Toward a Fundamental Right to Evade Law? The Rule of Power in Shelby County and State Farm
TOURO LAW JOURNAL OF RACE
TOWARD A FUNDAMENTAL RIGHT TO EVADE LAW? THE RULE OF POWER IN SHELBY COUNTY AND STATE FARM
MARTHA T. MCCLUSKEY 0
0 I. Uneven Concern for States' Rights?
Beyond its important impact on voting rights, Shelby County, Alabama v. Holder1 advances a constitutional vision that inverts the rule of law, so that government authority becomes particularly illegitimate when it constrains institutional power to violate the law. This essay compares Shelby County to State Farm Mutual Automobile v. Campbell, 2 a 2003 Supreme Court ruling involving a different subject area, governed by state rather than federal authority. Despite these differences, both cases similarly assert new federal judicial power to override government efforts to prevent unlawful gain from exploitation of racial and economic inequality.
denials of voting rights – a provision central to the Reconstruction of the
nation after the Civil War. 4 Shelby County invoked a newly articulated
principle of equal state sovereignty5 to explain its close scrutiny of Congress’s
2006 decision to renew the longstanding formula for targeting the Act’s
preventative enforcement mechanisms. This principle of states’ equal rights
does not derive from specific constitutional text or from the historical intent
of the 15th Amendment, or from long-established precedent, 6 but instead
appears to be grounded in a general theory of government structure that
emphasizes protection of state sovereignty against federal government
The Court does not carefully explain how this theory squares with the
change in federal-state relations represented by the Reconstruction
Amendments. The 13th, 14th and 15th Amendments turned away from the
preCivil War theory that states should be the primary protectors of fundamental
liberties to instead explicitly grant new federal individual political and civil
rights backed by specific federal enforcement authority. 7 Nor does Shelby
County clearly explain how its state sovereignty theory fits with the post-New
Deal principle emphasizing the structural importance of judicial deference to
democratic political processes, with federal judicial power reserved primarily
for explicit constitutional limits, for fundamental personal rights, and for
correcting systemic failures of the political process – such as race-based
barriers to political power.8
Indeed, Shelby County’s concern with protecting states from the
possible burdens of federal prevention of racially discriminatory voting
barriers appears especially questionable given the apparent inconsistency of
the contemporary Court’s commitment to reviving state sovereignty. The
State Farm decision is one of a number of notable recent decisions expanding
4 See Shelby County, 133 S.Ct. at 2614.
5 Id. at 9 (citing Northwest Austin Municipal Util. Dist. No. One v. Holder, 557 U.S. 193, 203
6 Id. at 2623; 2630-31 (Ginsburg, J. dissenting) (arguing that the “equal sovereignty” principle
“veers away from controlling precedent” without acknowledging that fact). See also Eric Posner,
John Roberts Opinion on the Voting Rights Act is Really Lame, The Supreme Court 2013: The
Year in Review, Blog Entry #13, SLATE, June 25, 2013 (discussing the lack of constitutional
support for the principle).
7 See 133 S.Ct. at 2633 (Ginsburg, J., dissenting) (quoting Justice Holmes’ explanation of the need
for federal legislative protection of voting rights in Giles v. Harris, 189 U.S. 475, 488 (1903)). In
contrast, the majority in Shelby County explains that narrowing federal legislative powers to
protect states’ rights furthers individual liberties. See 133 S.Ct. at 2626.
8 See id. at 2623 (Ginsburg, J., dissenting) (criticizing the Court for lack of ordinary respect for
Congress and for disregarding the legislative record).
federal powers to override state policy judgments in areas of traditional state
expertise and experimentation.9 The contrast between the Court’s rejection of
state sovereignty in State Farm and its embrace of state sovereignty in
Shelby County deserves analysis not simply as a reflection of arbitrary and
unprincipled judicial power, but rather as a purposeful construction of new
covert constitutional rules.10
II. What drives the Court’s Selective Scrutiny of Rationality?
In each case, the Court appears to focus on procedural flaws in the
government’s choice of remedy for wrongdoing, without questioning the
government’s substantive goal of preventing violations of voting rights (in
Shelby County) or insurance consumers’ rights (in State Farm). In both cases,
however, the Court’s criticism of the rationality of the decision making
process rests on implicit substantive judgments about the nature and
meaning of the underlying problems of unlawful activity.
Shelby County suggests the Voting Rights Act’s coverage formula fails
even a basic deferential minimal rationality standard, concluding that “no
valid reason” supported Congress’s decision to renew the law in 2006 without
fully reconsidering the formula for selecting jurisdictions required to get prior
federal approval for electoral changes. 11 In the majority’s analysis,
Congress’s reliance on the original formula was “irrational” because it was
based on “40-year-old data” rather than on current statistical evidence of
9 Richard A. Posner, The Voting Rights Act is about the Conservative Imagination, Supreme Court
2013: The Year in Review, Blog Entry 16, SLATE, June 26, 2013 (doubting that states’ rights is a
value for any of the Justices, noting the Court’s recent expansion of federal citizenship rights
limiting state police powers in McDonald v. City of Chicago, 567 F. 3d 856 (2010).
10 It is true that some language in State Farm suggests a states’ rights theory for its ruling
expanding federal rights. By limiting states’ power to award high punitive damages, based on
evidence of nationwide corporate policy affecting that state, the Court arguably protected other
states from the burdensome effects of high damage awards on multistate corporations in their
jurisdictions – or perhaps protected other states’ power to permit rather than punish the
underlying multistate corporate practices. See 538 U.S. at 421-22. Nonetheless, State Farm
addresses this possible concern about inter-state conflict by expanding federal citizenship rights
and narrowing state powers. The cases remain inconsistent because Shelby County took the
opposite approach to the parallel problem that states’ racially discriminatory election regulations
are likely to have a multistate reach, interfering with other states’ rights to fair and equal
participation in the federal political process – a problem that the Reconstruction Amendments
and Voting Rights Act intended to solve by expanding federal citizenship protections (contrary to
11 133 S.Ct at 2630.
12 Id. at 2630.
Constitutional scholars defending the majority’s reasoning have
similarly faulted the coverage formula for insufficient evidence, avoiding the
substantive question of the relative importance of state sovereignty compared
to federal political citizenship and racial equality. For example,
constitutional scholar Suzanna Sherry acknowledges Shelby County’s
potentially harmful impact on constitutionally protected voting rights, but
explains that Congress, not the Court, is at fault for exercising abnormal,
unprincipled, power based on unwise and arbitrary judgment.13 She insists
that a “rational, functional Congress” would have modified the current
coverage formula when renewing the Voting Rights Act to ensure that the Act
targets states with the lowest levels of current voter registration and
turnout.14 Similarly, a comment by law professor Marci Hamilton explains
that Shelby’s ruling was a “no-brainer” rather than a dramatic change in
constitutional substance because Congress chose a policy approach “not
tethered” to fact.15
As in Shelby County, the majority in State Farm determined that a
government strategy for deterring institutionalized wrongdoing was so
lacking in rational support that special judicial intervention was justified to
protect the federal citizenship rights of corporations.16 State Farm ruled that
a state award of $145 million in punitive damages in a civil case arbitrarily
deprived the corporate defendant of property in violation of the corporation’s
Fourteenth Amendment right to due process.17
Two questionable implicit normative judgments ground the Court’s
analysis of rationality in these cases. First, in both cases the Court presumes
that the wrongdoing at issue can only be legitimately understood as a
problem of isolated irrational and arbitrary mistake or misdeed, not as a
rational system calculated to produce ongoing gain through unlawful power.
Second, in both cases the Court determines that the government’s strategy
for controlling the acknowledged wrongdoing risks producing illegitimate
systemic, ongoing bias against the wrongdoers meriting unusual judicial
13 Suzanna Sherry, It’s Congress’s Fault, The Supreme Court’s Voting Rights Act Decision: Live
Updates, June 25, 2013, posted on Aaron Blake, POST POLITICS (blog of Washington Post,
http://www.washingtonpost.com/blogs/post-politics/wp/2013/06/25/the-supreme-courts-votingrights-act-decision-live-updates/ last visited June 2013.
15Marci A. Hamilton, The Inevitable Holding in Shelby v. Holder, And its Fallout, JUSTIA, June
16 See Martha T. McCluskey, Constitutionalizing Class Inequality: Due Process in State Farm, 56
BUFF. L. REV. 1035 (2008) (criticizing the majority’s due process analysis).
17 State Farm Mut. Auto. Ins. Cnty. v. Campbell, 538 U.S. at 429.
intervention. In the constitutional picture colored by these two assumptions,
both state and federal government power loses legitimacy when directed at
limiting long term unlawful institutional gain derived from exploiting racial
and economic inequality.
A. Denying the Rationality of Deterrence
Turning to the first presumption, regarding the nature of the problem,
the majority opinion acknowledged that, when originally enacted in 1965, the
coverage formula was rationally designed to target the problem of
discriminatory “tests and devices for voter registration” combined with
evidence of low turnout of voters of color in the jurisdictions selected for
coverage.18 The question, however, was whether Congress could continue to
target its enforcement to those jurisdictions fifty years later, when voter
turnout and registration rates “approach parity”19 with other jurisdictions,
and when those targeted jurisdictions showed evidence of substantial
improvement in racial minority voting and representation. The majority
agreed that these improvements “are in large part because of the Voting
Nonetheless, the majority rejected the rationality of using successful
deterrence as a reason for maintaining the original enforcement targets when
renewing the Act in 2006. The problem, according to the majority opinion,
was that this deterrence rationale plausibly could extend indefinitely: these
jurisdictions could not disprove their particular risk through empirical
evidence of improvement in voter turnout or registration. 21 Because the
majority deemed this deterrence rationale illegitimately broad, it went on to
fault Congress for its lack of new empirical evidence showing that the
problems in the covered jurisdictions remain worse than in others. The
majority’s rejection of the deterrence theory is noteworthy given the
prominence and power in contemporary jurisprudence of economic rationales
justifying policy with predictions about ongoing or future behavior –
predictions based not on detailed current empirical evidence but instead on
deductive logic from general assumptions about calculated gain-seeking in
response to incentives.22
18Shelby Cnty. v. Holder, 133 S.Ct at 2616.
19Id. at 2617.
20Id. at 2618 (emphasis in original).
21 Id. at 2619.
22 See e.g., A. Mitchell Polinsky, An Introduction to Law and Economics 79-97 (4th ed. 2011) (using
an economic theory of law enforcement centered on deterrence theory); see also Judicial
Symposium on the Law and Economics of Crime and Punishment, Law and Economics Center,
According to Shelby County‘s majority opinion, the evidence of
pervasive discrimination in the covered jurisdictions forty years ago has “no
logical relation to the present day.” 23 To the contrary, Justice Ginsburg’s
dissent argued that pervasive historical race discrimination, along with
recent evidence of ongoing patterns of new forms of discrimination, could be a
reasonable basis for predicting particular future risk meriting preventative
enforcement. Categorically severing the links in this causal chain, the
majority insisted that the current discrimination in the targeted jurisdictions
appears less “‘pervasive,’ ‘flagrant’ widespread’ and ‘rampant’ than in 196524
- overriding Congress’s explicit judgment that the evidence showed the
problem remained “serious and pervasive.”25 The majority therefore assumes
that in some unstated point in time the Act’s formula for targeting deterrence
became unnecessary and capricious rather than reasonable. The majority
further dismissed the dissent’s analysis of the substantive connection
between the jurisdictions’ previous strategies for undermining voting rights
and current evidence of “second generation” barriers to non-white electoral
power, such as racial gerrymandering.26 Instead, the majority noted that the
original coverage formula was based on the essentially different problem of
particular impediments to casting ballots rather than on the weight of
These categorical judgments suggest the view that racial
discrimination in voting is naturally isolated in time and scope. The
majority’s analysis forecloses the possibility that the historical discrimination
in the covered jurisdictions involved particular institutions designed to
produce long term unlawful political power, such as an especially racially
identified and racially polarized political party structure.28 Indeed, as the
dissent emphasizes, Congress found these objectionable voting changes were
not accidental or isolated irrational actions but rather were “calculated
decisions to keep minority voters from fully participating in the political
George Mason University, April 19-21, 2012,
http://www.masonlec.org/site/files/2012/04/C-PAgenda-FINAL-with-links-4.17.121.pdf, (opening a judicial training program with this reading).
23 133 S.Ct at 2629.
24 Id. at 2629.
25 133 S.Ct at 2641 (Ginsburg, J., dissenting) (citing 679 F. 3d. at 865).
26 133 S.Ct. at 2629 (Ginsburg, J., dissenting).
27 Id. at 2629.
28 See 133 S.Ct at 2643 (Ginsburg, J., dissenting) (noting that Congress relied on evidence showing
“that voting in the covered jurisdictions was more racially polarized than elsewhere in the
country”) (citing H.R. Rep. No. 109-478, at 34-35); see also 133 S.Ct at. 2634 (Ginsburg, J.,
dissenting) (noting that this racial polarization increases the vulnerability of minority citizens).
process.”29 If these jurisdictions’ past pervasive discrimination was motivated
by the desire to maintain and exacerbate racially privileged access to
resources and power, current evidence of strong non-white voter turnout in
covered jurisdictions could be logically consistent with a special continuing
risk of backlash meriting heightened prevention efforts. In fact, Ginsburg’s
dissent noted Congress considered evidence in 2006 showing an increase in
voting changes in the covered jurisdictions deemed objectionable because of
racial discrimination in the period from 1982 to 2004 compared with the
earlier period of enforcement from 1965to 1982.30
Similarly, in this understanding of the motive for historical voting
barriers, recent redistricting to strengthen partisan power and incumbent
strength could be logically linked to past discriminatory voter registration
tests and efforts to suppress turnout. Shelby County’s majority opinion
rejects the evidence and logic of this kind of institutional analysis not simply
as unpersuasive, but rather as inherently illogical and undeserving of the
general deference accorded to plausible legislative policy judgments.
The majority’s substantive judgment about the nature of the problem
underlies its further discussion doubting (without deciding) the rationality of
the preclearance solution, 31 which now is inoperable without a valid coverage
formula. The majority concludes by noting the Act’s nationwide ban on race
discrimination remains enforceable with post hoc litigation.32 However, if the
underlying motive for discrimination in covered jurisdictions centers on
skewing elections to institutionalize racial power, rather than on harming
individual voters, prevention of that institutionalized inequality will be
crucial. As the dissent explains, Congress had evidence that case-by-case
enforcement through litigation challenging past discriminatory practices is
likely to be ineffective compared to preclearance review,33 in part because
discriminatory elections secure the long term political and economic
advantages of incumbency– a problem that would be difficult to rectify or
undo after the fact, especially given that the evidence required to prove a
violation could take several election cycles to establish.34
29 133 S.Ct. at 2629 (Ginsburg, J., dissenting) (citing H.R. Rep. 109-478, at 21).
30 133 S.Ct. at 2629 (Ginsburg, J., dissenting).
31 133 St.Ct. at. 2625 (stating that Shelby County’s arguments challenging the constitutionality of
the preclearance requirement “have a good deal of force”).
32 133 S. Ct. at 2631 (noting that the decision “in no way affects the permanent, nationwide ban on
racial discrimination in voting”).
33 133 S.Ct. at 2640 (Ginsburg, J., dissenting).
34 133 S.Ct. at 2640 (Ginsburg, J., dissenting) (citing 1 EVIDENCE OF CONTINUING NEED 97).
Shelby County’s rejection of Congress’s institutional deterrence theory
echoes State Farm’s rejection of a state court’s reasoning for awarding
punitive damages against a multistate corporation. In that case, the state
court found that a national insurance company engaged in particularly
reprehensible illegal conduct in breaching its legal obligations to defend the
insured plaintiff in an automobile accident liability lawsuit. 35 The state
awarded punitive damages at a level much higher than the plaintiff’s
compensatory damages, based on evidence that the plaintiffs’ injury was
caused not by isolated error or malice but instead by a corporate plan and
institutional system designed to profit by denying policyholders’ rights and to
evade law enforcement efforts.36 In that theory, deterring future unlawful
activity by the company in that state could reasonably require a damage
award set high enough to threaten the company’s expected gains from this
larger system of wrongdoing.
State Farm ruled that the Fourteenth Amendment Due Process clause
barred this punitive damages award because the state’s theory connecting
this case’s injury to broader evidence of institutional wrongdoing was
fundamentally irrational. In the majority opinion’s reasoning, the state
court illegitimately aimed “to punish and deter conduct that bore no relation”
to the plaintiffs’ injury. 37 The Court argued that the state court could not
legitimately connect the evidence of an insurance company’s conduct in other
states or in other lines of insurance to predict and deter the risk of recidivism
in its own jurisdiction because the Court determined that evidence involved
categorically separate types of insurance using essentially disconnected
strategies of illegal gain.38
As in Shelby County, Justice Ginsburg’s dissenting opinion in State
Farm takes a more detailed look at the evidence to show the rationality of the
theory of institutional causation underlying the high punitive damages
award.39 Ginsburg notes “ample evidence” showing the plaintiffs’ injury was
not caused by “inadvertent error or mistake”40 but rather was part of a long
term nationwide “wrongful profit and evasion scheme”41 implemented across
insurance lines and states by top corporate management. Ginsburg
explained that the state court relied on evidence showing that that plan was
35 State Farm, 538 U.S. at 415-16.
37 Id. at 422.
38 Id. at 425.
39 See id. at 431-36 (Ginsburg, J., dissenting).
40 Id. at 437 (Ginsburg, J., dissenting).
41 Id. at 435 (Ginsburg, J., dissenting).
implemented through corporate-wide systems for undervaluing claims,
falsifying claims records, and destroying documents to avoid law enforcement,
as well as through institutional incentives pressuring employees to
participate in these unlawful schemes. 42 The state court could have
reasonably judged that this evidence showed particularly reprehensible
wrongdoing likely to have caused numerous other injuries to consumers in
the same state43 and likely to continue to pose an ongoing risk difficult to
control in that state without unusually high punitive damages calculated to
counter future opportunities for large wrongful scale gains likely to evade law
In the majority’s theory, the plaintiffs were at risk solely because they
were Utah automobile liability claimants victimized by the insurance
company’s bad faith legal defense, so that the state had no basis for
considering other forms of insurance claims fraud in determining the amount
of punitive damages needed for deterrence. Instead, Ginsburg cites trial court
testimony showing the corporation’s employees “were trained ‘to target the
weakest of the herd’ –‘the elderly, the poor, and other consumers who are
least knowledgeable about their rights and thus most vulnerable to trickery
or deceit, or who have little money’ and who therefore lack the power to
enforce their legal rights.”44
This evidence supports the theory that the corporate defendant’s
institutional position as a multistate business gave it the economic power and
motive to subvert the law. Its large scale organization and wealth enabled
the company to build competitive advantage and economic gain by
systematically cheating a large class of unorganized and non-wealthy
customers, profiting from wrongdoing that produced gain likely to far
outweigh the costs of getting caught and punished in individual cases, where
the low value of individual claims and information barriers would often make
litigation unaffordable and ineffective.45 To counter this unequal power to
evade the law, the state civil justice system used its authority to award
punitive damages to help position modest-income policyholders as if they
were organized (like the insurance corporations) across states and across
insurance lines to protect their rights. Like the majority in Shelby County,
however, State Farm categorically denies the legitimacy of a theory
interpreting particular evidence of wrongdoing as part of a pattern of ongoing
42 Id. at 431-32 (Ginsburg, J., dissenting).
43 Id. at 436-38 (Ginsburg, J., dissenting).
44 Id. at 433-34 (Ginsburg, J., dissenting).
45 See McCluskey, supra note 16, at 1053-54 (criticizing the Court’s denial of economic class power
in the case).
institutional exploitation of a disadvantaged group for deliberate unlawful
B. Reconstructing Deterrence as Illegitimate Bias Against the
Power to Evade Law
In addition to rejecting the government’s reasons as insufficient, in
both cases the Court goes further to impute illegitimate reasons to the
enforcement strategy at issue. In doing so, the Court embraces a structural
perspective in which the government’s chosen remedy risks systematic
victimization of a distinct group whose members share similar institutional
In Shelby County, the Court characterizes the coverage formula as
discrimination against particular states based on their sovereign identity.
The Court justifies its seemingly demanding scrutiny of the evidence for the
coverage formula by noting the Voting Rights Act’s “extraordinary” nature
due to its “stringent” and “potent”46 intrusion into “sensitive areas”47 of “a
disfavored subset of States.”48 It asserts the need for judicial intervention to
ensure that states enjoy a century-old tradition of “equal power, dignity and
authority.”49 In this narrative, the legislation’s purpose and effect is not
merely to ensure current equal state compliance with national constitutional
rights by tailoring the timing and quality of federal review. Instead, this
narrative infuses the mere process of federal review of illegal race
discrimination with pernicious substantive meaning that seems (in the
majority’s view) to eclipse the wrongfulness of the underlying problem of
unconstitutional race discrimination in voting.
The majority imagines the act of accounting to the federal government
for an electoral change as a shared trauma and stigma cutting to the core of
states’ identity and authority. In the Court’s narrative, when a covered
jurisdiction must show Voting Rights Act compliance before adopting
electoral changes, that action does not bolster its position as a responsible
constitutional partner proudly fulfilling its commitment to a national
democratic union upholding the law. Instead, the Court constructs selection
for preclearance review as an infantile position where states are forced to
“beseech” federal authorities for permission to exercise what the Court
46133 S.Ct. at 2624.
48133 S.Ct. at 2628.
49 Id. at 2624.
presents as important state rights to control elections. 50 The Court does not
discuss any actual evidence of harmful effects or of discriminatory
Congressional intent toward the covered states, nor does it explain why its
judgment about states’ interests should override that of the Senators
representing the covered states, all of whom voted in favor of continued
coverage. Indeed the dissent notes that the evidence instead shows
substantial benefits to states from being targeted for preclearance – such as
savings in litigation costs.51
Further, the Court’s narrative assumes its imagined harm to each
covered jurisdiction is not an isolated bureaucratic hassle affecting a variety
of disparate governmental decisions. Instead, the Court constructs this
imagined and highly variable harm as part of a larger structural pattern of
harm with fundamental constitutional implications. The Court presumes,
without inquiry into Congressional intent, that the law involves federal
discrimination against states, rather than, more precisely and neutrally
identifying its target as jurisdictions, including not only states as a whole but
also particular subdivisions like counties,52 defined by a variety of specific
factors related to their voting practices. Further, the Court presumes that
states lack sufficient power to protect their interests against such
discrimination in the normal federal political processes, despite the
constitutional design of the Senate giving States equal representation. The
Court does not discuss any evidence of barriers to states’ ability to assert
their alleged interests in the Senate’s unanimous vote in 2006 re-authorizing
the coverage provision.
Constitutional scholar Marci Hamilton develops the Court’s
implications of systemic bias by explaining the coverage formula not only as a
problem of Congress’s passivity -- shirking its purported duty to gather
sufficient supporting facts -- but also as an expression of active partisan
animus and prejudice (despite its overwhelming bipartisan support). 53
Hamilton suggests Congress resisted changing the formula because of
irrational stereotypes that the Republican party is too intransigent and
50 133 S.Ct. at 2616.
51 133 S.Ct. at 2615. (Ginsburg, J. dissenting) (citing Reauthorizing the voting Rights Act’s
Temporary Provisions: Policy Perspectives and Views from the Field: Hearing before the
Subcommittee on the Constitutional, Civil Rights and Property Rights of the Senate Committee
on the Judiciary, 109th Cong., 2d Sess.,pp. 13, 120-121 (2006); Brief for States of New York,
California, Mississippi, and North Carolina as Amici Curiae 8-9).
52 133 S.Ct. at 2620 (discussing 1975 changes in the Act’s coverage to include a number of counties,
as well as 1982 changes allowing bailout of subdivisions of states). Indeed, the petitioner in
Shelby was not a state, but a county.
53 Marci A. Hamilton, The Inevitable Holding in Shelby v. Holder, And its Fallout, JUSTIA, June 25,
oppressive to be trusted to participate in creating a currently rational
enforcement strategy.54 This suggestion echoes Justice Scalia’s comment at
oral argument that the law is suspect because “the normal political processes”
are so biased in favor of protecting “racial entitlements” that members of
Congress face illegitimate political pressure to renew the law. 55 These
comments deny the legitimacy of the unanimous Senate vote by constructing
the covered states’ Senatorial support as a sign that covered states are
victims of political suppression so pervasive that it makes them dependent on
Just as Shelby County assumes the covered states confront shared
structural barriers to defending their interests in Congress, State Farm
similarly suggests that pervasive structural victimization prevents multistate
corporations from seeking state or federal legislation to adequately protect
their interests in limiting punitive damage awards. In addition to criticizing
the arbitrary basis for the punitive damage award, the Court goes on to
identify the state court’s award with a broader pattern of corporate
victimization. It notes that the state court illegitimately took into account
evidence of the insurance company’s wealth, quoting a previous case warning
“juries will use their verdicts to express biases against big businesses.”56 In
this analysis, the majority assumes the insurance company shares common
vulnerability with wealthy corporations in different lines of business accused
of different types of wrongdoing-- despite the majority’s refusal to recognize
any shared vulnerability among insurance consumers with modest wealth
but different types of insurance claims.
As in Shelby County, the Court in State Farm not only limits
rationality to one-way recognition of the risk of wealth-based discrimination,
it also assumes, without evidence, that this distinctive vulnerability of
powerful wrongdoers extends beyond the particular enforcement process at
issue (judicial punitive damage awards) and into the political system in
general. State Farm’s ruling assumes that the shared vulnerability from
(theoretical) anti-corporate bias requires judicial creation of a fundamental
federal substantive due process right. In this view, wealthy multistate
corporations are particularly disadvantaged in the political process and
55 Justice Antonin Scalia, Oral Argument transcript, Shelby Cnty. v. Holder, Feb. 27, 2013, at 47;
see also Amy Davidson, In Voting Rights, Scalia Sees “Racial Entitlement”, NEW YORKER: CLOSE
READ BLOG, Feb. 28, 2013 (discussing Scalia’s comment).
56538 U.S. at 417, quoting Honda Moter Co. v. Oberg, 512 U.S. 415, 532 (1994).
distinctly unable to lobby Congress for federal legislation protecting them
from excessive state damage awards. 57 In addition, State Farm expands
federal courts’ power to invalidate individual state punitive damage awards
without requiring case-by-case proof of duplicative state punishments or
evidence of particularly devastating economic threat to a national corporation.
That is, State Farm treats corporate wrongdoers as deserving the kinds of
preventative federal control of state class bias it denies in Shelby County for
victims of state racial bias: corporations subject to punitive damage awards
by individual states do not have to wait for case-by-case judicial intervention
until after they are subject to numerous state damage awards for the same
Conclusion: Protecting Unequal Power Over Law
Although neither Shelby County nor State Farm directly bars the
government from outlawing the harmful activity at issue – racially
discriminatory voting practices or insurer bad faith – both cases limit the
government’s authority to give meaningful force to these formal rules. Taken
together with State Farm and other recent rulings, Shelby County may
herald not so much a new federalism as a revival of an older constitutional
ideal assuming that law’s protection normally and naturally must bend to
accommodate the weight of unequal economic and racial power.
These two cases show unusual solicitude to the potentially harmful
effects of preventative law enforcement, and unusual skepticism about the
evidence used to predict and control future wrongdoing. This heightened
concern for limiting government law enforcement authority is striking
because the principles established by these cases do not protect individual
human liberties but rather are directed solely at preserving the power of
institutions: states (or other governmental units) in Shelby County and
multistate business defendants in State Farm. The Court has often been
much less willing to protect individual criminal suspects from law
enforcement strategies based on dubious evidence of future risk or even based
on substantial risk of racial or economic bias.58 Individual human victims of
overreaching law enforcement are likely to be disproportionately racially and
57 See McCluskey, supra note 16, at 1055-56 (arguing that this heightened concern for supposed
anti-business bias turns Carolene Products note four on its head, protecting an especially
politically powerful group from the democratic process).
58 See e.g., McCleskey v. Kemp, 481 U.S. 297 (1987) (refusing to apply heightened judicial scrutiny
to Georgia’s death penalty despite evidence that its distinctive reliance on discretion had
disparate racial effects and increased the risk of intentional racial bias – and that it also reflected
a particular state history of racial discriminatory intent). See also McCluskey, supra note 16, at
1043-47 (discussing the Court’s unequal concern for due process interests of corporate defendants).
economically disadvantaged, raising the question whether the Court’s special
protection in these cases is particularly skewed toward accommodating
unlawful power that exacerbates racial and economic inequality.
Of course, the Court justifies its rulings in Shelby County and State
Farm not as protection against institutional wrongdoers’ interest in violating
the law, but rather as protection against their legitimate interests in relief
from the burdens of particular prevention strategies. But these “burdens”
appear to consist mainly of decreased power to organize and entrench illegal
exploitation of groups made vulnerable precisely because of their exclusion
from comparably powerful institutional protection. In Shelby County, the
Court protects the state’s interest in implementing possibly unlawful
electoral changes without the delay of federal oversight. Although that
interest in avoiding delay might seem benign, it is a key source of the
unlawful power at issue: the ability to entrench political racial inequality
through incumbency so that future enforcement actions will be less
meaningful. In State Farm, the Court protects corporate wrongdoers from
the risk that engaging in large scale multistate wrongdoing will subject them
to unusually high and overlapping damage awards (or, more likely, from the
less disruptive costs of having to devote company legal and economic
resources to seeking national legislative relief from such risks). But the
multistate corporation’s ability to spread and offset the cost of relatively
predictable, isolated and individualized damage awards over a large volume
of unlawful gains was exactly what gave it the power to profit from cheating
its modest-income individual customers.59
The Civil War Amendments stand for reconstructing a constitutional
system characterized not only by racially unequal rules but also by
institutional force operating above and against lawful government efforts to
advance equality.60 Shelby County joins with State Farm to retreat from that
goal, subordinating both state and federal authority to the interest in
protecting institutional power to evade the law.
59 See McCluskey, supra note 16, at 1040-42.
60 United States v. Cruikshank, 92 U.S. 542 (1876) (ruling the Constitution bars the federal
government from using Civil War Amendment powers to enforce the law in response to a white
supremacist massacre aimed at usurping the local government). See James Gray Pope, Snubbed
Landmark: How United States v. Cruikshank Shaped Constitutional Law and Racialized Class
Politics in America, 49 HARV. CIVIL RIGHTS-CIVIL LIBERTIES L. REV. 385 (2014).