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May 24, 2005

Supremes Do Their Job: Nothing

It was a good day at the Supreme Court yesterday. The Justices looked at a number of state and federal economic regulations and decided it was not the job of judges to second-guess elected legislators.

One decision upheld federal rules that levied assessments on meat producers to pay for collective marketing (i.e. "Beef, It's what's for Dinner"), rejecting bogus "corporate free speech" arguments in favor of upholding government power to assess taxes to pay for whatever programs it thinks appropriate.

Even more importantly, the judges made a major policy statement on "takings" legislation. In a surprising unanimous decision, the Court rejected previous rhetoric that economic regulation might be an unconstitutional taking if it did not involve a "compelling state interest." Looking at the case where a federal judge had struck down a Hawaiian rent control law for gas stations as ineffective and thus not serving a compelling state interest, the Justices rejected that decision and upheld the law. Basically, the judges said that elected leaders have the right to pass dumb laws as well as smart laws, especially since judges aren't the best people to put in charge of telling the difference. If the courts took on such a role:

it would require courts to scrutinize the efficacy of a vast array of state and federal regulations—a task for which courts are not well suited. Moreover, it would empower—and might often require—courts to substitute their predictive judgments for those of elected legislatures and expert agencies.
This decision is especially crucial for local legislators who often don't have the professional staff to "prove" that a decision was economically justified. From experience, I can tell you that city councilpeople are scared of lawsuits from big corporations. Any doctrine that would force them to do massive economic studies to justify any local regulation basically means that most local legislators will pass rather than risk a lawsuit.

So beyond doctrine, this clear statement by the Court that legislators have the right to be wrong on policy, yet not be subject to court review.

Not that this decision eliminated all "takings" worries for legislators. No previous rulings were overturned, but this decision made clear that the bans on uncompensated physical encroachment on land will not be extended recklessly to broader forms of economic regulation.

So a good day.

Posted by Nathan at May 24, 2005 05:31 AM