Archive | Commerce Clause

My SCOTUSblog Discussion of the Individual Mandate Decision

SCOTUSblog has just posted a detailed analysis of today’s decision that I did for them. It’s much more thorough than anything I have been able to put up elsewhere. Here is an excerpt:

Today’s 5-4 Supreme Court decision upholding the individual health insurance mandate is an extremely frustrating result for those of us who argued that the mandate is unconstitutional. One might even call it taxing. The plaintiffs came about as close as one can to winning a major constitutional case without actually winning it. It is the legal equivalent of losing the World Series after leading in the bottom of the ninth inning in the seventh game. It is not a happy day for supporters of limited government.

Yet the Court also offers us a measure of hope and vindication. A majority of the justices rejected claims that the mandate is authorized by the Commerce Clause and Necessary and Proper Clause. That has little immediate impact, but bodes well for the future. The numerous pundits who claimed that this case was a slam dunk for the federal government turned out to be spectacularly wrong. The struggle over the constitutional limits on federal power is far from over….

In his discussion of the Commerce Clause, Roberts ruled that the Constitution denies Congress the power to “bring countless decisions an individual could potentially make within the scope of federal regulation and … empower Congress to make those decisions for him.” Yet, having closed the front door of the Commerce Clause, the Chief Justice has now “empowered” Congress to make those same decisions for us through the tax power…

Today’s decision is unlikely to be the last word on the constitutional limits of federal power. As the close 5-4 division in the Court shows, the justices remain deeply divided on federalism issues….

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Supreme Court Majority Endorses Activity-Inactivity Distinction

Although the Supreme Court upheld the individual mandate as an exercise of the Tax Power, a majority of the justices also ruled that it is not a legitimate exercise of Congress’ powers under the Commerce Clause. In doing so, they endorsed the plaintiffs’ argument that the individual mandate exceeds the scope of the Commerce power because it does not regulate “economic activity,” but instead targets inactivity. Chief Justice Roberts also noted that upholding the mandate on this basis would lead to unconstrained congressional authority to enact other mandates:

The Constitution grants Congress the power to “regulate Commerce.” Art. I, §8, cl. 3 (emphasis added). The power to regulate commerce presupposes the existence of commercial activity to be regulated….. If the power to “regulate” something included the power to create it, many of theprovisions in the Constitution would be superfluous. For example, the Constitution gives Congress the power to“coin Money,” in addition to the power to “regulate the Value thereof.” Id., cl. 5. And it gives Congress the power to “raise and support Armies” and to “provide and maintain a Navy,” in addition to the power to “make Rules for the Government and Regulation of the land and navalForces.” Id., cls. 12–14. If the power to regulate the armed forces or the value of money included the power to bring the subject of the regulation into existence, the specific grant of such powers would have been unnecessary…

Our precedent also reflects this understanding. As expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: They uniformly describe the power as reaching “activity….”

The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product,on the ground that their failure

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Andrew Koppelman on the Origins of the Case Against the Individual Mandate

Northwestern University Law Professor Andrew Koppelman has an article in Salon on the origins of the case against the individual mandate, in which he tries to show that Democrats could not reasonably have anticipated that the mandate would run into legal problems, and therefore cannot be blamed for not being more careful in the way they drafted the law.

There are several flaws in the article. Perhaps the biggest one is that, even on Koppelman’s own account, by the time the law was enacted in March 2010, several leading scholars had raised constitutional objections to it, including the VC’s own Randy Barnett and David Kopel. So too did a number of state governments and members of Congress. Moreover, according to a recent book by investigative reporter Ron Suskind, President Obama himself worried that the mandate would be vulnerable to legal challenges, even before it was enacted. Thus, the mandate’s legal troubles were not only foreseeable, but at least in part actually were foreseen by the president, who chose to go with the mandate despite the possible legal risk.

I may write a more detailed comment on the article later. For now, I would like to correct a mistake related to me personally. Koppelman writes:

On August 22, [2009] David Rivkin and Lee Casey wrote a Washington Post op-ed declaring that “[t]he federal government does not have the power to regulate Americans simply because they are there.” There were some follow-up posts on Volokh Conspiracy by Jonathan Adler and Ilya Somin, both of whom reluctantly concluded that the bill was clearly authorized by current law. (Both later changed their minds and will now tell you that the mandate is obviously unconstitutional!)

Unfortunately for Koppelman, I have never said that “the mandate is obviously unconstitutional.” Rather, I have repeatedly written that [...]

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Jeffrey Rosen’s Proposed Limiting Principles for Federal Power

In a recent response to critics of his earlier column on the individual mandate case, Jeffrey Rosen claims that upholding the individual mandate would not lead to unlimited congressional power because “Congress [still] cannot use its commerce power to regulate activity that has no substantial effects on interstate commerce and where there are no collective action problems that make it impossible for the states to act on their own.”

If these two proposed constraints are interpreted in such a way as to allow the individual mandate, they would also allow any other mandate as well. In and of itself, the “activity” being regulated by the individual mandate – not having health insurance – has no “substantial effects on interstate commerce.” Not having health insurance does not involve purchasing any products across state lines or incentivizing anyone else to do so. It does, of course, have an effect on commerce in the sense that a person who doesn’t purchase health insurance could have made a different decision, which would have involved purchasing the product in question. That, however, is true of any decision to do or not do anything. A person who chooses to spend an hour reading a book at home could have instead used that time to earn income or buy a product, thereby affecting interstate commerce. The time I devoted to writing this post could have been spent doing consulting work for pay. Any decision to spend time on A is necessarily a decision not to do, B, C, or D. And the failure to do some of the latter is likely to have an effect on interstate commerce.

Rosen’s collective action limitation fares little better. If the Court seriously examines the individual mandate to determine if there is a collective action problem preventing states from adopting mandates [...]

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Nonlegal Arguments for Upholding the Individual Mandate

Both sides in the individual mandate litigation have developed a wide range of legal arguments to support their position. Some defenders of the mandate have also emphasized several nonlegal reasons why they believe the Court should uphold the law. These arguments have gotten more emphasis since the Supreme Court oral argument seemed to go badly for the pro-mandate side. The most common are claims that a decision striking down the mandate would damage the Court’s “legitimacy,” that a 5-4 decision striking down the mandate would be impermissibly “partisan,” and that it would be inconsistent with judicial “conservatism.”

Even if correct, none of these arguments actually prove that the Court should uphold the mandate as a legal matter. A decision that is perceived as “illegitimate,” partisan, and unconservative can still be legally correct. Conversely, one that is widely accepted, enjoys bipartisan support, and is consistent with conservatism can still be wrong. Plessy v. Ferguson and Korematsu are well-known examples of terrible rulings that fit all three criteria at the time they were decided.

In addition, all three arguments are flawed even on their own terms.

I. A Decision Striking Down the Mandate is Likely to Enhance the Court’s Legitimacy More than it Undermines it.

Claims that a decision striking down the mandate will undermine the Court’s “legitimacy” founder on the simple reality that an overwhelmingly majority of the public wants the law to be invalidated. Even a slight 48-44 plurality of Democrats agree, according to a Washington Post/ABC poll. Decisions that damage the Court’s legitimacy tend to be ones that run contrary to majority opinion, such as some of the cases striking down New Deal laws in the 1930s. By contrast, a decision failing to strike down a law that large majorities believe to be unconstitutional can actually damage [...]

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Larry Lessig on the Politics of the Supreme Court’s Federalism Jurisprudence

In this recent Atlantic article, Professor Larry Lessig argues that, if the Supreme Court strikes down the individual mandate, it could only be the result of politics, given its previous decisions rejecting “liberal” challenges to congressional legislation:

The Court has been asked to limit the scope of Congress’s authority in a wide range of cases. Some of these have been for liberal causes, some for conservative. I was lead counsel in a case that asked the Court to apply its newly announced will to enforce the limits on enumerated powers in the context of the copyright clause — viewed by many as a “liberal cause.” The Court said no, twice. The same with federal regulation of medical marijuana, which, the (said to be liberal) 9th Circuit had ruled, violated the limits on Congress’s power. The Supreme Court — including Scalia — said it didn’t.

So with these liberal cases, limits were not enforced. But when the cause is conservative, the willingness to limit Congress’ power comes alive. The Court has struck laws regulating guns — twice. It has struck a law that regulated violence against women. And if Obamacare falls, it will have struck down the most important social legislation advanced by the Democratic Party in a generation.

With that score sheet, I fear the cynics win.

I don’t doubt that the Supreme Court is often influenced by political factors, including in its federalism cases. But Lessig’s argument is greatly overstated. He ignores the fact that many of the votes upholding federal laws against “liberal” challenges in the medical marijuana and copyright cases actually came from the Court’s liberal justices. In Gonzales v. Raich, a decision I have been very critical of, four of the six votes in the majority came from the liberal justices. The five [...]

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Individual Mandates for Foreigners and Indians

In my previous post, I argued that the broad interpretation of the Commerce Clause advocated by the government would have the absurd result, when applied to the parallel foreign commerce clause, of allowing Congress to impose mandates on foreigners with no prior contacts with the U.S.

Many commentators fought the hypothetical, saying such a law was stupid, unenforceable, and unlikely, so not a good proof of anything. Two responses. First, one man’s idiotic and unenforceable is another man’s Patient Protection and Affordable Care Act, which aside from its merits is itself unlikely (once in a few centuries), and hard to enforce (waivers). Second, arguments from absurd consequences are valid even if the hypothetical law would be ill-advised; indeed, since presumably no one wants absurd consequences, such arguments inherently assume the possibility of legislative error.

A student of mine emailed me to raise a variant hypothetical much closer to home: Can Congress mandate Indians to purchase insurance? They “inevitably” leave their territory at some point in their lives (at least as “inevitably” as the healthy uninsured getting sick), so the arguments would be exactly the same as for the mandate under the Interstate Clause. So why have an Indian Commerce Clause at all? Factual query: does the ACA apply to Indians living on tribal land? (I invite the student to self-identify in the comments.)

Some suggested that Interstate Commerce is regulated “among” the states, whereas foreign and Indian commerce is only “with” other countries or tribes. This could suggest the interstate power is broader: commerce just “among” other nations seems explicitly excluded. But if “among” the states means not actually among but affecting things that are “among,” wouldn’t the same be true of “with”? Again, I think the best reading of the commerce clause is that the interstate power is [...]

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Nearing the end of the search for the non-existent limiting principles

With the Supreme Court probably voting on the constitutionality of Obamacare (a term the President proudly embraces) on Friday, the health control law’s academic friends are diligently attempting to do what the entire United States Department of Justice could not do after two years of litigation: articulate plausible limiting principles for the individual mandate. Over at Balkinization, Neil Siegel offers Five Limiting Principles. They are:

1. The Necessary and Proper Clause. “Unlike other purchase mandates, including every hypothetical at oral argument on Tuesday, the minimum coverage provision prevents the unraveling of a market that Congress has clear authority to regulate.” This is no limitation at all. Under modern doctrine, Congress has the authority to regulate almost every market. If Congress enacts regulations that are extremely harmful to that market, such as imposing price controls (a/k/a “community rating”) or requiring sellers to sell products at far below cost to some customers (e.g., “guaranteed issue”) then the market will probably “unravel” (that is, the companies will lose so much money that they go out of business). So to prevent the companies from being destroyed, Congress forces other consumers to buy products from those companies at vastly excessive prices (e.g., $5,000 for an individual policy for a health 35-year-old whose actuarial expenditures for health care of all sorts during a year is $845).

So Siegel’s argument is really an anti-limiting principle: if Congress imposes ruinous price controls on  a market, to help favored consumers, then Congress can try to save the market’s producers by mandating that disfavored consumers buy overpriced products from those producers.

2. The Commerce Clause. “The minimum coverage provision addresses economic problems, not merely social problems that do not involve markets.” This is true, and is, as Siegel points out, a distinction from Lopez (carrying guns) and Morrison (gender-related [...]

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My CNN Column on the Individual Mandate Case

The CNN website has just posted a column I wrote on the individual mandate case. Here’s an excerpt:

This week, the U.S. Supreme Court considers the case challenging the Obama administration health care plan’s requirement that most Americans purchase a government-approved health insurance plan by 2014. The court should rule that this individual mandate is unconstitutional. To do otherwise would give Congress almost unlimited power….

If Congress could use [the commerce] clause to regulate mere failure to buy a product on the grounds that such inaction has an economic effect, there would be no structural limits to its power. Any decision to do anything is necessarily a decision not to do something else that might have an economic effect. If I spend an hour sleeping, I thereby choose not to spend it working or shopping. As the lower court decision in this case explained, the government’s position “amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life.”

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Audio of My Recent NPR Individual Mandate Discussion with Professor Vikram Amar

Earlier today, UC Davis lawprof Vikram Amar and I were on a KQED NPR radio program discussing the individual mandate litigation. Amar believes that the Court should uphold the mandate whereas I, of course, do not. The audio is available here:

One thing I notice about these radio exchanges is that there is a tremendous advantage to whoever gets to respond to a question last. Both Amar and I were more effective when we got to respond after the other, in large part because that position allows you to rebut whatever the other person said, as well as make your own points. That said, I think we at least did a fairly good job of laying out some of the major arguments on both sides. [...]

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Obamacare in Wonderland

That’s the title of a new article by Gary Lawson and me, forthcoming in a symposium issue of Boston University’s American Journal of Law & Medicine. The Journal has a large readership among medical professionals who are interested in legal issues relating to medicine. Accordingly, if you have been following the VC’s debate on the ACA over the past couple years, most of what is in the article will already be familiar to you. Here is the abstract:

The question whether the Patient Protection and Affordable Care Act (“PPACA”) is “unconstitutional” is thorny, not simply because it presents intriguing issues of interpretation but also because it starkly illustrates the ambiguity that often accompanies the word “unconstitutional.” The term can be, and often is, used to mean a wide range of things, from inconsistency with the Constitution’s text to inconsistency with a set of policy preferences. In this article, we briefly explore the range of meanings that attach to the term “unconstitutional,” as well as the problem of determining the “constitutionality” of a lengthy statute when only some portions of the statute are challenged. We then, using “unconstitutional” to mean” inconsistent with an original social understanding of the Constitution’s text (with a bit of a nod to judicial precedents),” show that the individual mandate in the PPACA is not authorized by the federal taxing power, the federal commerce power, or the Necessary and Proper Clause and is therefore unconstitutional.

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Newt Gingrich on Marijuana and the Founding Fathers

Newt Gingrich recently claimed that Founding Fathers George Washington and Thomas Jefferson “would have rather strongly discouraged you from growing marijuana and their techniques with dealing with it would have been rather more violent than our current government.” As Jacob Sullum points out, this ignores the fact that Washington and Jefferson themselves grew hemp on their plantations, and that marijuana use was neither illegal nor socially stigmatized in the late 18th and early 19th centuries.

Perhaps more importantly, few if any of the Founders would have thought that the federal government had the constitutional authority to ban marijuana growing. As I discuss in this article, as late as the early twentieth century, advocates of Prohibition had to enact a constitutional amendment to forbid the sale of alcoholic beverages, because the dominant view at the time held that Congress did not already have the power to do this. If they are serious about enforcing constitutional limits on federal power, Gingrich and other conservatives cannot continue to ignore the ways in which the War on Drugs has severely undermined those limits, most notably in Gonzales v. Raich, the Supreme Court’s most expansive interpretation of federal authority so far. [...]

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The DC Circuit Decision Upholding the Individual Mandate

I was going to write a more detailed post on the recent DC Circuit decision upholding the individual mandate. However, co-blogger Randy Barnett has already said much of what I would have wanted to say.

Like Randy, I am skeptical that Justices Kennedy or Scalia will be willing to endorse the D.C. Circuit’s conclusion that there are no limits to Congress’ power to impose mandates under the Commerce Clause. Both of these justices have emphasized the need to enforce limits on the scope of federal power. If the Court does uphold the individual mandate, it will be on the basis of one or more of the various arguments claiming that health care is a special case.

Here are two additional points that go a little beyond Randy’s analysis.

First, Judge Silberman’s majority opinion is wrong to suggest that a long line of Supreme Court decisions that defined the scope of Congress’ Commerce Clause power in terms of “activity” or “economic” activity “were merely identifying the relevant conduct in a descriptive way, because the facts of those cases did not raise the question” of whether economic activity could be regulated. Several of those decisions clearly use the term “activity” as part of a doctrinal test, not merely a description of facts. In Gonzales v. Raich, the Court noted that the statutes invalidated in Lopez and Morrison were ruled unconstitutional because they “did not regulate any economic activity,” whereas the law in Raich was sustained because it did regulate “quintessentially economic” activity. That certainly looks like more than just “description” to me. Even more importantly, in several cases the Supreme Court could have saved itself a lot of analytical trouble if it could uphold Commerce Clause statutes simply by claiming that they regulate inactivity with economic effects. For example, [...]

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Judge Silberman on the Individual Mandate

I thought readers might be interested in the key passages from the DC Circuit’s majority opinion, authored by Judge Silberman, upholding the individual mandate under the Commerce Clause:

The mandate, it should be recognized, is indeed somewhat novel, but so too, for all its elegance, is appellants’ argument. No Supreme Court case has ever held or implied that Congress’s Commerce Clause authority is limited to individuals who are presently engaging in an activity involving, or substantially affecting, interstate commerce.

The Framers, in using the term “commerce among the states,” obviously intended to make a distinction between interstate and local commerce, but Supreme Court jurisprudence over the last century has largely eroded that distinction. See Lopez, 514 U.S. at 553-61; id. at 568-75 (Kennedy, J., concurring). Today, the only recognized limitations are that (1) Congress may not regulate non-economic behavior based solely on an attenuated link to interstate commerce, and (2) Congress may not regulate intrastate economic behavior if its aggregate impact on interstate commerce is negligible. See United States v. Morrison, 529 U.S. 598, 610, 615-19 (2000); Lopez, 514 U.S. at 558-61, 566-67. Those limitations are quite inapposite to the constitutionality of the individual mandate, which certainly is focused on economic behavior–if only decisions whether or not to purchase health care insurance or to seek medical care–that does substantially affect interstate commerce.

To be sure, a number of the Supreme Court’s Commerce Clause cases have used the word “activity” to describe behavior that was either regarded as within or without Congress’s authority. But those cases did not purport to limit Congress to reach only existing activities. They were merely identifying the relevant conduct in a descriptive way, because the facts of those cases did not raise the question–presented here–of whether “inactivity” can also be regulated. See Florida, 648 F.3d

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