The President's Duty of Good Faith Performance

|The Volokh Conspiracy |

[Virtually one year ago on January 12, 2015, I posted the following here about the President's duty to take care that laws be faithfully executed. With yesterday's cert grant in U.S. v. Texas on the question, "Whether the Guidance violates the Take Care Clause of the Constitution, Art. II, §3," it seemed timely to reprint it in its entirety. I suggest that the contractual doctrine of "good faith performance," properly understood, provides a practical way for courts to assess whether the President has violated this constitutional duty, as they routinely do in contracts cases.]

I admit initially to being ambivalent about the constitutionality of President Obama's executive actions on immigration. Just ask my students. As I explained in class, on the one hand it did seem to flout the President's duty to "take care that the laws be faithfully executed." On the other hand, as a former prosecutor, I am well aware of the inevitability of prosecutorial discretion. And, when administering the vast executive branch, how else is a unitary president to exercise his power than by issuing a policy that can be consistently followed by the principal and inferior officers who ultimately answer to him? Moreover, I was very sympathetic to the exercise of prosecutorial discretion not to enforce federal drug laws against marijuana possession and distribution in states that had made marijuana legal under state law.

Then I attended the Federalist Society's faculty conference and heard a speaker for whom I have great respect say that the entire issue turns on the degree to which Congress has granted the President discretion. Congress is free to constrain that discretion greatly, but if a statute allows discretion then the President is not failing to execute the law when he exercises it. He is executing the laws passed by Congress, which includes this discretion. If Congress doesn't like this, it should change the law. Something about this argument struck me as wrong, and I immediately realized what it was.

As a contracts professor, I teach how contracts routinely allow the parties some discretion in the exercise of their contractual duties. Indeed, such discretion is usually desirable. We want those we hire to perform tasks for us to use their discretion to employ the expertise they have—but we lack—as best they can. But all contracts impose a duty of good faith performance on the exercise of this discretion. For example, §1-304 of the Uniform Commercial Code is entitled, "Obligation of Good Faith," and specifies that: "Every contract or duty within the Uniform Commercial Code imposes an obligation of good faith in its performance and enforcement."

When teaching contracts, I always assign the classic articles on the duty of good faith performance by Iowa law professor Steven Burton (which can be found here and here). According to Burton, when a contract allows one party some discretion in its performance, it is bad faith for that party to use that discretion to get out of the commitment to which he consented. For example, suppose a party enters into a lease under which he owes the landlord a percentage of his gross sales as rent. Suppose the tenant refers a customer who comes into buy an item to another one of his outlets that happens not to have a percentage of sales lease agreement. Although the contract leaves the discretion of how to manage the business in the tenant's hands, it would be good faith for the tenant to refer the customer to the other store because he was out of stock on a particular good but had it in stock in the other store. But it would be bad faith for the tenant to refer the customer to the tenants other store for the purpose of avoiding the percentage lease.

What distinguishes good faith from bad faith performance of a contract is not the exercise of discretion but is the motive or purpose for which discretion is exercised. Does the party exercising its discretion under the contract seek to exercise the letter of the contract (the discretion) to evade its spirit (the rest of the commitment)? More concretely, does it seek to gain the benefit of the contract (the store lease) while using the discretion granted by the contract to evade the cost of entering into the contract (paying the percentage of sales as rent). In this way, the doctrine of good faith performance is not a restriction on the freedom of contract, but is instead a means of enforcing the actual terms of the contract where discretion is allowed. But is this theory applicable to the President of the United States?

At this point, the text of the Take Care Clause struck me: the President "shall take Care that the Laws be faithfully executed. . . ." There it was right in the text of the Constitution: the president's duty of good faith performance. True, I do not view the Constitution as a literal contract. But like a contract, the Constitution is a writing that must be interpreted and applied. And the President is supposed to be the agent of the people. He consents to take an oath to obey "this Constitution," the written one. Under the terms of this Constitution, the President owes a duty or "shall" take care that the laws be "faithfully" executed. Although this duty inevitably requires the exercise of discretion, like any other agent, the President owes his principal—the People—a duty of good faith in the exercise of this discretion.

What Burton's theory illuminates is that the duty of good faith performance operates precisely when a contact delegates discretion in performance to one party. So the fact that discretion exists under the terms of a contract (or statute) does not tell us whether the party (or President) is in breach of his duty. What matters is the purpose or motive for the exercise of discretion. Is it intended to honor the spirit of the contract or is it intended to evade the commitment?

According to this theory of good faith performance, "scarcity of enforcement resources" is an appropriate motive for exercising prosecutorial discretion, but disagreement with the law being enforced is not. The same holds true with exercising prosecutorial discretion to enforce marijuana laws in states that have made it legal under state law. Prioritizing seriousness of offenses is one thing; disagreeing with the policy of the Controlled Substances Act (as I do) is another.

But how do you tell the difference? Here is where the President's previous statements about the scope of his powers, about his legislative priorities, and his frustration with Congress's "inaction" become legally relevant. His prior statements go to the President's state of mind or motive, which is dispositive of the issue of "good faith." If the President believed that the law precluded these actions but he was exercising the discretion he was given under the law to accomplish them nonetheless, he was abusing his discretion and acting in bad faith. Whether or not the law gave him discretion is not the answer to the question, it is the problem that a doctrine of good faith performance is devised to address.

One problem with applying this approach is doctrinal. The courts have declined to assess, for example, the motives of Congress in enacting a law. In McCulloch v. Maryland, Chief Justice John Marshall asserted that "should Congress, under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the Government, it would become the painful duty of this tribunal, should a case requiring such a decision come before it, to say that such an act was not the law of the land." But later in U.S. v. Darby, the Supreme Court famously said: " Whatever their motive and purpose, regulations of commerce which do not infringe some constitutional prohibition are within the plenary power conferred on Congress by the Commerce Clause."

But there are two considerations that run the other way. First, ascertaining the motive and purpose of a multimember body like Congress is much more difficult that identifying the purpose of a unitary executive like the President. Indeed, it is just this sort of accountability that led the founders to adopt single executive. Second, Darby is best read as a doctrine to govern the judiciary in which judges will defer to other branches (though it is clearly claiming to be more than this). Whether courts decline to adjudicate whether the Congress has acted pretextually is not to affirm that it has acted faithfully. In the case of the President, other remedies, like that of impeachment, for example exist for disciplining a breach of the duties imposed by Constitution.

Moreover, courts do assess motive, purpose, or "intent," when assessing whether business have acted in a discriminatory manner, or whether state legislatures and executives are discriminating against out-of-state businesses. So current doctrine is mixed as to inquiries into motive or purpose.

To be clear, I am not saying whether the President did or did not violate his duty here. I am merely offering the following points to clarify our thinking about the matter:

  1. First, the fact a law has delegated discretion on the President is not an answer to the question of whether the President is adhering to his duty to see that the laws be faithfully executed.
  2. Second, whether the execution of the laws is faithful is a matter of motive or purpose.
  3. Third, that motive or purpose distinguishes good faith from bad faith performance of the duty of enforcement make past presidential statements—as well as known presidential purposes—highly relevant to the issue of whether the President is acting constitutionally.
  4. Fourth, the duty of good faith performance has been a judicially-administered doctrine for a very long time.

So did President Obama act in good faith when he issued his executive actions affecting millions of aliens who are illegally present in the United States? Did he act faithfully when his Attorney General decided not to prosecute marijuana offences in states where such activity is no longer criminal under state law? Would he be acting faithfully to the laws enacted by Congress if he released each and every detainee in Guantanamo until it was empty of prisoners?

In sum: The existence of statutory or prosecutorial discretion does not answer these questions. Such discretion is the problem for which the duty of good faith performance is the answer.

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