This article analyzes the Supreme Court's view of federalism during the decade of the 1920s. It offers a detailed discussion of four jurisprudential areas: congressional power, dormant Commerce Clause doctrine, intergovernmental tax immunity, and judicial centralization through the enforcement of federal common law and constitutional rights. The resurgent federalism of the contemporary Court is typically characterized as "reviving" pre-New Deal principles. The article concludes, however, that any such revival is highly implausible. It offers four reasons for this conclusion.
First, the pre-New Deal Court conceived federalism in terms of the ideal of dual sovereignty, which imagined that the federal government and the states regulated distinct and exclusive spheres of social and economic life. But because the national market had by the 20th Century become thoroughly integrated, this ideal produced doctrinal incoherence in the areas of both intergovernmental tax immunity and the dormant Commerce Clause. The application of this ideal also significantly undercut state power, because the dual sovereignty invited the pre-New Deal Court to prohibit states from regulating the exclusively federal area of interstate commerce. For these reasons the modern Court has abandoned the ideal of dual sovereignty in its doctrine of intergovernmental tax immunity and the dormant Commerce Clause. Contemporary opinions in these areas imagine federal and state interests as intermingled and overlapping, rather than as separated into discrete spheres. The modern view actually offers more protection for state regulations than did the ideal of dual sovereignty espoused by the pre-New Deal Court.
Second, the pre-New Deal Court understood itself as a common law court authorized to articulate the deepest experiences and values of the American people. This authority transcended the distinction between federal and state power, which is why the pre-New Deal Court never conceived itself as an agent of a federal government that was potentially in tension with state sovereignty. The Court never understood the centralization resulting from judicial decisionmaking as a federalism issue. The Court freely regulated intimate areas of state life through the promulgation of general common law. The pre-New Deal Court's common law authority was even regarded as more fundamental than Congress's claim to articulate the national will. The triumph of Holmesian positivism in Erie Railroad Co. v. Tompkins fundamentally transformed the Court into an instrument of specifically federal law. The federalism implications of judicial decisionmaking in the areas of common law and constitutional rights were thus made manifest for the first time. The Court's authority to impose structural limitations on congressional power was also profoundly altered.
Third, the pre-New Deal Court, like the country generally, regarded the federal government as a potentially distant, bureaucratic, and oppressive institution. States were by contrast conceptualized as sites of democratic self-government. Federalism was typically conceived as the problem of "reconciling centralization with self-government". Thus federal and state regulations, even of the same subject matter, were not regarded as equivalent. State regulation was self-chosen; federal regulation was potentially coercive. This view of the federal government was pushed to the margins of American political culture when the crisis of the New Deal legitimated the national government's authority to speak as the genuine representative of an authentic national democratic will. Combined with the demise of the Court's common law authority, this transformation of Congress's legitimacy undercut the Court's ability to second-guess Congress's vision of national priorities when reviewing the limits of congressional power.
Fourth, the pre-New Deal Court conceived structure and rights as complementary and mutually dependent concepts. The Court defined individual rights in ways designed to serve structural principles, like the integration of the national market. And it defined structural principles, like the limits of congressional power, in terms of the individual rights affected by federal legislation. Because the Lochnerism of the pre-New Deal Court inclined it to protect freedom of contract, it sought to impose limits on congressional power that were highly sensitive to the nature of the economic transactions regulated by federal legislation. Modern constitutional thinking, by contrast, sharply distinguishes structure from rights, and it does not seek to protect the same kind of economic rights as did pre-New Deal Lochnerism.
The "revival" of pre-New Deal federalism, in short, would require the contemporary Court to restore an ideal of dual sovereignty that in important doctrinal areas is not only incoherent, but deeply antagonistic to state power; to reassert its authority as a common law court; to resurrect an image of Congress as a national legislature unsupported by a genuine national democratic will; and to dismantle the contemporary distinction between structure and rights so as to limit congressional power in ways designed to protect rights of substantive due process.