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CRS Annotated Constitution

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Agency Adjudication.—The Court in two decisions following Marathon involving legislative courts clearly suggested that the majority was now closer to the balancing approach of the Marathon dissenters than to the position of the Marathon plurality that Congress may confer judicial power on legislative courts in only very limited circumstances. Subsequently, however, Granfinanciera, S.A. v. Nordberg,110 a reversion to the fundamentality of Marathon, with an opinion by the same author, Justice Brennan, cast some doubt on this proposition. In Thomas v. Union Carbide Agric. Products Co.,111 the Court upheld a provision of the pesticide law requiring binding arbitration, with limited judicial review, of compensation due one registrant by another for mandatory sharing of registration information, the right arising from federal statutory law. And in CFTC v. Schor,112 the Court upheld conferral on the agency of authority, in a reparations adjudication under the Act, also to adjudicate “counterclaims” arising out of the same transaction, including those arising under state common law. Neither the fact that the pesticide case involved a dispute between two pri[p.616]vate parties nor the fact that the CFTC was empowered to decide claims traditionally adjudicated under state law proved decisive to the Court’s analysis.

In rejecting a “formalistic” approach and analyzing the “substance” of the provision at issue in Union Carbide, Justice O’Connor‘s opinion for the Court pointed to several considerations.113 The right to compensation was not a purely private right, but “bears many of the characteristics of a ‘public’ right,” since Congress was “authoriz[ing] an agency administering a complex regulatory scheme to allocate costs and benefits among voluntary participants in the program.”114 Also important was not “unduly constrict[ing] Congress in its ability to take needed and innovative action pursuant to its Article I powers;”115 arbitration was “a pragmatic solution to [a] difficult problem.” The limited nature of judicial review was seen as a plus in the sense that “no unwilling defendant is subjected to judicial enforcement power;” on the other hand, availability of limited judicial review of the arbitrator’s findings and determination for fraud, misconduct, or misrepresentation, and for due process violations, preserved the “‘appropriate exercise of the judicial function.”’116 Thus, the Court concluded, Congress in exercise of Article I powers “may create a seemingly ‘private’ right that is so closely integrated into a public regulatory scheme as to be a matter appropriate for agency resolution with limited involvement by the Article III judiciary.”117

In Schor, the Court described Art. III, Sec. 1, as serving a dual purpose: to protect the role of an independent judiciary and to safeguard the right of litigants to have claims decided by judges free from potential domination by the other branches of government. A litigant’s Article III right is not absolute, the Court determined, but may be waived. This the litigant had done by submitting to the administrative law judge’s jurisdiction rather than independently seeking relief as he was entitled to and then objecting only after adverse rulings on the merits. But the institutional integrity claim, not being personal, could not be waived and the Court reached the merits. The threat to institutional independence was “weighed” by reference to “a number of factors.” The conferral on the CFTC of pendent jurisdiction over common law counterclaims was seen as[p.617]more narrowly confined than was the grant to bankruptcy courts at issue in Marathon, and as more closely resembling the “model” approved in Crowell v. Benson. The CFTC’s jurisdiction, unlike that of bankruptcy courts, was said to be confined to “a particularized area of the law;” the agency’s orders were enforceable only by order of a district court,118 and reviewable under a less deferential standard, with legal rulings being subject to de novo review; and the agency was not empowered, as had been the bankruptcy courts, to exercise “all ordinary powers of district courts.”

Granfinanciera followed analysis different from that in Schor, although it preserved Union Carbide through its concept of “public rights.” State law and other legal claims founded on private rights could not be remitted to non–Article III tribunals for adjudication unless Congress in creating an integrated public regulatory scheme has so taken up the right as to transform it. It may not simply relabel a private right and place it into the regulatory scheme. The Court is hazy with respect to whether the right must be itself a creature of federal statutory action. The general descriptive language suggests that, but in its determination whether the right at issue in the case, the recovery of preferential or fraudulent transfers in the context of a bankruptcy proceeding, the Court seemingly goes beyond this point. Though a statutory interest, the actions were identical to state–law contract claims brought by a bankrupt corporation to augment the estate.119 Schor was distinguished solely on the waiver part of the decision, relating to the individual interest, without considering the part of the opinion deciding the institutional interest on the merits and utilizing a balancing test.120

Thus, while the Court has made some progress in reconciling its growing line of disparate cases, doctrinal harmony has not yet been achieved.

Noncourt Entities in the Judicial Branch

Passing on the constitutionality of the establishment of the Sentencing Commission as an “independent” body in the judicial branch, the Court acknowledged that the Commission is not a court and does not exercise judicial power. Rather, its function is to promulgate binding sentencing guidelines for federal courts. It acts, therefore, legislatively, and its membership of seven is composed of three judges and three nonjudges. But the standard of constitu[p.618]tionality, the Court held, is whether the entity exercises powers that are more appropriately performed by another branch or that undermine the integrity of the judiciary. Because the imposition of sentences is a function traditionally exercised within congressionally prescribed limits by federal judges, the Court found the functions of the Commission could be located in the judicial branch. Nor did performance of its functions contribute to a weakening of the judiciary, or an aggrandizement of power either, in any meaningful way, the Court observed.121

JUDICIAL POWER

Characteristics and Attributes of Judicial Power

Judicial power is the power “of a court to decide and pronounce a judgment and carry it into effect between persons and parties who bring a case before it for decision.”122 It is “the right to determine actual controversies arising between diverse litigants, duly instituted in courts of proper jurisdiction.”123 Although the terms “judicial power” and “jurisdiction” are frequently used interchangeably and jurisdiction is defined as the power to hear and determine the subject matter in controversy between parties to a suit124 or as the “power to entertain the suit, consider the merits and render a binding decision thereon,”125 the cases and commentary support, indeed require, a distinction between the two concepts. Jurisdiction is the authority of a court to exercise judicial power in a specific case and is, of course, a prerequisite to the exercise of judicial power, which is the totality of powers a court exercises when it assumes jurisdiction and hears and decides a case.126 Included within the general power to decide cases are the ancillary powers of courts to punish for contempts of their authority,127 to issue writs[p.619]in aid of jurisdiction when authorized by statute,128 to make rules governing their process in the absence of statutory authorizations or prohibitions,129 to order their own process so as to prevent abuse, oppression, and injustice and to protect their own jurisdiction and officers in the protection of property in custody of law,130 to appoint masters in chancery, referees, auditors, and other investigators,131 and to admit and disbar attorneys.132

Supplement: [P. 618, add to text following n.126:]

Judicial power confers on federal courts the power to decide a case, to render a judgment conclusively resolving a case. Judicial power is the authority to render dispositive judgments, and Congress violates the separation of powers when it purports to alter final judgments of Article III courts.1 In this controversy, the Court had unexpectedly fixed on a shorter statute of limitations to file certain securities actions than that believed to be the time in many jurisdictions. Resultantly, several suits that had been filed later than the determined limitations had been dismissed and had become final because they were not appealed. Congress enacted a statute, which, while not changing the limitations period prospectively, retroactively extended the time for suits dismissed and provided for the reopening of the final judgments rendered in the dismissals of suits.

Holding the congressional act invalid, the Court held it impermissible for Congress to disturb a final judgment. “Having achieved finality, . . . a judicial decision becomes the last word of the judicial department with regard to a particular case or controversy, and Congress may not declare by retroactive legislation that the law applicable to that very case was something other than what the courts said it was.” 2 On the other hand, the Court ruled in Miller v. French 3 that the Prison Litigation Reform Act’s automatic stay of ongoing injunctions remedying violations of prisoners’ rights did not amount to an unconstitutional legislative revision of a final judgment. Rather, the automatic stay merely alters “the prospective effect” of injunctions, and it is well established that such prospective relief “remains subject to alteration due to changes in the underlying law.” 4

“Shall Be Vested.”—The distinction between judicial power and jurisdiction is especially pertinent to the meaning of the words “shall be vested” in Sec. 1. Whereas all the judicial power of the United States is vested in the Supreme Court and the inferior federal courts created by Congress, neither has ever been vested with all the jurisdiction which could be granted and, Justice Story to the contrary,133 the Constitution has not been read to mandate Congress to confer the entire jurisdiction it might.134 Thus, except for the original jurisdiction of the Supreme Court, which flows directly from the Constitution, two prerequisites to jurisdiction must be present: first, the Constitution must have given the courts the capacity to receive it,135 and, second, an act of Congress must have conferred it.136 The fact that federal courts are of limited jurisdic[p.620]tion means that litigants in them must affirmatively establish that jurisdiction exists and may not confer nonexistent jurisdiction by consent or conduct.137


Footnotes

110 Id.
111 473 U.S. 568 (1985).
112 478 U.S. 833 (1986).
113 Contrast the Court’s approach to Article III separation of powers issues with the more rigid approach enunciated in INS v. Chadha and Bowsher v. Synar, involving congressional incursions on executive power.
114 Id., 473 U.S., 589.
115 CFTC v. Schor, supra, 478 U.S., 851 (summarizing the Thomas rule).
116 Thomas, supra, 473 U.S., 591, 592(quoting Crowell v. Benson, 285 U.S. 22, 54 (1932)).
117 473 U.S., 594.
118 Cf. Union Carbide, supra, 473 U.S., 591 (fact that “FIFRA arbitration scheme incorporates its own system of internal sanctions and relies only tangentially, if at all, on the Judicial Branch for enforcement” cited as lessening danger of encroachment on “Article III judicial powers”).
119 Granfinanciera, supra, 492 U.S., 51–55, 55–60.
120 Id., 59 n. 14.
121 Mistretta v. United States, 488 U.S. 361, 384–97 (1989). Clearly, some of the powers vested in the Special Division of the United States Court of Appeals for the District of Columbia Circuit under the Ethics in Government Act in respect to the independent counsel were administrative, but because the major nonjudicial power, the appointment of the independent counsel, was specifically authorized in the appointments clause, the additional powers were miscellaneous and could be lodged there by Congress. Implicit in the Court’s analysis was the principle that a line exists that Congress could not cross over. Morrison v. Olson, 487 U.S. 654, 677–685 (1988).
122 Justice Samuel Miller, On the Constitution (New York: 1891), 314.
123 Muskrat v. United States, 219 U.S. 346, 361 (1911).
124 United States v. Arrendondo, 6 Pet. (31 U.S.) 691 (1832).
125 General Investment Co. v. New York Central R. Co., 271 U.S. 228, 230 (1926).
126 William v. United States, 289 U.S. 553, 566 (1933) ; Yakus v. United States, 321 U.S. 414, 467–468 (1944) (Justice Rutledge dissenting).
127 Michaelson v. United States, 266 U.S. 42 (1924).
128 McIntire v. Wood, 7 Cr. (11 U.S.) 504 (1813); Ex parte Bollman, 4 Cr. (8 U.S.) 75 (1807).
129 Wayman v. Southard, 10 Wheat. (23 U.S.) 1 (1825).
130 Gumble v. Pitkin, 124 U.S. 131 (1888).
131 Ex parte Peterson, 253 U.S. 300 (1920).
132 Ex parte Garland, 4 Wall. (71 U.S. ) 333, 378 (1867).
133 Martin v. Hunter’s Lessee, 1 Wheat. (14 U.S.) 304, 328–331 (1816). See also 3 J. Story, Commentaries on the Constitution of the United States (Boston: 1833), 1584–1590.
134 See, e.g., Turner v. Bank of North America, 4 Dall. (4 U.S.) 8, 10 (1799) (Justice Chase). A recent, sophisticated attempt to resurrect the core of Justice Story’s argument is Amar, A Neo–Federalist View of Article III: Separating the Two Tiers of Federal Jurisdiction, 65 U. L. Rev.205 (1985); and see Symposium: Article III and the Judiciary Act of 1789, 138 Pa. L. Rev.1499 (1990) (with articles by Amar, Meltzer, and Redish). Briefly, the matter is discussed more fully infra, Professor Amar argues, in part, from the text of Article III, Sec. 2, cl. 1, that the use of the word “all” in each of federal question, admiralty, and public ambassador subclauses means that Congress must confer the entire judicial power to cases involving those issues, whereas it has more discretion in the other six categories.
135 Which was, of course, the point of Marbury v. Madison, 1 Cr. (5 U.S.) 137 (1803), once the power of the Court to hold legislation unconstitutional was established.
136 The Mayor v. Cooper, 6 Wall. (73 U.S.) 247, 252 (1868); Cary v. Curtis, 3 How. (44 U.S.) 236 (1845); Sheldon v. Sill, 8 How. (49 U.S.) 441 (1850); United States v. Hudson & Goodwin, 7 Cr. (11 U.S.) 32, 33 (1812); Kline v. Burke Construction Co., 260 U.S. 226 (1922). It should be noted, however, that some judges have expressed the opinion that Congress’ authority is limited to some degree by the Constitution, such as by the due process clause, so that a limitation on jurisdiction which denied a litigant access to any remedy might be unconstitutional. Cf. Eisentrager v. Forrestal, 174 F. 2d 961, 965–966 (D.C.Cir. 1949), revd. on other grounds sub nom, Johnson v. Eisentrager, 339 U.S. 763 (1950); Battaglia v. General Motors Corp., 169 F.2d 254, 257 (2d Cir.), cert. den., 335 U.S. 887 (1948); Petersen v. Clark, 285 F. Supp. 700. 703 n. 5 (D.N.D. Calif. 1968); Murray v. Vaughn, 300 F. Supp. 688. 694– 695 (D.R.I. 1969). The Supreme Court has had no occasion to consider the question.
137 Turner v. Bank of North America, 4 Dall. (4 U.S.) 8 (1799); Bingham v. Cabot, 3 Dall. (3 U.S.) 382 (1798); Jackson v. Ashton, 8 Pet. (33 U.S.) 148 (1834); Mitchell v. Maurer, 293 U.S. 237 (1934).

Supplement Footnotes

1 Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 218–19 (1995) . The Court was careful to delineate the difference between attempting to alter a final judgment, one rendered by a court and either not appealed or affirmed on appeal, and legislatively amending a statute so as to change the law as it existed at the time a court issued a decision that was on appeal or otherwise still alive at the time a federal court reviewed the determination below. A court must apply the law as revised when it considers the prior interpretation. Id. at 226–27.
Article III creates or authorizes Congress to create not a collection of unconnected courts, but a judicial department composed of “inferior courts” and “one Supreme Court.” “Within that hierarchy, the decision of an inferior court is not (unless the time for appeal has expired) the final word of the department as a whole.” Id. at 227.
2 514 U.S. at 227 (emphasis by Court).
3 120 S. Ct. 2246 (2000).
4 120 S. Ct. at 2257.
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