Private Interests, Public Force

August 2002

Private Interests, Public Force:

IJ Study Will Highlight Court’s Role In Special Interest Legislation

By Steve Simpson

Anyone familiar with the Institute for Justice knows that we accomplish our mission not only by fighting our opponents in the courts of law, but by waging a broader battle in the court of public opinion. That is, we educate as well as litigate. While we generally focus on the clients we are fighting for, it is often just as important to emphasize the unjust laws and institutions we are fighting against.

One phenomenon that we face all too often in the cases we litigate is the role of private interests in the propagation and enforcement of laws that infringe economic liberty and property rights. From limousine companies in Las Vegas that benefit from an anti-competitive licensing process, to Donald Trump convincing a New Jersey agency to take land from widow Vera Coking for private limousine parking, private interests are involved in, if not behind, virtually every law or government action we challenge. Given the frequency with which we face entrenched private interests in our lawsuits, it is worth asking what, if any, role the judiciary and judicial review have played in this state of affairs.

As the Institute’s first Fellow in Constitutional Litigation, I will be examining this topic in an article over the coming months. The article will demonstrate, using case studies of former IJ clients and others, that the judiciary’s treatment of economic and property rights contributes significantly to the proliferation and enforcement of laws that benefit private parties to the detriment of their competitors and individual rights in general. In short, the pernicious influence of special interests in the political process can often be traced right to the doorstep of the judiciary. A bit of background is in order.

“We need to delegitimize the current approach to economic and property rights in order to make way for a better one.”

Since the 1930s, courts have largely removed themselves from the legal protection of economic and property rights. While courts vigorously scrutinize laws that infringe so-called ?fundamental rights? such as free speech and privacy, laws affecting economic and property rights are given only a cursory glance. Courts give great deference to governments’ decisions in these areas and presume a law constitutional until proved otherwise. Litigants must prove not only that a law is irrational on the facts of the case, but that it could not be rational under any set of facts that the court could imagine. This approach is known as ?rational basis review,? but, for all intents and purposes, it is no review at all. The Supreme Court’s jurisprudence bears this out: the Court has not struck down an economic or property regulation under the rational basis standard since the 1930s.It should surprise no one then that laws regulating economic and property rights have grown exponentially during the last 70 years. But while the growth of government is an obvious consequence of the courts’ deferential approach in this area, it is less evident that the approach would lead to the virtual co-opting of the legal process by private interests that we often see today.

Certainly, that was not the intent of the courts and scholars who legitimized this approach. Their avowed purpose was to promote democracy and scientific lawmaking by allowing legislatures and their appointed “experts” to strike the proper balance between rights and the needs of society.

The reality, however, has turned out to be markedly different than the theory. Today, legislation often benefits entrenched private interests to the detriment of individual rights, even allowing private interests a role in the process by which others’ rights are regulated.

So it’s worth examining the relationship between judicial deference to economic and property legislation and the influence of private interests in the legal process. Judicial review, after all, is a crucial part of the checks and balances written into our constitutional systems at both the federal and state level. Remove it, and an important check on the tendency of the legislature to serve its own interests or those of an active constituency disappears.

Should it surprise us, for instance, that the Tennessee funeral board (which is overwhelmingly made up of funeral directors) regulates in a fashion that benefits funeral directors at the expense of independent casket retailers? Or that the City of New London is twisting the concept of ?public use? to justify taking private property to build a new office complex that will increase tax revenues and benefit Pfizer, the City’s number one corporate citizen? As James Madison pointed out in Federalist No. 10, ?No man is allowed to be a judge in his own cause, because his interests would certainly bias his judgment, and . . . corrupt his integrity.? The same principle applies to legislatures, according to Madison, yet ?what are the different classes of legislators but advocates and parties to the causes which they determine??

By removing meaningful judicial review from economic affairs, courts have permitted the political branches of government to become precisely the “judges in their own cause” that Madison warned us about. This is a far cry from government by democratic legislatures and disinterested experts that was supposed to justify the judiciary’s deferential approach. Shedding as much light on this fact as possible is vital in turning the courts away from their flawed treatment of economic and property rights.

In short, we need to delegitimize the current approach to economic and property rights in order to make way for a better one. It is high time we stopped pretending that the treatment of economic liberty and property rights by the courts is anything but a sham. It leads to predictably unjust results—results that the Founders warned against; results that are inconsistent with our constitutional heritage and the rule of law; results that are detrimental to our liberty and our welfare as a society.

When courts are forced to confront the consequences of their current approach, these important rights will begin to receive the protection they deserve. The purpose of IJ’s work in this area is to ensure that that happens sooner rather than later.

Steve Simpson is IJ’s Dunn Foundation Fellow in Constitutional Litigation.