Monday, October 5, 2009

The Court and the Economic Crisis

Today is the beginning of the new Supreme Court October term. Yes, I'm sure everyone here, at least in the U.S., is excited about that. Nothing like a crisp October morning to awaken those long dormant legal skills that have slumbered over the summer.

Lots of things can be said about the new term, and I'm sure most commentators will focus on Justice Sotomayor's rulings. This post, however, will be about the types of cases the Court chose to hear this term. As the New York Times reports, the Court will hear more business and business related cases this year. I don't have the updated figured, but already in June the Court has agreed to hear 24 business cases, up from 16 the previous year. That number has since increased. Among these cases is a case challenging the constitutionality of the Public Company Accounting Oversight Boardnational board set up after the Enron scandal to oversee the auditing industry; another case deals with regulating the compensation paid to mutual fund investment advisers; yet another case deals with the question whether intangible business methods can be patented.

What is the possible meaning of this?

One thought comes to mind (at least to my mind). First, is that the issues taken up by the Court track public opinion. Or, rather, they tend to track what the public cares about, or is engaged in. This might seem trivially obvious, but several years ago Frederick Schauer argued that in reality, the Court's agenda is not only different than the country's, but that it has little to do with the issues that occupy national governance. Schauer provided empirical support for his argument, and showed that, for example, during the Warren Court era, very few people cared about race relations when Brown was decided, or criminal procedure, or the separation of church and state. Most people, Schauer said, cared about the Cold War and nuclear disarmament, issues that received very little judicial attention, if any.

Schauer, however, did name two exceptions: the pre New Deal era, referring to cases such as Lochner, and the Court's involvement with the New Deal programs. From these two examples one could make the argument that in times of economic stress, as opposed to other issues, the Court does get involved. One explanation is that courts feel more comfortable ruling on issues having to do with bankruptcy, patents, antitrust, contracts, corporations and the like, and are less inclined to rule on issues where their institutional competence is called into question, such as foreign policy, immigration, wars, etc.

This, however, is only a partial explanation. A fuller explanation must account for the public salience of some issues and how that salience is channeled through the institutional framework. This is in line with Schauer's work, but also fits with Barry Friedman's work on courts and positive political theory. Friedman's main argument, indeed a running theme in his work, is that one cannot understand judicial behavior without also appreciating the context (structural, personal, political and social) judges operate in. This is why, for example, judicial rulings cannot deviate from the median public opinion over a significant period of time. Even if one can point to a "perverse" case here or there, that case will either remain an outlier or at some point will be aligned and made to fit with other cases that fit people's general position.

So, what we're seeing here is that although the court can operate in silence, i.e. take on issues that are not under the public radar, the converse is also true. That is, given a significant crisis (such as the current economic crisis), and given sustained public attention, the courts will take on issues that are very much within the public eye. And perhaps, and only time will tell, the courts will try to aim (consciously or not) to the public's general expectations. As we saw before and during the New Deal, the Court finally did align itself with FDR's policies. It remains to be seen what will happen in this case.


  1. Thanks for the post, Adam. I have a question regarding timing - I owe this question to my ignorance on how the US SC works in thsi regard. Does the Court have a deadline to decide on those case that have been selected to be decided? My question has to do with the fact that some Supreme Courts actually select "hot" topics to decide on - those are the topics that justices are looking forwards to say what they think. But Courts may work with the political agenda in mind, so that that their decision may not have a direct impact opn what's going on outside the court. In Argentina, for instance, our Supreme Court had a case dealing with drugs for personal use and the decision should have been out by early this year. However, we also had a National election for Congress. Insecurity is an important issue in the political agenda and it is often related to drug dealing. As a result, presumably, the Court did not make its decision officially public until a few weeks after the election took place - the Court basically ruled that prosecuting those who hold drugs for personal use is unconstitutional unless they harm third parties.

    My sense is that the US S.C. does not work in this way. However, I am curious as to something like this goes on at a different level - say, at the deciison on whether to grant certiorari?

  2. Hi Martin. Yes, the Court does work a little differently. Almost all of the cases are heard and disposed of within a calendar year.Of course, within that year the Court has discretion when to issue its decision, but that's a relatively narrow time span. As for the decision when to grant certiorari, that happens throughout the year, and is done through the "cert pool" ( Here too, the Court will usually dispose of the 8,000 or so cert petitions it receives every year.

  3. Once again, Adam, great post. You're raising the bar for the rest of us on here. I have always found the work of Schauer and Friedman interesting, though some of the "insights" of "social science" explaining judicial behavior often seem pretty obvious: if courts continuously decide in ways that ourage the majority, eventually the court will either lose legitimacy or be, dethroned, by some other institutional measure: impeachment, judicial complaint, or Court Packing Plans ala FDR.

    Having said that, I wonder if we can explain more modern and highly controversial decisions like Bush v. Gore, by Friedman's argument? Can we say that the short term but arguably deep polarization and division in the middle of a national Presidential election was enough that the Court found it necessary to take on the case and settle the dispute?

  4. Thanks Jon. I think Bush v. Gore does raise interesting questions. In a sense, Bush v. Gore would have been controversial no matter what the Court would have decided. Suppose that the Florida recount would have shown Al Gore to be the winner. Well, I suspect that Republicans would argue that the Court handed Gore the victory by not intervening, which is a decision as well.

    But I think that what Friedman would say would be something along these lines: The Court enjoys an institutional legitimacy that transcends a particular case. Therefore, the Court has enough cash value to upset a significant part of the population over a brief period of time and still maintain its overall legitimacy as an institution. Public opinion polls consistently show this. While a segment of the population may not be pleased with a particular result, it nevertheless supports the Court as an institution generally.

    So it could be that in Bush v. Gore the majority thought it could risk it, that the public would soon forget and forgive (which is basically what happened), or that it misgauged its public acceptance. Either way, Friedman would say, I think, that the main of his argument, that you should look at a significant period of time and not just one case, still holds.


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