Wednesday, February 09, 2011

Constitutional Misdirection Will Not Derail the Health Care Law

The subtitle for this article could be “What is bad for pot growers is good for the health care law.”

Many pundits have prognosticated that the Affordable Care Act will be struck down by the Supreme Court because two District Court Judges (of four that have ruled on the merits) ruled some or all of the law violated the Constitution. These pundits are wrong for three simple reasons.

The ACA presents a very simple Commerce Clause case that is supported by at least sixty years of precedent. Second, the opponents of the law actually know this which is why their challenge is not based on traditional Commerce Clause arguments but rather what could politely be referred to as Constitutional misdirection. Lastly, it is not certain this case will go to the Supreme Court, but if it does it may ultimately be sustained by eight Justices.

Since the 1944 case, US v Southeastern Underwriters, the Supreme Court has held that the business of insurance involves interstate commerce. If insurance is commerce, it is impossible to argue that the business of health insurance is not commerce . As interstate commerce Congress can regulate that business through its authorities in the Necessary and Proper Clause, which provides:
The Congress shall have Power To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
As long as a federal law or regulation is necessary and proper to achieve an end that falls within a power granted to the Congress and as long as that law or regulation does not conflict with any other provision of the Constitution, it will be sustained. These points were recently made by Charles Fried, President Reagan’s Solicitor General and a self described opponent of the ACA and the individual mandate, in recent Congressional testimony.

So the question becomes whether the insurance mandate is necessary and proper to the achievement of Congress’ design in the regulation of the health insurance industry. Before looking at some Supreme Court Cases on the subject, there is actually support for the proposition from an unlikely source. The recent decision in Florida v HHS striking down the ACA actually supports that proposition. Yes, the court did rule that the insurance mandate, the requirement that individuals purchase insurance, is unconstitutional. But the court went on to rule that since that provision is absolutely integral and indispensable to the entire regulatory scheme established in the ACA, the entire law would have to be struck down. Well, the court was incorrect in saying that the mandate was unconstitutional but was clearly correct in saying the mandate is entirely necessary and proper and, in fact, an essential feature of the regulatory scheme established by Congress.

Opponents of the ACA have argued that a 1995 case in which the Supreme Court struck down a law making it a crime to have a gun near a school zone suggests that the Court has begun limiting Congress’ Commerce Clause powers. They are correct that US v Lopez struck down the Gun Free School Zones Act of 1990, but it did so because the Court found that
The Act neither regulates a commercial activity nor contains a requirement that the possession be connected in any way to interstate commerce. We hold that the Act exceeds the authority of Congress "[t]o regulate Commerce . . . among the several States . . . ." U. S. Const., Art. I, §8, cl. 3.

Lopez hinged on one question: does possession of a gun in a school zone affect interstate commerce. In support of the law, the Government argued “that possession of a firearm in a school zone may result in violent crime and that violent crime can be expected to affect the functioning of the national economy in two ways.” The Court didn’t buy the argument. In a widely quoted conclusion, the Court stated,
To uphold the Government's contentions here, we would have to pile inference upon inference in a manner that would bid fair to convert congressional authority under the Commerce Clause to a general police power of the sort retained by the States. Admittedly, some of our prior cases have taken long steps down that road, giving great deference to congressional action. See supra, at 8. The broad language in these opinions has suggested the possibility of additional expansion, but we decline here to proceed any further. To do so would require us to conclude that the Constitution's enumeration of powers does not presuppose something not enumerated, cf. Gibbons v. Ogden, supra, at 195, and that there never will be a distinction between what is truly national and what is truly local, cf. Jones & Laughlin Steel, supra, at 30. This we are unwilling to do.
Whether you agree with the Lopez decision or not, one thing is clear, it does not represent a significant change in Commerce Clause law and, moreover, should have no impact on any ACA cases. There is no doubt that the health insurance industry involves interstate commerce, that decisions to purchase or not purchase insurance have a direct effect on that commerce, and that the mandate to purchase insurance is not only necessary, but essential to giving effect to the overall regulatory scheme enacted by Congress.

Among lawyers there is a well-known adage when arguing a case: if the law is on your side, argue the law; if the facts are on your side, argue the facts; and if neither is on your side, argue the equities. The opponents of the ACA have adopted a revised version of this saying. They don’t have the law on their side. They don’t have the facts on their side. So they are left arguing irrelevancies. In this case the irrelevancy they argue is that by requiring people to buy insurance, Congress is not regulating activity, but rather is regulating inactivity. Even if that argument were valid, it is irrelevant.

The reason it is not valid is that Federal laws are filled with countless examples of cases where inactivity is sanctioned. If you don’t pay your taxes, i.e., you take no action, you will be sanctioned. The same applies to a business that is inactive when it comes to installing pollution control equipment or safety equipment for its workers. The requirement in the ACA that people buy health insurance is no different. If you don’t do it, you can be fined.

But frankly, that discussion is irrelevant, it is misdirection. The only questions before the Court is whether the business of health insurance constitutes interstate commerce and whether the mandate is a necessary and proper exercise of Congress’s power to achieve the regulatory scheme it has established in the ACA. Anything that is essential to achieving that scheme is Constitutional unless it conflicts with some other Constitutional provision.

In that regard, the opponents have suggested that they have some form of as yet unrecognized “liberty” interest in not buying insurance and that this interest overrides the Congress’ interest in having a universal health care system. However, in making this argument, they have to contend with the plight of Mr Jacobson. In 1905 the Supreme Court ruled in the case Jacobson v Massachusetts that a person could be fined or imprisoned for failing to have a smallpox vaccination that was required by state law. If you can be fined for failing to agree to a potentially painful vaccination, surely you can be fined for failing to buy health insurance.

Throughout the debate, there has been much discussion about whether Justice Scalia will vote to uphold the law. Before getting to that issue it is important to note that this case may not necessarily go to the Supreme Court. Most cases heard by the Supreme Court are considered only because the Court granted, in its sole discretion, what is called a writ of certiorari. Except in rare case not applicable here a case will not be heard unless certiorari is granted. The court has established non-binding rules governing the granting writs of certiorari. The most likely reason for certiorari to be granted in this case will be if there are conflicting decisions by two or more Courts of Appeals which have heard the case. We’ll have to wait and see whether such a split occurs, but one should not be surprised if all the Circuit decisions ultimately uphold the law. If that is the case, the Court may well decide to not hear the case.

Assuming the case does go to the Supreme Court, many people think that the outcome will hinge on the vote of Justice Kennedy, the so-called “swing” Justice. However, there is reason to believe the vote will not be that close. Lawrence Tribe recently argued this same point in a NYT opinion piece. But while Tribe speaks more generally about the Court and all the Justices, there is reason to believe that the key Justice will be Antonin Scalia.

When one looks at what Scalia has written in other Commerce Clause cases, it is clear that for him to strike down this law he would have to repudiate several of his past opinions and decisions. Chief among them is a notable case that will also present some irony for him and his critics.

Remember that 1995 case, US v Lopez, involving guns in school zones that the opponents want to hang their hats on. Well, ten years later, in 2005, the Court decided Gonzalez v Raich, which should have much more of a bearing on the issue. Raich involved the question of whether the Federal Controlled Substances Act was Constitutional in so far as it regulated (criminalized) the private, noncommercial, growth and consumption of marijuana. The law was found to be with Congress’ Commerce Clause powers and was roundly criticized by many progressives. Whether one agrees with the result in that case or not, it does illustrates how broadly the Court, and Justice Scalia in particular, has been willing to read the powers of Congress under both the Commerce Clause and the Necessary and Proper Clause. In his concurring opinion Scalia stated,
The application of these principles to the case before us is straightforward. In the CSA [Controlled Substances Act], Congress has undertaken to extinguish the interstate market in Schedule I controlled substances, including marijuana. The Commerce Clause unquestionably permits this. The power to regulate interstate commerce “extends not only to those regulations which aid, foster and protect the commerce, but embraces those which prohibit it.” Darby, 312 U.S., at 113. See also Hipolite Egg Co. v. United States, 220 U.S. 45, 58 (1911); Lottery Case, 188 U.S. 321, 354 (1903). To effectuate its objective, Congress has prohibited almost all intrastate activities related to Schedule I substances–both economic activities (manufacture, distribution, possession with the intent to distribute) and noneconomic activities (simple possession). See 21 U.S.C. § 841(a), 844(a). That simple possession is a noneconomic activity is immaterial to whether it can be prohibited as a necessary part of a larger regulation. Rather, Congress’s authority to enact all of these prohibitions of intrastate controlled-substance activities depends only upon whether they are appropriate means of achieving the legitimate end of eradicating Schedule I substances from interstate commerce.
To summarize, a non-economic, non-commercial, activity that occurs solely within a state can be regulated by Congress as long as it is an appropriate means for achieving a broader objective that involves regulating interstate commerce.

There is one last point. It has been argued that since the ACA requires people to purchase something from a private party, as opposed to paying a tax to the government, that requirement cannot be sustained. As with the “inactivity” argument there is no support for this. The court has upheld similar requirements in the past such as in US v Darby Lumber Co where the Court upheld the minimum wage. That law requires employers to pay money against their wishes to private parties, their employees. You can read more about that case in this article. The Darby opinion was cited by Scalia with approval in his Raich opinion where he wrote:  
In Darby, for instance, the Court explained that “Congress, having … adopted the policy of excluding from interstate commerce all goods produced for the commerce which do not conform to the specified labor standards,” 312 U.S., at 121, could not only require employers engaged in the production of goods for interstate commerce to conform to wage and hour standards, id., at 119—121, but could also require those employers to keep employment records in order to demonstrate compliance with the regulatory scheme, id., at 125. While the Court sustained the former regulation on the alternative ground that the activity it regulated could have a “great effect” on interstate commerce, id., at 122—123, it affirmed the latter on the sole ground that “[t]he requirement for records even of the intrastate transaction is an appropriate means to a legitimate end,” id., at 125.
It would be difficult to now argue that while Congress can require an employer to pay an employee a specified wage against his wishes, Congress cannot require an individual to pay an insurance company to purchase an insurance policy. In each case individuals are being required to pay money to private parties that they don’t wish to pay. 

1 comment:

  1. hmh-very thoughtful and good summary. i think the mandate is an integral part of the aca because healthy people need to be insured as well as others who in the past have presented sick to the ers without insurance coverage in order to make the program fiscally feasible and avoid cost shifting to the privately insured.