Commerce Clause Challenges To Health Care Reform
The following article, forthcoming in U. Penn. L. Rev., pinpoints the strongest arguments for and against federal power under the Commerce Clause to mandate the purchase of health insurance: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1747189
Among the key points I make in defense of this federal law are:
1. The “commerce” in question is simply health insurance, and not the non-purchase of insurance as challengers have framed it. Because “regulate” clearly allows both prohibitions and mandates of behavior, mandating purchase is lexically just as valid an application of the clause as is prohibiting purchase or mandating the sale of insurance.
2. Although existing precedent might allow a line to be drawn between economic activity and inactivity, there is no reason in principle or theory why such a line should be drawn in order to preserve state sovereignty. Purchase mandates, after all, are as rare under state law as under federal law.
3. Challengers do not seriously dispute the constitutional validity of the ACA’s regulation of insurers or the economic necessity of the mandate in order for that regulation to be effective. In fact, they essentially concede the mandate’s necessity by asking to strike the entire law if it is declared invalid. Accordingly, the mandate would pass the tests for constitutional necessity articulated by at least seven of the Justices in the Comstock opinion last year, and might even pass the necessity test embraced by Justices Thomas and Scalia.
4. An important challenge, not yet clearly discussed by court opinions to date, is that the mandate does not, strictly speaking, simply “carry into execution” Congress’ other regulatory powers, but is the exercise of a distinct power. However, both modern and historical precedents under the Necessary and Proper Clause are not limited narrowly to merely implementation measures. Both Comstock and a series of decisions under the Postal Power are good examples to the contrary since they authorize independent federal powers that expand the range of purposes and measures permitted by express Congressional powers.
5. There is no coherent basis for declaring a purchase mandate to be constitutionally “improper,” and a categorical ban on regulating inactivity would contradict the implicit reasoning underlying several other established precedents — such as those upholding the draft and the Congressional subpoena power. Also, federal eminent domain allows compelled transactions justified in part by the Necessary and Proper clause’s expansion of the commerce power, when applied, for instance, to citizen’s refusal to sell land for use in constructing highways, bridges, and canals.
6. Using the 10th Amendment to justify a categorical prohibition of purchase mandates (as Randy Barnett has argued) would be no more convincing than using the 9th or 5th Amendments (substantive due process). Instead, such a move would, for the first time and contrary to precedent, make the 10th a protector of individual liberties rather than just federalism concerns, and would radically enforce an absolute right to economic liberty, regardless of level of legislative justification or judicial scrutiny (see point 9).
7. Slippery slope concerns are no greater here than for any other of a range of expansive federal powers. Instead, the novelty of the mandate subjects it to greater political constraint, and so “parade of horribles” concerns may be even more unrealistic than similar settings where the Court has rejected them.
8. Grounding the mandate in the Necessary and Proper clause helps to confine its precedential effect by emphasizing it’s necessary role in the ACA’s particular regulatory scheme that, in other respects, clearly resides within the core of the conventional commerce power. This essential supportive and interconnected role is not shared by free-standing mandates to purchase American cars or broccoli, for instance.
9. Counteracting imaginary slippery slope concerns about absurd hypothetical laws are the legitimate concerns about insurmountable barriers that a prohibition of purchase mandates would erect. Forbidding Congress from any purchase mandate could cripple necessary efforts, for instance, to require preventive measures in the face of a massive pandemic that threatened tens of millions of lives.
By: Mark Hall, Professor of Law, Wake Forest University School of Law: Originally published in Health Reform Law, January 26, 2011.
The Fight Over The Individual Mandate Is Not About Liberty
Whatever the legal argument about the individual mandate is about, it’s not, as some of its detractors would have it, a question of liberty. Charles Fried, Ronald Reagan’s former solicitor general, put this well at Wednesday’s Senate Judiciary Committee hearing.
“As I recall,” he said, “the great debate was between this device and the government option. And the government option was described as being akin to socialism, and there was a point to that. But what’s striking is that nobody in the world could’ve argued that the government option or single-payer could’ve been unconstitutional. It could’ve been deplorable. It could’ve been regrettable. It could’ve been Eastern rather than Western European. But it would’ve been constitutional.”
I’d disagree slightly with Fried’s characterization of the policy debate — the individual mandate and the public option do very different things, and a bill with a public option would still have had an individual mandate — but on the law, even the panel’s anti-mandate witnesses agreed with his characterization of the single payer’s legality. So, too, does Daniel Foster, a conservative at the National Review, who wrote, “All conservatives, I’d imagine, think single-payer is unwise, but I’m sure plenty of them think it’s also constitutional (I’m probably one of them, as well).”
There is little doubt that the individual mandate, which preserves a private insurance market and the right to opt out of purchasing coverage, accords more closely with most conservative definitions of liberty than a single-payer system, which wipes out private insurers and coerces every American to pay for the government’s coverage. That doesn’t make it more constitutional, of course. But it does suggest that the dividing point isn’t liberty.
When it comes to the legislation itself, the key question actually comes down to semantics. It’s broadly agreed that tax breaks are constitutional. The individual mandate could’ve been called the “personal responsibility tax.” If you can show the IRS proof of insurance coverage, you then get a “personal responsibility tax credit” for exactly the same amount. This implies that what makes the mandate unconstitutional in the eyes of some conservatives is its wording: It’s called a “penalty” rather than a “tax.” As Judge Henry Hudson put it in his ruling, “In the final version of the [Affordable Care Act] enacted by the Senate on December 24th, 2009, the term ‘penalty’ was substituted for the term ‘tax’ in Section 1501(b)(1). A logical inference can be drawn that the substitution of this critical language was a conscious and deliberate act on the part of Congress.” And it was: Taxes are more politically toxic than penalties, or so the authors of the bill thought. But they’re not more damaging to liberty than taxes.
Despite the overheated rhetoric that’s been tossed around in this debate, I don’t believe our forefathers risked their lives to make sure the word “penalty” was eschewed in favor of the word “tax.” This is not a country built upon semantics. And I don’t think semantics underly the principle conservatives are fighting for here, either. After all, before Barack Obama adopted the individual mandate — and I mean mere months before — Sen. Chuck Grassley (R-Iowa) said there was “bipartisan consensus” around the need for an individual mandate. Sen. Olympia Snowe (R-Maine) voted for the individual mandate in the Senate Finance Committee. Sen. Bob Bennett (R-Utah) had his name on a bill that included an individual mandate. Sen. Bob Dole (Kan.), back when he led the Senate’s Republicans, co-sponsored a bill that included an individual mandate. None of these legislators takes the Constitution lightly. They didn’t see the individual mandate as a threat to liberty, and they weren’t constantly emphasizing that it was a tax rather than a penalty.
The principle conservatives are fighting for is that they don’t like the Affordable Care Act. And having failed to win that fight in Congress, they’ve moved it to the courts in the hopes that their allies on the bench will accomplish what their members in the Senate couldn’t. That’s fair enough, of course. But they didn’t see the individual mandate as a question of liberty or constitutionality until Democrats passed it into law in a bill Republicans opposed, and they have no interest in changing its name to the “personal responsibility tax,” nor would they be mollified if it was called the “personal responsibility tax.” The hope here is that they’ll get the bill overturned on a technicality. And perhaps they will. But no one should be confused by what’s going on.
By: Ezra Klein, The Washington Post, Posted February 2, 2011
On Health Care, Justice Will Prevail
The lawsuits challenging the individual mandate in the health care law, including one in which a federal district judge last week called the law unconstitutional, will ultimately be resolved by the Supreme Court, and pundits are already making bets on how the justices will vote.
But the predictions of a partisan 5-4 split rest on a misunderstanding of the court and the Constitution. The constitutionality of the health care law is not one of those novel, one-off issues, like the outcome of the 2000 presidential election, that have at times created the impression of Supreme Court justices as political actors rather than legal analysts.
Since the New Deal, the court has consistently held that Congress has broad constitutional power to regulate interstate commerce. This includes authority over not just goods moving across state lines, but also the economic choices of individuals within states that have significant effects on interstate markets. By that standard, this law’s constitutionality is open and shut. Does anyone doubt that the multitrillion-dollar health insurance industry is an interstate market that Congress has the power to regulate?
Many new provisions in the law, like the ban on discrimination based on pre-existing conditions, are also undeniably permissible. But they would be undermined if healthy or risk-prone individuals could opt out of insurance, which could lead to unacceptably high premiums for those remaining in the pool. For the system to work, all individuals — healthy and sick, risk-prone and risk-averse — must participate to the extent of their economic ability.
In this regard, the health care law is little different from Social Security. The court unanimously recognized in 1982 that it would be “difficult, if not impossible” to maintain the financial soundness of a Social Security system from which people could opt out. The same analysis holds here: by restricting certain economic choices of individuals, we ensure the vitality of a regulatory regime clearly within Congress’s power to establish.
The justices aren’t likely to be misled by the reasoning that prompted two of the four federal courts that have ruled on this legislation to invalidate it on the theory that Congress is entitled to regulate only economic “activity,” not “inactivity,” like the decision not to purchase insurance. This distinction is illusory. Individuals who don’t purchase insurance they can afford have made a choice to take a free ride on the health care system. They know that if they need emergency-room care that they can’t pay for, the public will pick up the tab. This conscious choice carries serious economic consequences for the national health care market, which makes it a proper subject for federal regulation.
Even if the interstate commerce clause did not suffice to uphold mandatory insurance, the even broader power of Congress to impose taxes would surely do so. After all, the individual mandate is enforced through taxation, even if supporters have been reluctant to point that out.
Given the clear case for the law’s constitutionality, it’s distressing that many assume its fate will be decided by a partisan, closely divided Supreme Court. Justice Antonin Scalia, whom some count as a certain vote against the law, upheld in 2005 Congress’s power to punish those growing marijuana for their own medical use; a ban on homegrown marijuana, he reasoned, might be deemed “necessary and proper” to effectively enforce broader federal regulation of nationwide drug markets. To imagine Justice Scalia would abandon that fundamental understanding of the Constitution’s necessary and proper clause because he was appointed by a Republican president is to insult both his intellect and his integrity.
Justice Anthony Kennedy, whom many unfairly caricature as the “swing vote,” deserves better as well. Yes, his opinion in the 5-4 decision invalidating the federal ban on possession of guns near schools is frequently cited by opponents of the health care law. But that decision in 1995 drew a bright line between commercial choices, all of which Congress has presumptive power to regulate, and conduct like gun possession that is not in itself “commercial” or “economic,” however likely it might be to set off a cascade of economic effects. The decision about how to pay for health care is a quintessentially commercial choice in itself, not merely a decision that might have economic consequences.
Only a crude prediction that justices will vote based on politics rather than principle would lead anybody to imagine that Chief Justice John Roberts or Justice Samuel Alito would agree with the judges in Florida and Virginia who have ruled against the health care law. Those judges made the confused assertion that what is at stake here is a matter of personal liberty — the right not to purchase what one wishes not to purchase — rather than the reach of national legislative power in a world where no man is an island.
It would be asking a lot to expect conservative jurists to smuggle into the commerce clause an unenumerated federal “right” to opt out of the social contract. If Justice Clarence Thomas can be counted a nearly sure vote against the health care law, the only reason is that he alone has publicly and repeatedly stressed his principled disagreement with the whole line of post-1937 cases that interpret Congress’s commerce power broadly.
There is every reason to believe that a strong, nonpartisan majority of justices will do their constitutional duty, set aside how they might have voted had they been members of Congress and treat this constitutional challenge for what it is — a political objection in legal garb.
By: Laurence H. Tribe, Op-Ed Contributor, New York Times: Professor, Harvard Law School and author of “The Invisible Constitution”, February 7, 2011
Gaming the System: At The Supreme Court, Could Legal Precedent Be Less Important Than Popular Opinion?
Articles of faith, as a rule, don’t change every few months. And yet, just nine months ago, it was an article of faith among court watchers that President Obama’s health care reform plan would be upheld at the Supreme Court by a margin of 7-2 or 8-1. Today it is an equally powerful article of faith that everything rests in the hands of Justice Anthony Kennedy in what will surely be a 5-4 decision. What changed between last March and last Monday?
To review: When the first lawsuits were filed challenging the law in March 2010, the conventional wisdom was that they were little more than a Tea Party stunt. “Several constitutional law experts said this week that it is somewhere between unlikely and hard-to-imagine that the Supreme Court would strike down the new healthcare law,” wrote David Savage at the Los Angeles Times. He quoted George Washington University law professor Orin Kerr, a former Kennedy clerk, saying that “there is a less than 1 percent chance that the courts will invalidate the individual mandate.” In Newsweek in September 2010, Stuart Taylor quoted Walter Dellinger, acting solicitor general under President Clinton, predicting an 8-1 vote at the high court, and Tom Goldstein, another prominent court watcher and litigator, calling for a vote of 7-2.
Fast forward to this week. As my colleague David Weigel put it Monday: “The fate of health care reform is where it was yesterday—in the hands of Supreme Court Justice Anthony Kennedy.” The Wall Street Journal agreed, sighing, “As with so many contentious issues in American life, destiny appears to have appointed [Kennedy] the ultimate arbiter of the constitutionality of the linchpin of this new law: the individual mandate.” Now, the composition of the court has not changed since last year. Nor has the meaning of the Commerce Clause, or the decades of precedents interpreting that doctrine, or the words of the Affordable Care Act itself. The only thing that has shifted between the filing of the Obama health care suits and Judge Roger Vinson’s decision finding the entire bill unconstitutional is the odds. We went from “a less than 1 percent chance” of the suits succeeding to their success being determined by a coin flip in Anthony Kennedy’s chambers.
Putting aside the question of whether it matters what court watchers think—or whether the new odds should make any difference—it’s astounding to witness the conventional wisdom shift so dramatically and so rapidly. It took years for court watchers to take challenges to the collective-rights theory of the Second Amendment seriously. It’s taken just weeks for them to come to believe that the fate of the health care law may be decided by a single vote.
To those in the business of making predictions about the Supreme Court justices, one thing that did change was a smoke signal sent up by Justices Clarence Thomas and Antonin Scalia last month in a passionate dissent from the court’s refusal to hear a case from the 9th Circuit Court of Appeals. Alderman v. United States involved the right of the federal government to criminalize a violent felon’s purchase of body armor. And as Andrew Cohen explained it, the two justices weren’t obligated to publish a lengthy dissent, spelling out—complete with references to Hershey’s Kisses (the new broccoli?)—their view that the Commerce Clause does not allow the federal government to make such a regulation. Their small treatise on the limits of the Commerce Clause’s power, Cohen wrote, “confirms to the world that no more than seven votes on the Supreme Court are still in play over the constitutionality of the federal health care measure.”
Court watchers have long argued that Scalia cannot possibly square his vote (indeed his own words) in the 2005 case of Gonzales v. Raich with a vote to strike down health care reform. Once they read the Thomas/Scalia dissent in Alderman, they had to swallow hard. In Raich, Scalia agreed that Congress could regulate marijuana that was neither purchased nor sold in any market but grown for medicinal reasons at home. “The authority to enact laws necessary and proper for the regulation of interstate commerce is not limited to laws governing intrastate activities that substantially affect interstate commerce,” Scalia wrote. “Where necessary to make a regulation of interstate commerce effective, Congress may regulate even those intrastate activities that do not themselves substantially affect interstate commerce.” He added that “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce.”
These words matter a lot to supporters of health care reform. But it’s no longer clear how much they matter to Justice Scalia.
Simon Lazarus has a thoughtful post about all the ways in which the court’s more conservative justices—not just Scalia but also Kennedy and Chief Justice Roberts—”will have to twist their prior decisions and statements into pretzels in order to rule the individual mandate or other ACA provisions unconstitutional.” Reading Raich against the Alderman dissent, I am not sure all the justices are terribly bothered at the prospect of performing such gymnastics. Supreme Court reporters like to believe that the justices are invariably hemmed in and pinned down by their prior decisions, and in a perfect world they might be. But if we learned anything at all from Bush v. Gore, it’s that in landmark cases with huge symbolic stakes, justices on both sides of the aisle can get all kinds of creative.
If that is the case, then in the coming months we should pay less attention to the words of Raich and more to the political scientists and judicial behavior theorists who have a lot to say about how justices decide cases. What really changed between last March and this week is that in making predictions about what happens to health care reform, we have almost entirely stopped talking about the law or the Constitution and begun to think solely in terms of strategic judicial behavior.
Court watchers on both sides of the debate seem to agree that Vinson’s opinion was rooted more in his convictions about the need to restrain federal overreaching than in the court’s modern Commerce Clause precedents. The question now seems to be less about whether the justices can find a way to strike down the law if they so choose—they can—than whether they have the political stomach to do it.
I am not an expert on judicial stomachs. But it seems to me that once you start thinking strategically about how health care reform will fare at the Supreme Court, pretty soon you arrive at some serious questions about the continued legitimacy of the court, judicial responses to public sentiment, and other matters that have far more to do with social psychology than Wickard v. Filburn.
Everyone would like to believe that the kind of constitutional issues presented in these health care suits are clear and specific. But they are precisely the sort of wide-open normative inquiries that may tempt even great and fair jurists to have a little extra-textual fun. “American constitutional lawyers, whether practitioners, academics or judges, seem to feel relatively few genuine constraints in the kinds of arguments they are willing to make or endorse,” professor Sanford Levinson has written. “It is, I am convinced, harder to recognize a frivolous argument in constitutional law than in any other area of legal analysis.”
If the odds of success for the health care challenges have tilted in recent months, it’s not because the suits themselves have somehow gained more merit. It’s because the public mood and the tone of the political discourse have shifted dramatically—emboldening some federal judges willing to support a constitutional idea whose time, in their view, has finally come. Whether this sea change will affect the Supreme Court remains to be seen. At least on paper, the Supreme Court is immune to whatever the odds makers are saying about the law’s chances. If recent weeks have shown us anything, however, it’s that what’s on paper doesn’t matter as much as we think it does in the nation’s courts.
By: Dahlia Lithwick, Slate, February 2, 2011
Judge Vinson’s Tea Party Manifesto
Mark Hall, Fred and Elizabeth Turnage Professor of Law, Wake Forest University School of Law
On first read, the most striking aspect of Judge Vinson’s ruling today is not its remedy — striking the Affordable Care Act in its entirety — but the impression one gets that the opinion was written in part as a Tea Party Manifesto. At least half of the relevant part of the opinion is devoted to discussing what Hamilton, Madison, Jefferson and other Founding Fathers would have thought about the individual mandate, including the following remarkably telling passage (p. 42):
It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.
As I’ve written elsewhere, the same Founders wrote a Constitution that allowed the federal government to take property from unwilling sellers and passive owners, when needed to construct highways, bridges and canals. But Judge Vinson dismissed those and other examples with the briefest of parenthetical asides: “(all of [these] are obviously distinguishable)” (p. 39). Instead, he twice cites and quotes the lower court opinion in Schechter Poultry (pp. 53, 55), which struck down the National Industrial Recovery Act, at the height of the Great Depression and the pinnacle of Lochner jurisprudence.
Still, it’s fair enough to conclude, absent controlling precedent, that being uninsured might not constitute interstate commerce. What’s harder to swallow is the judge’s rejection of the Necessary and Proper Clause. In refusing to sever the individual mandate, he not only concedes the mandate “is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to . . . what Congress was ultimately seeking to accomplish,” he astonishingly devotes about ten pages (63-74) to hammering home the mandate’s necessity, explaining, for instance, that:
this Act has been analogized to a finely crafted watch . . . . It has approximately 450 separate pieces, but one essential piece (the individual mandate) is defective and must be removed. It cannot function as originally designed. There are simply too many moving parts in the Act and too many provisions dependent (directly and indirectly) on the individual mandate and other health insurance provisions — which, as noted, were the chief engines that drove the entire legislative effort — for me to try and dissect out the proper from the improper
So if the mandate is so clearly necessary, why is it not “proper.” The answer, as in Virginia’s Judge Hudson’s opinion, is a virtual tautology: because the Commerce Clause does not permit it. Here are critical excerpts:
the Clause is not an independent source of federal power (p. 58) . . . Ultimately, the Necessary and Proper Clause vests Congress with the power and authority to exercise means which may not in and of themselves fall within an enumerated power, to accomplish ends that must be within an enumerated power. (p. 60)
In light of [United States v. South-Eastern Underwriters], the “end” of regulating the health care insurance industry (including preventing insurers from excluding or charging higher rates to people with pre-existing conditions) is clearly “legitimate” and “within the scope of the constitution.” But, the means used to serve that end must be “appropriate,” “plainly adapted,” and not “prohibited” or inconsistent “with the letter and spirit of the constitution.” . . . The Necessary and Proper Clause cannot be utilized to “pass laws for the accomplishment of objects” that are not within Congress’ enumerated powers. (p. 62)
The defendants have asserted again and again that the individual mandate is absolutely “necessary” and “essential” for the Act to operate as it was intended by Congress. I accept that it is. Nevertheless, the individual mandate falls outside the boundary of Congress’ Commerce Clause authority and cannot be reconciled with a limited government of enumerated powers. By definition, it cannot be “proper.” (p. 63)
My full rebuttal is here, but in brief: none of this is consistent with Comstock, which allows the federal government to commit mentally ill former prisoners to civil treatment, despite the clear absence of any general federal civil commitment power. And this is inconsistent with Lopez and with Justice Scalia’s concurrence in Raich, which note that regulation, otherwise forbidden, of local noneconomic activities, can be justified when this is “an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.” Thus, we still await a convincing explanation of why rejecting the “necessary and proper” defense is consistent with recent Supreme Court opinions, authored or joined by most of the conservative justices.
By: Professor Mark Hall, Health Reform Watch, January 31, 2011
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