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Article Iii, Equity, and Judge-Made Law in the Federal Courts

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Article Iii, Equity, and Judge-Made Law in the Federal Courts COLLINS IN PRINTER PROOF.DOC 10/17/2010 10:06:06 PM Duke Law Journal VOLUME 60 NOVEMBER 2010 NUMBER 2 “A CONSIDERABLE SURGICAL OPERATION”: ARTICLE III, EQUITY, AND JUDGE-MADE LAW IN THE FEDERAL COURTS KRISTIN A. COLLINS† ABSTRACT This Article examines the history of judge-made law in the federal courts through the lens of the early-nineteenth-century federal courts’ equity powers. In a series of equity cases, and in the Federal Equity Rules promulgated by the Court in 1822 and 1842, the Supreme Court vehemently insisted that lower federal courts employ a uniform corpus of nonstate equity principles with respect to procedure, remedies, and—in certain instances—primary rights and liabilities. Careful attention to the historical sources suggests that the uniform equity doctrine was not simply the product of an overreaching, consolidationist Supreme Court, but is best understood in the context of important and surprisingly underappreciated early-nineteenth- Copyright © 2010 by Kristin A. Collins. † Associate Professor of Law & Peter Paul Development Professor, Boston University. Many people have given generously of their time and insight, including Hugh Baxter, Jack Beermann, Hamilton Bryson, Michael Collins, Martha Field, Philip Hamburger, Peter Charles Hoffer, Andrew Kull, Alison LaCroix, Gary Lawson, Gerry Leonard, Maeva Marcus, Caleb Nelson, Nick Parillo, Jim Pfander, Jed Shugerman, David Seipp, Ann Woolhandler, and Larry Yackle. Earlier versions of this Article benefited from participants’ comments at the 2010 Stanford/Yale Junior Faculty Forum, at workshops held at the University of Virginia and Boston University law schools, and at sessions held at the 2009 annual meeting of the American Society for Legal History and the 2009 Junior Federal Courts Conference. My research assistants, Kimberly Parr, Jarrod Schaeffer, and Diana Snyder, and Boston University law librarian Stefanie Weigman, provided excellent assistance and tolerated completely unreasonable research requests with good humor. The editors of the Duke Law Journal provided superb editorial assistance. Any errors are mine. COLLINS IN PRINTER PROOF.DOC 10/17/2010 10:06:06 PM 250 DUKE LAW JOURNAL [Vol. 60:249 century debates concerning judicial reform. During this period, both Congress and the Court were preoccupied with the disuniformity in the administration of the federal judicial system, especially in the farther reaches of the republic. When reform was not forthcoming through legislation, the Supreme Court achieved a modicum of uniformity in the federal courts through the application of a single body of equity principles drawn from federal and English sources. But the Court did not act unilaterally. Congress’s repeated acquiescence to, and extension of, the Court’s uniform equity doctrine reveals a complex, interbranch dynamic at work. Retelling the story of nonstate, judge-made law in the federal courts through the lens of equity is not intended to demonstrate that such a formulation of federal judicial power was (or is) correct. Rather, by recuperating the history of federal equity power, this Article illuminates the significant metamorphosis of the meaning of Article III’s grant of judicial power. This change has been elided in modern accounts of federal judge-made law in an effort to bolster the legitimacy of a modern vision of federal judicial power. TABLE OF CONTENTS Introduction .............................................................................................251 I. Federal Judge-Made Law in Law and Equity .................................257 A. Sources of Law in Cases Brought in Law...........................259 B. Sources of Law in Cases Brought in Equity.......................265 1. The Origins of Federal Equity Power.............................266 2. Uniformity in Federal Equity ..........................................271 II. Foreign Law in the Federal Courts .................................................291 A. New States, Orphan States, and Quasi-Circuit Courts .....293 B. Kentucky: Panic, Process, and Alien Law..........................301 1. Senator Rowan Versus Senator Webster, and the Process Act of 1828 .........................................................304 2. Judicial Reform and Federal Equity in Kentucky.........308 C. Louisiana: “Foreign Law” in the Federal Courts ..............315 1. Equity in Louisiana Federal Courts................................317 2. Institutional Stalemate......................................................323 3. Federal Equity and Institutional Uniformity in Louisiana ..........................................................................328 D. Instituting the Federal Courts and Courting the Nation ..330 III. “A Considerable Surgical Operation” and the Erasure of Federal Equity ..............................................................................334 COLLINS IN PRINTER PROOF.DOC 10/17/2010 10:06:06 PM 2010] ARTICLE III, EQUITY, AND JUDGE-MADE LAW 251 INTRODUCTION The history of judge-made law in federal civil cases is commonly examined through the lens of Section 34 of the Judiciary Act of 17891 (the original Rules of Decision Act) and the Supreme Court’s famous interpretation of that Act in Swift v. Tyson.2 This Article examines the history of judge-made law in the federal courts, but shifts attention away from Section 34, focusing instead on early-nineteenth-century federal courts’ equity powers.3 This alternative doctrinal perspective 1. Judiciary Act of 1789, ch. 20, § 34, 1 Stat. 73, 92. 2. Swift v. Tyson, 41 U.S. (16 Pet.) 1, 18–19 (1842). In this Article, I use the term “judge- made law” and variations thereof to describe judicial decisionmaking in the absence or near absence of statutory or constitutional direction. Cf. Martha A. Field, Sources of Law: The Scope of Federal Common Law, 99 HARV. L. REV. 881, 890 (1986) (defining “federal common law” as “any rule of federal law created by a court . when the substance of that rule is not clearly suggested by federal enactments—constitutional or congressional”). While commentators generally use the term “common law” instead of “judge-made law,” I use the latter because my focus is on cases brought in equity. Using the term “common law” to describe the judicial exercise of equity power would be needlessly confusing. See infra Part I.B. I use the term “common law” in this Article only when discussing judge-made law in the context of cases brought in law. Some readers will object that the use of the term “judge-made law” necessarily and incorrectly imposes a modern gloss on early-nineteenth-century judicial practices because, at that time, it was generally understood that judges declared law, rather than made law. I address this concern later in the article. See infra text accompanying notes 367–69. 3. This Article focuses on the federal courts’ adjudication of private-law litigation in which a party sought enforcement of traditional equitable rights or remedies, or sought the benefit of procedures available in equity. See infra Part I.B.1. The term “equity,” or “equity of the statute,” was also used more broadly to describe a form of statutory interpretation— employed in law and in equity—that authorized judges to follow a restrictive or expansive interpretation of a statute to “prevent a failure of justice.” GORDON S. WOOD, THE CREATION OF THE AMERICAN REPUBLIC, 1776–1787, at 457 (1969). Other scholars have examined the early role of equitable principles as interpretive tools. See, e.g., William N. Eskridge, Jr., All About Words: Early Understandings of the “Judicial Power” in Statutory Interpretation, 1776– 1806, 101 COLUM. L. REV. 990, 1040–55 (2001) (observing that founding-era judges did not generally resort to the notion of “equity of the statute” to justify non-literal statutory interpretation); John F. Manning, Textualism and the Equity of the Statute, 101 COLUM. L. REV. 1, 79–85 (2001) (arguing that the ratification debates are inconclusive about whether the Framers intended to imbue the judiciary with the discretion inherent in the equity of the statute). Equity of the statute is not my focus here. Likewise, I do not consider the debates concerning the scope of federal equity power with respect to remediation of constitutional violations, nor the related debate concerning the federal courts’ inherent power to craft equitable remedies in that field. See, e.g., PETER C. HOFFER, THE LAW’S CONSCIENCE: EQUITABLE CONSTITUTIONALISM IN AMERICA 198 (1990) (“[F]ederal district courts transformed the rudimentary Balance of Equity in Brown [v. Board of Education, 349 U.S. 294 (1955),] from a remedial tool to a way of reading the Constitution.”); GARY L. MCDOWELL, EQUITY AND THE CONSTITUTION: THE SUPREME COURT, EQUITABLE RELIEF, AND PUBLIC POLICY 3–4 (1982) (arguing that since the mid-twentieth century, the Supreme Court has distorted the traditional view of equitable principles, resulting in excessive judicial discretion); John Yoo, Who Measures the Chancellor’s Foot: The Inherent Remedial Authority of the Federal COLLINS IN PRINTER PROOF.DOC 10/17/2010 10:06:06 PM 252 DUKE LAW JOURNAL [Vol. 60:249 allows a fresh look at a long-standing debate concerning the historical scope of federal judges’ power to apply nonstate, judge-made law, and enables reevaluation of some of the historiographic and doctrinal claims that are often at stake in that debate.4 The history of federal equity told in this Article challenges the notion that one can make broad generalizations about early-nineteenth-century views regarding the use of nonstate,
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