This essay is written for our symposium by Robert Schapiro, interim dean of the Emory University School of Law, where he also serves as a Director of the Center on Federalism and Intersystemic Governance.  His book, Polyphonic Federalism: Toward the Protection of Fundamental Rights, was published by the University of Chicago Press in 2009.

 

The Supreme Court will eventually decide the constitutionality of the Affordable Care Act, the signature health care reform legislation signed into law by President Obama in March 2010.  However, that ruling will likely come after the presidential election in November 2012.  It also seems increasingly likely that the Court will vote to uphold the Act, rather than fashioning a new limitation on congressional power.

The challenges to the Act target the "individual mandate," a provision of the statute that will eventually require most people either to purchase health insurance or to pay a fee.  The individual mandate forms an essential part of the Act's requirement that insurance companies issue insurance without regard to pre-existing medical conditions.  Without the mandate, individuals could wait to purchase insurance until they were sure they needed treatment.  Who would buy fire insurance, if you could just wait until the blaze erupted to obtain the policy?  Without the mandate, people in effect would not be buying "insurance" at all.  Rather, they would be purchasing discount coupons for services they were sure to need right away.  Such a scheme of forcing insurance companies to sell discounted health care would be financially unsustainable.

Indeed, some elements of this bad incentive system exist already.  Currently, individuals can avoid paying health care premiums, secure in the knowledge that hospitals "“ and ultimately taxpayers and the citizens who do buy insurance "“ will be on the hook for expensive emergency procedures.  In this way, we already provide emergency room insurance for people who could, but do not, pay the premiums.

The lawsuits proceeding around the country focus on whether the individual mandate comes within Congress's power to regulate interstate commerce.  The key question is whether the Supreme Court will recognize a new category of "inactivity" immune from congressional regulation.

A bit of background is useful here to understand the scope of this argument.  As the interstate economy of the United States expanded over the course of the nineteenth and early twentieth centuries, so too did the realm of activity that arguably came within Congress's constitutional power to regulate interstate commerce.  Before 1937, the Court experimented with various ways of enforcing boundaries around congressional authority.   The Court invoked various categories in an attempt to identify some judicially enforceable limit.  Thus, the Court distinguished between "commerce" and "manufacture," between activities with "direct" effects on commerce and those with "indirect" effects, and between regulations that were truly commercial in purpose and those more concerned with social or moral matters.  These lines proved difficult to identify and enforce.

Following the rise of the New Deal Court in 1937, the Court discarded these categorical limitations in favor of a practical approach that considered whether the regulated activity, however characterized, had a substantial effect on interstate commerce.  This framework entailed considerable deference to congressional judgment and resulted in the Court's rejecting all Commerce Clause challenges "“ until 1995.  In that year, the Court revived a modified categorical approach.  A majority of the Justices concluded that some judicially enforceable boundaries were required.  Congress, they believed, could not be trusted to limit itself.  Once these Justices perceived the need for a judicially enforceable boundary, they decided that only a formal, categorical approach could be judicially administrable.

The category the Court turned to was the concept of economic or commercial activity.  The Court restricted the ability of Congress to regulate local, noneconomic activity, even if the activity arguably did have an impact on interstate commerce.  Accordingly, in United States v. Lopez (1995) and United States v. Morrison (2000), the Supreme Court struck down congressional statutes that regulated noneconomic conduct "“ guns in schools and violence against women.

Following those cases, the question has been whether the economic/commercial category would provide a sufficient check on Congress or whether the Court would erect an additional categorical boundary.  The question was tested in the 2005 case of Gonzales v. Raich. That decision addressed the ability of Congress to prohibit the cultivation of marijuana for home consumption even in states, such as California, that allowed such home growing for medical purposes.

Those challenging the law knew they would need to suggest another categorical limitation on congressional power under the Commerce Clause.  They characterized the prohibited activity as intrastate cultivation authorized by state law.  The United States Court of Appeals for the Ninth Circuit accepted this formulation and struck down the law.  However, the United States Supreme Court reversed and upheld the statute.  The Court refused to recognize "intrastate activity authorized by state law" as a new realm forbidden to Congress.

So too in the health care litigation, the challengers offer a new categorical restriction on Congress's power, asserting that Congress may not regulate "inactivity."  The plaintiffs argue that requiring people to purchase health insurance or to pay a fee falls into this new, prohibited realm of a regulation of inactivity.

Recently, the United States Court of Appeals for the Sixth Circuit, the first appellate court to rule on the mandate, rejected this new category and upheld the law.  That decision points the way toward the eventual ruling of the United States Supreme Court.

The Sixth Circuit opinion that garnered the most attention was that of Judge Jeffrey Sutton.  Judge Sutton has impeccable conservative credentials.  Hired to clerk for retired Supreme Court Justice Lewis Powell, a centrist conservative, Sutton spent much of his clerkship working with Justice Scalia, a mainstay of the Court's conservative wing.

Sutton later served as the Solicitor General of Ohio, defending state prerogatives against assertions of broad federal power.  This background led to some controversy when President George W. Bush named Sutton to the Sixth Circuit.  Though first nominated in 2001, Judge Sutton did not receive Senate confirmation until 2003.  Judge Sutton's vote to uphold the individual mandate demonstrates that the law lies well within the mainstream of the Court's Commerce Clause jurisprudence.

In his opinion, Judge Sutton rebuffed the attempt to create a new category of "inactivity" immune from Congressional regulation.  He explained that such a category was vague, ungrounded, and ultimately unnecessary.

He pointed out the difficulty of drawing a line between "activity" and "inactivity."  Emphasizing the economic reality that all individuals must manage the risk of needing health care, he wrote, "No one is inactive when deciding how to pay for health care, as self-insurance and private insurance are two forms of action for addressing the same risk. Each requires affirmative choices; one is no less active than the other; and both affect commerce."

Judge Sutton further noted that existing federal laws arguably criminalize "inactivity."  For example, the Child Support Recovery Act punishes the failure to pay child support, and sex offender registration laws mandate activity by their targets.

Further, unlike the forbidden realm of noneconomic/noncommercial activity created by Lopez and Morrison, "inactivity" has neither a solid textual foundation nor a promise of clear enforceability.  As Judge Sutton put it, "And even the most powerful intuition about the meaning of the Constitution must be matched with a textual and enforceable theory of constitutional limits, and the activity/inactivity dichotomy does not work with respect to health insurance in many settings, if any of them."  This language makes a critical point.  The Constitution authorizes Congress to regulate "commerce among the several States."  To Supreme Court Justices committed to textualism, a focus on whether the underlying conduct is commercial has a firm foundation in the words of the clause.  The proposed activity/inactivity distinction lacks a comparable textual grounding.

Judge Sutton also rejected the most compelling rhetorical argument of the challengers: Once Congress starts mandating activity, where will it end?  Without this categorical limitation, could not Congress enact all manner of intrusive legislation, from requiring the purchase of health club memberships to mandating the purchase of broccoli?  Here, Judge Sutton made two critical points.  First, not every intrusive law is unconstitutional.  The political process remains a primary protection against unwanted invasions of personal liberty.  Second, these kinds of liberty-based arguments find their natural home in due process limitations on the power of both state and federal governments, rather than in the Commerce Clause.  If these horribles are indeed so horrible that judicial protection is necessary, should not the limits apply equally to state and federal governments?

The oral argument in the United States Court of Appeals for the Eleventh Circuit suggested that a majority of that panel, as well, was not inclined to recognize the new category.  Judge Frank Hull rejected the proposed activity/inactivity distinction as unhelpful.  Judge Stanley Marcus emphasized due process, rather than the Commerce Clause, as the proper framework for addressing intrusions on individual liberty.  Predictions based on oral arguments are always hazardous, but the Fourth Circuit panel also seemed sympathetic to the defense of the Act.

In view of the Sixth Circuit's ruling and the tenor of the other appellate arguments, it appears unlikely that the Court will confront an injunction restraining the implementation of the Affordable Care Act.  The Supreme Court eventually will want to provide a definitive ruling on such a significant piece of legislation with such a broad impact.  However, without a decision striking down the law, much less a split in the circuits, the Court can wait until after the elections to decide the issue.

This restraint is especially likely because, as Judge Sutton's opinion demonstrates, invalidating the law would require the Court to strike out into new territory.  The Court would have to create a new limitation on congressional power, a limitation that appears ungrounded, unclear, and unnecessary.

Posted in Featured, The Constitutionality of the Affordable Care Act

Recommended Citation: Robert Schapiro, Following Judge Sutton’s rejection of the “inactivity” argument, the Supreme Court can take its time, SCOTUSblog (Aug. 5, 2011, 3:00 PM), http://www.scotusblog.com/2011/08/following-judge-sutton%e2%80%99s-rejection-of-the-%e2%80%9cinactivity%e2%80%9d-argument-the-supreme-court-can-take-its-time/