As bar examiners around the country grapple with administering bar exams this summer (either in July, as originally scheduled, or a month or two later) in the kind of socially distanced format the COVID-19 pandemic seems likely to require, a troubling pattern is emerging. Starting with New York (three weeks ago), a number of states—anticipating that there will be more demand for exam seats than can be accommodated—have announced policies that give formal priority for exam registration to people who graduated from in-state law schools, and that discriminate openly against out-of-state schools and the graduates therefrom. Massachusetts and Tennessee (like New York) recently made clear they will give formal preference to, and only to, graduates of all in-state law schools. So too with Maine and North Dakota (the only law school in each state being that of the public flagship university). And Connecticut and Missouri will give preference to graduates of in-state law schools along with some graduates of out-of-state (but often nearby) schools.
This trend is disturbing, because of the message it sends (about selfishness in times of crisis) and also, even more importantly, because the actions of most of these state bars (Connecticut and Missouri may be more complicated) are unconstitutional.
To be sure, administering a professional licensure exam in these times is challenging. And many states—especially those states that give the so-called Uniform Bar Examination (UBE), a test whose score can be used to seek admission in over 30 states in the nation—are probably correct in expecting that more people will seek to take the test in their states than can, given social distancing, be accommodated. (I am fully supportive of efforts of my law dean colleagues around the country to brainstorm about ways to expand the number of exam seats, but the reality is that demand for exam spaces could easily exceed supply in many states this summer). Scarcity is unfortunate. But as public agencies (generally overseen by state high courts), bar examiner bodies must manage that scarcity in ways that are consistent with the United States Constitution. And treating all in-state law schools more favorably than all out-of-state schools simply won’t fly, constitutionally speaking. (Although many constitutional challenges might be made, in this essay I limit myself to Commerce Clause concerns.)
The “Dormant” Commerce Clause Notion
The Commerce Clause of Article I was the framers’ first line of defense against corrosive barriers to trade and economic balkanization among the states. Even in the absence of affirmative congressional action, the Commerce Clause generally forbids states from favoring in-state economic actors over out-of-state competitors. (This is known as “dormant Commerce Clause doctrine.”) As the Supreme Court has explained in many cases, “[t]o determine whether a law violates this so-called ‘dormant’ aspect of the Commerce Clause, we first ask whether it discriminates on its face against interstate commerce. . . . In this context, ‘discrimination’ simply means differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.”
When a state explicitly treats in-state businesses preferentially to out-of-state counterparts, the Supreme Court applies a strong presumption against the law and will uphold the measure only if it survives a form of strict scrutiny—one that requires the measure be necessary to achieve an important (and innocent) purpose that could not be accomplished through non-discriminatory means. The policies announced in New York, Massachusetts, Tennessee and the other states following suit explicitly treat all in-state law schools differently than all out-of-state law schools. This discrimination between local (that is, in-state) schools and non-local schools is facially overt and sharp, and raises precisely the kinds of unfair competitive advantages that dormant Commerce Clause doctrine exists to prevent. (The classifications used by Missouri and Connecticut are a bit messier, since some out-of-state law school graduates are also given preference alongside graduates of local institutions.)
Consider, for instance, New York’s policy. It tells the world (law schools and prospective students), at this crucial time of the year when people are making decisions about which law school to attend this fall, that if you want to take the New York bar exam in a time of scarcity, students from the 15 law schools located in the state will enjoy special, favorable status. Students from Columbia will be preferred to students from the University of Chicago, and students from Fordham will be given better treatment than those from Northwestern or Illinois. This favoritism on account of in-state location is exactly what dormant Commerce Clause cases reject.
An observer may ask: How many prospective students would take such things into account in selecting a law school? It is hard to say. No one knows how long COVID-19-related social distancing (and the difficulties it poses for administering bar exams) will last, whether such measures will need to be resurrected even after they are relaxed, and what other crises may arise three years down the road that may make it hard to accommodate all would-be test takers. Or what other special treatment (e.g., in curricular regulation) in-state law schools may receive by state bar administrators.
Nor does the fact that people who’d like to practice in New York can seek to take the UBE in a different state (and use the score to be admitted to New York) make the problem go away; even assuming that taking the UBE outside of one’s desired venue is equivalent to taking it in one’s first-choice state location (and of course it is not), throughout the nation this summer there may simply be more people in total who want to take the UBE than can be accommodated, period. And taking the bar exam at a later date is not a satisfactory option; recent graduates want to take and pass the exam earlier rather than later, to gain prompt entry into the profession.
There is no doubt that folks graduating this summer are anxious about whether, when and where they’ll be able to sit for a bar exam that suits their career plans. Remember too that not all UBE states are acting parochially the way New York and its followers are. Certainly if you attend a law school in a UBE state that is not favoring local schools, and there is more demand in that state than can be accommodated, you are at a distinct disadvantage compared to graduates of schools in other states that do favor their local-school graduates.
Imagine, for example, a stylized scenario in which Illinois and New York are the only two UBE states, and each has 80 bar-exam seats and 100 graduates of in-state law schools (all of whom seek to take the UBE.) If the 80 New York bar (UBE) seats are reserved for 80 of the 100 graduates of NY-based schools, and Illinois allocates its 80 UBE seats at random (or on a first-come, first-served basis), graduates of the Illinois-based law schools have only a 67% chance of taking the UBE this summer (because the 80 Illinois bar-exam seats are being sought by 120 seekers—the 100 graduates of Illinois-based schools plus the 20 graduates of New York-based schools who couldn’t be accommodated in New York). By contrast, graduates of the NY-based schools would have a 93% chance of being able to take the UBE (an 80% chance of success in obtaining a New York seat factored together with a 67% chance of success in obtaining an Illinois seat.)
Moreover, even if all UBE states were to favor their in-state schools (and each UBE state had the same number of exam seats relative to the number of in-state law graduates), then students who attend law schools located in non-UBE states but who want or need to take the UBE to practice in UBE jurisdictions are entirely on the outside looking in, simply by virtue of the location of the schools they chose to attend. (A similar, even more obvious, problem arises if non-UBE states favor local law schools; if you need to take a bar exam in a non-UBE state that is not the state where you attended law school, you may be aced out on account of the location of your school and the other state’s preference for its in-state schools.)
So even if some showing to demonstrate significant effects on interstate commerce (i.e., the competition between in-state and out-of-state law schools for matriculants) were needed, it would be satisfied here. But the Supreme Court has made clear that no such showing is necessary, when the discrimination against out-of-state institutions is explicit and clear on the face of a law or regulation. In New Energy Company Co. v. Limbach, Justice Scalia (no big fan of expanding dormant Commerce Clause limitations) wrote for the entire Court to reject the notion that overt discrimination against out-of-state institutions can be excused if “its practical scope is . . . limited.” In Limbach, the law in question regulated the sale of ethanol in Ohio in a way that facially favored Ohio manufacturers over manufacturers from other states. But it turned out in fact that only one manufacturer in Ohio was benefitted, and only one out-of-state producer (in Indiana) was disadvantaged. The unanimous Court found unavailing the argument that the Indiana company could still sell ethanol in Ohio simply by “cut[ting] its profits by reducing its sales price,” noting that such an option does not undo the wrongness of Ohio’s decision to impose “economic disadvantage upon out-of-state” entities. Indeed, the Court declared more generally “that where discrimination is patent, as it is here, neither a widespread advantage to in-state interests nor a widespread disadvantage to out-of-state competitors need be shown.” Discussing a pair of earlier decisions, the Limbach Court pointed out that “[i]n neither of these cases [where in-state favoritism was overt] did we consider the size or number of the in-state businesses favored or the out-of-state businesses disfavored relevant to our determination.”
Dormant Commerce Clause doctrine tracks equal protection doctrine in this respect; where discrimination based on a suspect classification (here in-state vs. out-of-state status) is embodied in the law as written, stringent judicial review is triggered, regardless of proof of substantial burden on the disfavored parties. It is only when a law is “evenhanded” (i.e., facially non-discriminatory) but may have the consequence of hindering interstate commerce that a deeper inquiry into effects is required. And this makes sense, because in-state favoritism to any extent is generally wrong, and line-drawing problems are to be avoided if possible. As the Limbach Court put it: “Varying the strength of the bar against economic protectionism according to the size and number of in-state and out-of-state firms affected would serve no purpose except the creation of new uncertainties in an already complex field.”
So New York’s rule (and every other one like it) cannot survive Commerce Clause review unless New York’s action falls under an exception to the general ban on in-state favoritism, or unless New York has legitimate interests that could not be accomplished by the use of a non-discriminatory regime. Neither is the case.
As for exceptions to dormant Commerce Clause principles, the primary one is known as the “market-participant” doctrine. It can apply when the state is not regulating private conduct, but instead is acting as a consumer or provider of goods or services itself. So, for example, when the State of New York buys ventilators, it can choose to favor in-state manufacturers. (So too, when a state provides/sells higher education, it can favor in-state residents by offering them lower tuition, at least under the Commerce Clause.) But in administering a bar exam, a state is neither a consumer nor a provider operating in a proprietary capacity; it is a sovereign operating in a regulatory capacity, determining who shall be allowed to offer professional services to consumers within the state. For this reason, the market-participant exception doesn’t apply in this context — even in those states like Maine and North Dakota where the only law school in the state is the part of state-run public university. And it certainly doesn’t apply in states like New York, Massachusetts, and Tennessee, where state bar authorities have favored not just in-state public law schools, but also in-state private law schools.
As for rationales that a state like New York could invoke to justify its discrimination, they are hard to imagine, much less defend. If New York believes that graduates from NY-based schools are more likely to be NY citizens than are graduates from out-of-state schools, it runs smack dab into Supreme Court of New Hampshire v. Piper, where an eight-person majority of the U.S. Supreme Court said it violated the Constitution for a state to reserve bar membership to residents of the state.
Nor does (or could) New York suggest that all NY-based law schools teach NY state law more broadly or deeply than do out-of-state schools. And New York’s adoption of the UBE itself demonstrates New York doesn’t use the bar exam to ensure competence in New York substantive and procedural law anyway. On top of all that, if competency in New York law were New York’s concern, it could give preference to graduates of all law schools, regardless of where the schools are located, who took and passed the right New York-law-focused courses.
What about the possibility that NY-based law school graduates are less likely (than graduates of out-of-state schools) to take their UBE score and leave the state to practice elsewhere? There is no empirical showing that this is true, and here too New York could easily develop other, non-discriminatory and more calibrated indicia of likelihood to practice in the state (if that be a legitimate objective), such as prior work experience in New York, a job offer in the state, attestation of a plan to work in New York, etc., rather than make dispositive where a law school someone attended happens to be located.
What if New York’s rule seeks to reduce interstate travel in this time of COVID-19? Assuming that a state can ever try to discourage interstate travel, because of the unusual public health moment (a big assumption), the problem here, again, is that non-discriminatory criteria—such as where someone happened to be when they registered for the bar—would address this concern more directly. The reality is that many folks who attend law school outside New York are sheltering in place and finishing their spring semesters within New York (perhaps at their parents’ homes), hoping to take the bar without having to leave the state. Similarly, there are many soon-to-be graduates of New York-based law schools who are not currently in New York, and who will need to travel back into the state to take the bar. If discouraging travel were the goal, why favor the latter over the former?
Finally, what about the fact (mentioned by New York officials) that (some) in-state law schools offered to help provide space for additional venues for the state’s planned September exam? That can’t justify New York’s action. Those NY-based schools that offered space did not do so, I am confident, on condition that they receive favorable treatment. Indeed, I expect most if not all the NY law deans reject homerism as a matter of principle. And in any event, schools outside of New York have made the same offer of space.
In short, it’s hard to imagine any of these (or any other) possible justifications surviving the strict scrutiny applicable to explicit disparate treatment between in- and out-of-state institutions.
Given that state bars (including New York’s) are generally overseen by state high courts, how could New York and other states be acting unconstitutionally with such seeming indifference?
I have several intuitions here. The first concerns the long-standing tolerance of Wisconsin’s so-called “diploma privilege” codified in Wisconsin Supreme Court Rule 40.03, that provides that persons who receive a JD “from a[n ABA-approved] law school in this state” are exempt from having to take the bar exam that graduates of out-of-state ABA-approved schools must take and pass (emphasis added.) That means that the University of Wisconsin (UW) Law School and Marquette University Law School are favored over all other law schools that produce graduates who may want to practice in Wisconsin. This diploma privilege is unconstitutional; it is facially discriminatory without any non-parochial justification. If a student who wants to practice in Wisconsin ultimately but who may not have had terrific success at standardized tests (like the bar exam) is choosing between Marquette’s law school in Milwaukee and DePaul’s law school across the state line in Chicago, clearly the former is advantaged in the competition.
The U.S. Court of Appeals for the Seventh Circuit could have made this clear in a lawsuit (Wiesmueller v. Kosobucki) a little over a decade ago brought by recent law graduates who attended law school outside Wisconsin and who objected to having to take the Wisconsin bar. The case ended up settling before being resolved definitively on the merits, but along the way Judge Posner authored an opinion (remanding some matters to the lower court) that wrongly characterized Wisconsin’s law as one that “regulates evenhandedly.” He found evenhandedness because law students didn’t need to be Wisconsin residents to obtain the diploma privilege (provided they attended a Wisconsin-based law school). Judge Posner’s big goof was in looking at the case primarily through the lens of the law school graduates who were complaining. It is true they didn’t have to be Wisconsin residents. But if one looks instead at the law schools affected, the diploma privilege is not even-handed at all: Favored law schools did need to reside in Wisconsin—“in this state,” to use the words of the Wisconsin Supreme Court—to be able to offer the diploma privilege to their students. Although the plaintiffs in Wiessmuller were individuals and not law schools, third-party standing doctrine in cases like Craig v. Boren makes clear that the court could have considered the interests of these competing out-of-state institutions (something Judge Posner seems to acknowledge, but then inexplicably ignores in deciding how stringent judicial review of Wisconsin’s rule should be). And once those interests of competing law schools are placed front and center, the case becomes easy because the level of scrutiny should be high. Indeed, the factual questions the Seventh Circuit remanded to have resolved—such as whether UW and Marquette teach Wisconsin law in any particular depth (they don’t) or whether the Wisconsin Supreme Court actively oversees the UW and Marquette curricula (it doesn’t)—were beside the point. Even if the State of Wisconsin wants to limit the diploma privilege to graduates of law schools that teach Wisconsin law or that periodically submit their curricula to Wisconsin Supreme Court review, the criteria for conferral of the privilege could be drawn in these non-discriminatory terms; no matter what, the State has no business making the location of the school in Wisconsin the key factor.
This can be seen clearly if we think about professional services being facilitated by software rather than practicing lawyers. If Wisconsin were to require that law-related software produced by out-of-state companies go through an approval process (to protect Wisconsin consumers) that software produced by firms located in Wisconsin are spared from having to navigate, would anyone doubt the unconstitutionality of Wisconsin’s regime?
The fact that Wisconsin’s unconstitutional diploma privilege endures may embolden (or mislead) states like New York into similarly unconstitutional favoritism. But the problem likely runs deeper. The reality is that courts (and remember that courts oversee bar examiners) are often very late to recognize and apply constitutional limits upon their own power to regulate the legal and judicial professions. Think of how long it took for the Supreme Court to invalidate various state-bar prohibitions on attorney advertising, even though such content- and viewpoint-based restrictions would likely have been struck down much earlier in any other setting, and seemed obviously inconsistent with the right to free speech, the right to counsel and the right to hire a lawyer as part of due process.
Or consider that the Supreme Court itself would not, until 2003, permit quiet note-taking by members of the public in the courtroom watching and listening to oral arguments! Can you imagine a city council in Anytown, USA, getting away with prohibiting notetaking by members of the public who are observing council meetings?
The short of it is that even conscientious judges have blind spots, which is why having commentators and litigants around to make arguments and press legal claims isn’t a bad thing.