September 11 was supposed to change everything, including federalism. Federalism has in fact become more problematic, and the Supreme Court's federalism suggests an alarming obtuseness to political realities. But the reasons for the incongruence between the Supreme Court's federalism and the nation's vulnerabilities have nothing to do with terrorists; they have to do with trial lawyers.
11. THE NATiON'S WAR, AND THE COURT'S
September 11 seemed to signal federalism's impending demise. Like any war, the thinking went, the war against terror would bring new respect for the national government, and wartime measures would entail new national programs and responsibilities.1 The Supreme Court would have to revisit-and perhaps abandon-federalism.2 Those predictions, though, have proven false. The federal government has grown, but mostly for reasons and in areas (from education3 to agriculture4 to corporate governance) far removed from the war against terror. The Supreme Court, for its part, stayed its federalism course during the 2001-2002 Term6 and, for the 2002-2003 Term, has IMAGE FORMULA7
already granted certiorari in a number of significant cases concerning federalism.
Predictions of federalism's demise rested principally on the belief that federalism-or at any rate, the Supreme Court's federalism-distrusts the national government.8 That distrust is a "luxury of peaceful times,"9 and we no longer have that luxury. But the notion that the national government must be trusted or distrusted tout ensemble is only plausible, if at all, at an absurd level of generality.10At a constitutional level, federalism is about discreet powers. While the Rehnquist Court has of course limited the national government's powers vis-a-vis the states, it has not constrained, and will not constrain, any powers that the national government conceivably might need in the war against terror. What has become problematic is not judicial federalism per se, but its point and purpose.
The Rehnquist Court has waged its federalism campaign on behalf of "states' rights" against national impositions, but the rehabilitation of a plausible, constitutional federalism is a twofront war. Federalism surely must limit the national government's powers over the states and protect intergovernmental immunities (in some domain, to some extent). However, it must also protect states from aggression and exploitation by other states; moreover, it must protect the common economic market from regulatory balkanization.11
The New Deal Court dismantled the horizontal federalism norms that once safeguarded those principles. 12 We are now IMAGE FORMULA9
paying the price of that constitutional mass destruction. Unimpeded by constitutional injunctions, trial lawyers and activist state attorneys general are launching assaults on sister states. As shown below, the product liability crisis-as well as state litigation campaigns against the tobacco, financial, and pharmaceutical industries-demonstrate that state aggression presents an increasingly serious economic and constitutional problem. 13 The leaders of those campaigns proudly sail under the banner of "federalism and states' rights." Their initiatives, however, are not simply an attack on corporate America (which may deserve it); they are also, and inherently, an assault on the integrity, autonomy, and equality of sister states. The trial lawyers' states' rights parochialism is a false federalism and the antithesis of the real thing. It is "the spirit which must either be killed, or else it will kill the Constitution of the United States.",14
The Rehnquist Court has ignored federalism's horizontal dimension. Worse yet, by exalting "states' rights" vis-ii-vis the national government, the Court has provided the false federalists with potent ammunition. The Court will never prevent the nation from preempting Iraq. …