Updated

The following is a rush transcript of the August 8, 2010, edition of "Fox News Sunday With Chris Wallace." This copy may not be in its final form and may be updated.

CHRIS WALLACE, ANCHOR: The national debate over same-sex marriage took another turn this week when a federal judge ruled a voter-approved ban in California is unconstitutional.

Ted Olson argued and won the case, which surprised a lot of people because he is a leading conservative lawyer who was solicitor general under George W. Bush. Mr. Olson joins us now from Wisconsin.

Mr. Olson, let's start with the issue of judicial activism. Seven million Californians voted for Proposition 8. Seven million people voted to amend the state constitution to ban same-sex marriage. Now a single judge overrules all of them?

TED OLSON, FORMER SOLICITOR GENERAL: Well, that's why we have judges. That's why we have an independent judiciary. We do not put the Bill of Rights to a vote. Forty-one states once prohibited interracial marriages, so that in Virginia when the Supreme Court finally struck that prohibition down, the president's parents could not have been married.

Our fundamental rights -- part of our Constitution is a separation of powers and an independent judiciary. We ask judges to make sure that when we vote for something we're not depriving minorities of their constitutional rights. And that's what the judge did.

WALLACE: But as a leading conservative lawyer, you have condemned such judicial activism in the past. Let's take a look at what you said in 2007. "Judges have taken some of those decisions off the policy table, taking them away from the people, by constitutionalizing these issues."

Question, isn't that exactly what Judge Walker did in this case?

OLSON: No. As a matter of fact, since 1888 the United States Supreme Court has 14 times decided and articulated that the right to marriage is a fundamental right. We're not talking about a new right here.

We're talking about whether a fundamental right, something that the Supreme Court has characterized as the most fundamental relationship we have in this country, can be deprived of certain individuals because of the color of their skin or because of their sexual orientation.

We do not permit discrimination, inequality. That's why we have a 14th Amendment that guarantees equal rights to all citizens. It's not judicial activism when judges do what the Constitution requires them to do, and they follow the precedent of previous decisions of the Supreme Court.

WALLACE: But, Mr. Olson, you have also said this. Judges should, quote, "interpret the law, not make it up, not create new rights that weren't there in the Constitution." Where is the right to -- you talk about the right to marriage. Where is the right to same- sex marriage in the Constitution?

OLSON: Where is the right to interracial marriage in the Constitution, Chris? The Supreme Court has said that marriage, the right to marry a person of your choice, is a part of liberty, privacy, association and spirituality guaranteed to each individual under the Constitution.

When you say "same-sex marriage," you're saying a particular type of marriage. The Supreme Court has looked at marriage and has said that the right to marry is a fundamental right for all citizens.

So you call it interracial marriage and then you could prohibit it?  No? The Supreme Court has said no. The same thing here. The judge, after hearing three weeks of testimony and a full day of closing arguments, and listening to experts from all over the world, concluded that the denial of the right to marry to these individuals in California hurt them and did not advance the cause of opposite sex marriage.

This is what judges are expected to do. It is not judicial activism.  It is judicial responsibility in its classic sense.

WALLACE: So society doesn't get to say that marriage should be between a man and a woman, even though society has said that for thousands of years.

Seven million people in California don't get to say that marriage is between a man and a woman, even though just November of 2008, 7 million Californians voted that they wanted to change their own state constitution to say just that.

OLSON: In the 1960s, an equivalent number -- it's a smaller number, but -- of Californians voted to change their constitution to say that you could discriminate on the basis of race in the sale of your home. The United States Supreme Court struck that down.

If 7 million Californians were to decide that we should have separate but equal schools, or that we would send some of our citizens to separate drinking fountains, or have them be in the back of the bus, that would be unconstitutional.

If we didn't have a separation of powers, if we didn't have a Bill of Rights, then 7 million Californians could take away your rights, or my rights or the rights of these citizens in California.   But we do have a Bill of Rights, and it's intended to protect us. The 14th Amendment was the result that -- the 14th Amendment that guarantees due process and equal protection to all citizens, to all persons, was the result of a civil war intended to enforce the promise of our Constitution that all men and women are created equal.

The judge is simply fulfilling that promise, that American promise.  The leading expert on the other side said that we -- when we stop this discrimination, America would be more true to its ideals. That's exactly what happened here.

WALLACE: When new Supreme Court justice Elena Kagan was up for solicitor general last year, she said this, Mr. Olson, "There is no federal constitutional right to same-sex marriage." Was now Justice Kagan wrong at that time?

OLSON: Well, what she was expressing is that the issue had never come before the Supreme Court. The Supreme Court had never decided that question. And she was correct that the Supreme Court has not addressed that question.

The Supreme Court will address that question at some day in the future, probably in this case.

WALLACE: But, Mr. Olson, you...

OLSON: She will have an...

WALLACE: ... you certainly are against judicial activism. How do you define what is judicial activism and what isn't?

OLSON: Well, most people use the term "judicial activism" to explain decisions that they don't like.

WALLACE: Exactly.

OLSON: What the court has done here -- I'm sorry if I interrupted you.

WALLACE: No, no. I just said exactly. That's...

OLSON: Yes.

WALLACE: ... how most people do define it.

OLSON: Yes. And what the court decided here -- the Supreme Court, as I said, of the United States has 14 times decided that the fundamental right to marry is an important constitutional right.

The judge applied that right, that existing right, that fully determined and repeatedly determined constitutional right, to some tens of thousands of citizens in California who are being harmed by discrimination.  That is not judicial activism. That is judicial responsibility.

WALLACE: Here's where some people see a comparison to the battle over abortion. The political process in the case of same-sex marriage was working. Five states and Washington, D.C. have legalized same-sex marriage.

Now, instead of letting this be decided on a state-by-state basis, you are, in effect, pushing the courts to pre-empt the argument, which is exactly what they did in Roe vs. Wade.

OLSON: Well, would you like your right to free speech -- would you like Fox's right to free press put up to a vote and say, "Well, if five states have approved it, let's wait till the other 45 states do?" These are fundamental constitutional rights.

The Bill of Rights guarantees Fox News and you, Chris Wallace, the right to speak. It's in the Constitution. And the Supreme Court has repeatedly held that the denial of our citizens of the equal rights to equal access to justice under the law is a violation of our fundamental rights.

Yes, it's encouraging that many states are moving towards equality on the basis of sexual orientation, and I am very, very pleased about that, because it is extraordinarily damaging to our citizens, our family members, our brothers, our sisters, our co- workers and our neighbors when they are labeled second-class citizens.

When the state of California, as it did in this case, enshrined in its constitution a separate status for certain of its citizens, it did immeasurable harm. We can't wait for the voters to decide that that immeasurable harm that is unconstitutional must finally be eliminated.

I applaud the fact that things are changing, and I think this case is helping open people's eyes to the damage done by discrimination on the basis of sexual orientation.

WALLACE: Let...

OLSON: All we have to do is look into the eyes of these individuals and decide why are we denying them the right to happiness that we afford to all of our other citizens.

WALLACE: Mr. Olson, we're beginning to run out of time, so I want to get to a few issues with you. Let's look at the process going forward.  Why not allow the judge's ruling in this case to stay on hold until the matter is settled?

Why push, as you are, to activate the ruling? It'll cause a flood of same-sex marriages that -- when they may soon be ruled or may later be ruled unconstitutional -- or, rather, that they may -- the ruling may be reversed.

OLSON: Well, the judge decided overwhelmingly that all of the evidence supported ending this discrimination now. The judge decided that this discrimination hurts individuals every single day, every single moment of their life.

WALLACE: But -- but -- but he did...   OLSON: It is time for this...

WALLACE: ... put his ruling -- he did put his ruling on hold. You're pressing for that hold to be ended, the stay to be ended, so that people can get same-sex marriages tomorrow.

OLSON: Chris, he put his decision on hold until he could hear from us as to why it shouldn't be put on hold. Yesterday the attorney general of California and the governor of California both said that the decision should go into effect immediately.

In other words, the chief executive officer and the chief legal officer of the state of California said, "It's time to end this discrimination. California will not be hurt if we stop discriminating now." We agree with that.

We believe that the individuals that we represent and tens of thousands of other Californians should not any longer be denied their constitutional rights. And we hope the judge decides to allow his decision to go forward.

WALLACE: All sides expect this case to go to the Supreme Court, and I guess all sides expect Justice Anthony Kennedy to be the swing vote. Let's take a look at his record over the years on this issue.

In 2003, Justice Kennedy wrote the opinion invalidating a Texas law that made gay sex a crime. In 2007, he struck down a Colorado provision that prohibited antidiscrimination ordinances that would protect gays.  Question: What do you make of Justice Kennedy's record on these issues?

OLSON: Justice Kennedy, like the other eight justices on the Supreme Court, are going to look at this issue. And most importantly, they're going to look at the overwhelming record produced by this trial.

This judge, this district judge, the trial judge in California, the federal judge in California, listened to all the evidence. We put on nine expert witnesses, seven lay witnesses, and the other side really produced no evidence at all. In fact, they said during the course of the trial they didn't need to prove anything, they didn't have any evidence, they didn't need any evidence.

This is an overwhelming record that supports the fact that individuals are being hurt, and it helps no one in California. And California has no rational basis for continuing this discrimination.

When that gets to the Supreme Court, I think that will be persuasive to all of the justices on the Supreme Court.

WALLACE: So you think you're going to win in the Supreme Court?

OLSON: Well, we are not taking anything for granted. The Supreme Court justices will decide the case when it gets there. But we believe that we're right under the Constitution.   This judge, if you read his 136-page opinion that analyzes every single issue, every single piece of evidence bearing on this case, decided that this discrimination is wrong, it's unconstitutional, it should be stopped.

We are hopeful and reasonably confident that the Supreme Court, when we get there, will agree with that.

WALLACE: Finally -- we've got about a minute left -- let's talk a little bit about Ted Olson. As we said at the top of this segment, your conservative credentials are unquestioned. You argued and won Bush v. Gore, which ended up with the election of President George W. Bush. You were his first solicitor general.

And a lot of people have asked me, so I want to ask you, why did you get involved in the cause? And is it, in fact, the case that Hollywood director and liberal Rob Reiner was the one who got you to take on the case?

OLSON: Well, there's a lot of people that asked me to take on this case. Chris, we believe that a conservative value is stable relationships and a stable community and loving individuals coming together and forming a basis that is a building block of our society, which includes marriage. We believe that that is a conservative value.

We also believe that it's an important conservative value to sustain the rights of liberty of our citizens and to eliminate discrimination on invidious bases, whether it's race, or sex or sexual orientation. It should be a liberal and a conservative value. It is a fundamental American value. All men and all women are created equal under the law.

WALLACE: Mr. Olson, we want to thank you so much for joining us today. We'll keep following your lawsuit. And I've got to say after your appearance today, I don't understand how you ever lost a case in the Supreme Court, sir.

OLSON: You're very kind, Chris. Thank you for having me on your program.