Academic journal article Missouri Law Review

What Story Got Wrong - Federalism, Localist Opportunism and International Law

Academic journal article Missouri Law Review

What Story Got Wrong - Federalism, Localist Opportunism and International Law

Article excerpt


In Swift v. Tyson, Justice Story argued that the rules of commercial law were too important to be localized. (1) The case involved a negotiable instrument. This specialized contract depends on wide circulation and acceptance for its value. Uniform rules promote these qualities, and an international body of legal rules already existed for this instrument. (2) Story concluded that federal courts, in the exercise of their diversity jurisdiction, should construe their statutory authority so as to disregard local rules that might obstruct the construction of a national common market in harmony with the international financial community. (3) Accordingly, the Court ruled that the federal judiciary could ignore a rule developed by the courts of New York, even though New York law governed the negotiable instrument in question.

Implicit in Story's argument is an assumption that state courts will embrace rules of law that harm general welfare. They might do so either because they are foolish or, more likely, because they seek local benefits at the expense of the national interest. At the time of the founding, the principal argument for creating the federal courts' diversity jurisdiction was a belief, based on considerable evidence, that state courts favored local parties to the detriment of the national interest. Story's interpretive strategy resonated with this constitutional determination: State judges are subject to local pressures inimical to interstate commerce and should be marginalized whenever possible.

Story's insight that the actions of local judges reflect local pressures seems indisputable. What he got wrong, however, is the assumption that local actors inevitably have an incentive to act so as to disadvantage outsiders. To be sure, it is an easy mistake to make. In any representative polity, local officials must answer mostly to local interests, because outsiders lack the franchise. But this argument is too primitive. Other mechanisms beside direct political accountability can induce local actors to internalize the effects of their actions on outsiders. Local officials do not always need federal supervision to promote acts that redound to the nation's benefit.

This point is fundamental to any inquiry into the role federalism plays in international law. If Story is wrong, then so are many others. In particular, Story's claim--that in law, localism is pervasive and inevitable, and thus requires federal supervision--underlies prominent arguments for the federalization of international rules within the domestic legal order. Harold Koh, for example, argues:

   One need not denigrate the ability or impartiality of state court 
   judges to recognize that the federal judges have structural 
   attributes that make them more appropriate adjudicators to rule on 
   international matters that may embroil the nation in foreign policy 
   disputes. Unlike state judges, who are effectively unaccountable to 
   national institutions on matters of pure state law, federal judges 
   are nominated by a national official (the President), are confirmed 
   by a national body (the Senate), are granted salary independence 
   and life tenure, and render federal common law rulings subject to 
   review and revision by federal appellate courts, Congress, and the 
   executive branch. (4) 

Others too have maintained that international law must be federal to avoid local actions that, as Koh put it, "may embroil the nation in foreign policy disputes." (5) These scholars walk with Story in seeing the risk of localism as a compelling argument for a nationalist approach to international law--that is, regarding all international law as federal in nature and presumptively enforceable by federal courts at the behest of interested parties. The core error in Story's argument is the assumption that the accountability of local actors necessarily depends on direct federal supervision. …

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