Equity in United States v. Texas, Part 3

This is the third post on equity in the United States v. Texas litigation. (The first one is here, and the second here.) How has Grupo Mexicano been received so far in the case?

Let's start in this post with the district court's opinion. It says this:

The State is mistaken in searching for a blueprint of the cause of action here. For the United States' cause of action is a creature of equity, a centuries-old vehicle which eschews categorical definition. That remedy is available where no adequate remedy exists at law; any attempt to codify such situations would be futile, and likely require powers of clairvoyance which no legislator possesses.

There's a lot here that's right. The United States is suing in equity. Equity does eschew categorical definition. Equitable remedies (at least in equity's concurrent jurisdiction) depend on there being no adequate remedy at law. And equity does resist codification. And the line about the legislator's clairvoyance might be a nice allusion by the district court to the Nicomachean Ethics, where equity is precisely for situations that the legislator could not foresee. (For more on that sense of "equity," you can read A Student's Guide to the Meanings of Equity.)

But to say equity eschews "categorical definition" doesn't mean there are no rules, no patterns, no definition. In the immortal words of The Big Lebowski, "This is not 'Nam, this is bowling. There are rules." And the Court said very clearly in Grupo Mexicano that, in the federal courts, equity—what we could call its rules, patterns, and definition—is traditional equity.

So the opinion next tries to distinguish Grupo Mexicano, and here's where it runs off the rails:

Relying on Grupo Mexicano de Desarrollo S.A.v. All.BondFund, Inc., 527 U.S.308 (1999), the State argues for limiting equitable actions to the exact claims available at common law. (Resp., Dkt. 43, at 14). That reliance, however, is misplaced. Grupo Mexicano at most stands for the proposition that federal courts have jurisdiction over suits in equity, in which the broad equitable remedies that predate the Constitution remain available. The formal source of that jurisdiction is codified in the Judiciary Act of 1789, as discussed in Grupo Mexicano. However, the principle itself is broader and is not defined by that Act. Indeed, by the time he returned to the question in Armstrong, Justice Scalia—the author of Grupo Mexicano—had dispensed with any need to locate this power in the Judiciary Act. Nowhere in the latter case did he cite to the Judiciary Act. Rather, he wrote of general equitable powers "tracing back to England," translating to the "judge-made remedy" in the federal courts. Armstrong, 575 U.S. at 327. It is the essential nature of equity that it is not subject to strict limitations, unless and until Congress acts directly to restrict it.

Here the district court rejects—and rightly so—the argument that equity is limited to "the exact claims" that were historically available. That would be a too-rigid reading of Grupo Mexicano. But the district court goes further and gives three arguments for distinguishing Grupo Mexicano, and none of them work.

The first is that Grupo Mexicano says "at most" that the federal courts can give "the broad equitable remedies that predate the Constitution." In other words, on this reading, Grupo Mexicano was affirming the grant of traditional equitable powers, but it did not deny that there were any other equitable powers ("the principle itself is broader and is not defined by that Act"). That's an impossible reading of Grupo Mexicano, and would more or less line up with the Grupo Mexicano dissent. The Court held that a traditional basis in equity was not just sufficient but necessary for the exercise of federal equity power.

The second argument is that Armstrong overruled Grupo Mexicano sub silentio. That is startling and implausible.

The third argument is that equity is unlimited unless Congress restricts it. But that's the exact opposite of what the Court says in Grupo Mexicano: congressional authorization is required to go beyond the equity tradition. (As I mentioned in an earlier post, that's the least persuasive part of the Grupo Mexicano decision, but that doesn't mean it can be turned on its head.)

In effect, the district court opinion treats Grupo Mexicano as if the dissent had prevailed, with federal courts having an undefined power, subject to no strict limitations, to right all wrongs, subject only to congressional limitations. This is not a plausible reading of Grupo Mexicano. Indeed, on the district court's reading of that case, it would almost certainly have come out the other way. But the district court was right to call attention to the fact that the United States is suing in equity, and to the importance in equity of assessing whether there is an adequate remedy at law.

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NOTE: If you'd like to read more about Grupo Mexicano, here are four views. A less critical one is my The Supreme Court and the New Equity. More critical ones are Steve Burbank's The Bitter with the Sweet: Tradition, History, and Limitations on Federal Judicial Power—A Case Study; Jim Pfander and Wade Formo's The Past and Future of Equitable Remedies: An Essay for Frank Johnson; and Judith Resnik's Constricting Remedies: The Rehnquist Judiciary, Congress, and Federal Power.