There is a curious dichotomy marking the Court’s jurisprudence during the Taft years, one best understood by seeing the Court in a transitional stage, a condition that reflected the country as well. In the decades following the Civil War, the United States had begun the great transformation from a primarily agrarian society to an urban industrialized nation with large corporations dominating the economy. The changes sped up after World War I and did not sit well with many people. Scholars see the 1920s as a battleground between traditionalists fearful of the new ways and modernists eager to shed the shackles of older ideas and practices. The high points of this battle in secular society—the Scopes evolution trial, the struggle over prohibition, and the Sacco and Vanzetti case—played out in the battle within the Court over those struggling to maintain the older jurisprudence and those wanting the Court to promote a law reflective of newer ideas and conditions. Although Louis Brandeis found much to dislike in the modern temper, he nonetheless believed in and fought for what he had called “a living law.”
THE YEARS OF THE TAFT COURT marked the high point of legal classicism, a jurisprudential theory that arose in the latter part of the nineteenth century and that ultimately fell apart during the constitutional crisis of the 1930s. Legal thinkers developed a jurisprudence reflecting the predilections of the Gilded Age—protection of property rights, fear of government intervention in the market, and disdain for labor and minority rights. It rested on two pillars: freedom of contract, interpreted so as to prevent the government from interfering with the labor market; and substantive due process, derived from the Fourteenth Amendment and used to protect property rights from the state. Classicism also elevated formal logic above any consideration of the real world around it. The innovations introduced by Christopher Langdell at Harvard in the 1870s, which Brandeis prized so greatly, replaced the older learning by rote and emphasized the evolution of legal rules through cases. Langdell wanted to make law into a science, and within a short time casebooks stopped using names and referred to litigants as “A” and “B” or “buyer” and “seller.” The flexibility of the common law in meeting new factual situations vanished, to be replaced by a set of formal rules that paid little attention to the realities of the economy or the society. If the facts in some cases did not quite fit the rule, then judges ignored them.
Brandeis on his way to the Court, mid-1920s
Today most people who think seriously about the law see it as a social development reflecting the changing needs of an evolving society. The post–Civil War generation believed, as had Blackstone a century earlier, that law rested on universal principles that did not alter with the times, but stood as an unyielding arbiter of right and wrong. Because law embodied morality, judges had to administer it impartially to all, rich or poor, great or humble, but to do so, they had to “discover” the right rule and then administer it neutrally. When judges ruled against protective legislation or restrictions on property rights, they claimed that they were not making policy or law but merely applying the proper rule. Abstract reasoning, deliberate ignorance of the facts of industrial society, a limited role for the state, and a belief in immutable law combined with an emphasis on individualism to make up classical legal thought.
Brandeis, despite his fond memories of Harvard Law and his belief in absolute rules of morality, had long since gone a different way. Like Holmes and Roscoe Pound, he advocated a “sociological jurisprudence” that took facts into account and demanded that law respond to changing social and economic conditions. His brief in Muller v. Oregon remains the great practical embodiment of that view, and once on the bench Brandeis tried to educate his brethren about the real world.
A majority of the Court, however, clung to classical legal thought, and its clearest expression came in Justice Sutherland’s opinion in Adkins v. Children’s Hospital (1923). The federal government had enacted a minimum-wage statute covering women workers in the District of Columbia. The hospital brought suit against the Minimum Wage Board created to administer and enforce the law, and because Brandeis’s younger daughter, Elizabeth, worked for the board, he recused himself from the case. Felix Frankfurter, who had taken over as counsel for the National Consumers League, presented a fact-laden “Brandeis brief” to explain why Congress considered the law necessary. Although the Court had never upheld a minimum-wage law, the rationale of Muller—facts to prove the need for the law under the police power and judicial restraint in leaving policy judgments to the legislature—would have encouraged the belief that the justices would sustain the law. Instead, by a 5–3 vote the Court struck it down, and in the minds of many turned the jurisprudential clock back twenty years to Lochner.
Sutherland, after piously noting that the decision to declare an act of Congress unconstitutional is “one of great gravity and delicacy,” and noting that the courts did not review policy decisions of the legislature, then went on to do just that. The statute in question involved one of the most cherished of all rights, freedom to make a contract. “That the right to contract about one’s affairs is a part of the liberty of the individual protected by [the Fifth Amendment] is settled by the decisions of this court, and is no longer open to question.” While conceding that “there is, of course, no such thing as absolute freedom of contract,” he stated that it is nevertheless “the general rule and restraint the exception.” To abridge it, therefore, required the existence of exceptional circumstances.
The work that Frankfurter and the National Consumers League had put into their brief might as well have not existed, for the majority opinion dismissed it as irrelevant. Sutherland could not, however, ignore the many cases where the Court had approved restrictions on contracts, such as those involving labor on public works, methods of payment, and hours of labor. The last category by 1923 encompassed a variety of laws affecting men as well as women, but Sutherland denied that any general rule existed that automatically permitted regulation of hours; rather, in every case there had been special circumstances. As for the most famous of these cases, Muller v. Oregon, the passage of the Nineteenth Amendment giving women the vote had done much to eliminate “the ancient inequality of the sexes,” and he intimated that such laws would no longer be either needed or deemed valid.
Even though special circumstances had been found in prior cases to limit contract, the minimum-wage act struck at the very heart of a labor contract—how much would the worker receive in exchange for his or her labor? None of the prior exceptions for hours laws applied here, and the law impinged on what the Constitution expressly protected, “two parties having lawful capacity to freely contract with one another in respect to the price for which one shall render service to the other in a purely private employment where both are willing, perhaps anxious, to agree.” There could be no special circumstances to justify any interference with this right. The law exacted an arbitrary payment—the minimum wage—without any reference to the type of work or the manner in which it would be performed. It interfered with the right of two free people to reach a lawful agreement, and nothing more important could be done to protect the public welfare than to ensure individual liberties against arbitrary restraints.
Van Devanter, McReynolds, and Butler joined Sutherland’s opinion, and thus formed the conservative bloc that would oppose reform legislation by both the states and the federal government for the next fourteen years, the group that would be known as the “Four Horsemen,” a reference to the four riders of the Apocalypse. McKenna—who in the past had written several opinions upholding the use of the police power—signed on as well, although whether he understood the case by this time is questionable.
The decision proved too much even for Chief Justice Taft. In words that Holmes or Brandeis could have written, he conceded that people could differ over the wisdom or efficacy of minimum-wage legislation but said that “it is not the function of the Court to hold congressional acts invalid simply because they are passed to carry out economic views which the Court believes to be unwise or unsound.” Holmes, aware that Brandeis could not write, made sure to speak for him. Alone of all the opinions, his took notice of the material Frankfurter had entered. He thought that such questions about the right of the state to protect workers in the marketplace had long been settled, and that “Lochner would be allowed a deserved repose.” As for Sutherland’s claim that the Nineteenth Amendment had eliminated the differences between men and women, Holmes declared it would take far more than that “to convince me that there are no differences between men and women, or that legislation cannot take these differences into account.” Holmes also dismissed Sutherland’s elaborate explanation that all the judges did was apply law here, noting that the only real criterion applied was whether the majority considered the law a good thing; it did not, and so the law—one reasonable people could support—had been declared unconstitutional. The merit of the law was not a question that he as a judge should decide, and neither should the majority.
Sutherland’s opinion had all the hallmarks of classical legal thought: a complete disregard for the real world in which a minimum-wage law had been deemed necessary; an assumption that courts were better equipped to judge the wisdom of policy than legislatures; a formalism that elevated rules, especially those relating to freedom to contract, to a sacrosanct position; and an unrelenting opposition to government intervention in the market.
Brandeis, throughout his tenure on the bench, regularly dissented from legal classicism, joined first by Holmes and then also by Stone. During the Taft years no opinion better captures Brandeis’s efforts to educate the Court than his dissent in Jay Burns Baking Co. v. Bryan (1924).
In 1921, Nebraska enacted a law establishing standard weights for loaves of bread sold at retail. The state wanted to make it easier for customers to understand the sizes and prices of bread and to prevent “short weights” (bread sold as a loaf that weighed less because of air), and to protect honest bakers from unfair competition. Violation of the law could lead to fines and/or imprisonment. The Burns Baking Company challenged the law as an unconstitutional infringement on its property as the law limited its right to operate its business free from government interference.
Speaking for the 7–2 majority, Pierce Butler agreed, holding that the police power of the state did not extend to unreasonable regulations, and he condemned the law as setting arbitrary requirements that most bakers could not attain. The only way that bakers could prevent shrinkage by evaporation after baking was to wrap the loaves, and most people preferred to buy unwrapped bread. In essence, the market should not be tampered with by the government. Bakers should be free to put out loaves of any size, and then consumers should be free to purchase them or, if unhappy with the size and quality, take their business elsewhere. Like Sutherland in Adkins, Butler opposed government regulation of the market in any form and substituted the majority’s evidence for that of the legislature.
Brandeis entered an elaborate dissent that ran more than twice as long as the majority opinion and, to make sure that the brethren understood why the legislature had enacted the law, gave them a lesson in bread making. “Unless we know the facts on which the legislature may have acted, we cannot properly decide whether they were (or whether their measures are) unreasonable, arbitrary, or capricious. Knowledge is essential to understanding; and understanding should precede judging. Sometimes, if we would guide by the light of reason, we must let our minds be bold.” What did the Court need to know in order to understand? “Merely to acquaint ourselves with the art of bread making and the usages of the trade; with the devices by which buyers of bread are imposed upon and honest bakers or dealers are subjected by their dishonest fellows to unfair competition; with the problems which have confronted public officials charged with the enforcement of the laws prohibiting short weights; and with their experience in administering those laws.” Because the State of Nebraska had not filed a “Brandeis brief” in support of the law, the justice had to develop one of his own.
Brandeis then proceeded to tell the brethren more than they ever wanted to know about bread making. He documented his argument with materials from state legislative as well as congressional hearings, articles in trade journals, publications from state and federal bureaus of weights and measures, reports from the wartime Food Administration, dozens of examples of states establishing standard sizes and weights for food, and testimony on the effectiveness of similar legislation and how such measures did not harm the business of honest bakers. His law clerk that term, Samuel Maslon, collected everything he could find on bread making and regulation, composed a nineteen-page memorandum, and got copies of dozens of state laws. When Representative Charles Brand heard about the case, he wrote directly to Brandeis to tell him about his experience in the Ohio legislature, where he had sponsored a similar law, and sent him a copy of hearings before the U.S. House Agriculture Committee on a so-called Bread Bill. “Full weight bread,” Brand declared, “is extremely important to the consumers of the country.”
Brandeis’s wealth of facts upset the already-confused McKenna, who noted that “disturbing doubts have come to me,” although in the end he stayed with the majority. “A1. A Sockologgo. I agree of course,” wrote Holmes on the return, and he told Frederick Pollock that Brandeis had written a good dissent, “showing profound study of the art of bread making.”
None of this, of course, should have been necessary. The only question should have been whether the states, under the police power, could establish a system of standard weights, something states had been doing for decades. Absent any constitutional provision specifically enjoining the states from this task, the whole matter involved a policy judgment by the state legislature, a decision that the courts had no business reviewing. Because the majority had insisted on doing so and declaring the law arbitrary, Brandeis went to great lengths to expose the fallacy of that claim. The Court, he said in conclusion, had no authority to act as a super-legislature, a power that went far beyond the limits of acceptable judicial review.
THE BAKERY CASE displayed another aspect of the conservative mind-set that prevailed on the Taft Court. When the justices believed that an activity clearly and historically belonged in the public domain, laws regulating that activity could meet constitutional muster. When, on the other hand, the actions were private in nature, the Due Process Clause of the Fourteenth Amendment protected them from governmental interference. The war had led to governmental regulation of many hitherto private relationships, and conservatives looked to the courts to, as much as possible, reestablish the boundaries that had existed earlier. Just as Warren Harding wanted to lead the country back to “normalcy,” so the conservatives on the Taft Court felt the need to reestablish the normal peacetime constitutional order. Butler’s opinion in Burns Baking cries out in protest at the idea that the government should interfere in the essentially private business of a consumer purchasing a loaf of bread. As law professor Robert Post noted, Butler’s opinion was neither as formalistic nor as arbitrary as Brandeis painted it, but rather it attempted to preserve certain areas of experience once thought to be totally private—such as the choice of what kind of bread to buy—from governmental regulation.
In this dichotomy it would be unfair to say that Brandeis favored extensive government regulation as opposed to letting individuals make certain decisions. Rather, he believed that courts should not sit in judgment of policy decisions. The Court’s second-guessing of legislative facts represented the “exercise of the powers of a super-legislature—not the performance of the constitutional function of judicial review.” Brandeis the democrat and the judge believed that the people, through their elective bodies, should determine policy. If facts showed Congress or a state legislature had reasonable grounds to enact a particular regulation, and if no specific constitutional bar existed, then judicial restraint required that courts allow the law to stand, whether the judges agreed with it or not. The Brandeis dissents in the 1920s, with their lengthy historical and factual expositions, all carry the same message: there is enough justification for the legislature to have enacted this law; there is no constitutional barrier to it; it is not the Court’s business to pass on its wisdom.
The majority, however, with its narrow view of what constituted an activity affected with a public interest, struck down 140 state laws between 1920 and 1930, a large majority on the grounds that not being affected with a public interest, they invaded the sphere of the private and thus violated the Due Process Clause. For example,
• A Pennsylvania health statute prohibited the use of shoddy (reclaimed wool) in bedding materials; the Court ruled the measure arbitrary and unreasonable and so violated due process.
• New York forbade brokers from selling theater tickets at a price more than fifty cents above the box-office price; the Court held theaters to be essentially private undertakings and therefore immune from state regulation of their tickets.
• New Jersey set maximum fees for an employment agency, and a majority ruled that employment agencies were private undertakings and therefore beyond the reach of state interference.
Brandeis, along with Holmes and Stone, nearly always dissented.
IN ONE OF THE MOST FAMOUS of these cases, Pennsylvania Coal Company v. Mahon (1922), Brandeis entered a lone dissent against a majority opinion written by none other than Holmes. The Kohler Act prohibited mining coal within the limits of a city so as to prevent the subsidence—or collapse—of any building. The coal company had sold land in Pittston, Pennsylvania, for development purposes, but had retained mineral rights under that land, a common reservation at the time. It now wanted to exercise that right, but could not do so, because the mining threatened the Mahon home at 7 Prospect Place, and thus violated the Kohler Act.
In his opinion, Holmes noted that property always stood subject to government regulation, but in this case the regulation went too far. “The natural tendency of human nature is to extend the qualification more and more until at last private property disappears. But that cannot be accomplished in this way under the Constitution of the United States.” The company had from the beginning reserved the right to coal in the ground, and that right could be realized only through actually mining it. To prohibit mining destroyed the value of the coal in a constitutionally impermissible way. In essence, the Kohler Act took away private property in the form of minable coal deposits without compensation.
Brandeis in his dissent noted that all property is subject to constraint when the public welfare is involved, and the fact that the company had reserved rights to the coal did not place that particular property beyond the reach of the police power. That the value of that land had been diminished was irrelevant. “Restriction upon use does not become inappropriate as a means, merely because it deprives the owner of the only use to which the property can be profitably put.” The only questions the courts need ask were whether the legislature had a valid reason for enacting the law and whether the law reasonably protected the public interest. If so, the restriction on property had to be maintained. In essence, Brandeis would effectively have nullified the Takings Clause except where the government took full title to the land.
The following summer on Cape Cod, Felix Frankfurter asked Brandeis about the case, since Holmes’s opinion seemed so out of character for him. Brandeis thought about the question, and said that growing old had led Holmes to an increased respect for property and a fear that he might outlive his own resources. Intellectually, Brandeis thought, Holmes knew better, but emotionally he was vulnerable. Taft and the conservatives had caught Holmes at a weak moment, right after his prostate operation, and “played him to go whole hog.”
Although the case drew relatively little notice at the time, it has gained in interest over the years. Holmes’s champions downplayed the opinion, treating it as an aberration from his typical respect for judicial restraint, and even the normally fulsome Frankfurter avoided comment after Holmes sent him a copy. In an unsigned editorial Dean Acheson claimed that Holmes had reached the “wrong” results and praised Brandeis’s dissent as more “statesmanlike.” Moreover, Acheson termed the case “an outstanding illustration of the way in which fundamental constitutional decisions depend at bottom not upon ascertainable rules of law but upon personal judgment,” and cited as the source of this wisdom Holmes himself.
Yet although Brandeis’s view of property and the Takings Clause has gained dominance over the years, the majority holding in Mahon has never been overruled. Modern commentators praise both Holmes and Brandeis for the cogency of their arguments, and the case is often used in Property classes as a means of balancing differing views of property rights and state regulation. In takings cases before the courts, Holmes’s opinion is cited when the judges believe that a state has gone “too far,” while the Brandeis opinion becomes the authority if a majority believes that the state had valid public interest reasons for its action. In many ways the two opinions also mirror the two warring jurisprudential theories—that of Holmes reflecting the older legal classicism and that of Brandeis, the newer.
THE TAFT COURT seems to have had a particular animus against labor and showed little sympathy for union rights to organize or strike. Brandeis, while far more favorable to organized labor than his colleagues, could never be described as an all-out champion of unions or their methods. “Neither the common law, nor the Fourteenth Amendment,” he wrote, “confers the absolute right to strike.”
The Taft Court’s first major labor case illustrated the various themes that played throughout the decade—the desire to retreat from the extensive powers given to government during wartime and the rigid distinction between those areas affected with a public interest and those considered wholly private in nature. In an experiment that summed up a great deal of progressive thought about the role of government, Kansas had enacted the so-called Allen Bill. Governor Henry Allen had returned from Europe after the war to confront a serious emergency caused by a midwinter coal strike. A Bull Moose Republican, he acted as he believed his hero Theodore Roosevelt would have done, breaking the strike by calling up a volunteer army, mostly men recently discharged from war service, to mine the coal. He resolved that the public should never again suffer because of private labor conflict. His proposal went far beyond the “voluntary” agreements between labor and management during the war, and required compulsory arbitration in labor disputes. To provide this arbitration, the state legislature created the Kansas Court of Industrial Relations.
The Kansas court perfectly reflected progressive ideas about factual information and the ability to resolve—to “master”—problems through knowledge. Both organized labor and capital opposed the plan, the former because it took away the strike and the latter because it forced management not only to defend its labor policies and wages in court but to accede to a third-party determination. Several members of the Supreme Court, including Taft and Sutherland, believed strongly that in most labor disputes the public interest received little or no attention. During the war Taft had worked hard to resolve labor differences in light of the greater need of the nation—the public—to pursue the war effort. Allen believed that the impetus that had forced wartime cooperation could be exercised by the state in peacetime. Not all progressives, of course, supported the Kansas experiment; Felix Frankfurter and the editors of the New Republic condemned it, and there is reason to believe that Brandeis did as well, probably due to the compulsory nature of the Allen Bill.
The conservatives on the Court disliked it because it smacked too much of the big government that had existed during the war. In Wolff Packing Co. v. Court of Industrial Relations (1923), Chief Justice Taft spoke for a unanimous Court in declaring the Allen Bill unconstitutional. While a meatpacking house could certainly be subjected to state-imposed health regulations, it did not constitute that sort of business affected with a public interest to permit the state to fix wages for its employees. A butcher was but one of the common callings, an ordinary way for a person to earn a living, and therefore beyond the reach of such extensive regulation. To allow meat processing to be tagged as clothed with a public interest through a legislative declaration would be revolutionary in its implications. As for wartime regulations, that time had come and gone; the type of control that the Court had been willing to permit during the war would no longer be entertained. The power of the industrial court to fix wages in a business not affected with a public interest intruded into the realm of the private and violated the company’s rights of liberty and property without due process of law.
Brandeis and Holmes went along, and there is no indication that they disagreed with the result. In all probability Brandeis shared the views expressed by Felix Frankfurter, a relief that the Court of Industrial Relations no longer existed, because he did not believe in compulsory arbitration to settle labor disputes. But the method of its demise concerned the Harvard professor. “Thus fails another social experiment, not because it has been tried and found wanting, but because it has been tried and found unconstitutional…. It was for the legislature of Kansas, and not for the Supreme Court, to kill it.” Brandeis also believed that experiments in social legislation, unless specifically barred by the Constitution, should be subject to public criticism, and if found wanting, then the legislature, and not the courts, should act.
Organized labor did not care for the Kansas scheme, but it cared greatly about section 6 of the Clayton Antitrust Act, which had explicitly declared that labor did not constitute a commodity or an article of commerce and that consequently the antitrust laws should not be interpreted to forbid unions from seeking their legitimate objectives. Section 20 went even further and prohibited federal courts from issuing injunctions or restraining orders in labor disputes, “unless necessary to prevent irreparable injury to property, or to a property right.” The same section also forbade injunctions against peaceful picketing or primary boycotts. At the time of its passage, labor leaders had hailed the Clayton Act as a Magna Carta and believed that the wording of the law made perfectly clear that federal courts should no longer be involved in labor disputes.
The Supreme Court did not rule on these sections until 1921, in Duplex Printing Press Co. v. Deering. Unions had boycotted a manufacturer’s products in New York to enforce a strike in Michigan. Justice Pitney’s opinion for the majority held that the Clayton Act had never legitimized secondary boycotts, nor had section 6 provided a blanket exemption from the antitrust laws; rather, it protected labor only when engaged in legitimate activities. Since a secondary boycott was unlawful, neither section 6 nor section 20 applied. Moreover, despite the wording of the latter section, Pitney interpreted the Clayton Act not only to allow injunctions against the immediate parties—the employer and the striking workers—but also to restrain another union from supporting the strikers.
Later in the year the Court handed down its decision in Truax v. Corrigan, invalidating a state anti-injunction law. An Arizona restaurant owner sought an order in state court against peaceful pickets, claiming that the law deprived him of property rights without due process of law. Chief Justice Taft agreed and declared the law unconstitutional as an arbitrary and capricious exercise of power. Taft drew property rights and their constitutional protection in the broadest strokes and then concluded that “the Constitution was intended—its very purpose was—to prevent experimentation with the fundamental rights of the individual.” Even Mahlon Pitney, who had written the Duplex opinion, found this too much and argued in dissent that states had considerable latitude to determine “each for itself, their respective conditions of law and order, and what kind of civilization they shall have as a result.” Holmes dissented separately, denouncing the probusiness activism of Taft’s opinion. Business activity in and of itself did not invoke any “sacred” property right, and a state had the power to respond to abuses of property as well as to attacks upon it. Both Pitney and Holmes believed that Arizona had the right to ban labor injunctions, and the Supreme Court had no business second-guessing the legislature.
Brandeis dissented in both cases. In Truax he differed from Holmes, even though they reached the same result. The skeptical Holmes had no faith in reform legislation and thought much of it useless and misguided, but such judgments did not concern the courts. If the elected branches wanted to do something foolish and the Constitution did not forbid it, then let them do it. Brandeis, on the other hand, saw the anti-injunction statute as a positive good and, as he often did in his dissents, explored the economic and social conditions that had led the legislature to adopt the law. His dissent shredded the chief justice’s reasoning, especially his assumption that property rights stood beyond legislative reach. Brandeis delved into labor conditions in the United States and changes that had taken place earlier in England in response to that nation’s Industrial Revolution. He cited not only English cases but those from other countries, such as Australia, as well as from numerous American states, writing in effect a history of peaceful picketing and the changing laws that eventually approved and protected such practices.
In every change of law, there had been voices raised to claim that property rights would be destroyed, that anarchy and lawlessness would prevail. What the Arizona legislature had recognized was that business owners sought injunctions not to protect property, or even to protect the owners in its use, but to give them sovereignty over their workers. Many disinterested men, he declared, “solicitous only for the public welfare, believed that the law of property was not appropriate for dealing with the forces beneath social unrest; that in this vast struggle it was unwise to throw the power of the state on one side or the other; … that pending the ascertainment of new principles to govern industry, it was wiser for the state not to interfere in industrial struggles by the issuance of an injunction.” Reasonable men could and did decide to limit injunctions, and the Court had no business passing on that decision.
In Duplex at least two members of the Court had firsthand knowledge of what Congress had wanted to do; Justices McReynolds and Brandeis had both played important roles in drafting the legislation. McReynolds, however, voted with the majority to negate congressional intent, while Brandeis argued that Congress had meant what it said in sections 6 and 20. In hearings on the Clayton bill Congress had determined that abuses of the injunction had gone too far in limiting labor’s legitimate activities, and had then established a standard it considered fair to both sides. Judges did not have the prerogative to undo congressional policy because they happened to disagree with it or because their own economic views ran counter to those of the legislative branch.
The two decisions created a zone in which neither the states nor the federal government could act to prevent the abuses of labor injunctions. Whenever unions threatened to strike, employers would go to court and get an injunction barring them from doing so. Throughout the 1920s, liberals condemned the excessive use of the injunction, but not until the Depression undermined the dominance of business interests did reformers finally succeed. Congress passed the Norris–La Guardia Anti-injunction Act in March 1932 with language that made it impossible for federal courts to ignore its provisions, and a number of states soon followed with similar measures reining in the excesses of state courts.
THE EROSION OF LABOR RIGHTS during the 1920s might have been even worse save for Brandeis, Holmes, and Stone. In some instances, such as Duplex and Truax, Brandeis’s efforts took the form of powerful dissents. When he could, however, he tried to convince his brethren that labor, too, had rights that needed protection. In a decision that came down shortly before Truax, Taft had allowed that a local union, if it acted peacefully, might engage in reasonable “persuasion” to make a strike effective. In that case, Brandeis did not dissent, despite the generally hostile tone toward labor of the chief justice’s opinion, but rather concurred “in substance in the opinion and the judgment of the court.” In another case, Brandeis went so far as to write a dissent and then withdraw it when Taft agreed to modify his opinion.
The Coronado Coal Company, located in the mountains of western Arkansas, had decided to break its contract with the United Mine Workers. It closed one of its mines and then reopened it with nonunion laborers, a pattern it announced it would follow in all its other mines. The local UMW chapter retaliated by deliberately destroying mining equipment and other company property. In coalfields that had a long history of violence, the workers armed themselves, attacked security guards and nonunion employees, and used dynamite to blow up coal shipments, all clearly designed to prevent Coronado from shipping its coal. The violence escalated until the workers and their supporters had destroyed all of the company’s mines. Coronado then sued both the local union and the national UMW for treble damages, claiming the action had been a conspiracy in restraint of interstate trade as prohibited by the Sherman Act. During the trial the jury seemed unable to agree, so the judge practically ordered the twelve men to find for the company.
The case came to the Supreme Court in October 1920, when Edward White still presided as chief justice, and the union secured the services of the former justice Charles Evans Hughes. “Since I’ve been on the Bench,” Brandeis later told Frankfurter, “only one labor case [was] well argued, Hughes’ argument on first hearing of Coronado case.” Despite Hughes’s efforts, at conference the vote went against the union and upheld the award. Brandeis prepared a dissent, in which he clearly described the lawlessness of the violence in the coalfields and argued that unions, just as corporations, should be suable, a position he had argued against Samuel Gompers nearly two decades earlier. Whatever else might be said about the destruction and the actions of the workers, however, they could not be deemed a conspiracy in restraint of interstate commerce. He then quoted from Hammer v. Dagenhart, where over his and Holmes’s dissent the Court had ruled that Congress could not control child labor because manufacturing was a local activity and not part of interstate commerce. If manufacturing in the earlier case did not constitute interstate commerce, then neither could coal mining be considered as such. Even if the United Mine Workers had been successful and had organized every miner in the country, it still would not violate the Sherman Act, because mining remained a local activity. Interstate trade would be affected only if the union attempted to monopolize the production, distribution, and price of coal sold in interstate commerce, and that had been neither claimed nor shown in this case.
Brandeis finished his revision at the end of March 1921 and waited for Chief Justice White to circulate the majority opinion. But on 19 May, White died, leaving the case to be held over and reargued in March 1922, with William Howard Taft now in the center chair. Week after week passed with no sign of a decision. Then at one Saturday conference Taft reported that he believed that the union, although an unincorporated association, could be sued; that the evidence supported the charge that the union had intended to restrain commerce in violation of the antitrust laws; and that the union was liable for the damages imposed at the jury trial. Taft had not yet written his opinion when Brandeis showed him his proposed dissent, and at first it did not seem to affect the chief justice’s views. But as Taft tried to write he found Brandeis’s arguments unassailable, and in conversations with the chief Brandeis strongly argued his view that any liability existed at common law and not under a federal statute, that there had been no evidence of a conspiracy, and that by the Court’s own definition there had been no interstate commerce. “The wrongs committed were violations of the law of Arkansas,” Brandeis emphasized, “not of any federal law.” In the final opinion for a unanimous Court, Taft held the union not liable because the actions did not constitute a conspiracy in restraint of trade. Brandeis took particular satisfaction in the last paragraph of Taft’s opinion, since, as he told Frankfurter, “I pounded on jurisdictional observance & glad to get Taft to say what he did.” “The circumstances are such as to awaken regret,” Taft wrote, “that, in our view of the Federal jurisdiction, we cannot affirm the judgment. But it is of far higher importance that we should preserve inviolate the fundamental limitations in respect to federal jurisdiction.” Brandeis knew that Taft shared his views on jurisdiction, and appealed to him not on prolabor grounds but rather on the “higher” ideal of sustaining jurisdictional standards. The brethren would accept this argument from Taft, Brandeis told Frankfurter without rancor, but not from him. “If good enough for Taft good enough for us, they say, and a natural sentiment.”
BRANDEIS’S LAST MAJOR DISSENT in a labor case came in 1927, when the conservative majority found a way to get around the jurisdictional and logical barriers that Taft, at Brandeis’s urgings, had created in Coronado. The Bedford Cut Stone Company for many years had a contract with the Journeymen Stone Cutters’ Association, but in the anti-labor agitation following World War I had decided to terminate the agreement and to hire nonunion workers. In conformity with their union’s constitution, journeymen stonecutters employed by other firms refused to “finish” stone from the Bedford company, in effect setting up a secondary boycott. The company sought an injunction that the lower court granted on the Sherman Act’s restriction of secondary boycott, but based on the high court’s prior rulings, both the district court and the court of appeals refused to issue a restraining order. The Supreme Court did.
The definitions of commerce in the two child labor cases and in Coronado had been very narrow, and certainly if manufacturing and mining were, as the Court had insisted, local exercises, then surely the output of a stone quarry would be as well. But Sutherland’s majority opinion in Bedford Cut Stone Co. v. Journeymen Stone Cutters’ Association practically obliterated any distinction between local and national commerce. The real question, Sutherland declared, was whether the union had attempted to prevent the shipment of the stone in interstate commerce. He found that it had, and therefore had violated the Sherman Act. Observers could hardly fail to note that while conservatives on the Court would ignore reasonable restrictions on trade caused by industry under a rule of reason, they would ignore this same rule when asked to apply it to a clearly reasonable act of labor.
The logic of the decision insofar as it blurs distinctions between local and interstate commerce is not by itself wrong; later courts would use it to justify national intervention in the economy. But the ruling in effect told lower federal court judges to issue as many injunctions against unions as they wanted, because the labor provision of the Clayton Act meant nothing. In those rare instances when the high court would overturn an injunction, so much time had passed from the initial issuance that the restraining order had served its purpose and no real relief would be had. Many conservatives believed the Court had gone too far, and one wrote that after reading the high court’s labor opinions, “one is apt to arrive at the conclusion that the activities of labor are lawful so long as they are confined to means which are ineffective for achieving perfectly legitimate purposes.”
Brandeis, joined by Holmes, dissented, pointing up the inconsistency of the majority opinion with prior holdings of the Court. The actions taken by the journeymen had been peaceful and certainly reasonable by the principles of common law. The lower courts had quite properly refused to issue injunctions, because nothing in state or federal law required them to do so. Even under the rules of Duplex, “the propriety of the union’s conduct can hardly be doubted by one who believes in the organization of labor.” Brandeis went on to show that the company was not some small firm threatened by a national union; quite the opposite, Bedford and the companies that had joined it in the suit shipped 70 percent of all cut stone in the country. The labor union had 150 locals, with an average membership of thirty-three workers.
There had been no bloodshed; the journeymen “were innocent alike of trespass and of breach of contract. They did not picket. They refrained from violence, intimidation, fraud and threats. They refrained from obstructing otherwise either the plaintiffs or their customers.” Taking the Court’s position to a logical extreme, Brandeis argued that the majority opinion turned the Sherman and Clayton acts into instruments “for imposing restraints upon labor which reminds of involuntary servitude.” It would be strange, he concluded, if Congress had intended “to deny to members of a small craft of workingmen the right to cooperate in simply refraining from work, when that course was the only means of self-protection against a combination of militant and powerful employers. I cannot believe that Congress did so.”
As soon as the Court adjourned, Brandeis sent a copy of the opinion to Felix Frankfurter, with a note saying, “If anything can awaken Trade Unionists from their lethargy, this should.” While the decision infuriated organized labor, the justice was perhaps somewhat unrealistic in what the unions could or should do. With Calvin Coolidge in the White House, Republicans controlling both houses of Congress and most state legislatures, and the courts following the lead of the Taft majority, labor could actually do very little. Not until the Depression broke the power of both business and the Republican Party, and the New Deal passed prolabor legislation, would unions come into their own.
The dissents did establish Brandeis as a champion of labor, although not in the sense that later liberals viewed unions. Brandeis had always believed in the right of workers to organize; labor needed to cooperate to resist the demands of employers and to secure decent wages and working conditions. But he had also believed that unions should be incorporated and that they should be answerable for their actions. The Coronado decision for the first time held that unions could be sued, a position that appalled many labor leaders but one that Brandeis firmly endorsed. While he recognized that in the battle between labor and management union strength provided balance, he never saw unions as weapons against capitalism. He wanted them to be strong but also responsible, and when they abused their power, they should pay the price, the same as corporations should.
The Taft Court’s labor decisions would be repudiated both by Congress in the 1930s and by subsequent courts. What strikes one looking at the Brandeis record is how often the arguments made in dissent would become the accepted jurisprudence of the Court. In some instances it happened while the justice still sat on the bench; other times his position would not be adopted until decades had passed. He saw his dissents as part of a constitutional discourse, a view that other judges recognized. He did not feel the need to win so much as to start the dialogue, one that would be picked up in the law journals, where arguments could be dissected and refined. “You and Holmes set the pace,” Benjamin Cardozo wrote to him in gratitude. “The rest of us are merely imitators who try to keep in line.” If judges like Cardozo, Julian Mack, and the Hands recognized and joined in this effort, then his faith, as he said so often, was great in time, and by all measures time has justified that faith.
Henry J. Friendly, law clerk
in the 1927 term
A SOLICITOR GENERAL once told the lawyer George Farnum that “when Mr. Justice Brandeis writes an opinion dealing with a question of federal practice, the law is settled for fifty years to come.” While this may be somewhat exaggerated, Brandeis did have a great impact not only on jurisdictional matters but on commercial law, antitrust, administrative law, utility regulation, federalism, and individual liberties, and while not every one of his views has been accepted, many have been.
The most influential antitrust scholar of the twentieth century, Milton Handler, believed that no one on the Court affected this field of law more than Brandeis. Of course Brandeis went on the Court with fairly well-defined views on big business and monopoly; he had written extensively on the subject, testified before congressional hearings, advised Wilson, and helped draft the Clayton Act. His views on bigness as a curse and monopoly as inefficient were well known by the time he went onto the bench. During his tenure the Court heard thirteen merger cases, and he wrote in none. He disqualified himself in five cases, and voted in six cases for dissolution and in two against. The nearest he came to expressing these views can be found in his dissent in Liggett Co. v. Lee, in which he supported the constitutionality of a Florida tax on chain drugstores. Brandeis’s contribution to antitrust law, however, came not in his opposition to bigness but in his sophisticated development of the “rule of reason,” first enunciated by Chief Justice Edward White in the 1911 Standard Oil case. A combination by itself, or even actions that restrained trade, would not be considered illegal if reasonable. The courts then had to deal with what constituted a “reasonable” combination or action in restraint of trade.
The first cases in which Brandeis wrote on antitrust amazed some of his reform colleagues. He spoke for a unanimous Court in holding that the Chicago Board of Trade’s rules on futures trading, which essentially locked out a group of warehousemen, did not violate the antitrust law. Then Brandeis dissented when his colleagues held that an association of hardwood manufacturers violated the antitrust law, arguing that the group had legitimate reasons for sharing pricing and other information and that their cooperation fostered rather than limited competition. As one might expect, Brandeis wanted the courts to examine the facts. Courts must “consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint; and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose of or end sought to be attained, are all relevant facts.”
Thirteen years later, in the so-called Cracking Oil case Brandeis presented a highly sophisticated analysis of competition that still governs antitrust jurisprudence. He developed what Professor Handler called the “concentric circle rule of reason.” The fact that a combination eliminated competition among a small group of companies (the inner circle) did not matter if the quality of competition in the market as a whole (the outer circle) remained unimpaired. In the case Brandeis spoke for the Court in reversing a government conviction of four major gasoline producers using a new “cracking,” or refining, technology. The companies had established a horizontal price agreement on royalties for pooled patent sublicenses, which the government claimed violated the antitrust law. Brandeis looked at various dimensions of competition in the industry and determined that while the merger effectively ended competition among the four producers, it did not have a negative effect on competition in the larger gasoline market. The companies had done what many companies in changing markets did, join together to take advantage of and to share new technology. The companies did not prevent other firms from utilizing the new cracking methods, but established a rational and fair system by which their patents could be licensed.
Although Brandeis emphasized the finding of facts relating to various layers of the market and the actions of the companies, the facts by themselves did not tell the Court enough. It then had to evaluate these facts in light of the total market; per se rules would not do. In the early twenty-first century this type of multidimensional analysis is the beginning of all antitrust law.
AT THE TIME, a large number of utility rate cases came to the Supreme Court, the result of earlier decisions by a Court hostile to the new administrative agencies at both the state and the federal levels that had been given authority to set rates for public utilities and common carriers. The courts distrusted these creations, since they had not been envisioned by the Framers and because they had a mix of legislative, executive, and judicial powers. Smyth v. Ames (1898) may have been one of the worst mistakes the high court ever made, because by appropriating to the judiciary the power to review rates after they had been set by an administrative agency, it plunged the courts into the business of second-guessing both agencies and legislatures on the complex issue of establishing fair rates, a job for which very few of the judges were qualified.
Taft hated these cases. “I dislike them extremely and don’t feel competent in them,” he told his son. “We have some experts on our Court. One is Pierce Butler, the other is Brandeis.” Taft relied on the two men in this area, and their competence relieved him of much anxiety. In October 1922, Brandeis worked on several complicated cases from North Carolina, and Taft wrote to him, “I have tried to be gentle with you on account of them.” When he saw the work, he wrote on the return, “Admirable, compact, forcible, and clear. It relieves me greatly to get rid of such a case so satisfactorily.”
Brandeis and Butler, of course, came at the problem of evaluating a just return from completely different perspectives. The key question involved the actual value of the railroads’ properties, because rates were supposed to bring a fair return on that investment. Butler, a former railroad lawyer, agreed with the lines that the property ought to be assessed at the cost of replacement, which, in times of rising prices, meant higher rates. Brandeis did not oppose a fair return on investment, as he had shown in the sliding-scale fight; but he believed that a better way existed to determine the real value of the property. He recognized that most of the brethren, with the exception of Butler, had no grasp of the issues involved. The chief justice, despite his vast experience, “hasn’t the slightest grasp of fiscal or utility aspects of these cases.” So Brandeis tried, albeit unsuccessfully, to educate them.
As he had noted in his dissent in the Associated Press case, courts had no expertise to valuate property. Therefore it made little sense to lay upon the courts the burden of reviewing rates determined by those who had the knowledge and the facts needed. The replacement theory of Smyth v. Ames also struck him as wrong and impractical; railroads and other utilities should get a fair return based on the actual value of their property. The rate of return on that investment, he believed, should be the same as that earned by a prudent investor. No magic formula existed to determine either valuation or rates, and the courts would be better off leaving that task where it belonged, in the hands of the appropriate administrative agencies, which could adjust formulas to take into account inflation and other factors. (Most economists believe the prudent investment theory a better basis for rate determination than reproduction costs.)
Brandeis’s opportunity came when the Southwestern Bell Telephone Company alleged that in setting telephone rates, the Public Service Commission of Missouri had not allowed for a sufficient return on its investment because it had undervalued its property; the commission had used original costs rather than replacement value in its calculations. At the conference a majority of the justices voted to reverse the commission and require it to allow the company a higher rate. There had, however, been a lot of discussion among the brethren, since they had recently heard several other rate cases, and in one of them Brandeis, speaking for all save McKenna, managed to work in the idea that reproduction costs, while important, were but one of numerous factors involved in rate setting. Believing that the justices might be willing to jettison Smyth v. Ames, Brandeis decided to see if Taft would be amenable to changing his mind. If he did, that would bring over a majority of the other justices. He went to see Taft and explained to him what he saw as the problems in the current system. Although Taft did not see eye to eye with Brandeis, and certainly did not understand the issue well, he agreed that Brandeis should present the matter to the conference and put aside a whole day to discuss the issue.
Brandeis set to work and over the next few months prepared a sixty-two-page memorandum dissecting all of the flaws in the current system and suggesting why the prudent investment basis would be better. McReynolds objected, since he had already written what he assumed would be the majority opinion in the case, but Taft and Van Devanter insisted. “It was a thorough discussion,” Brandeis reported. “Some didn’t grasp the facts & hadn’t thoroughly mastered the memorandum, but it was a new method in consideration of issues.” In the end, the justices voted 7–2 to stay with the old formula, and McReynolds delivered the opinion directing the commission to reopen the rate hearings. Brandeis utilized his memorandum as he thought he would, in the form of a dissent.
The case demonstrated how a determined public utility could eviscerate state rate-making agencies through constant appeals to sympathetic courts, claiming that the state had failed to establish a fair base for rates. Brandeis cared less about which method to use than that the courts should get out of the business of rate review completely. If the state agency had followed all of the rules of fair procedure, utilities would have a proper opportunity to present all of the necessary data regarding property, investment, and expenses, and then the agency’s determination would be final unless negligence could be proved. But conservatives, who disliked the rate-making agencies to begin with, had no desire to see the courts leave the field. Not until business dominance collapsed in the Depression did Brandeis’s arguments prevail, and the judiciary began to withdraw from reviewing rates, a process finally completed in 1944. Although some state agencies adopted the prudential investment theory, over the years the process of property valuation and rate making have grown exceedingly complex, requiring that public service commissions take into account more and more data that need to be assessed by experts in various ways. Brandeis would have been pleased.
IN ONE ADDITIONAL AREA Brandeis helped to transform American law. According to one scholar, “The contributions of one man, Justice Louis D. Brandeis, reoriented the focus of administrative law toward the appropriate allocation of functions and power between courts and agencies.” Courts had been leery of federal administrative agencies ever since the creation of the Interstate Commerce Commission in 1887. The ICC seemed to violate one of the cardinal tenets of the Constitution, the separation of powers, because it exercised executive, legislative, and judicial functions. Initially, the Supreme Court hamstrung the ICC through a series of decisions that either took a very narrow view of its delegated authority or permitted extensive judicial review of its findings. Then, in Smyth v. Ames (1898), it reserved to the courts the power to review rates set by public service commissions. Not until the progressive era, when Congress significantly strengthened the ICC and lawyers became more comfortable with administrative regulation, did the Supreme Court begin to allow the agency leeway to operate. In one of his first administrative law decisions, Brandeis upheld the doctrine of primary jurisdiction, in which federal rate making took precedence over state judicial scrutiny.
In 1923, Brandeis entered a dissent in Pennsylvania v. West Virginia, a suit by Pennsylvania and Ohio to enjoin West Virginia from enforcing a state law designed to divert or retain, for the benefit of its own citizens, natural gas in an interstate pipeline passing through the state that would otherwise have gone to neighboring states. West Virginia created a public service commission that had the power to limit the amount of gas going through the state and to divert it to West Virginia consumers. A majority of the Court held the statute unconstitutional as interference with interstate commerce.
In his dissent Brandeis maintained that the determination of an equitable allotment of natural gas required an investigation into production, demand, reserves, and the business practices of the various companies, all requiring expert knowledge and experience and beyond the abilities of the courts. The situation would change regularly, thus requiring constant adjustment and fact-finding, duties properly exercised by an administrative agency. To determine what the responsibilities of an agency should be and what the courts should do, Brandeis developed four criteria: Did the problem’s complexity require expert knowledge? Was the question one that could be conclusively resolved in one sitting (a court case) or that required continued involvement over time by the regulatory body? Were the problems presented, by their very nature, “administrative” in scope? Were the particular issues ones of “fact” or of “law”? Responses to the first two provided the criteria to answer the third; only in the fourth area, where questions of law arose, should the courts get involved. These standards became the primary criteria for allocating power between courts and administrative agencies in modern America, and came into full flower with the great explosion of administrative agencies during the New Deal, World War II, and postwar America.
A majority of the Taft Court, however, had no desire to turn over what they considered a judicial function to administrative agencies, even though it was becoming increasingly clear that judges lacked the expertise to establish rates, much less review complex administrative findings. In addition, conservative justices disliked the idea of a federal agency’s regulating business practices. Although the Taft Court tended to support national power vis-à-vis the states, it had no love for the Federal Trade Commission, and the FTC had no worse enemy than Justice McReynolds, who had helped draft the measure creating it.
In FTC v. Gratz (1920) McReynolds spoke for the majority in denying the commission the power to determine “unfair methods of competition,” because the statute had not defined what this phrase meant. Three years later McReynolds again delivered an opinion overturning a cease-and-desist order after extensive investigation and held that the courts had the power to look at the evidence de novo. If a judge agreed with the agency’s findings, then they would be considered conclusive; if not, the court could make its own determination. Brandeis dissented in Gratz, and in several more cases during the decade, trying to get the Court to recognize administrative agencies not only as legitimate but also as entrusted with particular duties requiring expert knowledge that the courts lacked.
While willing to give administrative agencies broad discretion in matters of economic regulation, Brandeis held them to a higher standard when individual rights came into play. Although the Milwaukee Leader is normally discussed as a speech case, it was also a case testing the power of the postmaster general to award and retract valuable mailing privileges, a decision often considered administrative in nature. When agency decisions affected individual liberties, Brandeis could be just as insistent as his colleagues on judicial review. In Ng Fung Ho v. White (1922), two Chinese immigrants had been summarily deported by an immigration official, and they challenged his action, claiming they were American citizens. Writing for a unanimous Court, Brandeis held that their claim of citizenship was entitled to judicial review, since the immigration agency’s power to deport a person depended solely on the fact of that person’s being an alien. To refuse to review a claim of citizenship would be a denial of due process.
Brandeis’s concern with delineating the powers of administrative agencies led Felix Frankfurter to offer one of the first courses in administrative law at Harvard, and when Frankfurter decided to edit a book of cases for use as a text, Brandeis put additional moneys at his disposal to hire a student and also to get out a book on the related subject of federal jurisdiction.
During the New Deal, Brandeis’s dissents began to bear fruit, and following the 1937 Court fight open resistance to the idea of administrative agencies collapsed. In 1939, just a few months after he stepped down, Brandeis learned that the Court, after several hearings, had finally decided United States v. Morgan, a case that had been going back and forth between the high court and a Missouri district court for three years, involving the administrative power of the secretary of agriculture to dispose of moneys held in escrow following a controversy over stockyard fees. The Court said that while there had been procedural irregularities, the secretary could correct his own missteps without further judicial scrutiny. In his opinion, Justice Stone essentially followed the criteria that Brandeis had set up fifteen years earlier.
• • •
DURING THE TAFT YEARS Brandeis, Holmes, and Stone, but especially Brandeis, fought the rigidity of the conservative majority’s attachment to legal classicism, with its emphasis on unyielding rules that ignored social and economic facts. Brandeis from the time he had been in law school believed that law divorced from factual reality could only be sterile, and the more separated it became, the greater a threat to society. At times his dissents seemed too concerned with facts, as in the bread case, but he had a reason, to drive home the sins of the majority in refusing to recognize that law had to fit the conditions of society.
The factual underpinnings of his jurisprudence fit in well with his idea of judicial restraint. Policy making should be a function of the legislative branch. If Congress or a state assembly identified a problem, analyzed the facts, and then came up with a plan, then judges should not interpose their views on the correctness of those choices. The relevance of facts shaped his belief in a living law, and as facts changed, judges had to take into account what impact this had on the law, even on constitutional law. Although he was seemingly a voice in the wilderness in the 1920s, in the end his faith in time, as he put it, led to the acceptance of his views. The decisions of the majority, with their rigidity and formalism, have been overturned. Brandeis’s dissents pointed the way to the future.