Tuesday, November 08, 2011

The Affordable Care Act Upheld Yet Again

The District of Columbia Circuit, considered by many as the most prestigious Court of Appeals in the country, is the latest Circuit Court to uphold the Affordable Care Act. The case is Seven-Sky v Holder and it is important for several reasons. Two of the judges are Republicans, including a conservative icon, Judge Silberman. There was a dissenting opinion but only because that judge would have thrown the case out on jurisdictional grounds.

This is a very strong, well reasoned opinion. The case boiled down to whether the court would accept the plaintiffs argument that Congress could not regulate "inactivity." As discussed in this article that activity-inactivity argument is basically Constitutional misdirection and the DC circuit was having none of it.

As framed by the Court,

The contested issue here is whether the Government can require an immensely broad group of people–all Americans, including uninsured persons with no involvement in the health insurance and health care markets–to buy health insurance now, based on the mere likelihood that most will, at some point, need health care, thus virtually inevitably enter that market, and consequently substantially affect the health insurance market. Appellants say that Congress cannot regulate based on such sweeping generalizations. Only individuals who are voluntarily engaging in an “activity” related to interstate commerce–not the uninsured, who are “inactive”–are within the scope of the Commerce Clause.

The court's response goes on for many pages, but is best summarized in this paragraph,

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.

That last sentence is the key. There is no Supreme Court president supporting the argument that the individual mandate is unconstitutional. None.

The Court also pointed out the the absurdities that would result from the plaintiffs' argument.

Indeed, were “activities” of some sort to be required before the Commerce Clause could be invoked, it would be rather difficult to define such “activity.” For instance, our drug and child pornography laws, criminalizing mere possession, have been upheld no matter how passive the possession, and even if the owner never actively distributes the contraband, on the theory that possession makes active trade more likely in the future. And in our situation, as Judge Sutton has cogently demonstrated, many persons regulated by the mandate would presumably be legitimately regulated, even if activity was a precursor, once they sought medical care or health insurance. (citations omitted)

The Supreme Court has repeatedly rejected these kinds of distinctions in the past–disavowing, for instance, distinctions between “indirect” and “direct” effects on interstate commerce–because they were similarly unworkable.

The opinion discusses may Supreme Court precedents but relies most heavily on the great New Deal case Wickard v. Filburn. In Wickard,

[A] farmer ran afoul of his allowed wheat acreage under the Agricultural Adjustment Act of 1938 by growing additional wheat, not for sale, but to feed his family and his livestock. Filburn argued that the Act was unconstitutional as applied to him because he was not using the excess wheat for any activity in the interstate market. The Supreme Court unanimously rejected this claim. It held that even growing wheat for personal consumption, not for sale in any market, could affect the national price, and therefore was within the Commerce Clause.

This conclusion was not only because his wheat might be diverted into the national market, as was recognized in Gonzales v. Raich, 545 U.S. 1, 18-19 (2005). Justice Jackson said even “if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon.” Justice Jackson thus recognized that the Act “force[d] some farmers into the market to buy what they could provide for themselves.” Although a regulation limited the size of the farms covered, the logic of the opinion would apply to force any farmer, no matter how small, into buying wheat in the open market. Wickard, therefore, comes very close to authorizing a mandate similar to ours, at least indirectly, and the farmer’s “activity” could be as incidental to the regulation as simply owning a farm.

The citation of Wickard and more importantly Gonzalez v Raich is really critical. Gonzalez is a 2005 decision, in which Scalia wrote a concurring opinion. As discussed earlier this year,

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 within 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.” 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). 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. (citations omitted)

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.

Anything can happen with the Supreme Court and there is reason to be skeptical about its most results oriented members. But for Scalia and the rest of the radicals on the Court to strike down the ACA they will have to find heir way around some very old and very new decisions, including a concurrence that Scalia authored.