III. THE JUDICIAL ANTECEDENTS OF THE INSTITUTIONAL APPROACH
I shall begin this section by returning to the judgment with which I initiated my discussion in chapter one, and which marks the origins of the ‘state action’ doctrine and the public/private divide in contemporary constitutionalism: the Civil Rights Cases.
Recall that the Civil Rights Act guaranteed non-discriminatory access to inns, theatres and other public conveyances. The constitutionality of the Civil Rights Act was challenged on the grounds that the federal Congress lacked the competence to regulate interpersonal relations between private actors. In response, the government argued, inter alia, that the Act was saved by the Thirteenth Amendment to the US Constitution. The Thirteenth Amendment prohibited ‘slavery’ and ‘involuntary servitude’, and authorised the federal Congress to enforce this prohibition through appropriate legislation. The Civil Rights Act, so the government argued, was an example of ‘appropriate legislation’.How did the government draw the link between ‘slavery’ and ‘involuntary servitude’ on the one hand and non-discriminatory access to public facilities on the other? The answer can be found in Solicitor-General Phillips’s submissions to the Supreme Court, which are summarised at the beginning of the judgment:
Granting that by involuntary servitude, as prohibited in the Thirteenth Amendment, is intended some institution, viz., custom, etc., of that sort, and not primarily mere scattered trespasses against liberty committed by private persons, yet, considering what must be the social tendency in at least large parts of the country, it is ‘appropriate legislation’ against such an institution to forbid any action by private persons which in the light of our history may reasonably be apprehended to tend, on account of its being incidental to quasi-public occupations, to create an institution. (emphasis added)[385]
I want to pay close attention to the highlighted words.
First, Solicitor-General Phillips argued that the term ‘involuntary servitude’ referred to an ‘institution’. The word ‘institution’ was defined in both positive and negative terms. In positive terms, the Solicitor-General drew an analogy with ‘custom’, which the dictionary defines as a ‘a mode of behaviour... which is widely practised and accepted... in a particular society’.[386] In negative terms, he distinguished it from ‘mere scattered trespasses’ - that is, individual acts that could not accurately be classified as components of ‘a traditional and widely accepted way of behaving’. Now, how was one to tell the difference? The Solicitor-General advocated for a historical examination that would ask whether these private acts constituted a ‘social tendency’ towards creating an institution. In other words, historical context and the social backdrop were the glue that bound together a collection of seemingly ‘individual private acts’ and gave them their ‘institutional’ power.This proto-articulation of an ‘institution’ tracks the tentative definition that I offered at the beginning of this chapter. ‘Involuntary servitude’, as understood by the Solicitor-General, was constituted by a pattern of behaviour, but was not simply reducible to an aggregate of individual, convergent practices (what the Solicitor-General referred to as a ‘social tendency’). Its effect was to construct a hierarchy of power between white and Black people, which put the former in a position to violate the rights of the latter. And importantly, the pervasive character of the institution made individual exit unviable.
However, we saw in chapter one that the majority of the Supreme Court did not take up the Solicitor-General’s invitation to interpret the Thirteenth Amendment in this way. As Nerken points out, through its distinction between the ‘invasion’ and the ‘impairment’ of rights, the majority in fact ‘atomize[d]
The Judicial Antecedents of the Institutional Approach 99 the problem of Black civil rights, portraying violations as discrete, isolated, individual transactions, the outcome of which was determined by the individual circumstances and initiative of the Black participant in each transaction’.[387] In other words, the majority believed that civil rights violations were, indeed, nothing more than ‘mere scattered trespasses...
committed by private persons’.Justice Harlan disagreed. And he, at least partly, adopted the institution- focused language of the Solicitor-General, noting that the ‘institution [ie of slavery and involuntary servitude] rested wholly upon the inferiority, as a race, of those held in bondage’ (emphasis added).[388] The denial of equal civil rights was an integral manifestation of institutional inferiority, a component of the ‘practical subjection’[389] of one class by another.
While advancing a proto-version of the institutional approach, however, the pull of the public/private binary was too strong to be resisted entirely. Solicitor-General Phillips found himself slipping back into it at the very end, making reference to ‘quasi public occupations’;[390] Justice Harlan did as well, by noting that innkeepers were, in a sense, ‘public servants’.[391] Even in dissent, therefore, the institutional approach remained only partially imagined, at best.
The language of the institutional approach, nonetheless, would reappear on more than one occasion in subsequent decades, often as an undercurrent to the dominant reasoning in a judicial opinion. In Shelley v Kraemer, which was discussed in chapter two, the Supreme Court refused to enforce a racially restrictive covenant on the basis that judicial enforcement would amount to impermissible ‘state action’ in contravention of the Fourteenth Amendment. At the very beginning of its judgment, however, the Court observed that what was at issue was ‘the particular patterns of discrimination’ (emphasis added) caused by ‘terms of agreement among private individuals’.[392] Similarly, in Reitman v Mulkey, where the Supreme Court struck down a Californian constitutional amendment that would have authorised racially restrictive covenants, Justice Douglas observed that the case presented a ‘zoning problem’.[393] Both the Shelley majority and Justice Douglas viewed racially restrictive covenants not as an aggregate or a collection of private decisions by property owners and buyers, but as components of a ‘pattern’ of discriminatory conduct (constitutive of the institution of racism) that, essentially, was aimed at reshaping or maintaining spatial demographics.
A year after that, in Jones v Alfred HMayer, a majority of the Supreme Court came close to revisiting the Solicitor-General’s arguments in the Civil Rights Cases and accepting them.
The Court held that a federal law that mandated equal property rights across the USA, regardless of race, was directly applicable to private parties by virtue of the Thirteenth Amendment. A majority of the Court observed that the law reflected a legislative understanding that property rights ‘might be infringed not only by “state or local law” but also by “custom, or prejudice”’ (emphasis added).[394] The Court referred to the ‘imposing body of evidence pointing to the mistreatment of Negroes (sic) by private individuals and unofficial groups, mistreatment unrelated to any hostile state legislation’ (emphasis added),[395] but which had the sanction of ‘local prejudice’.[396] It was the operation of this systematic prejudice that brought the ‘private acts’ in question within the ambit of the Thirteenth Amendment:Just as the Black Codes, enacted after the Civil War to restrict the free exercise of those rights, were substitutes for the slave system, so the exclusion of Negroes from white communities became a substitute for the Black Codes. And when racial discrimination herds men into ghettos and makes their ability to buy property turn on the color of their skin, then it too is a relic of slavery. (emphasis added)[397]
This judicial undercurrent continues to surface, on occasion, in contemporary US Supreme Court jurisprudence. In 2015, for example, a narrowly divided Supreme Court held that disparate impact claims were cognisable under the Fair Housing Act.[398] Disparate impact claims focus on the consequences or results of allegedly discriminatory acts, rather than on the intention or motives of allegedly discriminatory actors. The structure of disparate impact analysis, it should be obvious, bears a family resemblance to the institutional approach, as it acknowledges that discrimination can arise out of the impact of practices and patterns of behaviour that cannot be reduced to individual transactions by malicious actors.[399] This is evident in the judgment of the Court: while the question raised was one of statutory interpretation, and therefore did not involve issues of horizontality, in its examination of the historical context leading up to the enactment of the Fair Housing Act, the Court had this to say:
[In the mid-twentieth century] various practices were followed, sometimes with governmental support, to encourage and maintain the separation of the races: Racially restrictive covenants prevented the conveyance of property to minorities; steering by real-estate agents led potential buyers to consider homes in racially homogenous areas; and discriminatory lending practices, often referred to as redlining, precluded minority families from purchasing homes in affluent areas...
By the 1960’s, these policies, practices, and prejudices had created many predominantly black inner cities surrounded by mostly white suburbs. (emphasis added)[400]As the italicised portions show, a majority of the Court was keenly aware that segregation and housing discrimination were caused by an agglomeration of private acts that had constituted themselves into ‘policies, practices, and prejudices’ - a result that justified imposing disparate impact-based nondiscrimination obligations on both state and private parties (albeit, in this case, statutorily). As the majority also observed - by flagging the point about governmental support - institutions of the kind that are the subject of this discussion rarely exist without the background support of, or at least facilitation by, legal structures (a point I shall come back to later in this chapter).
Unsurprisingly, all of these judgments spoke to the most obvious fault line in US society, and the most visible, institutionally mediated social hierarchy: that of race. What these judges understood was the simple fact that white property owners and (potential) Black property buyers (for example) did not stand as two formally equal parties in a transaction that they were equally free and responsible for shaping. Rather, their social locations were defined by and through the structures and institutions of race (and racism), which shaped what actions they were effectively free to take (or not to take). It was this social institution of race, and the manner in which it constituted permanent and abiding hierarchies of power, that the Thirteenth Amendment’s prohibition of ‘slavery’ and ‘involuntary servitude’ was intended to address. It was through this institutional logic that judges drew a connection between the ‘private’ act of (for example) entering into a racially restrictive covenant and the constitutional prohibition of slavery and involuntary servitude.
As we have also seen, however, the development of the idea was partial, at best.
A similarly partial account was provided by the South African Constitutional Court in Du Plessis v De Klerk, as discussed in chapter three. Recall that in Du Plessis, ultimately, the Constitutional Court decided against the application of direct horizontality in the interim Constitution, because of the absence of a specific enabling constitutional provision (a defect that was remedied in the final Constitution, in the form of section 8(2)). However, a plurality of the judges expressed significant unease with this conclusion, precisely because a Constitution limited to the vertical application of rights remained oblivious to the fact that apartheid as a social institution would continue to linger even after it was legally dismantled.So, for example, in his concurring opinion, Mahomed DP warned that ‘to leave individuals free to perpetuate advantages, privileges and relations, quite immune from the discipline of chapter three [of the South African Constitution], would substantially be to allow the ethos and pathology of racism effectively to sustain a new life’ (emphasis added).[401] ‘Ethos’ (‘the characteristic spirit of a culture... as manifested in its attitudes’[402]) and ‘pathology’ (‘social abnormality’[403] in this context) are both terms redolent of institutions and systems, a point made explicit a little later by Mahomed DP, when he lamented the ‘private and institutionalised desecration of [constitutional] values’, and insisted that the Constitution was not intended to permit ‘the privatisation of apartheid’.[404] The use of the words ‘private’ and ‘institutional’ in the same sentence is particularly significant as, much like Solicitor-General Phillips in the Civil Rights Cases, it provides the principled basis for determining which private acts ought to be subjected to constitutional scrutiny and why. The fear of ‘privatising’ apartheid was echoed by Ackermann J, who specifically referred to the ‘freedom of contract and other devices of the common law’[405] - quintessentially private transactions (underpinned by legal structures), as discussed in chapter one - that could be (ab)used to accomplish this.
Moreover, in his dissenting opinion, Madala J expressly distinguished the circumstances that had led to the creation of the South African Constitution from the contexts that framed the US, Canadian and German charters. For Madala J, the key distinction lay in the fact that:
The extent of the oppressive measures in South Africa was not confined to govern- ment/individual relations but equally to individual/individual relations. In its effort to create a new order, our Constitution must have been intended to address these oppressive and undemocratic practices at all levels... our Constitution starts at the lowest level and attempts to reach the furthest in its endeavours to restructure the dynamics in a previously racist society, (emphasis added)[406]
Quoting a previous opinion of Justice Froneman, Madala J went on to note that South Africa had been marked by ‘a history of structural inequality and injustice on racial and other grounds, gradually filtering through to virtually all spheres of society’.[407] Thus, the principled case for horizontality was based upon a link between oppressive practices in all spheres (including the private sphere), reflective and constitutive of institutional inequality and injustice.
However, these initial articulations - marking the first groping towards an institutional approach - were stillborn. As we saw in chapter three, a majority of the South African Constitutional Court decided that the implementation and balancing problems with direct horizontality (an issue that shall be addressed later in this chapter) meant that it was a question better left to Parliament, to address through legislation. While the framers of the Constitution disagreed with this conclusion by introducing a horizontal rights provision into the final text, the proto-articulation of the institutional model is yet to be taken further by the South African Court.[408]
Much like in the USA, the social institution that the Court evidently had in mind when considering the problem of horizontality was that of race (manifested in the form of slavery in the USA, and apartheid in South Africa). Analytically, the manner in which race operates as an oppressive institution is relatively straightforward to parse. There are other cases, however, where the institutions in question, and their effects, are more difficult to identify, especially in the scope of a judicial enquiry. Courts have, nonetheless, attempted to do so on occasion. The Federal Constitutional Court of Germany presents an instructive example. As we saw in chapter two, Germany follows the indirect model of horizontality, where constitutional norms ‘radiate’ into private law through statutory general clauses. In Handelsvertreter, the Court was concerned with the enforcement of a non-competition clause in a contract between an entrepreneur and a commercial agent. Among other things, the statutory provision allowed entrepreneurs to impose up to a two-year non-compete requirement in their contracts, with no compensation payable if the agent was culpable for terminating the contract.
The German Constitutional Court noted that what was at issue was a contractual term which, in theory, had been negotiated through ‘the exercise of individual freedom’[409] of the contracting parties, on the basis of their ‘private autonomy’[410] and their ‘own responsibility’[411] (note the explicit references to the default verticality’s assumptions of abstract freedom and individual responsibility). In practice, however, the Court observed that
because private autonomy is based on the principle of self-determination, that is, it presupposes that the conditions of free self-determination actually exist... If one of the contract parties has such a strong preponderance that it can in fact set contractual provisions unilaterally, this will result in the other contract part being determined differently. Where there is a lack of balance of power between the parties involved, the means of contract law alone can not guarantee an appropriate balance of interests. (emphasis added)[412]
The Court then found that, as a class, commercial agents had ‘hardly any room for negotiation. This is especially true of so-called single-company representatives who put all their workforce in the service of a single company.’[413] Indeed, various provisions of the Civil Code themselves recognised that ‘the majority of commercial agents are economically dependent and therefore do not have sufficient bargaining power to freely negotiate their rights and obligations with the entrepreneurs’ (emphasis added).[414] It was therefore the task of legislation to rebalance the skewed power relations, something that it failed to do when it incorporated a blanket exclusion of compensation for agents whose contracts were terminated and who were subject to a two-year non-compete requirement if the termination was caused by their own culpability. The exclusion, therefore, was struck down.
It is important to draw attention to the fact that the Court was not considering, in this case, the specific contract between the employer and the agent, who were the parties to the case. This was not a case where the ‘imbalance of power’ was individual, based upon the positions of the two contracting parties (a classic ‘contract of adhesion’[415]). Rather, the imbalance was structural: it arose out of the relative bargaining power possessed by entrepreneurs and agents as members of economic classes, and was based upon their relative locations within the institution of the marketplace, within which they were interacting. Indeed, this fits within one of the foundational reasons for the introduction of indirect horizontality into German constitutional law, which both Lewan and Clapham describe as the recognition that individuals need to be protected not only from state power, but also from ‘social power’.[416]
While Handelsverteter provides us with a strong proto-statement of the institutional approach beyond the institution of race, the German commitment to indirect horizontality ensures that its reach - and the reach of other judgments based on similar reasoning[417] - remains limited. For an application of the institutional approach to direct horizontality as well, we must look elsewhere. And that brings us to the Indian Constitution, the subject of the next section.