When government officials express intent to disparage or discriminate against a group, the constitutional consequences can be severe, but they are rarely imposed. In this Article, I argue that discriminatory motive is, and should be, enough to declare government acts unconstitutional. Second, I argue that the main reason why is the harm it causes to government legitimacy. While some argue that the concern with intentional discrimination is its harm, such as stigmatizing effect, I argue that the focus should not be on harm, but on how it delegitimizes government. I make the descriptive claim that constitutional doctrine, in its broad outlines, reflects a legitimacy-based view. In the Equal Protection context, courts have set out how discriminatory goals are not legitimate state interests. In the executive action context, courts state that absent a legitimate and bona fide justification, the Executive may not have power delegated from Congress to act. What courts have not done is specified what happens when the hammer falls: how intent disables government policymaking and for how long. The legitimacy-focused approach can neutralize government decisions, even when the government tries to re-do its policy and claim new reasons. Third, I argue that the legitimacy-focused approach toward constitutional intent doctrine that I advance in this Article is normatively preferable. The approach does incentivize insincere reasons for government actions. However, I argue that the advantages outweigh those costs. There are real benefits to even insincere expressions of non-discrimination. Conversely, when the government makes discriminatory statements, this is very strong evidence of discriminatory motive. During a time of nationwide litigation of intentional discrimination claims in areas including immigration rights, voting rights, and religious non-establishment, it has never been more important to set out the doctrine, the costs, and the consequences of unconstitutionally illegitimate intent.
Article
Administrative Rationality Review
Under the familiar rational basis test, a court must uphold a challenged statute if there is any conceivable basis to support it. Courts routinely accept speculative—even far-fetched—justifications that few would describe as “rational” in a colloquial sense. Modern rational basis review typically is justified as a necessary concession to the nature of the legislative process. The puzzle is why courts apply this same deferential standard when reviewing constitutional challenges to administrative agency actions. Neither courts nor scholars have explained why administrative agencies—which share few of the features of democratically accountable legislative bodies—should enjoy the same degree of judicial deference to their decisions. In many states and localities, this permissive rationality standard is all that constrains the decisions that agencies make. This Article argues that there is in fact no justification for the prevailing approach and that as a constitutional matter courts have an obligation to scrutinize agency regulations more closely than they do legislative enactments. Courts must ensure that agencies at all levels of government act on the basis of actual reasons, and there is at least a plausible connection between regulatory means and ends.
The Insignificance of Proxy Access
Proxy access is the right of shareholders to nominate directors and to have their nominees included in the company’s proxy statement. Because proxy access is viewed as dramatically lowering the costs of an election contest, both proponents and opponents of proxy access predict that it will have a significant impact. Contrary to this conventional wisdom, we argue that proxy access will lead to few shareholder nominations, that most of these nominees will be defeated, and that the occasional nominee who may get elected will have little impact.
Based on past involvement in shareholder activism, we believe that neither mutual funds nor private pension funds would make significant use of proxy access. Certain large public pension funds have shown a modest interest in activism and may make some nominations. The entities with the greatest interests in activism hedge funds and union-affiliated funds-would generally not satisfy the ownership and holding period requirements.
When compared to traditional proxy contests and to withhold campaigns, proxy access involves significant disadvantages while promising only modest advantages. The cost savings of proxy access compared to traditional contests are overstated because most proxy contest expenses are discretionary campaign expenses or relate to other expense items that are unaffected by the proxy access rule. By contrast, the limitations that come with proxy access are significant: the number of nominees a shareholder can propose is limited; the level of shareholder support required to gain a seat, as a practical matter, is increased; the company retains control over the design of the proxy cards; and the company retains exclusive access to preliminary voting information.
When compared to withhold-vote campaigns, proxy access has the advantage that, if it succeeds, it results in the election of a dissident director. But this benefit must be weighed against countervailing factors that reduce the likelihood of success: the higher level of shareholder support required for success, the greater challenge of positive versus negative campaigning, and the vulnerability of the dissident shareholders and their nominees to attacks by the company for lack of qualification or conflicts of interest. Such attacks will resonate especially for nominees by unions and public pension funds and may make it difficult to find qualified nominees.
Overall, we believe that proxy access would have some undesirable effects-it would result in some increase in company expenses and may, rarely, increase the leverage of shareholders whose interests conflict with those of shareholders at large-and some desirable effects-it may occasionally lead to the election of nominees to recalcitrant boards, where such nominees may have a modest impact on governance and a marginal impact on company value. None of these effects is likely to be very material, and the net effect is likely to be close to zero.