Friday, October 08, 2021

The S.B. 8 Injunction and the Questionable Principle that Equity Acts Only When there is no Adequate Remedy at Law

 by Michael C. Dorf

I spent an hour yesterday on the phone with a very smart but very perplexed reporter trying to understand the various nuances of the many issues addressed by Judge Pitman in his opinion granting a preliminary injunction against Texas SB 8 in the case brought by the Department of Justice. That's completely forgivable. These issues are hard enough to explain over the course of a semester in my Federal Courts class. And at least some aspects of the SB 8 litigation involve novel applications of complex doctrines.

Here I want to focus on a fairly basic idea that permeates Judge Pitman's analysis. He repeatedly states that private litigation is inadequate to vindicate the constitutional right to abortion in Texas, given the procedural trapdoors in SB 8. Why does he keep coming back to that point? I think there are at least two reasons.

First, Judge Pitman wants to ward off a criticism--offered anticipatorily by Texas in its submissions--that his ruling licenses the federal government to sue any state any time it allegedly violates anybody's constitutional rights. By pointing to the inadequacy and de facto unavailability of other remedies, Judge Pitman preemptively rebuts the criticism that his decision will open the floodgates to litigation by the federal government against states.

Second, Judge Pitman needs to show that the United States is entitled to an equitable remedy. By long tradition, however, equitable relief--i.e., an injunction ordering a defendant to do something or refrain from doing something--is only available when there is no adequate "remedy at law"--typically defined to mean a damages lawsuit but for our purposes also an after-the-fact remedy such as the ability to raise the constitutional right to an abortion as a defense to a civil action. As Judge Pitman shows in detail, by design, SB 8 erects numerous obstacles to remedies in the ordinary course of a civil action. Thus he shows that there isn't an adequate after-the-fact remedy, and therefore prospective equitable relief is justified.

I believe that Judge Pitman's ruling is correct--which is not to say that I'm entirely confident that it will be affirmed by the Fifth Circuit and/or SCOTUS, whose jurists might take a different view from mine about the procedural issues, the underlying right to abortion, or both. In any event, I want to put all of that aside for now to focus on what everyone has long taken for granted: the traditional rule that a court should not issue an injunction where there is an adequate remedy at law. I'll argue that the rule is unjustified.

First, a bit of background. At the time of the adoption of the Constitution, courts of equity were a parallel system to courts of law in both England and the colonies-then-states. Why? Mostly because of a highly path-dependent history. The official courts of law in England--the "King's bench"--operated under strict, often highly formalistic rules. A sensible solution would have been to relax or change those rules when they produced injustice, but instead, chancery courts, also called courts of equity, developed in England to mitigate the harshness of English law courts. Although courts of equity would eventually themselves become encrusted with arcane procedural rules (as Dickens explored in Bleak House), in principle an equity court was empowered to act more flexibly to achieve justice. In practice, the chief differences between law and equity were jurisdictional and procedural: courts of law heard criminal cases and lawsuits seeking money damages for completed wrongs, whereas equity courts heard cases seeking an injunction of some sort; and courts of law used juries, whereas the chancellor (the judge in a court of equity) did not.

At the Founding, states maintained separate courts of law and equity, as some do even today. However, from the beginning Congress invested federal courts with both the powers of law courts and equity courts. A federal judge would hear a case on either the law "side" or the equity "side." That distinction was abolished in 1937 with the adoption of the Federal Rules of Civil Procedure; Rule 2 declares that there is only one form of action, thus merging law and equity. Nonetheless, even in the federal courts, vestiges of the old separation remain.

Perhaps the clearest vestige is the Seventh Amendment, which preserves the right to a jury trial in "suits at common law." Supreme Court case law construes this provision and related doctrines to ensure a civil jury trial in civil cases seeking damages, but injunctive relief still comes from the judge acting alone. (Where a plaintiff seeks both damages for past wrongs and an injunction against future similar wrongs, the Supremes have said that the court ought to order the rulings in such a way as to prioritize the jury determination of the damages action.)

In addition to the Seventh Amendment's division of labor, sub-constitutional doctrines limit the scope of equitable remedies. Here, for example, is a familiar statement of the proposition from a 1992 SCOTUS case (omitting internal quotation marks and citations): "It is a basic doctrine of equity jurisprudence that courts of equity should not act when the moving party has an adequate remedy at law and will not suffer irreparable injury if denied equitable relief."

Basic doctrine? Sure. Sensible? Not so much. To see why, consider that in ordinary life we typically think the opposite. The adage an ounce of prevention is worth a pound of cure reflects the folk wisdom that it typically makes sense to avoid a problem rather than remedy it. Better, say, to take the COVID vaccine and dramatically reduce the risk of serious infection, hospitalization, and death than to wait for an infection and then hope that monoclonal antibodies or a ventilator keep you alive. Likewise in many settings, it is better to obtain compliance with a legal duty in advance than to have to sue afterwards in an effort to undo the damage.

To be sure, one could liberalize the availability of injunctive relief by narrowly construing what constitutes an "adequate" remedy at law. But in fact, the case law construes much of what we might conventionally think an inadequate remedy to be an adequate one. There are any number of reasons why a post-hoc damages remedy may be less useful than prospective injunctive relief. The defendant may have inadequate assets to satisfy a judgment (or the assets may be difficult to reach); even if the defendant can satisfy a judgment, the delay in obtaining one could be long; there may be substantial legal uncertainty about whether the defendant is even liable, so that acting first in reliance on the possibility of retrospective relief carries risks. (That last example describes the situation of the SB 8 targets, even though they would be the defendants in a lawsuit in the Texas courts.)

Accordingly, although there may well be reasons why a court would think a post hoc damages remedy is preferable to injunctive relief in any particular case, there is no good reason to systematically prefer the former. Before concluding, however, I'll consider two objections.

First, one might think, and courts sometimes say, that injunctive relief is more intrusive than an order to pay damages. Depending on the size of the damages award and the nature of the injunctive relief--for example, whether it requires ongoing supervision--that can be true, but it is not universally so. Moreover, injunctive relief is in one important sense less intrusive. Suppose a patent case in which defendant has infringed plaintiff's valid patent. An injunction to defendant to cease selling the infringing product precisely remedies the problem, at least prospectively. By contrast, a damages award requires the court to calculate the economic value of the infringement, which is speculative and complicated. Here is how Judge Posner put the point in a 1992 case involving a contract dispute between Walgreens and a landlord on whose property one of its stores was located:

The benefits of substituting an injunction for damages are twofold. First, it shifts the burden of determining the cost of the defendant's conduct from the court to the parties. If it is true that Walgreen's damages are smaller than the gain to Sara Creek from allowing a second pharmacy into the shopping mall, then there must be a price for dissolving the injunction that will make both parties better off. Thus, the effect of upholding the injunction would be to substitute for the costly processes of forensic fact determination the less costly processes of private negotiation. Second, a premise of our free-market system, and the lesson of experience here and abroad as well, is that prices and costs are more accurately determined by the market than by government.

Second, one might think that the Constitution limits the circumstances in which federal courts can issue injunctions to those that were available at the Founding. To tie this objection to the constitutional text, one would say that when Article III vests "the judicial power" in federal courts, it vests the power as it was known in 1789.

That objection strikes me as misguided. Even in the context of the Seventh Amendment, where the constitutional text requires the preservation of the earlier practice, the Supreme Court has quite sensibly said that preservation does not mean freezing every aspect of civil practice involving juries as it existed in 1791. What the Court said in Galloway v. United States about the permissibility of the directed verdict under the Seventh Amendment seems at least as applicable to the permissibility under Article III of injunctive relief even where a damages remedy might be possible:

The [Seventh] Amendment did not bind the federal courts to the exact procedural incidents or details of jury trial according to the common law in 1791, any more than it tied them to the common-law system of pleading or the specific rules of evidence then prevailing. Nor were "the rules of the common law" then prevalent, including those relating to the procedure by which the judge regulated the jury's role on questions of fact, crystalized in a fixed and immutable system. On the contrary, they were constantly changing and developing during the late eighteenth and early nineteenth centuries.

Judge Pitman is right that the remedies available for SB 8's egregious violation of the constitutional right to abortion are woefully inadequate, indeed nearly nonexistent. That suffices to show the propriety of injunctive relief. But as a general matter, the threshold for injunctive relief is too high and rests on nothing more solid than historical accident. Or as O.W. Holmes, Jr. wrote in The Path of the Law: "It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past."

11 comments:

  1. Mike, even if Article III does not limit the circumstances in which federal courts can issue injunctions, isn't the problem for your position (and Judge Pittman's opinion) that the Supreme Court, per Justice Scalia, has held that *Congress* so limited federal courts in granting them equity jurisdiction? See Grupo Mexicano v. Alliance Bond Fund, 527 US 308, 318-22 (1999) (citations omitted):

    The Judiciary Act of 1789 conferred on the federal courts jurisdiction over "all suits . . . in equity." § 11, 1 Stat. 78. We have long held that "[t]he `jurisdiction' thus conferred . . . is an authority to administer in equity suits the principles of the system of judicial remedies which had been devised and was being administered by the English Court of Chancery at the time of the separation of the two countries." "Substantially, then, the equity jurisdiction of the federal courts is the jurisdiction in equity exercised by the High Court of Chancery in England at the time of the adoption of the Constitution and the enactment of the original Judiciary Act, 1789 (1 Stat. 73)." "[T]he substantive prerequisites for obtaining an equitable remedy as well as the general availability of injunctive relief are not altered by [Rule 65] and depend on traditional principles of equity jurisdiction." We must ask, therefore, whether the relief respondents requested here was traditionally accorded by courts of equity.

    ...

    We do not question the proposition that equity is flexible; but in the federal system, at least, that flexibility is confined within the broad boundaries of traditional equitable relief. To accord a type of relief that has never been available before — and especially (as here) a type of relief that has been specifically disclaimed by longstanding judicial precedent — is to invoke a "default rule," post, at 342, not of flexibility but of omnipotence. When there are indeed new conditions that might call for a wrenching departure from past practice, Congress is in a much better position than we both to perceive them and to design the appropriate remedy.

    ReplyDelete
  2. Very interesting post. I think the overriding concern, that we should not have any distinction between equity and "at law" anymore, is more academic than real. In practice, a party who will suffer continuing damage without a court intervening and putting a halt to the process will prove enough to obtain injunctive relief. I think at law cases remain where the damage has been done and the only issue is whether liability ensues for the defendant (think simple car accident, contract dispute over one event, fight over title) compared to those where damage continues (tortious interference with business, covenant not to compete, nuisance). I cannot think of a case I encountered in practice where I was blocked from injunctive relief because of the barriers of adequate remedy at law. That said, I do agree that the separation between the two "courts" no longer makes sense in practice (but it does give equity judges more stuff to do, or less, depending on how they interpret adequate). I agree that its presence in the SB8 case takes center stage simply because of the procedural oddity/audacity of the law. I was happy to see Judge Pittman rely heavily on Shelley v. Kraemer in his opinion, since I had mentioned that as a straightforward precedential path to relief in one of my comments on the blog here some weeks ago. :-)

    ReplyDelete
  3. And btw, the last paragraph from Grupo Mexicano explains why this interpretation of the equity jurisdiction makes sense. It is a basic separation of powers concern. Namely, you may well be right that there are reasons to depart from traditional equitable rules in various ways. But there may also well be reasons to keep them. And those policy calls should be made by Congress, not unelected and unaccountable federal judges. For much the same reason that federal courts generally don't exercise federal common-law making power either.

    And the sb8 litigation is exhibit A for this point: surely Congress, which is vested with 14A enforcement power, should be the entity to decide whether the United States can sue a sovereign State and obtain an "injunction" that purports to prevent state judges from even adjudicating a state-law dispute simply because there's a federal constitutional defense that they, presumably, would recognize themselves.

    ReplyDelete
  4. "which is not to say that I'm entirely confident"

    Prof. Dorf optimism in that phrasing, perhaps.

    ReplyDelete
  5. There are some significant fact/context issues that make Grupo Mexicano more than somewhat off-point as to the SB8 litigation. In no particular order:

    (1) The absence of jurisdiction was founded as much on a Mexican holding company's desire to dispose of assets in Mexico under the jurisdiction of the courts of Mexico as anything else. The dispute arose when holders of US securities of the holding company didn't want those assets disposed of (allegedly at below-market prices through... shenanigans). Thus, there's a really strong extraterritoriality issue in Grupo Mexicano that is not present in the SB8 suit before Judge Pitman. (And context matters to broad-sweeping "general statements of law." The irony that broad-sweeping general statements were disfavored in equity, and even in the Star Chamber, all too often escapes notice.)

    (2) Something that is not at all in the opinion, but becomes apparent only by tracing all the way back to the papers in the District Court: Grupo Mexicano also concerned allegations of harm to security-holders (who, by definition, have a quasi-at-law remedy of "disgorgement" available, thus making injunctions even less appropriate) through money-laundering schemes of dubious legality that may — or may not, what I've read of the record is unclear — have had any relationship to the assets in question sufficient to make an injunction meaningful and equitable in the first place.

    (3) Grupo Mexicano also directly implicates the foreign-affairs power in a way that makes it inapposite to SB8 litigation. For all of the whingeing about "states' rights" and "federalism" and "limited federal jurisdiction" being thrown about, the Supremacy Clause puts the federal government in a position to assert standing in a way that the securities holders in Grupo Mexicano never could have been.

    ReplyDelete
  6. it does seem to me that the preference for law over equity is rooted in a political preference for juries rather than judges.

    ReplyDelete
  7. Hash, is the federal courts' power to hear suits in equity based on the Judiciary Act of 1789, or on the recodification of Title 28 enacted in 1948 and amendments thereafter? I know the Court has said in cases like Ankenbrandt that there's a presumption the recodification changed nothing unless it said so somewhat explicitly, and I get that for specific rules like the domestic relations exception to diversity, but I have a harder time seeing how 18th-century equity law generally seeps into a mid-20th-century recodification that doesn't even, I believe, talk about equity in terms.

    ReplyDelete
  8. Asher, it's a good question that I've never run down myself given that cases like GM look to 1789 rather than 1948. That said, I doubt there's a difference. As you note, there's nothing in the 1948 codification of Title 28 that expressly purports to authorize federal courts to exercise broader equitable powers than they previously had. There's the general grants of jurisdiction (which arguably implicitly carry with them authorization to issue traditional equitable relief post-merger of law and equity, but certainly not any broader than traditional equitable relief), and there's the All Writs Act, 28 usc 1651, which specifically provides that federal courts "may issue all writs necessary or appropriate in aid of their respective jurisdictions *agreeable to the usages and* principles of law," and thus again seems to call for a tradition-based approach rather than to delegate authority to invent newfangled relief. (I recognize that the All Writ Act says "law," not "law and equity," but the Supreme Court has cited that statute as their basis for issuing injunctions pending appeal and other forms of equitable relief.) So the only way there'd even arguably be a difference is if federal courts, between 1789 and 1948, had expanded the scope of equitable relief beyond what was traditionally authorized in 1789, such that this expansion was incorporated into the 1948 codification. But I'm not aware of any such expansion -- which, of course, would itself have been inconsistent with the 1789 Act (or its successors), at least as construed by the Court in GM. And if there had been, since that would have been illegitimate under the reasoning of GM, then arguably the Court shouldn't treat that as incorporated into the statute, just as the Court in Sandoval refused to go back to the freewheeling approach to implied causes of action from the 1960s/1970s even for a statute enacted in that period. In all events, however, with respect to sb8, there's no tradition in 1948, or at any point between 1789 and this week, when a federal court has *ever* done anything remotely resembling allowing the Executive Branch to invoke equity to sue a State merely because the State judiciary was authorized to adjudicate claims and defenses under a state law that allegedly violates citizens' 14A rights, especially given that Congress has expressly authorized various other forms of relief for 14A violations.

    ReplyDelete
  9. I think Grupo Mexicano overstates the importance of Founding-era equity practice as a limit on judge-made remedies, but even accepting it as good law, there is a question of how broadly or narrowly to characterize the relief sought here to determine whether it fits within that practice. To my mind it does, but I acknowledge that this is a potential ground for reversal--especially now that the 5th Circuit has granted an administrative stay. That said, I think the votes of the 5th Circuit (and 5 or 6 Supreme Court Justices) will be determined at least as much by their views about abortion as their views about how to understand the scope of equity in 1789 or since.

    ReplyDelete
  10. This comment has been removed by the author.

    ReplyDelete
  11. All fair Mike. Fwiw, though, I sincerely hope you're wrong that they make this decision based on the underlying substantive issue rather than the immediate procedural issues. As I've mentioned before, i would say the same exact thing if this were a blue state and gun/property regulation, and that's because this presents a trans-substantive separation-of-powers issue that is at least as important, if not more important - do courts or congress have primacy in authorizing the right to sue to enforce federal law. The conservatives have been emphasizing Congress's primacy consistently and recently (see, eg, Sandoval, Abbasi, Jesner, etc.), and it would be very disappointing if they subordinated their views about that fundamental issue to let their views be driven by the particular federal right at issue or particular concern about how a state is violating the right.

    ReplyDelete

Note: Only a member of this blog may post a comment.