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When the Rehnquist Court ends its long run, as someday it must — and perhaps sooner rather than later — the legal archaeologists will start excavating in search of the sources of its powerful jurisprudence. One case the search will inevitably lead to is an obscure 1975 decision called Fry v. United States, in which the U.S. Supreme Court upheld a congressionally imposed wage freeze as it applied to state employees in Ohio. When the decision was handed down on May 27, 1975, it merited only two sentences on Page 16 of The New York Times the next day. And yet former Acting Solicitor General Walter Dellinger III has already called it “the Rosetta stone for understanding the Rehnquist Court.” Dellinger’s reason for saying that has less to do with the six-page opinion, written by Justice Thurgood Marshall for the eight-justice majority, than with the 11-page solitary dissent by then-Associate Justice William Rehnquist. “He projects a vision in that dissenting opinion which is now the dominant law of the land,” says Dellinger. And yet it appears from internal Court correspondence found in Marshall’s papers on file at the Library of Congress that Rehnquist’s dissent almost went unwritten. Considering how far the Court has come on the issue of federalism, Fry reads as a remarkable, almost antiquated decision. In the modern climate of relaxed regulation of the private sector, the law that the Court upheld in Fry — the Economic Stabilization Act of 1970 — itself seems quaint, harkening back to a time when Congress and Republican presidents felt muscular about controlling the economy. To dampen inflation, Congress authorized the president to freeze wages. Under authority granted by the law, President Richard Nixon established a pay board that capped salary increases at 5.5 percent and required large employers to submit proposed raises for approval in advance. When the state of Ohio sought to give its 65,000 state employees a 10.6 percent raise — a figure that now seems quite high — the pay board said no. State employees Ernest Fry and Thelma Boehm sued, claiming that the federal law was not meant to cover state employees, and that even if it was, it could not, because it interfered with state sovereignty. The case was argued in November 1974, and justices began commenting on Marshall’s draft opinion in January. Marshall made short work of the challenge, noting that in deliberations over the act, Congress had specifically rejected an amendment that would have exempted state employees from the pay freeze. Marshall then spent four paragraphs dismissing the state sovereignty claim. Citing cases ranging from Heart of Atlanta Motel v. United States to Wickard v. Filburn, Marshall asserted that the broad power of Congress to regulate interstate commerce could reach “activity that is purely intrastate in character.” But the main precedent Marshall cited was Maryland v. Wirtz, a 1968 Warren Court decision holding that the Fair Labor Standards Act (FLSA) could be applied to schools and hospitals run by a state. “Wirtz reiterated the principle that states are not immune from all federal regulation under the commerce clause merely because of their sovereign status,” Marshall wrote. He relegated the 10th Amendment to a footnote, acknowledging that “it is not without significance” but not dispositive in this case. The 10th Amendment, Marshall acknowledged in the footnote, “expressly declares the constitutional policy that Congress may not exercise a power that impairs the states’ integrity or their ability to function effectively in a federal system.” According to Marshall’s papers, it does not appear that any justice — including Rehnquist — planned to dissent from Marshall’s opinion at first. Justice Lewis Powell Jr. expressed the most concern about Marshall’s initial draft opinion. In a letter to Marshall dated Jan. 14, 1975, Powell made it clear that he had his eye not on Fry but on a pending case that was destined to become much better known. “In its present form,” Powell wrote, “ Fry would make it difficult for us to consider National League of Cities with genuine freedom to decide it on its own merits. Putting it differently, Fry (as now written) will strengthen the force of Wirtz as a precedent and possibly be viewed as extending Wirtz. . . . If Fry comes down in its present form, I am afraid the Court will have gone a long way to prejudge National League of Cities.“ In the case that would become known as National League of Cities v. Usery, 21 states had challenged a law that extended minimum wage requirements under the FLSA to local police and firefighters. The case was set to be argued in April, and Powell, who apparently wanted the Court to keep open its options to strike down the minimum wage law, did not want a ruling in Fry to foreclose that possibility. At this stage, Powell was not breaking away from Marshall’s opinion but rather lobbying for the inclusion of limiting language that would have confined the impact of Fry to the rare circumstances of a congressionally imposed wage freeze. In a letter to Marshall later the same day, Rehnquist wrote, “I am in substantial accord with the sentiments Lewis expressed to you. . . . I can’t join the opinion in its present form.” Rehnquist, like Powell, was applying pressure on Marshall to change his draft — but still not announcing a dissent. Two days later, however, Marshall wrote to Powell that he had reread his draft and Powell’s letter; he concluded, “I cannot agree with you.” Powell did not respond right away, but the next day Rehnquist dispatched a “Dear Thurgood” letter that announced for the first time his intention to circulate a dissent. “I am sorry to have taken so long to fish or cut bait,” Rehnquist told Marshall. Meanwhile, it appears that Marshall did make changes to the majority opinion in order to meet Powell’s concerns, which he had put in writing in the form of a concurrence. In a third draft opinion, dated March 25, Marshall added a few sentences stressing that the wage freeze was “even less intrusive” upon state prerogatives than the FLSA regulation at issue in Wirtz. With that, Powell wrote to Marshall in April, “I am happy to withdraw my concurring opinion and join you.” But Rehnquist had already set out on a contrarian path to lay out his vision of federalism. “I do not believe the Constitution was intended to permit the result reached today, and so I dissent,” Rehnquist wrote. An attack on the power of Congress solely on commerce clause grounds is “difficult to sustain,” Rehnquist acknowledged. But he added that an individual who claims that Congress, acting under commerce clause powers, has violated his First or Fifth Amendment rights, has “greater force” because he is asserting an “affirmative constitutional defense of his own.” Similarly, in Fry, Rehnquist said, “the state is not simply asserting an absence of congressional legislative authority, but rather is asserting an affirmative constitutional right, inherent in its capacity as a state, to be free from such congressionally asserted authority.” Placing state sovereignty on the same constitutional plane as individual rights was a bold concept, and Rehnquist acknowledged that his analysis did not flow explicitly from the 10th Amendment “by its terms.” But both the 10th and 11th amendments, Rehnquist said, are “simply examples of the understanding of those who drafted and ratified the Constitution that the states were sovereign in many respects, and that although their legislative authority could be superseded by Congress in many areas where Congress was competent to act, Congress was nonetheless not free to deal with a state as if it were another individual or business enterprise subject to regulation.” Rehnquist was making a structuralist, not a textualist, argument — freeing himself from the vague words of the 10th Amendment, but insisting that strong state sovereignty was what the Framers had in mind. The ruling was handed down after National League of Cities had been argued for the first time, but that case deadlocked 4-4, with the ailing Justice William Douglas not participating. It was reargued a year later, and when the decision finally came down, in June 1976, it was clear that Powell’s strategy — and Rehnquist’s — in Fry had worked. The limiting language Marshall had inserted allowed the Court in National League of Cities to distinguish among the cases and strike down the minimum wage law as it pertained to state employees. And the Marshall footnote in Fry gave the majority in National League of Cities some 10th Amendment language to hang its hat on. Most remarkably, Rehnquist was transformed from the lone 10th Amendment dissenter in Fry to the author of the majority 5-4 opinion in National League of Cities, breathing new life into the 10th Amendment. According to the 1979 book The Brethren, Justice Byron White talked Justice Potter Stewart into joining the majority, even though it meant overturning Wirtz. Rehnquist used much the same language he had tried out in Fry, asserting that the “states as states stand on quite a different footing from an individual or corporation when challenging the exercise of Congress’s power to regulate commerce.” But it soon appeared that the Court — and the public — were not yet ready for Rehnquist’s vision of state sovereignty. In National League of Cities, dissenting Justice William Brennan Jr. attacked Rehnquist for dealing a “catastrophic body blow at Congress’s power under the commerce clause.” And the ruling was destined to be interpreted narrowly and viewed by most commentators as an aberration. Finally, in 1985, National League of Cities was overturned in Garcia v. San Antonio Metropolitan Transit Authority. Justice Harry Blackmun, who had voiced reservations in National League of Cities even while joining the majority, switched sides. It took nearly another decade for Rehnquist’s position to rise again, in a series of 5-4 decisions that have restored the respect for state dignity that Rehnquist first argued for in Fry. But will it shift back again, as it did after National League of Cities? Not this time, says Duke University law professor H. Jefferson Powell, who has studied Rehnquist’s federalism opinions: “What was viewed in Fry as basically a lunatic position has now become orthodoxy. Chief Justice Rehnquist has shifted the center of the discussion so far it would take a long time to shift it back. He took the long view, and he has won.” This piece was first published as Tony Mauro’s “Supreme Advocacy” column in the January issue of The American Lawyer.

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