Equity's Constitutional Source

89 Pages Posted: 14 Apr 2022

Date Written: February 18, 2022

Abstract

Over the past three decades, the Supreme Court has led a historicist revolution in equity jurisprudence. In a series of decisions known as the “new equity” cases, the Court has sought to limit federal equitable remedies to the forms of relief typically issued by the English Court of Chancery at the Founding. It has read this stringent limitation into various federal statutes that refer to equity—from ERISA to the Judiciary Act. But these cases miss the mark on their own quasi-originalist terms. By focusing on statutes as the basis for the judiciary’s power to grant equitable relief, the Court has overlooked the underlying source of that power—the provision of Article III that extends “the judicial Power” to cases in “Equity.”

This Article uncovers federal equity’s constitutional source. Applying the Supreme Court’s historically-inflected methodology, it argues that “the judicial Power” in “Equity” is best understood as vesting the federal courts with inherent power to grant equitable relief. That power is coextensive with the remedial authority of the Founding-era English Chancellor. Put simply, Article III empowers the courts to apply the system of equitable remedies that was administered by the Court of Chancery in 1789 as the baseline of federal equity power. Thus, absent express Congressional action altering this system (which is rare), it is Article III itself—not federal statutes—that supplies authority for and defines the limits of federal equity.

Returning equity to its constitutional source suggests that the judiciary has greater leeway to develop the federal system of equitable remedies than the Court’s time-bound new equity cases seem to permit. To be sure, the remedial power incorporated by Article III was not illimitably flexible. Founding-era Chancellors were bound by settled rules from which they did not depart absent legislative authorization. But nor was it fixed in time. Chancery could elaborate the system of equitable remedies in a gradual, accretive, precedent-based way. Article III vests an equivalent power in the federal courts. By ignoring this power and instead tying federal equity to particular statutes, the Court has, in the name of fidelity to history, adopted an ahistorical, cramped understanding of the federal equity power.

Suggested Citation

Gallogly, Owen, Equity's Constitutional Source (February 18, 2022). Yale Law Journal, Forthcoming 2023, Available at SSRN: https://ssrn.com/abstract=4058852 or http://dx.doi.org/10.2139/ssrn.4058852

Owen Gallogly (Contact Author)

Harvard Law School ( email )

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Griswold 103
Cambridge, MA 02138
United States
+1-617-496-4173 (Phone)

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