Court Opinion

ID: 8976768
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:06:05.355575+00
Date Added: 2024-06-11T17:10:35.366975
License: Public Domain

EASTERBROOK, Circuit Judge,
concurring.
I join the court’s opinion but add a few words about the commissioners’ “concession” that they cannot evaluate the constitutionality of the laws they administer. How can a state “concede” that the Constitution is not supreme for its executive branch? The Supremacy Clause, Art. VI cl. 2, provides that “This Constitution, and the Laws of the United States which shall *1054be made in Pursuance thereof ... shall be the supreme Law of the Land ..The Constitution is supreme for commissioners of insurance no less than for legislators and judges. Concessions surrender valuable entitlements; here the concession asserts an immunity from federal rules, an act of aggrandizement rather than abasement. As the court observes, 896 F.2d at 1051, the concession is common, but no case I could find holds that state agencies have the immunity from federal law they say they possess.
State agencies could disregard federal rules only if the second portion of the Supremacy Clause — “the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” — meant that the Constitution is supreme only for judges. Yet the nullification debates are behind us. No one believes these days that legislative and executive branches of state governments may ignore the Constitution and federal law until slapped with an injunction. The Supremacy Clause establishes a hierarchy of rules, binding on all governmental actors. The Illinois Commerce Commission may not, for example, yank the certificates of two interstate carriers whose merger was approved by the Interstate Commerce Commission and issue an opinion saying something like: “We ignore the Interstate Commerce Act when making our decisions, and if you don’t like that go sue us.” Federal law is supreme for all state actors, at all times, “any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
Federal courts proclaim, when requiring state officials to pay damages for disobedience to federal law (including constitutional doctrine), that state actors must follow the federal rules without waiting for litigation. National rules govern even though no case on all fours has been rendered. Anderson v. Creighton, 483 U.S. 635, 640, 107 S.Ct. 3034, 3039, 97 L.Ed.2d 523 (1987); Kurowski v. Krajewski, 848 F.2d 767 (7th Cir.1988). Local governments acting on the basis of local rules that have been preempted by federal ones must pay damages. E.g., Golden State Transit Corp. v. Los Angeles, — U.S. -, 110 S.Ct. 444, 107 L.Ed.2d 420 (1989); Community Communications Co. v. Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982). Governmental bodies do not even get the benefit of the qualified immunity available to their minions. Owen v. City of Independence, 445 U.S. 622, 100 S.Ct. 1398, 63 L.Ed.2d 673 (1980). Governments are liable only for their laws and other policies, so the universe of damages actions against governmental bodies is precisely the one in which, according to the “concession” in this case, agencies are free to disregard federal law.
Officials may not act as if state law is the only law. After Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), made it pellucid that the Constitution forbids discrimination in the operation of public schools, a school board could not say that it was required by state law to segregate its students and had to keep doing this until some judge told it to stop. See Green v. County School Board, 391 U.S. 430, 88 S.Ct. 1689, 20 L.Ed.2d 716 (1968). So too with state laws discriminating on account of sex. Once Duren v. Missouri, 439 U.S. 357, 99 S.Ct. 664, 58 L.Ed.2d 579 (1979), held that states may not exclude women from jury venires, it was unnecessary to bring 49 more suits, or perhaps 3,041 more (one per county), to achieve compliance throughout the nation. There were 83,166 local governments in the United States in 1987 and oodles of state agencies, 1988 Statistical Abstract of the United States Table 452; I shudder to think that none of them need comply with the Constitution until told to by a judge, one clause at a time. Under the Supremacy Clause, state administrative agencies may — must—conform their conduct to constitutional norms without waiting to be hit by a judicial order. Even the concept of a “judicial” order supposes a separation of powers that states are not required to observe. Bethune Plaza, Inc. v. Lumpkin, 863 F.2d 525, 528 (7th Cir.1988). States may merge the powers of administration and adjudication, as in Middlesex Ethics Committee v. Garden State Bar Ass’n, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982), or may abolish judicial review. Reallocations of this kind could not abrogate the Supremacy Clause.
The most sonorous justification for the commissioners’ position is that they are following the law and leaving to orderly adjudication claims that their law is defective. Such an approach supposes that state rules are the whole law of the commissioners’ jurisdictions, that national rules are a form of foreign law. Yet the Supremacy Clause integrates the legal systems. We have one body of law, with a hierarchy among rules.
*1055The laws of the United States are laws in the several States, and just as much binding on the citizens and courts thereof as the State laws are. The United States is not a foreign sovereignty as regards the several States, but is a concurrent, and, within its jurisdiction, paramount sovereignty. Every citizen of a State is a subject of two distinct sovereignties, having concurrent jurisdiction in the State, — concurrent as to place and persons, though distinct as to subject-matter.... The disposition to regard the laws of the United States as emanating from a foreign jurisdiction is founded on erroneous views of the nature and relations of the State and Federal governments. It is often the cause or the consequence of an unjustifiable jealousy of the United States government, which has been the occasion of disastrous evils to the country.
Claflin v. Houseman, 93 U.S. 130, 136-37, 23 L.Ed. 833 (1876). If state laws conflict, the commissioners will attempt to reconcile these laws as best they can and may enforce one at the expense of another. When the conflicting pair is one state and one federal, the duty to resolve the conflict is no less, and the Supremacy Clause names the winner. To say otherwise is to misunderstand the structure of our federal system. And it is an offense against that structure to force persons holding federal rights to wait for vindication, and pay lawyers to secure it, when persons holding identical entitlements under state law face no such obstacles.
This does not mean that constitutional questions are the first order of business for an administrator any more than for a court. Judges regularly deal with statutory questions before they take up constitutional ones. Even though deferral increases slightly the expense of obtaining a favorable decision, it is justified to ensure appropriate respect for rules established by the political branches. States might separate their decision-making not only temporally but also among officials, some specializing in statutory interpretation and others in constitutional law. Here the parallel to judicial practice breaks down. An insurance commissioner does not resolve questions of state law and then turn to the state’s Attorney General (or even to a court) for authoritative guidance on federal law; the commissioner resolves questions of state law and then issues a binding order. The person claiming a federal right is directed to comply. A judge does not resolve the statutory point, issue an injunction, and then turn to the Constitution. A judge resolves the questions of federal law before issuing a binding decision; agencies must do this too.
Abjuring administrative “authority” to act on the basis of federal law creates problems under 42 U.S.C. § 1983 as well as the Supremacy Clause, for it amounts to a demand that people abandon their federal remedies. Indiana and Wisconsin insist that the state as an entity will listen to constitutional (and other federal) claims only in state court. Yet § 1983 creates an entitlement to litigate in federal court, free of any efforts by the state to limit access. Felder v. Casey, 487 U.S. 131, 108 S.Ct. 2302, 101 L.Ed.2d 123 (1988). Given the doctrine of claim preclusion, which 28 U.S.C. § 1738 enforces, Migra v. Warren City School District Board of Education, 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984), a state rule allocating to state courts all resolution of claims under federal law amounts to: “This state will ignore your entitlements under federal substantive law unless you give up your right to litigate in federal court.” Felder and, e.g., Patsy v. Board of Regents, 457 U.S. 496 (1982), show that no such demand may be made or honored.
Often we are told that chaos would break out if everyone made his own decision about which legal rules are enforceable. Let us leave difficult questions to the courts, the refrain goes, so that we may have order. Although the division of labor is beneficial in the main — no one who has watched tax protesters find fantastic propositions in the Constitution, see Coleman v. CIR, 791 F.2d 68 (7th Cir.1986), could tolerate the thought of revenue clerks making up and enforcing private versions of constitutional tax law — the proposition that there must be a chain of command takes us only so far. Public officials owe their allegiance to the Constitution first, federal laws second, and state laws third. Even a command from the President of the United States does not relieve public employees of their duty to follow the Constitution. United States v. Ehrlichman, 546 F.2d 910 (D.C.Cir.1976). See also United States v. Konovsky, 202 F.2d 721, 730-31 (7th Cir.1953) (reliance on a superior’s order does not negate specific intent in a prosecution under 18 U.S.C. § 241 for violating the *1056Constitution). Cops on the beat must follow Tennessee v. Garner, 471 U.S. 1, 105 S.Ct. 1694, 85 L.Ed.2d 1 (1985), rather than state laws that may permit or even direct them to use deadly force in apprehending felons. Police who prefer state to federal law will find themselves in the dock.
Perhaps functionaries are entitled to follow the orders of their superiors, unless clearly unlawful, so that there may be efficient and consistent administration. A commissioner of insurance is no functionary; he commands a cadre of lawyers. Any legal staff good enough to interpret the arcane insurance laws these officials must apply can look up constitutional doctrine as well. State agencies, in conjunction with state attorneys general, possess ample legal skill — and more experience, I wager, than a randomly selected judge of a court of general jurisdiction who may not see a claim under the dormant Commerce Clause during his career. We should require no less of a commissioner of insurance than of a police official or a prison warden.
At all events, the “constitutional” question here turns out to be a dispute about the meaning of the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-15. If that statute authorizes states to regulate insurance holding companies, then there is no remaining issue, see Western & Southern Life Insurance Co. v. State Board of Equalization, 451 U.S. 648, 652-55, 101 S.Ct. 2070, 2074-76, 68 L.Ed.2d 514 (1981). If the McCarran-Ferguson Act does not apply, then the jig is up under the dormant Commerce Clause, see Edgar v. MITE Corp., 457 U.S. 624, 643-46, 102 S.Ct. 2629, 2641-43, 73 L.Ed.2d 269 (1982). No insurance commissioner could say with a straight face that he and his staff lack expertise needed to interpret the McCarran-Fergu-son Act. They do it all the time.
The role of the Constitution in administrative decision-making turns out to be irrelevant to this litigation. Under 28 U.S.C. § 1738, the decision of a state official — be he called “judge” or “commissioner” — has the same preclusive effect in federal litigation as in state litigation. Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985). All agree that the decisions of these commissioners of insurance are reviewable in some court. Suits filed in state courts could not have been met with claims of preclusion. The preclu-sive effect would be the same — none—if the commissioners had considered and rejected the Commerce Clause arguments on the merits. Indiana and Wisconsin do not view administrative decisions as preclusive in their own courts, so they are not preclu-sive in federal court.
ORDER
Less than a week after we issued our decision, the Eighth Circuit decided two parallel cases involving Alleghany’s challenge to the state insurance holding company statutes — decided them opposite to, but apparently unaware of, our decision. Alleghany Corp. v. McCartney, 896 F.2d 1138 (8th Cir.1990); Alleghany Corp. v. Pomeroy, 898 F.2d 1314 (8th Cir.1990). We are not persuaded to abandon our position, but the emphasis which the opinions place on Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975), prompts us to add this brief note on that case, which we cited only in passing in our original opinion.
The state brought suit in Huffman to close down a pornographic theater. It obtained a judgment in state court, and the theater owner did not appeal, but instead brought a suit in federal court to enjoin the enforcement of the state statute and thus the closing of the theater. The Supreme Court held that Younger abstention was proper in these circumstances. Indeed it was. The theater owner had violated the state statute, and if you violate a state statute and the state prosecutes you (not necessarily by means of a criminal proceeding) in state court, you must stay there. That is Younger in a nutshell. It is not this case, since Alleghany has violated no state law, and since the state has not proceeded against it in state court. Alleghany applied for a license and was turned down. It did not engage in the activity for which it had sought the license, and therefore did not expose itself to an enforcement proceeding. It challenged the licensing statute. It was not required Younger or any other doctrine to file that challenge in state court.
The defendant-appellant, John J. Dillon, III, filed a petition for rehearing and suggestion of rehearing en banc on March 7, 1990. No judge in regular active service has requested a vote on the suggestion of rehearing en banc, and all of the judges on the panel have voted to deny rehearing. *1057The petition for rehearing and suggestion for rehearing en banc is DENIED.