Cities, Economic Development, and the Free Trade Constitution

The role of cities and local government generally has gone unexamined by legal scholars of the constitutional common market. Yet in a highly urbanized country in which cities and large metropolitan areas dominate the national economy, much of the cross-border movement of persons, goods, and capital inside the United States is more accurately characterized as inter-municipal rather than inter-state. This Article examines the constitutional rules that govern this cross-border movement from the perspective of the city. The Article argues that judges and commentators have misapprehended the jurisprudence of the American common market because they have been looking at its operation on the wrong scale. Examining how the doctrine operates at the municipal level exposes the gaps and contradictions in the jurisprudence, reveals connections between legal doctrines that heretofore had not been considered part of the free trade regime, and highlights the Supreme Court’s implicit (and under-theorized) urban economic policy. The reframing of the economic and jurisprudential place of cities in the free trade constitution sheds light on a number of important recent cases, in particular Kelo v. New London, in which the Court upheld a city’s use of eminent domain for economic development purposes under the Fifth Amendment’s Takings Clause. The Article’s city-centric approach also intervenes in a number of judicial and scholarly debates, including the appropriate reach and application of the “dormant” commerce clause, the appropriate judicial oversight of local land use regulations under the Takings Clause, and the role of courts in policing and shaping local economic development efforts more generally.

Judicial Takings and the Course Pursued

This Note will argue that the constitutional holding of Erie Railroad Co. v. Tompkins requires that the takings protections of the Federal Constitution apply to state judge-made law as well as state statutes and administrative regulations. It will contend that Erie requires that the federal government not interfere with state separation-of-powers decisions, and that state courts be presumed to have the authority to make real law, binding as statute, on behalf of the states. Imbued with such power, in making law, state courts are at least capable of offending the takings protections of the Constitution. For the federal government to ignore such a capability would not only allow easy circumvention of the Takings Clause but also introduce an impermissible “exogenous factor into a state’s choice of the proper branch to make changes in property law” in violation of Erie’s constitutional holding. Though a daunting charge, answering the background-principles question is inherent in the complex enterprise of one sovereign policing changes in another sovereign’s laws. So long as state courts wield lawmaking power, exercising the will of the state by articulating new legal rules, and so long as states are prohibited from changing legal rules in ways that take private property for public use without just compensation, federal courts must take up the task.

Awards for Pain and Suffering: The Irrational Centerpiece of Our Tort System

When a petit jury in a civil tort action awards damages for pain and suffering, it does not award damages that compensate, or that indemnify, or that provide restitution to the injured party—the traditional functions of damage awards. Damages that are awarded for pain and suffering are probably intended as a pecuniary bonus or gift in an amount thought roughly to reference the pain suffered or expected to be suffered. But there seem to be no rational, predictable criteria for measuring these damages. For that reason, there are also no criteria for reviewing pain and suffering awards by the presiding judge or by an appellate court. Without rational criteria for measuring damages for pain and suffering, awarding such damages undermines the tort law’s rationality and predictability—two essential values of the rule of law. Yet it is this irrationality in awarding money for pain and suffering that provides the grist for the mill of our tort industry, which is now estimated to have grown to $200 billion. 

This Essay addresses the tension between the community’s desire, through the rule of law, to compensate injured victims for pain and suffering and the problems that have arisen in authorizing awards of damages that are irrationally quantified.

To address a problem that is so widely tolerated might be daunting, but I submit that the appropriate response need not be invented from scratch. There is a model from an analogous problem that can be explored and adopted in material respects. This model is shaped by the actions of the several States that have responded to the rise of punitive damages during the past fifty years.