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An Agency Theory of The Constitution as a Power of Attorney

Chief Justice John Marshall“[W]e must never forget that it is a constitution we are expounding.”

Chief Justice John Marshall, McCulloch v. Maryland (1819)

Reviewing the 200 years of “expounding” the Constitution has undergone can be quite confounding.  There have been hundreds of Supreme Court opinions.

Legal scholars, lawyers, and judges engage in continuing debate over the proper method to understand the Constitution’s meaning.  Words are used that have special meaning[1], for example, “originalism” or “living Constitution” or “compact theory”.[2]

The most basic way to look at the Constitution is to recognize the relationships created between the “We the People”, the central government and the states. Absent School House Rock, most efforts to explain the document lapse into the legalistic world of judges, lawyers and scholars.  There is a document that most people are familiar with that looks in many ways like the Constitution:  The Power of Attorney.

Most people are familiar with Powers of Attorney. It may have been for health care decisions or an elderly parent’s financial matters.  The drafters and ratifiers of the Constitution were familiar with the power of attorney, and comparing the relationships created by the form of that document with those created by the Constitution can be informative.

What is a Power of Attorney?

A power of attorney allows one person[3], called the agent, to act on behalf of another, the principal.  The principal typically grants the agent the authority to do specific things about specific subjects.  The authority might be as limited as signing documents at a real estate closing, or as broad as making critical health care decisions.

When a power of attorney is created the principal defines and limits the agent’s authority.  The principal retains the power to revoke the agent’s authority at any time.  The agent has an obligation of loyalty to the principal and a duty to follow the principal’s instructions and to not act improperly in the performance of those instructions.  Legally, the responsibilities of the agent are defined as “fiduciary”.[4]

Elements of a Power of Attorney

If one looks at a power of attorney form, it follows this format:

  • The parties are identified (principal/agent).
  • The purpose of the document is described.
  • The responsibility, powers, duties and relationship to third parties of the agent are defined.
  • Limits on the agent’s authority are placed.
  • Provisions for altering/revoking the agent’s power are included.
  • Often a successor/alternate agent is named.

Constitution’s Structure Compared to Power of Attorney

What does any of that have to do with the Constitution?   Here’s a comparison between the Constitution and a power of attorney:

  • Name of the Principal (We the People)
  • Designation of the Agent (United States)
  • Purposes of the Agency (Preamble)
  • Outlines the Fiduciary Responsibility (Necessary and Proper Clause)
  • Authority Granted to the Agent (Article I, Sec. 8 and elements of Art. II & III)
  • Limitations of the Agent’s Authority (Art. I, Sec. 9 and other limits from mixed functions of the branches) (Amendments I-VIII, e.g. “Congress shall pass no law …..” from Amendment I)
  • Defining Agent’s Relationship with Third Parties (Art. IV, Obligations of States to each other) (Art. VI, debts of US to others and relation of state/federal law)
  • Provisions for Altering or Revoking Agency (Art. V, Provisions to Amend)
  • Appointment of Successor/Alternate Agent (Ninth and Tenth Amendments)

How Powers of Attorneys are Interpreted

Dating back well before the Revolution, legal rules developed to interpret legal documents, including powers of attorney.  Many ancient rules were frequently stated in Latin.[5]  For example: Expressio unius est exclusio alterius is Latin for “The expression of one thing is the exclusion of another. “ This rule means when certain things are specified in a legal document, an intention to exclude all others may be inferred.

Regarding powers of attorney, this phrase indicates that when a principal grants an agent authority to deal with a specific subject, the agent does not have authority to deal with other subjects that have not been named.

Alexander Hamilton, a Contributor to the Federalist Papers

Alexander Hamilton

The Ratification Debates and expressio unius est exclusio alterius

Between September 17, 1787[6] and January 10, 1791[7] special state conventions were held to consider the proposed Constitution.  During this period there were debates throughout the country regarding the extent of powers given to the new government and the need for additional restrictions in the nature of a Bill of Rights.  Throughout the debates expressio unius est exclusio alterius was a recurring theme.

During the debates, the Federalists[8] used the legal maxim both ways.  For those concerned about the potential power of the federal government, the Federalists assured that by listing powers, the central government would, because of expressio unius est exclusio alterius, have only the powers listed.  To those that believed a Bill of Rights was necessary, the Federalists said, having a Bill of Rights was dangerous because by listing certain rights, other rights would be excluded.[9]

Understanding the Constitution as a Power of Attorney

“The Constitution should be read through a fiduciary lens. A central purpose of the document was to adopt for America a federal government whose conduct would mimic that of the private-law fiduciary.”[10]

The arguments made during the Ratification debates revolved around legal principles that in the 18th Century and into the 21st interpret power of attorney agreements.

The Constitution’s elements are that of the power of attorney. It designates the PEOPLE as the Principal, and the United States as the Agent.  The PEOPLE ultimately have the power as the principal and the United States has the obligation of loyalty to the people and a duty to follow the people’s instructions as set out in the Constitution and to not act improperly in the performance of those instructions.

A final thought regarding the principal/agent relationship of a “power of attorney”: the Principal (in this instance, the PEOPLE) always retains the absolute right to revoke the agent’s authority.

Constitutionally Speaking Discussion with Byron Donalds

Byron Donalds and I discussed the Agency Theory of the Constitution as a Power of Attorney on Constitutionally Speaking.  You can hear the discussion:

[1]Sometimes called “terms of art” because a word, in the context of the legal world, has a special meaning attached to it that would not be the common understanding in any other setting.  The phrase itself “terms of art” is a “term of art”.  It certainly has nothing to do with the “arts” commonly understood to be painting, theater or sculpture, but rather to distinct legal terms like: contract.  The word “contract” is filled with legal meaning once it is said, and thus a “term of art”.

[2]The “compact theory” indicates that the Constitution is a contract between the states and the federal government is a creature of the states.  Jefferson and Madison both in the Kentucky and Virginia Resolutions of 1798 supported such a principal.  Despite the support of such luminaries, the Supreme Court and others have indicated the Constitution was created directly by the People.  The Constitution was not ratified by state legislatures, but rather special state ratifying conventions, hence ratified directly by the people.  This strongly supports a principal/agency relationship between the People and the federal government.  As an aside, the same argument goes to the relationship between the People and state governments which are creatures of state constitutions, created directly by the People.  This is consistent with the idea of federalism with a sovereignty pie sliced in three pieces and the People as Principal with the states and federal governments their agents for different purposes.

[3]It is possible for a corporation to be appointed as an agent, so the agent is not necessarily a “person”.

[4]  A “fiduciary” is a person in who is placed the utmost trust and confidence to manage and protect property or money. The duties of a fiduciary include loyalty and reasonable care of the assets within his custody. A fiduciary’s actions are performed for the advantage of the beneficiary.  The agent appointed by a power of attorney agreement is a fiduciary.

[5]The Latin sometimes finds its way into court opinions and legal documents in the 21st century.  While modern Latin use might be considered a bit pretentious, every occupation has its own expressions that convey a great deal of information from the use of short terms that those outside the industry would not understand.

[6]This is the date the Constitutional Convention in Philadelphia finished its work.  The delegates signed the proposed Constitution and sent it to the Continental Congress for transmission to the states.

[7]This is the date that Vermont became the final original state to ratify the Constitution.  Under the terms of Article VII the Constitution had become effective on June 21, 1788 when New Hampshire became the ninth state to ratify.

[8]An example of this is Alexander Hamilton’s Federalist No. 84.

[9]Ultimately the Constitution was ratified, but with the understanding that a Bill of Rights would be added.  The Ninth Amendment addressed the concern that listing certain rights would exclude others:  “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”

[10]  Robert G. Natelson, The Legal Origins of the Necessary and Proper Clause, in GARY LAWSON, GEOFFREY P. MILLER, ROBERT G. NATELSON & GUY I. SEIDMAN, THE ORIGINS OF THE NECESSARY AND PROPER CLAUSE 52, 52-53 (2010).



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