A classic constitutional parable teaches that our federal system of government allows states to function as “laboratories of democracy.” This tale has been passed down from generation to generation, often to justify constitutional protections for state autonomy from the federal government. But scholars have failed to explain how state governments manage to overcome numerous impediments to experimentation, including resource scarcity, free rider problems, and misaligned incentives.

This Article maintains that the laboratories account is missing a proper appreciation for the coordinated networks of third-party organizations (such as interest groups, activists, and funders) that often fuel policy innovation. These groups are the real laboratories of democracy today. They perform the lion’s share of tasks necessary to enact new policies; they create incentives that motivate elected officials to support their preferred policies; and they mobilize the power of the federal government to change the landscape against which state experimentation occurs. If our federal system of government seeks to encourage policy experimentation, then courts should endeavor to create ground rules for regulating competition between political networks, rather than continuing futile efforts to protect state autonomy. This Article concludes by sketching some implications for several areas of legal doctrine, including federal preemption of state law, conditional spending, and the anticommandeering principle.

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We all know the story. Received wisdom says that our federal system of government encourages high levels of policy experimentation. “It is one of the happy incidents of the federal system,” Justice Louis D. Brandeis wrote, “that a single, courageous State may . . . serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.” 1 New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting). While usually attributed to Justice Brandeis, the notion that federalism encourages policy innovation appeared in nascent form as early as the Founding. See The Federalist No. 17, at 120 (Alexander Hamilton) (Clinton Rossiter ed., 1961) (noting the states’ competition with the federal government for the people’s “affection”); Todd E. Pettys, Competing for the People’s Affection: Federalism’s Forgotten Marketplace, 56 Vand. L. Rev. 329, 332 (2003); see also Truax v. Corrigan, 257 U.S. 312, 344 (1921) (Holmes, J., dissenting); 1 James Viscount Bryce, American Commonwealth 468 (3d ed. 1908). The basic idea is simple: The Constitution divides power and responsibility between the federal and state governments, giving states reign over their own affairs. That arrangement encourages state officials to compete for a mobile tax base by inventing better policies, and it allows them to tailor state law to local conditions. “Our Federalism” thus creates fifty state “laboratories,” whose officials toil to “devise[] solutions to diffi­cult legal problems.” 2 Ariz. State Legislature v. Ariz. Indep. Redistricting Comm’n, 135 S. Ct. 2652, 2673 (2015) (internal quotation marks omitted) (quoting Oregon v. Ice, 555 U.S. 160, 171 (2009)). And the nation benefits from knowing whether, and under what conditions, those solutions work. 3 See Nestor M. Davidson, Cooperative Localism: Federal-Local Collaboration in an Era of State Sovereignty, 93 Va. L. Rev. 959, 1007, 1013–14 (2007).

In the decades since Justice Brandeis penned his memorable opinion, countless scholars and judges have spun the same yarn about federalism’s role in promoting policy experimentation. The laboratories account has been deployed in thousands (yes, thousands) of academic works. 4 We’ll spare the reader the full string citation. Suffice it to say that as of November 2022, Westlaw contained over 3,000 law review articles citing New State Ice for Brandeis’s “laboratories” idea. See Westlaw, https://‌‌‌‌‌‌‌‌‌‌RelatedInformation/‌I2e2163979ca411d9bdd1cfdd544ca3a4/kcCitingReferences.html?originationContext=documentTab&transitionType=CitingReferences&contextData=(sc.Default)&docSource=fbd4f9ff86b4498ea4766f523d7cc657&rulebookMode=false&ppcid=db92fe9d11404d339fbb2489a0046317 (on file with the Columbia Law Review) (last visited Nov. 1, 2022) (searching for “New State Ice Co. v. Liebmann” and filter­ing by “Secondary Sources,” then by “Law Reviews”). That search doesn’t even include the vast number of political science and economics papers invoking the idea. And the Supreme Court has invoked it in scores of decisions on topics far and wide. 5 See Espinoza v. Mont. Dep’t of Revenue, 140 S. Ct. 2246, 2260–61 (2020); Fisher v. Univ. of Tex., 136 S. Ct. 2198, 2214 (2016); Ariz. State Legislature, 135 S. Ct. at 2673; Grutter v. Bollinger, 539 U.S. 306, 342 (2003); Smith v. Robbins, 528 U.S. 259, 272–73 (2000); Lewis v. Casey, 518 U.S. 343, 351–52 (1996); Arizona v. Evans, 514 U.S. 1, 8 (1995); County of Riverside v. McLaughlin, 500 U.S. 44, 53 (1991); Gregory v. Ashcroft, 501 U.S. 452, 458 (1990); Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 546 (1985); Schall v. Martin, 467 U.S. 253, 275 (1984); Chandler v. Florida, 449 U.S. 560, 579 (1981); Fullilove v. Klutznick, 448 U.S. 448, 491 (1980); Reeves, Inc. v. Stake, 447 U.S. 429, 441 (1980); Whalen v. Roe, 429 U.S. 589, 597 (1977); Gerstein v. Pugh, 420 U.S. 103, 123 (1975); San Antonio Indep. Sch. Dist. v. Rodriguez, 411 U.S. 1, 50 (1973); McKeiver v. Pennsylvania, 403 U.S. 528, 547 (1971); Powell v. Texas, 392 U.S. 514, 536–37 (1968); Fay v. New York, 332 U.S. 261, 296 (1947); New State Ice, 555 U.S. at 171. We cite only majority opinions here. Counting separate concurrences and dissents, we found sixty-five opinions in total where a Justice has invoked the laboratories idea since Justice Brandeis’s dissent in New State Ice. Westlaw, https://‌*oc.Search) (on file with the Columbia Law Review) (last visited Nov. 1, 2022) (searching for “New State Ice” and filtering by “Cases,” then by “Jurisdiction” and “Supreme Ct.,” then by “Date after ‘03/21/1932’”). In those decisions, the laboratories account often fits into a larger theory about how best to promote federalism values, such as choice, par­ticipation, competition, the diffusion of power, and experimentation. 6 For sources reeling off these purported benefits of federalism, see Gregory, 50 U.S. at 458­–59; David L. Shapiro, Federalism: A Dialogue 75–106 (1995); Akhil Reed Amar, Five Views of Federalism: “Converse-1983” in Context, 47 Vand. L. Rev. 1229, 1230–46 (1994); Lynn A. Baker & Ernest A. Young, Federalism and the Double Standard of Judicial Review, 51 Duke L.J. 75, 136–39 (2001); Steven G. Calabresi, “A Government of Limited and Enumerated Powers”: In Defense of United States v. Lopez, 94 Mich. L. Rev. 752, 774–79 (1995); Michael W. McConnell, Federalism: Evaluating the Founders’ Design, 54 U. Chi. L. Rev. 1484, 1493–511 (1987); Deborah Jones Merritt, The Guarantee Clause and State Autonomy: Federalism for a Third Century, 88 Colum. L. Rev. 1, 3–10 (1988); Ernest A. Young, The Rehnquist Court’s Two Federalisms, 83 Tex. L. Rev. 1, 53–63 (2004) [hereinafter Young, Rehnquist Court]. In particular, the Court has sought to achieve those ends by carving out a policy space where states are autonomous—where federal law and federal officials may not intrude. The laboratories account aligns with this vision of federalism, as it seeks to prevent a federal behemoth from displacing states from domains where they can experiment.

The laboratories account has had a remarkable run, but it is little more than a campfire story. Even a cursory glance at states and their offi­cials suggests that they are poorly equipped innovators. For starters, there’s the problem of resources. State officials tend to be overwhelmed by the many demands on their time and hamstrung by tiny budgets, short legis­lative sessions, and low levels of expertise. There are also problems of incentives. As Professor Susan Rose-Ackerman and others have argued, a state often has little reason to pioneer new policies when it can simply copy successful ones from other jurisdictions at a fraction of the cost. 7 See Susan Rose-Ackerman, Risk Taking and Reelection: Does Federalism Promote Innovation?, 9 J. Legal Stud. 593, 610–11 (1980); see also Brian Galle & Joseph Leahy, Laboratories of Democracy? Policy Innovation in Decentralized Governments, 58 Emory L.J. 1333, 1361 (2009); Doni Gewirtzman, Complex Experimental Federalism, 63 Buff. L. Rev. 241, 265–66 (2015). Further, the potential electoral costs of endorsing unsuccessful policies will often outweigh the potential gains from endorsing successful ones. 8 See Galle & Leahy, supra note 7, at 1371–72. Taken to­gether, these obstacles to innovation suggest that major parts of the laboratories account are mistaken.

These obstacles, however, can’t be the end of the story. States are, in fact, flourishing sites for policy innovation. Just in recent years, they’ve pi­oneered a huge range of policies—from fracking to climate-change laws; from voter ID laws to sanctuary cities; from LGBTQ civil rights to protec­tions for the “right to work”; from enhanced firearm restrictions to stand-your-ground defenses. 9 See Krsna Avila, Kemi Bello, Lena Graber & Nikki Marquez, Immigr. Legal Res. Ctr., The Rise of Sanctuary: Getting Local Officers Out of the Business of Deportations in the Trump Era 1 (2018), https://‌‌‌sites/‌default/‌files/‌resources/‌rise_of_sanctuary-lg-20180201.pdf [https://‌]; Alexander Hertel-Fernandez, State Capture 2–3 (2019) [hereinafter Hertel-Fernandez, State Capture]; Sarah Warbelow, Courtnay Avant & Colin Kutney, Hum. Rts. Campaign Found., State Equality Index 2019, at 4 (2020), []; Jasmine C. Lee, Rudy Omri & Julia Preston, What Are Sanctuary Cities?, N.Y. Times (Feb. 6, 2017), https://‌‌interactive/‌2016/09/02/us/sanctuary-cities.html (on file with the Columbia Law Review) (describing sanctuary-city policies that cities, counties, and states have adopted to limit cooperation between local law enforcement and federal immigration authorities); Following the Parkland Shooting, 20 States and Washington, D.C.—Including Nine Led by Republican Governors—Passed Meaningful Gun Violence Prevention Bills Into Law., Everytown Rsch. & Pol’y, https://‌‌map/‌following-the-parkland-shooting-20-states-and-washington-d-c-including-nine-led-by-republican-governors-passed-meaningful-gun-violence-prevention-bills-into-law/‌ [https://‌‌5YSE-DVTM] (last visited Aug. 8, 2022); Weihua Li & Humera Lodhi, Which States Are Taking on Police Reform After George Floyd?, The Marshall Project (June 18, 2020), https://‌‌2020/‌06/‌18/‌which-states-are-taking-on-police-reform-after-george-floyd [https://‌‌MH44-TPU8]; Daniel Nichanian, Criminal Justice Reform in the States: Spotlight on Legislatures, Appeal, https://‌‌legislative-round-up/ [https://‌] (last updated June 30, 2021); Sam Ricketts, Rita Cliffton, Lola Oduyeru & Bill Holland, States Are Laying a Road Map for Climate Leadership, Ctr. for Am. Progress (Apr. 30, 2020), https://‌‌article/‌states-laying-road-map-climate-leadership/ [https://‌‌4DJ5-F82F]; State Climate Policy Maps, Ctr. for Climate & Energy Sols., https://‌‌content/‌state-climate-policy/ [https://‌‌CHG4-22YL] (last visited Aug. 8, 2022); States With Extreme Risk Laws, Everytown Rsch. & Pol’y, https://‌‌map/‌states-with-extreme-risk-laws/ [https://‌‌J9LU-3NMA] (last visited Aug. 8, 2022) (displaying on a map the states that have enacted extreme risk restrictions on firearm possession). On the right and the left, ideas for new policies are often first enacted in the states. While some legal scholars have criticized the laboratories account, no one has offered a satisfactory affirmative ac­count of how states and their officials manage to enact major innovative policies despite the obstacles to innovation mentioned above. The primary task of this Article, then, is to figure out where the laboratories account goes wrong and to propose a better account in its place.

This Article maintains that the laboratories account focuses on the wrong actors. It focuses inward, viewing state policies as the output of offi­cials working within state governments to promote local interests and concerns. But it should focus outward—on interest groups, activists, constituency-mobilization organizations, advocacy coalitions, donor con­sortia, and other third-party organizations that aggressively advocate for their pre­ferred policies.

To illustrate the influence of these groups, consider the state of Iowa in the aftermath of the 2016 elections. Republicans had just gained total control of Iowa’s state government for the first time in nearly two decades. One of the first items on the agenda was changing the legal rules govern­ing public sector labor unions. 10 Hertel-Fernandez, State Capture, supra note 9, at 174. The bill that was ultimately signed into law drew heavily from a proposal by the conservative-leaning American Legislative Exchange Council (ALEC) and was championed by several ALEC members. 11 Id. at 176. Policy briefs published by an affiliate of the State Policy Network (SPN)—a national association of right-leaning think tanks—ad­vocated for the bill. 12 Id. at 177. And lawmakers were pressured to publicly pledge support for the bill by the Iowa chapter of Americans for Prosperity (AFP)—a national libertarian advocacy organization established by indus­trial magnates Charles and David Koch—which launched a “grassroots” campaign that included mailers, advertisements, and constituent out­reach. 13 Id. at 176. Together, these groups both made the lawmaking process easier for Republicans who antecedently supported the union-busting legislation and exerted considerable electoral and social pressure on any lawmaker who would have preferred to move more slowly.

As this example illustrates, policy innovations are often devised and then propagated by third-party organizations connected to state officials through political networks. For many of the most important state policies, these organized interests are the true “laboratories of democracy,” as they catalyze policy experimentation in several crucial ways. They inform public officials about important social issues; propose solutions supported by be­spoke research; provide model legislative text and talking points tailored to local conditions; create electoral incentives and social connections that conduce to policy experimentation; and use the federal government’s power to spark state innovation. 14 See infra section II.B. State officials aren’t so much the scien­tists responsible for many of the most important policy innovations as they are the test subjects on which the real laboratories of democracy can ex­periment. 15 See Jessica Bulman-Pozen, Partisan Federalism, 127 Harv. L. Rev. 1077, 1081 (2014) [hereinafter Bulman-Pozen, Partisan Federalism]. Professor Jessica Bulman-Pozen’s im­portant article reexamines the relationship between political parties and federalism. She argues that federalism provides “durable and robust scaffolding” for partisan competition, thus explaining why states challenge the federal government and why Americans identify with particular states (sometimes different from where they reside). Id. She also argues that partisan federalism recasts states as “laboratories of partisan politics” and explores how par­tisanship, rather than local preferences or needs, shapes state policy. Id. at 1124–30. This Article adopts Bulman-Pozen’s insight but moves it in a different direction. It shifts the focus from political parties writ large and bores down on the crucial role that networked interest groups play in moving ossified state policymaking apparatuses forward, something that Bulman-Pozen touches upon only briefly. See id. at 1085 & n.20, 1101, 1126. In doing so, this Article explains how these interest group dynamics help solve a long-standing puzzle about how state experimentation gets off the ground, highlighting the dynamics of intra­party as well as interparty policymaking. It also focuses on a key problem for any form of partisan or interest group competition­—that one side will use its power to shut down the efforts of the other—and identifies the doctrinal solutions one would seek if this threat to state policy experimentation is taken seriously.

The prominent role of intense policy demanders in creating and dif­fusing state policy is familiar to close observers of American politics. But it has failed to elicit a change in federalism doctrine, and a fair amount of federalism scholarship remains oblivious to it. If one takes that role seri­ously, it becomes clear that the Court’s federalism doctrine needs to be revised. For starters, state autonomy shouldn’t be the desideratum. There is no reason to think that leaving states to their own devices will result in higher levels of experimentation since the third-party organizations be­hind many of the most important policy innovations aren’t typically motivated by the possibility of giving one state a competitive advantage over others or tailoring its policies to local conditions. Instead, these in­tense policy demanders seek to push their agendas in any jurisdiction where they have political leverage. 16 See, e.g., Hertel-Fernandez, State Capture, supra note 9, at 2 (discussing the rapid wave of stand-your-ground, right-to-work, and voter ID legislation promoted by networked interest groups); Rena M. Conti & David K. Jones, Policy Diffusion Across Disparate Disciplines: Private- and Public-Sector Dynamics Affecting State-Level Adoption of the ACA, 42 J. Health Pol. Pol’y & L. 377, 379–81 (2017) (discussing the rapid diffusion of policy packages implementing the Affordable Care Act (ACA)). Moreover, many influential state pol­icy experiments take place within federal regulatory regimes. Creating separation from these regimes would thus sometimes inhibit state experi­ments that wouldn’t otherwise occur. In short, there is little gained and much lost from attempts to maintain separation between the state and fed­eral governments.

At the same time, it’s important to acknowledge that the federal gov­ernment’s wide-ranging power can be used to interfere with state experiments. The federal government can impose draconian funding con­ditions designed to put an end to state policies; it can try to co-opt state officials into regulatory regimes with which they disagree; and it can broadly preempt state law. But the axis along which federal–state rivalry occurs is less intergovernmental than it is interpartisan. 17 See generally Bulman-Pozen, Partisan Federalism, supra note 15 (identifying the partisan forces that shape federal–state conflict). The threat to ex­perimentation with which we should be most concerned isn’t federal encroachment on state domains—rather, it is a federal government con­trolled by officials with one set of partisan interests using its power to thwart the experiments of states controlled by another set of partisans. The problem with the autonomy model is that it proposes a separation-of-powers solution to what is fundamentally a separation-of-parties problem. 18 See Daryl J. Levinson, Empire-Building Government in Constitutional Law, 118 Harv. L. Rev. 915, 940–50 (2005) (positing that federal and state government actors seek to maximize voter and interest group support, rather than jurisdictional power or wealth); Daryl J. Levinson & Richard H. Pildes, Separation of Parties, Not Powers, 119 Harv. L. Rev. 2311, 2316–30 (2006). For a more sympathetic take on institutional loyalties in the separation-of-powers context, see David Fontana & Aziz Z. Huq, Institutional Loyalties in Constitutional Law, 85 U. Chi. L. Rev. 1, 27–37 (2018).

This Article proposes an alternative to the autonomy model that doesn’t require the futile task of keeping the federal government out of the states’ domains. Instead, the proposal aims to obtain the right condi­tions for federal–state bargaining within areas of overlapping jurisdiction. Put differently, the goal isn’t to prevent federal–state fights by keeping the two sides separated—it is to establish ground rules to push the fights to­ward beneficial forms of contestation. While the Article does not aim to identify the complete set of doctrinal rules that courts following this model should adopt, it concludes by sketching some potential implications for several areas of doctrine, including federal preemption of state law, con­di­tional spending, and the anticommandeering principle.

The argument proceeds in three parts. Part I describes the labora­to­ries account in more detail and outlines several obstacles inhibiting state officials’ propensity to experiment with new policies. Part II explains the role of networks of organized interests in the creation and diffusion of state policy innovations and how they help state officials overcome obsta­cles to innovation. Part III identifies the implications for legal theory and doctrine.

Before proceeding, two preliminary points are in order. First, this Article follows the convention of political scientists in using the term “in­novation” to refer to “a program or policy which is new to the state[] adopting it.” 19 Jack L. Walker, The Diffusion of Innovations Among the American States, 63 Am. Pol. Sci. Rev. 880, 881 (1969). This definition includes mimicked policies (i.e., policy diffu­sion) as well as policies instantiated for the very first time. One reason for this choice is methodological: It is easier to determine when a policy is new to a particular jurisdiction than it is to determine whether it is the first such policy anywhere. Another reason is nor­mative: Policies that are new to a jurisdiction provide information about how the policy works in particular circumstances, and that is a good above and beyond the information obtained when the policy is first instantiated. That sense of the term differs from another common sense according to which something is an “innovation” only if it’s better than the thing preceding it. 20 Similarly, the use of the term “experimentation” does not imply that a state has followed the scientific method. See, e.g., Malcolm M. Feeley & Edward Rubin, Federalism: Political Identity and Tragic Compromise 26–28 (2008); Michael Abramowicz, Ian Ayres & Yair Listokin, Randomizing Law, 159 U. Pa. L. Rev. 929, 947 (2011); Edward L. Rubin & Malcolm Feeley, Federalism: Some Notes on a National Neurosis, 41 UCLA L. Rev. 903, 923–26 (1994) [hereinafter Rubin & Feeley, National Neurosis]. Thanks to Professor Deborah Hensler for clarification on this and some related points. This Article uses the more value-neutral definition because it’s more tractable—not everyone will agree about which policies are genuine improvements over their predecessors. Indeed, one of the most powerful justifications for our federal system of government is that Americans have different conceptions of the “good” and thus different ideas about which policies to adopt. Attempting to study “innovation” in its value-laden sense would lead to disagreement as to which phenomena count as part of the study. Further, there is value in determining whether particular doctrines, frameworks, and systems conduce to producing “democratic churn,” 21 Heather K. Gerken, The Supreme Court, 2009 Term—Foreword: Federalism All the Way Down, 124 Harv. L. Rev. 4, 10 (2010) [hereinafter Gerken, Foreword]. quite apart from whether the changes they tend to produce align with any particular conception of the good. When jurisdic­tions implement new policies, they show us how those policies fare relative to their predecessors, and that information may allow us to improve our decisions in the future. 22 This is one of the “discursive benefits of structure”—that is, the ways that federalism “help[s] tee up national debates, accommodate political competition, and work through normative conflict.” Heather K. Gerken, Federalism as the New Nationalism: An Overview, 123 Yale L.J. 1889, 1894 (2014) [hereinafter Gerken, New Nationalism]; see also Heather K. Gerken, Federalism 3.0, 105 Calif. L. Rev. 1695, 1720 (2017) [hereinafter Gerken, Federalism 3.0].

Second, this Article is primarily interested in the influence of the la­bora­tories myth on our constitutional discourse and the development of constitutional law. Accordingly, its inquiry is limited to policy domains where clashes between the federal and state governments are likely to oc­cur—where the threat to state experimentation is at its peak. 23 As with the use of the word “innovation,” this Article uses “threat” to refer to any intervention that would diminish the frequency of state policy experiments, regardless of whether one believes that the intervention improves the overall policy ecosystem. The Article thus sets to one side policies that are idiosyncratic to a particular jurisdic­tion or that otherwise lack national salience. The potential for our federal structure of government to encourage the latter sort of experimentation is a point in its favor and would be relevant to someone trying to design a political system from scratch. But our interest is in whether and how courts can encourage policy experimentation by policing disputes between the federal and state governments. 24 This Article also sets to one side a related debate concerning whether state courts do and should serve as laboratories in defining the scope of constitutional rights. See, e.g., Jeffrey S. Sutton, 51 Imperfect Solutions: States and the Making of American Constitutional Law 174–78 (2018); Goodwin Liu, State Courts and Constitutional Structure, 128 Yale L.J. 1304, 1338–39 (2019) (reviewing Jeffrey S. Sutton, 51 Imperfect Solutions: States and the Making of American Constitutional Law (2018)).