Our Equity: Federalism and Chancery
93 Pages Posted: 9 Dec 2017
Date Written: December 4, 2017
Federal courts sitting in diversity cannot agree on whether state or federal law governs the award of a preliminary injunction. The conditions for the exercise of a federal diversity court's extraordinary remedial power are anybody's guess. The immediate cause of the confusion is Justice Frankfurter's cryptic opinion in Guaranty Trust Co. v. York, which aggressively enforced Erie and, at the same time, preserved the so-called "equitable remedial rights" doctrine. There are, however, much broader and deeper causes that explain why the equitable remedial rights doctrine is almost incomprehensible today.
This Article argues that the early history of equity in the federal courts is a distinctive and untold story about equity's interaction with judicial federalism. Conventionally, this is a tale of two equities: homogeneous equity, where federal courts apply uniform nonstate equity, and heterogeneous equity, where federal courts apply state equity. This Article demonstrates that homogeneous federal equity commenced in 1809, about a decade earlier than previously thought, and that there is a deep and unappreciated tension at the center of heterogeneous federal equity.
The primary contribution of this Article is to recover a third federal equitable tradition, a middle ground between the extremes of homogeneity and heterogeneity. This third conception of federal equity—the facilitative conception—is revealed by a close reading of federal equity cases before 1809, a period to which equity scholars have paid scant attention. The facilitative conception originated in the earliest years of the Republic, was sensitive to the legitimate interests and activities of the states, and contributed to the construction of the early United States. Using a key supplied by the facilitative conception of federal equity, this Article proposes a system of shifting presumptions to systematize and structure the equitable remedial rights doctrine.
Suggested Citation: Suggested Citation