July 18, 2005
Two Ways of Looking at "Rational Basis"
Posted by Will Baude

David Bernstein at the Volokh Conspiracy and Christine Hurt (below) have both posted about this decision from the Wisconsin Supreme Court, striking down medical malpractice damage caps because they lack a "rational basis", and in particular, fail to limit the costs of health care. I add a few observations.

Professor Bernstein complains that the decision is "remarkably illogical":

Won't have a noticeable effect? It's possible. Is not "rationally related?" Only because the court seems to define "rationally related" as "having a guaranteed large effect."

"Rational" is, of course, a legal term of art, so Bernstein's argument is insufficient to show that the rationality threshhold is lower than the noticeable-effect threshhold.

Professor Hurt, meanwhile, brings a bit of actual empiricism to bear, and points out that there is in fact very little evidence that malpractice caps do their job. She then wonders about that term of art, "rational":
As long as the legislation has or could have an effect greater than zero, even if not noticeable? That is quite a bit of deference there. I would hope that rational basis scrutiny would require some estimation that the legislation would effect its goals to a noticeable degree.

The trouble here, which leads to some of Bernstein's and Hurt's disagreement, is that we have two rational-basis tests. For example, compare Beach Communications ("(A) statutory classification ... must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification. ... In other words, a legislative choice ... may be based on rational speculation unsupported by evidence or empirical data.") with Cleburne (finding a statute to be irrational because there was no empirical evidence supporting it in the record) or Stevens' concurrence in Cleburne (suggesting that a statute is rational only if a "rational member of th(e) disadvantaged class" might support it). [The Wisconsin Court collects other cases here.]
This is why C.J. Abrahamson admits in her opinion that she is applying "rational basis with teeth," which involves some judicial scrutiny rather than sitting around like a potted plant. Since the case goes off on the Wisconsin Constitution, which rational basis to apply (toothy or toothless) is surely just a question of state law. One could object that the Wisconsin Constitution mandates some other doctrinal rule, or that there is in fact plenty of empirical evidence despite what Professor Hurt and the Court think, but there's simply no reason to think that the rational basis test imposed by a state constitution should always be the toothless one that Bernstein envisions.

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Comments (18)

1. Posted by Plainsman on July 18, 2005 @ 17:00 | Permalink

Fair enough. But it's worth emphasizing that the Wisconsin Supreme Court is "Lochnerizing" here in the most precise sense of the term. It is tossing out a general economic regulatory statute on the ground that the judges think the legislature's economic judgment is substantively defective. The court picks over the statute in detail and concludes that its economic rationale is too ill-supported to be allowed to stand.

The court admits that no suspect classification is involved. And while the case is decided under the Wisconsin constitution, the court expressly assimilates the legal standard it's applying to the rationality standard that is imposed by the Fourteenth Amendment to the U.S. Constitution. So this is straight up Lochner.

Perhaps that's fine. I have long predicted (in a positive, rather than a normative tone of voice) a partial latter-day revival of Lochner. The Fourteenth Amendment and its state-law analogs are articulated in broad terms. The originalist case for allowing courts to protect property rights and entitlements by scrutinizing economic regulations is not bad -- 18th and 19th century Americans cared very much about this stuff.

But it's important to be clear about what it entails. As Prof. Bernstein observed, sketchy regulatory statutes that the left may favor are also made vulnerable by such a doctrine. Professor Hurt might consider what a court like the Michigan Supreme Court (viewed by some as the current conservative "bad boys" of the American state judiciary) could do with Ferdon as a precedent.

In particular, it seems to me that one cannot consistently applaud the Wisconsin decision while condemning the Sixth Circuit's much-discussed "casket case," Craigmiles v. Giles (http://www.ca6.uscourts.gov/opinions.pdf/02a0417p-06.pdf).

Craigmiles struck down a cartel-like scheme of state occupational requirements that prevented anyone from selling caskets except for licensed funeral directors (who had to receive special training for one to two years). The Sixth Circuit held that the Tennessee licensing scheme violated the rational basis standard of the Fourteenth Amendment -- to the howls of some pro-regulation folk on the left that the decision marked the return of the dreaded Lochner.

Who says Ferdon must say Craigmiles.


2. Posted by Will Baude on July 18, 2005 @ 19:31 | Permalink

I suppose the Court is Lochnerizing, but what of it? I take it that if the people of the sovereign state of Wisconsin decide that it would be on the whole better to have semi-elected officials giving a second-look to economic legislation, they certainly can.

Of course, it's an open question whether the people actually did any such thing, but that just goes to the actual state law issue.

Out of curiosity, what makes you think I condemn the 6th Circuit's decision to apply substantive equal protection analysis in Craigmiles?


3. Posted by Christine on July 18, 2005 @ 19:34 | Permalink

I have not read the casket case, but I applaud the striking down of regulations that create monopolies, especially in industries with as huge an asymmetry in information as the funeral home industry.


4. Posted by Ted on July 19, 2005 @ 6:33 | Permalink

I don't think Professor Bernstein is unaware of the distinction you raise. I'm reminded of Judge Posner's remark that there's really only two levels of scrutiny: deference or no deference. The gymnastics the Wisconsin Supreme Court performed here was clearly of the latter persuasion. The opinion is objectionable because the Wisconsin Supreme Court first created a new test, divorced from its own precedents, that aggrandized its ability to strike down legislative judgments, and then second, dishonestly applied that test to strike down a statute that, by any objective judgment, would pass the "rational-basis-with-teeth" test for the reasons mentioned by Professor Litvak and by Walter Olson in the comments to Christine's post. Bernstein's criticism is legitimate.

I see nothing in the Wisconsin constitution that discards separation of powers and gives its Supreme Court the power to act as a super-legislature, but perhaps I missed something.


5. Posted by Will Baude on July 19, 2005 @ 6:52 | Permalink

Maybe. I'm not familiar with Wisconsin equal-protection-law but the Court does seem to cite some of its own precedents for the proposition that rational basis has more teeth than the Beach Communications standard. Maybe those cites are dishonest or off-point; I haven't looked. In any case, I take it just like the U.S. Supreme Court the Wisconsin Court is authorized to use various modalities to justify deviations from past precedent-- I don't see a lot about structure or text or original history in the opinion, which would be my preference, but maybe the tradition in Wisconsin is different.

Anyway, I do think Bernstein's comment makes quite clear that he thinks that the "rational-basis" standard can be met even if a law "won't have a noticeable effect". That is not rational-basis-with-teeth.

You, Mr. Olson and Professor Litvak are all probably right on the actual empirical question-- the Court seems to have made a factual misjudgment-- but that just goes to the application of the standard, not the standard they chose.

Anyway, the ability to apply equal protection review of at least some minimal level to all laws that treat people unequally doesn't seem to me to be a violation of separation of powers principles, nor does it turn a court into a legislature-- courts are forced to apply murky standards like that all the time, whether from the 4th Amendment's "reasonableness" prong, or from RFRA, or whatever. It's possible that the Court is simply wrong about what their equal protection clause says, but that is a simple error of state law, not a violation of any principle of separation of powers.

And luckily for the people of Wisconsin, unlike with a federal court, they can always throw out their judges if they've gotten it greivously wrong.


6. Posted by David Bernstein on July 19, 2005 @ 12:43 | Permalink

Do you really need empirical evidence to show that limiting malpractice awards is "rationally [with teeth or not] related" to the price of malpractice insurance? Do the Wisconsin malpractice carriers simply make up their premiums without regard to how much money they have to pay out? The notion is ridiculous.

It's one think to "Lochnerize." It's another to pretend to be applying a rule of law when what you are really doing is striking down legislation you don't like. State supreme courts have come up with all sorts of ridiculous reasons for invalidating tort reform statutes, usually with a Democratic S.C. overturning the work of a Republican legislature.


7. Posted by David Bernstein on July 19, 2005 @ 12:48 | Permalink

P.S. The best that could be said for the opinion is that if the law had been more stringent, e.g., no noneconomic damages at all, or, better yet, a $350,000 cap on ALL damages, it would have been more effective and thus constitutional. But does that make any sense (a harsher law passing constitutional muster)?

BTW, does Wisconsin, or any locality in Wisconsin, have a minimum wage law? I don't see how such a law, which is almost certainlyless effective at helping the poor that the cap is at reducing malpractice premiums, could be constitutional, if (and that's a big if) the court was actually applying a real standard, which it almost certainly wasn't.


8. Posted by Will Baude on July 19, 2005 @ 12:48 | Permalink

Do you really need empirical evidence to show that limiting malpractice awards is "rationally [with teeth or not] related" to the price of malpractice insurance?

Apparently, in Wisconsin, you do now.


9. Posted by Will Baude on July 19, 2005 @ 12:56 | Permalink

But does that make any sense (a harsher law passing constitutional muster)?

This happens in different kinds of constitutional adjudication all the time. See, e.g. R.A.V. v. St. Paul (striking down a cross-burning statute that would have been upheld if it had restricted more speech); 44 Liquormart (striking down advertising regulations that could have been upheld if the state banned liquor entirely); Swedenberg v Kelly (striking down discriminatory direct-shipment bans that would have been upheld if state banned alcohol or direct-shipments of alcohol altogether). And so on.

The minimum-wage laws are a fascinating point, though. I tend to agree with your prediction that the Wisconsin Supreme court will be unwilling to apply the same standard there, but it is also possible that it will apply rational-basis-with-teeth, and then find empirical evidence there that it ignored here.


10. Posted by Christine on July 19, 2005 @ 15:01 | Permalink

Both David and Kate have made the argument that if the cap were lower (or zero), then it may well have passed the rational basis test because it would have been more effective at achieving its goal. However, if the cap had been too low, or zero damages for all harms, then I would assume that it may have violated a fundamental right that would have then triggered strict scrutiny. (I'm not sure what right this would be. In Texas, there is an open courts provision in the Constitution. Or perhaps it would be a substantive due process claim.)

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