Concept
Displacement by Congress
Federal common law
Displacement by Congress
Federal common law lasts only as long as Congress stays silent. A federal court makes a rule because no federal text answers the question before it, and once Congress answers that question, the reason for the rule is gone and the statute governs. This section states the principle, follows it through two environmental decisions, and then marks the limit that keeps it from swallowing the interstitial lawmaking discussed earlier.
Two reasons support the principle. The first is logical: judicial lawmaking presupposes a gap, and a statute that speaks to the question closes the gap, so the court’s task turns from creation into interpretation. The second is institutional. The Court has said that judicial lawmaking in the form of federal common law “plays a necessarily modest role” under a Constitution that vests the federal government’s legislative powers in Congress and reserves most other regulatory authority to the States. It exercises the power with reticence, adopting appropriate state law or waiting for Congress to speak.1 A judge-made rule that survived a statute on the same subject would let courts override choices the legislature had made.
Milwaukee and the Clean Water Act
Illinois v. City of Milwaukee shows the principle in a single lawsuit. Interstate waters were already a home for federal common law: on the day it decided Erie, the Court said that whether the water of an interstate stream must be apportioned between two States is a question of “federal common law” on which neither the statutes nor the decisions of either State can be conclusive.2 In the first phase of the Milwaukee litigation, the Court recognized a federal common law remedy for interstate pollution, and the remedy did not last. Congress legislated six months after that decision. In a later phase of the same litigation, City of Milwaukee v. Illinois, the Court held that the legislation implicitly extinguished the common-law remedy.3
The word “implicitly” does real work. Congress did not have to say that it was abolishing the federal nuisance action, because the judge-made remedy existed to fill a space that the statute now occupied. Given the breadth of the federal codification of environmental standards, few if any areas remain in which federal common law governs interstate pollution.4
Between the two phases, the litigation, the waters, and the interstate character of the dispute stayed the same. Only the statute changed. Displacement is therefore a limit independent of the power and federal-interest requirements developed earlier in this chapter: a subject can satisfy both and still be closed to judicial lawmaking because Congress has taken it up.
Agency Authority Without Agency Action
American Electric Power Co. v. Connecticut applies the principle to a statute that assigns the question to an agency. Several states and cities brought a federal common law nuisance action against emitters of carbon dioxide. A unanimous Supreme Court held that the courts’ ability to make federal common law had been displaced by the authority of the Environmental Protection Agency to regulate those emissions, even though the agency had not yet acted.5
Students often assume that displacement must wait for a regulation. It does not. By authorizing the agency to regulate, Congress has already chosen who will answer the question and through what process. A court that answered first would write a rule for one case that the agency might later contradict, and waiting for the agency’s rule would leave the question with the courts for as long as the rulemaking took. The test is whether Congress has addressed the question, and the pace of the agency does not reopen it.
Gaps That Remain
Displacement reaches only as far as Congress’s answer, and every statute leaves some questions open. The point is usually put this way: “the inevitable incompleteness presented by all legislation means that interstitial federal law making is a basic responsibility of the federal courts.”6
Textile Workers Union v. Lincoln Mills shows what such a gap looks like. A majority of the Court read § 301, which concerns labor-management contracts, as requiring the federal courts to fashion and apply a federal common law of those contracts. The reading has difficulties of its own, but it obviates any jurisdictional problem: federal law then supplies both the right and the remedy, and the case is one of true federal-question jurisdiction.7 The statute left the substantive rules to the courts, so the judge-made rule completes the scheme and does not compete with it.
The retaliation statute and the emissions statute in American Electric Power both leave a federal court with a question that the words of the text do not literally answer, so textual silence alone does not separate them. The emissions statute gave an agency authority over the very question the nuisance claim raised, which means Congress had already chosen the decisionmaker. The retaliation statute chose no one for the defense question and left the court to complete the scheme. The inquiry is whether the statute, or an agency it empowers, addresses the question that the judge-made rule would answer.
Effect on State Law
Displacing a federal common law rule does not by itself settle what remains of state law in the field. The Court’s own default shows why: absent a demonstrated need for a federal rule of decision, it adopts the readymade body of state law as the federal rule of decision “until Congress strikes a different accommodation.”8 The phrase leaves the balance between federal and state law to Congress. What a statute leaves standing is therefore a question for the statute’s terms and for preemption doctrine. The Clean Water Act’s effect on state-law claims is the subject of International Paper Co. v. Ouellette, which is best studied together with preemption.
On the exam, the question is usually whether federal common law survives in a field that Congress has since regulated. Start with what the statute addresses, not with whether the earlier judge-made rule was sound.