Real Due Process or Charades Due Process for Economic Regulation? A Simple Textual Interpretation of the Due Process Clause

By Dustin Romney*

INTRODUCTION

Standard Supreme Court doctrine has it that when an economic regulation is challenged under the Due Process Clause of either the Fifth or Fourteenth Amendments, the Court will apply its lowest level of scrutiny, rational basis.[1] But rational basis allows for a subjective range of scrutiny to be applied in a given case. Since the New Deal, the Court has essentially applied no scrutiny to economic regulations, or what has been called “weak rational basis.”[2]

In recent months, the country has been subjected to a slew of lockdown orders intended to slow the spread of COVID-19. These economic shutdowns have contributed to a massive economic slowdown.[3] Many businesses have brought suits challenging the constitutionality of the lock down orders, alleging a violation of due process.[4] Without commenting on the strength of these suits, the situation highlights the dangers of forfeiting meaningful judicial review of arbitrary government actions that cripple economic activity, even in the face of a public health emergency.[5]

In addition, as the nation roils from protests over racial inequalities, the issue of economic freedom is a pertinent one. Due process challenges to economic regulations often involve occupational licensing laws, which in turn often present particularly heavy burdens to poor communities of color.[6] One important way the judiciary can contribute to the economic liberation of these communities is to more carefully scrutinize arbitrary economic regulations.[7]

The Due Process Clause of the Fourteenth Amendment declares that “[no] State [shall] deprive any person of life, liberty, or property, without due process of law.”[8] At first reading, it should be fairly apparent that refusing to apply any scrutiny to the government’s process is a suspect way of enforcing this guarantee. Interpreting the Constitution’s text according to the plain meaning of its words often reveals considerable insight. Decades of relying on court-developed interpretive methodologies have a way of obscuring the text so that fairly obvious deductions are lost.[9] Thus, in this paper, I will focus on the due process language rather than the rational basis language as the touchstone for what the Due Process Clause (“DPC”) requires of the government. My goal is to demonstrate that a simple textual interpretation of the DPC shows that it requires meaningful scrutiny of all legislation. I will then use these conclusions to address the two best arguments for applying weak rational basis to economic regulations.  

BACKGROUND

In the early 20^th century, the DPC was at the heart of a monumental constitutional struggle. On one side were progressives[10] seeking to expand the power of government to regulate the economy. On the other side were constitutional traditionalists[11] who understood the Constitution to prohibit at least some regulatory experiments. Progressive intellectuals, such as Louise Brandeis, argued vociferously that the Constitution was not a barrier to legislative experiments with economic regulation.[12] These arguments eventually revolutionized constitutional law during the New Deal.

While it cannot be claimed that there was a general agreement on the meaning of these clauses before the Progressive era, there was a great deal of common ground at least by the time the Fourteenth Amendment was ratified. First, it was generally accepted that the DPC provided some form of substantive protections of rights.[13] Prior to the New Deal revolution, American courts meaningfully reviewed, and occasionally struck down, economic regulations pursuant to the DPC (both state and federal versions).[14] More than simply guaranteeing a formal process, the DPC guarantees that laws depriving persons of life, liberty, or property must comply with some minimum threshold of reasonableness and objectivity. This requires the Court to meaningfully assess the purpose and effect of a challenged law. I will refer to this approach as “real due process.”

Second, it was generally understood that real due process was based, at least in part, on natural rights principles. For example, the Supreme Court declared in 1898:

This court has never attempted to define with precision the words ‘due process of law,’ nor is it necessary in this case. It is sufficient to say that there are certain immutable principles of justice which inhere in the very idea of free government, which no member of the Union may disregard.[15]

Several years later, in Lochner v. New York, the Court struck down a state labor law limiting the number of hours that bakers could work as being inconsistent with the fundamental liberties protected by the DPC, namely the liberty to contract for labor.[16]

The Lochner case became the lightning rod of progressive rhetoric against traditional constitutional interpretation. Progressive intellectuals such as James Thayer laid the groundwork for so-called judicial restraint. Thayer and others sought to emphasize that judges should strike down laws only when they are certain as to its unconstitutionality.[17] Since natural rights and economics are nebulous topics, and since new economic realities brought about by industrialization required legislative experimentation, the courts should afford wide deference to the legislature.

But on the surface, the progressives did not seem to be saying anything new. When progressives took over the Supreme Court in the 1930s, they relied on essentially the same legal standards as traditional constitutionalists when interpreting the DPC only with a slightly different emphasis.[18] To this day, the Supreme Court has never expressly disclaimed real due process.[19] So what actually changed?

For starters, the standard was relaxed from one of “reasonableness” to one of “rationality”[20] (though the difference between the two is quite subjective). But the more important change was simply that an exception to real due process was carved out for economic regulation.[21] The Court then subsequently gutted the rational basis standard of all meaning in Williamson v. Lee Optical.[22] In that case, instead of checking for an actual rational basis behind the regulation, the Court made it clear that it would uphold any regulation if there was any conceivable rational basis that the legislature might have used to justify the law.[23] I will call this approach “charades due process.” This remains the Supreme Court’s DPC doctrine to this day.

A SIMPLE TEXTUAL INTERPRETATION

It seems odd to describe constitutional interpretation as “textual.” What else is interpretation supposed to be based on? But when it comes to the Constitution, broad language often fails to reveal satisfactory answers in concrete cases. It is clear that one needs more than just a copy of the Constitution and a dictionary. Courts must often turn to the maxim that text cannot be properly understood without context.[24] 

That context begins with the fact that most of the Framers (including those of the Fourteenth Amendment) were deeply concerned with protecting natural rights.^[25] This should be clear from a cursory review of the Declaration of Independence and the many state constitutions drafted thereafter.^[26] The Framers understood the Constitution to protect negative liberties including property, the very essence of economic activity.[27] They generally understood liberty and property rights as natural, moral rights which government did not invent but is supposed to protect.[28] The language of the Constitution could hardly make this clearer. It does not speak of grants of rights to citizens from government. It speaks of securing and protecting liberty and property against government encroachment.^[29] It even declares that rights not discussed in the Constitution are to be protected.^[30] Clearly then, the Constitution was designed to protect rights pre-existing the government. What can these be? The only answer is natural rights. This is even more salient when interpreting the DPC because both the Fifth and Fourteenth Amendment versions were written in response to demands for more stringent protection of individual rights. Thus, faithfully interpreting key words in the DPC must be informed by reference to natural rights.

We begin with “due process.” It remains a point of sharp controversy that due process protects substantive rights. I will not dwell much on this because today’s progressives mostly accept a substantive interpretation of due process in one form or another. I say today’s progressives because those of the early 20^th century seemed to oppose the idea that judges could rely on the DPC to strike down any democratically enacted law, economic or otherwise.[31] When the progressives took over the Supreme Court, they were quick to reverse a precedent of real due process as it concerned economic regulation.[32] But they quickly realized that a more meaningful review was essential to redeeming its promise in the context of laws or activities they preferred to protect.[33] Thus, it is widely, though certainly not universally, accepted that due process protects at least some substantive rights.[34]

But what is the substance? The text of the DPC does not seem to deal with substantive rights. Thus, I sympathize with Justice Scalia’s textual position that the DPC is about process.[35] In fact, I fully accept the position that this is primarily, even exclusively, what the DPC guarantees. But there is a logical absurdity underpinning an interpretation of the DPC that would disclaim any judicial role for ensuring the substance of the process guaranteed. Only one (or even a half) inferential step is necessary to see that process without substance is meaningless.[36] A defendant would not take comfort in being provided a judge and jury (process) if the judge and jury were in the tank (substance). Nor should a voter seeking to ply his trade take comfort in his vote if the legislature is in the tank with his competitors, or especially if they are his competitors sitting on a regulatory board.

The rise of “substantive due process” as distinguished from “procedural due process” is an unfortunate development if for only pedagogical reasons. There is no need to strain ourselves to find hidden rights that have supposedly been snuck into the DPC. We only need to deduce that the DPC guarantees a process not for the sake of a process, but because we expect that a process of substance, one with reason and impartiality, will actually protect our life, liberty, and property when there is no reasoned or objective basis to be deprived of them. The process that is due to persons in a free society is not a hollow sham that blindly checks the boxes of trial and jury or “democratic vote.” Rather, the process due is one that comports with some basic level of reason and objectivity. This is the substance protected by the DPC. The only legitimate debate is how to apply the “rational basis” standard.[37] Is a theoretical rational basis sufficient to satisfy due process or must there really be a rational basis?

On the one hand, a textual interpretation of the DPC strongly indicates that the judiciary should defer to the legislature. The clause clearly infers that citizens can be deprived of life, liberty, and property so long as due process is given. Thus, there is a range of legislation that may deprive people of life, liberty or property but still be rational enough to pass muster as due process.[38] But this must be countered by the equally strong inference that some deprivations are so arbitrary or unreasonable that they cannot be considered due process. The fulcrum between these two inferences is a proper definition of the terms liberty and property.

The Supreme Court claims that liberty cannot be precisely defined.[39] Instead of attempting to define it, the Court resolves DPC cases by determining whether the regulated activity is “deeply rooted in this nation’s history and tradition.”[40] It is said that this approach diminishes subjectivity.[41] The result is that liberty is parsed into distinct activities with varying degrees of protection depending on the Court’s interpretation of history or its ability to manipulate it. Thus, we find the Supreme Court bizarrely debating the traditional value of gay sex when prohibitions on that activity were challenged under the DPC.[42] In spite of the history, which suffice it to say was not favorable to gay sex, the prohibitions were struck down.[43] Contrast this with the undeniable fact that freedom of contract and property rights were virtual royalty in America’s history and traditions, at least until the New Deal. Yet, economic regulations are universally approved. Far from decreasing subjectivity, the Court’s approach enhances it. There is a better way.

It begins with a simple textual interpretation of liberty combined with a bit of deduction.[44] Liberty is not the same thing as the activities people choose to engage in. It is a state in which one has the capacity to engage in all activities that do not violate the personal integrity or property rights of another.[45] Liberty is a presumption that the individual chooses his activities based on his values. Thus, the very process of singling out activities for protection based on extraneously supplied criteria violates a basic premise of liberty. The substance of liberty is a presumption of choice, not a qualification on choice. It is not liberty at all to say, “You’re free so long as I approve of your choices.” This cuts against a strong presumption that the legislature can deprive citizens of liberty without meaningful restraint.    

This understanding also undermines the platitudes often used to justify regulations, such as that the right to contract is not absolute,[46] or that when we “enter society,” we give up a certain portion of our liberty.[47] Under a proper understanding of liberty, we can see that no portion of it is surrendered when we “enter society.” The rights to life, liberty and property are unalienable.[48] When we choose to live in close proximity to others, we give up certain choices that we might have made if we lived in isolation. But we should not confuse available options for the right to liberty. Moreover, rights are indeed absolute. That is why they are called rights and it is why they appear in the Constitution.

The task for judges when interpreting liberty is not to assess historical national traditions in order to decide which activities the DPC protects. Rather, the task is to discover (yes, discover, not invent), the line where one person’s liberty ends, and another’s begins. Every person’s liberty must count. Fortunately, and here is the key deduction, there is a readily available natural law that provides a much better criterion that can justly be applied to all. It is the millennia-old maxim: sic utere tuo ut alienum non laedas (hereinafter “sic utere”) or “use your property [and liberty] so as not to injure another.” Sic utere provides a much more objective and just tool for courts to use in judging due process. If the government chooses to regulate an activity, the due process protection of liberty and property demands that there be some meaningful potential harm from the activity to justify the regulation.[49]

Of course, some activities are more dangerous than others and thus, regulation in some areas will be more constitutionally tolerable. Thus, it may seem that this approach arrives at the same point as judging legislative enactments depending on the regulated activity. But the key difference is that sic utere demands a focus on the harm of the activity and an evaluation of everyone’s rights rather than an evaluation of tradition and history. This will produce more consistent results.

The advocates of charades due process are apt to paint the advocates of real due process as proponents of “lazzie-faire.”[50] This intended pejorative misses the mark. Mr. Herbert Spencer’s social statics[51] would have nothing to do with the Lochner-era court which upheld the vast majority of economic regulations that came before it.[52] The sic utere approach to due process would be a much more moderate change (restoration) to constitutional law than its opponents advertise.

Finally, we must interpret the word “law” in the phrase “due process of law.” To what law is it referring? There are only two options, positive law or natural law. It would be absurd to conclude that it refers only to the positive law. The clause itself is a check on the legislatures’ authority to enact statutes.[53] If “law” refers to statutes then the clause would be saying that the legislatures cannot take away life, liberty or property unless the legislatures pass a statute that takes away life, liberty or property.[54] This absurd result would render the clause meaningless. The only remaining option for the meaning of “law” is the natural law.[55] As Justice Chase told us long ago, an act that is void of a legitimate purpose or is arbitrary cannot be called a “law.”[56]

Of course, much of what the DPC requires of government is not itself part of the natural law. A democratically enacted statute, a criminal proceeding with a judge and jury, or other common law procedures are not natural law. But these processes are either derived from, or are explained by their utility to accomplish, natural law objectives, namely preventing the government from purposelessly or arbitrarily depriving citizens of their natural rights to life, liberty or property.[57] Thus, to ignore the foundational natural law/rights purposes of the DPC is to concede to the legislature the power to decide due process rather than the Constitution and the judiciary. The legislature has a range of flexibility but the DPC keeps the range limited within a framework of objective rationality based on sic utere. In a government of, by and for the people, the government can have no rights greater than those held by the people themselves. None of us has a right to intervene in another’s affairs except to prevent force. The same moral rule applies to government.

With a proper interpretation of the DPC in mind, I proceed to address the two main arguments for charades due process for economic rights.             

Judicial Realism

Unfortunately, sic utere does not get us very far when analyzing complex economic legislation for constitutionality. What exactly constitutes a sufficient harm? What are the appropriate means of addressing a harm? These questions lie at the core of all political debate and they will not be decided here (or ever). It is unsurprising then that a chief criticism of real due process for economic regulation is that it is too standardless for judges to consistently decide cases.[58] Therefore, it is argued, judges should bow to social interests so as not to disrupt what might turn out to be important public policies.

In my first year of law school, after discussing the Supreme Court case of Ashcroft v. Iqbal and related cases, my Civil Procedure professor asked the class to articulate the pleading standard necessary to survive a motion to dismiss. I raised my hand and, in an attempt to be humorous (which usually fails as it did in this case), I shouted, “Who knows!” My professor gently chided me by responding, “Ok, rather than punt, who wants to really take a stab at it?” That experience taught me a great lesson about the law that has been amplified countless times since. The law is hard! If there were always clear standards, we wouldn’t need judges.

A real rational basis standard based on sic utere is very difficult to apply in practice. But it is no more difficult to apply than “reasonableness” in tort, obscenity in free speech (“I know it when I see it”[59]), or the Supreme Court’s new-found “dignity” standard apparently relied on in Obergefell v. Hodges.[60] Free speech is a particularly good example because in this area, the Supreme Court has taken the only logical approach that can be taken to determine the scope of the right: apply the doctrine of sic utere (albeit roughly) to distinguish between protected and unprotected speech.[61]

As another example, when Justice Breyer wanted to apply real due process to a state court’s punitive damages award, concerns about the lack of a clear standard were not enough to dissuade him from invalidating the award.[62] How much is too much for a punitive damages award to violate real due process? Justice Breyer apparently knows it when he sees it.[63] And why shouldn’t he? He is a rational human being. No one knows exactly at what point a punitive damages award is so high that its absurdity and disproportionality to the evil at hand violates due process. But that point exists. Neither can anyone predict exactly when a legislature’s (or a regulatory board’s) attempt to regulate the economy crosses the line between a sloppy, ill-conceived law that passes muster as rational, and one that clearly is meant to favor special interests and whose rational relation to a legitimate government purpose, while perhaps theoretically sound, is in reality too anemic to be considered due process.

We all have a natural understanding that if a person acts in harmless ways, there is no rational basis for restraining his behavior. When a law’s burden on liberty is so disproportionate to the harm supposedly addressed, a judge has a duty to determine that due process is not satisfied. The DPC was written to provide more than a judicial rubber stamp of government actions. It was written to ensure a meaningful process and meaning means there is at least a chance the process can be struck down as an unconstitutional deprivation of life, liberty or property. There is nearly always room to attack judicial standards interpreting general constitutional provisions as amorphous. But generality or ambiguity does not weaken the demand to protect the right.

Separation of Powers

Eventually, the judicial realism track merges with a separation of powers argument in one form or another. It is usually articulated as a need to defer to democratic majorities.[64] As the Court said in Lee Optical, “For protection against abuses by legislatures the people must resort to the polls, not to the courts.”[65] These arguments are often premised on the belief that the Constitution’s core principle is democracy.[66] But the Constitution is to democracy what a dam is to a river. It presumes its flow but was built to control it. It has little to do with its structure, particularly when it comes to protecting individual rights. 

The separation of powers is the Constitution’s primary feature and, as originally envisioned, protector of individual rights.[67] Many Framers viewed the Bill of Rights as a redundancy.[68] It is thus ironic that separation of powers is invoked as the basis for a doctrine that allows for individual rights to be trampled by democratic majorities. The separation of powers acts as a protection because it is founded on the assumption that each branch will jealously check, not submissively defer to, the other branches. As ambition counteracts ambition, no branch accumulates enough power to seriously abuse rights.[69] But it appears the Framers overlooked the fact that the urge for power is equaled by a desire to avoid accountability. Thus, the legislature defers to the executive (a situation which itself was accommodated by judicial deference run amuck) and the judiciary defers to both with each proclaiming, “It’s not my job” in the face of one irrational policy after another. This is not what separation of powers is supposed to look like.

The notion that democracy is the core principle behind the Constitution, and thus deserving of special deference, is hopelessly flawed. For starters, if this is so, then why should any fundamental right require that democratically enacted laws be subjected to strict scrutiny? All should admit that the Constitution’s protections of individual rights, including the DPC, are written precisely to place them beyond the reach of democratic decision-making.[70] In contrast, according to the progressives, popular consensus, not the Constitution or the courts tasked with interpreting it, determines what rights are fundamental.[71] At least, that is, so long as the popular consensus is correct. When the majority is wrong, democracy suddenly becomes less romantic. And where do they turn? The judiciary of course! The clearest example of this was the switch from state votes over gay marriage to litigation.[72]

The Constitution is so clearly un-democratic. Even some progressives are willing to admit it.[73] As originally written, three out of the four bodies created by the Constitution were not popularly elected. The Framers were careful to insulate government bodies from democratic control because they knew that popular passions were apt to override individual rights. Witness for example, the gun ban at issue in McDonald v. City of Chicago.[74] Justice Breyer, in dissent, lamented that the gun ban struck down in the case was enacted after the community, in response to a shooting death in a courtroom, had gathered 6,000 signatures in support of the ban.[75] According to Justice Breyer, the people have spoken, the unmistakable text of the Second Amendment (as incorporated by the DPC against the states) be damned. Popular consensus determines what rights are fundamental.[76]

No branch was designed to be more insulated from majoritarian mobs than the judiciary. And yet, oddly enough, this insulation itself is often invoked as a reason why judges should defer to the democratic branches rather than checking them.[77] Insulation from the democratic process was designed to embolden the courts to strike down unconstitutional laws, not to instruct them to roll over.[78]

Of course, a proper understanding of separation of powers has an important place for judicial deference. Certain powers are enumerated for Congress and the states have broad police powers. But deference to the level of charades due process has no place in interpreting a provision meant to protect individual rights and check the power of states. Less so given that the Court is assigned the task of deciding cases and controversies arising under the Constitution,[79] a task that cannot be accomplished without saying what the law is,[80] and without declaring void those acts of the legislature that are inconsistent with it. The Court, not the legislature or “the people,” is to determine the meaning of liberty, property, and the process due for their protection. 

Going back centuries, it has been a fundamental tenet of due process that “no man may be a judge in his own case.” [81] Neither can the legislature be its own judge as to liberty, property or due process.[82] Thus, the Court itself violates due process (and the separation of powers) by giving extreme deference to the legislature to weigh constitutional rights.[83] Often when deciding due process cases, the Court says it is not supposed to be a super-legislature.[84] But the practical reality which this truism seeks to justify makes the legislature into a super-legislature, free from constitutional restraints and endowed with the judicial power to say what the law is. This is no separation of powers. It is an affront to it.  

CONCLUSION

Much has been written and debated about due process. In my view, most of the literature looks past the simple deductions arising from the text; that due process must have reason and objectivity; that liberty and property are best defined by sic utere; that the word “law” in the DPC cannot logically mean any statute the legislature passes; and finally, that the separation of powers demands that judges, not legislatures, make and enforce these determinations. Even more simply, since the Court has never officially abandoned rational basis, it should stop using the phrase as a prop in a game of charades. If the Court continues to advertise the rational basis shell corporation, then it should once again start conducting business.