“State Capture” and the Role of State Courts

Recent polling suggests that a majority of Americans still believe that state and local governments have their best interests at heart. Yet lawyers and political scientists routinely warn that money exercises too much control at virtually all levels of governmental decision-making. Facing mounting pressure from wealthy corporations and individual activists, many states and localities are rejecting federal aid; offering massive incentive packages for controversial development projects; removing families from their homes; preempting grassroots efforts to build labor power; encouraging firearms abuse; and gerrymandering election maps for maximum partisan gain.

That is not a comprehensive list, but it does illustrate that “state capture” — the informal control of public policymaking by private interests — has become widespread. Because state capture entails a form of de facto minority rule, it presents a distinctive threat to basic premises of state democracy, like popular sovereignty, majoritarianism, and rule of law. Yet because state capture does not involve the kinds of quid-pro-quo exchange traditionally associated with political corruption, it is extremely difficult to regulate.

In a recent law review article, however, I argue that state constitutions offer powerful tools for contesting the capture of our state and local institutions. State capture is nothing new. Back in the 19th century, as it turns out, reformers added a wide variety of substantive and procedural safeguards to virtually all our state constitutions with the idea of establishing the people and the courts as bulwarks against private influence. Though vastly underutilized today, these provisions invite litigants to challenge special interest legislation and authorize state courts to respond with something more searching than toothless rational basis review.

From “single-subject” and “original purpose” requirements to prohibitions on “gifts,” these widely shared state constitutional provisions generally work by limiting legislative power. To highlight two particularly important examples, 46 state constitutions contain explicit “public purpose” requirements and 34 either prohibit or restrict the enactment of “special” or “local” laws. Respectively, these provisions prohibit states from granting public aid to private enterprise and from singling out particular individuals or groups for special benefits or burdens absent a valid public purpose justification.

Even today, litigants at state and local levels commonly bring challenges under these provisions against a wide spectrum of official activities. The problem, however, is that all but a few state courts have thus far failed to give them much effect. Instead, the vast majority have opted to enforce them using extremely deferential doctrines largely modeled on federal equal protection doctrine. In effect, that means that state courts will uphold most facially neutral legislation as long as it is possible to imagine some public purpose that it might be said to serve.

This general state judicial tendency to “lockstep” with the federal bench is, of course, well-documented — and not all scholars agree that it is necessarily a bad thing. But in an era characterized by extreme levels of democratic uncertainty and corporate monopoly power, it is worth asking whether, in fact, state courts should be doing more. Indeed, the problem posed by rampant state capture is not only that it results in controversial policy decisions but also that it tends to result in higher barriers to entry, thus making it more difficult for any kind of popular, countermobilization to get off the ground. This raises an important question for (small-d) democratic opponents of a stronger state judiciary: If not state courts, then who?

Still, even if state courts were willing to take a stronger stand against special interest legislation, it is not necessarily clear what that approach should entail. Luckily, state constitutional case law holds forth some compelling possibilities. One example is the 2010 case of Turken v. Gordon, wherein the Arizona Supreme Court found that a municipality’s agreement to pay a private corporation nearly $100 million to develop a commercial hub in a master-planned community violated the Arizona Constitution’s gift clause. Noting that the clause had originally been added to the Arizona Constitution to prevent public expenditures for private gain, the court reasoned that it could not uphold the agreement because its benefits to the community were not sufficiently direct.

From Turken, we learn that one way state courts might take a stronger stance against special interest legislation might be to apply what scholars commonly refer to as rational basis review “with bite.” But heightened scrutiny is not the only tool available to state courts today, as demonstrated, for instance, by the Maryland Court of Appeals’s decision in the 1981 case of Cities Service Company v. Governor. Turning again to state constitutional history, the court determined that giving adequate effect to the Maryland Constitution’s special legislation prohibition would require abandoning rational basis review in favor of a multifactor approach in which no single factor is determinative. To determine whether a challenged enactment amounted to special legislation, the court held, it would need to consider six factors: First, whether the law “was actually intended to benefit or burden a particular member or members of a class instead of an entire class;” second, “whether particular individuals or entities are identified in the statute;” third, the expected distribution of its benefits and burdens; fourth, whether “a particular individual or business sought and received special advantages from the legislature, or if other similar individuals or businesses were discriminated against by the legislation;” fifth, whether the “public need and public interest underlying the enactment” could be served by a general law; and, finally, whether the legislative enactment was “arbitrary and without any reasonable basis.”

For some, cases like Turken and Cities Service stand out as exceptions that prove the norm of highly deferential review. For others, however, they may serve as starting points for building out a state constitutional discourse that is better equipped to apprehend emerging challenges to state and local democracy.

If so, there is indeed a great deal of work to be done. For scholars, such work might involve educating the public about their state constitutional rights, compiling repositories of legal tools, and drawing attention to the existing, anti-capture case law. Litigants, meanwhile, can continue to bring challenges to enactments suspected of capture, and encourage courts to understand that they have authority to give these laws a harder look. And perhaps most importantly, state judges may consider taking up the challenge of trying out what states like Arizona and Maryland have done in their own jurisdictions — actually give doctrinal effect to their unique state constitutional provisions.

All this will undoubtedly take courage and time. But with democracy in crisis, business as usual may simply not be enough.

Lucien Ferguson is an assistant professor of law at Chicago-Kent College of Law and the Illinois Institute of Technology.

Suggested Citation: Lucien Ferguson, “State Capture” and the Role of State Courts, Sᴛᴀᴛᴇ Cᴏᴜʀᴛ Rᴇᴘᴏʀᴛ (June 4, 2026), https://statecourtreport.org/our-work/analysis-opinion/state-capture-and-role-state-courts