Rehnquist's Law

As the new Rehnquist Court debuts this month in Washington, it is probably only natural for American business to heave a sigh of relief. After all, a doctrinaire Republican conservative with heavy-gauge intellectual firepower will now sit at the top of the nation's judicial system. His is only one vote on a court of nine. But over time, with the help of strong new allies like Justice Antonin Scalia, Chief Justice Rehnquist might well be expected to put a pro-business spin on American commercial law for the balance of the century.

The fault lines of the law, however, do not always follow the fault lines of politics. And William Hubbs Rehnquist, it turns out, is not so much a country club conservative as he is a legal conservative. He is less interested in curbing the initiatives of legislatures and regulators than he is in restraining the initiatives of judges. And he is less interested in preserving the status quo than in restoring the status quo antebellum. Indeed, one critic describes Rehnquist and his new colleague, Scalia, as "two of the finest nineteenth-century minds in America."

"His conservatism does not necessarily correspond with the way a businessman might define conservatism," explains Laurence Tribe, the leading Supreme Court watcher at Harvard Law School.

Thus Rehnquist's elevation is something of a mixed blessing for business.The good news is that the new chief justice can be expected to be staunch in his support of business in legal battles against employees and consumers. The bad news is that business may receive little help in its campaign against government regulation and restrictions. Remember that Rehnquist came to Washington to be the government's lawyer, as an assistant attorney general in the first Nixon Administration. Now, even after 15 years on the bench, he is still every bit the "government man" he was back in 1969.

It is 15 years of Rehnquist opinions and dissents that gives us this window onto his future as chief justice:

* He nearly always votes against union power, whether pitted against management or individual employees.

* He embraces property rights protected by patent, copyright, and trade secrets. Had his opinion prevailed in the famous Betamax case in 1984, for instance, it would be illegal to videotape a television show on your home recorder.

* He consistently votes to reduce the reach of antitrust and securities laws.

* He is reluctant to invalidate government regulations affecting business, but takes a dim view of citizens' suits seeking to force regulators to be more aggressive.

* He defers to state government over federal, executive branch over legislative, and both branches over the judiciary.

As clear and simple as those principles may appear, the cases that reach the Supreme Court are rarely so neat or clear-cut that they can be decided merely by applying one of them. And it is in cases where those principles conflict that Rehnquist has had to set his conservative priorities -- and then not always in favor of business interests.

Above all else, Rehnquist is an old-style federalist who would bow to state sovereignty, or states' rights, almost as it was understood before the Civil War. "Federalism is the central organizing theme of his jurisprudence," says H. Jefferson Powell, a professor at the University of Iowa College of Law who scrutinized Rehnquist's writing in a 1982 article for The Yale Law Journal. "He wants to protect the local or state decision maker against federal intrusion, even if the intrusion goes the way he wants it to."

The University of Chicago's Richard Epstein argues that the federalist sword cuts two ways as far as business is concerned. If the federalist concept is extended to new areas of the law, a company doing business nationwide might have to deal with 50 different sets of state regulations instead of a single federal code. On the other hand, if federal law or regulation is oppressive, companies might prefer the balkanization of government oversight.

Rehnquist doesn't worry much about consistency of regulatory policy so much as consistency of constitutional interpretation. In a 1981 case, for example, he sided with the state of Iowa, which, in the interest of safety, had attempted to ban 65-foot double trucks from its state roads and interstate highways. Lawyers for Consolidated Freightways Corp., which had a fleet of the larger trucks, convinced a majority of the Court that Iowa's restrictions violated the commerce clause of the U.S. Constitution, which reserves to Congress the right to regulate interstate commerce. But Rehnquist, ignoring a long line of Supreme Court cases, dissented.

For Rehnquist, states' rights are to be protected even at the expense of another cherished conservative principle, property rights. Several years ago, the state of Hawaii used its powers of eminent domain to seize land owned by some of the state's largest landowners, divide it, and redistribute it to less affluent citizens. The islands' land barons, naturally, considered this an unconstitutional taking of private property, even though they were "justly compensated." But Rehnquist, as part of the Court majority, turned a deaf ear to their pleas.

"That was a major loss for protection of private property," says Washington lawyer Peter Ferrara. "This case means you are subject to the power of eminent domain almost at the whim of the state."

Along the same lines was the case of PruneYard Shopping Center v. Robins, which dealt with the rights of a group of students to collect petition signatures in a privately owned shopping mall. The California courts had ruled that the free speech provisions of California's Constitution protected the students' rights. And in an opinion written by Rehnquist, the U.S. Supreme Court affirmed, declaring that there was nothing in prior Court decisions to limit "the authority of the state to exercise its . . . sovereign right to adopt, in its own constitution individual liberties more expansive than those conferred by the federal Constitution."