Federalism and Accountability: State Attorneys General, Regulatory Litigation, and the New Federalism

Abstract

This article examines how one particular state institution, state attorneys general (SAGs), has operated within a unique set of institutional and political constraints to create state-based regulation with nationwide impact in policy areas including consumer protection, antitrust, environmental regulation, and securities regulation. This state-based regulation casts doubt on one of the principle rationales advanced in the Supreme Court's anticommandeering line of cases for limiting federal power; namely, that judicially-enforced limits on federal power enhance electoral accountability, a concept central to our democracy. If in the absence of federal regulation narrowly accountable state-based actors from a small number of states can create nationwide regulation in a non-legislative fashion, accountability cannot continue to be a coherent justification for a revival of judicially-enforced federalism. While this critique of accountability is not an argument for untrammeled federal regulatory authority, it does call into question the empirical accuracy of the Court's assumptions about how state and federal institutions interact with each other to promote democratic and constitutional values.

This article will proceed in five parts. Part I will briefly review the Supreme Court's federalism jurisprudence in the last fifteen years, focusing on the accountability rationale for limiting the power of the federal government. The next three parts will examine the political and institutional environment that permits SAGs to cooperate in regulatory litigation. Part II examines the state-based institutional constraints under which SAGs typically operate. While SAGs have much in common with each other, the variations in these structures between states will in part account for the actual way in which any given SAG regulatory scheme evolves. Part III draws on empirical work by political scientists to explore the ideas developed in Part II in the context of the tobacco litigation of the 1990's. Part III also begins the discussion of the incentives for SAGs to cooperate with each other. Part IV expands on the federal dimension of SAG cooperation. Finally, Part V argues that the use of regulation through litigation by SAGs undermines democratic accountability in at least two ways. First, regulation by a group of states that has nationwide effects denies the citizens of other states the opportunity to influence the regulatory process. This denial of political access undercuts the accountability rationale. Second, regulation accomplished through litigation is more difficult to overturn than regulation accomplished through legislative or administrative channels, making it less responsive to political changes. Thus, SAG regulation can be less politically accountable over time, as well as across states.

Keywords: Federalism, Constitutional Law, Democratic Accountability, Federal Regulation, State Regulation, State Attorney Generals, Regulation, Administrative Law

JEL Classification: K29, K23