Market Competition as a Constitutional Virtue: A Defense of Lochner and a Revitalized Dormant Commerce Clause
A common proposition in constitutional law, often embraced on both sides of the political spectrum, is that major political decisions should be left to legislatures because courts have neither the competence nor knowledge to resolve these issues. This article takes an alternative view: on questions of both individual rights and structural federalism, the correct choices can be made by courts so long as they are attendant to the need to protect competitive institutions from monopolization efforts by governments and private parties alike. Under this framework, courts must first identify the deviation from the competitive ideal, whether wrought by legislation, regulation, taxation, or administrative order, and then require the government to justify the challenged action, typically by showing how it advances some legitimate government interest. To be sure, there are always some cases at the margins where the balance is best left to a trier of fact. Nonetheless, in the many cases discussed here, the legislative or regulatory deviations from the competitive equilibrium are patent and the public justifications minimal at best, leaving courts in an ideal position to strike down the law.
These insights offer the basis for my critique of any effort to dial down judicial oversight under the dormant Commerce Clause. The explicit antidiscrimination principle that courts use in such cases solves some easy cases, but the norm is underinclusive because it ignores the disparate impacts of otherwise facially neutral laws. The well-known and much mooted Pike balancing test helps pick up the slack, but its effectiveness will be blunted if it is applied only to “price affirmation” cases that tie sales outside the defendant state to changes in local prices. A broader conception that covers the full range of taxes and regulation is needed to plug the gap, and, if done with an eye to preserving competitive equilibria, will not be subject to systematic oversight. The conservative views on disparate impact cases are misapplied in these situations, for the balancing tests used in these cases are widely applied in virtually every area of law, including constitutional protection of individual rights in property, religion, and speech cases, antitrust, employment discrimination, and elsewhere.
