerald Kerska, Restoring the Lost Anti-Injunction Act, 103 Va. L. Rev. 1683 (2017), https://perma.cc/SJX3-FDLV.

[13] Id. at 1684.

[14] Id. at 1687, 1766.

[15] Id. at 1753–56.

[16] Id. at 1721.

[17] Ch. 119, 12 Stat. 432.

[18] Hickman & Kerska, supra note 12, at 1721–22. Congress included an income tax in the Revenue Act of 1861, ch. 45, § 49, 12 Stat. 292, 309, but that statute never took effect. See Sheldon D. Pollack, The First National Income Tax, 1861–1872, 67 Tax Law. 311, 320–21 (2014).

[19] Hickman & Kerska, supra note 12, at 1722.

[20] Id. at 1723–24; see Revenue Act of 1862 § 19.

[21] Revenue Act of 1867, ch. 169, § 10, 14 Stat. 471, 475.

[22] Note, Enjoining the Assessment and Collection of Federal Taxes Despite Statutory Prohibition, 49 Harv. L. Rev. 109, 109 & n.9 (1935).

[23] Hickman & Kerska, supra note 12, at 1725.

[24] Id.

[25] I.R.C. § 6213(a) (2012).

[26] Id. § 6015(e).

[27] Id. § 6330(e)(1).            

[28] Id. § 6694(c).

[29] Id. § 7426(a) & (b)(1).

[30] Hickman & Kerska, supra note 12, at 1731.

[31] 28 U.S.C. § 1341 (2012).

[32] 135 S. Ct. 1124, 1127 (2015).

[33] See id. at 1129.

[34] Hickman & Kerska, supra note 12, at 1711.

[35] Id. at 1757.

[36] Id. at 1684–85; see 5 U.S.C. §§ 701–706 (2012).

[37] 387 U.S. 136, 140 (1967).

[38] Hickman & Kerska, supra note 12, at 1757.

[39] Id. at 1713, 1717–20.

[40] I.R.C. § 32 (2012).

[41] Id. § 42.

[42] Hickman & Kerska, supra note 12, at 1754.

[43] Id. at 1756–57.

[44] Id. at 1758.

[45] Id.

[46] Harry T. Edwards, The Growing Disjunction Between Legal Education and the Legal Profession, 91 Mich. L. Rev. 34, 35 (1992).

[47] Id.

[48] Hickman & Kerska, supra note 12, at 1751.

[49] Id. at 1725.

[50] 28 U.S.C. § 1341 (2012); see also I.R.C. § 7421(a) (2012) (“restraining the assessment or collection of any tax”).

[51] Direct Mktg. Ass’n v. Brohl, 135 S. Ct. 1124, 1131 (2015).

[52] Hickman & Kerska, supra note 12, at 1756–57.

[53] 5 U.S.C. § 559 (2012) (emphasis added).

[54] Id. (emphasis added).

[55] I.R.C. § 32 (2012).

[56] Id. § 42.

[57] See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962) (stating that through the AIA, the federal government “is assured of prompt collection of its lawful revenue”).

[58] See id. at 7–8 (stating that a “collateral objective of the Act” is “protection of the collector from litigation pending a suit for refund”).

[59] 26 C.F.R. § 1.7874-8T (2017).

[60] Kristin E. Hickman, Unpacking the Force of Law, 66 Vand. L. Rev. 465, 492–502 (2013); see 5 U.S.C. § 553 (2012) (notice-and-comment requirement).

[61] Hickman, supra note 60, at 531.

[62] Internal Revenue Serv., Internal Revenue Service Data Book 2016, at 66 tbl. 29 (2016), https://perma.cc/48YA-VB47.

[63] Compare Office of Mgmt. & Budget, Budget of the United States Government, Fiscal Year 2019, at 90 (2018) (proposing an IRS budget of $11,100,000,000), with Office of Mgmt. & Budget, Budget of the United States Government, Fiscal Year 2011, at 119 (2010) (proposing an IRS budget of $12,147,000,000). The 2010 figure adjusted for inflation is $13,894,000,000. See U.S. Dep’t of Labor, Bureau of Labor Statistics, CPI Inflation Calculator, https://perma.cc/W3DW-88ZF (last visited Feb. 20, 2018).

[64] Gardner v. Toilet Goods Ass’n, 387 U.S. 167, 183 (1967) (Fortas, J., dissenting in part and concurring in part) (“[A]rming each of the federal district judges in this Nation with power to enjoin enforcement of regulations and actions under . . . federal law . . . is a general hunting license; and I respectfully submit, a license for mischief . . . .”).

[65] For comprehensive treatments of the subject, see Samuel L. Bray, Multiple Chancellors: Reforming the National Injunction, 131 Harv. L. Rev. 417, 418–422 (2017); Zayn Siddique, Nationwide Injunctions, 117 Colum. L. Rev. 2095 (2017).

[66] This is not to suggest that nationwide injunctions should be abolished altogether. But even those who defend the practice under some circumstances acknowledge that district courts should not use them in all circumstances. See Spencer E. Amdur & David Hausman, Response, Nationwide Injunctions and Nationwide Harm, 131 Harv. L. Rev. F. 49, 50–51 (2017).

[67] See South Carolina v. Regan, 465 U.S. 367, 381 (1984).

[68] See Bob Jones Univ. v. Simon, 416 U.S. 725, 737 (1974); Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7 (1962).

[69] See I.R.C. § 7874 (2012) (imposing tax on “inversion gain” of expatriated entities).

[70] See South Carolina, 465 U.S. at 381.

[71] See Bob Jones Univ., 416 U.S. at 737.

[72] See Editorial, Don’t Cheer as the I.R.S. Grows Weaker, N.Y. Times (Dec. 29, 2017), https://www.nytimes.com/2017/12/29/opinion/dont-cheer-as-the-irs-grows-weaker.html; Jeanne Sahadi, IRS Needs More Money to Implement the New Tax Law, CNN Money (Jan. 10, 2018), https://perma.cc/6AQM-MMNJ.

When White Supremacists Invade a City

In August 2017, hundreds of white supremacists came to Charlottesville, Virginia, ostensibly to protest the city council’s decision to remove a statue of Robert E. Lee. This Essay argues that Charlottesville’s vulnerability in the face of white supremacist invasions is a feature of all cities’ liminal status in American law. Municipal corporations neither enjoy the full power of the state nor the rights accorded individuals and private corporations. Among other limitations, state law restricts Charlottesville’s authority to remove Confederate war memorials or to regulate firearms. So too, our current constitutional doctrine does not easily permit cities to assert First Amendment rights against state-mandated local government speech. Nor can cities readily assert a collective civil or constitutional right to be free from violence and intimidation. The lack of either municipal power or municipal rights means that a city faced with the symbolic and physical “takeover” of its downtown by heavily armed aggressors has limited legal resources with which to respond.

“That we have fallen into the habit of treating the city as a mere jurisdictional entity, subject to the whims of the state, is unnecessary. And it means that the next time the white supremacists come to town, the city will still not have the tools to defend itself.”

Introduction

CHARLOTTESVILLE is a small university town. It has a population of approximately 47,000 residents; it occupies a territory of about 10 square miles.[1] The Charlottesville “downtown” is about eight square blocks. The city has a part-time city council and mayor, a professional city manager, a city attorney and an assistant city attorney. The Charlottesville police department has 127 officers.[2] There is one high school, one synagogue, and the largest employer in town is by far the University of Virginia.

When white supremacists, neo-Nazis, and Ku Klux Klan members targeted Charlottesville in August 2017, they did so in part because the city council had voted to remove a statue of Robert E. Lee that was erected in 1924 as a symbol and reassertion of the authority and power of the Old South, in a town that is 19% African-American and overwhelmingly politically liberal.[3] The statue sits in what used to be Lee Park, until the name was changed to Emancipation Park more recently.[4]

The Unite the Right rally was promoted as a direct challenge to the idea of Charlottesville itself—a relatively socially progressive community seeking to reconcile with its apartheid past. The white supremacists came with torches and marched at night to heighten the sense of foreboding and fear that they intended to foster.[5] The marchers also carried guns, and even more elaborate weaponry—shields, mace, helmets, body armor, clubs, and flag poles.[6] The Unite the Right rally was not a march per se; it was an armed invasion, well-coordinated and planned, and intended to be a visible manifestation of force and occupation. It was, according to the organizers’ own rhetoric, an effort to assert territorial claims, to undermine the feelings of safety and security felt by Charlottesville residents.[7] The protestors chanted “Jews will not replace us,” and more generically, “You will not replace us.”[8] And they promised to keep coming back to Charlottesville—a promise they kept by returning again with a smaller group on October 7, 2017.[9]

What is the proper response of a city to this kind of ongoing threat? It is not entirely clear—at least as a legal matter. Of course, there are practical ways to deploy police to more effectively ensure public safety. Better rules of engagement can be adopted and those who act violently can be arrested.

But the city’s vulnerability is more profound, even if more difficult to address. This vulnerability is a function of the city’s—all cities’—liminal status in American law. Cities are state actors, but without the real power of the state. Constitutionally and legislatively subordinate to state legislatures, cities cannot effectively self-govern in important ways. Cities only exercise “state” power derivatively and that exercise is often and easily overridden.

At the same time, however, cities generally do not enjoy constitutional or civil rights. The city is on the “public” side of the public/private distinction in American law, which means that the city cannot be legally understood to be a victim of powerful private exercisers of violent force.

In other words, American cities are betwixt and between—they enjoy neither power nor rights. The city of Charlottesville is only nominally the state—the Virginia General Assembly exercises virtually plenary power over what it can and cannot do. Yet the city—unlike other corporate or associational entities—is also not a full-fledged rights-bearer. Under current doctrine, a city qua city cannot readily invoke the First Amendment to protect its decision to remove Confederate monuments, nor can it readily assert a collective constitutional or civil right to be free from fear and intimidation. The city has few rights, but also enjoys limited powers.

There is nothing in the nature of cities or local governments to require this state of affairs, as commentators have regularly observed.[10] Municipal corporations could assert rights against the state without threatening the state’s authority; private corporations regularly assert such rights. Similarly, the city could be granted more extensive powers by the state. Again, private corporations have significant authority to govern themselves even while being subject to the state’s general laws.

That cities are limited in their legal capacity is mostly a matter of judicial habit. But this habit has consequences. Unable to exercise the full power of the state but also denied the rights enjoyed by individuals and other corporate bodies, the city finds itself unable to respond to existential threats.

I. The City’s Power

The foundational reality for cities in America is that any power they exercise is—as a legal matter—derivative. Citizens and elected officials in Charlottesville debate what the city can do in response to invading paramilitary, neo-Nazi forces. But the answer is not a great deal, for one major reason: much of the power and authority to act is lodged not in city officials but in state officials, namely in the Virginia General Assembly.

Cities are weak legal creatures, and cities in Virginia are particularly so. Virginia is a so-called “Dillon’s Rule” jurisdiction.[11] Formulated by jurist John Dillon in 1868, Dillon’s rule requires that all exercises of city power be traced back to a specific legislative grant of authority.[12] Dillon’s Rule is often contrasted with “home rule” jurisdictions, in which cities enjoy a broader initial grant of authority and are able to act without specific authorization. The practical differences between Dillon’s Rule and home rule jurisdictions, however, can be slight—a difference of emphasis more than outcome—because even in states with home rule, legislatures can normally override municipal laws with conventional legislation. States do so with increasing regularity.[13]

Two Virginia state laws are relevant in Charlottesville’s case. The first is the Commonwealth’s “open carry” statute, which permits individuals to carry weapons openly on their person except under limited circumstances.[14] Virginia’s open carry law complicates the city’s ability to regulate and control armed protestors. At the August 12 Unite the Right rally, hundreds of protestors (and a few counter-protestors) marched through the city brandishing their semi-automatic weapons.[15] Many protestors were associated with various non-state “militias” that had mustered from different parts of the country—mostly out-of-state. The militia members were in many cases uniformed—some wore helmets, body armor, and carried military-style backpacks and other paraphernalia. For that reason, they were sometimes mistaken for police or national guardsmen.[16]

Arms and the First Amendment create a combustible combination.[17] Jurisdictions have regularly restricted the items that protestors can carry in public places during First-Amendment-protected activities.[18] But in Virginia, local governments are preempted by state law from regulating almost any aspect of firearms ownership and use absent explicit state authorization.[19] The Charlottesville police were constrained in restricting the carrying of guns by Virginia’s laws.[20] If the city had the authority, it would undoubtedly have adopted much more restrictive gun laws than the Commonwealth. But the city does not have that power.

So too if it had the authority, the city would have removed the Robert E. Lee statue that provided the excuse for the armed protestors to march in the first place.[21] But here too state law governs local decisions. Virginia law authorizes localities to erect war memorials to certain wars (including the “War Between the States”) and then bars their removal.[22] This “statue statute” was amended in 1997 to include cities within its ambit.[23] A currently contested question is whether the law applies to Charlottesville’s Confederate monuments, which were constructed before 1997. A Charlottesville circuit court has ruled that it does, while a different circuit court, the Governor, and the Commonwealth’s Attorney General have all asserted that it does not.[24] Charlottesville’s statue of Robert E. Lee was erected in 1924, at the same time that the city created the park in which the statue sits.

There is a strong argument for applying the statute only going forward. In a Dillon’s Rule state, localities only have the powers expressly granted, and the predecessor statute to the 1997 version never granted authority to cities to build Confederate war memorials in the first place. Early versions of the war memorial statute—going back to 1904—expressly authorized counties to erect war memorials and restricted their ability to remove them.[25] When the Lee statue was built, Charlottesville must have been acting under a different grant of authority, and one that never contained a restriction on removal. In 1924, Virginia cities enjoyed a general grant of authority to build, maintain, and beautify parks—a provision that would arguably include putting up statuary.[26] Telling Charlottesville that it is stuck with the monuments it erected in the early part of the twentieth century under a grant to beautify its parks seems like the imposition of a restriction that was not contemplated at the time.

Whether the statute applies only going forward or also to previously erected monuments, however, the point remains the same: the legislature exercises unquestioned control over a city’s decision to erect or remove a war memorial wherever it stands. The statuary in local parks, along local avenues, and in town squares is a matter of state authorization and restriction, at least going forward. The General Assembly could clarify its authorization at any time to permit local governments to remove Confederate monuments. It has instead attempted to do the opposite—passing a 2016 law that the Governor vetoed that would have made clear that the current statute applies retroactively.[27]

Why adopt such a restraint on local authority? It is not entirely clear. A predecessor version of the war memorial statute applied only to Confederate monuments, authorizing their erection and forbidding their removal.[28] Perhaps the General Assembly was worried that some in the community would find the valorization of Confederate soldiers and generals ill-timed or insulting—after all, the Confederates were traitors to the Union. And African-American residents of these places might have different views as to the appropriate memorialization of such men.

Perhaps the legislature thought that future generations might look less kindly on these old generals, or might simply decide to commemorate something else, as memories dimmed and tastes changed. Like many Confederate memorials throughout the South, Charlottesville’s Lee statue was erected in what was originally a whites-only park, as a symbol of racial supremacy during Jim Crow.[29] Its purpose and message was to reassert white southern identity and celebrate a distinctly southern nationalism.[30]

If one asks what sorts of government tasks should be allocated to what level of government, decisions regarding statuary in a local park would seem to be best made by local communities. Why does the state-wide political community care whether Charlottesville has a Lee statue in the middle of now-Emancipation Park? If we begin with a presumption of subsidiarity—a principle that governmental tasks should be allocated to the most decentralized level of government that is competent to perform those tasks[31]—then one needs a rationale for regulating at the state level. The usual rationales for centralized regulation in any given case are the presence of externalities, the need for uniformity, and a concern about pathologies in the local political process that result in majoritarian oppression.

The first two are very weak in the case of Confederate statues, unless the psychic pain of the removal of the Lee statue is so great to residents living in other parts of the state that it overrides any local psychic pain of leaving it standing. Whether externalities should include psychic harms is itself an important question—most centralized regulation is justified when local regulation imposes material costs on outsiders, as when a local government adopts too lax pollution controls. Uniformity too seems unnecessary in this instance; that rationale usually applies to regulatory ordinances that impose costs on cross-border activities. That a city has or does not have a Confederate monument makes little difference in any particular cross-border enterprise.

That leaves oppression—the worry that local majorities are somehow targeting local minorities for differential (and unfavorable) treatment. Certainly there are members of the Charlottesville community who would prefer to see the Lee statue remain. But is this really the kind of majoritarian oppression we are worried about when we regulate centrally? Again, the psychic harms of removal might be real, but do they really demand the assertion of state authority over local decision-making about statues in parks?

Defenders of a general state ban on the removal of war memorials could argue that such a ban protects veterans from being dishonored by local anti-war or anti-veteran factions. But the chances of such dishonor seem slim. Veterans are likely to be well-represented in the local political process; anti-memorial groups are much more likely to lose local political fights—especially if those who oppose the memorials are a traditionally discrete and insular minority. African-American citizens may be more likely to oppose Confederate monuments—but they are generally outvoted. It is worth noting that in an initial vote, Charlottesville’s city council rejected a proposal to remove the Lee statue.[32]

Those who think that local war memorials are properly the province of state law likely would find that any action that locals take with which they disagree is grounds for centralized regulation. So too with regard to open carry laws. For those who believe in strong gun rights, local restrictions are anathema, even if local communities might be better suited to consider the conditions under which guns might be productively regulated. Urban places, for example, might have very different concerns about gun use than rural ones. A sensible decentralization would likely obtain if these policies were not so ideologically fraught.

Unfortunately, a sensible division of labor is not generally the norm. Debates tend to focus on the substantive policy rather than on who should be tasked with adopting it. The location for the regulation of guns and statues is not based on principled decisions about where authority should reside, but is rather a political decision about what outcomes certain groups desire. Once local governments across the country began to take down Confederate monuments, state legislatures (mostly in the former Confederacy) began to restrict or consider restricting local power.[33] That is no surprise.

II. The City’s Rights

That the city is subject to state power is unremarkable—all individuals and corporate bodies are subject to state law. But the city is subordinate in a second way. Unlike individuals and corporations, the city does not generally enjoy countervailing property or constitutional rights. Even though Charlottesville is not the state, it is the “state.” It is conceptually difficult for the city to assert rights against the state or private rights-bearers.

The relative thinness of a municipality’s corporate rights is a function of the rise of the public/private distinction in the nineteenth century. Almost a generation ago, legal scholars Gerald Frug and Hendrik Hartog described how the municipal corporation lost its corporate privileges and became an arm of the state, while the private business corporation attained property and constitutional rights.[34] Both the municipal corporation and the business corporation were and are creatures of the state—the powers of all subordinate corporate bodies are derived from the legislature. And yet the distinction between public and private corporations means that the former are almost wholly beholden to state power, while the latter can assert the rights that all individuals enjoy against state encroachment.

One important implication of the private/public distinction is that the city cannot immediately assert a First Amendment right to speak on its own behalf.[35] Certainly war memorials, Confederate statues, and the names of parks and streets are expressive. But these acts of expression are—in the parlance of the First Amendment—”government speech”[36]—and cities, being subordinate governments, cannot readily argue that the city’s free-speech rights are being violated when the state refuses to let them decide what to say. Private corporations enjoy expansive First Amendment rights.[37] But courts have treated the municipal corporation as differently situated vis a vis state speech restrictions, even if the logic of the distinction is undertheorized.[38]

Recently, Professors Chip Lupu and Robert Tuttle argued that a First Amendment right could be asserted by city residents on the theory that the city’s removal decision implicates core free speech concerns.[39] They argue that in blocking the removal of Confederate monuments, the state is putting a thumb on the speech scale—in this case in favor of a white supremacist message that is anathema to the local community.[40] The privileging of a particular viewpoint by the state violates the Charlottesville citizens’ First Amendment rights by making it impossible for them to decide what they as a community want to say.

That “[e]ach political community—federal, state, and local—should have presumptive political autonomy to decide whom to venerate”[41] (as Lupu and Tuttle write) seems correct to me. Principles of democratic self-government and subsidiarity support that contention.

Nevertheless, the public/private distinction is a barrier to the assertion of the city’s First Amendment rights. As Lupu and Tuttle concede, the state is entitled “to choose and broadcast its own message, even if the message is obnoxious to a number of its people.”[42] Governments speak all the time. For the most part, what they say is a matter of politics and not a matter of constitutional law.

Government speech motivated by animus or speech that denigrates religious or racial minorities by sending a message of disfavored status can be challenged on constitutional grounds, however.[43] Charlottesville can certainly assert that the city’s Confederate monuments were motivated by animus (the Ku Klux Klan was a visible celebrant at the dedication of the Lee statue) and that those statues continue to express a message of disfavored status to the city’s minority communities. More importantly, the city can argue that it does not want to be associated with those messages. It wants to be able to control its own expressive acts in accordance with the views of its own political community.[44]

The public/private distinction makes such arguments doctrinally problematic. If cities qua cities do not enjoy rights, then what is the basis for a claim that a city’s speech is being unconstitutionally restricted? So too the public/private distinction makes it difficult for a city qua city to assert that private actors are threatening its peace and security. Again, the city cannot readily assert a right to be free from intimidation and violence, even if it is under siege from well-organized and well-supported private actors.

Consider two lawsuits arising out of the Unite the Right events. In the first, filed in federal court, members of the Charlottesville community who were injured in the protests are suing white supremacist organizers and actors for conspiring to deprive them of their constitutional rights.[45] They are using a federal statute[46]—the so-called Ku Klux Klan Act (codified at 42 U.S.C. § 1985 and § 1986)—which was intended to counter the power of private vigilante groups to prevent them from terrorizing newly-freed black slaves.[47] The Ku Klux Klan exercised de facto political and coercive power in Charlottesville and in many places in the South (and sometimes in the North)—often operating hand-in-hand with local authorities.[48] That history is a good example of how public rights can be undermined by private actors exercising something that looks like public power.

A second lawsuit has been filed in state court on behalf of the City of Charlottesville, a group of local businesses, and a number of neighborhood associations.[49] That lawsuit seeks an injunction to prevent the return of well-armed militias to the city pursuant to the Virginia Constitution, which states that “in all cases the military should be under strict subordination to, and governed by, the civil power.”[50] The complaint also asserts that the defendant militias engaged in unlawful paramilitary activity in violation of the Virginia Code[51] and that their activities constituted a public nuisance.[52]

Both lawsuits will have to run a First Amendment gauntlet, though the allegations in the complaints together appear to establish that the Unite the Right rally participants engaged in a well-organized effort to threaten and terrorize the city’s residents and commit acts of violence against them.[53] Based on the alleged facts, the protestors’ exercise of constitutionally-protected free speech was incidental to the actual purpose and outcome of their gathering—to spread fear and induce violence against the local populace.

Those acts represent a moment when the state lost control of a central feature of its “stateness.” As the city’s complaint observes “[t]he establishment of private armies is inconsistent with a well-ordered society and enjoys no claim to protection under the law.”[54] Without the capacity to control private paramilitary groups, Charlottesville revealed itself to be a vulnerable party, unable to meet its basic obligation to defend its citizens from violence. In the lawsuit to which it is a party, Charlottesville invokes state power. It seeks to reassert its monopoly on violence by clothing itself in the Commonwealth’s authority to control the militias.

That the city cannot readily join the first lawsuit and has to seek a judicial decree to enforce the state’s basic obligation in the second is telling. On the one hand, the city lacks an injury to a cognizable constitutional right—the city qua city enjoys no such rights. On the other hand, the city appears to have limited power to counter the non-state exercise of coercive force. The city’s duty “to protect public safety was undercut”[55] by the militias, which acted as if they were the police and military. The city’s capacity to protect its citizens was also undercut by the Commonwealth of Virginia, which is the ultimate repository of the monopoly on force and failed effectively to assert it. In the state’s absence, the city has limited capacity to act on its own.

The two complaints are remarkable documents. They reveal a set of interlocking organizations and leaders intent on asserting territorial domination—at least for a short time—over a small university town. The white supremacists mock the mayor, threaten civilians with violence, and make plans for repeated invasions. The purposes and goals of the Unite the Right rally are asserted in military terms—the enemy is the city.[56] The city itself is under siege—physically and mentally—a “takeover” of space that is symbolic of the larger assertion of white supremacy and religious superiority.

More disturbing, however, is the city’s seeming impotence in the face of these threats. The city’s weakness is not in the main a function of its politics or administration (though important questions have been raised about the city’s preparation and response to the events of August 11–12[57]). Whatever the city administration did or failed to do on those days, the city’s legal and constitutional vulnerability remains the same. Limited in its exercise of power and rights, the city can only urge the state to grant it powers or to assert state power on the city’s behalf.

Conclusion

We should worry about this state of affairs, both in the immediate aftermath of white supremacist invasions and more generally. The city is vulnerable in that it is subordinate to the state, which can and does limit the city’s authority significantly.[58] The city is also vulnerable because it is subject to domination by private actors, which can and do imperil the city’s safety, security, and economic stability. We treat cities as if they are exercising state power, but municipal corporations exercise significantly less power than do their private counterparts, as Gerald Frug argued more than twenty-five years ago.[59]

Nevertheless, we demand a great deal from the city—and from sub-state governments of all kinds. Local governments in the United States are charged with effectuating the “police power”: regulating for the health, safety, and morals of the populace. Cities are asked to foster economic development, provide basic services, respond to environmental, public health and other crises, and adopt effective rules and regulations that are responsive to citizens’ needs and desires. These broad responsibilities often come with limited capacity, as the legislature tends to be stingy in its grants of authority or regularly preempts local laws with which it disagrees.

In the case of Charlottesville, state laws limiting the ability of the city to regulate guns or remove controversial war memorials have hampered the city’s efforts to respond to the white supremacist threat. At the same time, the absence of clear and unambiguous municipal rights—a right to local self-expression or a right to live without fear—means that the city cannot readily assert claims on its citizens’ behalf when the state is unresponsive or when private actors threaten the city’s well-being.

To be sure, the city’s well-being is not a legal concept. The city is a jurisdiction, a government, and a state actor for purposes of constitutional doctrine. It is also a place with a history and a people, however. It is an association, a polity, and a community. The law could treat Charlottesville as a substantive rights-holder; it could recognize the existence of municipal powers derived from the locally-governed. That we have fallen into the habit of treating the city as a mere jurisdictional entity, subject to the whims of the state, is unnecessary. And it means that the next time the white supremacists come to town, the city will still not have the tools to defend itself.

 

 

*Perre Bowen Professor, Joseph C. Carter, Jr. Research Professor of Law, University of Virginia School of Law. Many thanks to Jill Rubinger for research assistance, to Amanda Lineberry for fruitful discussions, and to the staff at the Virginia Law Review for their editorial support. 

[1]2016 Charlottesville QuickFacts, U.S. Census Bureau, https://perma.cc/SP7U-4VQE.

[2]Charlottesville Police Dep’t, 2016 Annual Report 2 (2016), https://perma.cc/KC2M-PCJ6.

[3]2016 Charlottesville QuickFacts, supra note 1; Chris Suarez, Charlottesville City Council Votes to Remove Statue from Lee Park, The Daily Progress (Feb. 6, 2017), https://perma.cc/2TJN-WPGC.

[4]Jacey Fortin, The Statue at the Center of Charlottesville’s Storm, N.Y. Times (Aug. 13, 2017), https://www.nytimes.com/2017/08/13/us/charlottesville-rally-protest-statue.html.

[5]See Joe Heim, Recounting a Day of Rage, Hate, Violence and Death, Wash. Post (Aug. 14, 2017), https://perma.cc/8VJU-U64N. See also Complaint at 46, Sines v. Kessler, No. 3:17-cv-00072 (W.D. Va. Oct. 12, 2017) [hereinafter Sines Complaint]; Complaint at 30, City of Charlottesville v. Penn. Light Foot Militia, No. 3:17-cv-00078-GEC (Va. Cir. Ct. Oct. 27, 2017) [hereinafter Penn. Light Foot Militia Complaint].

[6]See Sines Complaint, supra note 5, at 2; William J. Antholis, Two Blocks from the Culture War, The Miller Center (Aug. 13, 2017), https://perma.cc/7T65-KEGX; Paul Duggan, Militiamen Came to Charlottesville as Neutral First Amendment Protectors, Commander Says, Wash. Post (Aug. 13, 2017), https://perma.cc/HV2E-KDUK; Jon Sharman, Militia Force Armed with Assault Rifles Marches Through US Town Ahead of White Nationalist Rally, The Independent (Aug. 12, 2017), https://perma.cc/82WV-2K6S.

[7]Natasha Bertrand, Here’s What We Know About the ‘Pro-White’ Organizer of ‘Unite the Right,’ Who Was Chased out of His Own Press Conference, Business Insider (Aug. 14, 2017), http://www.businessinsider.com/who-is-jason-kessler-unite-the-right-charlottesville-2017-8 (“We’re trying to show that folks can stand up for white people. The political correctness has gotten way out of control, and the only way to fight back against it has been to stand up for our own interests.”);Vincent Law, The ‘Unite the Right’ Rally Is Going to Be a Turning Point for White Identity in America, AltRight.com (Aug. 5, 2017), https://perma.cc/JF4R-3UBS.

[8]Sines Complaint, supra note 5, at 20; Heim, supra note 5.

[9]Henry Graff, Richard Spencer Plans Return to Charlottesville, NBC 29 WVIR-TV (Oct. 25, 2017, 6:18 PM), http://www.nbc29.com/story/36573304/richard-spencer-plans-return-to-charlottesville; Matt Stevens, White Nationalists Reappear in Charlottesville in Torch-Lit Protest, N.Y. Times (Oct. 8, 2017), https://nyti.ms/2y2qM1d.

[10]See Gerald E. Frug, City Making: Building Communities Without Building Walls 3–4 (1999); Richard Schragger, City Power: Urban Governance in a Global Age 1–2 (2016). For a specific argument, see Kathleen S. Morris, The Case for Local Constitutional Enforcement, 47 Harv. C.R.-C.L. L. Rev. 1, 1 (2012).

[11]Commonwealth v. Cty. Bd. of Arlington Cty., 232 S.E.2d 30, 40–41 (Va. 1977).

[12]City of Clinton v. Cedar Rapids and Mo. River R.R. Co., 24 Iowa 455, 475 (1868).

[13]See Richard Schragger, The Attack on American Cities, ___ Tex. L. Rev. ___ (forthcoming 2018) (manuscript at 2–3), https://ssrn.com/abstract=3026142.

[14]In Virginia, the open carrying of certain handguns is prohibited in specific populous cities and counties. See Va. Code Ann. § 18.2-287.4 (2014). Virginia law also states that the prohibition against carrying a concealed weapon “shall not apply to a person who has a valid concealed handgun permit.” Id. § 18.2-308.01. The Virginia statute regarding firearm reciprocity states: “A valid concealed handgun or concealed weapon permit or license issued by another state shall authorize the holder of such permit or license who is at least 21 years of age to carry a concealed handgun in the Commonwealth.” Id. § 18.2-308.014.

[15]Frances Robles, As White Nationalist in Charlottesville Fired, Police ‘Never Moved,’ N.Y. Times (Aug. 25, 2017), https://www.nytimes.com/2017/08/25/us/charlottesville-protest-police.html.

[16]Penn. Light Foot Militia Complaint, supra note 5, at 21–22; see also Joanna Walters, Mistaken for the Military: The Gear Carried by the Charlottesville Militia, The Guardian (Aug. 15, 2017), https://perma.cc/4UMR-WLZD.

[17]See Kendall Burchard, Your ‘Little Friend’ Doesn’t Say ‘Hello’: Putting the First Amendment Before the Second in Public Protests, 104 Va. L. Rev. Online 30, 31–32 (2018).

[18]Emily Alpert Reyes, L.A. Bans Pepper Spray, Baseball Bats, Weapons and Other Items at Protests, L.A. Times (Oct. 31, 2017), https://perma.cc/3UAU-ZXAQ.

[19]See Va. Code Ann. § 15.2-915 (2014). The Virginia legislature has not regulated the possession of rifles at rallies and protests, but maybe they should. See Martin London, Why States Should Ban Guns From Political Rallies, Time (Aug. 22, 2017), https://perma.cc/P68L-9KAZ.

[20]See Hunton & Williams, Independent Review of the 2017 Protest Events in Charlottesville, Virginia, Final Report, at 156–57 (Dec. 1, 2017), https://www.hunton.com/‌images/content/3/4/v2/34613/final-report-ada-compliant-ready.pdf.

[21]Suarez, supra note 3; Payne v. City of Charlottesville, No. CL 17-145, 2017 Va. Cir. LEXIS 323 at *1 (Oct. 3, 2017) (ruling on demurrer).

[22]Va. Code Ann. § 15.2-1812 (2012).

[23]1997 Va. Acts, ch. 587, at 1114.

[24]See Amanda Lineberry, Payne v. City of Charlottesville and the Dillon’s Rule Rationale for Removal, 104 Va. L. Rev. Online 45, 47–48­ (2018); see also Richard Schragger, Opinion, Is Charlottesville’s Robert E. Lee Statue Illegal?, Richmond Times-Dispatch (Aug. 30, 2017), https://perma.cc/F6AK-QZ83.

[25]Lineberry, supra note 24, at 49.

[26]Id. at 46­–47.

[27]The proposed amendment eliminated the key conditional, prospective phrase (“[i]f such are erected”) and in its place added “the provisions of this subsection shall apply to all such monuments and memorials regardless of when erected” attempting to apply the war memorial statute retroactively. H.B. 587, 2016 Gen. Assemb., 2016 Sess. (Va. 2016) (proposed amendment); see also Governor’s Veto of H.B. 587, 2016 Gen. Assemb., 2016 Sess. (Va. 2016).

[28]See 1904 Va. Acts, ch. 29, at 62.

[29]Mark Jacob, How a Former Chicago Office Boy Built Charlottesville’s Gen. Lee Statue, Chi. Trib. (Aug. 18, 2017), http://www.chicagotribune.com/news/history/ct-charlottesville-robert-e-lee-statue-chicago-20170818-story.html (“The deed for McIntire Park described it as ‘a public park and playground for the white people of the City of Charlottesville.’”).

[30]S. Poverty L. Ctr., Whose Heritage? Public Symbols of the Confederacy 15, 35 (April 21, 2016), https://perma.cc/2W6G-6CKM.

[31]Markus Jachtenfuchs & Nico Krisch, Subsidiarity in Global Governance, 79 Law & Contemp. Probs. 1, 1 (2016) (“Subsidiarity is typically understood as a presumption for local-level decisionmaking, which allows for the centralization of powers only for particular, good reasons.”).

[32]Council of the City of Charlottesville, Council Chambers Minutes, at 12 (Jan. 17, 2017), https://perma.cc/T6LU-VX8P.

[33]See Alabama Memorial Preservation Act of 2017, 2017 Ala. Laws 354 (Alabama, the most recently passed restriction); see also Ga. Code Ann. § 50-3-1(b)(1) (2013) (Georgia); N.C. Gen. Stat. § 100-2.1(b) (2015) (North Carolina); S.C. Code Ann. § 10-1-165 (2009) (South Carolina).

[34]Hendrik Hartog, Public Property and Private Power: The Corporation of the City of New York in American Law, 1730–1870, at 223 (1983); Gerald E. Frug, The City as a Legal Concept, 93 Harv. L. Rev. 1057, 1065–66 (1980); see also Trs. of Dartmouth Coll. v. Woodward, 17 U.S. (4 Wheat.) 518, 659–60 (1819) (dividing private corporations—which are founded by individual contributions of property—from public corporations—which are founded by the government without individual contributions).

[35]For a discussion of municipal speech, see David Fagundes, State Actors as First Amendment Speakers, 100 Nw. U. L. Rev. 1637, 1641 (2006).

[36]Id. (“Courts and commentators alike have long dismissed the notion that the Speech Clause could serve as a source of constitutional protection for government speech.”).

[37]See, e.g., Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 319 (2010) (finding that the government may regulate corporate speech through “disclaimer and disclosure requirements, but it may not suppress that speech altogether”); First Nat’l Bank v. Bellotti, 435 U.S. 765, 784 (1978) (taking expansive view of corporation speech rights).

[38]See, e.g., Anderson v. City of Boston, 380 N.E.2d 628, 635–37 (Mass. 1978) (holding that Boston had no First Amendment right to disregard the state’s campaign finance statute restricting the city’s use of monies in a referendum campaign); City of Boston v. Anderson, 439 U.S. 1060 (1979) (dismissed for want of substantial federal question). For a discussion, see David J. Barron, The Promise of Tribe’s City: Self-Government, the Constitution, and a New Urban Age, 42 Tulsa L. Rev. 811, 819–23 (2007) (describing Boston’s argument that it should be entitled to the same speech protections as private corporations). It should be noted that though the Supreme Court has not directly addressed a state restriction on municipal political speech since Anderson (and did not do so in that case), the Court has held that municipal political advocacy is government speech, immune from challenges by dissenting taxpayers. See Walker v. Texas Div., Sons of Confederate Veterans, 135 S. Ct. 2239, 2246 (2015) (insulating municipal government speech from challenge by dissenting taxpayers); Pleasant Grove City v. Summum, 555 U.S. 460, 467–68 (2009) (same). For an early theory of municipal speech rights, see Mark G. Yudof, When Governments Speak: Toward a Theory of Government Expression and the First Amendment, 57 Tex. L. Rev. 863, 870 (1979). For a discussion of municipal speech rights, see Mosdos Chofetz Chaim, Inc. v. Vill. of Wesley Hills, 701 F. Supp. 2d 568, 598–99 (S.D.N.Y. 2010).

[39]Ira C. Lupu & Robert W. Tuttle, The Debate Over Confederate Monuments, Take Care (Aug. 25, 2017), https://perma.cc/XCJ3-6LL6.

[40]Id.

[41]Id.

[42]Id.

[43]See Micah Schwartzman & Nelson Tebbe, Charlottesville’s Monuments Are Unconstitutional, Slate (Aug. 25, 2017), https://perma.cc/MV97-S8DW; see also, e.g., McCreary Cty. v. Am. C.L. Union, 545 U.S. 844, 875–76 (2015) (finding that government messages that favor one religion over another or religion over irreligion are suspect under the Establishment Clause); Vill. of Arlington Heights v. Metro. Hous. Dev. Auth., 429 U.S. 252, 265 (1977) (holding the Equal Protection Clause bars government actions that have a racially discriminatory purpose or intent).

[44]For an argument along these lines, see Fagundes, supra note 35, at 1638, 1645–46; see also, e.g., Cty. of Suffolk v. Long Island Lighting Co., 710 F. Supp. 1387, 1390 (E.D.N.Y. 1989) (“A municipal corporation, like any corporation, is protected under the First Amendment in the same manner as an individual.”), aff’d, 907 F. 2d 1295 (2d Cir. 1990).

[45]Sines Complaint, supra note 5, at 1–3, 88.

[46]Id. at 87, 89.

[47]Brian J. Gaj, Section 1985(2) Clause One and Its Scope, 70 Cornell L. Rev. 756, 756 (1985).

[48]S. Poverty L. Ctr., Ku Klux Klan: A History of Racism and Violence 14, 22 (6th ed. 2011), https://perma.cc/V3AZ-UNUE (“In some counties the Klan became the de facto law, an invisible government that state officials could not control.”).

[49]Penn. Light Foot Militia Complaint, supra note 5.

[50]Va. Const. art. I, § 13; Penn. Light Foot Militia Complaint, supra note 5, at 1.

[51]Penn. Light Foot Militia Complaint, supra note 5, at 74.

[52]Id. at 76.

[53]See id. at 26–27.

[54]Id. at 1.

[55]Id. at 4.

[56]See id. at 47–48; Sines Complaint, supra note 5, at 20.

[57]John Domen, Charlottesville Citizens Vent, Criticize Leaders at Community Recovery Town Hall, WTOP (Aug. 28, 2017), https://perma.cc/6VA3-CN3X; see Hunton & Williams, supra note 20, at 4–8.

[58]Schragger, supra note 13.

[59]Frug, supra note 34, at 1065–66.

 

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