Tag Archives: Commerce Clause

“Unconstitutional,” says the 11th Circuit.


The news making its way through the legal blogosphere, and the online news outlets, is that the 11th Circuit has ruled the individual mandate part of the Patient Protection and Affordable Care Act (the “Act”) is unconstitutional.

Let me underscore that: only the individual mandate was found unconstitutional. The rest of the law has been, for now, left untouched.

The Washington Post called it one of the “most significant legal setbacks to the Obama administration’s health-care overhaul.”

If  you’re short on time, read at least the excerpts of the 2-1 decision  (of a very lengthy opinion) over at the Volokh Conspiracy. In short the Act is:

[…] the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.

Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional.

Etc, etc…and, here’s the part the right will love:

This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. “

Too bad this didn’t come out yesterday. The Iowa Republican debate would have been that much more juicy with the ruling hanging in the air, even with the Supreme Court still in the Act’s future.

If  you have more time, here are a few more commentaries you might look at:

From Utah Political Summary’s Curt Bentley:

One of the more odd things about the majority opinion — at least in my humble opinion — is its use of an overinclusiveness argument.  Over/underinclusiveness is a consideration in individual rights cases, but, in my opinion, has no real role to play when it comes to evaluating a Congressional action under the Commerce Clause.  The over/underinclusiveness analysis is designed to get at the sincerity of a legislature’s expressed motivations.  For example, if a legislature regulates more broadly (or narrowly) than necessary to solve a particular problem, one can infer that it may be dislike for a certain group, rather than a desire to solve the stated problem, that motivates the legislature action.

Jonathan Turley, expressing concerns about federalism issue the Act affects opined that

I view the health care legislation as presenting a new type of federal claim and one that could leave few things as protected by federalism by expanding Congress’ enumerated powers to an unprecedented scope.

In other words, if the feds can do this, what can’t they do? (And, I would add, what does that mean for the 10th Amendment?

Ilya Somin, also at Volokh, noted that this wasn’t a partisan decision:

Significantly, Judge Frank Hull, a Clinton appointee has now become the first Democratic-appointed judge to vote to strike down the mandate, balancing Republican Sixth Circuit Judge Jeffrey Sutton who voted to uphold it. The decision further undermines claims that the individual mandate suit is a sure loser that goes against a supposed expert consensus that the mandate is clearly constitutional.

Jonathan Adler says “Hear, hear!

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An Impressive New Blog in Utah: the “Utah Political Summary”

Reading up on some of the local blogger commentary on HB 477 this morning, I ran into a blog I’d not seen before: the Utah Political Summary.

Written and published by local attorney Curt Bentley, the blog purports to provide a political commentary with dual purposes: “(1) to help people who want to know get informed about local politics despite the existence of these traditional barriers and a federal-focused media, and (2) to give me a place to vent intelligent commentary.” (Ignore for a moment the ironic placement of “vent” directly before “intelligent,” and just assume that such is possible…)

Although he’s an attorney, it is by no means a site intended for attorneys, or to provide a legal perspective on politics. That said, Bentley does a great job of integrating his legal training to enhance his analysis of policies and politics. A few examples:

On the Commerce Clause :

Although the exact extent of Congress’ authority under the Commerce Clause can be (and has been) debated ad naseum, I think we can safely say one thing: the Constitution’s drafters and ratifiers never intended for the Commerce Clause to give Congress a general legislative power like that enjoyed by the states. Constitutional lawyers refer to the general legislative authority of the states as the “Police Power,” or the power to legislate broadly for the health, safety, and welfare of the people. And if we interpret the Commerce Clause as authorizing Congress to legislate to require people to purchase health insurance, one can make a persuasive argument that we have just conferred on Congress the functional equivalent of a federal police power.

On “American Exceptionalism”

In its original sense, American Exceptionalism refers to view that the developmental path taken by the United States of America (and its citizens) was, and is, objectively different from the developmental path taken by other countries and their citizens.  The concept has its roots in some obvious contrast between America and other nations, particularly  that fact that America was both republican in government and had a quasi-religious zeal for commerce.  People who subscribed to, or studied, the idea of American Exceptionalism, acknowledged only that America was different in significant ways from other countries and had a different developmental history — not that anything about that history was inherently superior.

And speaking of “exceptionalism,” Utah Political Summary is exceptionally well written and very readable, for layman and wonk alike. Thoughtful and articulate, Bentley’s style manages to walk the line between analysis and information without falling over into heavy rhetoric or ever spouting a party talking point. With so many blogs sounding more like trumpets for one political ideology or another and without any regard for reasoned analysis, Bentley’s voice is a fresh take on politics, and one you should consider adding to your reader.

(Just to be clear, I do not know Bentley and he has not asked me to write this to plug his site. I just like it that much.)

What is American Exceptionalism, Anyway? | Utah Political Summary.

The Commerce Clause, Federal Police Power, and Judicially-Enforced Federalism | Utah Political Summary.

The Commerce Clause argument in Virginia v. Sebelius, among others

Yesterday, the headlines shouted that individual mandate of the Affordable Health Care for America Act (let’s just call it “the Act” for short) was found unconstitutional by a federal court in Virginia. (see my short post on it here) Partisan critics of the ruling were quick to point out that there have already been two cases upholding it; partisan supporters were just as quick to note that this is the first substantial ruling on the act.

After a brief reading of the opinion, here are a few quotes from it and a couple of thoughts:

The Obama Administration‘s arguments in support the Act fall can be boiled down to this: Congress was within its powers to pass the Act because it acted under its power to regulate interstate commerce. To pick that apart, the Administration is arguing that Congress has the right to regulate activities that in the aggregate “substantially affect” interstate commerce. The Administration is relying upon aggregation theory, says Judge Hudson:

“…which is conceptually based on hypothesis that the sum of individual decisions to participate or not in the health insurance market has a critical collective effect on interstate commerce.”

In other words, each of us make enough decisions on health care that all taken together it is enough to affect interstate commerce. Under the Commerce Clause argument, the Minimum Essential Coverage Provision–what is more commonly known as the “individual mandate“– is necessary to make sure that the program of reforms in other areas work. In essence, if not everyone is paying into the system, then there won’t be enough people paying in to support the sick and poor that cannot pay for the benefits of health care. The dysfunctional system cannot be reformed if every person does not participate because, well, to put it simply–it’ll cost too much. So, to sum up the argument, since Congress has the power to regulate healthcare under the Commerce Clause, it also has the power under the Necessary and Proper Clause to make the regulations necessary.

Judge Hudson notes that although the Necessary and Proper Clause “vests Congress with broad authority to exercise means […] to implement legislation, it is not without limitation.” This is an interesting, and perhaps understated commentary, on what many, including Speaker Pelosi, see as the definition of the Necessary and Proper Clause. It is an unenumerated power, but there are still limits. The means to accomplish the end must be “rationally related to the implementation of a constitutionallyenumerated power, but it must not violate an independent constitutional prohibition.” And here is the crux of the Virginia assault on the Act; it is a violation that “offends a fundamental restriction” on the Commerce Clause powers.

Central to the Commerce Clause is that it relates to economic activity. Can the government compel an unwilling person to perform an involuntary activity? Previous cases that the Administration cited dealt with individuals who grew wheat or cannabis and thereby voluntarily inserted themselves in the stream of interstate commerce. Here, however, the individual mandate compels a person to do an involuntary act, buy health insurance, and thereby become subject to the Commerce Clause. Because this goes beyond the bounds of the Commerce Clause, Congress is outside of its ability to use the Necessary and Proper powers to force the purchase. Congress can use its authority to pass constitutional laws; outside those bounds its powers are “bridled.” Quoting Chief Justice Marshall,

[l]et the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consistent with the letter and spirit of the constitution, are constitutional.

And thereby is why Judge Hudson ruled the individual mandate of the Act unconstitutional. As laudable as were the intentions of Congress in passing the Act, “the legislative process must still operate within constitutional bounds. Salutatory goals and creative drafting have never been sufficient to offset an absence of enumerated powers. And, my favorite quote: “Congressional findings, no matter how extensive, are insufficient to enlarge the Commerce Clause powers of Congress.”

What are those boundaries? Judge Hudson cites case law that limits Congressional powers under the Commerce Clause to subject matter that is economic in nature and voluntary activity. However, despite arguments by the Administration that everyone will at some point in their life need healthcare of some sort, this was the bridge too far for the Judge.

Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individuals to involuntarily enter the stream of commerce by purchasing a commodity in the private market.

Because it is not voluntary, the government cannot require individuals to make a purchase, to participate in the market.  Ironically, this seems to be the very lynch pin upon which the entire scheme relies–without participation, voluntary or otherwise, of healthy individuals paying into healthcare, the government will be unable to pay for the costs of covering the poor and sick.

Interestingly, critics are attacking Judge Hudson’s interpretation of the Necessary and Proper Clause powers. See their discussion here. Others suggest that Judge Hudson is writing for Justice Scalia, and that it is a better opinion than the critics are giving him credit for. “Nonetheless, once read in light of Scalia’s concurring opinion in Raich, Judge Hudson’s analysis is considerably more coherent that his critics allow.”

There are other arguments in the case, including a tax argument that Judge Hudson calls “simplistic.” (He also refers to the precedent it cites as “dicta,” a slap at the value of the authority the Administration cites).  I thought the Commerce Clause argument, however, was the most interesting, not to mention the most important.

A last and important element of the opinion is that of the severability of the individual mandate clause from the rest of the Act. In other words: can the rest of the Act survive even though the individual mandate is unconstitutional? In this case, because it is difficult for the court to determine whether Congress intended that the rest of the Act to survive the invalidity of any single clause, the Judge ruled only on the section (1501 in this case, if you were wondering) is invalid and the rest of the Act, as it is currently unchallenged, survives.

Read the opinion here.

The legal challenges to the health care bill

Apparently, there is some question about the legality of the bill recently (as in yesterday) signed into law by President Obama.  I’ve already discussed the questionable procedures used to pass it in the House.  But what about

Obama signs the health care reform bill while Congress people look on... and what's with Pelosi? How does she manage to always look so goofy?

the bill itself?  Is it legal?  Is it constitutional?

Let me just say at the outset that rational minds can disagree, and this topic is no exception.  I hope merely to provide some short review of the differing sides of this discussion, and hopefully you can come to your own conclusions without falling back on your pre-conceived partisan inclinations (yes, we all have biases, even if we don’t recognize them).

On the one side of the discussion, there are those that believe that the health care reform bill is unconstitutional.  Their arguments boil down into several points and discussed in two lawsuits contesting the bill, one by the state of Virginia and the other by  Florida and, in the words of Josh Blackmun, “a bunch of other states.”

Virginia and the Commerce Clause complaint

The Virginia case attacks the health care bill on “commerce clause” grounds.   The commerce clause, found in Art. 1, Sec. 8, Clause 3 of the Constitution, gives Congress the power to “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes[.]”  Historically, the commerce clause has been one of the most empowering in the Constitution and the means through which Congress passes a large portion of legislation every year because it allows Congress to regulate anything that passes through the stream of commerce.  However, as Randy Barnett, professor of constitutional law at Georgetown University, very aptly points out, insurance contracts have not before now been considered as affecting interstate commerce:

[…] the individual mandate extends the commerce clause’s power beyond economic activity, to economic inactivity. That is unprecedented. While Congress has used its taxing power to fund Social Security and Medicare, never before has it used its commerce power to mandate that an individual person engage in an economic transaction with a private company. Regulating the auto industry or paying “cash for clunkers” is one thing; making everyone buy a Chevy is quite another. Even during World War II, the federal government did not mandate that individual citizens purchase war bonds.

If you choose to drive a car, then maybe you can be made to buy insurance against the possibility of inflicting harm on others. But making you buy insurance merely because you are alive is a claim of power from which many Americans instinctively shrink.

If we have to buy insurance for our car, why not for our health?

Josh Blackman points this out, too, citing directly from the Virginia complaint:

Paragraph 17:  ”The status of being a citizen of Virginia is not a channel of interstate commerce; nor a person or thing in interstate commerce; nor is it an activity arising out of or connected with a commercial transaction. Instead, the status arises from an absence of commerce, not from some sort of economic endeavor, and it is not even a non-economic activity affecting interstate commerce. It is entirely passive.”

Paragraph 18:  The Commerce Clause authority has never been held to “require citizens to buy goods or services. To depart from that history to permit the national government to require the purchase of goods or services would deprive the Commerce Clause of any effective limits contrary to Lopez and Morrison and would create powers indistinguishable from a general police power in total derogation of our constitutional scheme of enumerated powers.”

Paragraph 19: “Requiring citizen-to-citizen subsidy or redistribution is contrary to the foundational assumptions of the constitutional compact [under the Necessary and Proper Clause].”

In closing, the Virginia complaint dismisses the bill with rhetorical flair:

“because the individual mandate exceeds the enumerated powers conferred upon Congress. Because the individual mandate is an essential, non-severable provision, the entire act is likewise invalid.”

Florida and the “bunch of other states” everything-but-the-kitchen-sink complaint

Florida is joined in its complaint by South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Michigan, Pennsylvania, Washington, Idaho, and South Dakota.  Other than a short mention of the commerce clause

Both the Florida and the Virginia legal challenges to the health care reform act are rooted in states' belief that the federal government is overreaching its constitutional authority.

, the complaint challenges the bill through the 10th Amendment, the Capitation Clause, the Guarantee Clause , general principles of federalism (commandeering) and state sovereignty.   In pertinent part, and again a nod to Blackman, some of the highlight from the complaint are these:

2. The Act represents an unprecedented encroachment on the liberty of individuals living in the Plaintiffs’ respective states, by mandating that all citizens and legal residents of the United States have qualifying healthcare coverage or pay a tax penalty. The Constitution nowhere authorizes the United States to mandate, either directly or under threat of penalty, that all citizens and legal residents have qualifying healthcare coverage. By imposing such a mandate, the Act exceeds the powers of the United States under Article I of the Constitution and violates the Tenth Amendment to the Constitution.

3. In addition, the tax penalty required under the Act, which must be paid by uninsured citizens and residents, constitutes an unlawful capitation or direct tax, in violation of Article I, sections 2 and 9 of the Constitution of the United States.

4. The Act also represents an unprecedented encroachment on the sovereignty of the states.

5. Further, the Act converts what had been a voluntary federal-state partnership into a compulsory top-down federal program in which the discretion of the Plaintiffs and their sister states is removed, in derogation of the core constitutional principle of federalism upon which this Nation was founded. In so doing, the Act exceeds the powers of the United States and violates the Tenth Amendment to the Constitution.

56. The Act exceeds Congress’s powers under Article I of the Constitution of the United States, and cannot be upheld under the Commerce Clause, Const. art. I, §8; the Taxing and Spending Clause, id.; or any other provision of the Constitution.

57. By effectively co-opting the Plaintiffs’ control over their budgetary processes and legislative agendas through compelling them to assume costs they cannot afford, and by requiring them to establish health insurance exchanges, the Act deprives them of their sovereignty and their right to a republican form of government, in violation of Article IV, section 4 of the Constitution of the United States.

58. The Act violates the Tenth Amendment of the Constitution of the United States, and runs afoul of the Constitution’s principle of federalism, by commandeering the Plaintiffs and their employees as agents of the federal government’s regulatory scheme at the states’ own cost.

Are the criticisms legitimate?

Just because a lot of conservative states have filed suit does not necessarily mean that the criticisms are legitimate.  Jack Balkin, a Yale constitutional professor, dismissed the legal challenges presented to the health care bill.  Since the 1930s, Congress has had almost unfettered authority to regulate the economy, and as long as the individual mandate is framed as a tax, Congress may be well within its rights to require it:

“The attack on this bill,” said Jack M. Balkin,“is not merely an attack on the substance of this particular measure. It’s also a challenge to understandings that come with the New Deal.”

Replying to the proposition that people have a right not to buy health insurance, Erwin Chemerinsky, a constitutional scholar and dean of the University of California, Irvine School of Law speaking to the New York Times:

[S]aid the right not to buy health care was “rhetorically appealing” because of its paean to personal freedom. But “individual freedom not to purchase health care, I think, has no basis in Constitutional law.

In fact, Professor Chemerinsky added, “there is no case law, post 1937, that would support an individual’s right not to buy health care if the government wants to mandate it.”

Congress has often taken actions that impinge on personal freedom for a national purpose, he noted, including the Civil Rights Act of 1964, which required hotels and restaurants to serve minorities.

“If the court stays true to its Commerce Clause jurisprudence of the last 15 years,” Professor Chemerinsky said, “I think this will be upheld.”

Vote Counting on the Supreme Court

Ironically, it is this very point–that it doesn’t really matter how close the legislation adheres to the Constitution that will allow it to survive legal challenges but whether it can be upheld on judicial precedent of the last eighty years–that Bartlett notes will be the ultimate determinate of its legality.  When it comes to the legal challenge, Bartlett says

Ultimately, there are three ways to think about whether a law is constitutional: Does it conflict with what the Constitution says? Does it conflict with what the Supreme Court has said? Will five justices accept a particular argument?

What the Constitution says, what the Supreme Court has said, and what will five justices accept are not necessarily the same thing, and it is this last factor that draws the ire of the political left.  Regarding the lawsuits filed by Virginia and Florida (et al.), the Economist View had this to say:

From what I’ve read, there are two points to make. First, it would be crazy to rule that the individual mandate (or any other component of the legislation) is unconstitutional. Second, we have four crazy justices on the Supreme Court.

Start counting the votes now.  It may come down to just one swing justice, and that’s a vote that neither side can presume.