Politicians as Fiduciaries
69 Pages Posted: 13 Mar 2012 Last revised: 24 Jan 2013
Date Written: January 23, 2013
When incumbent legislators draw the districts from which they are elected, the conflict of interest is glaring: they can and do gerrymander district lines to entrench themselves. Despite recognizing that such incumbent self-dealing works a democratic harm, the Supreme Court has not figured out what to do with political gerrymandering claims, which inherently require first-order decisions about the allocation of raw political power — decision that courts are institutionally ill-suited to make. But the same type of agency problem arises all the time in corporate law. And though we do not think courts are any better at making business decisions than political ones or trust elections alone to align the interests of corporate directors with their shareholders, courts nevertheless play an important role in checking self-dealing by corporate agents. They do so through an enforceable fiduciary duty of loyalty. Courts apply a strict standard of review when corporate agents act under a conflict of interest, typically invalidating the transactions unless the taint of self-dealing is cleansed by approval through a neutral process (such as ratification by disinterested directors or shareholders), in which case courts apply the much more deferential “business judgment rule.”
Drawing from constitutional history and political theory, this Article argues that political representatives should be treated as fiduciaries, subject to a duty of loyalty, which they breach when they manipulate election laws to their own advantage. Courts can thus check incumbent self-dealing in gerrymandering by taking a cue from corporate-law strategies for getting around their institutional incompetence. As in corporate law, courts should strictly scrutinize incumbent decisions that are tainted by conflicts of interest (such as when a legislature draws its own districts). But when the taint is cleansed by a neutral process (such as an independent districting commission), courts should apply a much more deferential standard of review. The threat of searching review should serve as a powerful incentive for legislators to adopt neutral processes for redistricting, allowing a reviewing court to focus not on the substantive political outcomes, but on ensuring that the processes are free from incumbent influence — a role for which they are institutionally well-suited.
Keywords: redistricting, election law, gerrymandering, fiduciary duties, law of democracy, self-dealing
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