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Samuel Bray on Equity and U.S. v. Texas
Michael Ramsey

Apparently it turns on a Scalia opinion from the 1990s called Grupo Mexicano (that I had not heard of until quite recently) (but then I don't teach Federal Courts).  At Volokh Conspiracy, Professor Bray explains

I've begun a series of posts on equity in United States v. Texas. (The first post was here, and if you need a quick primer on what equity is, go here.) This will be the first of several posts on Grupo Mexicano. It's a Supreme Court case from the 1990s that says that the equitable jurisdiction of the federal courts is the jurisdiction of the English Court of Chancery (because of the Judiciary Act of 1789). Therefore, the Court concluded, the remedy requested by the plaintiff—a preliminary injunction to freeze the defendant's assets, sometimes called a Mareva injunction—could not be issued by federal courts.

That decision was bitterly contested, with Scalia writing for the five-justice majority and Ginsburg writing a vigorous dissent. The Scalia opinion isn't perfect. Among other things, it takes a legislature-first approach to equity that is a bit mind-boggling given that the equity is not a creature of statute (nor—this is an understatement—is it an area of particular legislative expertise). And there are passages in the majority opinion that could be read as saying that equity was fixed in 1789 and there can't be new developments.

But that's not the best reading of the majority opinion in Grupo Mexicano. Rather, the Court says that the equitable jurisdiction of the federal courts is the power to do what the Court of Chancery could do in 1789—and analogous things. So some development is allowed, but it has to be tied to the tradition of equity. And in taking this position, the Court in Grupo Mexicano was aligning with many other cases from the Supreme Court in the preceding century. Grupo Mexicano was a surprise to scholars who were done with the law/equity distinction, but its principles were not novel. (I work through Grupo Mexicano in my article The Supreme Court and the New Equity.)

The dissent in Grupo Mexicano by Justice Ginsburg captured some of the freedom of movement in equity. But the real problem was that she identified no limiting principles. If equity was just "flexibility," then there was nothing a federal court couldn't do.

The next post applies this to U.S. v. Texas

[T[he district court rejects—and rightly so—the argument that equity is limited to "the exact claims" that were historically available. That would be a too-rigid reading of Grupo Mexicano. [Ed.: Well, I'm not so sure ... it was a Scalia opinion, after all.] But the district court goes further and gives three arguments for distinguishing Grupo Mexicano, and none of them work....


In effect, the district court opinion treats Grupo Mexicano as if the dissent had prevailed, with federal courts having an undefined power, subject to no strict limitations, to right all wrongs, subject only to congressional limitations. This is not a plausible reading of Grupo Mexicano. Indeed, on the district court's reading of that case, it would almost certainly have come out the other way. But the district court was right to call attention to the fact that the United States is suing in equity, and to the importance in equity of assessing whether there is an adequate remedy at law.

Also a Big Lebowski reference.

And some related thoughts on Grupo Mexicano from Josh Blackman here, with an excellent twist at the end.