standing in law equity - green bag

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Standing in Law � EquityA Defense of Citizen and Taxpayer Suits

Richard A. Epstein

hither standing? Few provisionsin the United States Constitutionhave generated more heat and less

light than Article III, section 2, whichspeciÕes the scope of the federal judicialpower: “The judicial Power shall extend to allCases, in law and Equity, arising under thisConstitution, the United States, and TreatiesMade, or which shall be made under theirAuthority.” The canonical view holds thatthese words restrict the power of federalcourts to decide disputes (to use a neutralword) between parties for two reasons. First,the words “cases” and “controversies” are saidto embed the notion of “standing” into thescope of the federal judicial power, eventhough that term appears nowhere in the textof Article III itself. Second, the proper inter-pretation of the standing requirement in turnrespects the separation of powers that demar-cates the legislative power in Article I, theexecutive power in Article II, and the judicial

power in Article III.From these institutional concerns Justice

O’Connor in Allen v. Wright drew these stronginferences, with both prudential and constitu-tional signiÕcance:

Standing doctrine embraces several judiciallyself-imposed limits on the exercise of federaljurisdiction, such as the general prohibitionon a litigant’s raising another person’s legalrights, the rule barring adjudication ofgeneralized grievances more appropriatelyaddressed in the representative branches, andthe requirement that a plaintiÖ’s complaintfall within the zone of interests protected bythe law invoked. The requirement ofstanding, however, has a core componentderived directly from the Constitution. AplaintiÖ must allege a personal injury fairlytraceable to the defendant’s allegedly unlawfulconduct and likely to be redressed by therequested relief.1

That redressable injury, moreover, must be“distinct and palpable,” as opposed to

1 Allen v. Wright, 468 U.S. 737, 751 (1984) (citations omitted).

Richard Epstein is James Parker Hall Distinguished Service Professor of Law at the University of Chicago andPeter and Kirsten Bedford Senior Fellow at the Hoover Institution.

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“abstract” or “conjectural” or “hypothetical.”2

In essence there is a requirement that thedefendant’s conduct be the cause of a dis-tinct injury to the plaintiÖ not shared byother individuals for which the legal systemcan provide an appropriate remedy.

The thesis of this article is that the conven-tional account of standing is wholly errone-ous.3 The words “cases” and “controversies” donot impose any limitation on the judicialpower of the federal courts above and beyondthose associated with the prohibition againstadvisory opinions. From the earliest times, theSupreme Court, even on request, refused tooÖer its advice to the President or one of hisagents on the constitutionality of some pro-posed legislative or executive decision. Thispractice rests on the simple observation that itwould be unwise for the judges to compromisetheir judicial independence by giving advice onmatters that might come before them in theirjudicial capacity.4

This prohibition against advisory opinionsÔows easily from the basic text. The minimum– indeed, only – requirement for a case or con-troversy is two parties with adverse interests.The advisory opinion typically has but a singleparty who works outside the normal judicialpath. The same cannot be said, however, ofthe standing gloss on Article III, which seeksto partition lawsuits between adverse partiesinto those that count as cases or controversiesand those that do not. As a textual matter, thisdodge seems precluded by the phrase “allcases, in law and equity” arising under theConstitution, the Laws, and Treaties of theUnited States. The term “all” has to be read asa term of inclusion, not one of limitation.

Most critically, the reference to cases cov-ers both cases in law and cases in equity. As

this article explains, however, the SupremeCourt has in its standing requirementsarticulated only a test for cases in law, butnot for those in equity. Consistent with thishypothesis, the historical requirements forequity cases often diverged from those forcases in law. The requirement of discreteharm applies only to cases in law. Obviouslymany equity cases also involve discreteharms, but for many cases in equity thegoverning principle was exactly the opposite.The plaintiÖ could bring an action on behalfof a class of individuals only if they weresimilarly situated with him. The success ofthese amalgamations depended on the plain-tiÖ’s interest being indistinguishable from thosewhom he sought to represent. Particularizedinjury at equity was a disqualiÕcation, not arequirement for these class-like suits.

Once the relationship between legal andequitable cases is understood, it follows thatthe concept of standing, while vital to civil lit-igation, has no connection to any distinctiveconstitutional limitation of the use of federaljudicial power. Rather the principle arisessolely in response to one simple and sensiblerequirement of judicial administration: Donot allow actions to be brought by remoteand distant plaintiÖs, of whom there may bemany, when a single plaintiÖ with a distinc-tive and substantial interest is able to sue inhis own right. Rightly understood, standinghas nothing to do with causation or redress-ability under Article III. Parties deniedstanding have suÖered harm caused by thedefendant’s action. They are precluded fromsuing solely because other individuals withlarger injuries can imperfectly vindicate theirinterests. On this view, taxpayer and citizensuits, now routinely barred in federal court,

2 Id.3 For a longer and more detailed defense of this position, see Richard A. Epstein, Standing and

Spending – The Role of Legal and Equitable Principles, 4 Chapman L. Rev. 1 (2001).4 See, for the materials, P. Bator, P. Mishkin, D. Shapiro � H. Wechsler, Hart � Wechsler’s The

Federal Courts and the Federal System 65-66 (2d ed. 1973).

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Standing in Law � Equity

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should be routinely allowed as cases in equityunder Article III.

In order to establish these claims, theremainder of this article is divided into fourparts. Part I explores the role of standing incases in law. Part II discusses the very diÖerentlogic of standing in equity. Part III thenexplores the misguided rationales oÖered forthe standing requirements in Justice Suther-land’s watershed opinion in Massachusetts v.Mellon and Frothingham v. Mellon.5 Part IV thenexplains why many cases that have dismissedactions for want of standing were correct for adiÖerent reason: courts in equity, in the exer-cise of their sound discretion, should havedenied relief unless other necessary or indis-pensable parties were joined to the case asdefendants.

I. Standing in Law

Start with the simplest of cases. A kills B’sdog. The normal response to this situation isthat B, not C some stranger, has the sole rightto sue for the loss under the substantive law.That right to sue makes it easy to say that Bhas standing to sue as well. But it would stillbe a mistake to conÔate the idea of standingwith the view that B has a valid cause ofaction. Suppose the jurisdiction requires B toprove negligence in order to recover for theloss of his dog. B still has standing to bring astrict liability cause of action, even though hewill be met with a successful demurrer to hisclaim. Likewise, B has standing to sue X, evenif she had nothing to do with the death of B’sdog. Standing never turns on the validity ofthe cause of action, but only on the substantialstake that the plaintiÖ has in bringing thatcause of action, regardless of its merits. B hasstanding to bring a Ôawed cause of action forthe loss of his dog.

Nor, as a moment’s reÔection reveals, is thelaw of standing crystal clear about C’s posi-tion. Here it is tempting to say that since Cdoes not own the dog, she is in no position tosue for its loss. The idea of standing becomesclosely entwined with the protection of prop-erty interests. But it hardly follows that Chasnot suÖered any harm because she lacks anownership interest. C could be B’s next-doorneighbor who plays with the dog on a regularbasis, and is shattered by its death. No theoryof proximate causation makes that damagetoo remote.6 The sequence of harm is “direct”because no act of God or deliberate action ofsome third party severs the causal connec-tion. The harm is, if this matters, so routinethat it is impossible to deny that such collat-eral damages are foreseeable to the reasonableperson.

Causation then does not decide the out-come in this case. Rather, a specialized ruleof standing is invoked out of the recognitionthat each owner could have many neighbors.Each of these more numerous neighbors hasa smaller stake on the outcome of the casethan the owner. It is therefore better toignore these losses in order to simplify thelegal system by channeling the rights ofaction through one party. So long as theowner is allowed to sue, others receive theindirect beneÕts of deterrence before the loss,even if they do not get any direct compensa-tion after the fact. The standing requirementreÔects the implicit tradeoÖ that the sharpincrease in suits creates a huge administra-tive nightmare for little improvement inmarginal deterrence.

It should not, however, be assumed that thistradeoÖ is uniform in all cases. The commonlaw action for loss of consortium provides auseful counterexample. The defendant injuresone spouse, and the other is allowed to sue for

5 262 U.S. 447 (1923) (consolidated actions).6 For discussion generally, see Richard A. Epstein, Torts §§ 10.6 –10.13 (1999).


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20 6 G r e e n B a g 2 d 1 7

the loss of companionship.7 Each person has atmost one spouse, not many. The losses arelikely to be concentrated and large. The admin-istrative complications are relatively smallowing to the high level of cooperation betweenthe two plaintiÖs. Yet while American law iswilling to brook the additional complications,English law, which has always had less conÕ-dence in the remedial wonders of the tortsystem, denies the action for loss of consortiumto both husbands and wives.8 We see a genuinediÖerence of opinion on the tradeoÖ in theclose case, but none in the easier ones. Thedominant American rule denies children theright to sue for the loss of consortium of theirparents,9 although some courts have begun toallow this cause of action at least in cases ofdeath or serious injury to the parent.10

This same approach carries over to mattersinvolving Õnancial losses. The person who isdeceived is normally allowed to sue for fraud.But the courts have uniformly refused to allowindividuals who seek recovery for indirectlosses to bring their own lawsuits. Perhaps theleading decision on this score is Holmes v. Secu-rities Investor Protection Corp.,11 which referredto common law rules on proximate causationto fashion this standing principle in RICOsuits. That decision has been followeduniformly at common law to deny health careplans the ability to sue tobacco companiesalleged to have deceived smokers who werealso plan enrollees. The sensible solution is toallow the smokers to maintain their own causeof action. The health plans could then recover

their own out-of-pocket expenses by bringingactions of subrogation. Here again there is notheory of proximate causation, whether basedon directness or foreseeability, that rules thehealth plan losses out of bounds. Rather, theactions are denied categorically out of the clearrecognition that the added complexity of cal-culating the proper level of losses is notjustiÕed by any marginal improvement inoverall deterrent eÖect. “In this light, thedirect injury test can be seen as wisely limitingstanding to sue to those situations where thechain of causation leading to damages is notcomplicated by the intervening agency of thirdparties (here, the smokers) from whom theplaintiÖs’ injuries derive.”12 The standingnotion is easily introduced into this contextwholly without regard to either the limitednature of the federal judicial power or someindependent concern with separation of pow-ers. The same arguments could, and should,bar the plaintiÖs’ actions in state courts withplenary jurisdiction.

The tort issues, however, become morecomplex in the absence of private ownership.Thus suppose that the defendant emits pollu-tion that kills thousands of Õsh in publicwaters. Since no Õsh have been caught, noneare owned. No one therefore Õlls the shoes ofB in the earlier case where A killed B’s dog.Ownership rules therefore do not identify anideal person with standing to sue. One possi-bility is to insist that since no owner has beeninjured, no one need compensate for the loss. Ihave made this misguided argument myself.13

7 See, e.g., HitaÖer v. Argonne Co., 183 F.2d 811 (D.C. Cir. 1950) (extending the right to recover for lossof consortium from husbands to wives).

8 See Administration of Justice Act, 30 � 31 Eliz. 2 § 2 (1982) (for the abolition of all actions for loss ofconsortium in England, and of all such actions for parents, children and menial servants).

9 Borer v. American Airlines, 563 P.2d 858 (Cal. 1977) (denying action for death of children).10 See, e.g., Ferriter v. Daniel O’Connell’s Sons, Inc., 413 N.E.2d 690 (Mass. 1980).11 503 U.S. 258 (1992).12 Laborers Local 17 Health and BeneÕt Fund v. Philip Morris, Inc., 191 F.3d 229, 240 (2d Cir. 1999)

(emphasis added).13 Richard A. Epstein, Corrective Justice and Its Utilitarian Constraints, 8 J. Legal Stud. 49, 52 (1979).




But the more complete analysis asks what sub-stitutes for this direct right of action mightimprove the overall situation. One possibilityis to allow commercial Õshermen to sue fortheir losses sustained.14 But who else? OneDistrict Court decision also conferred stand-ing on marina, boat, tackle and bait shopowners, but denied it to seafood wholesalers,retailers and distributors who purchased theoutput of commercial Õshermen. It is the sametradeoÖ all over again. The fewest parties withthe largest stakes may bring suit. All others aredenied, in so many words, standing to bringsuit for losses that the defendant did cause.

Last are the mixed cases where one personhas suÖered large injuries while many othershave suÖered smaller ones. One party isinjured by an obstacle on the public road thatmerely inconveniences hundreds of others. In1535 the English judges allowed the one partywho suÖered the special injury to maintainsuit, but denied all others the right of action.15

Their collective interest was vindicatedthrough administrative sanctions against thewrongdoer. None of the huge number of smalllosses is too remote. Rather the familiartradeoÖ is at work, with one variation: thestate may impose a Õne on the wrongdoer tooÖset the insuÓcient deterrence that stemsfrom the truncation of the set of tort actions.But notice the Õnal result. The selective stand-ing rule for public nuisance anticipates themodern standing doctrine by nearly 400 years.But equity needs to be added to the picture.

II. Standing in Equity

Frequently, standing in equity follows the

rules for standing at law. The plaintiÖ whodemands speciÕc performance of a land salescontract, who seeks to foreclose a mortgage, orwho seeks to enjoin a nuisance is not contentwith common law damages, but requests thecourt to order the defendant to perform orabstain from particular actions. These suits allmeet the traditional requirements for standingin actions at law. The situation, however,changes when courts of equity invoke novelremedies to amalgamate individual claims. Forexample, the equitable invention of the deriva-tive action allows a representative shareholderto sue corporate oÓcers and directors in thename of the corporation for the beneÕt of allshareholders similarly situated.

In these circumstances, the shareholders’injury (diminution in the value of their shares)derives from the fact that the allegedmisconduct has reduced the value of thecorporation’s assets. Further, this type ofderivative injury is suÖered in common by allshareholders according to their proportionateinterest in the corporation. The shareholders’derivative suit was created by equity courts topermit a shareholder to vindicate wrongs doneto the corporation as a whole thatmanagement, because of either self-interest orneglect, would not remedy.16

This rationale carries over to class actionsagainst unincorporated associations,17 and tomany corporate reorganizations. Modern classactions make the most sense in just those con-texts where all plaintiÖs have fungible interests,as with the so-called 23(b)(1) class actions.18

Here any outcome both beneÕts and binds allmembers of the class. No shareholder can freeride oÖ the collective solution. No defendanthas to face an endless repetition of similar

14 See, e.g., Union Oil Co. v. Oppen, 501 F.2d 558 (9th Cir. 1974).15 Anon., Y.B. Mich. 27 Hen. 8, f. 27, pl. 10 (1535).16 Jesse H. Choper et al., Cases and Materials on Corporations 785-86 (3rd ed. 1989).17 See, e.g., Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356 (1921) (a representative early case).18 Fed. Rules Civ. Proc. at advisory committee’s note, clause B (citing Ben-Hur, as well as a large

number of corporate derivative actions dealing with “the proper recognition and handling ofredemption or pre-emption rights”).


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22 6 G r e e n B a g 2 d 1 7

suits.19 The remedial structure thus providesfull and complete redress. Equitable aggrega-tion in derivative actions thus works preciselybecause no plaintiÖ has any discrete or specialinterest diÖerent in quality or kind from that ofany other aggrieved party. Far from seekingunique plaintiÖs, suits in equity depend on thecommonality of interests that the named plain-tiÖ can establish with the rest of the class. Anystanding limitation at most precludes any non-shareholder from becoming a class member, letalone the class representative.

III. Standing in Public Law

We are now in a position to see how litigationin equity undermines any special standingunder Article III. One common attack on theCourt’s restrictive standing rules seeks to dis-tance constitutional litigation from private lawrules on standing. DiÖerent rules are neededunder the administrative state, as Wade andForsyth note, because “public authorities havemany powers and duties, which aÖect thepublic generally rather than particular individ-uals.”20 Note that these are English writerswho address the question of standing in theEnglish system, which has no federalism andno strong position of judicial separation ofpowers. But even if we pass those points aside,the eÖort to create new public law rules ofstanding seems plausible only if we falselyequate “private law” with the common law,21

when in fact it embraces both cases in law andcases in equity. The explicit linkage between

public and private law works by carrying overthese equitable conceptions from private asso-ciations to governments. The municipal cor-poration becomes the analogue to the privatecorporation and the doctrine of ultra virescould apply to both.22 In dealing with thesecases, the uniform nineteenth-century ruleallowed any citizen or taxpayer of the localgovernment, just like any shareholder of thecorporation, to enjoin the transaction thatexceeded its powers.

Thus in Crampton v. Zabriskie, a member ofthe local township was allowed to enjoin thecompletion of a contract for which the localgovernment had not, in violation of its char-ter, secured the requisite funding. JusticeField allowed the taxpayer action under theuniform practice of the time, given “the illegalcreation of a debt which they in common withother property-holders of the county mayotherwise be compelled to pay.” In his view,“it would seem eminently proper for courts ofequity to interfere upon the application of thetax-payers of a county to prevent the consum-mation of a wrong, when the oÓcers of thosecorporations assume, in excess of their pow-ers, to create burdens on property-holders.”23

Here the injunctive relief works for thebeneÕt of all citizens and taxpayers. The useof the class action thus allows the entire mat-ter to be resolved for all persons at one time.The pressing question is why this precedentdoes not carry over to all citizen and tax-payer suits brought against the United Statesfor actions of the Congress or the Executive

19 See, e.g., Ben-Hur, 255 U.S. 356; Hansberry v. Lee, 311 U.S. 32 (1940).20 See William Wade � Christopher Forsyth, Administrative Law 696 (7th ed. 1994). For the same

sentiment, see Cass R. Sunstein, Standing and the Privatization of American Law, 88 Colum. L. Rev.

1432, 1434-36 (1988).21 Cass R. Sunstein, What’s Standing After Lujan? Of Citizen Suits, Injuries, and Article III, 91 Mich. L.

Rev. 163, 187 (1992) (“In the context of standing, the reluctance to take this step has been embodiedin a private law model of standing – that is, in the idea that standing should be reserved principally topeople with common law interests and denied to people without such interests.”) (emphasis added).

22 See, e.g., Robert Charles Clark, Corporate Law 675-676 (1986).23 101 U.S. 601, 609 (1879) (emphasis added).




that, like those in Crampton, are ultra vires.In order to answer that question, it is criti-

cal to look closely at Justice Sutherland’sopinion in Frothingham, which refused toapply Crampton to federal issues. At issue inFrothingham was whether Congress’s spendingpower authorized federal expenditures offunds to the states for the purposes of pro-moting maternal and infant health under theMaternity Act.24 The gist of the challengewas that Congress could not make grantsunder Article I, section 8, clause I to accom-plish what it could not do through direct reg-ulation under the pre-1937 restrictive readingof the commerce clause then in force underHammer v. Dagenhart.25 This constitutionalobjection was deÔected on technical groundswhen Justice Sutherland held that neitherMassachusetts nor one of its citizens, Mrs.Frothingham, had standing to seek to enjoinMellon, as the Secretary of the Treasury, fromdistributing the statutory funds.

PlaintiÖs urged that Crampton should gov-ern, noting that this case too was “a proceed-ing to be maintained by one of a large classaÖected by a law alleged to be invalid, for thepurpose of enjoining a public oÓcer fromexecuting it.”26 Likewise, Massachusettsprotested the introduction of the programbecause it could not protect itself simply byrefusing to accept the funds.27 That partialopt-out would not prevent its citizens hav-ing their tax revenues spent entirely in otherstates. Its “consent” to participate in that pro-gram counted for naught given its inability to

opt out of both federal contributions and fed-eral distributions. If Massachusetts wereforced to choose between paying taxes andreceiving beneÕts, and paying taxes andreceiving no beneÕts, then the outcome wasinexorable. It, and every other state, wouldjoin the program even if it were Ôatlyunconstitutional.

In spite of these objections, Justice Suther-land refused to treat either claim as raisingstructural objections to a new constitutionalorder. Instead he wrote as if the only stake ofthe individual plaintiÖs was to securerestoration to the treasury of their “minuteand indeterminable” share of the federal taxrevenues expended on the program. Cramptondisappears beneath the waves because: “Theinterest of a taxpayer of a municipality in theapplication of its moneys is direct and imme-diate and the remedy by injunction to preventtheir misuse is appropriate.”28 But nothing inCrampton suggested that the right to enjoinillegal action depended on a taxpayer showingsome minimum fraction of Õnancial harm,and nothing that Sutherland wrote suggestedthat the size of the dollar stake for any individ-ual taxpayer was larger in Frothingham than inCrampton.29 The words “direct and immediate”formed no part of Crampton’s logic, whichstressed exactly the opposite point of view thatthe taxpayer’s position was one shared “incommon” with other members of the commu-nity. Sutherland niftily suppressed the equita-ble basis for plaintiÖ’s action, and in its steadhe adopted, though not in so many words, the

24 262 U.S. at 478-79; Act of Nov. 23, 1921, ch. 135, 42 Stat. 224.25 247 U.S. 251 (1918), holding that Congress did not have power to restrict the Ôow of goods in interstate

commerce in order to assure compliance with federal child-labor standards. The matter changedsharply with the post-1937 view of the commerce power. National Labor Relations Bd. v. Jones � LaughlinSteel Corp., 301 U.S. 1 (1937).

26 Frothingham, 262 U.S. at 475, argument of William Rawls.27 See the argument of Alexander Lincoln in Massachusetts v. Mellon, 262 U.S. 447, 459-466 (1923).28 Id. at 486.29 This point led David Currie to question Frothingham, even within the framework of the conventional

standing doctrine, which he accepts. See David P. Currie, The Constitution in the Supreme

Court, The Second Century 1888-1986, at 183-185 (1990).


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24 6 G r e e n B a g 2 d 1 7

deÕnition of standing needed for common lawtort actions.

Sutherland muddied the waters still furtherby invoking the principle of separation ofpowers when it was least needed, by notingthat our Constitution commits to the legisla-ture the duty of making the laws; to theexecutive the duty of executing them; and “tothe judiciary the duty of interpreting andapplying them in cases properly broughtbefore the courts.”30 At this point the doctrineof standing should be exposed for what it is –the conscious narrowing of Chief Justice Mar-shall’s decision in Marbury v. Madison.31 One ofthe great uncertainties of that case arosebecause in declaring portions of the JudiciaryAct of 1789 unconstitutional, Marshall simplyheld that the courts did not have to issue acommission to the worthy Marbury. The casedid not in so many words decide that the judi-cial department had the power to order eitherCongress or the Executive to issue a commis-sion in that case. It was only with Cooper v.Aaron,32 when the Court ordered the Arkan-sas governor and legislature to back down,that it became clear that the power of judicialreview in Marbury gave the Court plenarypower to order all other branches of govern-ment, state or federal, to do its bidding.

Usually some direct victim is available tochallenge any legislative or executive action.But using tax revenues to achieve impermissi-ble ends typically does not impose a discreteburden on anyone. The usual complaintagainst the standing rules is that they leave an

unnecessary void in the power of courts todetermine whether government conduct isillegal whenever no one suÖers any dispropor-tionate impact from the state action. Writersfrom Aristotle on forward have understoodthat “everyone’s business is nobody’s busi-ness,”33 and so too have judges in equity. Thispolitical objection therefore has a securetextual home in the words “all cases … inequity.” Any given individual willing to bearthe inordinate costs of bringing extensive liti-gation against the United States should havehis day in court. If more than one personwants to press the same objection, then somemulti-district panel could coordinate stays orconsolidations if the parties themselves areunable to prevent unnecessary repetition inlitigation.

What seems utterly odd in this situation,however, is the common assertion, made mosteloquently by Alexander Bickel, that standingis needed in order to insure the “necessary con-creteness” in the outcome of the case.34 Whobetter able to litigate these issues than thosegroups who care not a whit about a few dollars,but deeply about the preservation of the overallconstitutional structure as they see it? An odd,if somewhat unprincipled, exception to thegeneral rule against standing has been made forcases brought under the EstablishmentClause.35 But can anyone say with a straightface that Americans United Against Churchand State does not have the requisite interest tomaintain a challenge against a giveaway of sur-plus property to a Christian College, solely

30 Id. at 488.31 5 U.S. 137 (1803).32 358 U.S. 1 (1958).33 See Aristotle, Politics, Book II, ch. 3 (B. Jowett trans., Richard McKeon, The Basic Works of

Aristotle 1148 (1941)) (“For that which is common to the greatest number has the least carebestowed on it.”). For the modern statement, see Russell Hardin, Collective Action 8 (1982).

34 See Alexander M. Bickel, The Least Dangerous Branch 115-116 (1962), echoed in Valley ForgeChristian College v. Americans United Against Church � State, 454 U.S. 464 (1982).

35 Flast v. Cohen, 392 U.S. 83 (1968), challenging federal aid to religious education under the Elementaryand Secondary Education Act of 1965.




because it is brought under the excess propertyclause,36 while some disappointed bidder whoexpected a tiny proÕt from the receipt of suchproperty is in a better position to contest theclaim? There is no correlation at all betweenthe capacity to represent a position eÖectivelyand the presence of a distinctive pocket-bookinterest.

This ad hoc rationalization should not dis-place the general rules of equity jurisdictionwhen the stakes are so high. In Valley Forge, thecourt insisted that the representative branchesof government should be held to account fortheir misdeeds through the political process.Perhaps they will. But surely that is no answerto the obvious objection that if the distribu-tions were unconstitutional in the Õrst place,they could not be ratiÕed by a political major-ity. Certain political questions may well be toohot for the Court to handle, but the standingdoctrine is a wretched Õlter for singling themout. I can think of no reason why the want of aspecial plaintiÖ should lead the Court to take apass in such cases as Schlesinger v. Reservists toStop the War,37 where the plaintiÖs claimedthat the Incompatibility Clause – “no Personholding any OÓce under the United States,shall be a Member of either House during hisContinuance in OÓce” – was violated whenseveral members of Congress held commis-sions in the reserves. The plaintiÖs sought toshow that they were “special” because theywere present and former members of thereserves. But any citizen should be able toraise a challenge to this structural issue. Like-wise, the companion case of United States v.Richardson38 made the same mistake by refus-ing to allow the plaintiÖs to attack the secrecysurrounding the appropriations to the Central

Intelligence Agency as a violation of Article I,section 9, clause 7 – “a regular Statement andAccount of the Receipts and Expenditures ofall public Money shall be published from timeto time.” Perhaps the issue should be kept outof courts in the name of military security. Butif so it is utterly misguided to hide that fact inthe observation that the loss in question was“common to all members of the public.”

IV. Complications in the

Equitable Method

A clear recognition of the role of equitablejurisdiction also helps to answer other impor-tant questions about how complex litigationshould be organized in federal court. In partic-ular, three general issues present themselvesfor discussion. First, should plaintiÖ’s actionbe dismissed unless some necessary or indis-pensable parties are joined to the suit? Second,how should federal courts apply the tradi-tional limitations on equitable remedies oncethose standing obstacles have been overcome?Third, may any purported limitationsimposed by the standing requirement benegated if Congress grants certain citizens orgroups the right to sue in federal court?

Joining DefendantsThe Õrst problem could easily arise if theUnited States entered into collusive litigationwith an ostensibly adverse party. Thus in Allenv. Wright,39 the parents of black public-schoolstudents enrolled in districts undergoingdesegregation sued to require the IRS tostiÖen the standards that allowed federal tax-exemptions to private schools operatingwithin those districts, which the plaintiÖs

36 Valley Forge, 454 U.S. 464; Article IV, § 3, cl. 2 (“The Congress shall have [the] Power to dispose ofand make all needful Rules and Regulations respective the Territory or other Property belonging tothe United States.”).

37 418 U.S. 208 (1974).38 418 U.S. 166 (1974).39 468 U.S. 737 (1984).


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26 6 G r e e n B a g 2 d 1 7

claimed had adopted racially discriminatorypractices. Although the suit was dismissed onthe ground that the plaintiÖs lacked standingbecause they only alleged that black studentswere “stigmatized” by their inability to attendthese private schools, the action still shouldhave been dismissed unless the local schoolswhose tax-exemptions were at risk had beenjoined as defendants in the case. But if all par-ties were joined, then why not hear the caseout on the merits with all points of view fullyrepresented?

Similarly, in Simon v. Eastern Ky. WelfareRights Org.,40 the IRS had treated as charitable,tax-exempt corporations several nonproÕt hos-pitals that supplied only limited emergencyservices to indigent patients. Justice Powelldenied the relief chieÔy on the inability to tracethe causal connection between the hospital’sfavorable tax treatment and its policy towardindigent patients. But as a matter of equity, theright solution is not to dismiss the suit but tooÖer the tax-exempt institutions a place at thetable under the usual federal rules governingthird-party practice.

Equitable DiscretionThe current concern with the redressablenature of grievances is also a standard issuewhenever a court in a nuisance case decideswhether, and on what terms, to issue aninjunction. Is the injunction issued as of rightwhenever the harm is substantial, or does thecourt balance the equities between the partieswhen the defendant’s use is highly valuable,and the plaintiÖ’s of only minor worth?41 Sim-ilarly, speciÕc performance is generallyawarded in land sale contracts, at least wherethe rights of third parties do not intervene.42

This broad set of equitable principles surelyapplies to cases under Article III when a courtis asked to order an administrative agency toappropriate funds or enlist the cooperation ofother public oÓcials. These questions shouldnot, however, be buried under the singlebanner of standing, for disaggregation oÖers abetter understanding of why it may well havebeen correct for courts to decline to exercisetheir equitable jurisdiction. For example, theSupreme Court should not have declined toexercise its equitable jurisdiction in AlabamaPower Co. v. Ickes, where the question waswhether a private electric company had stand-ing to protest loans and grants made under theNational Industrial Recovery Act to severalAlabama municipalities to help defray theircost of production for a local distribution sys-tem.43 If the grants were illegal, then either ataxpayer or a competitor should be able toraise the matter, and a simple injunctionagainst the practice would not lie beyond thepowers of a court of equity. Justice Sutherlandjust complicated the matter unnecessarilywhen he held that the term “direct injury”from Massachusetts v. Mellon should only beunderstood to mean “a wrong which directlyresults in the violation of a legal right.” Here itis insuÓcient to invoke the old Roman phrase“damnum absque injuria” (harm without legalinjury) to solve the problem at hand. Thatmaxim has nothing to do with standing, butembodies the substantive principle that cer-tain injuries (e.g., competition, blocking ofviews) are not wrongs in themselves. But ithardly precludes the argument that certainmethods of competition (e.g., product dispar-agement or passing oÖ) are in fact wrongful, atwhich point the competitor is far more likely

40 426 U.S. 26 (1976).41 For some of the complications, see Boomer v. Atlantic Cement Co., 257 N.E.2d 870 (N.Y. 1970);

Madison v. Ducktown Sulphur, Copper � Iron Co., 83 S.W. 658 (Tenn. 1904).42 See Anthony Kronman, SpeciÕc Performance, 45 U. Chi. L. Rev. 351, 355-364 (1978).43 302 U.S. 464 (1938). See Tennessee Elec. Power Co. v. Tennessee Valley Auth., 306 U.S. 118 (1939), where

similar issues were raised in this equally unsatisfactory decision.




to sue than disappointed consumers. Whenthe dust settles, the case hardly raises mattersso diÓcult that a well-drawn injunction couldnot deal with them. Fortunately, our moremodern cases incorporate elements of theEnglish practice,44 which is to allow a disap-pointed party to an administrative procedureto maintain an action to attack an award to acompetitor on grounds of injury in fact.45 Butthe obscure law as to what counts as an injuryin fact seems unnecessary if the only questionis who can enjoin the performance of an ultravires act. Anyone can. Issues of damages ofcourse raise diÖerent considerations.

Yet, by the same token, no court could exer-cise its equitable jurisdiction in favor of theplaintiÖs in United States v. Students ChallengingRegulatory Agency Procedures (SCRAP).46 There,environmental groups had challenged thedecision by the Interstate Commerce Com-mission (ICC) not to suspend surchargesimposed on railroad shipment rates. Any con-nection between the asserted icc conduct andthe global injury claimed was far from clear;and any rate rollback would have dramaticconsequences on all sorts of third parties,including a full range of shippers and carriers,and perhaps other environmental groups thatdid not see the causal universe through thesame rose-colored glasses. Any damageswould be, to say the least, speculative so thatthe most that any court should do is to ask theICC to take into account SCRAP’s views inthe course of its own deliberations, which ofcourse it had.

A similar analysis applies in Lujan v. Defend-ers of Wildlife,47 where the substantive question

before the Court was whether the Secretary ofthe Interior had properly limited Section 7 ofthe Endangered Species Act to apply only toactions done within the United States or on thehigh seas, but not within foreign countries.Why not allow Defenders of Wildlife tochallenge that determination in light of itslong-term commitments? It is a sad commen-tary on misplaced judicial ingenuity that theCourt bypassed the obvious, and instead madefederal jurisdiction turn on whether two mem-bers of the Defenders had seen some protectedspecies overseas and wished at some indeÕnitetime to travel abroad to see them again. Whythen bother with standing at all? Just order, ifappropriate, the Secretary to apply the samestandards of review to projects in foreignnations as he does to domestic projects or tothose on the high seas. But it is an open ques-tion whether judicial supervision should gofurther in light of the diÓculty of scrutinizingoverseas projects that in individual cases maybe subject to inconsistent local requirements.At some point, a court of equity should refrainfrom overseeing individual budget allocationsbecause the issues are not redressable in legalaction.

Is Standing Doctrine Constitutionally Required?This account of standing largely obviates thevexed constitutional question of whether Con-gress can Õx up the defects in the standingdoctrine by authorizing citizen suits in envi-ronmental cases. On this question JusticePowell in Warth v. Selden stated that somecomponents of the standing doctrine were

44 See Wade � Forsyth, supra note 20, at 702-03.45 See Association of Data Processing Serv. v. Camp, 397 U.S. 150, 153 (1970), for the liberalization of

standing law, not without problems of its own, which also makes reference to the AdministrativeProcedure Act to raise “the question whether the interest sought to be protected by the complainantis arguably within the zone of interest to be protected or regulated by the statute or constitutionalguarantee in question.”

46 412 U.S. 669 (1973).47 504 U.S. 555 (1992).


Richard A. Epstein

28 6 G r e e n B a g 2 d 1 7

“prudential,” while others, including therequirement that “plaintiÖ … allege a distinctand palpable injury to himself,”48 were consti-tutionally mandated. The distinction makesno sense. Article III says that the “judicialPower shall extend to all Cases in Law andEquity, arising under … .” That language car-ries with it the clear implication that it doesnot extend to those cases that do not “ariseunder” the appropriate classes of cases. Thus,Congress could not authorize the Court toconsider requests for advisory opinionsbecause those do not count as cases at all. Butthe discrete and palpable injury case is not cutfrom the same cloth. Once the equitable juris-diction of the federal courts is acknowledged,then citizen or taxpayer suits to enjoin illegalconduct fall squarely within the judicialpower. No further congressional authoriza-tion is needed. Indeed, any eÖort by Congressto strip the Supreme Court of its appellatejurisdiction to hear these issues would itselfraise serious constitutional issues.

The bottom line is this: courts use judicial

review is to make sure that the legislature andthe executive do not exceed their respectivepowers. Today’s convoluted doctrine of stand-ing is wholly antithetical to that objective andamounts to the partial overruling of Marbury v.Madison without any textual or structuralwarrant for that reversal of policy. Herein liesperhaps the greatest irony about our level ofcollective trust in constitutional safeguards forthe rule of law. The English Constitution con-tains no explicit power of judicial review, andno limitations on Parliamentary power. Thedoctrine of standing is part and parcel of theirjudicial law. England too has been subject tothe powerful winds of the welfare state, andhas adopted many substantive policies that Iregard as indefensible and self-destructive. Buton this standing issue it has followed a moresensible path. The English can recognize thatunless some method is given to challengeillegal administrative actions, “the rule of lawbreaks down.”49 Why can’t we, when ourfederal courts have jurisdiction over all casesin law and in equity? B

48 422 U.S. 490, 501 (1975).49 See Wade � Forsyth, supra note 20, at 696.


standing in law equity - green bag

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