The Exploitation of Legal Delay

how to prevent

Congress or a state legislature wants a law that it expects the Supreme Court to rule against. They pass the law anyway. Lower level judges that share the legislature’s view rule in favor of the law but eventually the case reaches one who does not. The state appeals, exhausts its options for appeals, stops enforcing the law. It passes another law doing the same thing in an arguably different way.

This looks like a tactic by which a legislature can avoid control by the courts for an indefinite, perhaps unlimited, length of time. Gun control opponents claim states where gun control is popular, such as New Jersey, have employed it successfully to get around the 2^nd Amendment. An example from the other side of the political spectrum could be Trump’s tariffs.

How might the tactic be prevented?

By Neutralizing Effects

One possible approach is to reverse effects the law had before it was found invalid. Refund any fines paid. Compensate anyone imprisoned under the law for his time, legal expenses and other costs.

There are likely to be costs that cannot be measured. If New Jersey passes a law sharply restricting ownership of firearms, how do you measure the cost to people who would have owned a firearm and, because of the law, didn’t? If Trump imposes tariffs he had no right to impose, companies that paid the tariffs can, apparently will, collect a refund; what about the cost to companies and consumers of goods not imported because of the tariffs?

Tariffs are an interesting case both because it is a real world example of this approach — companies are being compensated — and because it is a case where the market provides at least a partial solution to the problem of invisible costs. Imagine that Trump imposes a tariff that everyone expects to be reversed by the Supreme Court. A company imports a hundred dollars worth of goods, pays a twenty dollar tariff. It now has both the goods and a future claim against the government for twenty dollars plus interest. If everyone expects the tariff to be reversed that claim has a market value of twenty dollars so the goods cost the company the same hundred dollars as before the claim. The tariff has no effect.

In practice, of course, people will not know for certain that the tariff will be reversed or, if it is, that the court will require the government to refund the money collected, so the claim is worth less than twenty dollars, how much less depending on how confident people are of the reversal. The mechanism still works but only to partially neutralize the effect of the tariff.

Compensation for a tariff not expected to be reversed is to some degree a windfall to the importers. They were able to raise the price they sold at because cost had gone up for both them and their competitors, are now being compensated for a cost paid in part by their customers. To the extent that the reversal and refund were anticipated, however, costs did not go up, prices did not go up, so the refund is going to the customers even though it is the importers who both paid the tariff and received the refund. In this case as in many others, who bears the burden of a tax is not entirely determined by who hands over the money.

Deterring the New Jersey Legislature — or the President

Another approach to solving the problem is to alter the incentives of the people creating it. Fully compensating those affected by the law, as in the case of a tariff expected with certainty to be reversed, is one way of doing it. A gun control law enforced only by fines which everyone expects to be refunded will have little effect, so not worth the trouble of passing.

In practice compensation is unlikely to be complete or reversal to be certain, so even an unconstitutional law has some effect. That raises the question of how to deter those responsible from passing laws they expect to be reversed by the courts.

If we imagine a state as a single actor, requiring it to compensate those injured is a punishment that should deter the offense. But the state is not a single actor; the cost is paid by the taxpayers not the legislators. If voters were perfectly informed they might connect the taxes to pay compensation to the law that the court has overruled and vote out legislators who voted to pass it, but voters are rationally ignorant and won’t.

The obvious solution to that problem would be to hold legislators who voted for a law that was overturned liable for some or all of the cost of compensating those harmed by the law. An obvious problem with that solution is that, while my original hypothetical was a law that the legislators knew was unconstitutional, the fact that it was eventually overthrown by the court does not tell us that. If the objective is to punish legislators for deliberately violating the constitution how do we distinguish deliberate violation from honest disagreement?

The legal system of Periclean Athens contained a solution for the corresponding problem in a different context. If a private prosecutor failed to get at least a fifth of the (large) jury to vote for conviction, the prosecutor was fined. The equivalent in our system might be a unanimous vote of the Supreme Court holding a law unconstitutional. Alternatively, inspired by Scottish law,¹ we could have appeals courts and supreme courts offer one of three verdicts: Constitutional, unconstitutional, obviously unconstitutional. Only the third would make legislators liable for the costs of a law they had supported.

Mark Twain’s Solution

Somewhere in his writing² there is a scene of Twain explaining the American legal system to someone who knows nothing about it, a man from Mars or the equivalent. After hearing the explanation of the relation between the legislature and the court system, he responds that presumably, after Congress passes a law, it is sent to the Supreme Court to be checked for consistency with the Constitution before it goes into effect.

That looks like the obvious and elegant solution to the problem but it has some practical problems. It would be a stretch even if the Supreme Court did nothing else, since the Court hears about 80 cases a year and in most years Congress passes more bills than that. Executive acts by the president and rules put out by regulatory agencies raise the same issue and would have to be somehow included in the solution.

There are fifty state legislatures. Potential conflicts with the state constitution could be dealt with by having bills checked by the supreme court of the state but the states are also bound by the federal constitution. State acts could be checked against federal law by the appeals court in the relevant federal district but that could still allow the possibility of a law approved at that level but struck down by the Supreme Court.

It is an elegant solution and might be workable in a society whose government was much less active than ours. In our society it could at most reduce the problem by passing acts through some part of the court system at a lower level than the Supreme Court before they went into effect.

I see various ways of reducing the problem, none of eliminating it. Suggestions welcome.

P.S. An idea inspired by a comment. There is a one month delay before a new law goes into force, during which anyone can challenge it — at a price high enough to discourage frivolous challenges. If the challenge succeeds, he gets his money back. The idea is for the court only to have to deal with laws that have a good chance of being found unconstitutional, which should substantially reduce the burden, make the approach more nearly workable.

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1. The three possible verdicts were innocent, not-proven (we aren’t sure you did it but don’t do it again), and guilty. The “not proven” verdict was recently abolished.

2. I am going by memory, was unable to find the scene. If you recognize it, let me know.