South Texas Law Review Vol.57 No.2

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SOUTH TEXAS LAW REVIEW

SOUTH TEXAS COLLEGE OF LAW HOUSTON, TEXAS

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SOUTH TEXAS LAW REVIEW VoL. 57 No. 2

WINTER 2015

EDITORIAL BOARD 2015-2016 KELSIE HAALAND

Editor in Chief

DRAKE LAWSAGE

Managing Editor

REBECCA MARSHALL

DAVID MANN

Information Editor

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The opinions expressed in the South Texas Law Review are those of the contributors and are not necessarily representative of the views of the editors of the Review or of South Texas College of Law.

IV

DEREK FINCHAM, B.A., University of Kansas; J.D., Wake Forest University School of Law; Ph.D., University of Aberdeen School of Law; Associate

Professor of Law.

SHARON FINEGAN, B.A., University of Virginia; J.D., American University Washington College of Law; LL.M., Columbia Law School; Professor of

Law.

PAMELA E. GEORGE, B.S., University of Texas; M.L.S., University of Texas; J.D., University of Texas School of Law; Professor of Law. MAXINE D. GooDMAN, B.A., Brandeis University; J.D., University of Texas School of Law; Professor of Law. DONALD J. GuTER, B.A., University of Colorado; J.D., Duquesne University School of Law; President, Dean, and Professor of Law. DAVID R. HAGUE, B.A., University of Utah; J.D., University of Kansas School of Law; Assistant Professor of Law. HELEN BISHOP JENKINS, B.M.E., Peabody Conservatory of Johns Hopkins Institute; M.M.E., Howard University; J.D., University of Houston Law Center; Executive Vice President and Professor of Law. R. RANDALL KELSO, B.A., University of Chicago; J.D., University of Wisconsin Law School; Spurgeon E. Bell Distinguished Professor of Law. JosEPH K. LEAHY, B.A., Swarthmore College; J.D. New York University School of Law; Professor of Law. KATERINA LEWINBUK, B.A., Minnesota State University; J.D.; John Marshall Law School; Professor of Law. BETTY J. LUKE, B.S., Lamar University; B.S., University of Texas Medical Branch; J.D., South Texas College of Law; LL.M., University of Houston Law Center; Associate Professor of Clinical Studies.

BRUCE A. McGOVERN, B.A., Columbia University; J.D., Fordham University School of Law; LL.M., University of Florida College of Law; Vice President,

Associate Dean, and Professor of Law.

SHELBY AD. MooRE, B.A., Towson State University; J.D., University of Baltimore School of Law; LL.M., Harvard Law School; Professor of Law. RAY E. MosEs, B.A., University of Texas; J.D., University of Texas School of Law; LL.M., Northwestern University Law School; S.J.D., Southern Methodist University School of Law; Professor of Law. OLGA L. MOYA, B.A., University of Texas; J.D., University of Texas School of Law; Professor of Law. JAMES L. MussELMAN, A.A., Illinois Central College; B.S., Illinois State University; J.D., Brigham Young University; J. Reuben Clark Law School;

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Professor of Law.

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of Law.

JEAN FLEMING PowERS, B.A., University of Texas; J.D., University of Houston Law Center; Professor of Law. ScoTT REMPELL, B.A., University of Michigan; J.D., American University, Washington College of Law; Associate Professor of Law.

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JEFFREY L. RENSBERGER, B.A., Wabash College; J.D., Indiana University, Bloomington; Vice President for Strategic Planning and Institutional Research and Professor of Law. CHARLES W. "RocKY" RHODES, B.B.A., Baylor University; J.D., Baylor University School of Law; Vinson & Elkins Research Professor and Professor of Law. VAL D. RICKS, B.A., Brigham Young University; J.I)., Brigham Young University, J. Reuben Clark Law School; Charles Weigel II Research Professor and Professor of Law. GARY S.RosIN, B.S., Texas A&M University; J.D., University of Texas School of Law; Professor of Law. NrnRI MATHIS RUTLEDGE, B.A., Spelman College; J.D., Harvard Law School; Professor of Law. MARKR. SIEGEL, B.S., B.A., University of Florida; J.D., Florida State University College of Law; LL.M.,Emory University School of Law; Professor of Law. ANDREW T. SOLOMON, B.A., University of Michigan; J.D., Boston University School of Law; Professor of Law. TOBIN A. SPARLING, B.A., Dartmouth College; M.S., Columbia University School of Library Service; M.A., Columbia University Graduate School of Arts & Sciences; J.D., Columbia Law School; Professor of Law. MARKE. STEINER, B.A., University of Texas; J.D., University of Houston Law Center; Ph.D., University of Houston; Godwin Lewis PC Research Professor and Professor of Law. DRU STEVENSON, B.A., Wheaton College; J.D., University of Connecticut School of Law; LL.M., Yale Law School; Professor of Law. CHERIE 0. TAYLOR, A.B., Harvard University-Radcliffe College; J.D., University of Georgia School of Law; LL.M., Georgetown University Law Center; Professor of Law. T. GERALD TREECE, B.A., University of Houston; J.D., University of Houston Law Center; Vice President, Associate Dean, Special Counsel to the President and Dean, and W. James Kronzer, Jr. Distinguished Professor of Law. MICHAEL E. WHEELER, B.A., Arkansas Tech University; J.D., University of Arkansas at Little Rock William H. Bowen School of Law; Professor of Law. KENNETH WILLIAMS, B.A., University of San Francisco; J.D., University of Virginia School of Law; Professor of Law. JoHN J. WORLEY, A.B., University of Georgia; J.D., University of Georgia School of Law; M.A., Rice University; Vice President, Associate Dean, Director of Transactional Law Practice Certificate Program and Professor of Law. KEVIN M. YAMAMOTO, B.S., University of California at Davis; J.D., University of San Diego School of Law; LL.M., University of Florida College of Law; Professor of Law.

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SOUTH TEXAS LAW REVIEW VOL. 57

WINTER 2015

No. 2

ARTICLES CONTINGENT FEE CONTRACT REMEDIES UNDER TEXAS LAW: How AND WHEN SUING A FORMER CLIENT MAY

PROTE CT HER BEST INTEREST .............

Daniel Ray Correa 121

WHAT WOULD A LIBERTARIAN TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John R.

LOOK LIKE?

Dorocak 147

CLARITY AND REASONABLE DOUBT IN EARLY STATE-CONSTITUTIONAL

JUDICIAL REVIEW ........................ Christopher R. Green

169

BoOK REVIEWS BOOK REVIEW: RESTITUTION REVISITED .....

Craig Estlinbaum 203

xii

CONTINGENT-FEE CONTRACT REMEDIES UNDER

TEXAS LAW: How AND WHEN SUING A FORMER CLIENT MAY PROTECT HER BEST INTEREST DANIEL RAY CORREA*

I.

INTRO DU CTION ............................................................................... 12 1

II.

A CONTINGENT-FEE CONTRACT IS NOT EQUIVALENT TO AN ACTUAL ASSIGNMENT IN TEXAS ....................................................

A.

Cannot Createan OrdinaryAssignment, Void of Public Policy Considerations.............................................................

Terminated Counsel Working Under a Contingent-Fee Contract May PursueHer Mandell Remedies Against Her Former Client, But Courts Heavily Scrutinize Contracting Around These Remedies ..........................................................

130

A CONTINGENT-FEE CONTRACT CANNOT CHILL A CLIENT'S RIGHT TO TERMINATE OR SETTLE .................................................

134

B.

III.

123

ContractsInvolving the Attorney-Client Relationship 125

A.

Attorney Fee Arrangements CannotImpose an Undue Burden on the Client's Ability to Change Counsel ................. 134 B. Attorney Fee Arrangements CannotImpose an Undue Burden on the Client's Right to Settle .....................................

135

IV. V. V I.

A PETITION IN INTERVENTION IS NOT THE PROPER REMEDY TO RECOVER ON A CONTINGENT-FEE CONTRACT ............................... 137 TIME TO RETHINK THE MANDELL REMEDIES ................................. 140 C ON CLU SION .................................................................................. 146

I.

INTRODUCTION

Suing former clients to recover a contingent fee is never ideal. But, neither is working for free. Like any other contract for services, when an attorney enters into a contingent fee agreement with a client, the attorney expects she will be paid for her services if her client recovers. What if the * Daniel Correa is an Associate Attorney at Cowles & Thompson, PC in Dallas, Texas. Daniel would like to thank Kelsie Haaland and the South Texas Law Review editors for their insight and work on this Article, and his wife, Wendy Correa, for her inspiration and encouragement, and daughter, Abigail, for making everyday wonderful. Special thanks to Byron K. Henry for a great discussion on this topic and for his passion on getting this issue right, both of which influenced section IV of this Article.

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attorney, though, has worked on her client's case for some time and the client terminates the attorney-client relationship before the client recovers?

How may the attorney recover for services she provided?

In Texas, there are multiple avenues an attorney may take to recover on a contingent fee contract. First, she may pursue what are known as the Mandell remedies by "seek[ing] compensation in quantum meruit or in a suit to enforce the contract by collecting the fee from any damages the client subsequently recovers."' According to Texas courts, she may also file a petition in intervention in her former client's suit to protect any interest she might have in the cause of action.2 One might wonder, though, whether it is reasonable to allow a terminated attorney to recover the full contingency fee, when such an arrangement essentially forces a client to accept the risks associated with both an hourly fee and a contingent fee.3 And, what if the client hires another attorney and the new attorney helps the client settle the case? Does the former attorney have a remedy against the client's new counsel or the third party with whom the former client settled? Suits to recover on contingent fee contracts often include the former client and the third party (often an insurance carrier paying the settlement on behalf of the actual third party) with whom the client settled.

Texas law permits an attorney to recoup a contingent fee from a third party when, in an effort to undercut or vitiate the attorney's contractual rights, the attorney's client conspires with the opposing party to settle the case. 4 However, when these circumstances are not present, the law is less 1.

Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 561 (Tex. 2006) (citing Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969)).

2.

See, e.g., Serna v. Webster, 908 S.W.2d 487, 491 (Tex. App.-San Antonio 1995, no writ) ("A plea in intervention in the principal suit is an appropriate vehicle by which a discharged attorney may recover fees for services rendered.").

This article addresses contingent fee recovery when a client terminates his attorney's 3. services. Texas courts allow an attorney to recover attorney fees when the attorney withdraws from his client's case with just cause. See, e.g., Augustson v. Linea Aerea Nacional-Chile S.A., 76 F.3d 658, 662-63 & n.6 (5th Cir. 1996); Royden v. Ardoin, 331 S.W.2d 206, 209 (Tex. 1960).

There is no clear case, however, that dictates the measure of damages. Augustson, 76 F.3d at 66263 & n.6. A question arises whether an attorney who withdraws should ever be able to enforce the contract to recover her full contingent fee.

A petition for review has been filed with the Texas Supreme Court in a case involving a law firm that withdrew from representing its client. Parallel Networks, LLC v. Jenner & Block, LLP, No. 16-0080 (Tex. Mar. 17, 2016). The law firm was awarded the full contingent fee in arbitration.

Parallel Networks, LLC v. Jenner & Block LLP, No. 05-13-00748-CV, 2015 WL 5904685, at *4 (Tex. App.-Dallas Oct. 9, 2015, pet. filed) (mem. op.). On appeal, the former client argued that the arbitrator's award should be vacated as it violated public policy by, among other things, allowing the withdrawing law firm to recover the full contingent fee. Id. Though this Article does not expressly deal with attorney-withdrawal situations, the arguments and case law herein suggest an answer.

See Dow Chem. Co. v. Benton, 357 S.W.2d 565, 568 (Tex. 1962); Honeycutt v.

4.

Billingsley, 992 S.W.2d 570, 584 (Tex. App.-Houston [ 1st Dist.] 1999, pet. denied).

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CONTINGENT FEE CONTRA CT REMEDIES

clear on whether the attorney may sue a third party who settles with her former client, such as where the attorney has notified the third party's counsel or insurance carrier prior to settlement of her interest in the cause of action.

This Article argues that, absent evidence that a present client conspired with the opposing party to settle the case in an effort to undercut or vitiate the attorney's contractual rights, the attorney's remedy lies against her former client, not any third party with whom the former client settled. Part I examines contingent fee contracts with "assignment" language and demonstrates that Texas law does not sanction treating such contracts as effecting an assignment. Part II examines the impact a remedy against a third party would have on a client's right to choose counsel of her choice and absolute right to decide when to settle. Part II concludes that case law and public policy argue against a remedy to sue a third party with whom a former client settled. Part III argues against intervention by a terminated attorney in her former client's suit to recover on a contingent fee contract, focusing on the arguments made in Parts I and II. The former attorney should pursue the Mandell remedies against her former client alone and in a separate suit. Part IV reexamines the Mandell remedies when used only against a former client and argues that, based on the public policy considerations in Parts I-III, an attorney should only be allowed to seek the lesser of a contingent fee or the reasonable value for her services.

II.

A CONTINGENT-FEE CONTRACT IS NOT EQUIVALENT TO AN ACTUAL ASSIGNMENT IN TEXAS

Standard contingent-fee contracts in Texas read as follows: In consideration of the services rendered by [X], you hereby agree to "sell, transfer, assign and convey to [X] the respective undivided interests [of x%] in and to [your] [cause of action] as set out above against [Y (third party)] and to any judgment or judgments that [you] may obtain or that may be rendered to [you] or [your] heirs and assigns." 5 The extent to which this language operates to create an actual assignment (an effective assignment)-that is, a present proprietary interest in the client's cause of action-ultimately determines whether an attorney, terminated before the client recovered, possesses a remedy against a third party with whom the former client settles when the third party or its agent or representative had notice of the 'assignment' prior to the settlement.

5.

See Dow Chem. Co., 357 S.W.2d at 566 (internal quotation marks omitted).

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The Texas Supreme Court appeared to waver on this issue in Dow Chemical Co. v. Benton,6 which has prompted some lower courts to entertain treating "assign" language in contracts creating attorney-client relationships as a present proprietary interest in the client's cause of action, even if the cause of action is personal injury.7 But, the Texas Disciplinary Rules of Professional Conduct clearly do not allow attorneys to take a proprietary interest in a client's cause of action, except to contract for a reasonable contingent fee, or acquire a lien granted by law to secure the lawyer's fee or expenses. 8 Though these rules are not binding on courts, they purport to bind attorneys practicing law in Texas. Something's got to give.

A close look at Dow Chemical and repair to its reasoning provides an answer in line with the Texas Disciplinary Rules of Professional Conduct.

An attorney does not obtain an actual and present assignment in the client's cause of action from a contingent fee contract.

See id. at 568.

6.

See, e.g., Carroll v. Hunt, 168 S.W.2d 238, 241 (Tex. 1943) ("In order that an 7. agreement for a contingent fee may operate as an equitable assignment, there must be in effect a constructive appropriation of so much of the amount to be recovered as will confer upon the attorney a complete and present right to receive the same without the further intervention of the client." (quoting 7 C.J.S. Attorney & Client § 187, republished as 7A C.J.S. Attorney & Client § 473 (2015) (internal quotation marks omitted))); Law Offices of Windle Turley, P.C. v. French, 140 S.W.3d 407, 412-13 (Tex. App.-Fort Worth 2004, no pet.); Rapp v. Mandell & Wright, P.C., 127 S.W.3d 888, 894 (Tex. App.-Corpus Christi 2004, pet. denied) (holding that the attorney-client contract did not effect an assignment, but entertaining the possibility of an effective assignment in contingent fee cases); see also Galveston, H. & S. A. Ry. Co. v. Ginther, 72 S.W. 166, 167 (Tex. 1903); Wichita Falls Elec. Co. v. Chancellor & Bryan, 229 S.W. 649, 650 (Tex. Civ. App.-Amarillo 1921, writ ref'd) (holding that an attorney-client contract for "onethird interest in the case, rather than in any amount or judgment which might be recovered by prosecuting the litigation" evidenced an intent to assign a present one-third interest in wrongful death suit and not a promise to pay a contingent fee upon recovery).

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.08(h)(1)-(2), reprinted in TEX. 8.

GOV'T CODE ANN., tit. 2, subtit. G, app. A (West 2015) (TEX. STATE BAR R. art. X, § 9); see also Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 563-64 (Tex. 2006) (citing TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(d), 1.08(h)). It is important to note what is not being argued in this Article. Nowhere does this Article suggest or mean to suggest that an attorney cannot obtain an effective assignment interest in an actual contract or property that is the subject of a cause of action. This Article only argues that an attorney cannot obtain an assignment in the cause of action itself. This is an important difference. For example, a person may have a right to performance under a contract and assign a portion of that right under the contract to an attorney in order to pay for the attorney to litigate a cause of action against a breaching party. The assigned interest is in the contract itself. Personal injury is unique in that only the right to sue, that is, a right to pursue a cause of action, can be assigned. Beech Aircraft Corp. v. Jinkins, 739 S.W.2d 19, 22 (Tex. 1987) ("We are mindful of the general rule that a cause of action for damages for personal injuries may be sold or assigned."). It is precisely this right that an attorney cannot obtain by assignment according to this Article and the Texas Disciplinary Rules of Professional Conduct.

2015]

A.

CONTINGENT FEE CONTRA CT REMEDIES

ContractsInvolving the Attorney-Client Relationship Cannot Create an OrdinaryAssignment, Void ofPublic Policy Considerations

Contracts that involve the attorney-client relationship invoke public policy considerations, as the Texas Supreme Court acknowledged in Dow Chemical.9 In Dow Chemical, the original plaintiff refused to appear for deposition, despite being urged to appear by his attorney, and did not show good cause for his failure to appear. l The trial court, upon motion by the defendant, dismissed the plaintiffs cause of action. 1" The trial court also granted the defendant's motion to strike plaintiff's counsel's petition in intervention, which was based on the law firm's contingent-fee interest in the plaintiffs cause of action."

On appeal, the Eleventh Court of Appeals reversed the trial court's order on Dow Chemical's motion to strike.1 3 The appellate court held that plaintiffs counsel could prosecute its client's cause of action to recover its contingent fee.' 4 The Texas Supreme Court reviewed the issue of "whether an attorney may prosecute a cause of action on his own behalf to secure a contingent fee after his 15client, the original plaintiff, has been properly dismissed from the case.'

A contingent-fee contract involves the attorney-client relationship, so the court reasoned that this case could not be "regard[ed] ... as one involving an ordinary assignment, devoid of any potential public policy considerations.' ' 6 To examine whether a cause of action is divisible, such that the plaintiffs attorney under a contingent fee contract can try it for only a percentage, the court devised three intuition pumps 17 involving Texas Civil Procedure Rule 215(a): In addition to giving the trial court the power to dismiss a cause of action for failure of a party to give a deposition, [Rule 215a] provides alternative sanctions including any orders "as may be just." One of the sanctions specifically permitted is the striking of any part of the pleadings of the defaulting party. Suppose that the trial court had invoked the latter sanction in this case, rather than 9.

Dow Chem. Co., 357 S.W.2d at 567.

10.

Id. at 566.

11.

Id. 12.

Id. 13.

Benton v. Dow Chem. Co., 351 S.W.2d 899, 900 (Tex. Civ. App.-Eastland 1961), rev'd, 357 S.W.2d 565 (Tex. 1962).

14.

Id. 15.

Dow Chem. Co., 357 S.W.2d at 566.

16.

Id. at 567.

17.

Thought experiments that are designed to invoke or provoke one's intuition on a matter have been dubbed by Daniel C. Dennett as "intuition pumps." See DANIEL C. DENNETT, INTUITION PUMPS AND OTHER TOOLS FOR THINKING 5-15 (2013).

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dismissing the cause entirely. Could it be said that these pleadings would be stricken only as to the plaintiff, but that they could still be used in the same lawsuit to support the introduction of evidence and submission of issues on behalf of the plaintiffs lawyer? Conversely, most of the actual details of any lawsuit are necessarily handled by the lawyer on behalf of his client. Suppose that in a particular lawsuit the lawyer fails to make proper objections, drafts defective special issues, or is late in filing a particular document. Could we allow the client to argue on appeal that all these defects related only to the attorney's case and not to his? Rule 215a is based on Rule 37(d) of the Federal Rules of Civil Procedure, 28 U.S.C.A. The case of Hammond Packing Co. v. Arkansas, 212 U.S. 322, 29 S. Ct. 370, 53 L. Ed. 530, indicates that the legal justification for rules such as these is that failure to produce requested documents or to appear for a deposition creates a presumption of want of merit in the defaulting party's claim.

Suppose that in this case Champion had appeared for his deposition but then proceeded to testify that there was no merit in his cause of action. Could we hold 8 that this testimony would not also conclude his lawyer's case?'

Answering each question in the negative, the Texas Supreme Court held, a "lawyer's rights, based on the contingent[-]fee contract, are wholly derivative from those of his client."' 9 There is only one cause of action; the cause of action is not divisible such that it "may be tried for only a percentage of the cause of action., 20 An attorney is not a party to the suit or co-plaintiff with his client in the litigation. 21 Rather, where an attorney has a contingent-fee contract, he "elects to litigate his interest simultaneously with his client's interest, in his client's name, and elects implicitly to be bound by any judgment properly rendered in the case. 2 2 As soon as the client's rights in the case were extinguished against the third party, in other words, so, too, were the client's attorney's rights against the third party, if any such rights actually existed.

Clearly, the court does not equate a contingent-fee contract to an actual assignment.2 3 However, the court, in dictum, made a statement that has been the source of much confusion: "We do not reject the rationale that a properly worded contingent fee contract may effect an assignment of part of

18.

Dow Chem. Co., 357 S.W.2d at 567.

19.

Id.

20.

21.

22.

23.

Id. Id. at 568.

Id. See id.

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CONTINGENT FEE CONTRA CT REMEDIES

the recovery and a part of a cause of action to the attorney. ' ' 24 Does this mean that a contingent-fee contract can create an effective assignment?

Some lower courts have suggested that attorneys can create an effective assignment in a client's cause of action.25 However, these courts, according to the reasoning in Dow Chemical and the Texas Disciplinary Rules of Professional Conduct, are wrong.

Consider first an effective assignment's characteristics. An assignment is a present transfer of a right.26 A contract, in contrast, is not a present transfer of a right, but a promise for future performance. 27 A contingent-fee contract is nothing more than a promise to pay a debt from an existing or expected future designated fund; it does not operate as a present assignment. 28 As in Dow Chemical, a contingent-fee contract that uses the word "assign," does not promote the contingent fee from an ordinary contract to an effective assignment.29 Repair to an intuition pump will demonstrate why a contingent fee between an attorney and his client does not effect an assignment on either part of the recovery or part of the cause of action. 30 Imagine that by law an attorney may recover her contingent fee in full when terminated by a client and the amount from which the fee is derived is the amount of the client's actual recovery net of any offsets. 31 If a client has fired three prior 24.

Id (emphasis added).

25.

See supra note 7 and accompanying text.

26.

Carroll v. Hunt, 168 S.W.2d 238, 241 (Tex. 1943) ("In order that an agreement for a contingent fee may operate as an equitable assignment, there must be ... so much of the amount to be recovered as will confer upon the attorney a complete and present right to receive the same without the further intervention of the client." (quoting 7 C.J.S. Attorney & Client § 187, republished as 7A C.J.S. Attorney & Client § 473 (2015))); RESTATEMENT (SECOND) OF CONTRACTS § 317(1) (1981) ("An assignment of a right is a manifestation of the assignor's intention to transfer it by virtue of which the assignor's right to performance by the obligor is extinguished in whole or in part and the assignee acquires a right to such performance."); 3 E. ALLEN FARNSWORTH, FARNSWORTH ON CONTRACTS § 11.3, at 69 (3d ed. 2004) ("To make an effective assignment of a contract right, the owner of that right must manifest an intention to make a present transfer of the right without further action by the owner or by the obligor.").

27. See RESTATEMENT (SECOND) OF CONTRACTS § 1 (1981).

28. Silverthorne v. Mosley, 929 S.W.2d 680, 681-82 (Tex. App.-Austin 1996, writ denied); see also Reynolds v. Nagely, 262 S.W.3d 521, 527 (Tex. App.-Dallas 2008, pet. denied) (treating a contingent-fee contract as an ordinary promise to perform, while treating the contract, simultaneously, as an assignment); RESTATEMENT (SECOND) OF CONTRACTS § 330(1) ("A contract . . . to transfer proceeds to be received in the future by the promisor[] is not an assignment."); FARNSWORTH, supra note 26, § 11.3, at 68 ("Sometimes an obligee (B) promises to collect money owed to the obligee by an obligor (A) and to pay it to a promisee (C). Though the obligee's promise may be enforceable as a contract, there is no assignment.... [T]he promisee's only right is against the obligee, not against the obligor." (footnote omitted)).

29. Dow Chem. Co., 357 S.W.2d at 566.

30. Id. at 567.

31.

See Levine v. Bayne, Snell & Krause, Ltd., 40 S.W.3d 92, 94 (Tex. 2001) (quoting RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 35 & cmt. d (2000)).

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attorneys, each with a 40% contingent-fee contract, and the client recovers $100,000.00, net of any offset, with the help of his fourth counsel of choice (who also has a 40% contingent fee contract with the client), the client will recover nothing and owe $60,000. This would be true even if attorney A worked only two days on the case, attorney B worked one month, attorney C three months, and attorney D one year.

The net effect is that the attorneys have leveraged their contracts to the detriment of their former client under the auspices of the law. This result obtains whether the contingent fee contract is construed as assigning part of the client's cause of action or recovery to the attorney. Now, snap out of the intuition pump and into reality: Texas law allows, according to some courts, this egregious result to obtain. 2 In other words, some Texas courts continue to mistake contingent-fee contracts for effective assignments.33 Bearing the immediate intuition pump in mind, case law and the Texas Disciplinary Rules of Professional Conduct make it clear that a lawyer cannot obtain a proprietary interest in his client's cause of action or the subject matter of the litigation, except to contract for a reasonable contingent fee, or acquire a lien granted by law to secure the lawyer's fee or expenses. 34 "A reasonable client does not expect that a lawyer engaged on a contingent-fee basis will charge a fee equaling or... exceeding 100% of the recovery." 35 Every attorney's fee, even under contract, is subject to the Texas Disciplinary Rules of Professional Conduct's reasonable fee limitation. 36 The law, in other words, specially treats contracts creating attorney-client relationships.37 It follows that an attorney cannot create an assignment of a client's personal injury action in the ordinary sense, such that the attorney owns the case and has a final say in its disposition. Likewise, it follows that an attorney cannot create an assignment of part of a client's recovery from a contingent fee contract because the same egregious result in the above intuition pump would be obtained under either instance. If a contingent fee

32.

See, e.g., Reynolds, 262 S.W.3d at 529. This Article revisits Reynolds in detail in Part V. See discussion infra Part V. See, e.g., Reynolds, 262 S.W.3d at 529.

33.

See, e.g., TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.08(h), reprinted in TEX. 34.

GOV'T CODE ANN., tit. 2, subtit. G,app. A (West 2015) (TEX. STATE BAR R. art. X, § 9); Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 563-64 (Tex. 2006) (citing TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.08(h)).

Walton, 206 S.W.3d at 563.

35.

See TEX. DISCIPLINARY RULES PROF' L CONDUCT R. 1.04(a)-(b).

36.

See, e.g., id. at R. 1.06(c)-(d), 1.08(a)(l)-(3) & cmts. 1-2; Walton, 206 S.W.3d at 565 37. ("Lawyers have a duty, at the outset of the representation, to 'inform a client of the basis or rate of the fee' and 'the contract's implicationsfor the client."' (emphasis added)); RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS §§ 36 & cmt. b, 18, 126 (2000).

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contract could operate as an assignment of part of the client's recovery, such that it could be enforced against the third party with whom a former client settles or receives a judgment, then attorneys would be able to create an end-run around the rule in Dow Chemical.

Dow Chemical held that an attorney cannot litigate part of her client's case as her own against the third party to recovery her fee. 38 To hold that an attorney, nevertheless, may litigate part of her client's recovery as her own case against the third party to recovery her fee would place form over substance. The form attributed to the object of assignment cannot take precedence over the substantive effect, which is illustrated above in the intuition pump involving prior counsel.

An assignment of a cause of action founded on personal injury by a client to his attorney operates as a mere contingent fee.39 Otherwise, the law would incentivize the moral hazards the rules of professional conduct attempt to avoid, namely providing the attorney(s) with an ownership basis in the litigation, creating an economic basis for the attorney(s) to claim to control the prosecution and settlement of the case, and relegate the client to a subordinate position. a Attorneys hold a special relationship of trust with their clients, so the Dow Chemical court made it clear that public policy considerations do not allow attorneys to treat a case as if they presently own it.41 Even though the Dow Chemical court unfortunately used language indicating the possibility that a properly worded contingent fee could effect an assignment,42 it is best to treat this statement merely as dictum, which it is, that misunderstands the nature of a contingent fee.

If a contingent fee is not an assignment, then an attorney on a contingent-fee contract who is terminated by his client has no cause of action against the third party (obligor) in a personal injury suit.4 3 More important, the court's clear holding in Dow Chemical requires courts not to allow a terminated attorney to proceed against the third party whom her client is suing. 4 Dow Chemical held that an attorney working on a contingent fee "elects to litigate his interest simultaneously with his client's interest, in his client's name, and elects implicitly to be bound by any

Dow Chem. Co. v. Benton, 357 S.W.2d 565, 567 (Tex. 1962).

38.

See, e.g., TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.08(h)(1)-(2); Walton, 206 39.

S.W.3d at 563-54; Galveston, H. & S.A. Ry. Co. v. Ginther, 72 S.W. 166, 167 (Tex. 1903).

40.

See RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 36 cmt. b.

41.

42.

43.

44.

See Dow Chem. Co. v. Benton, 357 S.W.2d 565, 567-68 (Tex. 1962).

Id.at 568.

See RESTATEMENT (SECOND) OF CONTRACTS §§ 336(1), 338(1) (1981).

See Dow Chem. Co., 357 S.W.2d at 567-68.

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judgment properly rendered in the case."45 A terminated attorney cannot simultaneously litigate her interest with her former client and in her former client's name; the representation is severed. Logic does not sanction vesting a terminated attorney with greater rights than any other attorney working on a contingent fee by allowing the terminated attorney to separately pursue the third party to recover on her contingent fee contract with a former client, 46 nor does public policy.

B.

TerminatedCounsel Working Under a Contingent-FeeContractMay Pursue Her Mandell Remedies Against Her Former Client,But Courts Heavily Scrutinize ContractingAround These Remedies

Texas law provides a number of remedies to terminated attorneys to recover on an agreed-upon, contingent-fee contract with their former clients. When a former client terminates an attorney's services without good cause, the terminated attorney "may seek compensation in quantum meruit or in a suit to enforce the contract by collecting the fee from any damages the client subsequently recovers." 47 These remedies are known as the Mandell remedies.48 The terminated attorney may, instead of filing a separate suit, file a petition in intervention in her client's pending litigation to protect any interest she has in the cause of action. 49 These cases do not allow a remedy by the discharged attorney against the former opposing party in the subject litigation, unless, as stated above, the client conspired with the opposing party to settle the case in an effort to undercut or vitiate the attorney's contractual rights.5 ° The Texas Supreme Court looks unfavorably upon attorney-client contracts that purport to contract around the Mandell remedies. 51 In Hoover Slovacek LLP v. Walton, the court held an attorney-client fee arrangement unconscionable where it called for payment of the present value of a contingent fee if the client terminated the law firm.52 The court looked to the value and purpose of contingent-fee arrangements. Contingent-fee 45.

Id.at 568 (emphasis added).

46.

See discussion infra Part I.B. 47.

See Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 561 (Tex. 2006) (citing Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969)).

48.

Id.at 561-62.

49.

See Serna v. Webster, 908 S.W.2d 487, 491 (Tex. App.-San Antonio 1995, no writ)

("A plea in intervention in the principal suit is an appropriate vehicle by which a discharged attorney may recover fees for services rendered.").

50.

See Dow Chem. Co., 357 S.W.2d at 568; Honeycutt v. Billingsley, 992 S.W.2d 570, 584-85 (Tex. App.-Houston [1st Dist.] 1999, pet. denied) (reaffirming the exception in a case involving a referral agreement with a fee-splitting arrangement).

51.

See Walton, 206 S.W.3d at 562-64.

52.

Id.at 559, 566.

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arrangements facilitate risk-sharing: A less well-off client can avoid the risk of net financial loss that may occur under other fee arrangements, and the attorney(s) has/have the potential for a greater fee than billable hours may 53 offer to compensate the attorney(s) for the risk of no fee if the case is lost.

This arrangement also incentivizes the attorney(s) to work diligently to obtain the best result. 4 The court reasoned that the termination fee at issue was unconscionable in large part because it sought to contract around the Mandell remedies. Mandell remedies allow an attorney who has been terminated without good cause to recover funds owed to her for her work on the case only if the client recovers. 5 The termination fee at issue in Walton attempted to contract around the Mandell remedies in three material ways: First, it made no distinction between discharges occurring with or without cause. Second, it assessed the attorney's fee as a percentage of the present value of the client's claim at the time of discharge, discarding the quantum meruit and contingent fee measurements. Finally, it required [the client] to pay [the attorney] the percentage fee immediately at the time of discharg[ing] the 56 attorney [without regard to whether the client recovered or not].

Underlying the court's concern here is the fact that the termination fee sought to vest a present and proprietary interest in the client's cause of action. The court reasoned: [E]ven if Hoover's termination fee is viewed as transforming a traditional contingent fee into a fixed fee, it nonetheless impermissibly grants the lawyer a proprietary interest in the client's claim by entitling him to a percentage 5of 7 the claim's value without regard to the ultimate results obtained.

Relatedly, this termination-fee arrangement disrupted the risk-sharing balance offered by contingent-fee arrangements. The client bore the risks that accompany both hourly and contingent fees. According to the contract, the client would pay 28.66% for any recovery, thus exposing the client to the risk that the attorney "would easily settle his claims without earning the fee.",58 But, the client also bore the risk of an hourly fee because discharging59 the attorney would cost 28.66% whether or not he prevailed on his claim.

53.

54.

55.

Id.at 561.

Id. Id.at 561-62.

56.

57.

58.

59.

Id.at 562.

Id.at 564.

Id. Id

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The fee arrangement at issue inured to the attorney's benefit and the client's detriment, which was held impermissible by Walton.60 Walton indirectly addresses the issue of whether a contingent fee may be treated as an assignment so as to allow a terminated attorney to have a cause of action against both her former client and the third party with whom the former client settled--despite the third party's notice of the attorney's alleged interest. It should be noted, first, that Dow Chemical answers this question, albeit not as clearly as one would hope. There, the court held that an attorney working on a contingent-fee basis "elects to litigate his interest simultaneously with his client's interest, in his client's name, and elects implicitly to be bound by any judgment properly rendered in the case."6 1 Once the client severs the attorney-client relationship, it follows that the termination cannot create greater contract rights than the attorney had prior to termination; otherwise, the rule from Dow Chemical would have no force. Therefore, terminated counsel cannot separately pursue a remedy against the settling third party based on the extinguished cause of action after it has settled and been dismissed by the court.

Let us return to Walton. If a contingent fee could be leveraged the same way as an assignment, thus enabling a terminated attorney to separately pursue a cause of action for her contingent fee against the third party with whom her former client settled and against the former client, would this undermine the Mandell remedies and disrupt the risk-sharing balance offered by contingent fees? The Mandell remedies are only available against the former client,62 so adding the settled third party would alter the Mandell remedies. Releases often include an indemnity clause that requires the party receiving funds in exchange for a release (i.e., the plaintiff/former client) to promise to pay for the third party's defense and any judgment rendered against them in the event a family member, agent, or representative of the plaintiff tries to bring an action against the third party after it has settled. A suit by a terminated attorney against the third party would invoke the indemnity clause. The former client, then, would be in a worse position than she would be if her former attorney sued her alone by pursuing one of the Mandell remedies.

Also, if the contingent fee could be treated as an assignment against the settled-third party, third parties would not be concerned with whether the client discharged her attorney with or without good cause. Mandell remedies are only available to an attorney terminated without good cause.63 60.

61.

62.

63.

Id.at 566.

Dow Chem. Co. v. Benton, 357 S.W.2d 565, 568 (Tex. 1962) (emphasis added).

Walton, 206 S.W.3d at 561.

Id. (citing Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969)).

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Although the former client might not directly be impacted by this twist, she would still be indirectly and materially impacted. For one thing, the terminated attorney can streamline the third party's liability because the former attorney need only show that the third party knew about the attorney's interest and failed to respect the assignment. Therefore, if the indemnity clause is invoked, that makes it a near-guarantee that the former client will have to pay the third party's judgment.

Also, a third party, knowing it could be placed in a liability situation without settling a terminated attorney's purported interest in the cause of action, might avoid settlement until the third party can ascertain whether the plaintiff fired her attorney with good cause. Consequently, this would not only place an impermissible burden on the plaintiff's right to settle her own case, which will be discussed in greater detail below, but it would also impose an undue burden on the third party, who is not in the best position to determine whether good cause in fact existed, especially since the former client and terminated attorney are bound to disagree as to what constitutes duties or good cause. Even a real assignment cannot impose additional 64 burdens on the obligor than would exist without the assignment.

A suit by a terminated attorney against a settled-third party also disrupts the risk-sharing balance offered by contingent fees. Return to the hypothetical involving multiple terminated attorneys. If the contingent fee operates as an ordinary assignment, the former client would recover nothing and likely be forced to pay once the case is resolved. Such a result forces the client to bear the risk of both hourly fees and contingent fees-since each attorney would have an incentive to "easily settle his claims without earning the fee." 65 Further, this result inures to the benefit of the attorneys, at least the ones that get paid. Even if courts decided to fashion a way to divide the settlement or judgment funds so that all of the attorneys could recover a pro-rata share of the funds so the client can retain a portion of the recovery, the risk-sharing offered by contingent fees would be disrupted because the attorneys, both terminated and present counsel, assume a greater risk of generating little recovery based on the unilateral actions of the client.

Under the holding and reasoning in both Dow Chemical and Walton, Texas Supreme Court appears to be clear, at least clear enough, that a the contingent fee does not operate as an assignment, and an attorney terminated without good cause may only pursue the contingent fee against her former client, not the third party with whom the former client settled.

64.

RESTATEMENT (SECOND) OF CONTRACTS § 336 (1981).

65.

Walton, 206 S.W.3d at 564.

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III. A CONTINGENT-FEE CONTRACT CANNOT CHILL A CLIENT'S RIGHT TO TERMINATE OR SETTLE

Aside from conceptual problems with treating contingent-fee contracts as effective assignments, there are also policy reasons that counsel against such treatment. By law and the rules of professional conduct, a client in a civil action holds an absolute right to fire her attorney for any reason and to select counsel of her choice. A client in a civil action also holds an absolute right to decide when and if to settle her case. Both of these rights are undermined if a contingent fee acts as an ordinary assignment.

A.

Attorney Fee Arrangements CannotImpose an Undue Burden on the Client's Ability to Change Counsel

The Texas Disciplinary Rules of Professional Conduct make clear that "[a] client has the power to discharge a lawyer at any time, with or without cause." 66 Case law supports this power. 67 Contingent-fee contracts alone do not burden a client's right to discharge an attorney, nor does a contingent fee coupled with Mandell remedies, necessarily, when a lawyer is discharged without good cause. The Mandell remedies were designed to ensure that an attorney is reimbursed for her work on a case. 68 And those remedies limit the attorney's fee to what is reasonable. But if a contingent fee operates as an assignment, a present proprietary interest in the cause of action, the client's right to discharge her attorney is substantially hindered.

The Walton court's primary reason for holding the contingent-fee arrangement void was not simply because it contracted around the Mandell remedies or disrupted the risk-sharing balance offered by contingent fees.

The court held that because the fee arrangement "impose[d] an undue burden on the client's ability to change counsel, Hoover's termination fee provision violate[d] public policy and [was] unconscionable as a matter of law., 69 The termination fee at issue imposed 28.66% of the present value of the claim on the client that had to be paid to the attorney immediately upon discharge, not recovery. 70 So in order to exercise his right to fire his

66.

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.15 cmt. 4, reprintedin TEX. Gov'T CODE ANN., tit. 2, subtit. G, app. A (West 2015) (TEX. STATE BAR R. art. X, § 9).

67.

See Walton, 206 S.W.3d at 562-63; Whiteside v. Griffis & Griffis, P.C., 902 S.W.2d 739, 746 (Tex. App.-Austin 1995, writ denied) (recognizing that "the strong public-policy considerations of client choice in attorney selection preclude the application of commercial standards to" agreements that restrict the practice of law).

68.

Walton, 206 S.W.3d at 565 (citing Mandell & Wright, 441 S.W.2d at 847).

69.

Id. at 563.

70.

Id. at 560.

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attorney, the client had to forfeit nearly a third of what he hoped to recover, though he still might not have recovered anything.

Again, refer to the hypothetical involving three prior terminated attorneys and one present counsel, each having worked or working under a 40% contingent-fee contract. If a contingent fee operates as an assignment of either part of a client's cause of action or part of any recovery and that fact was made clear to the client at the time she signed the contract, then the client likely would never have gotten to the second attorney, because a third or more of the client's recovery belonged to that attorney regardless of whether the client terminated the attorney with or without cause. The Walton opinion does not sanction treating contingent-fee contracts as an assignment because it would severely limit the client's ability to change counsel, even if it is for (really) good cause.

B.

Attorney Fee Arrangements CannotImpose an Undue Burden on the Client'sRight to Settle

A lawyer must abide by her client's decision to settle the case. 71 A contingent fee cannot undermine a client's absolute right to decide when to settle, in good faith, her cause of action against a third party. "[A]n attorney never has the right to prohibit his client from settling an action in good faith."7 2 A "client may not be asked to agree to ... surrender the right to terminate the lawyer's services or the right to settle or continue litigation that the lawyer might wish to handle differently., 73 Contractual clauses that any way "are generally held to purport to limit the client's right to settle in 74 policy." public against as be unenforceable Terminated attorneys working under a contingent fee often notify counsel for the third party (opposing party) or the third-party's insurance carrier that they retain an interest in the case and the third party must not agree to settle a cause until the third party has negotiated a settlement with the terminated attorney in addition to the former client's present counsel.

Notice is required to an obligor by an assignee to hold the obligor (here the third party) liable for failing to respect the assignment and pay the debt owed to the assignee. 75 This tactic, on its face, hinders the former client's ability to settle her case. It also defies reason since most of these terminated attorneys acknowledge that they are trying to recover a contingent fee, but 71.

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.02(a)(2).

72.

Singleton v. Foreman, 435 F.2d 962, 970 (5th Cir. 1970).

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.02 cmt. 5.

73.

Lewis v. S. S. Baune, 534 F.2d 1115, 1122 (5th Cir. 1976) (citing Purvis v. United 74.

States, 61 F.2d 992, 997 (8th Cit. 1932)).

See RESTATEMENT (SECOND) OF CONTRACTS §§ 336(2), 338(1).

75.

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"a contingent-fee lawyer 'is entitled to receive the specified fee only when and to the extent the client receives payment."'' 76 What a fine example of putting the cart before the horse. The third party has no cause to settle with the terminated counsel trying to recoup a contingent fee, even if put on notice. A contingent fee is not an assignment; it is an ordinary contract of which the third party was not in privity.

If an opposing party must not agree to settle a case until it has negotiated a settlement with a plaintiff's present counsel and all other prior terminated counsel who have asserted a contingent-fee interest in the outcome, the plaintiffs ability to settle the case would be substantially hindered, if not completely thwarted. It is not hard to imagine the delays to settlement that may ensue under such a recover theory. Prior counsel may have an incentive not to agree to settle if she deems the value too low. And, if the opposing party must reach a settlement agreement with more than one prior counsel and present counsel, it may opt into a trial to avoid unnecessary costs and delays associated with settlement efforts. 77 Worse still, the risk of unethical collusion among nominal parties rears its ugly head, especially in a case with multiple prior attorneys with contingent-fee contracts.

As mentioned, most settlement agreements come standard with an indemnity clause.7 8 If prior counsel in every case had a remedy against a former party, in addition to their own prior client, every client with a contingent-fee contract with a prior attorney would have no choice but to negotiate with his previous attorney to settle his own case. Without the former attorney's involvement in the settlement negotiations, the client would be vulnerable to the indemnity clause if his prior counsel decided to sue the former opposing party with whom the client settled in order to recoup funds owed under the contingent-fee contract. This type of remedy would put the former client in a worse-off position than the Mandell remedies allow; not to mention the fact that the former client would also be

76.

Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 562 (Tex. 2006) (emphasis added)

(quoting RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS § 35(2) (2000)).

77.

An example of this can be found in Reynolds v. Nagely, 262 S.W.3d 521 (Tex. App. Dallas 2008, pet. denied). There, Reynolds sued her insurance company for uninsured motorist benefits under her policy. Id.at 523. She hired Nagely on a contingent-fee basis but fired him after eight months for what she thought was good cause. Id.at 524. Twenty months after firing Nagely, her insurance carrier offered to settle for her policy limits-$100,000.00. Id. Prior to the offer, Nagely had notified her insurance carrier that he maintained a contingent-fee interest in the funds.

Id.Reynolds hired another attorney, who attempted to negotiate the terms of payment. Id.Since Reynolds' new counsel and Nagely could not come to an agreement on the fund distribution, the insurance carrier filed an interpleader action. ld.

78.

See discussion supra note 62.

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on the hook for her former attorney's fees, which the former attorney is entitled to recover in an action for breach of contract.79 The law does not impose such a constraint on the client's absolute right to settle. Texas law favors settlements, but looks down upon settlement arrangements "that promote rather than discourage further litigation.,, 80 To avoid these evils, the Mandell remedies lie against the client who has recovered her damages. 81 The Texas Supreme Court looks unfavorably upon attorney-client contracts that purport to contract around the Mandell remedies.82 Terminated attorneys cannot directly or indirectly through an attorney-client contract circumvent the law that gives the client the absolute right to settle her own case. 83 A client by virtue of a contract with his attorney is not made an indentured servant, a puppet on counsel's string, nor a chair in the courtroom. Counsel should advise, analyze, argue, and recommend, but his role is not that of an imperator whose edicts must prevail over the client's desire. He has no authoritarian settlement thwarting rights by virtue of his employment.84 Case law and public policy support a clear bright-line rule for contingent-fee contracts: a contingent fee is never and can never affect an assignment of part of a client's cause of action. 85 An attorney terminated without good cause cannot pursue the third party with whom her former client settled; she must pursue her former client directly. 86 And, the Mandell remedies are the only remedies available to counsel terminated without good cause to recover against her former client on a contingent-fee contract.87 IV. A PETITION IN INTERVENTION IS NOT THE PROPER REMEDY TO RECOVER ON A CONTINGENT-FEE CONTRACT

Some Texas courts allow a terminated attorney to file a petition in intervention to protect her contingent-fee interest in her former client's

79.

TEX. Civ. PRAC. & REM. CODE ANN. § 38.001 (West 2013).

80.

See Elbaor v. Smith, 845 S.W.2d 240, 250 (Tex. 1992).

81.

Walton, 206 S.W.3d at 561-62.

82.

See id. at 562-64.

83.

See id. at 563-65 (holding that a contingent fee agreement requiring the client to pay a fee equal to the present value of the law firm's interest in the client's claim if the law firm was terminated before completing its representation of the client was forbidden).

84.

Singleton v. Foreman, 435 F.2d 962, 970 (5th Cir. 1970).

85.

See Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969).

86.

See Dow Chem. Co. v. Benton, 357 S.W.2d 565, 568 (Tex. 1962).

87.

Mandell & Wright, 441 S.W.2d at 847.

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cause of action. 88 Considering the discussion in this Article so far, a petition in intervention in the former client's present cause of action proves too excessive of a procedure for terminated counsel to recover on a contingent fee contract or in quantum meruit. The better rule is to force terminated counsel to pursue the Mandell remedies against her former client.

A person may intervene in a cause of action by filing a petition with the court. 89 The intervenor must demonstrate a justiciable interest in the lawsuit, which may be a legal or equitable interest, "[b]ut it must be 'greater than a mere contingent or remote interest.' 90 The Second Court of Appeals has held that "Texas courts have repeatedly recognized that where a contingent[-]fee contract 'assigns' an interest in the lawsuit, a cause of action, or the recovery, as opposed to merely agreeing to pay a percentage of the amount recovered, a justiciable interest in the suit is created." 91 The Second Court of Appeals' statement is not completely correct and, in any event, should be ignored.

The Second Court of Appeals, in Law Office of Windle Turley, P.C. v.

Ghiasinejad,incorrectly cited to a number of cases to support its holding that intervention is a proper method to recover on a contingent fee contract.92 The court cited to Dow Chemical, but Dow Chemical did not hold that a contingent-fee contract with "assign" language creates 93a justiciable interest that can be bifurcated through a petition in intervention.

In fact, Dow Chemical explicitly held that a lawyer trying to recoup a contingent fee, even with "assign" language, "elects to litigate his interest simultaneously with his client's interest, in his client's name, and ' elects 94 implicitly to be bound by any judgment properly rendered in the case.

The Ghiasinejad court also cited to Honeycutt v. Billingsley.95 The facts in Honeycutt did not involve an attorney who had been terminated by 88.

See, e.g., Law Offices of Windle Turley, P.C. v. French, 140 S.W.3d 407, 409 (Tex. App.-Fort Worth 2004, no pet.); Law Offices of Windle Turley, P.C. v. Ghiasinejad, 109 S.W.3d 68, 69-71 (Tex. App.-Fort Worth 2003, no pet.) (citing Serna v. Webster, 908 S.W.2d 487, 491 (Tex. App.-San Antonio 1995, no writ)); cf Berry v. Nueces Cnty., No. 13-05-338-CV, 2006 WL 1280901, at *6 (Tex. App.-Corpus Christi May 11, 2006, pet. denied) (mem. op.) (reaffirming the Dow Chemical holding that an attorney cannot separately pursue a contingent fee apart from his client).

89.

Ghiasinejad,109 S.W.3d at 70.

90.

Id. (quoting Rogers v. Searle, 553 S.W.2d 440, 442 (Tex. Civ. App.-Corpus Christi 1976, no writ)).

91.

Id. at 70-71. (citing Dow Chem. Co., 357 S.W.2d at 568; Galveston, H. & S. A. Ry. Co. v. Ginther, 72 S.W. 166, 167 (Tex. 1903); Honeycutt v. Billingsley, 992 S.W.2d 570, 584 (Tex. App.-Houston [1st Dist.] 1999, pet. denied); Trinity River Auth. v. Badders, 453 S.W.2d 304, 308 (Tex. Civ. App.-Houston [14th Dist.] 1970, no writ)).

92.

See id at 71.

93.

Dow Chem. Co., 357 S.W.2d at 568.

94.

Id. Ghiasinejad,109 S.W.3d at 70-71 (citing Honeycutt, 992 S.W.2d at 584).

95.

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CONTINGENT FEE CONTRA CT REMEDIES

his former client. Rather, the Honeycutt's first attorney entered into a referral agreement to which the first attorney, Honeycutt, and the referred law firm were parties to. 96 The first attorney retained his contingent-fee interest by the language of the agreement.97 These facts were important to the court in Honeycutt. The court reiterated the general rule stated in Dow Chemical that a suit for attorney's fees is not ordinarily maintainable as a separate cause of action against a third party, except "where a client has conspired with a third party to circumvent the attorney-client relationship with the intention of terminating it unilaterally." 98 The defendants in Honeycutt settled the suit without recognizing the interest of the first attorney, who was a present party to the referral agreement. 99 Further, Honeycutt was decided in 1999 by the Court of Appeals in Houston and the other cases cited to by the Ghiasinejadcourt, including the Ghiasinejad decision itself, were decided before 2005.100 The Texas Supreme Court issued its Walton opinion in 2006.101 As discussed, Walton expressly affirms that an attorney cannot obtain a proprietary interest in a client's cause of action, except to contract for a reasonable contingent fee, 10 2 or acquire a lien granted by law to secure the lawyer's fee or expenses.

Additionally, the court in Walton clearly states that public policy requires a terminated attorney to pursue her contingent fee through the Mandell 04 remedies.'l 3 These remedies lie only against her former client. 1 Consider also the logistical problems intervention creates for the plaintiffs cause of action. The trial court in Ghiasinejad considered the following factors before denying the intervenor's petition: (1) whether the law firm "could have brought the same action, or any part of it, in its own name; (2) the intervention would not complicate the case by excessively multiplying the issues; and (3) the intervention is almost essential to effectively protect [the law firm's] interest."'' 0 5 The trial court found, and the appellate court agreed, that the intervention would inject unrelated issues into the principal lawsuit, primarily whether the attorney was fired for good cause. 106 Equally important, the terminated attorney may pursue 96.

Honeycutt, 992 S.W.2d at 574.

97.

Id. at 574-75.

98.

Id at 584 (citing Dow Chem. Co., 357 S.W.2d at 568).

99.

Id.at 584-85.

100.

101.

102.

103.

104.

105.

See id.at 570; Ghiasinejad,109 S.W.3d at 68.

Hoover Slovacek LLP v. Walton, 206 S.W.3d 557 (Tex. 2006).

See discussion supra note 8.

Walton, 206 S.W.3d at 562-63.

See id at 561-62.

Ghiasinejad,109 S.W.3d at 70.

Id.at 71.

106.

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his Mandell remedies; therefore, intervention was not necessary to protect the fired attorney's interests.10 7 These two findings will always occur when an attorney working under a contingent-fee contract is fired and seeks to recover her fee. There is no reason to entertain intervention as an option for recovery in this context.

Consider also the public policy concerns that arise when a terminated attorney attempts to intervene in her client's suit to recover on a contingent fee that has not ripened. The attorney detracts from her former client's prima facie case with side issues about whether the termination was for good cause and whether the fee is reasonable, because even a contingent fee must be reasonable. 108 A former client undoubtedly has a strong incentive to fight the amount of money claimed by counsel she terminated. This hinders the client's ability to resolve the cause of action. It also creates incentives for terminated counsel to hold out for a better settlement deal, thwarting the client's absolute right to decide when to settle the cause of action.

Intervention as a remedy also creates the problems sought to be avoided by the holdings in Dow Chemical and Walton, namely, allowing attorneys to control their client or former client's cause of action. 0 9 In the hypothetical involving three prior attorneys and one present counsel, if the three terminated attorneys sought intervention in the cause of action, the client's case would take a backseat to the interests of the attorneys. Such a result is anathema to the integrity of the practice of law and the judicial system.

The Mandell remedies seek to promote, rather than undermine, the risk-sharing balance offered by contingent-fee arrangements. Courts should not allow terminated attorneys to bypass this balance by seeking to disrupt their former client's cause of action. After all, a contingent fee is not owed unless or until the client recovers.' 10 Why make the client indirectly pay by delaying the resolution of her claim with issues unrelated to her cause of action, adding to litigation costs? There is no good reason.

V.

TIME TO RETHINK THE MANDELL REMEDIES

The legwork is complete to easily answer the following question: if a contingent fee contract cannot be treated as an ordinary assignment, and if See id.at 72.

107.

See TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(a) & cmts. 1, 4, reprinted in 108.

TEX. GOV'T CODE ANN., tit. 2, subtit. G, app. A (West 2015) (TEX. STATE BAR R. art. X, § 9); Walton, 206 S.W.3d at 561.

See Walton, 206 S.W.3d at 561-66; Dow Chem. Co. v. Benton, 357 S.W.2d 565, 567109.

68 (Tex. 1962).

Walton, 206 S.W.3d at 562 (quoting RESTATEMENT (THIRD) OF THE LAW GOVERNING 110.

LAWYERS § 35(2) (2000)).

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CONTINGENT FEE CONTRACT REMEDIES

awarding contingent fees in full chills a client's absolute right to select counsel of her choice, settle her case, and forces her to bear the risk of both hourly and contingent fees, then how can courts apply the Mandell remedies without violating public policy? If one takes the Walton and Dow Chemical opinions seriously, the result should be that an attorney cannot pursue the full contingent fee or her hourly fee in quantum meruit whether fired with or without good cause. A contingent-fee attorney, fired with cause, is not entitled, as the Mandell court held, to "the amount of... compensation" designated in the contract,111 but to the reasonable value for services she performed. 2 In a particularly egregious ruling, the Fifth Court of Appeals had to confront the validity of the Mandell remedies. In Reynolds v. Nagely, Karen Reynolds hired Neal Nagely on a contingent-fee basis to represent her in an underinsured/uninsured motorist (UIM)claim against her insurance carrier, USAA Casualty Insurance Company. 13 Nagely secured funds from USAA under Reynolds's personal injury protection policy to assist her with mounting medical bills she incurred as the result of the hit-and-run accident that formed the basis of her claim against USAA. 114 Eight months after hiring Nagely, Reynolds fired him "'for not taking care of her properly' and 'not doing his job."' 1 5 Nagely subsequently notified Reynolds that he retained a lien on the claim. 16 Twenty months later, USAA offered Reynolds $100,000.00, her Um policy limit, to settle her claim. 117 USAA would only issue payment to Reynolds payable to both her and Nagely, so Reynolds refused payment and informed USAA to contact her new attorney.11 USAA filed an interpleader" 9 after unsuccessful negotiations between Nagely and 20 Reynolds's new counsel about how the payment would be divided.

Nagely made a counterclaim against Reynolds for breach of contract, 111.

See Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969).

112.

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(a) ("Alawyer shall not enter into an arrangement for, charge, or collect an illegal fee or unconscionable fee. A fee is unconscionable if a competent lawyer could not form a reasonable belief that the fee is reasonable.").

113.

Reynolds v. Nagely, 262 S.W.3d 521, 523-24 (Tex. App.-Dallas 2008, pet. denied).

114.

Id.at 524.

115.

Id.

116.

Id.

117.

118.

Id.

119.

Id. Id.Insurance companies typically file interpleader actions under Texas Civil Procedure

Rule 43 when "there exist[s] a reasonable doubt, either of fact or law, as to which of the rival claimants was entitled to the proceeds of the policy." See TEX. R. CIV. P. 43; Great Am. Reserve Ins. Co. v. Sanders, 525 S.W.2d 956, 958 (Tex. 1975).

120.

Reynolds, 262 S.W.3d at 524.

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among other claims. 121 At trial, the jury found that Reynolds had breached the contract and awarded Nagely his contingent fee ($36,666.66) plus 22 attorney's fees ($52,000.00), which was affirmed as modified on appeal.1 This case is particularly egregious because it demonstrates first hand all the evils this Article aims to avoid. First, USAA tried to settle with Reynolds twenty months after Reynolds fired Nagely. 123 But Nagely, holding onto his contingent-fee contract, prevented USAA from settling with Reynolds without first settling with him. Reynolds was forced to enlist another attorney's assistance, thereby incurring more costs to settle her case. 124 USAA opted out of the discussion by filing an interpleader because Nagely would not agree with Reynolds over the fee, thereby preventing settlement. 125 Now the issue was whether Reynolds fired Nagely for good cause.

This issue pit an attorney against his former client and put the issue of good cause in jurors' hands. Reynolds was portrayed as a particularly dislikeable 126 person, being described as "demanding, uncooperative, and difficult.'

Nowhere did the appellate opinion even consider how this "good cause" issue potentially disrupts and injects distrust into the attorney-client 127 relationship.

Further, at no time did a discussion in the opinion arise concerning how this "good cause" issue itself demonstrates that an assignment does not exist. 28 After all, "[i]t is essential to an assignment of a right that the obligee manifest an intention to transfer the right to another person without further action or manifestation of intention by the obligee.' 29 The law imposes further action by this "good cause" requirement; that is, attorneys already know they cannot recover on a contingent-fee contract if they are fired with good cause, so they already know a contingent-fee contract can never effect an assignment on the cause of action or on part of the

121.

Id. Id. at 525, 532. The appellate court reduced the amount awarded for Nagely's 122. contingent fee to $33,333.33, after finding that he was entitled to one-third of the $100,000 UIM

policy limit. Id. at 529, 532.

123.

Id. at 524.

124.

125.

See id.

Id.

Id. (internal quotation marks omitted).

126.

127.

See id. at 529 (focusing on whether Nagely performed on his obligations under the contract and whether further performance was excused by Reynolds' dismissal of him).

128.

See id. at 523. Here, the court of appeals made it a point to insert the following sentence in the opinion: "Additionally, Reynolds 'assign[ed Nagely] his interest out of avails of the recovery and agree[d] it [was] not necessary that he become a party to any suit." Id. (alteration in original).

129.

RESTATEMENT (SECOND) OF CONTRACTS § 324 (1981).

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CONTINGENT FEE CONTRACT REMEDIES

recovery. 130 But if attorneys know this, then would it not be unconscionable per se for an attorney 1to pursue the full contingent fee when fired with or 13 without good cause?

Not only did Reynolds have to forfeit one-third of her UIM settlement with USAA to Nagely, but she also had to pay Nagely's attorney's fees, which amounted to more than the contingent fee. 1 32 Nagely recovered $88,666.66, and after court costs and paying her own attorney, Reynolds likely ended up with nothing or close to it. 33 The appellate court appeared not to be bothered with this result. Reynolds objected to Mandell as valid law, and the court allowed her to raise her objection to preserve error for further appeal, recognizing 134 that it had "no authority to overrule decisions by ' Court.

Supreme the Texas No trial or appellate court need overrule any Texas Supreme Court case to hold that a terminated attorney cannot, in every and any case, pursue her full contingent fee whether fired with or without good cause. Walton already made clear that an attorney's fee arrangement with her client cannot place an undue burden on the client's ability to fire the attorney, and no attorney can obtain a proprietary interest in the client's cause of action.'

Dow Chemical also made clear that a contingent-fee contract is subject to public policy limitations. 136 And, it violates13public policy to place an undue 7 burden on a client's right to settle her case.

The discussion in this Article concerning the law and public policy concerning contingent-fee contracts logically leads to a conclusion already propounded in the Texas Disciplinary Rules of Professional Conduct: an attorney cannot contract for or try to collect an unreasonable fee.

Obviously, there may be occasions where something close to the full contingent fee would be warranted, such as if an attorney had worked on a client's case for years and was on the verge of settlement only to be fired without good cause. As the Court held in Walton, a client cannot be made to bear the risk of both hourly and contingent fees. 38 So in the case 130.

See Mandell & Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969).

131.

See TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(a), reprintedin TEX. Gov'T CODE ANN., tit. 2, subtit. G, app. A (West 2015) (TEX. STATE BAR R. art. X, § 9) ("A lawyer shall not enter into an arrangement for, charge, or collect an illegal fee or unconscionablefee. A fee is unconscionable ifa competent lawyer could not form a reasonable belief that the fee is reasonable." (emphasis added)).

132.

Reynolds, 262 S.W.3d at 525, 529.

133.

Id.(deducting Nagely's award from the $100,000 UIM insurance settlement Reynolds received).

134.

Id. at 532.

135.

See discussion supra Part III.A. 136.

See discussion supra Part I.A. 137.

See discussion supra Part III.B. 138.

See supra notes 56-58 and accompanying text.

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described-an attorney who essentially settles her client's case-the contingent fee may be warranted, because the hourly fee may exceed the recovery not simply due to the billable rate, but also because of the actual time spent working on the case. In this manner, courts could interpret the Mandell remedies as providing for the lesser of the full contingent fee or quantum meruit.

Cases may arise when both the full contingent fee and quantum meruit appear unreasonable to some courts but reasonable to others. For example, an attorney may list her billable rate at $400.00 per hour, even for simple cases, and standard contingent fee at 40% of her client's recovery. If the attorney worked twenty hours on a simple car accident case, was subsequently fired, and the former client settled the case one year later for $20,000.00, the attorney would be seeking $8,000.00, which would be the full value of her contract. What makes the fee either reasonable or not should turn on the ordinary factors courts consider when determining whether a fee is reasonable.139 A simple automobile case, for example, may not warrant $400.00 per hour because the issues are generally not novel or difficult, and require ordinary, not extraordinary, skill. 140 But occasions may arise where the issues in an automobile case are unique and require extraordinary skill.

In close cases, perhaps in all cases, the client's situation must also be factored in the equation. As a fiduciary, the attorney is charged to represent the client's best interest. 41 Even when a fee may appear reasonable based on the professional-oriented factors listed in Texas Disciplinary Rule of Professional Conduct 1.04(b), client-oriented circumstances warrant consideration. 142 Often the former attorney knows about these clientoriented circumstances and should be charged with such knowledge when the court considers whether the fee is reasonable. After all, if a former attorney knows a particular circumstance about the client's financial or medical situation that could be made worse or is threatened by the fee the attorney is pursuing, then a court would be warranted in considering whether "a competent lawyer could [] form a reasonable belief that the fee 143 reasonable.' is

139.

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(b), reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G, app. A (West 2015) (TEX. STATE BAR R. art. X, § 9); Lopez v.

Muhioz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 867 (Tex. 2000) (Gonzales, J., concurring and dissenting).

140.

See TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04(b)(1 ).

141.

Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 561 (Tex. 2006) (quoting Lopez, 22 S.W.3d at 866-67).

142.

TEX. DISCIPLINARY RULES PROF'L CONDUCT R. 1.04 cmt. 4.

143.

Id.at R. 1.04(a) & cmt. 1.

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CONTINGENT FEE CONTRA CT REMEDIES

But what about attorney fees? As Reynolds demonstrates, a terminated attorney's fees alone could exceed the reasonable fee for services, if any, to which the attorney was entitled. Attorney's fees are recoverable in claims for rendered services on oral or written contracts.1 44 As the statute concerning recoverable attorney fees is currently written, an attorney trying to recover on a contingent fee with-or services rendered for-a former client. 145 client can recover the costs to litigate her claim from that former But, as with the fee, the statute only allows recovery of "reasonable attorney's fees.' 46 Courts should consider the admonishment in Walton that a client should not be forced to bear the risk of both hourly and contingent fees. 147 Enforcing the Texas Civil Practices and Remedies Code against former clients in this manner is a roundabout way of forcing former clients to bear these risks. Terminated attorneys leverage this remedy to the detriment of their former clients when they force such clients to settle, and these pressured settlements should be disallowed.

Another route to attack availability of attorney fees in this context is to consider the contingent-fee contract and fee arrangement itself. As Walton held, "Lawyers have a duty, at the outset of the representation, to 'inform a client of the basis or rate of the fee' and 'the contract's implications for the client."",148 If the contingent-fee contract does not specify that the lawyer will be entitled to recover both the full contingent fee or value of her services as well as the cost to litigate (including her own attorney's fees), and there is no evidence that this had been explained in detail to the client, then the lawyer will have breached this duty. As a result, the attorney should only be allowed to recover according to what was properly disclosed and conveyed to the client. One might retort that the law allows attorney fees, and a client's ignorance of the law is no excuse. To which, the reply must be, placing this burden on the attorney "is entirely reasonable, both because of [the attorney's] greater knowledge and experience with respect to fee arrangements and because of the trust [the] client has placed in [the attorney] .,,149

TEX. CIv. PRAC. & REM. CODE § 38.001(1), (8) (West 2013).

144.

Id. § 38.001.

145.

Id. 146.

Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 564 (Tex. 2006).

147.

Id.at 565 (emphasis added) (quoting Levine v. Bayne, Snell & Krause, Ltd., 40 S.W.3d 148.

92, 96 (Tex. 2001)).

Id.(alteration in original) (quoting Levine, 40 S.W.3d at 95) (internal quotation marks 149. omitted).

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VI. CONCLUSION Lawyers know the risk of contingent-fee arrangements. The risks include no recovery, the same result that occurs if or when an attorney is terminated with or without good cause. Attorneys should not be able to leverage a contingent-fee contract, or any remedy available by law to recoup a contingent fee, to the detriment of a former client. Likewise, a client should not be able to hire an attorney to do all the legwork, only to fire her and reap the benefits of the attorney's labor. So, Texas law provides a remedy for attorneys fired without good cause. That remedy does not include suing a third party with whom the former client settled, even when that third party had notice that the terminated attorney maintained a contingent-fee interest. That remedy also should not include either the full contingent fee or quantum meruit at the attorney's election. The remedy has always been a reasonable fee. And an attorney fired without good cause may pursue a reasonable fee against, and only against, the former client.

Under these conditions, suing a former client better protects her best interest and maintains the integrity of the bar.

WHAT WOULD A LIBERTARIAN TAx LOOK LIKE? JOHN R. DOROCAK* I.

II. III. IV.

V.

147 INTRODUCTION .................................

LIBERTARIAN TAX THEORY .......................................................... 148 LIBERTARIAN TAX THEORY AS PRAGMATICALLY APPLIED IN U .S. TAX ATION .......................................................................... 151 LIBERTARIAN TAX THEORY AS PRAGMATICALLY APPLIED IN THE FUTURE IN U.S. TAXATION ................................................. 157 THE REVENUE REDISTRIBUTION PROBLEM WITH LIBERTARIAN TAXES ......................................................................

V.

162

C ON CLU SION .................................................................................. 166

I.

INTRODUCTION

Libertarian ideas have been given attention, particularly recently, in academic, judicial, and political areas.' Those who have been involved with taxation as practitioners or academicians at some point in time likely wrestle with the question of what should "fair" taxation look like. The goal here is not to discuss all philosophical underpinnings of a tax system, but rather to discuss how libertarians might frame a tax system.

* John R. Dorocak, Honors A.B., Xavier University, J.D., Case Western Reserve University, LL.M. (Tax), University of Florida, C.P.A., California and Ohio, is a Professor of Accounting at California State University, San Bernardino. Thank you to my wife, Tanya, who constantly inspires me, our dog Murphy, who constantly entertains me, and our sons Jonathan and Garrett, who constantly interest me. Thank you also to Kathi Menard, who has taken on the task, from the now retired Marion Wiltjer, of trying to decipher my dictation and handwriting.

1. See, e.g., Randy E. Barnett, Is the Constitution Libertarian?, 2008-2009 CATO Sup. CT. REV. 9, 9; John R. Dorocak, Is the Constitution Only Libertarian and Not Socially Conservative? U.S. v. Windsor and the Unconstitutionalityof DOMA 's Definition of Marriageto Exclude Same-Sex Couples-Requiemfor a Heavyweight?, 24 GEO. MASON U. C.R. L.J. 263, 263 (2014); John R. Dorocak, Why is Obamacare Constitutional While DOMA Was Not? How LibertarianIs the Constitution? 14 CONN. PUB. INT. L.J. (forthcoming 2016). But see, e.g., Randy E. Barnett, Correspondence, GradingJustice Kennedy: A Reply to ProfessorCarpenter, 89 MINN. L. REV. 1582 (2005); Dale Carpenter, Is Lawrence Libertarian?,88 MINN. L. REV. 1140, 1141 (2004); Brian Doherty, Rand Paul, Lukewarm Libertarian, N.Y. TIMES, Apr. 21, 2015, Li Heidi http://www.nytimes.com/2015/04/21/opinion/rand-paul-lukewarn-libertarian.html; Feldman, Libertarianismwith a Twist, 94 MICH. L. REV. 1883 (1996) (reviewing RICHARD A. EPSTEIN, SIMPLE RULES FOR A COMPLEX WORLD (1995)).

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First, this Article will discuss libertarian tax theory to the extent such theory can be discerned. In the discussion, basic libertarian principles will be briefly discussed. The application of those principles to taxation basically follows the general tax formula: base times rate equals tax. That is, the questions to discuss briefly will be: what base would libertarians use for a tax (e.g., income or some other base), and what rate structure (e.g., progressive, flat, or regressive) would libertarians use for a tax? Second, this Article will look to see if some libertarian taxes have been enacted within the U.S., particularly looking to President Ronald Reagan's pragmatic application in the 1986 Tax Reform Act. Third, this Article will discuss what a libertarian tax in the future might look like. If the trend is toward "lower taxes, less government, more personal freedom," as President Reagan suggested,2 the questions of government spending and government redistribution will again be addressed after first being raised in the discussion of libertarian tax theory. Any tax theory, which favors lower taxes, likely must ultimately address government spending and redistribution, although a fuller discussion of restraining spending is likely beyond the scope of this Article.

II.

LIBERTARIAN TAx THEORY

Others have attempted the task of defining what a libertarian tax would look like.3 One commentator concludes, "Surprisingly, however, there 4 appears to be little consensus on the form that this tax should take.", Perhaps somewhat predictably, discussions of a libertarian tax take up the topics of tax base and tax rate-the general tax formula is often expressed as base times rate equals tax. 5

2.

See John R. Dorocak, Tax Constitutional Questions in "Obamacare": National Federation of Independent Business v. Sebelius in Light of Citizens United v. Federal Election Commission and Speiser v. Randall: Conditioning a Tax Benefit on the Nonexercise of a Constitutional Right, 11 U. N.H. L. REV. 189, 215 (2013) (citing General Article: Program Summary-Reagan, PBS: AM. EXPERIENCE, http://www.pbs.org/wgbh/americanexperience/features/general-article/reagan-program (last visited Oct. 1, 2015)).

3.

See generally, e.g., Joseph M. Dodge, Theories of Tax Justice: Ruminations on the Benefit, Partnershipand Ability-to-Pay Principles,58 TAX L. REV. 399 (2005); David G. Duff, Private Property and Tax Policy in a Libertarian World: A CriticalReview, 18 CAN. J. L. & JURISPRUDENCE 23 (2005); Barbara H. Fried, The Puzzling Case for Proportionate Taxation, 2 CHAP. L. REV. 157 (1999).

4.

Duff, supra note 3, at 32.

5.

See id at32-34; see also WILLIAM H. HOFFMAN ET AL., SOUTH-WESTERN FEDERAL TAXATION: COMPREHENSIVE VOLUME 1-5 (2016).

LIBERTARIAN TAX

2015]

The libertarian concept of a limited state is often the starting point of any discussion of a libertarian tax, particularly with cites to leading libertarian scholars such as John Locke,6 Robert Nozick,' and Richard A. Epstein.8 One commentator describing the libertarian state summarizes, "As the sole legitimate purpose of this state is to protect the personal liberty and private property to which individuals are entitled in the state of nature, the 9 scope of the libertarian state is necessarily circumscribed."

The libertarian acceptance of some taxation is justified, it appears, in that "even a minimal state requires resources to finance its activitiesresources that cannot be obtained through voluntary contributions alone .... For this reason, the libertarian state must levy some kind of ' compulsory levy or tax in exchange for the services that it provides. " Since redistribution is often opposed in libertarian approaches to government spending and taxation,"1 libertarians often rely on a benefit theory of taxation-taxes in a libertarian state should correspond to the benefits received by each individual. 12 Although apparently there is agreement among libertarians on the benefit theory of taxation, there is little agreement on the form of the tax.

In practice, however, it is often difficult to determine the specific beneficiaries of publicly-provided goods and services .... As a result, a libertarian state must rely on a more general tax in order to implement the benefit principle ....

Surprisingly, however,

there appears to be little consensus on the form that this tax should take. 13

This Article will continue, after the attempt to conceptualize a libertarian tax, to the discussion of pragmatically what apparently libertarianmotivated taxes have looked like in U.S. taxation and what they might look like in the future.

6.

See generally JOHN LOCKE, SECOND TREATISE OF GOVERNMENT (C. B. MacPherson

ed., Hackett Publ'g Co. 1980) (1690).

See generally ROBERT NOZICK, ANARCHY, STATE, AND UTOPIA (1974).

7.

See generally RICHARD A. EPSTEIN, TAKINGS: PRIVATE PROPERTY AND THE POWER OF 8.

EMINENT DOMAIN (1985).

Duff, supra note 3, at 30.

9.

Id. at 30-31 (footnote omitted) (citing Richard A. Epstein, Taxation in a Lockean 10.

World, 4 SOC. PHIL. & POL'Y 49, 54 (1986); Richard A. Epstein, Can Anyone Beat the Flat Tax?, 19 SOC. PHIL. & POL'Y 140, 143 (2002)).

Epstein, Taxation in a Lockean World, supra note 10, at 68.

11.

Duff, supra note 3, at 31-32 (citing Epstein, Can Anyone Beat the Flat Tax?, supra 12. note 10, at 147).

Id. (footnote omitted).

13.

150

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On the matter of a tax base for a libertarian tax, libertarians have apparently supported many taxes bases. 14 Thomas Hobbes argued for a poll or head tax. 15 However, Richard A. Epstein criticizes the poll tax as a "very bad measure" of benefits received by an individual for public goods and services. 16 John Locke appears to suggest that a wealth tax is a better measure of benefits received by an individual from the state.17 Still, libertarians often oppose a wealth tax, including an estate tax.' 8 Adam Smith seemingly argued for an income tax, with language echoed by other libertarians: "[t]he subjects of every state ought to contribute towards the support of the government.., in proportion to the revenue which they respectively enjoy under the protection of the state."' 9 Richard A. Epstein, similarly, supports a broad-based income tax, claiming that anything of value afforded government protection is subject to taxation.2 ° Some libertarians and others have argued for a consumption tax. 21 This Article will focus on libertarian-oriented models for the income tax. As acknowledged by others, a consumption tax at the U.S. federal level seems to be regarded as a radical tax reform.22 Since the label "libertarian" often strikes some as radical,23 this Article proposes that past and future tax reforms that are libertarian-oriented will likely amend the current income tax model.

With regard to tax rates, libertarians seem to coalesce on a flat tax.24 Libertarians have made some statements supportive of progressive taxation.

14.

Id. at 33-34.

15.

Id. at 32 (citing THOMAS HOBBES, LEVIATHAN 386 (C.B. Macpherson ed., Penguin Books 1985) (1651)).

16.

Id. (citing EPSTEIN, supra note 8, at 297).

17.

Id. (citing LOCKE, supra note 6, at 74).

18.

Id at 33; see also Fried, supra note 3, at 158.

19.

Duff, supra note 3, at 33 (alteration in original) (quoting 2 ADAM SMITH, AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS 825 (R. H. Campbell et al. eds., Oxford Univ. Press 1976) (1776)); see also Graeme S. Cooper, The Benefit Theory of Taxation, 11 AUSTL. TAX F. 397, 493 (1994) ("[I]ncome is an appropriate measure of the benefit.").

20.

See Duff, supra note 3, at 33-34 (citing EPSTEIN, supra note 8, at 60).

21.

E.g, id. at 33 (citing William D. Andrews, A Consumption-Type or Cash Flow Personal Income Tax, 87 HARV. L. REV. 1113, 1167-68 (1974); Arthur Cockfield, Income Taxes and IndividualLiberty: A Lockean Perspective on Radical Consumption Tax Reform, 46 S.D. L. REV. 8, 9 (2001)); see also, e.g., Alan Schenk, Radical Tax Reform for the 21st Century: The Role for a Consumption Tax, 2 CHAP. L. REV. 133, 153 (1999). But see Alvin Warren, Would a Consumption Tax Be FairerThan an Income Tax?, 89 YALE L.J. 1081, 1120-21 (1980).

22.

Schenk, supra note 21, at 156 ("However, it is not clear that there is public support for the kind of radical tax reform contemplated by the proposals discussed in this article, especially.. other returns to savings implicit in a tax imposed on a consumption base.").

23.

See, e.g., Doherty, supra note 1 ("He's even called libertarianism an 'albatross'.

24 Duff, supra note 3, at 34.

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20151

Based on a benefits theory of taxation, it might be argued that "benefits do increase with income or wealth" in justification of a progressive tax. 25 However, it is not altogether clear that benefits increase with an increase in income or wealth.26 In fact, it can be said that John Stuart Mill argued for both a regressive tax and a progressive tax. On one hand, Mill wrote, "those who are least capable of helping or defending themselves, being those to whom the protection of government is the most indispensable, ought to pay the greatest share of its price., 27 On the other hand, Mill argued that taxes as a burden on property should be structured so that "whatever sacrifices [the government] requires of them should be made to bear as nearly as possible with the same pressure upon all.",28 Whereas the first quoted statement of Mill's might sustain a regressive tax, the latter statement might support a progressive tax "in order to ensure 'equality of sacrifice' in terms of happiness or utility."30 One commentator has concluded that libertarians gravitate toward a flat rate tax and, further, a flat rate income tax. 31 Now that libertarian tax theory has been reviewed briefly, this Article will discuss how that tax theory has been applied pragmatically in the U.S. tax system and then how that tax theory might be applied in the future. In discussing particularly how libertarian tax theory might be applied in the future, this Article will discuss briefly redistribution of income through taxation, a seemingly difficult matter for libertarian tax theory.

III. LIBERTARIAN TAx THEORY AS PRAGMATICALLY APPLIED IN U.S. TAXATION

To discover libertarian tax theory pragmatically applied in the United States, one would likely, based on a brief review of libertarian tax theory in

25.

Id. at 34-35.

26.

Id.at 35 (citing EPSTEIN, supra note 8, at 298; Walter J. Blum & Harry Kalven, The

Uneasy Case for Progressive Taxation, 19 U. CHI. L. REV. 417, 454 (1952); Marjorie E. Kornhauser, The Rhetoric of the Anti-Progressive Income Tax Movement: A Typical Male Reaction, 86 MICH. L. REv. 465,497 (1987)).

27.

JOHN STUART MILL, PRINCIPLES OF POLITICAL ECONOMY WITH SOME OF THEIR

APPLICATIONS TO SOCIAL PHILOSOPHY 156 (Donald Winch ed., Penguin Books 1970) (1848).

Duff, supra note 3, at 35-36 (alteration in original) (quoting MILL, supra note 27, at 28.

155) (internal quotation marks omitted).

Id.at 35 (citing Jeffrey A. Shoenblum, Tax Fairnessor Unfairness?A Considerationof 29.

the PhilosophicalBases for Unequal Taxation of Individuals, 12 AM. J. TAX POL'Y 221, 225-33 (1995)).

30. Id.at 36.

Id.at 35 (citing MILTON FRIEDMAN, CAPITALISM AND FREEDOM 175 (1962)).

31.

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the previous portion of this Article,32 look toward instances of lowered tax rates, particularly lowered income tax rates. The two most dramatic lowerings of the U.S. federal income tax since World War II took place under Presidents Kennedy and Reagan.3 3 Although it may be somewhat easier to find evidence of President Reagan's libertarianism 34 than President Kennedy's, 35 both leaders apparently embraced at least the pragmatic

32.

See discussion supra Part It. 33.

See Arthur B. Laffer, Introduction to PRESIDENT RONALD REAGAN'S INITIAL ACTIONS PROJECT xv-xvi, xxiv-xxv (2009). President Reagan apparently acknowledged his recognition of President Kennedy's commitment to lowering taxes. In his handwritten notes used in his speeches, Reagan excerpted a quote from Kennedy's November 1962 speech to the Economic Club of New York. See THE NOTES: RONALD REAGAN'S PRIVATE COLLECTION OF STORIES AND WISDOM 17

(Douglas Brinkley, ed. 2011). In the speech, President Kennedy famously said, "In short, it is a paradoxical truth, that tax rates are too high today and tax revenues are too low and the soundest way to raise revenues in the long run is to cut rates now." John F. Kennedy, President of the United States of America, Address and Question and Answer Period at the Economic Club of New York (Dec. 14, 1962), availableat http://www.presidency.ucsb.edu/ws/?pid=9057. President Reagan excerpted as follows: "Our true choice is not between tax reduction on the 1 hand & the avoidance of large Fed. deficits on the other. Our economy stifled by restrictive tax rates will never produce enough revenue to balance the budget. Just as it will never produce enough jobs or enough profits." THE NOTES, supra, at 17. President Obama even conceded that he sometimes felt the emotional pull of Reagan's vision: "I understood his appeal ... Reagan spoke to America's longing for order, our need to believe that we are not simply subject to blind, impersonal forces but that we can shape our individual and collective destinies .... ".BARACK OBAMA, THE AUDACITY OF HOPE: THOUGHTS ON RECLAIMING THE AMERICAN DREAM 31 (2006). "Among

Obama loyalists, the Reagan theory was received wisdom, and for political reasons it was closely held." Michael Duffy & Michael Scherer, The Role Model: What Obama Sees in Reagan, TIME (Jan. 27, 2011), http://content.time.com/time/magazine/article/0,9171,2044712,00.html.

In January 2008, Obama broke cover-" think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not and in a way that Bill Clinton did not .... [H]e tapped into what people were already feeling, which is, we want clarity, we want optimism .. " In Their Own Words: Obama on Reagan, N.Y. TIMES, http://www.nytimes.com/ref/us/politics/2 lseelye-text.html (last visited Feb. 15, 2016).

34.

Matt Naham, 8 Ways Ronald Reagan Was a Libertarian, RARE (June 5, 2014, 4:19 PM), http://rare.us/story/8-ways-ronald-reagan-was-a-libertarian; Alex Tabarrock, RonaldReagan the Libertarian, MARGINAL REVOLUTION (June 7, 2004, 7:10 AM), http://marginalrevolution.com/marginalrevolution/2004/06/ronald reagan-t.html. But see Gene Healy, Ronald Reagan Was No Libertarian, CATO INST., http://www.cato.org/publications/commentary/ronald-reagan-was-no-libertarian (last visited Oct. 1, 2015); Jeet Heer, Rand Paul Will Break Libertarian Hearts, Just Like Reagan Did, NEW REPUBLIC (Apr. 6, 2015), http://www.newrepublic.com/article/121468/rand-paul-2016-and-gopsawkward-embrace-libertarianism.

35.

See Jeff Jacoby, Op-Ed., 'Kennedy' Once Meant 'Tax Cutter', BOS. GLOBE, Aug. 30, 2009, http://www.boston.cofm/bostonglobe/editorial opinion/oped/articles/2009/08/30/kennedy-once m eant tax cutter (suggesting that Kennedy was both a Democrat and a "resolute supply-sidetaxcutter"); see also Ira Stoll, John F. Kennedy Was a Conservative, REASON.COM (Oct. 14, 2013), http://reason.con/archives/2013/10/14/j ohn-f-kennedy-was-a-conservative (suggesting that many of Kennedy's policies were influenced by libertarian ideals).

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version of a libertarian tax policy. Although President Kennedy's long-term commitment to tax cuts might be unknown and questioned,3 6 the case for President Reagan's commitment to tax cuts is clear.37 The focus of this Article is what previous tax cuts may reveal about past, pragmatically enacted libertarian taxes, and also the future of a libertarian tax.

Thus, it may be necessary to show the link between libertarian tax theory-or at least libertarian thinking-and Reaganomics or supply side economic theory, in order to demonstrate that supply side tax cuts are, at least in some sense, a pragmatic application of libertarian tax theory.3 8 As outlined in the introduction to this Article, the objectives of this Article are to discuss libertarian tax theory, the theory's practical applications, and where the theory might lead in the future. 39 Thus, this Article seeks to remain grounded in traditional law review literature, understanding legal principles and where they have or might lead.

Libertarians have certainly embraced supply side tax cuts. 4° As

described in this Article thus far, it appears that libertarian theories and supply side theories developed separately and coalesced in agreement on lower tax rates. 4 1 These theories came into agreement by apparently different routes. It appears relatively clear that supply side supporters and libertarians at least agreed on lower taxes-the latter because lower taxes might lead to smaller government.42 Supply side theory is to lower tax rates so taxpayers will spend more, thus increasing supply and creating

36.

See Robert Schlesinger, The Myth of JFK as Supply Side Tar Cutter, U.S. NEWS & WORLD REP. (Jan. 26, 2011, 12:30 PM), http://www.usnews.com/opinion/articles/2011/01/26/themyth-of-jfk-as-supply-side-tax-cutter.

37.

See id 38.

See, e.g., Richard M. Ebeling, Some Thoughts on Supply-Side Economics, 8 LIBERTARIAN F. 3 (1980), available at https://mises.org./library/some-thoughts-supply-sideeconomics; Brian Domitrovic, Tax Revolt! It's Time to Learn from Past Success, CATO INST. (Jan.-Feb. 2014), http://www.cato.org/policy-report/januaryfebruary-2014/tax-revolt-its-timelearn-past-success; Dan Mitchell, Defining Austerity: What's the Difference Between a Libertarian, a Supply-Sider, a Keynesian, and an IMF Bureaucrat?, INT'L LIBERTY (Feb. 26, 2012), https://danieljmitchell.wordpress.com/2012/02/26/whats-the-difference-between-alibertarian-a-supply-sider-a-keynesian-and-an-imf-bureaucrat.

39.

See supraPart I. 40.

See, e.g., Mitchell, supra note 38. Mitchell identifies "Stereotype Supply-Side Economics" as "[a]ll that matters is low tax burden" and "Libertarian Principles" as "[g]oal is less government and low tax rates." Id. He also states that "supply-side economists tend to be serious and sober people who favor smaller government. ... Id. He further explains, "[t]he right approach, needless to say, is libertarianism. Small government ... and low tax rates ....

Id. (citations omitted).

41.

See supra Part II. 42.

See Mitchell, supra note 38.

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demand.43 Whether lower tax rates resulting from a supply side theory lead to economic prosperity, higher tax revenues, or both seem to be the subject of endless debate. 44 The proposition that lower tax rates do seem to at least lead to the same revenues as a percentage of gross domestic product (GDP) attracts a little more universal support.4 5 President Reagan cut the highest individual income tax rate in 1981 from 70% to 50%, which continued to drop to 28% by 1988.46 President Kennedy cut the highest individual income tax rate from 91% to 70%, the lowest individual income tax rate from 20% to 14% and the highest corporate income tax rate from 52% to 48%.

48 The following two charts (sometimes viewed as over-simplistic) show: (1) total federal revenue as a percentage of GDP in comparison to the See Supply-Side Economics, LAFFER CTR., http://www.laffercenter.com/supply-side43. economics (last visited Mar. 11, 2016).

See generally Jason E. Taylor & Jerry L. Taylor, MarginalTax Rates and US. Growth: 44.

Flaws in the 2012 CRS Study, 34 CATO J. 33, 36-37 (2014) (discussing the various views as to whether lower tax rates lead to growth).

See, e.g., W. Kurt Hauser, Op-Ed., There's No Escaping Hauser's Law, WALL ST. J., 45. http://taxprof.typepad.com/taxprof blog/2010/l1/wsj-hausers-law.html (last updated Nov. 26, 2010, 12:01 AM) ("Yet during this period, federal government tax collections [from all sources] as a share of GDP have moved within a narrow band of just under 19% of GDP."); Federal Budget in Pictures: Raising Tax Rates Does Not Necessarily Lead to Higher Tax Receipts, HERITAGE FOUND., http://www.heritage.org/federalbudget/income-tax-receipts (last visited Oct. 1, 2015) (showing tax receipts from individual income tax varying between 9.9% and 7.5% of GDP with rates varying from 91% to 28% of income for the years 1960 through 2014); Hauser's Law, WIKIPEDIA, https://en.wikipedia.org/wiki/Hauser's_law (last updated Dec. 12, 2014, 4:48

AM).

Laffer, supra note 33, at xxiv-xxv.

46.

Id.at xv-xvi.

47.

See, e.g., Jonathan Chait, Lying Chart of the Day, Classic Edition, NEW REPUBLIC 48.

(Nov. 29, 2010), http://www.newrepublic.com/blog/jonathan-chait/79495/lying-chart-the-dayclassic-edition; Mike Kimel, Hauser's Law is Extremely Misleading, ANGRY BEAR (Nov. 30, 2010, 8:04 AM), http://angrybearblog.com/2010/jlhausers-law-is-extremely-misleading.html. But see Veronique de Rugy, Reality Isn 't Negotiable: The Government Can't Raise More Than 19% in 2010), 29, (Nov. U. MASON GEO. CTR., Long, MERCATUS Taxes for http://mercatus.org/publication/reality-isnt-negotiable-govemment-cant-raise-more- 19-taxes-forlong ("From 1930 to 2010, tax revenue collection in the United States has never topped 20.9%, averaging 16.5% of GDP over these 80 years."). Chait counters de Rugy as follows: De Rugy's chart, one which the scale of federal tax revenue goes from an absurd 0 to 100, seems to show little change .... ...[T]he swings are fairly dramatic .... revenue to plummet.

[T]he first Reagan tax cuts in 1981 caused

... [T]he tax cuts by George W. Bush... were followed by a massive, 5% of GDP drop in revenue, which receded to 2% of revenue at the peak of the 2000s economic cycle.

Chait, supra note 48. Kimel states as follows:

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top (marginal) individual federal income tax rate,49 and (2) total individual income tax receipts as a percentage of GDP in comparison to the top individual income tax rate.50 Fuller data on these comparisons, from the Office of Management and Budget, 51 is included as Appendix A to this Article.

Tax Rates and Federal Revenues Top~ marinal rate %)on indivduals

20 1930

1940

1950

1950

1970

1980

1990

2000

2010

Year

Notice the size of [the] narrow band-its width is over 5% of GDP! . . . In tax hike periods, the smallest amount collected was 18.3% of GDP. By contrast, the median collection in tax cut periods is 18.2%; in other words, in over half of the tax cut years, collections were less than the smallest amount ever brought in during the tax hike periods. Furthermore, both the median and average for the two series [were] a full percent of GDP apart.

Kimel, supra note 48.

49.

Hauser, supra note 45.

50.

Raising Tax Rates Does Not NecessarilyLead to Higher Tax Receipts, supra note 45.

51.

Office of Mgmt. & Budget, Table 2.3-Receipts by Source as Percentages of GDP: 1934-2020, WHITE HOUSE, https://www.whitehouse.gov/ombibudget/historicals (last visited Oct.

1,2015).

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156

91%

70%

Top Individual Tax Rate

(% income) %50%

396%

39.6%

77% 79% 75%

9,9%

39.6%

Total Individual Tag ceipts .

77%

9.1%

The design of this Article has been, it is hoped, modest. After examining libertarian tax theory, this Article sought to review how that theory has been implemented and how it might be implemented in the future. Thus, it is not necessary here to determine whether or not supply side theory succeeded in its goal of improving the economy-and possibly a side benefit of increasing tax revenues-through decreasing tax rates.

What appears to be clear is that libertarians and supply siders coalesced on the aim of lower taxes. 52 Since President Reagan is famously known to some-or infamously to others-as the supply side chief executive, it might be instructive to briefly examine his role. That is, is Ronald Reagan, the acknowledged 53supply side leader, also a leader in at least pragmatic libertarian tax?

Reagan's formula of lower taxes, less government, and more personal freedom is one libertarians might embrace.54 Before his election to presidency, President Reagan himself said: "If you analyze it I believe the very heart and soul of conservatism is libertarianism .... But again, I stand on my statement that I think that libertarianism and conservatism are travelling the same path. 55 In that same interview, the not yet President Reagan admitted: "I'm an inveterate reader. Bastiat and von Mises, and

See supra Part II. 52.

53.

See supra note 38 and accompanying text.

54.

See supra notes 2, 40 and accompanying text.

55.

Manuel Klausner, Inside Ronald Reagan: A Reason Review, REASON.COM (July 1975), http://reason.com/archives/I 975/07/01/inside-ronald-reagan.

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Hayek and Hazlitt-I'm one for the classical economists., 56 This admission would likely warm libertarians' hearts.57 Surely, there appears to be agreement among the libertarians and supply siders-from the time of pre-Presidential Ronald Reagan, if not 58 before, until the present day-on lower taxes, specifically income taxes.

However, libertarians found much to criticize about Ronald Reagan's policies, particularly his failure to reign in the government. 59 Such criticism might shape libertarian tax in the future, specifically how libertarian tax theories might be pragmatically applied given the expectations about big government, entitlements, and redistribution. The pragmatic adaption of libertarian tax theory in the future, particularly at the federal level, is the subject of the next section of this Article.

IV. LIBERTARIAN TAX THEORY AS PRAGMATICALLY APPLIED IN THE FUTURE IN U.S. TAXATION

Professor Edward J. McCaffery stated, "Taxation is a strangely undertheorized subject despite its social and economic importance.' 60 Professor McCaffery also "complained that issues of race, gender, and class have not been addressed very much by tax professors, who have instead 'focused on more narrow and technical issues in business and financial taxation. '' ' 6 Professor Jensen emphasized, however, "the tax academy's traditional insistence on connection with the real world of practice., 62 This author has frequently cited the sentiments of Professors McCaffery and Jensen,63 and is now seeking to apply these to this area of tax theory by attempting to discuss libertarian tax theory and its pragmatic application in the "real world of practice ... focused on more narrow and technical issues. 64

56.

Id 57.

See Tom Palmer, Principles of Liberty: A Reading List on the Principlesof Liberty, CATO INST., http://www.cato.org/research/libertarian/rl-principles-of-liberty.html (last visited Oct. 1,2015).

58.

See supra notes 32-37 and accompanying text.

59.

See, e.g., Healy, supra note 34; Heer, supra note 34. But see Naham, supra note 34.

60.

Edward J. McCaffery, Introduction, 18 CAN. J. L. & JURISPRUDENCE 3, 3 (2005).

61.

Eric M. Jensen, Critical Theory and the Loneliness of the Tax Prof,76 N.C. L. REv. 1753, 1756 (1998) (quoting Edward McCaffery, Statement at Taxation and the Family Conference at Lewis & Clark Northwestern School of Law (Oct. 6, 1995)).

62.

Id.

63.

See, e.g., Dorocak, Why is Obamacare Constitutional While DOMA Was Not?, supra note 1, at 141 n.10.

64.

Jensen, supra note 61, at 1756 (quoting McCaffery, supra note 61).

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Some have even suggested there is an "unconscious libertarianism," apparently with an often unstated assumption that tax is government taking from the individual.65 Despite the suggestion that there may be an unconscious libertarian base in much of tax thinking and attitudes, libertarian theory does not seem to lead necessarily to a particular tax structure.66 Some in the academic and popular press have thought libertarians might favor a consumption tax.67 However, even those acknowledging there may be some bipartisan support for a consumption tax also acknowledge there is bipartisan opposition: Some liberals are concerned that consumption taxes affect poor people disproportionately, while unduly benefiting the rich, unless adjustments are made. For their part, conservatives fear that some types of consumption tax-particularly value-added taxes-would 68 make it too easy to dial up government revenue collection.

E.g., Duff, supra note 3, at 23-24 & n.6 (citing LIAM MURPHY & THOMAS NAGEL, THE 65.

MYTH OF OWNERSHIP: TAXES AND JUSTICE 27 ("An unreflective form of libertarianism casts a shadow over much discussion of tax policy.")).

See supra note 13 and accompanying text. Professor McCaffery characterized Professor 66.

Duff's conclusion, "Duff finds libertarian theories under-determinative at best, unhelpful at worst." McCaffery, supra note 60, at 4.

See, e.g., Edward J. McCaffery, Three Views of Tax, 18 CAN. J. L. & JURISPRUDENCE 67.

153, 164 (2005); Robert H. Frank, A Tax Even Libertarians Can Love, FORBES (Apr. 23, 2009, http://www.forbes.com/forbes/2009/0511/026-opinions-tax-libertarians-on-myAM), 10:20 nind.html.

John D. McKinnon, Tax Proposals Would Move U.S. Closer to Global Norm: 68.

Proposals for a Consumption Tax Gain Traction in Both Parties, WALL ST. J., (last updated http://www.wsj.cor/articles/tax-proposals-would-move-u-s-closer-to-global-norm Mar. 29, 2015, 4:01 PM). The consumption tax has been proposed by various parties at various times. For example, a Treasury Report provided to President Reagan in 1984 discussed four tax options, one of which was a consumption tax. See generally 1 TAX REFORM FOR FAIRNESS, SIMPLICITY, AND ECONOMIC GROWTH: THE TREASURY REPORT TO THE PRESIDENT, DEP'T

http ://www.treasury.gov/resource-center/tax(1984), 191-212 TREASURY policy/Documents/tres84vlAll.pdf. Senators Pete Domenici and Sam Nunn proposed a tax reform plan including a consumption and value added tax. Amy Hamilton, TEl Meeting-Domenici Revising USA Tax Plan, TAX NOTES, Mar. 30, 1998, at 1600 ("Generally, the Nunn-Domenici plan . . . would replace the existing federal income tax with two different consumption-based taxes: a cash flow 'savings-exempt income tax' on individuals and a subtraction-method value added tax on businesses."). Further, the libertarian Cato Institute has published articles that seem to both support and criticize a value added tax. Compare Chris Edwards, Policy Analysis No. 536: 2005), 24, (Feb. 8 INST. CATO Reform, Tax for Options 36 http://object.cato.org/sites/cato.org/files/pubs/pdf/pa5 .pdf (concluding in support of sales tax, flat tax, and modified flat tax, after discussing the consumption tax), with Daniel J. Mitchell, The 2011), 26, (July INST. CATO Tax, Value-Added the Against Case Recently, http://www.cato.org/publications/congressional-testomony/case-against-valueaded-tax. the consumption tax has again been raised in numerous ways. See, e.g., David van den Berg, Laffer, Other Economists Working on Walker's Tax Plan, TAX NOTES, July 27, 2015, at 372

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Bipartisan support and opposition for a consumption tax may result in tax proposals and policies that had perceived success in the past (i.e., lower federal income tax rates).69 If future federal tax policy from a libertarian standpoint will encompass lower federal income tax rates, that tax policy may meet some of the same criticisms that supply side economics did-that such a tax policy does not aid the economy and leads to lower tax revenues collected. 70 Thus, libertarians advocating for lower tax rates may need to revisit the defense of supply side economics. In addition, others may argue that tax revenues need to be increased to meet future goals of redistribution programs such as Social Security, Medicare, and Obamacare.71 Supply siders, who support lower taxes because they see higher taxes as a drag on the economy, and libertarians, who see lower taxes as a route to smaller government,72 are both likely to face the criticism that lower taxes will not fund such future, anticipated increased expenditures.

However, there is evidence that lower tax rates may actually increase revenues. 73 Likewise, there is evidence that increased rates may not bring increased revenues, particularly as a percentage of GDP. 4 This raises the question: if higher or lower tax rates seem to bring a relatively constant percentage of GDP as revenues, is there seemingly some limit as to how much government can spend? Although libertarians generally oppose redistribution, one prominent libertarian has recently argued for redistribution and progressive income tax rates.75 Beyond the likely unwanted redistribution of a socialist or communist system, which may try to account for all government expenses by taking all possible revenues, the (discussing various speakers who addressed, in addition to the consumption tax, the flat tax, "a new flat tax," a national sales tax, and the Laffer curve); Jonathan Curry, Off the Beaten Tax: White House Rebuffs FairTaxPetition,TAX NOTES, Aug. 3, 2015, at 502 (discussing the Fair-fax plan, which "would replace all federal income taxes with a national consumption tax"). Some have criticized the consumption tax as a regressive tax, meaning the impact would fall more on those in the lower brackets. Blaise M. Sonnier & Nancy B. Nichols, The ProgressiveConsumption Tax's Impact on Low-Income Taxpayers, TAX NOTES, July 27, 2015, at 43 1.

69.

See Domitrovic, supra note 38.

70.

See Taylor & Taylor, supra note 44.

71.

See generally Ezra Klein, Yesterday's Tax Revenues Can't Support Tomorrow's America, WASH. POST (Dec. 7, 2012), http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/07/yesterdays-tax-revenues-cantsupport-tomorrows-america.

72.

Mitchell, supra note 38.

73.

See supra notes 45-50 and accompanying text.

74.

See supra notes 45-50 and accompanying text.

75.

Richard A. Epstein, Taxation with Representation: Or, the Libertarian Dilemma, 18 CAN. J. L. & JURISPRUDENCE 7, 21 (2005) ("[T]he case against redistribution through state power cannot be made on the grounds that all forms of taxation are off-limits to the well-run state.

Rather, the next battle ground is over the permissible objects and functions of a tax system ... ").

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theory that increasing GDP will likely result in increased revenues because revenues as a percentage of GDP remain nearly the same discounts supporters of progressive income tax rates.76 Such is the belief of supply side supporters-that an improving economy will raise revenues and that high taxes are a drag on the economy.77 Still the question remains as to whether there is some finite limit on government expenditures. There is some evidence that revenues exceeded expenses in some of fiscal years under President Clinton.78 The question of whether any tax may be able to generate sufficient revenues for expenses of possibly unlimited wants is likely beyond the scope of this Article. However, libertarian tax theory, and pragmatic applications of that theory, appears to be headed toward lower tax rates, particularly lower income tax rates. 79 Thus, one would expect that, if libertarian tax theories are espoused during a presidential election cycle, candidates might advocate lower tax rates.

There is evidence that both libertarian leaning and supply-side leaning candidates, and possibly Republicans in general, support low or lower tax rates early in the 2016 presidential election campaign. 80 In addition, some are suggesting even that Democratic candidates should cut taxes. 8 Among the 2016 Republican presidential candidates, Senator Rand Paul is likely the

See supra text accompanying notes 73-74.

76.

See infra note 94 and accompanying text.

77.

78.

See, e.g., Brooks Jackson, The Budget and Deficit Under Clinton, FACTCHECK.ORG (Feb. 3, 2008), http://www.factcheck.org/2008/02/the-budget-and-deficit-under-clinton. But see (Oct. 31, 2007), The Myth of the Clinton Surplus, CRAIG STEINER, U.S. http://www.craigsteiner.us/articles/16 ("Notice that while the public debt went down in each of those four years, the intragovernmentalholdings went up each year by a far greater amount-and, in turn, the total national debt (which is public debt + intragovemmental holdings) went up.

Therein lies the discrepancy."); Stephen Moore, No, Bill Clinton Didn't Balance the Budget, CATO INST. (Oct. 8, 1998), http://www.cato.org/publications/commentary/no-bill-clinton-didntbalance-budget; William A. Niskanen & Stephen Moore, Policy Analysis No. 261: Supply Tax Cuts and the Truth About the Reagan Economic Record, CATO INST. (Oct. 22, 1996), http://www.cato.org/publications/policy-analysis/supplyside-tax-cuts-truth-about-reaganeconomic-record.

79.

See supra text accompanying note 58.

80.

See generally Michael Tanner, Rating the GOP Contenders on Taxes, NAT'L REV. (June 3, 2015, 4:00 AM), http://www.nationalreview.com/article/419216/rating-gop-contenders-

taxes-michael-tanner.

81.

See, e.g., Jacoby, supra note 35; Rich Karlgaard, Where Are the JFK Democrats?, FORBES (Mar. 9, 2007, 12:10 PM), http://www.forbes.com/forbes/2007/0326/037.html.

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most libertarian.82 Senator Paul, Senator Ted Cruz, and Dr. Ben Carson have all been characterized as favoring a flat income tax.83 Specifically, Senator Paul proposed a 17% flat tax and considered lowering that rate further while working with the Heritage Foundation on a plan that would make capital gains, interest, and dividends untaxed, as well as eliminate the estate, gift, and alternative minimum taxes. 8 4 Similarly, Senator Cruz and Senator Marco Rubio advanced plans seeking lower and flatter income tax rates; the myriad of other republican presidential rates.85 candidates seemingly all called for lower and flatter income tax Donald Trump has advocated various tariffs, lower taxes on the middle class, higher taxes on the wealthy, lower taxes on corporations, and higher taxes on hedge fund managers.86 Notably, Governor Mike Huckabee, a Republican candidate who raised taxes as a governor, supported FairTax, which is a national sales tax or consumption tax in place of an income tax.8 7 At least some have acknowledged that the movement toward a flat income tax could be a "means to an end: shifting taxes away from income to consumption," and that exempting savings from taxation is based on the theory that more money would be freed up for investment.88 There is some question, though, when tax rates are cut, whether sufficient revenues would be collected.

Senator Paul himself estimated in his originally proposed plan that revenue would be reduced "by about $700 billion per year," which he intended to offset with spending cuts. 89 Senator Paul's proposal and admission of a possible revenue shortfall raises the problem of the next section of this Article-the revenue and redistribution problem with libertarian taxes.

See Heer, supranote 34.

82.

Patricia Cohen, Republican Presidential Candidates Rally Around Flat Tax, N.Y. 83.

TIMES, May 15, 2015, http://www.nytimes.com/2015/05/16/business/economy/republicanpresidential-candidates-rally-around-flat-tax.html.

Tanner, supra note 80.

84.

Id; Cohen, supra note 83; Paul Waldman, Don't Expect 2016 GOP Candidates to 85.

5, 2015), (May Taxes, WASH. POST Conservative Dogma on Break with http://www.washingtonpost.com/blogs/plum-line/wp/2015/05/05/dont-expect-2016-gopcandidates-to-break-with-conservative-dogma-on-taxes.

Linda Killian, Donald Trump on Taxes: Keeping It Flexible, WALL ST. J., WASH. WIRE 86.

(Sept. 4, 2015, 6:02 PM), http:/Iblogs.wsj.com/washwire/2015/09/04/donald-trump-on-taxeskeeping-it-flexible.

Cohen, supra note 83; Ryan Lovelace, GOP PresidentialCandidates Moving Toward 87.

Consumption-Based Tax Proposals, WASH. EXAMINER (May 12, 2015, 6:06 PM), http://www.washingtonexaminer.com/gop-presidentia-candidates-mving-tward-onsumptionbased-tax-proposals/article/2564363.

Cohen, supra note 83.

88.

Tanner, supra note 80.

89.

162

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Four democratic candidates for president early in the 2016 election cycle-Hillary Clinton, Bernie Sanders, Martin O'Malley, and Jim Webbdid not appear initially to address tax rates specifically, whether increases or decreases, at their campaign websites. Hillary Clinton subsequently proposed a longer holding period for capital gains property, with the capital gains tax rate reducing from the current highest regular income tax rate on individuals, 39.6%, down to the current maximum of approximately 24% over a six-year period. 90 Bernie Sanders later proposed a 90% highest marginal income tax rate and a 65% estate and gift tax. 9 V. THE REVENUE AND REDISTRIBUTION PROBLEM WITH LIBERTARIAN TAXES

Those who favor lower tax rates, such as supply side advocates or libertarians, seem destined to face the question of whether sufficient revenues can be raised by lower rates.92 Similarly, those who oppose progressive rates and redistribution, supporting, for example, tax based on a benefit theory, seem destined to face the question of how to provide for the less fortunate in a society. 93 Those questions likely raise a third question about the limits on government spending, if only from the standpoint that the government's resources are not inexhaustible.

Supply-siders may be able to point to some evidence to support the assertion that lower tax rates do not necessarily lead to lower tax revenues and may, in fact, lead to increased tax revenues. One commentator has summarized as follows: In 1980, by contrast, President Ronald Reagan self-consciously tried the supply-side formula for the first time

90.

Sam Frizell, Hillary Clinton Courts Both Liberals and Wall Street with Tax Plan, TIME,

http://time.com/3969682/hillary-clinton-tax-capital-gains (last updated July 24, 2015, 3:49 PM).

91.

Bryce Covert, Bernie Sanders Would Tax the Income ofthe Wealthiest Americans at 90

Percent, THINKPROGRESS (May 26, 2015, http://thinkprogress.org/economy/2015/05/26/3662773/sanders-90-percent-tax;

2:57 see

PM), Ashlea

Ebeling, Bernie Sanders Callsfor 65% Top Estate Tax Rate, FORBES (June 25, 2015, 12:56 PM),

http://www.forbes.com/sites/ashleaebeling/2015/06/25/bernie-sanders-calls-for-65-top-estate-taxrate. Bernie Sanders did state on his website, "At a time of massive wealth and income inequality, we need a progressive tax system in this country which is based on ability to pay." An Economic Agenda

for

America:

12

Steps

Forward, BERNIE

SANDERS

(Dec.

1,

2014),

http ://www.sanders.senate.gov/newsroom/recent-business/an-economic-agenda-for-america- 12steps-forward.

92.

See Taylor & Taylor, supra note 44, at 37.

93.

See supra notes 12-13 and accompanying text.

2015]

LIBERTARIAN TAX

The result was 12 years of sustained economic growth in a row-the longest unbroken expansion in American history-with an average GNP growth rate of 3.2 percent. Twenty-one million jobs were created; even government revenues rose-a paradox created by the fact that the increased economic activity generated more taxable income.94 As previously mentioned, there seems to be some support that lower tax rates may lead to the same revenues as percentage of GDP as higher rates. 95 Supply siders have tended to emphasize that lower tax rates lead to an expansion of the economy, increasing the supply of goods and services which itself generates a demand. 96 Supply siders have also made the claim that increased economic activity leading to increased GDP should lead to increased tax revenues because revenues as a percentage of GDP, whether income tax revenues or total federal tax revenues, tend to remain relatively stable as a percentage of GDP. 97 Thus, there may be some statistical proof that lower tax rates may generate the same or higher tax revenues as a percentage of GDP. Those who might want to oppose lower rates might also be those arguing for progressive rates and, inherently, redistribution. As previously discussed, libertarian tax theory tends to have difficulty with redistribution and progressive rates.98 As also previously discussed, libertarian benefit theory of taxation has generally led99 to a position against redistribution and even in support of a regressive tax.

However, as previously mentioned, John Stuart Mill, besides supporting regressive taxation under a benefit theory, also appeared to support progressive taxation.100 Furthermore, the contemporary libertarian Richard Epstein has argued in support of a progressive tax, as well as other libertarians often along the lines of the argument that the wealthy benefit more from the state and should pay more.101 Thus there may be some support in libertarian circles and literature for a progressive tax, whereas the

Arthur Herman, Pro: Supply-Side Economics Worked Wonders for Reagan; Obama 94.

Should Give It a Shot, AM. ENTERPRISE INST. (July 5, 2012), https://www.aei.org/publication/prosupply-side-economics-worked-wonders-for-reagan-obama-should-give-ita-shot.

See supra notes 45-50 and accompanying text.

95.

Herman, supra note 94; see also Domitrovic, supra note 38; Taylor & Taylor, supra 96. note 44, at 40-41.

97.

Hauser, supra note 45; Raising Tax Rates Does Not Necessarily Lead to Higher Tax Receipts, supra note 45.

See supra notes 11-12 and accompanying text.

98.

See supra note 27 and accompanying text.

99.

See supra notes 27-30 and accompanying text.

100.

See supra notes 25, 75 and accompanying text.

101.

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[Vol. 57:2

supply siders may even argue more forcefully for flatter rates02 so that less is paid to the government and more is used to increase supply.

As mentioned, the more difficult question for supply siders, libertarians, and others, may be whether or not there is just some end point as to how much revenue the government can raise and therefore how much it can spend. 0 3 Conceivably, any government could borrow more and thus spend more than it collects in revenue. However, there must be some end point to the spending, if only from a common sense standpoint, in that the 104 currency becomes devalued and creditors will demand payment.

IRS data from 2011, set forth below, indicates that the top 5% of taxpayers ($161,599 and above), who earned 34% of the income, are paying 56% of the income taxes and the top 1% ($369,691 and above), who earned 19% of the income, are paying 35% of the income taxes.'0 5 The top 5 to 10% ($116,623-161,579), who earn 12% of the income, are paying 12% of 10 6 the income taxes.

The bottom 90% of taxpayers, who earn 55% of the income, are only paying 31% of the income tax, with the bottom 50%, who earn 12% of the income only paying 3% of the tax. 10 7 John Stuart Mill suggested at one point, in support of regressive taxes, that those such as the bottom 90% could be required to pay more taxes in accord with the benefits that they receive.1 08 Others have argued that when other taxes are included in the tax burden, including such taxes are sales tax and social security tax, which are 09 both likely regressive, the lower income groups do pay more tax.

102.

See supra note 96 and accompanying text.

103.

See supra notes 92-94 and accompanying text.

104.

See, e.g., Alan Clendenning, Greek Relief over Bailout Deal Tempered by Harsh Reality, SAN DIEGO UNION-TRIB., July 13, 2015, 10:05 AM, http://www.sandiegouniontribune.com/news/205 1/jul/1 3/greek-relief-over-bailout-deal-tempered-

by-harsh.

105.

Raising Tax Rates Does Not NecessarilyLead to Higher Tax Receipts, supra note 45.

106.

Id.

107.

Id.

108.

See MILL, supra note 27, at 156.

109.

See, e.g., Daniel J. Mitchell, Will "Hauser'sLaw" Protect Us from Revenue Hungry

Politicians?, FORBES (May 21, 2010, 1:35 http://www.forbes.com/sites/beltway/2010/05/21/will-hausers-law-protect-us-from-revenuehungry-politicians.

PM),

2015]

LIBERTARIAN TAX

Top 10 Percent of Earners Pad 68 Percent of Federal Income Taxes Top earners were the main target of recent tax increases under President Obama, but the federal income tax system is already highly progressive. The top 10 percent of income earners paid 68 percent of all federal income taxes in 2011 (the latest year available), though they earned 45 percent of all income. The bottom 50 percent paid 3 percent of income taxes, but earned 12 percent of income.

SHARE OF FEDERAL INCOME TAXES AND INCOME EARNED IN2011 This grup -. Bottom 50% of income

Top 2S%-SO

Top 10%-2S%

Top S%-10%

Top 2%-M%

Top 1%

21%

22%

12%

15%

19%

11%

17%

12%

21%

35%

MIMeS..

_a.nd paidthisshareof

3%

feea ,il

-75'

tcamr

W

Sow =Inte.al Rmrne Seie. Note: FIj, es do not ,um to totaldue to towwdin'

the TaxSuftenChant I - * Redo"c

&uttin W )ms-21 rdeI

hvitaseoka

Top 1%, $369,961+ Top 2-5%, $151,579,369,691 Top 5-10%, $116,623-161,579 Top 10-25%, $69,128 -116,023 Top 25-50%, $34,388-69128 Bottom 50%, below $34,388 Source: Internal Revenue Service, 2011 data.l°

110.

FederalBudget in Pictures: Top 10 Percent of Earners Paid 68 Percent of Federal

Income Taxes, HERITAGE FOUND., http://www.heritage.org/federalbudget/topl0-percent-incomeearners (last visited Oct. 1, 2015).

SOUTH TEXAS LAW REVIEW

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VI. CONCLUSION

Senator Paul acknowledged that his lower income tax rates would generate lower revenues."' He then suggested spending cuts to offset the revenue losses." 2 Perhaps Senator Paul was too quick to concede lower rates would necessarily result in lower revenues in light of some of the data previously cited. 1 3 Still there is the question of a finite limit to revenues and spending, if revenues and spending are to be balanced. Essentially, the end point of this Article is the old economics problem of the allocation of apparently limited revenues among potentially unlimited wants. Facing that question does not, however, diminish the discussion of the theory and pragmatic past and future applications of a libertarian tax. Likely, a libertarian tax spears similar to a supply side tax of lower income tax rates.

Possibly a libertarian government would cut spending to bring spending into balance with revenues. Still revenues might increase, even with lower tax rates, if GDP increases.

111.

112.

113.

Tanner, supra note 80.

Id. See supra notes 43-51 and accompanying text.

2015]

LIBERTARIAN TAX

APPENDIX A Receipts by Source as Percentages of Gross Domestic Product: 1934-2020 331354

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43

CLARITY AND REASONABLE DOUBT IN EARLY STATE-CONSTITUTIONAL JUDICIAL REVIEW CHRISTOPHER R. GREEN*

I.

INTRO DU CTION ............................................................................... 170

II.

EARLY CASES AND MATERIALS ON CLARITY AND REASONABLE DOUBT FORMULATIONS OF THE PRESUMPTION OF CONSTITUTIONALITY .....................................................................

A. B. C. D. E. III. IV. V.

172 Background.: The Presumptionof Constitutionalityin Early FederalCases and Other Material.........................................

172 Doubt Simpliciter and Other Standards.................................. 173 Clarity ..................................................

176 R easonableDoubt ...................................................................

179 Clarity v. ReasonableDoubt ...................................................

182

THE SYNONYMY OF CLARITY AND PROOF BEYOND REASONABLE D OUBT ..................................................................... 183 THE CONTINGENCY OF CLARITY AND AN OVERTON-PARKSTYLE REQUIREM ENT .................................................................... 187 IS CLARITY OBSOLETE 9 ............................. . . . . .. . . . . .. . . .. . . . .. . . . .. . . . .. . . . .. 191

A. B.

Is Obsolescence Relevant? ......................................................

Two Basic Rationalesfor a Presumptionof Constitutionality......................................................................

1. The High Stakes andRelative Unsusceptibilityto CorrectionofJudicialReview ...........................................

2. Respectfor the Elected Branches......................................

C. Are the Rationales Obsolete?..................................................

V I.

C ON CLU SIO N ..................................................................................

191 192 192 194 195

197

* Associate Professor of Law and H.L.A. Hart Scholar in Law and Philosophy at the University of Mississippi School of Law; affiliated faculty member in the Department of Philosophy and Religion; affiliated scholar, Center for the Study of Constitutional Originalism at the University of San Diego; Fall 2015 Ann and Herbert W. Vaughan Visiting Fellow, James Madison Program at Princeton University. Thanks to Larry Alexander, Michele Alexandre, Randy Barnett, Will Baude, Will Berry, Tucker Carrington, Ben Cooper, Matt Estrin, Elizabeth Price Foley, Clark Gibbs, Matthew Hall, Catherine Janasie, Douglas Kmiec, Stacey Lantagne, John McGinnis, Jack Nowlin, Stephanie Showalter Otts, Mike Ramsey, Mike Rappaport, Lee Strang, David Upham, and Brad Wilson for comments and discussion, and the Lamar Order of the University of Mississippi for support. Please send comments to crgreen@olemiss.edu.

SOUTH TEXAS LAW REVIEW

[Vol. 57:2

ABSTRACT

Courts exercising judicial review in every state require the conflict between a statute and the state constitution to be "clear," rather than simply shown by the preponderance of the evidence. In almost every state, however, courts also require proof of unconstitutionality beyond reasonable doubt. A state-by-state canvass shows that in the great majority of states, a clarity requirement appeared first, sometimes long before a noreasonable-doubt rule. To the extent they conflict, clarity has a better pedigree, but there are compelling reasons to take early reasonable-doubt formulations as elaborations of a clarity rule, rather than a consciously higher standard.

The judicial obligation to exercise judicial review only when a constitutional conflict is clear is coupled with an obligation to render constitutional requirements as clear as possible. This obligation means, at a minimum, responding to all contrary considerations with an adequate reasoned explanation, as in contemporary administrative law. Because clarity is contingent on the amount of analysis that courts have given a constitutional issue in response to litigation, it can change over time.

Are historic rationales for a clarity requirement obsolete? One basic sort of rationale-the gravity of judicial review because of its resistance to correction-is not. Another sort of rationale, however-deference to the constitutional views of elected branches-is undermined if and when legislators fail to conduct constitutional analysis or executive officers fail to justify statutes adequately in litigation. Judicial consideration of such failures, however, need not eliminate a clarity requirement, which is a burden of persuasion, not production. Failures of legislative or executive justification can satisfy a clarity requirement or presumption of constitutionality rather than eliminating them.

I. INTRODUCTION

This Article is the first complete survey of the standard for the presumption of constitutionality in early state constitutional law. I search for the earliest variants in each state of any of the three standards of proof generally recognized in current law-proof by a preponderance of evidence, by clear and convincing evidence, or beyond reasonable doubt-to consider (a) which standard has the best pedigree, (b) what the standards mean, and the extent to which they were explicitly distinguished, and (c) whether the reasons offered in support of the standards remain valid today.

2015]

CLARITYAND REASONABLE DOUBT

My canvass of the earliest case in each state adopting each of the three standards shows that the middle requirement, clarity, has the best historical pedigree. No cases adopt a preponderance-of-the-evidence standard or reject at least a clarity requirement, and in most states, clarity cases come earlier, sometimes much earlier, than reasonable-doubt cases. However, there are several reasons to think that the earliest state cases on the presumption of constitutionality actually do not distinguish the two formulations at all, but merely take them as alternative verbal formulations of the same rule. Proof-of-unconstitutionality-beyond-reasonable-doubt rules were born as elaborations of the generally earlier clarity requirements.

The most important element of clarity set out in early cases closely approximates a duty imposed on agencies in present administrative law: full investigation and full consideration of counterarguments or competing considerations. At the bare minimum, courts working under a clarity standard must do as well as the EPA. Of the two sorts of historic rationales for a clarity requirement, onethe gravity of judicial review because of its relative finality-retains full vitality today. The other-respect for elected branches' assessments of constitutional issues-is contingent on how well elected branches actually perform that job. Sometimes elected branches perform it quite poorly indeed, but because of the vitality of the gravity-finality rationale, courts can use such failures as a means of satisfying a clarity requirement, rather than eliminating it.

Part II briefly surveys the historical support for a presumption of constitutionality and presents my data on the earliest statements in each state mentioning clarity or the lack of reasonable doubt as a requirement for judicial refusal to enforce statutes. Part III argues that "reasonable doubt" was initially conceived as an elaboration on the lack of clarity, rather than the higher standard it connotes today. Part IV argues for the contingency of clarity and the requirement of Overton-Park-stylereasoned explanation and full consideration of counterargument. Part V argues that the rationales given in early cases for the presumption of constitutionality have not become obsolete, though courts would do well to impose a duty of production on the state which, when duly flouted, would render constitutional violations clear. Part VI concludes.

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II. EARLY CASES AND MATERIALS ON CLARITY AND REASONABLE DOUBT FORMULATIONS OF THE PRESUMPTION OF CONSTITUTIONALITY

A.

Background. The Presumption of Constitutionalityin Early Federal Cases and Other Material

Clarity requirements on judicial review appear in federal law in a few pre-Marbury separate opinions-Justice James Wilson on circuit in 1793,1 Justice Samuel Chase in 1796,2 1798, 3 and Justices Bushrod Washington and William Paterson in 1800 4-before Chief Justice Marshall embraced it for the Court in Fletcher v. Peck in 1810. 5 Federal law first embraced a reasonable-doubt formulation of the presumption of constitutionality in Justice Washington's opinion in Ogden v. Saunders in 1827.6 The earliest reference to a heightened burden for judicial review appears to be St. George Tucker's 1782 argument to the Virginia Court of Appeals in Commonwealth v. Caton that only if a statute was found "absolutely & irreconcileably [sic] contradictory to the Constitution" would it be "null & void.",7 At the Federal Convention of 1787, George Mason rebutted a judicial-review-based objection to a council of revision by noting that such review would be limited to statutes "plainly" violating the Constitution. 8 The next month, convention delegate Richard Dobbs Spaight

James Iredell, Recollection of the Opinions in Ravara (1973) (unpublished manuscript) 1. (on file with the Vanderbilt Law Review and the McDougal Papers, Historical Society of New York), reprinted in William R. Casto, There Were Great Men Before Agamemnon, 62 VAND. L. REV. 371 app. B, at 404 (2009) ("[T]ho' an Act of Congress plainly contrary to the Constitution was void, yet no such construction should be given in a doubtful case" (internal quotation marks omitted)). Greatly-abbreviated versions of the opinions appear in United States v. Ravara, 2 U.S.

(2 Dall.) 297,298-99, 27 F. Cas. 713, 713-14 (C.C.D. Pa. 1793) (No. 16,122).

Hylton v. United States, 3 U.S. (3 Dall.) 171, 175 (1796) (opinion of Chase, J.) ("very 2. clear case").

Calder v. Bull, 3 U.S. (3 Dall.) 386, 395 (1798) (opinion of Chase, J.) ("very clear 3. case").

Cooper v. Telfair, 4 U.S. (4 DalI.) 14, 18 (1800) (opinion of Washington, J.) ("clearly 4. demonstrated"); id. at 19 (opinion of Paterson, J.) ("clear and unequivocal ... not a doubtful and argumentative implication").

Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 128 (1810) ("not on slight implication and 5. vague conjecture .... clear and strong conviction").

Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 270 (1827) (Washington, J.) ("It is but a 6. decent respect due to the wisdom, the integrity, and the patriotism of the legislative body, by which any law is passed, to presume in favour of its validity, until its violation of the constitution is proved beyond all reasonable doubt.").

PHILIP HAMBURGER, LAW AND JUDICIAL DUTY 313 (2008) (internal quotation marks 7.

omitted).

See 2 THE RECORDS OF THE FEDERAL CONVENTION OF 1787, at 78 (Max Farrand ed., 8.

Yale Univ. Press 1911) (Madison's notes) ("They could declare an unconstitutional law void. But

2015]

CLARITYAND REASONABLE DOUBT

criticized judicial review in correspondence with future Justice James Iredell, who had earlier advocated judicial review in a 1786 pamphlet "To the Public" 9 and had gotten North Carolina courts to embrace the idea the next year. l 0 Spaight complained that judicial constitutional error was irreversible, but legislative constitutional error was not. Iredell conceded that such concerns would counsel against judicial review in "doubtful cases."1' 1 Alexander Hamilton defended judicial review, but only in the case of a conflict with the "manifest tenor of the Constitution" (in Federalist 78) or "evident opposition" between the Constitution and a statute (in Federalist 81).12

Reasonable-doubt formulations of the presumption of constitutionality do not seem to appear at all in early non-judicial materials, but they were set out in frequently cited treatises by Theodore Sedgwick in 185713 and Thomas Cooley in 1868.14 B.

Doubt Simpliciter and Other Standards

A few judicial formulations refer, like Iredell, to "doubt" rather than "reasonable doubt." Justice James Wilson did so on circuit in 1793,15 as did Justice William Paterson in 1800,16 and Chief Justice Marshall for the Court

with regard to every law however unjust oppressive or pernicious, which did not come plainly under this description, they would be under the necessity as Judges to give it a free course.").

9.

JAMES IREDELL, TO THE PUBLIC (Aug. 17, 1786), reprintedin 2 GRIFFITH J. MCREE, LIFE AND CORRESPONDENCE OF JAMES IREDELL 145-49 (1857).

10.

See Bayard v. Singleton, 1 N.C. (Mart.) 42, 42-48 (1787). For elaboration, see Christopher R. Green, Constitutional Theory and the Activismometer: How to Think About Indeterminacy, Restraint, Vagueness, Executive Review, and Precedent, 54 SANTA CLARA L. REV. 403, 430-31 (2014).

11.

See IREDELL, supra note 9, at 169-70, 173-75.

12.

THE FEDERALIST NO. 78, at 426 (Alexander Hamilton) (E.H. Scott ed., 1898); THE FEDERALIST NO. 81, at 441 (Alexander Hamilton) (E.H. Scott ed., 1898).

13.

THEODORE SEDGWICK, A TREATISE ON THE RULES WHICH GOVERN THE INTERPRETATION AND APPLICATION OF STATUTORY AND CONSTITUTIONAL LAW 483, 592 (Forgotten Books 2013) (1857) ("no reasonable doubt") (following New York and federal cases).

14.

THOMAS M. COOLEY, A TREATISE ON THE CONSTITUTIONAL LIMITATIONS WHICH REST UPON THE LEGISLATIVE POWER OF THE STATES OF THE AMERICAN UNION 182 (Bos., Little, Brown, & Co. 1868) ("beyond reasonable doubt") (following Massachusetts case law). Cooley then immediately cites a large variety of cases-federal, Arkansas, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, New Hampshire, New York, and Pennsylvania-for the proposition that "[a] reasonable doubt must be solved in favor of the legislative action, and the act be sustained." Id Some of these cases set out reasonable-doubt formulations, but others do not. See id. at 182 n.3.

15.

See Iredell, supra note 1, at 387-88.

16. Cooper v. Telfair, 4 U.S. (4 Dall.) 14, 19 (1800) (opinion of Paterson, J.) ("[not] doubtful and argumentative").

SOUTH TEXAS LAW REVIEW

[Vol. 57:2

in Fletcher v. Peck in 181017 and in Trustees of Dartmouth College v.

Woodward in 1819.18 Mississippi in 1823,19 Maine in 1830,20 Indiana in 1839,21 Georgia in 1851, 22 Maryland in 1860, 23 Kansas in 1862,24 Oregon in 1882,25 Hawaii in 1960,26 and Alaska in 196627 all refer simply to doubt, rather than reasonable doubt.

The basic idea of avoiding verdicts in cases of doubt goes very far back indeed. Gregory the Great said in the sixth century, "It is a grave and unseemly business to give a judgment that purports to be certain when the matter is doubtful. '28 Britton, in the thirteenth century, required acquittal "if the jurors are in doubt of the matter and not certain. 29 In 1775, shortly before the emergence of the reasonable-doubt rule, the Lord Chief Justice Impey instructed a jury, "Your sense of justice, and your own feelings, will not allow you to convict the prisoner, unless your consciences are fully satisfied beyond all doubt of his guilt. '30 Against this baseline requiring acquittal in any doubtful case at all, requiring only reasonable doubt in criminal cases favors prosecutors, not defendants.31 17.

Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 128 (1810) ("seldom, if ever . . in a doubtful

case").

Trs. of Dartmouth Coll. v. Woodward, 17 U.S. (4 Wheat.) 518, 625 (1819) ("no 18. doubtful case").

Runnels v. State, 1 Miss. (1 Walker) 146, 146-47 (1823) ("any doubt"). I speak of what 19.

"Mississippi" or other states required to avoid cluttering this paper with names like the "Mississippi High Court of Errors and Appeals." The court was, of course, part of the government of the state, and for ease of expression I attribute its statements to the state itself. Qui facit per aliumfacitper se.

Lunt's Case, 6 Me. 412, 413 (1830) ("free from all doubt").

20.

State v. Cooper, 5 Blackf. 258, 259 (Ind. 1839) (per curiam) ("no doubt").

21.

Carey v. Giles, 9 Ga. 253, 258 (1851) ("doubtful case").

22.

Mayor of Balt. v. State ex rel. Bd. of Police, 15 Md. 376, 453 (1860) ("cases of doubt").

23.

State ex rel. Crawford v. Robinson, 1 Kan. 17, 27 (1862) ("beyond substantial doubt").

24.

Cline v. Greenwood, 10 Or. 230, 241 (1882) ("free from all doubt").

25.

Koike v. Bd. of Water Supply, 352 P.2d 835, 838 (Haw. 1960) ("cases of doubt").

26.

Suber v. Alaska State Bond Comm., 414 P.2d 546, 557 (Alaska 1966) ("resolve doubts 27. in favor of validity").

JAMES Q. WHITMAN, THE ORIGINS OF REASONABLE DOUBT: THEOLOGICAL ROOTS OF 28.

THE CRIMINAL TRIAL 116 (2008) (internal quotation marks omitted).

Anthony A. Morano, A Reexamination of the Development of the Reasonable Doubt 29.

Rule, 55 B.U. L. REV. 507, 510 (1975) (quoting FRANCIS MORGAN NICHOLS, BRITTON: AN ENGLISH TRANSLATION AND NOTES 27 (John Byrne & Company 1901)) (internal quotation marks omitted).

Id.at 512 (quoting Maha Rajah Nundocomar's Case, 20 How. St. Tr. 923, 1078 (India 30.

1775)) (internal quotation marks omitted).

WHITMAN, supra note 28, at 116, tells this story in great detail; a quicker version 31. appears in Morano, supra note 29, at 514-15. For more elaboration, see BARBARA J. SHAPIRO, "BEYOND REASONABLE DOUBT" AND "PROBABLE CAUSE": HISTORICAL PERSPECTIVES ON THE ANGLO-AMERICAN LAW OF EVIDENCE 1-41 (1991); Barbara Shapiro, The Beyond Reasonable Doubt Doctrine: 'Moral Comfort' or Standard of Proof?, 2 LAW & HUMAN. 149, 153 (2008);

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CLARITY AND REASONABLE DOUBT

Other early indications of some sort of presumption of constitutionality include requirements of "mature consideration," required by Maryland in 1802,32 or "great respect" for the elected branches, required by Indiana in 1835. 33 Both of these ideas also appear in the cases setting out a clarity requirement, either as elaborations of what clarity requires,34 or as explanations of its rationale.35 Another very strong early version of the presumption of constitutionality, offered by trial courts in Georgia in 180836 and South Carolina in 1812, 37 is the idea that all reasonable people would agree about the constitutional issue.38 One way to operationalize such a requirement would be to allow judicial review only if a court were unanimous, akin to the rule for a jury. If actual judges were deemed reasonable, their dissents alone would show that reasonable observers could disagree about a constitutional issue. No state has gone as far as unanimity, but three states have imposed supermajority requirements on judicial review. In 1912, Ohio began to require six of its seven justices to agree if the lower court had upheld legislation, but it abandoned the rule in 1968. 39 In 1918, North Dakota began requiring four of its five justices to agree, 40 and in 1920

James Q. Whitman, Response to Shapiro, 2 LAW & HUMAN. 175, 187 (2008). For one early definition of reasonable doubt with a decidedly pro-prosecution vibe, see Commonwealth v.

Webster, 59 Mass. (5 Cush.) 295, 320 (1850) ("Then, what is reasonable doubt?... It is not mere possible doubt; because every thing relating to human affairs, and depending on moral evidence, is open to some possible or imaginary doubt. . . . [I]f the law, which mostly depends upon considerations of a moral nature, should go further than this, and require absolute certainty, it would exclude circumstantial evidence altogether."), abrogatedby Commonwealth v. Russell, 23 N.E.3d 867 (Mass. 2015).

32.

Whittington v. Polk, 1 H. & J. 236, 245 (Md. 1802).

33.

Hedley v. Bd. ofComm'rs, 4 Blackf. 116, 118 (Ind. 1835) (per curiam).

34.

See infra Part [V on the contingency of clarity as examination becomes more mature.

35.

See infra Part V.B.2 on respect for the elected branches as one of three sorts of rationales for a presumption of constitutionality.

36.

See Grimball v. Ross, T.U.P. Charlt. 175, 178 (Ga. Super. Ct. 1808) (for an act to be unconstitutional, it must be "directly in the teeth of the constitutional provision .... This violation of a constitutional right ought to be as obvious to the comprehension of every one, as an axiomatic truth; as that the parts are equal to the whole.").

37.

See Adm'rs of Byrne v. Adm'rs of Stewart, 3 S.C. Eq. (3 Des. Eq.) 466, 477 (Ct. App. Eq. 1812) ("[S]o obviously repugnant to the constitution, that ... all men of sense and reflection in the community may perceive the repugnancy.").

38.

As seen below, however, both courts pair such a standard with a much more lax approach to the judicial duty of clarification than do other courts. See infra notes 224-25 and accompanying text.

39.

See OHIO CONST. art. IV, § 2 (amended 1968); City of Euclid v. Heaton, 238 N.E.2d 790, 795 (Ohio 1968).

40.

See N.D. CONST. art. VI, § 4 (originally adopted in 1912 as art. IV, § 88 and renumbered in 1976).

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Nebraska began requiring five of its seven justices to agree; 4' both rules are in effect today. All other states, however, conduct judicial review by a simple majority rule.42 But now on to the main show: my survey of early clarity and reasonable-doubt requirements.

C.

Clarity

Every state has articulated a clarity requirement for judicial review at some point, and no state has ever repudiated such a requirement. No state has ever adopted a mere preponderance-of-the-evidence standard or embraced, as such, judicial review in an unclear case. Judicial review was required to be clear--or synonyms like plain, manifest, or evident-by 45 44 Virginia in 1793, 43 Pennsylvania in 1799, Massachusetts in 1809, Louisiana in 1813,46 Kentucky in 1822, 47 Maine in 1829, 48 North Carolina Illinois in 1838, 49 Connecticut 50 and Indiana 5 in 1839, Vermont in 1839,52 57 56 54 in 1841,53 Mississippi and Maryland

55

in 1842, Delaware,

Georgia,

New York, 58 and Texas59 in 1846, Iowa in 1849,60 Arkansas in 1851,61 Ohio See NEB. CONST. art. V, § 2 (adopted in 1920).

41.

See, e.g., W. Orange-Cove Consol. I.S.D. v. Alanis, 107 S.W.3d 558, 562-63 (Tex. 42.

2003) ("The final authority to determine adherence to the Constitution resides with the Judiciary." (citing Marbury v. Madison, 5 U.S. (1 Cranch) 137, 176-178 (1803))).

43.

See Kamper v. Hawkins, 3 Va. (1 Va. Cas.) 20, 39-40 (1793) ("plainly repugnant").

See Respublica v. Duquet, 2 Yeates 493, 501 (Pa. 1799) ("evident indeed . . .

44. unequivocally").

See Kendall v. Inhabitants of Kingston, 5 Mass. (5 Tyng) 524, 534 (1809) ("manifestly 45. erroneous").

46.

Syndics of Brooks v. Weyman, 3 Mart. (o.s.) 9, 12 (La. 1813) ("manifestly").

47.

Bliss v. Commonwealth, 12 Ky. (2 Litt.) 90, 94 (1822) ("clear and strong conviction").

48.

Bowdoinham v. Richmond, 6 Me. 112, 114 (1829) ("clearly").

49.

State v. Manuel, 20 N.C. (3 & 4 Dev. & Bat.) 144, 164 (1838) ("clear repugnancy").

Trs. of the Bishop's Fund v. Rider, 13 Conn. 87, 93 (1839) ("clearly repugnant"); see 50. also Landon v. Town of Litchfield, II Conn. 251, 265 (1836) (Church, J., dissenting) ("clear and obvious").

State v. Cooper, 5 Blackf. 258, 259 (Ind. 1839) (per curiam) ("so obvious as to admit of 51.

no doubt").

52.

Trs. of Caledonia Cnty. Grammar Sch. v. Burt, 11 Vt. 632, 637-38 (1839) ("the most clear and unquestionable grounds").

53.

Lane v. Doe ex dem. Dorman, 4 111. (3 Scam.) 238, 240 (1841) ("plain and obvious").

54. Campbell v. Miss. Union Bank, 7 Miss. (6 Howard) 625, 672 (1842) ("palpably").

55.

State ex rel. Wash. Cnty. v. Bait. & Ohio R.R. Co., 12 G. & J. 399, 438 (Md. 1842) ("clear"), affid, 44 U.S. (3 How.) 534 (1845).

56.

Bailey v. Phila., Wilmington & Balt. R.R. Co., 4 Del. (4 Harr.) 389, 403 (1846) ("plain, palpable").

Nunn v. State, 1 Ga. 243, 246 (1846) ("clear and strong conviction").

57.

58.

Morris v. People, 3 Denio 381, 394 (N.Y. 1846) (Lott, Sen.) ("clearly demonstrated").

A majority of the Court for the Correction of Errors, which then included Senators, apparently agreed with Senator Lott's statement. The Court of Appeals, created by the New York

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CLARITY AND REASONABLE DOUBT

in 1852,62 Wisconsin in 1853,63 Florida64 and South Carolina65 in 1856, Michigan in 1858,66 California 67 and Alabama 68 in 1859, Minnesota in 1860,69 Kansas in 1862, 70 Missouri in 1869,71 New Jersey in 1870,72 Tennessee in 1879, 73 Colorado in 1880, 74 Oregon in 1882, 75 West Virginia in 1883,76 Nevada in 1884, 77 New Hampshire in 1888,78 Rhode Island in 1889, 79 Idaho in 1891,80 Washington in 1894,81 Nebraska in 1894,82 South

Constitution of 1846, required clarity in People ex rel. Burrows v. Supervisors of Orange County.

See 17 N.Y. 235, 241 (1858) ("[more than] mere conflict ....clearly appear that the act cannot be supported by any reasonable intendment or allowable presumption").

Sutherland v. DeLeon, 1 Tex. 250, 304 (1846) ("clearly").

59.

Reed v. Wright, 2 Greene 15, 21 (Iowa 1849) ("clear and apparent").

60.

61.

Eason v. State, 11 Ark. 481, 486 (1851) ("clear and strong conviction").

62.

Cincinnati, Wilmington & Zanesville, R.R. Co. v. Comm'rs of Clinton Cnty., 1 Ohio St. 77, 83 (1852) ("clearly").

Dickson v. State, 1 Wis. 122, 126 (1853) ("clearly").

63.

64.

Cotten v. Cnty. Comm'rs, 6 Fla. 610, 613 (1856) ("very clear case" (quoting Hylton v.

United States, 3 U.S. (3 DalI.) 171, 175 (1796) (opinion of Chase, J.)) (internal quotation marks omitted)).

Att'y Gen. ex rel. Indep. or Congregational Church of Wappetaw v. Soc'y for Relief of 65.

Elderly & Disabled Ministers, 29 S.C. Eq. (8 Rich. Eq.) 190, 226 (Ct. App. Eq. 1856) ("clear and strong conviction" (quoting Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 128 (1810)) (internal quotation marks omitted)).

Sears v. Cottrell, 5 Mich. 251, 259 (1858) (Christiancy, J., concurring) ("manifestly").

66.

People ex rel. Att'y Gen. v. Burbank, 12 Cal. 378, 384-85 (1859) ("clear repugnancy..

67. extreme caution").

Sadler v. Langham, 34 Ala. 311, 321 (1859) ("clearlydemonstrated').

68.

Heyward v. Judd, 4 Minn. 483, 491 (1860) ("must clearly appear").

69.

70.

State ex rel. Crawford v. Robinson, 1 Kan. 17, 27 (1862) ("clear, beyond substantial doubt").

Stephens v. St. Louis Nat'l Bank, 43 Mo. 385, 390 (1869) ("plainly").

71.

72.

State v. Fuller, 34 N.J.L. 227, 232 (1870) ("clearly").

State ex rel. Morrell v. Fickle, 71 Tenn. 79, 81-82 (1879) ("[no] hypercritical test....

73. manifestly [void] according to the plain letter and spirit of the Constitution").

People ex rel. Tucker v. Rucker, 5 Colo. 455, 458-59 (1880) ("clear and unquestioned 74. violation . . . . clearly demonstrated" (quoting SEDGWICK, supra note 13, at 482) (internal quotation marks omitted)).

Cline v. Greenwood, 10 Or. 230, 241 (1882) ("clear and palpable and free from all 75. doubt").

76.

Varner v. Martin, 21 W. Va. 534, 543 (1883) ("clearly").

77.

State ex rel. Perry v. Arrington, 4 P. 735, 737 (Nev. 1884) ("clearly").

State v. Marshall, 15 A. 210, 211 (N.H. 1888) ("clear and substantial conflict").

78.

79.

State v. Dist. of Narragansett, 16 A. 901, 906 (R.I. 1889) ("clearly" (quoting People ex rel. Burrows v. Supervisors of Orange Cnty., 17 N.Y. 235, 241 (1858)) (internal quotation marks omitted)).

80.

Doan v. Bd. of Cnty. Comm'rs, 26 P. 167, 170 (Idaho 1891) ("so clearly repugnant to the constitution as to admit of no other reasonable construction").

81.

State ex rel. McReavy v. Burke, 36 P. 281, 283 (Wash. 1894) ("greatest caution ... clearly").

82.

State ex rel. Stull v. Bartley, 59 N.W. 907, 909 (Neb. 1894) ("clear and manifest").

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Dakota in 1897,83 Wyoming in 1900,84 Montana in 1903,85 Utah 86 and Oklahoma 87 in 1908, New Mexico in 1912,88 North Dakota in 1915,89 Arizona in 1921,90 Hawaii in 1960, 91 and Alaska in 1962.92 Strikingly, no cases at all adopt a preponderance-of-the-evidence standard by consciously rejecting a higher level of proof.93 Some cases, like Marbury v. Madison,9 fail to mention a presumption of constitutionality or specify the precise evidentiary burden to overcome it, but this is of course different from rejecting such a presumption or adopting a preponderance rule. Likewise, there are cases that exercise judicial review in circumstances that to modem observers seem less than fully clear, 95 but such cases only show the ability of early courts in "asserting principles inconsistent with

83.

State ex rel. Adams v. Herried, 72 N.W. 93, 97 (S.D. 1897) ("plainly and palpably").

84.

Farm Inv. Co. v. Carpenter, 61 P. 258, 263-64 (Wyo. 1900) ("clearly").

85.

W. Ranches, Ltd. v. Custer Cnty., 72 P. 659, 661 (Mont. 1903) (per curiam) ("clearly").

86.

Blackrock Copper Mining & Milling Co. v. Tingey, 98 P. 180, 185 (Utah 1908) ("clearly").

87.

Anderson v. Ritterbusch, 98 P. 1002, 1017 (Okla. 1908) ("clear and strong conviction"

(quoting Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 128 (1810)) (internal quotation marks omitted)), overruledinpart on other grounds by Fent v. Fallin, 345 P.3d 1113 (Okla. 2014).

88. State ex rel. Lucero v. Marron, 128 P. 485, 488 (N.M. 1912) ("clear and strong conviction" (quoting Fletcher, 10 U.S. (6 Cranch) at 128) (internal quotation marks omitted)).

89. O'Laughlin v. Carlson, 152 N.W. 675, 677 (N.D. 1915) ("manifestly").

90. Smith v. Mahoney, 197 P. 704, 706 (Ariz. 1921) ("clearly").

91. Koike v. Bd. of Water Supply, 352 P.2d 835, 838 (Haw. 1960) ("clearly").

92. DeArmond v. Alaska State Dev. Corp., 376 P.2d 717, 724-25 (Alaska 1962) ("clearly").

93.

It is hard to find anyone explicitly advocating a mere-preponderance rule, but one is Steven G. Calabresi. See Steven G. Calabresi, Introduction: A Critical Introduction to the OriginalismDebate, in ORIGINALISM: A QUARTER-CENTURY OF DEBATE 22 (Steven G. Calabresi ed., 2007) ("[C]ourts should be restrained in striking down such a law except where it appears by a preponderance of the evidence to conflict with the Constitution. I would not go as far as James Bradley Thayer and invalidate only laws that are clearly and beyond a reasonable doubt unconstitutional.").

94.

Marbury v. Madison, 5 U.S. (1 Cranch) 137, 176-80 (1803) (defending judicial review without mentioning presumption of constitutionality or requirements of clarity or proof beyond reasonable doubt).

95.

See Gary Lawson & Christopher D. Moore, The Executive Power of Constitutional Interpretation, 81 IOWA L. REV. 1267, 1275 (1996) (conceding that Thayerian deference to elected branches "was a frequently expressed position during the founding era" (citing SYLVIA SNOWISS, JUDICIAL REVIEW AND THE LAW OF THE CONSTITUTION 13-44 (1990))); id.at 1277-78

("[P]eople did not always practice what they preached. There were relatively few occasions for constitutional judicial review in the founding era, but it is hard to describe all of the examples that did take place as Thayerian."); William Michael Treanor, Judicial Review Before Marbury, 58 STAN. L REV. 455, 460 (2005) ("[T]here was certainly some support for the view that judicial review should only be exercised in cases of clear unconstitutionality. Nonetheless, the case law discussed in this Article principally reflects an approach to judicial review that . . .[was not] limited to cases of clear unconstitutionality ...").

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CLARITY AND REASONABLE DOUBT

those on which they were acting., 96 If textually expressed principles represent the state constitution,9 7 they matter more than actions when the two conflict.

As a side note, it is also striking that no state cases-indeed, only one state judge, later repentant-reject judicial review itself.98 Federal separation-of-powers principles are not binding on states, of course, but every state has cited Marbury favorably in the Westlaw database at least eight times.99 If Marbury represented Marshall's sleight of hand,100 the same trick was performed independently fifty times over.

D.

Reasonable Doubt

Clarity seems, then, the unanimous rule. However, every state, except Alaska, 10 1 has also embraced a reasonable-doubt-style formulation of the presumption of constitutionality: Pennsylvania in 1811,102 Massachusetts in 1834,103 Maryland in 1838,104 New York in 1846,105 Arkansas in 1851,106

96.

See Dred Scott v. Sandford, 60 U.S. (19 How.) 393, 410 (1857) (denying such a possibility), superseded by constitutional amendment, U.S. CONST. amend. XIV; see also Christopher R. Green, Originalismand the Sense-Reference Distinction, 50 ST. Louis U. L.J. 555, 581-82, 597-98, 608-09 (2006) (explaining DredScott's error).

See generally Christopher R. Green, "This Constitution ": ConstitutionalIndexicals as 97. a Basisfor Textualist Semi-Originalism, 84 NOTRE DAME L. REV. 1607 (2009) (surveying federal and state constitutional language that defines constitutions as historically-situated textual expressions of meaning).

See Norris v. Clymer, 2 Pa. 277, 281 (1845) (Gibson, C.J.) (interrupting argument to 98. repudiate earlier rejection of judicial review); Eakin v. Raub, 12 Serg. & Rawle 330, 344-58 (Pa. 1825) (Gibson, J., dissenting).

99.

See, e.g., W. Orange-Cove Consol. I.S.D. v. Alanis, 107 S.W.3d 558, 563 (Tex. 2003) ("The final authority to determine adherence to the Constitution resides with the Judiciary." (citing Marbury v. Madison, 5 U.S. (1 Cranch) 137, 176-178 (1803))).

100.

See Ken Vinson, How to Read Marbury v. Madison, STUDENT LAW. J., Jan. 1971, at 10, ").

11 ("[A] piece of sleight of hand called Marbury v. Madison ....

101.

Alaska comes close to such a rule in DeArmond v. Alaska State Dev. Corp., 376 P.2d 717, 721 (Alaska 1962) ("[T]his court will not set aside the finding of the legislature unless... such finding is arbitrary and without any reasonable basis in fact.").

Commonwealth ex rel. O'Hara v. Smith, 4 Binn. 117, 123 (Pa. 1811) (Tilghman, C.J.) 102. ("so manifest as to leave no room for reasonable doubt").

In re Wellington, 33 Mass. (16 Pick.) 87, 95 (1834) (Shaw, C.J.) ("beyond reasonable 103. doubt").

104.

Regents of Univ. of Md. v. Williams, 9 G. & J. 365, 383 (Md. 1838) ("where the doubt is bonafide, and well founded, and not the result of a disinclination to deny the authority of the legislature").

105.

Morris v. People, 3 Denio 381, 394 (N.Y. 1846) (Lott, Sen.) ("no rational doubt" (quoting Ex parte McCollum, 1 Cow. 550, 564 (N.Y. Sup. Ct. 1823) (opinion of Savage, C.J.)) (internal quotation marks omitted)).

106.

Eason v. State, 11 Ark. 481, 486 (1851) ("every rational doubt").

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Florida in 1856,107 Michigan in 1858,108 New Hampshire in 1859,109 Connecticut in 1860,110 California in 1863,111 Wisconsin in 1863,112 Missouri in 1868,113 Iowa in 1870,114 Vermont in 1877,"' South Carolina in 1881,116 Illinois117 and West Virginia11 8 in 1882, Colorado in 1884,119 1889,121 South Dakota,2 2 Tennessee, and Idaho in 1891, Nevada in 1893,125 North Carolina in 1895,126 Indiana, 127 Montana 128 and Minnesota 129 in 1896, Delaware130 and Kentucky

in

123

1885,120

Rhode

Island

in

124

107.

Cotten v. Cnty. Comm'rs, 6 Fla. 610, 613 (1856) ("reasonable doubt").

108.

Sears v. Cottrell, 5 Mich. 251, 256 (1858) (Manning, J.) ("reasonable doubt"); id at 261 (Christiancy, J., concurring) ("clear from a reasonable doubt").

109.

Rich v. Flanders, 39 N.H. 304, 312 (1859) ("beyond all reasonable doubt").

110.

Hartford Bridge Co. v. Union Ferry Co., 29 Conn. 210, 227 (1860) ("manifest and free from all reasonable doubt").

111.

Cohen v. Wright, 22 Cal. 293, 308 (1863) ("so clear that no reasonable doubt can be said to exist" (quoting SEDGWICK, supra note 13, at 592) (internal quotation marks omitted)).

112.

State ex rel. Chandler v. Main, 16 Wis. 398, 399, 415 (1863) ("clear and free from a reasonable doubt" (quoting Tyler v. People, 8 Mich. 320, 333 (1860)) (internal quotation marks

omitted)).

113.

Abbott v. Lindenbower, 42 Mo. 162, 168 (1868) ("clear and certain beyond reasonable

doubt").

114.

Stewart v. Bd. of Supervisors, 30 Iowa 9, 15 (1870) (per curiam) ("clearly,palpably, plainly, and in such a manner as to leave no reasonable doubt").

115.

Town of Bennington v. Park, 50 Vt. 178, 192 (1877) ("free from all reasonable doubt" (quoting HartfordBridge Co., 29 Conn. at 227) (internal quotation marks omitted)).

116. Pelzer, Rodgers & Co. v. Campbell & Co., 15 S.C. 581, 593 (1881) ("proved beyond all reasonable doubt").

117.

Home Ins. Co. v. Swigert, 104 Ill. 653, 669 (1882) ("clear, beyond reasonable doubt").

118.

Chesapeake & Ohio Ry. Co. v. Miller, 19 W. Va. 408, 422 (1882) ("beyond a reasonable doubt"), af'd, 114 U.S. 176 (1885).

119.

Alexander v. People ex rel. Schofield, 2 P. 894, 896 (Colo. 1884) ("beyond reasonable doubt" (quoting In re Wellington, 33 Mass. (16 Pick.) 87, 95 (1834) (Shaw, C.J.)) (internal quotation marks omitted)).

120.

Sullivan v. Berry's Adm'r, 83 Ky. 198, 206 (1885) ("beyond reasonable doubt").

121.

State v. Dist. of Narragansett, 16 A. 901, 906 (R.I. 1889) ("beyond a reasonable doubt").

122.

State v. Morgan, 48 N.W. 314, 316 (S.D. 1891) ("beyond reasonable doubt").

123.

Cole Mfg. Co. v. Falls, 16 S.W. 1045, 1046 (Tenn. 1891) ("[elvery reasonable doubt must be solved in favor"). For a much earlier use of the phrase "no reasonable doubt" that could conceivably reflect the standard for judicial review, see Hartley v. United States, 4 Tenn. (3 Hayw.) 45, 52 (1816) (Haywood, J.) ("It is as much the duty of a judge to cause his judgment to be carried into effect when he has no reasonable doubt pressing on his mind, as it is to suspend it when he has, and I can not say that my mind is affected with any reasonable doubt.").

124.

Doan v. Bd. of Cnty. Comm'rs, 26 P. 167, 170 (Idaho 1891) ("so clearly repugnant to the constitution as to admit of no other reasonable construction").

125.

State ex rel. Mack v. Torreyson, 34 P. 870, 871 (Nev. 1893) ("beyond reasonable doubt" (quoting In re Wellington, 33 Mass. (16 Pick.) 87, 95 (1834) (Shaw, C.J.)) (internal quotation marks omitted)).

126.

Sutton v. Phillips, 21 S.E. 968, 968 (N.C. 1895) ("any reasonable doubt").

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CLARITY AND REASONABLE DOUBT

Maine 131 in 1899, Nebraska in 1900,132 Georgia in 1902,133 Texas in

1903,134 Washington in 1904,135 Mississippi in 1906,136 Alabama, 37 Utah, 13 8

in 1908, Oklahoma in 1909,140 New Jersey in 1910,141 Kansas in 1912,142 North Dakota in 1914,143 Ohio in 1915,144 Virginia in and Louisiana

139

127.

State v. Gerhardt, 44 N.E. 469, 473 (Ind. 1896) ("no reasonable doubt or hesitation in our minds").

128.

State v. Camp Sing, 44 P. 516, 517 (Mont. 1896) ("beyond all reasonable doubt" (quoting COOLEY, supra note 14, at 183) (internal quotation marks omitted)).

Lommen v. Minneapolis Gaslight Co., 68 N.W. 53, 54 (Minn. 1896) ("beyond 129. reasonable doubt").

Mayor of Wilmington v. Ewing, 43 A. 305, 309 (Del. 1899) ("reasonable doubt").

130.

State v. Lubee, 45 A. 520, 521 (Me. 1899) ("beyond a reasonable doubt").

131.

State v. Standard Oil Co., 84 N.W. 413, 414 (Neb. 1900) ("[A]ll reasonable doubts 132. must be resolved in favor of its constitutionality.").

Park v. Candler, 40 S.E. 523, 526 (Ga. 1902) ("beyond a reasonable doubt" (quoting 133.

Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 270 (1827) (Washington, J.)) (internal quotation marks omitted)).

134.

Brown v. City of Galveston, 75 S.W. 488, 494 (Tex. 1903) ("beyond all reasonable doubt" (quoting Ogden, 25 U.S. (12 Wheat.) at 270) (internal quotation marks omitted)).

135.

State v. Ide, 77 P. 961, 962 (Wash. 1904) ("no reasonable doubt"), overruled in part by Town of Tekoa v. Reilly, 91 P. 769 (Wash. 1907).

State ex rel. Greaves v. Henry, 40 So. 152, 154 (Miss. 1906) ("well-founded reasonable 136. doubt").

State ex rel. Woodward v. Skeggs, 46 So. 268, 270 (Ala. 1908) ("beyond a reasonable 137. doubt").

Blackrock Copper Mining & Milling Co. v. Tingey, 98 P. 180, 185 (Utah 1908) 138. ("beyond a reasonable doubt").

State ex rel. Labauve v. Michel, 46 So. 430, 432 (La. 1908) ("Every reasonable doubt 139. (quoting HENRY CAMPBELL BLACK, HANDBOOK ON THE must be resolved in favor ......

CONSTRUCTION AND INTERPRETATION OF THE LAWS 110) (internal quotation marks omitted)).

Rakowski v. Wagoner, 103 P. 632, 634 (Okla. 1909) ("beyond a reasonable doubt").

140.

141.

Booth v. McGuinness, 75 A. 455, 461 (N.J. 1910) ("no room for reasonable doubt" (quoting Commonwealth ex rel. O'Hara v. Smith, 4 Binn. 117, 123 (Pa. 1811) (Tilghman, C.J.)) (internal quotation marks omitted)).

142.

State v. Sherow, 123 P. 866, 867 (Kan. 1912) ("beyond reasonable doubt").

143.

State ex rel. McCue v. N. Pac. Ry. Co., 145 N.W. 135, 153-54 (N.D. 1914) ("more than a mere preponderance"; "clearly and beyond reasonable doubt"), rev'd, 236 U.S. 585 (1915).

Miami Cnty. v. City of Dayton, 110 N.E. 726, 728-29 (Ohio 1915) ("beyond 144. reasonable doubt").

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1918,145 Arizona in 1921,146 Wyoming in 1923,' 47 New Mexico in 1925,148 Oregon in 1933,149 and Hawaii in 1975.150 E.

Clarity v. Reasonable Doubt

Comparing the dates for the earliest cases setting out a reasonabledoubt or a clarity formulation, generally clarity comes first. Only one state, New Hampshire, adopts a reasonable-doubt formulation significantly (twenty-nine years) before adopting a clarity formulation. 151 In many other states, a clarity requirement emerges long before reasonable-doubt 13 language-125 years before in Virginia,"' ninety-five in Louisiana, seventy in Maine, 154 sixty-four in Mississippi,15 5 sixty-three in Kentucky and Ohio,' 56 fifty-seven in Indiana, North Carolina, and Texas, 157 fifty-three in Delaware, 158 fifty-one in Oregon, 159 fifty in Kansas, 160 forty-nine in Alabama, 161 forty-one in Illinois, 162 forty in New Jersey, 163 thirty-eight 166 in 165 twenty-five in Massachusetts, 164 Minnesota, in thirty-six Vermont,

145.

146.

City of Roanoke v. Elliott, 96 S.E. 819, 824 (Va. 1918) ("any reasonable doubt").

Smith v. Mahoney, 197 P. 704, 705 (Ariz. 1921) ("Every reasonable doubt is to be

resolved in favor of the law ... ").

147.

State ex rel. Sch. Dist. No. 1 v. Snyder, 212 P. 758, 759 (Wyo. 1923) ("beyond a reasonable doubt" (quoting Chesapeake & Ohio Ry. Co. v. Miller, 19 W. Va. 408, 422 (1882), aff'd, 114 U.S. 176 (1885)) (internal quotation marks omitted)).

148.

In re Proposed Middle Rio Grande Conservancy Dist., 242 P. 683, 694 (N.M. 1925) ("beyond reasonable doubt" (quoting Miami Cnty., 110 N.E. at 728-29) (internal quotation marks omitted)).

149.

Anderson v. Thomas, 26 P.2d 60, 76 (Or. 1933) (in banc) ("beyond reasonable doubt").

150.

State v. Kahalewai, 541 P.2d 1020, 1024 (Haw. 1975) ("all reasonable doubt"; "clear and convincing"; "beyond question" (quoting Bishop v. Mahiko, 35 Haw. 608, 641 (1940)) (internal quotation marks omitted)).

151.

See supranotes 78 and 109 (1888 v. 1859).

152.

See supranotes 43 and 145 (1793 v. 1918).

153.

See supra notes 46 and 139 (1813 v. 1908).

154.

See supra notes 48 and 131 (1829 v. 1899).

155.

See supra notes 54 and 136 (1842 v. 1906).

156.

See supra notes 47, 120, 62, and 144 (1822 v. 1885 and 1852 v. 1915).

157.

See supra notes 51, 127, 50, 126, 59, and 134 (1839 v. 1896, 1839 v. 1895, and 1846 v.

1903).

158.

See supra notes 56 and 130 (1846 v. 1899).

159.

See supra notes 75 and 149 (1882 v. 1933).

160.

Seesupra notes 70 and 142 (1862 v. 1912).

161.

See supra notes 68 and 137 (1859 v. 1908).

162.

See supra notes 53 and 117 (1841 v. 1882).

163.

See supra notes 72 and 141 (1870 v. 1910).

164.

See supra notes 51 and 115 (1839 v. 1877).

165.

See supra notes 69 and 129 (1860 v. 1896).

166.

See supra notes 45 and 103 (1809 v. 1834).

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twenty-five in Wyoming, 167 twenty-one in Connecticut, 6 8 and twenty-one in Iowa. 169 In other states, the standards emerge within twenty years of each other; in seven states-New York in 1846,170 Arkansas in 1851,171 Florida in 1856,172 Michigan in 1858,173 Rhode Island in 1889,74 Idaho in 1891,175 and Utah in 1908 176-the two facially inconsistent evidentiary thresholds appear for the first time in the very same case.

The charts presented in the appendices illustrate this data in four ways: (a) by plotting the first-formulation years against each other, 177 (b) by plotting the difference in first-formulation years against the firstformulation years of a clarity requirement, 178 (c) by plotting firstformulation years after statehood against each other, 179 and (d) by plotting the difference in first-formulation years against first-formulation years after 0 statehood of a clarity requirement.18 III. THE SYNONYMY OF CLARITY AND PROOF BEYOND REASONABLE DOUBT

Present law treats a distinction between clear-and-convincing evidence and proof beyond reasonable doubt as axiomatic, and observers usually assume that beyond-a-reasonable-doubt formulations are older. 181 But both the distinction and the assumption of reasonable-doubt priority are mistaken, at least in the context of the presumption of constitutionality.

Clarity formulations of the presumption of constitutionality generally come

167.

See supra notes 84 and 148 (1900 v. 1925).

168.

See supra notes 51 and 110 (1839 v. 1860).

169.

See supra notes 60 and 114 (1849 v. 1870).

170.

See supra notes 58 and 105.

171.

See supranotes 61 and 106.

172.

See supranotes 64 and 107.

173.

See supranotes 66 and 108.

174.

See supranotes 79 and 121.

175.

See supranotes 80 and 124.

176.

See supra notes 86 and 138.

177.

See infra Appendix A. 178.

See infra Appendix B. 179.

See infra Appendix C. 180.

See infra Appendix D. 181.

See, e.g., Oral Argument at 8:06, Addington v. Texas, 441 U.S. 418 (1979) (No. 775992), available at http://www.oyez.org/cases/1978/77-5992 (statement of Justice Rehnquist) ("Well don't you think though that the rule of proof beyond a reasonable doubt, which was applied at Winship, had great historical roots in the common law as proof for a criminal case.

Whereas clear and convincing evidence simply comes over from the fraud type of case and a civil action, it's a fairly recent origin and so far as I know it hasn't been implanted in the constitution historically.").

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earlier, sometimes much earlier, than reasonable-doubt formulations. 182 Further, there are several reasons to think that when first articulated, the two standards were synonymous.

First, very few cases explicitly distinguish the two standards. The earliest case doing so-preferring a mere clarity requirement-was from Alabama in 1859.13 West Virginia followed the same line, acknowledging possible synonymy, in 1883,184 but no other states addressed the issue. 85

See supra Part ILE. 182.

183.

Sadler v. Langham, 34 Ala. 311, 321 (1859). Because explicit consideration of the choice between clarity and reasonable-doubt formulations is so rare, the court's reasoning is worth setting out at length: On the measure of proof necessary to set aside a statute as unconstitutional, the language of the adjudged cases varies. In some cases it is said, that the expressed will of the legislature ought not to be disregarded, unless the unconstitutionality be clearly demonstrated.In another case it is said, that we should not hold that the legislature had exceeded its power, except in cases admitting of no reasonable doubt. With due respect, we think this language entirely too strong. It indulges, in favor of legislative infallibility, the same strength of presumption as that which obtains in favor of innocence when the life or liberty of the citizen is jeoparded in the courts of criminal jurisdiction.

Constitutional provisions are intended as a protection to life, liberty and property, against encroachment, intentional or otherwise, at the hands of the government. Had not the framers of our system of government supposed it possible that legislative bodies might fall into error, they would not, in their sovereign capacity, have adopted a written constitution, superior alike over themselves and the legislature. We cannot believe that construction a sound one, which indulges every reasonable presumption against the citizen, when the legislature deals with his rights, and gives him the benefit of every reasonable doubt, when his life and liberty are in jeopardy before the courts of the country.

Id. (citations omitted).

184.

Varner v. Martin, 21 W. Va. 534, 542-43 (1883). Again, the rarity of the discussion merits quoting the court's discussion at length: In some cases it has been said, that before the courts declare an act of the Legislature void it should be shown to be unconstitutional beyond all reasonable doubt. Perhaps this really means no more than we have said, that before declaring an act of the Legislature void its unconstitutionality should be clear to our minds. But the use of this phrase beyond all reasonable doubt seems to me to be very inappropriate in such a connection, and to be well calculated to produce mischief. It is a phrase which has long been appropriated to express the character of the evidence necessary to convict a criminal, and has so often in this connection been perverted from its proper meaning by counsel defending criminals, that it is almost impossible to prevent its making a false impression on the mind when it is applied to other subjects, to which the phrase as so used is inappropriate. Perhaps no harm results or at least no very serious harm from the overstrained meaning given to this phrase by criminal lawyers; all the harm resulting in such case is, that now and then by perverting the true meaning of this phrase a criminal is acquitted, who should have been condemned. However this cannot be regarded as a very great evil when it is borne in mind, that it has been said, that it is better that ninetynine guilty persons should escape than that one innocent person should be condemned.

But not so with the question before us. It is not better, that the Constitution should be violated ninety and nine times by the Legislature than, that the courts should erroneously hold one act of the Legislature unconstitutional. We cannot raise

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Not until 1915 did Ohio mildly distinguish the standards by noting that a proof-beyond-reasonable-doubt requirement (with which the court agreed) emerged later. 186 Second, seven states adopted the two standards for the first time in the 187 very same case; they obviously represent a single criterion, not two. presumptions in favor of legislative infallibility as strong as those of a jury in favor of the innocence of a prisoner charged with murder.... ... We admit, that it is our duty not to hold void an act of the Legislature unless we are satisfied, that it is clearly unconstitutional. But if after approaching the question involved in this case with great caution and delicacy, as is our duty, and if after a careful examination we are satisfied, that this section 44 of chapter 194 Acts 1872-73 is clearly unconstitutional, it is our duty to unhesitatingly so declare ....

My views on this question are well expressed by Judge Stone in the case of Sadler ....

Id As noted above, West Virginia adopted a reasonable-doubt formulation only a year earlier in Chesapeake & Ohio Ry. Co. v. Miller, 19 W. Va. 408, 422 (1882), aff'd, 114 U.S. 176 (1885). See supra note 118 and accompanying text. Both decisions were without dissent: Judge Johnson, the author of Chesapeake & Ohio Ry. Co., joined Varner, and Judge Green, the author of Varner, joined Chesapeake & Ohio Ry. Co. West Virginia shortly went back to a reasonable-doubt standard without discussing Varner. See, e.g., Peel Splint Coal Co. v. State, 15 S.E. 1000, 1004 (W. Va. 1892); cf id. at 1014 (English, J., dissenting) (quoting Varner, but not on this point).

185.

As noted above, Alabama itself embraced a reasonable-doubt formulation in 1908; it gave no attention to its earlier rejection of the formulation in Sadler. State ex rel. Woodward v.

Skeggs, 46 So. 268, 270 (Ala. 1908); see supra note 137 and accompanying text. Later courts cited Sadler alongside reasonable-doubt formulations without noting the tension. See, e.g., Swindle v. State ex rel. Pruitt, 143 So. 198, 199 (Ala. 1932).

While no other courts (and almost no commentators) have pointed out the discussion of the different presumption-of-constitutionality standards in Sadler and Varner, their holdings on the public-use requirement have been widely cited, most recently and prominently in Kelo v. City of New London, 545 U.S. 469, 513 n.2 (2005) (Thomas, J., dissenting). Thomas Grey cites Sadler and Varner in Thomas C. Grey, Thayer's Doctrine: Notes on Its Origin, Scope, and Present Implications, 88 NW. U. L. REV. 28, 30 n.9 (1993), but without mentioning-oddly enough for an article on Thayer's doctrine ofjudicial review!-their discussions of reasonable doubt and clarity.

For a few mentions of Sadler on the presumption of constitutionality, see Timothy Sandefur, Equality of Opportunity in the Regulatory Age: Why Yesterday's Rationality Review Isn't Enough, 24 N. ILL. U. L. REV. 457, 501 n.239 (2004); Steve Sheppard, The Metamorphoses of Reasonable Doubt: How Changes in the Burden of Proof Have Weakened the Presumption of Innocence, 78 NOTRE DAME L. REV. 1165, 1189 n.77 (2003) (citing Sadler as the second-named companion case, Moore v. Wright & Rice); and J. Gorman Houston, Jr., A Government of Laws and Not of Men: Judicial Restraint and the Doctrine of Separation of Powers, 59 ALA. LAW. 166, 168 (1998). But see Houston, supra, at 167 (stating reasonable-doubt standard without noting conflict with Sadler). I also cite Sadler in Green, supra note 10, at 428 & n.54.

186.

Miami Cnty. v. City of Dayton, 110 N.E. 726, 728 (Ohio 1915) ("Both state and federal courts are uniform in their holding that, before a legislative act can be declared unconstitutional, it must be clearly in conflict with some provision of the Constitution.... Of late many of the courts, and especially the federal courts, have held that the conflict must be 'beyond a reasonable doubt,' and all the courts throughout the states and Union hold that, where there is a reasonable doubt as to whether or not there is such conflict, that doubt must be resolved in favor of the statute, and its validity therefore upheld.").

187.

See supra notes 171-77 and accompanying text.

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Third, the two standards seem precedentially interchangeable. The earliest initial adoptions of a reasonable-doubt standard-O'Hara in 1811,188 Ogden in 1827,189 and Wellington in 1834 19 0-all claim that the standard had already been adopted in many earlier cases. Read with the understanding of current law distinguishing the two standards, such claims are obviously false-and, moreover, easily refutable. But if proof beyond reasonable doubt is taken as an elaboration of a clarity requirement, rather than a higher standard, these statements make perfect sense. To similar effect is Virginia's adoption of a reasonable-doubt rule in 1918, 125 years after embracing a clarity standard.' 9' The court cites nine Virginia cases to support its statement that "[t]hese principles have been repeatedly announced by this court from a very early date."' 92 None use a reasonabledoubt formulation of the presumption of constitutionality; six refer to clarity. 193 Fourth, the two standards were precedentially interchangeable the other way as well. The only state with a significantly earlier reasonablesimply doubt formulation, New Hampshire, adopts its clarity formulation 194 with a citation to the case adopting a reasonable-doubt rule.

Fifth, the adoption of the reasonable-doubt rule in criminal procedure, as detailed by the materials canvassed by James Q. Whitman, shows exactly the same move as in O'Hara, Ogden, and Wellington: clarity is taken as a background assumption, and reasonable doubt is used to explain and

Commonwealth ex rel. O'Hara v. Smith, 4 Binn. 117, 123 (Pa. 1811) ("[The 188. reasonable-doubt standard] has been assumed as a principle in construing constitutions, by the Supreme Court of the United States, by this Court, and every other court of reputation in the

").

United States ....

189. Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 270 (1827) (Washington, J.) ("[The reasonable-doubt standard] has always been the language of this Court ...").

190. In re Wellington, 33 Mass. (16 Pick.) 87, 95 (1834) ("[The reasonable-doubt standard merely] repeat[s] what has been so often suggested by courts of justice ...").

City of Roanoke v. Elliott, 96 S.E. 819, 824 (Va. 1918); see also Kamper v. Hawkins, 3 191.

Va. (1 Va. Cas.) 20,40 (1793).

192. Elliott, 96 S.E. at 824 (citing various Virginia Supreme Court cases).

The six that mention clarity are Eyre v. Jacob, 55 Va. (14 Gratt.) 422, 426 (1858); 193.

Commonwealth v. Moore & Goodsons, 66 Va. (25 Gratt.) 951, 953 (1875); Va. & Tenn. Coal & Iron Co. v. McClelland, 36 S.E. 479, 481 (Va. 1900); Whitlock v. Hawkins, 53 S.E. 401, 403 (Va. 1906); Button v. State Corp. Comm'n, 54 S.E. 769, 770 (Va. 1906); Willis v. Kalmbach, 64 S.E.

342, 344, 348 (Va. 1909). The other three Roanoke-cited cases uphold legislation without stating a specific standard. See Prison Ass'n of Va. v. Ashby, 25 S.E. 893, 894 (Va. 1896); Brown v. Epps, 21 S.E. 119,122 (Va. 1895); Commonwealth v. Drewry, 56 Va. (15 Gratt.) 1, 5 (1858).

State v. Marshall, 15 A. 210, 211 (N.H. 1888) (citing Rich v. Flanders, 39 N.H. 304, 194.

312 (1859)).

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elaborate upon it. 195 Two of Whitman's pieces of evidence are particularly striking. In 1783, the jury charge in the Trial of John Clarke stated, If from all these circumstances you are clearly satisfied that the wound was the cause of his death, and are also clearly satisfied with the truth of the rest of the evidence, and that the result of that evidence is proved clearly to your satisfaction, that the prisoner is the man that gave the wound, I am then obliged to tell you that I am of opinion there is nothing in this case that can reduce the crime below that aggravated crime of murder: and it will in that case be your duty to find the prisoner guilty of this indictment: If on the other hand you think there is any room to doubt the truth of the evidence, or that believing the truth of the evidence is not sufficient proof that the prisoner gave the wound, or that the wound was the cause of his death; in that case it is your duty to acquit the prisoner wholly; or if there appears any circumstances that would reduce the crime to manslaughter, in that case you may find that verdict; but there does not appear to me any sort of evidence to take that middle line: Therefore, give your verdict according to your own consciences, you must be clearly satisfied of the fact of a crime so heinous in its nature, and so penal in its consequences, and then it is your duty to the public and to justices, to find the prisoner guilty. If on the other you think there is any reasonable cause for doubt, either upon the fact of his warning the man, or of the wound being the cause of his death, you will acquit him.

96 Guilty of the wilful murder. Death. 1 Note the court's reasoning-twice the court stresses that conviction is required if the jury is "clearly satisfied."' 97 The "other hand" of that standard is the existence of "reasonable cause for doubt. 198 The same bit of reasoning happened again the next year, in the jury charge for the Trial of Richard Corbett: But you gentlemen will weigh all these circumstances in your minds, in such a case you certainly will not convict the prisoner on a mere suspicion; but if you think his conduct such as can by no possibility be accounted for consistent with his innocence, you 195.

See Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 270 (1827) (Washington, J.); In re Wellington, 33 Mass. (16 Pick.) at 95-96; Commonwealth ex rel. O'Hara v. Smith, 4 Binn. 117, 123 (Pa. 1811); see also, generally WHITMAN, supra note 28, at 1-7 (explaining the adoption of the reasonable-doubt rule in criminal procedure).

196.

WHITMAN, supra note 28, at 197-98 (quoting The Proceedings of the Old Bailey Ref: t17831210-4).

197.

Id. (quoting The Proceedings of the Old Bailey Ref: t17840707-10).

198.

Id. at 198.

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will be obliged to find him guilty; I do not mean to say that you are to strain against all evidence, or that if you are clearly and truly convinced of his guilt in your own minds you ought to acquit him, but I say if there is a reasonable doubt, in that case that doubt ought to decide in favour of the prisoner.' 99 To be "clearly and truly convinced" is to lack any "reasonable doubt., 20 0 If this reasoning gave initial birth to the reasonable-doubt standard of proof in criminal law, it seems quite likely to have been at work in the later transition of verbal labels in the presumption-of-constitutionality cases.

IV. THE CONTINGENCY OF CLARITY AND AN OVERTON-PARK-STYLE REQUIREMENT

Many early cases explaining a clarity requirement stress that it allows-indeed, requires-the full examination of constitutional issues.

Constitutional conflicts that begin as unclear may later be clarified.

Analysis and investigation may dissolve initial doubts or render them unreasonable. If clarity requires careful, reasoned interaction with all proffered counterarguments, clarity can change over time. What was once unclear can be made clear through the argumentation, research, and analysis. Such clarification, however, is not only possible, but also mandatory; courts exercising judicial review shoulder a burden to justify their conclusions against all proffered counterarguments.

John McGinnis recently explained in considerable detail the early 20 1 federal and jurisprudential background for a judicial duty of clarification, and I will not attempt to recapitulate it here, beyond two bits of evidence.

McGinnis gives several reasons to think clarification is part of "liquidation," 20 2 which Madison famously referred to in Federalist 37: "All new laws, though penned with the greatest technical skill, and passed on the fullest and most mature deliberation, are considered as more or less obscure and equivocal, until their meaning be liquidatedand ascertainedby a series of particulardiscussions and adjudications.'2 °3 An epistemic interpretation of "liquidated," which seems to fit the context of Federalist 37 and other uses of the term, makes Madison a strong proponent of the duty of

Id.at 199.

199.

See id.

200.

John 0. McGinnis, The Duty of Clarity 21-50 (Nw. Univ. Sch. of Law, Public Law & 201.

Legal Theory Ser. No. 15-14, 2015), available at http://ssm.com/abstract-2578318.

Id.at 25-27.

202.

THE FEDERALIST No. 37, at 198 (James Madison) (E.H. Scott ed., 1898) (emphasis 203. added).

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clarification. 2 04 To clarify is to "ascertain" the "obscure" through "discussions."20 5 In 1792, Justice Iredell and District Judge Sitgreaves were more straightforward in their Hayburn's Case refusal-to-participate letter: "[W]e are under the indispensable necessity of acting according to the best dictates of our own judgment, after duly weighing every consideration that can occur to us .... ,,206 The same idea appears quite frequently in early state materials on the presumption of constitutionality. In 1802, Maryland required that issues be "fully discussed by counsel learned in the law" and receive "mature consideration. ' 20 7 In 1822, Kentucky required that a purported constitutional conflict "deserves the most mature and deliberate consideration of the court., 20 8 In 1834, Massachusetts noted, "[C]ourts will approach the question with great caution, examine it in every possible aspect, and ponder upon it as long as deliberation and patient attention can throw any new light on the subject .... ,,209 In 1836, a dissenting judge in Connecticut disavowed judicial review by "an immatured judicial opinion.,,210 In 1838, Maryland required "full consideration.,, 2 11 In 1841, Illinois noted that possible constitutional conflict "demands the most deliberate and mature consideration. '2 12 In 1853, Georgia required a "settled conviction., 21 3 In 1857, Indiana said that courts confronted with constitutional arguments will "hesitate long, and weigh them well," and "think for itself and decide for itself., 21 4 In 1868, Thomas Cooley, commenting on many states' law, noted that courts "will approach the question with great caution, examine it in every possible aspect, and ponder upon it as long as deliberation and patient attention can throw any new light upon the subject."' 5 In 1882, West Virginia required a court's exercise of judicial review to proceed only "after using all the aids, that it has a right to

204.

See id.

205.

See id.

206.

Haybum's Case, 2 U.S. (2 Dall.) 409,412 (1792).

207.

See Whittington v. Polk, I H. & J. 236, 245 (Md. 1802).

208.

Bliss v. Commonwealth, 12 Ky. (2 Litt.) 90, 94 (1822).

209.

In re Wellington, 33 Mass. (16 Pick.) 87, 95 (1834).

210.

Landon v. Town of Litchfield, 11 Conn. 251, 265 (1836) (Church, J., dissenting). This language, which fits the context, appears in the version of the case which was used for the Westlaw database. At least one reprinted version of the case, however, uses "immaterial" rather than "immatured."

211.

Regents of Univ. ofMd. v. Williams, 9 G. & J. 365, 384 (Md. 1838).

212.

Lane v. Doe ex dem. Dorman, 4 111. (3 Scam.) 238, 240 (1841).

213.

Franklin Bridge Co. v. Wood, 14 Ga. 80, 83-84 (1853).

214.

City of Lafayette v. Jenners, 10 Ind. 74, 80 (1857) (per curiam).

215.

COOLEY, supra note 14, at 182.

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use, in its own mind acting for itself and upon its own responsibility, 21 6 adding in 1883 that judicial review may happen only "after approaching the question involved in this case with great caution and delicacy, . . . after a 2 17 In careful examination," and a "free and full enquiry into the subject., 1900, Wyoming required a "careful investigation of the serious question presented.,218 In 1912, Minnesota required "the most careful consideration., 21 9 In 1923, Wyoming noted that courts were "permitted to resort to all proper lights to determine" constitutional issues.220 The duty of clarification was not quite universally acknowledged. Two early trial courts-the same two that articulated the all-reasonableobservers-must-agree approach to judicial review, from Georgia in 1808 1 that "no critical exposition of and South Carolina in 181 2 2 2 -said 223 were necessary on the part of 222 exactness,, no "scrupulous and words, courts. But the bulk of courts to address the issue were, on the contrary, strong proponents of critical exposition and scrupulous exactness as elements of their duty of clarification. 4 The most important error-the clearest mistake-of James Bradley Thayer's 1893 analysis of judicial review 225 is his failure to see this contingency of clarity and this judicial duty of clarification. As an example of the approach he rejects, Thayer quotes Daniel Webster's argument from 1829 in the CharlesRiver Bridge case: "The correct ground is this, that the Court shall interfere and declare an act to be void, where the case, which " ' 226 may have been doubtful, shall be made out to be clear by examination.

In rejecting Webster's explanation of the contingency of clarity, Thayer is, thus, emphatic that the existence of a reasonable doubt of unconstitutionality must be assessed only at the time of legislation, not 216.

Chesapeake & Ohio Ry. Co. v. Miller, 19 W. Va. 408, 422 (1882), aff'd, 114 U.S. 176

(1885).

217. Varner v. Martin, 21 W. Va. 534, 543 (1883).

218. Farm Inv. Co. v. Carpenter, 61 P. 258, 263-64 (Wyo. 1900).

219. State ex rel. Hildebrandt v. Fitzgerald, 134 N.W. 728, 730 (Minn. 1912).

220. State ex rel. Sch. Dist. No. 1 v. Snyder, 212 P. 758, 759 (Wyo. 1923).

221. See supra notes 36-37.

222. Grimball v. Ross, T.U.P. Charlt. 175, 178 (Ga. Super. Ct. 1808).

223. Adm'rs of Byrne v. Adm'rs of Stewart, 3 S.C. Eq. (3 Des. Eq.) 466, 476 (Ct. App. Eq. 1812).

224. For one later case similarly neglecting the possibility that a doubt at one time might be dissolved later through the process of clarification, see Ivy v. Robertson, 70 So. 2d 862, 865 (Miss. ").

1954) ("To doubt the constitutionality of the act is to uphold its validity ....

225. James B. Thayer, The Origin and Scope of the American Doctrine of Constitutional Law, 7 HARV. L. REV. 129 (1893).

226. Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 24 Mass. (7 Pick.)

344, 442 (1829) (per curiam), aff'd, 36 U.S. (11 Pet.) 420 (1837). Thayer quotes Webster, but leaves off "by examination." See Thayer, supra note 225, at 146.

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later. 7 The very case on which Thayer relies to show how Webster's position was rejected, however-Chief Justice Lemuel Shaw's 1834 in opinion in Wellington-proves precisely the opposite. 228 Shaw's explanation bears repeating: courts considering a possible constitutional/statutory conflict must "approach the question with great caution, examine it in every possible aspect, and ponder upon it as long as deliberation and patient attention can throw any new light on the subject., 229 Thayer ignores this language and merely quotes Wellington's adoption of a reasonable-doubt standard, noting that Shaw had been Webster's Charles River co-counsel five years before, and therefore would have been well aware of Webster's position in order to repudiate it, which Thayer thinks Shaw did by referring to reasonable doubt. 230 Thayer plainly misinterprets the case, given Wellington's simultaneous acknowledgement of a judicial duty to seek new light. 231 A reading of Shaw's thought that renders it coherent, both between 1829 and 1834, and within the different parts of the Wellington opinion, is obviously better than the schizophrenic reading Thayer offers.

A duty to seek new light and consider every possible aspect of a case is strongly akin to the duty in modem administrative law to respond to contrary considerations with reasoned judgment. A court exercising judicial review, under a duty of clarity and clarification, shoulders a burden at least as heavy as the requirement of reasoned explanation in Overton Park,23 2 State Farm,233 and their progeny. 234 In order for a constitutional

227.

See Thayer, supra note 225, at 144-47.

228.

See In re Wellington, 33 Mass. (16 Pick.) 87, 95 (1834); see also Thayer, supra note 225, at 145-46.

229.

In re Wellington, 33 Mass. (16 Pick.) at 95.

230.

Thayer, supra note 225, at 146 ("A rule thus powerfully attacked and thus explicitly maintained, must be treated as having been deliberately meant, both as regards its substance and its form."). Of course, Wellington deliberately meant to adopt a reasonable doubt standard, but Thayer then jumps, quite without justification, to the deliberate repudiation of Webster's insistence on a duty of clarification. See id. at 146-47; see also In re Wellington, 33 Mass. (16 Pick.) at 95.

231.

See Thayer, supra note 225, at 145-47.

232.

See Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971) (requiring "adequate explanation").

233.

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) ("[T]he agency must examine the relevant data and articulate a satisfactory explanation for its action ... ").

234.

E.g., Michigan v. EPA, 135 S. Ct. 2699, 2706 (2015) (requiring "reasoned decisionmaking" by a process that is "logical and rational" (quoting Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998)) (internal quotation marks omitted)); FCC v. Fox Television Stations, Inc., 556 U.S. 502, 516 (2009) ("[A] reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy.").

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determination to count as "clear," courts exercising judicial review must provide reasoned, satisfying explanations of what precisely is wrong with the arguments in favor of the constitutionality of the statutes they are considering.

V. IS CLARITY OBSOLETE?

A.

Is Obsolescence Relevant?

Devotees of a living constitution need no persuasion here. Textualist originalists as well, however, will be concerned about the continuing vitality today of historic rationales for a presumption of constitutionality or clarity requirement because such interpreters see original textually expressed meaning, but not necessarily originally understood or originally expected applications as interpretively binding.23 5 We must examine the process of reasoning that early courts used to travel from (a) the meaning expressed by the phrase "judicial power" to (b) concrete applications and instances of judicial review or deference to legislatures out in the world. 6 If that trip travels through factual assumptions that are no longer true today, a textualist originalist will not see a court's conclusions as binding, even if that court should be deemed likely to have reliably grasped the sense originally expressed by constitutionally binding text.

Two Basic Rationalesfor a Presumptionof Constitutionality

B.

A canvass of early cases reveals two basic sorts of rationales for a clarity requirement: (1) the delicacy or weight of the occasion of judicial review, sometimes further explained by a disparity between the likelihood of correction of errors of omission and commission and (2) literal respect for legislative judgments and processes of constitutional decision making.

The first sort of rationale retains full validity today, but possible changes in the facts underlying the second rationale require a more elaborate response.

The High Stakes and Relative Insusceptibility to Correctionof Judicial Review

1.

A first rationale (or cluster of rationales) for the presumption of constitutionality relates to the stakes. The weightiness, importance, and delicacy of the occasion for judicial review fits very well with modern

235.

236.

See Green, supra note 97, at 625.

See id. at 591.

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CLAR1TY AND REASONABLE DOUBT

epistemologists' explanation for how epistemic standards might shift depending on the stakes.237 We might have enough evidence to support knowledge, and hence the assertion of a purported fact, if relatively little hangs on the proposition. Sure, "the bank is open on Saturday," we might say if it only matters so we can obtain poker money. But if a mortgage default rather than mere poker money is at issue, we will obtain more evidence before making such a claim. 238 The modem law constitutionalizing burdens of proof in certain contexts sounds this sort of note.239 James Iredell's 1787 exchange with convention-going Richard Dobbs Spaight gave still more explanation of why, precisely, judicial constitutional errors would be more serious and weighty, as a general matter, than legislative ones: the relative uncorrectibility of judicial error. Their correspondence provides one of the most thorough early rationales for a presumption of constitutionality. Spaight complained about judicial review on who-will-guard-the-guardians grounds: "If they possessed the power, what check or control would there be to their proceedings? [O]r who is there to take the same liberty with them, that they have taken with the Legislature, and declare their opinions to be erroneous?, 240 Spaight questioned judicial review itself, but Iredell's reply turned Spaight's concern into a mere argument for restraint, conceding that "in a doubtful matter it [this argument about possible abuse] may be of great weight. 241 Early courts did not give rationales for the presumption of constitutionality as often as one might like, but when they did, they frequently averted to the high stakes in judicial review. The Supreme Court in 1810 called the possibility of an unconstitutional statute "a question of ,,24224 a formulation echoed by Kentucky in 1822,243 much delicacy, Mississippi in 1823,244 Alabama in 1835,245 a dissenting judge in See Green, supra note 10, at 430.

237.

See id. (internal quotation marks omitted).

238.

See, e.g., Santosky v. Kramer, 455 U.S. 745, 755 (1982) ("[S]tandard of proof tolerated 239. by the due process requirement reflects not only the weight of the private and public interests affected, but also.., how the risk of error should be distributed .... "); Addington v. Texas, 441 U.S. 418, 427 (1979) (stating that the "weight and gravity" of interests involved require more than preponderance of evidence); In re Winship, 397 U.S. 358, 371 (1970) (Harlan, J., concurring) (explaining that "comparative social disutility" and seriousness of errors of commission and omission determine burden of proof "in a rational world").

See IREDELL, supra note 9, at 169.

240.

See id.at 173-74.

241.

Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 128 (1810).

242.

Bliss v. Commonwealth, 12 Ky. (2 Litt.) 90, 94 (1822) ("a question of great delicacy").

243.

244. Runnels v. State, 1 Miss. (1 Walker) 146, 146 (1823) ("magnitude of the case, or the delicacy of our situation" (internal quotation marks omitted)).

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Connecticut in 1836 (specifically echoing Spaight and Iredell's 249 elaboration), 246 Vermont in 1839,247 Illinois in 184 1,248 Mississippi again and Maryland 250 in 1842, Georgia in 1848,251 Arkansas in 1851,252 Wisconsin in 1853,253 Florida in 1856,254 Michigan in 1858 (again echoing Spaight and Iredell's concerns), 255 Tennessee in 1879,256 and South Carolina

in 1881.257 2.

Respectfor the ElectedBranches

Independent of the importance of the issues involved or how risks of error should be distributed, judges might, of course, defer to legislatures out of literal respect for the actual legislative process of reasoning on constitutional issues. A South Carolina trial court voiced this sort of

245.

Dyer v. Tuskaloosa Bridge Co., 2 Port. 296, 303 (Ala. 1835) ("delicate, if not a painful

duty").

246. Landon v. Town of Litchfield, 11 Conn. 251, 265 (1836) (Church, J., dissenting) ("In ordinary cases, the evils resulting from a mistaken opinion of the judiciary, have a remedy in the action of the legislature; but in cases involving the unusual validity of laws, no such remedy exists.").

247. Trs. of Caledonia Cnty. Grammar Sch. v. Burt, 11 Vt. 632, 637 (1839) ("The most delicate and most important duty ever to be discharged by the judiciary, is to pronounce upon the validity of an act of the legislature .... ").

248. Lane v. Doe ex dem. Dorman, 4 Ill. (3 Scam.) 238, 240 (1841) ("not only a matter of delicacy, but of grave import").

249. Campbell v. Miss. Union Bank, 7 Miss. (6 Howard) 625, 672 (1842) (stating that the judicial duty to declare a statute unconstitutional is "delicate," and one the court "cannot treat lightly").

250. State ex reL Wash. Cnty. v. Balt. & Ohio R.R. Co., 12 G. & J. 399, 438 (Md. 1842) ("grave and delicate nature"), aff'd, 44 U.S. (3 How.) 534 (1845).

251.

Flint River Steamboat Co. v. Foster, 5 Ga. 194,209 (1848) ("delicate duty").

252. Easonv. State, 11 Ark. 481, 485 (1851) ("delicacy and pain").

253. Dickson v. State, 1 Wis. 122, 126 (1853) ("delicate matter").

254. Cotten v. Cnty. Comm'rs, 6 Fla. 610, 613 (1856) (describing "how delicate a character is the duty" imposed upon the judiciary in determining the constitutionality of a statute including "its duty to be careful not rashly and inconsiderately to trench upon or invade" other branches of the government, and detailing the duty as "a most grave and important power, not to be exercised lightly or rashly").

255.

Sears v. Cottrell, 5 Mich. 251, 256, 260 (1858) (Manning, J.) ("[I]t is better the court should err in favor of the power than against it; as the error in that case may be more readily corrected by the people, through their representatives, than in the other, which would require an amendment of the constitution."); id. at 260 (Christiancy, J., concurring) ("[W]hile the supreme judicial power may interfere to prevent the legislative and other departments from exceeding their powers, no tribunal has yet been devised to check the encroachments of that judicial power itself").

256. State ex rel. Morrell v. Fickle, 71 Tenn. 79, 81 (1879) ("very grave and responsible").

257. Pelzer, Rodgers & Co. v. Campbell & Co., 15 S.C. 581, 592 (1881) ("It is no small matter to declare an act of the legislature unconstitutional.").

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consideration in 1812,258 as did the Supreme Court in 1827,259 Connecticut in 1836,260 Georgia in 1853,261 Iowa in 1849,262 Alabama in 1859,263 Tennessee in 1879,264 and West Virginia in 1883.265 As the overlap with the list above show, many courts combined this rationale with a concern for the gravity ofjudicial review.

C.

Are the Rationales Obsolete?

Our second category of rationale, the respect due to the elected branches in light of their consideration of constitutional issues, depends, to be sure, on the extent to which legislatures actually consider and reliably evaluate the constitutionality of legislation. There is no sense, of course, in deferring to an unreliable or nonexistent process for determining constitutionality. If the legislature is merely deferring to the courts, it makes no sense for courts to complete a deferential circle by deferring back to the legislature. This was well recognized by Daniel Webster in 1829266 and Adm'rs of Byrne v. Adm'rs of Stewart, 3 S.C. Eq. (3 Des. Eq.) 466, 476 (Ct. App. Eq. 258.

1812) ("confidence in the wisdom and integrity of the legislature").

Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 270 (1827) (Washington, J.) ("decent 259. respect due to the wisdom, the integrity, and the patriotism of the legislative body, by which any law is passed").

Landon v. Town of Litchfield, 11 Conn. 251, 265 (1836) (Church, J., dissenting) ("The 260. legislature is subject to the same constitutional restraint as the courts, bound by the same oaths, impelled by the same sense of duty to regard the constitution as fundamentally obligatory. The enactment of a law, therefore, furnishes primafacie evidence of its constitutionality, not to be "). slightly regarded ....

Macon & W. R.R. v. Davis, 13 Ga. 68, 83 (1853) ("The Legislature is bound by the 261.

Constitution as well as this Court, and the members of the Legislature, like ourselves, are sworn to maintain it. All presumptions are in favor of the constitutionality of an Act of the Legislature ...

Reed v. Wright, 2 Greene 15, 21 (Iowa 1849) ("[Mlembers of the legislature[,] in the 262. discharge of their duties, act under an oath to support the constitution ....).

Sadler v. Langham, 34 Ala. 311, 321 (1859) ("This presumption is but the result of two 263. maxims of the law, namely, omnia presumunturrite esse acta [all things are presumed to be done in due form], and ei incumbitprobatio,qui dicit [he who asserts must prove].").

State ex rel. Morrell v. Fickle, 71 Tenn. 79, 81 (1879) ("The members of the 264.

Legislature in enacting laws must of necessity judge of their constitutionality in the first instance, and the opinion of that body, which is not conclusive upon the court, is yet entitled to the respectful consideration due from one department of the government to another ....).

Varner v. Martin, 21 W. Va. 534, 543 (1883) ("[I]t is the duty as it doubtless is the 265. pleasure of both the legislative and the judicial departments of the government to presume, that the other will keep within the bounds of constitutional authority, yet, that presumption is not only not conclusive, but it is not so strong as to prevent a free and full enquiry into the subject ....).

266. Proprietors of Charles River Bridge v. Proprietors of Warren Bridge, 24 Mass. (7 Pick.)

344, 443 (1829) (per curiam) (argument of counsel Daniel Webster) ("[I]f the legislature are to pass a law because its unconstitutionality is doubtful, and the judge is to hold it valid because its unconstitutionality is doubtful, in what a predicament is the citizen placed. The legislature pass it

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Thomas Cooley in 1868,267 and Randy Barnett has forcefully pointed it out recently.268 However, the weightiness of the occasion of judicial review turns on enduring structural considerations related to the separation of powers.

Particularly if, as advocated above in Part IV,269 clarity is cashed out in terms of thoroughness of the consideration of competing considerations, the delicacy of the occasion of inter-branch conflict persists today as a justification. Webster's answer to the deferential circle-a strong judicial duty of clarification 270 -is just as proper today. It is incumbent on those declaring independence of elected authority on a constitutional issue both to state the reasons that impel them to such a separation and to vindicate those reasons against all honestly stated objections. 271 The relative susceptibility of judicial and legislative errors to future correction likewise counsels in favor of a requirement that courts only exercise judicial review when it can be thoroughly reasoned and explained in the face of counterargument.

Judicial errors are just as difficult to correct today as they have ever been.

de bene esse; if the question is not met here and decided upon principle, then the responsibility rests nowhere ...."),affid, 36 U.S. (11 Pet.) 420 (1837). Thayer quotes this argument, but, tellingly, was unmoved. See Thayer, supra note 225, at 146.

267.

See Green, supra note 10, at 453 ("Whether the power be legislative, executive, or judicial, there is manifest disregard of constitutional and moral obligation by one who, having taken an oath to observe that instrument, takes part in an action which he cannot say he believes to be no violation of its provisions. A doubt of the constitutionality of any proposed legislative enactment should in any case be reason sufficient for refusing to adopt it; and, if legislators do not act upon this principle, the reasons upon which are based the judicial decisions sustaining legislation in very many cases will cease to be of force." (quoting COOLEY, supra note 14, at 74) (internal quotation marks omitted)).

268.

See Randy Barnett, The Origination Clause and the Problem of "Double Deference", WASH. POST (Mar. 12, 2014), https://www.washingtonpost.com/news/volokhconspiracy/wp/2014/03/12/the-origination-clause-and-the-problem-of-doube-deference ("That is the problem of 'double deference.' On constitutional questions, the courts defer to Congress's assessment that its acts are constitutional. Then when you ask members of Congress whether what they are doing is constitutional, they respond by saying, 'that is the job of the courts' or, even more commonly, they predict that 'the courts will uphold us.' Of course, if the courts defer constitutional judgments to Congress, and Congress defers constitutional judgments to the courts, then no one is considering the Constitution itself. Double deference is a shell game ....");see also RANDY E. BARNETT, OUR REPUBLICAN CONSTITUTION: SECURING THE LIBERTY AND

SOVEREIGNTY OF WE THE PEOPLE 128 (2016).

269.

See discussion supra Part IV. 270.

Thayer, supra note 225, at 146.

271.

Cf THE DECLARATION OF INDEPENDENCE para. 1 (U.S. 1776) ("[A] decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.").

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CLARITY AND REASONABLE DOUBT

"It is particularly incumbent on those who never change their opinion, to be secure ofjudging properly at first. 2 72 If a weightiness-and-unlikelihood-of-correction rationale for a clarity requirement on judicial review follows from the unchanging meaning expressed by "judicial power," then the possible relative paucity of legislative consideration of constitutional issues today, while it would undermine a second possible rationale for a presumption of constitutionality, need not undermine the presumption itself. Rather, such failure-and the failure of government to justify its distinctions or the purposes of its regulations in the teeth of hostile litigation--can be used as a means of satisfying a presumption of constitutionality.273 A burden of production need not lie on the same party as the burden of persuasion. For the government to bear a burden of production with respect to information peculiarly in its control simply allows those who challenge a statute to point to the government's failure as itself a strong reason to think that the challenger's burden of persuasion-i.e., to show unconstitutionality clearly-has itself been met. In the context of criminal law, for instance, a defendant who offers no evidence related to self-defense is conclusively barred from raising the issue to the jury; he has a burden of production on the issue.274 But once he offers such evidence, the prosecution must disprove the defense beyond a reasonable doubt.275 The burdens of production and persuasion come apart when a defendant must justify his actions. They likewise can come apart when a government must justify itself in the face of a constitutional challenge; the challenger retains an unchanging burden of showing constitutional violations to the court, but can take advantage of the government's failure of proof, either at the legislative-deliberation or executive-litigation stages, to satisfy that burden.

VI. CONCLUSION

Federal judicial review following Marbury is not the only variety in town. Attention to its state-constitutional cousins offers a much deeper, richer picture of just how well embedded, and how remarkably free of dissent on basic theoretical issues, the American constitutional tradition of judicial review has been. The fifty-one slightly distinct flavors of American judicial review display very strong consensus, and the rationale for that JANE AUSTEN, PRIDE AND PREJUDICE 70 (Random House, Inc. Modem Library ed.

272.

1995) (1813) (internal quotation marks omitted).

For more elaboration of these last two paragraphs, see Green, supra note 10, at 444-46.

273.

274.

Id.at 445-46.

Id.at 446.

275.

198

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consensus is enduring: judicial review is the exercise of an extremely important, weighty, and not-easily-corrected power. Courts may refuse to enforce statutes, but only when they conflict with state or federal constitutions, and clearly so, in light of a reasoned consideration of all of the relevant considerations. At the same time, courts are duty-bound to make constitutional issues as clear as possible, using every means at their disposal, including the inference from legislative or executive failures to justify legislation adequately.

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199

CLARITYAND REASONABLE DOUBT

APPENDIX A Year of Earliest Reasonable-DoubtFormulaion v Year of Earliest Clarity Formulation 1980

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1920

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1820

1840 1160 1880 1900 Year of Earliet Clarity Fonnalation

1920

1910

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19801

[Vol. 57:2

SOUTH TEXAS LA wREVIEW

APPENDIX B

Reasonable-Doubt-Clarity Difference V.

Year of Earliest Clarity Formnulafion

,k............

.................. ...... .......... . .... . ... ........

0

0

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1860

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1980

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CLARITYAND REASONABLE DOUBT

201

APPENDIX C

Years After Statehood of Earliest Reasonable-Doubt Formulation V, Years Afler Statehood of Earliest Clarity Formulation

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SOUTH TEXAS LAW REVIEW

202

APPENDIX D

Reasonable-Doubt-Clarity Difference V.

Years After Statehood of Earliest Clarity Formulation 140 8 120

100 8

20

8

8 8 8

20 . .............

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8

p

-20 :.....

0

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40

60

s0

Years After Statebood of Earliest Clarity Fomulation

[Vol. 57:2

BOOK REVIEW: RESTITUTION REVISITED CRAIG ESTL1NBAUM* A review of RESTITUTION: CIVIL ENRICHMENT, By: Ward Famsworth.**

LIABILITY

FOR

UNJUST

203

I.

IN TROD UCTION ...............................................................................

II. III. IV.

RESTITUTION AS A STAND-ALONE REMEDY: BACKGROUND ........ 204 FARNSWORTH'S FOUR FAMILIES OF RESTITUTION ........................ 206 RESTITUTION AS AN ALTERNATIVE REMEDY FOR BREACH OF C ON TRA CT ...................................................................................... 2 10 RESTITUTION REMEDIES ................................................................ 212 C ON CLU SION .................................................................................. 212

V.

V I.

I.

INTRODUCTION

The term "restitution" has many meanings to American lawyers.

Restitution can mean the money ordered through criminal proceedings to be

paid by an offender to a victim for the harm caused by the offender's criminal act.' Restitution also describes an interest protected by damages for civil wrongs committed, such as in contract 2 or tort. 3 In these two versions, restitution represents payment made in compensation for a

* Judge, 130th Judicial District Court of Texas and Adjunct Professor of Law, South Texas College of Law. J.D., South Texas College of Law; B.A. and M.Agr., Texas A&M University. ** Dean and John Jeffers Research Chair in Law, University of Texas School of Law. 1. E.g., TEX. CODE CRIM. PROC. ANN. art. 42.037 (West Supp. 2015) (authorizing Texas courts to order offenders to pay restitution under described circumstances).

2.

RESTATEMENT (SECOND) OF CONTRACTS § 344 cmt. d (1981) ("Occasionally a party

chooses [to protect] the restitution interest even though the contract is enforceable because it will give a larger recovery than will enforcement based on either the expectation or reliance interest."); see, e.g., Coon v. Schoeneman, 476 S.W.2d 439, 443-44 (Tex. Civ. App.-Dallas 1972, writ ref d n.r.e.) (holding a plaintiff could recover the alternative remedy of restitution for breach of contract, "even though the contractual compensation was contingent on profits").

3. E.g., Williams Elecs. Games, Inc. v. Garrity, 366 F.3d 569, 576 (7th Cir. 2004) ("Restitution is available in any intentional-tort case in which the tortfeasor has made a profit that exceeds the victim's damages (if the damages exceed the profit, the plaintiff will prefer to seek damages instead), whether or not the tort involved a breach of fiduciary duty ... ").

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discrete legal wrong.4 Restitution also lends its name to a substantive field of law designed to prevent unjust enrichment.5 This latter meaning is the subject of an outstanding and very timely new reference book by Dean 6 Ward Farnsworth titled Restitution. Civil Liabilityfor Unjust Enrichment.

Farnsworth's book is particularly timely. Restitution as a stand-alone action is enjoying a revival in American legal scholarship following publication of the American Law Institute's (ALI's) Restatement (Third) of Restitution and Unjust Enrichment in 2011.7 The ALI adopted the Third Restatement after terminating an earlier attempt at a second restatement approximately a decade earlier.8 The Third Restatement promptly gave rise to symposia, 9 reviews, l° and law review articles" renewing attention and focus to this substantive legal field. Farnsworth's Restitution makes a valuable contribution to this growing field.

II.

RESTITUTION AS A STAND-ALONE REMEDY: BACKGROUND

Farnsworth's book comes at a time when understanding restitution as a field of law by the bar has suffered from years of neglect. This neglect has produced confusion, misunderstanding, and doctrinal conflict among lawyers, scholars, and judges alike. 2 Andrew Kull, the Restatement See Douglas Laycock, The Scope and Significance of Restitution, 67 TEX. L. REV. 4.

1277, 1286-87 (1989) [hereinafter Laycock, Scope andSignificance].

See RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 1 (2011) ("A 5. person who is unjustly enriched at the expense of another is subject to liability in restitution."); DOUG RENDLEMAN & CAPRICE L. ROBERTS, REMEDIES: CASES AND MATERIALS 469 (8th ed.

2011) (describing restitution as a "substantive branch of the common law like property, contract, and tort").

6. WARD FARNSWORTH, RESTITUTION: CIVIL LIABILITY FOR UNJUST ENRICHMENT (2014).

See RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 1 cmt. a 7.

(2011).

See Andrew Kull, Three Restatements of Restitution, 68 WASH. & LEE L. REV. 867, 8.

867, 874-75 (2011) (describing the failed attempt to publish the Restatement (Second) of Restitution).

E.g., Symposium, Restitution Rollout: The Restatement (Third) of Restitution & Unjust 9.

Enrichment, 68 WASH. & LEE L. REv. 865, 865 (2011).

E.g., Douglas Laycock, Restoring Restitution to the Canon, 110 MICH. L. REV. 929, 10.

929 (2012) [hereinafter Laycock, RestoringRestitution] (reviewing the RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT (2011)).

See, e.g., David Dittfurth, Restitution in Texas: Civil Liability for Unjust Enrichment, 11.

54 S. TEX. L. REV. 225, 226 (2012) (calling for "the Texas Supreme Court [to] establish an independent and generally applicable cause of action," following the Restatement (Third)'s publication).

See Caprice L. Roberts, The Restitution Revival and the Ghosts of Equity, 68 WASH. & 12.

LEE L. REV. 1027, 1039 (2011) ("American courts have continued to issue restitutionary rulings but, all too often, the doctrinal logic is utterly absent, the terminology misstated, and the law misconstrued." (footnotes omitted)).

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RESTITUTiON RE VISITED

(Third's) Reporter, described the confusion plaguing restitution and unjust enrichment in the legal profession this way: Confusion over the content of restitution carries significant adverse consequences. To put it bluntly, American lawyers today (judges and law professors included) do not know what restitution is. The subject is no longer taught in law schools, and the lawyer who lacks an introduction to its basic principles is unlikely to recognize them in practice. The technical competence of published opinions in straightforward restitution cases has noticeably declined; judges and lawyers sometimes fail to grasp the 13 rudiments of the doctrine even when they know where to find it.

How restitution came to this place is largely an accident of history.

While the elements of restitution date to early English common law, those elements, primarily quasi contract and the constructive trust, 14 were not combined under a singular heading or within a unifying context until the First Restatement's publication in 1937.15 Prior to that time, the legal maxim that one cannot "reap where it has not sown"' 6 existed as a "miscellaneous assortment (part legal, part equitable) of forms of action and remedial devices, familiar in some of their particularized applications but never described or understood as parts of a coherent whole.' 17 The First Restatement attempted to combine these varying and disparate rules into a cohesive and unifying whole, and in the process, establish restitution as a field unto itself.18 Following that publication, restitution briefly enjoyed prominent status alongside contract and tort in law school curricula, with casebooks written by prominent scholars made available on the market. 19 In the 1970's, however, a new generation of scholars melded restitution into the modem remedies course, diminishing its significance and importance as 13.

Andrew Kull, Rationalizing Restitution, 83 CAL. L. REv. 1191, 1195 (1995) (footnote omitted); see also Laycock, Scope and Significance, supra note 4, at 1277 ("In the mental map of most lawyers, restitution consists largely of blank spaces with undefined borders and only scattered patches of familiar ground. Few law schools teach a separate course in restitution, no restitution casebook is in print, and scholarship in the field is largely devoted to specific applications.").

14.

John H. Langbein, The Later History of Restitution, in RESTITUTION: PAST, PRESENT AND FUTURE 57, 57 (W.R. Cornish et al. eds, 1998), available at https://www.law.yale.edu/system/files/documents/pdf/Faculty/Langbein-RestitutionPast Present and Complete.pdf.

15.

RESTATEMENT (FIRST) OF RESTITUTION pt. I, intro, note, at 4-5 (1937).

16.

Int'l News Serv. v. Associated Press, 248 U.S. 215, 239-40 (1918).

17.

Peter Birks, Unjust Enrichment and Wrongful Enrichment, 79 TEX. L. REv. 1767, 1768 (2001) (quoting RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT, at xv (Discussion Draft 2000)).

18.

Kull, supra note 8, at 868.

19.

See, e.g., Page Keeton, Recent Books, 37 TEX. L. REv. 365, 365-67 (1959) (reviewing JOHN W. WADE, CASES AND MATERIALS ON RESTITUTION (1958) and JOHN P. DAWSON & GEORGE E. PALMER, CASES ON RESTITUTION (1958)).

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20 its own distinct and substantive legal field like contract and tort. With money damages and injunctive relief in ascension, restitution became relegated to afterthought. This history explains why many among the current generation of lawyers and judges find restitution, "needlessly archaic, complex, and boring, 2 1 and why the field's principles, terminology, and doctrines remain confused and muddled.22 As Professor from law school in the last Laycock notes, "hardly anyone who graduated 23 forty years has taken a restitution course.,

III. FARNSWORTH'S FOUR FAMILIES OF RESTITUTION

Practicing attorneys seeking to expand their knowledge in this field will find Farnsworth's book very accessible and extremely valuable.

Farnsworth presents his subject in four parts-the introduction, the four families of restitution, remedies and defenses.2 4 The introductory chapter describes restitution's relationship with contract, tort and other fields.25 This chapter clearly establishes restitution's importance in the attorney's arsenal of major families of potential claims. Farnsworth next identifies 2"four 2 8 takings 29 7 26 liability in restitution., These areas are mistakes, conferrings, and failed contracts. 30 Each family is given its own chapter. The next two 31 and equitable 32 remedies, and the book closes with chapters cover money 33 a chapter on defenses.

The book is lean, to the point, and presented without cutting comers or sacrificing clarity. Farnsworth relates the possibly unfamiliar, and sometimes confusing terms and principles, with dynamic prose in plain English. The book's examples are simple enough to understand in one reading, while clearly and effectively explaining the idea being discussed.

Judges and practicing attorneys sometimes criticize law professors and 20.

CANDACE S. KOVACIC-FLEISCHER ET AL., EQUITABLE REMEDIES, RESTITUTION AND

DAMAGES: CASES AND MATERIALS 522 (8th ed. 2011).

George P. Roach, How Restitution and Unjust Enrichment Can Improve Your 21.

Corporate Claim, 26 REV. LITIG. 265, 267 (2007).

See, e.g., RENDLEMAN & ROBERTS, supra note 5, at 495 (discussing the United States 22.

Supreme Court's confusion on the subject in the ERISA context).

Laycock, RestoringRestitution, supra note 10, at 930.

23.

FARNSWORTH, supra note 6, at vii-ix.

24.

25.

26.

27.

28.

29.

30.

31.

32.

33.

Id.at viii-ix, 1-13.

Id.at ix.

Id.at ix, 14-36.

Id.at ix, 37-60.

Id. at ix, 61-74.

Id.at ix, 75-103.

Id.at 104-118.

Id.at 119-141.

Id.at 142-154.

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RESTITUTiON RE VISITED

scholars for failing to write with practical applications in mind.34 Dean Farnsworth cannot be so accused with this book.

A leading professor once wrote that restitution can "arise in a bedazzling variety of situations" and that attorneys rarely take notice of "the restitutionary implications or potential" of the problems their clients face.35 This sentiment is likely as true today as it was then.36 While attorneys can purposely avoid some fields like family law or aviation law through careful case screening, restitution, like bankruptcy, can rear its head in cases where it's presence is not immediately evident.3 7 Attorneys often find themselves handling a restitution case without warning or preparation. For this reason, it is important for attorneys to have a working understanding of the field and how restitution relates to other substantive fields.

Farnsworth begins his book by comparing restitution's scope with the scope of contract law and tort law to position restitution within the reader's existing understanding. 8 Because contract and tort law occupy such prominent places in the legal curricula, it is easy to consider restitution as the exception to the law's general rules. Farnsworth observes that because the circumstances presented in contract and tort cases create incentives for parties to breach, contract and tort cases are more common. 39 In contract cases, the contract's existence creates incentives to overlook an obligation or avoid a promise when doing so benefits the actor.4 0 Likewise, time and cost considerations create incentives for actors to short-cut precautions, fail to consider risks or, in cases of intentional torts, affirmatively harm others.4' Farnsworth explains that these incentives make contract and tort cases more common "because opportunism is a more powerful force than the altruism,

34.

See, e.g., Harry T. Edwards, Another Look at Professor Rodell's Goodbye to Law Reviews, 100 VA. L. REV. 1483, 1484 (2014).

35.

GRAHAM DOUTHWAITE, ATTORNEY'S GUIDE TO RESTITUTION § 1.1, at 2-3 (1977),

quoted in Candace Saari Kovacic-Fleischer, Quantum Meruit and the Restatement (Third) of Restitution and Unjust Enrichment, 27 REV. LITIG. 127, 127 (2007).

36.

Kovacic-Fleischer, supra note 35, at 127.

37.

For example, when the contract in a breach of contract case is later found to be void for violating the statute of frauds, a party lacking capacity or some other reason, the case will often turn on restitution principles. See Smestad v. Harris, 820 N.W.2d 363, 369 (N.D. 2012) (holding that a party barred by the statute of frauds from recovering on a contract may be entitled to restitution); see also 37 C.J.S. Statute ofFrauds § 193 (2008) ("Although part performance by one of the parties to a contract within the statute of frauds will not, at law, entitle such party to recover on the contract itself, he or she may nevertheless recover for money paid by him or her, or property delivered, or services rendered in accordance with, and on the faith of, the contract, the law will raise an implied promise on the part of the other party to pay for what has been done in the way of part performance.").

38.

FARNSWORTH, supra note 6, at 4-7.

39.

Id at 6-7.

40.

41.

See id See id

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and other forces that give rise only to claims of self-injuring carelessness, 42 enrichment. unjust Farnsworth observes, however, that it is error to think that just because tort and contract cases are more common, restitution exists only to cover cases tort and contract do not: [I]t would be a mistake to infer ... that restitution just exists to give plaintiffs some recourse in cases that tort and contract law miss. It might be closer to the truth to think of tort and contract law as exceptional. Recovery is generally available for unjust enrichment that one party makes at another's expense. Granted, "unjust enrichment" is a term with particular legal meaning; there is a great deal of profitable injustice in the world that the law of restitution leaves alone. But principles of restitution law do speak in detail to all four types of problems outlined a moment ago-mistakes, conferrings, takings, and failed contracts-and provide a remarkable array of tools to rectify them. Then come tort and contract law, which provide some special and additional rules that also allow plaintiffs to recover their losses, even without reference to whether anyone else has gained-but only in a fairly narrow set of cases when particular requirements are satisfied, and then usually by a simple remedy. The plaintiff just presents the defendant with a bill. 43 This introduction serves an important purpose-readers begin their journey by understanding that restitution is not a separate field attorneys can easily avoid. Restitution exists in and among tort and contract cases, often hidden from view in the case's early stages. Returning to the statute of frauds example, an unwary attorney representing the party that has performed a void contract may see the statute of frauds defense as a bar to her client's recovery. 44 However, a savvy attorney, well versed in restitution law, will see the need to plead restitution alternatively and prepare evidence needed to support a recovery under that cause so that if the opponent's affirmative defense prevails, some recovery may still be had.

Farnsworth's four families of restitution cover virtually every type of restitution a litigator might encounter. The first, mistake, includes mistaken payments of money, benefits other than money, mistaken improvements to property, mistaken payment of another's debt or performance of another's obligation, and temporal mistakes in expectations of ownership and unmarried cohabitants. 45 The general rule here provides that the receipt of a

42.

43.

44.

45.

Id. at7.

Id. at 5.

See supra note 37.

FARNSWORTH, supra note 6, at 14, 22, 26, 30, 33-34.

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benefit conferred by mistake creates liability in restitution, but only insofar as the recipient would otherwise be unjustly enriched.46 This chapter also includes an important section on allocation of the risk of mistake-a key limiting principle in restitution law in mistake cases. 47 A plaintiffs claim for restitution fails, and a defendant's gain is not unjust, when the plaintiff assumed the risk of mistake.4 8 Cases involving assumption of the risk of mistake can be difficult to distinguish. The Third Restatement has abandoned the mistake of law and mistake of fact distinctions from earlier versions and asks whether the circumstances of the mistaken payment suggest the risk should be allocated to the payor.4 9 The second family, conferrings, has some elements in common with mistake, but includes one important distinction. 50 A mistake occurs when "a benefit moves from one person to another without either party intending it."51 A conferring, by contrast, occurs when a party confers the benefit intentionally or knowingly, and otherwise "would not have acted differently if he had known that the benefit would land where it did.",5 2 This chapter includes money and non-money benefits conferred, interventions to protect life or health, interventions to save property, and performance of another's obligations.5 3 This chapter also includes a section on cases where the claimant has a duty by contract with a third party.54 Takings include cases where someone takes a benefit from the owner.55 Farnsworth acknowledges that this chapter is "conceptually messy,' 56 and it very much is because, in these cases, the defendant has committed an act deemed wrong by law or equity.57 Also, the plaintiff may have more than one remedy available. For example, in Qiwell v. Nye & Nissen, Co., the defendant converted the plaintiffs egg-washing machine for its own use. 58 The court explained "[i]t is uniformly held that in cases where the defendant ... benefited by his wrong, the plaintiff may elect to

46.

RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 5(1) (2011).

47.

48.

49.

FARNSWORTH, supra note 6, at 17-21.

Id. at 17.

See RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 6 cmt. d

(2011).

50.

51.

52.

53.

54.

55.

56.

57.

58.

FARNSWORTH, supra note 6, at 37.

Id. Id. Id. at 38, 41, 44, 46, 49.

Id. at 52.

Id. at 61.

Id. Id. OlwelI v. Nye & Nissen Co., 173 P.2d 652, 653 (Wash. 1946).

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'waive the tort' and bring suit in assumpsit for restitution., 59 In Qiwell, the plaintiff recovered an amount in restitution greater than the conversion remedy would have allowed. 60 This result illustrates both the restitution's standing as its own body of law and how an attorney well versed in the field can enhance client outcomes.

Farnsworth's final category is failed contracts. 6 1 This category includes cases where a transfer was intended at the outset by both parties, but for some reason the contract fails, leaving one party enriched at the other's expense.62 These cases include situations where an intended contract fails for some legal reason, such as capacity or statute of frauds, or when some critical assumption underlying the contract fails to occur.63

Here, public

policy considerations come into play, and where the law is hostile to the underlying contract's purpose, restitution sometimes fails on these policy grounds.64 This chapter also addresses restitution where contracts are set aside for duress or fraud.65 IV. RESTITUTION AS AN ALTERNATIVE REMEDY FOR BREACH OF CONTRACT

The failed contracts chapter also discusses restitution as a remedy when enforceable contracts are breached. 66 The law often allows the nonbreaching party to seek rescission and restitution, which puts the party in the position held before the contract was made, as an alternative to expectancy damages.67 Rescission is a remedy whereby courts set aside or unwind the contract as though the contract were never made. 68 Restitution following rescission requires the parties to return what they received in

59.

Id.; accord FARNSWORTH, supra note 6, at 62 (stating the term "waives the tort" is misleading, electing instead to apply election of remedy principles).

60.

The plaintiff offered to sell the machine to the defendant for $600. Olwell, 173 P.2d at 653. The defendant countered with an offer to purchase it for $50. Id. The restitution remedy, derived by calculating the cost savings realized by the defendant from using the machine, amounted to $900. Id. at 653, 655.

61.

FARNSWORTH, supra note 6, at ix, 75.

62.

Id. at 75.

63.

Id. at 75, 77. To illustrate, Farnsworth offers the example of the party that pays for a life insurance policy on another person only to later learn the other person is already deceased. Id. at 77-78 (citing RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 34 cmt. e, illus.

20(2011)).

64.

See id.at 79-80.

65.

See id.at 84-89.

66.

Id. at 92.

67.

Id. at 93.

68.

Id.

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performance, usually either restitution of property or payments or other incidental damages to which the claimant is entitled.69 In contract litigation, a client's objectives may sometimes be met best by pursuing the rescission and restitution remedy. When the contract is a good one for the non-breaching party, he can sue for expectancy and recover what he would have gained had the contract been performed.70 However, when the contract is a losing one, or expectancy damages are difficult or impossible to prove with the requisite certainty, rescission and restitution offer an alternative, and perhaps under the circumstances, the best available recovery.71 In this chapter, Farnsworth weighs in on a controversy between the two relevant Restatements: Does contract price provide a cap on restitution damages when the claimant seeks restitution as an alternative to expectancy? 72 Stated another way, do courts allow restitution to act as an escape hatch for non-breaching parties that would have lost money had the contract been performed? There is, in fact, a split in authority and a disagreement among Restatements whether contract price caps restitution damages.

The Restatement (Second) of Contracts and most cases, provide that unless the injured party has completed performance, contract price does not cap restitution damages.73 This means under certain circumstances the party can recover more in restitution damages than in expectancy damages. On the other hand, some cases and the Restatement (Third) reject this view and limit the plaintiffs recovery to that provided by the parties' agreement.74 Farnsworth presents the arguments for each position clearly and fairly, then adopts the view that the agreed price should cap restitution damages.7 5 After contract is fortunate for the all, he concludes a party under a losing it. 76 by enriched is and breach defendant's

69.

See RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 37(1) cmt. a (2011).

70.

FARNSWORTH, supra note 6, at 94.

71.

Id; see also, e.g., Richard R.W. Brooks & Alexander Stremitzer, Remedies On and Off Contract, 120 YALE L.J. 690, 698 (2011) ("Error! Main Document Only.Only in those odd cases where realized value of performance is less than price-that is, in losing contracts-is the option to rescind and pursue restitution preferable to expectation damages.").

See id. at 97-99.

72.

73.

RESTATEMENT (SECOND) OF CONTRACTS § 373 & cmt. b (1981); see, e.g., United States ex rel. Harkol, Inc. v. Americo Constr. Co., 168 F. Supp. 760, 761 (D. Mass. 1958); Oliver v. Campbell, 273 P.2d 15, 19 (Cal. 1954) (in bank).

RESTATEMENT (THIRD) OF RESTITUTION & UNJUST ENRICHMENT § 38(2)(b) (2011); 74. see, e.g., Johnson v. Bovee, 574 P.2d 513, 514 (Colo. App. 1978).

75.

76.

FARNSWORTH, supra note 6, at 99.

Id.

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V. RESTITUTION REMEDIES Determining whether or not a defendant has been enriched unjustly, warranting restitution recovery is only half the battle. The next question is what, if anything, will the plaintiff recover? Farnsworth identifies two available remedies-either a money judgment against the defendant, or alternatively, the right to recover the specific thing taken by the defendant (or caused by the defendant to have been lost). 77 These two options are covered in Chapters Six and Seven, respectively. 78 Money judgments are measured by the amount of the enrichment-a measure often very elusive in practice. 79 The leeway given to the plaintiff in calculating the enrichment is controlled in important part by the defendant's culpability in his own enrichment. 80 Farnsworth presents examples involving innocent defendants, defendants partly responsible for the enrichment, and defendants having done wrong, either inadvertently or deliberately. 81 As expected, the law provides less protection to the defendant as the defendant's conduct grows more blameworthy. 82 Farnsworth concludes the chapter on money judgments83 with final comments on causation, value added, and intellectual property.

The chapter on equitable remedies discusses remedies designed to return to the plaintiff the specific thing lost in the transaction. 84 These remedies include "a constructive trust, an equitable lien, subrogation, and rescission., 85 The final chapter covers defenses to the restitution cause of action, including change of position, bona fide purchaser or creditor, and absence of unjust enrichment.8 6 VI. CONCLUSION

Farnsworth's book is not a complete treatise on restitution, nor is it intended to be. Persons looking for such an exhaustive treatment can turn to the Restatement (Third), which includes two volumes and over 1400 pages in detail. Any criticism that Farnsworth's book is incomplete or fails to address particular details or policy disagreements would be unfair to Farnsworth's stated purpose. Farnsworth set out to write a reference book in 77.

78.

79.

80.

81.

82.

83.

84.

85.

86.

Id at 104.

Id.at 104, 119.

Id.at 105.

Id.at 105-06.

Id.at106-14.

See id. at 105.

Id. at 114-18.

Id.at119.

Id. Id. at142-54.

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plain English that introduces the law of restitution to students and practicing lawyers in a way that is clear, concise and interesting. Prior to this book's publication, a practicing lawyer searching for such a book would likely come away disappointed.

Thanks to Farnsworth's book, this is the case no longer. The book is accessible, readable and has broad appeal to the practicing bar. The and boring" 87 criticism that restitution law is "needlessly archaic, complex, may hold some truth, but thanks to Dean Farnsworth, it is now a little less so.

87.

See ROACH, supra note 21, at 267.