Limited government, federalism, and the Affordable Care Act
The following essay for our symposium is by Elizabeth Price Foley, the Institute for Justice Chair in Constitutional Litigation and Professor of Law at Florida International University College of Law. Her research centers on the intersection of health care and constitutional law. She is the author of Liberty for All: Reclaiming Individual Privacy in a New Era of Public Morality (Yale 2006), The Law of Life and Death (Harvard 2011), and is currently working on a book about the tea party, forthcoming in early 2012 from Cambridge University Press.
Health reform supporters have labeled lawsuits challenging its constitutionality as silly, frivolous, and purely political. To paraphrase Shakespeare’s Hamlet, methinks they doth protest too much.
Two lower federal courts "“ in Virginia and Florida "“ have ruled the law unconstitutional. While neither the Fourth nor Eleventh Circuits have yet issued their opinions, it seems likely that at least one "“ most likely the Eleventh Circuit "“ will agree, creating a circuit split upon which certiorari will be granted by the Supreme Court. How the Court will rule is anyone’s guess, but a deeply divided Court would not be surprising, given the ideological gap that exists on two critical principles raised by these lawsuits: limited government and federalism. These principles aren’t just quaint, outdated relics. They are designed to protect individual liberty by restraining government’s innate tendency toward ever-expanding power.
I. Limited government: Commerce and the Necessary and Proper Clauses
In Wickard v. Filburn, a farmer violated federal law by growing more wheat than allowed. He used the excess wheat for home consumption, with no excess being sold or otherwise entering the stream of commerce. The Wickard Court reasoned that by growing excess wheat, the farmer affected the interstate market for wheat by reducing the demand for wheat sold in the market. The Court declared that the farmer’s actions were not to be viewed in isolation, but rather assessed “together with that of many others similarly situated . . . .”
Wickard‘s aggregation principle was reaffirmed by Gonzales v. Raich, challenging the constitutionality of the federal Controlled Substances Act (CSA) as applied to plaintiffs who used marijuana for medical purposes pursuant to California law. The facts of Raich were remarkably similar to those in Wickard. In both cases, a citizen claimed that he or she was engaging in an activity "“ growing/consuming wheat or growing/consuming pot "“ that was solely intra-state and non-commercial and thus outside the reach of the commerce power.
As in Wickard, the Raich Court concluded that growing medicinal pot at home could have an aggregate substantial effect on the market for recreational pot.
Health reform proponents also cite Heart of Atlanta Motel v. United States and Katzenbach v. McClung, involving challenges to the constitutionality of the Civil Rights Act of 1964. The Act prohibited discrimination or segregation in “places of public accommodation” on the basis of race, color, religion, or national origin.
In both Heart of Atlanta and Katzenbach, the plaintiffs argued that their businesses, located within a single state, could not be considered as engaging in or affecting interstate commerce. The Supreme Court disagreed, concluding that the activity targeted by the Civil Rights Act "“ discrimination on the basis of race, color, religion or national origin "“ had an aggregate substantial effect on interstate commerce. Congress had established an ample record demonstrating that such discrimination impeded the interstate movement of travelers and thus, the free and robust flow of interstate commerce.
Obamacare supporters have suggested that Heart of Atlanta and Katzenbach involved a law that targeted “inactivity” "“ namely, the failure of public accommodations to serve people based on race, color, religion, or national origin. Dean Chemerinsky, for example, made this argument in an October 2010 Politico op-ed: “The court has said that Congress can use its commerce power to forbid hotels and restaurants from discriminating based on race, even though their conduct was refusing to engage in commercial activity.” Similarly, the federal district judge in the Michigan litigation made the same connection, asserting that Heart of Atlanta held that the “Commerce Clause allows Congress to regulate decisions not to engage in transactions with a person with whom plaintiff did not wish to deal.”
This is a mischaracterization of Heart of Atlanta and Katzenbach. The Civil Rights Act didn’t target “inactivity” "“ i.e., the failure of businesses to serve blacks. Its language unequivocally targeted affirmative acts of discrimination by businesses engaging in interstate commerce. Contrast that with the individual mandate, which declares, “[a]n applicable individual shall . . . ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for each month.” This language does not target activity involving interstate commerce; it targets “an applicable individual”"”that is, someone who is alive and not excluded from the mandate.
A law targeting the failure to buy health insurance by anyone alive is not the same as a law targeting discrimination by a business that affects commerce in well-defined ways. The former penalizes individual inactivity with no obvious connection to interstate commerce; the latter penalizes activity by businesses that clearly affect interstate commerce. Being alive and not doing engaging in commerce is easily distinguishable from engaging in constant commercial activity.
On the other side of the coin are two cases cited by the law’s challengers: United States v. Lopez and United States v. Morrison. In Lopez, the Court invalidated a federal law that criminalized carrying a gun near a school zone. The government argued that when all instances of carrying guns near schools were aggregated, commerce was negatively affected: Students couldn’t learn and teachers couldn’t teach, harming the economy.
The Court rejected this argument, observing that it required piling “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.” It concluded that the targeted activity "“ carrying a gun near a school "“ “has nothing to do with ‘commerce’ or any sort of economic enterprise, however broadly one might define those terms.”
In United States v. Morrison (2000), the government similarly contended that women who were victims of violence were less likely to go to work, school, travel, shop, etc., harming the overall economy. Similar to Lopez, the Morrison Court concluded that an act of violence is not an economic activity, and that such acts, even aggregated, could not rationally be characterized as having a “substantial effect” on interstate commerce.
Not buying health insurance is "“ like carrying a gun near a school or committing an act of violence against another "“ inherently non-commercial, non-economic in nature. Nothing is being bought or sold. Nothing of value is being exchanged. In fact, nothing is happening at all.
Yet the more challenging question is not whether failing to buy something is economic activity. It seems pretty obvious that it is the antithesis of economic activity. The harder question is whether not buying something is “activity” at all. The substantial effects cases have always focused on identifying a the volitional act being targeted "“ growing wheat or marijuana, carrying a gun near a school, committing an act of violence "“ that when aggregated with other acts of the same nature, are claimed to substantially affect interstate commerce.
In the Obamacare litigation, the Obama Administration now argues that “activity” is not required under the Commerce Clause. Instead, any economic “decision” with a substantial effect on commerce is fair game. A person who does not buy health insurance, the argument goes, may not be undertaking an “activity” but is surely making a “decision” that, when aggregated with all such individuals, substantially affects interstate commerce.
The proposed shift from “activity” to “decisions” is novel and breathtakingly broad. There is no Supreme Court precedent that has dared to go this far, equating deciding whether to do something with actually doing something. As Judge Vinson explained when ruling in favor of the states, “The decisions of whether and when (or not) to buy a house, a car, a television, a dinner, or even a morning cup of coffee also have a financial impact that"”when aggregated with similar economic decisions"”affect the price of that particular product or service and have a substantial effect on interstate commerce.” He concluded, “To be sure, it is not difficult to identify an economic decision that has a cumulatively substantial effect on interstate commerce; rather, the difficult task is to find a decision that does not.”
Such an omnipotent Commerce Clause is inherently incompatible with the principle of limited and enumerated powers. Realizing this, the Obama Administration has been desperately trying to identify a limiting principle to assuage the concern that upholding health reform will not fundamentally alter our constitutional structure. The primary argument that has emerged is that health care is “unique” because: (A) no one can completely “opt out” of the health care market entirely; and (B) uninsured individuals who do attempt to opt out merely shift the costs of their decision onto the rest of society.
Such inevitability and cost-shifting isn’t unique to health care at all. We cannot really opt out of the market for food, water, clothes, or housing. Everyone has to have these things at some point in their life, and once they do, a failure to pay for them will shift the cost of their bad debt incurred to the rest of society via higher prices.
Moreover, the uniqueness premise is not even accurate. It is conceivable that a person can live a healthy life and die peacefully at home, without ever incurring a health care debt they cannot pay. Many other people successfully self-insure for their health costs.
A second, equally unpersuasive limiting principle articulated is that forcing people to buy something is different from forcing them to use or consume it. At a recent hearing of the Senate Judiciary Committee, for example, Senator Durbin asked Professor Fried the following, “[I]f the government can require me to buy health insurance, can it require me to have a membership in a gym, or eat vegetables?” Fried replied, “[T]hat would be a violation of the [Due Process Clauses] to force you to eat something. But to force you to pay for something, I don’t see why not. It may not be a good idea, but I don’t see why it’s unconstitutional.” Dean Chemerinsky likewise told Reason TV that while “what people choose to eat well might be regarded as a personal liberty” nonetheless “Congress could use its commerce power to require people to buy cars.”
So while Congress can force us to buy anything it wants "“ cars, shoes, broccoli, gym memberships "“ it cannot force us to use or consume them. It cannot make us drive the car, wear the shoes, eat the broccoli or go to the gym. This is not much of a limiting principle.
The ironic thing about this buying-versus-consuming liberty distinction is that its proponents seem completely unconcerned with the liberty implications of the individual mandate itself, or the fact that there’s no precedent recognizing a liberty to “eat what you want,” “drive what kind of car you want” or “exercise if you want.” Indeed, to the extent we enjoy such liberties, current jurisprudence imposes deferential rational basis review on laws restricting them.
A law mandating that we eat our veggies could well be constitutional under such an expansive view of federal power. After all, if it would make us all healthier, why not force us to do the right thing, as with buying health insurance? Consider the rationale articulated by Professor Tribe in the New York Times, “Those [trial court] judges [ruling Obamacare unconstitutional] made the confused assertion that what is at stake here is a matter of personal liberty"”the right not to purchase what one wishes not to purchase"”rather than the reach of national legislative power in a world where no man is an island.”
Tribe’s reasoning is coldly realistic. He is pointing out that there is no constitutional right to decide what to buy. To him, the salient question is the “reach of legislative power in a world where no man is an island.” If buying or not buying X affects commerce "“ and why wouldn’t it? "“ Congress should be able to regulate your decision whether to buy (or not buy) it. The same logic applies to your decision to eat, consume, or otherwise use X. All these decisions "“ buying/not buying, eating/not eating, using/not using "“ will affect commerce in a substantial way. Indeed, because “no man is an island,” every decision we make "“ including whether to eat our veggies "“ is within the reach of the Commerce Clause.
The six-million-dollar question is thus whether the Court accepts that there is no difference between “activity” and “inactivity.” In classic Orwelllian doublethink "“ where black becomes white "“ Obamacare supporters unabashedly assert that inactivity is really just a form of activity, since there’s no such thing, in today’s interconnected world, as inactivity. Every decision we make, in some way, has an aggregate effect on the economy.
This logic should frighten ordinary Americans. If it is accepted, the Commerce Clause becomes a police power, capable of reaching every decision we make.
Even if the Supreme Court balks at equating inactivity and activity, a final constitutional consideration "“ the Necessary and Proper Clause "“ must be addressed. The Administration’s argument goes like this: (1) Congress can regulate insurance under the commerce power; (2) Obamacare regulates health insurance; and therefore (3) the individual mandate is a “necessary and proper” way to effectuate these health insurance regulations.
In McCulloch v. Maryland (1819), Chief Justice Marshall articulated the test for whether the Necessary and Proper Clause supports a law:
We admit, as all must admit, that the powers of the government are limited, and that its limits are not to be transcended. But we . . . must allow to the national legislature that discretion with respect to the means by which the powers it confers are to be carried into execution . . . . Let 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.
Marshall clarified that if a law is a “pretext” for accomplishing objectives outside the enumerated powers, it would be unconstitutional: “Should congress . . . under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the government, it would become the painful duty of this tribunal . . . to say that such an act was not the law of the land.”
With health reform, the “legitimate end” relied upon is the regulation of the health insurance market. But is the mandate a means “plainly adapted” to achieve this end? A mandate to buy insurance is not a method of regulating insurance at all; it is a regulation of individual conduct. The individual mandate does not regulate health insurance in the same way as, for example, a ban on excluding pre-existing conditions or eliminating lifetime coverage limits. The mandate commands, “Thou shalt buy insurance.” This may help sustain the solvency of the health insurance market, especially since the law’s market reforms made health insurance a very expensive and risky thing to underwrite. But the individual mandate itself is not a means of regulating insurance qua insurance.
Combined with McCulloch‘s requirement that the law be “consistent with the letter and spirit of the constitution,” the concerns about the mandate are deepened. Forcing individuals to buy a product, as a supposed means of stabilizing the market for such a product, is dangerous bootstrapping. Under the guise of saving a statutorily destabilized and reconfigured market, the individual mandate attempts to accomplish an object not entrusted to the government "“ the power to force citizens to buy a private product. This is precisely the type of “pretext” situation Chief Justice Marshall was referring to in McCulloch.
If the Necessary and Proper Clause, annexed to the Commerce Clause, gives the federal government the power to force us to buy whatever it deems useful to bolstering the American economy, there’s no limited government anymore and we should just stop pretending there is.
The other constitutional challenge focuses on Obamacare’s expansion of Medicaid, the health program for the poor. States argue that the Medicaid expansion “commandeers” them in violation of New York v. United States (1992) by creating a Hobson’s Choice: either implement expensive new Medicaid rules or opt out altogether, leaving millions without coverage.
While a series of Supreme Court decisions has effectively gutted much of the Tenth Amendment, one core aspect of federalism remains, exemplified by New York: If the federal government wants to do X, it must use its own resources to accomplish X. It cannot treat states as junior partners and commandeer their legislative or executive officials to carry out federal law.
The ability of states to discontinue their Medicaid programs altogether would appear to dispose of a commandeering claim, but for the possible salience of South Dakota v. Dole (1987). In Dole, the state challenged a federal law withholding five percent of highway funds from states that failed to raise the drinking age.
The Dole Court ruled in favor of the federal government, concluding that in exercising its spending power, Congress is generally free to attach conditions on the receipt of federal funds, yet warning in dicta that “financial inducement offered by Congress might be so coercive as to pass the point at which ‘pressure turns into compulsion.'” When this imaginary line is crossed, an exercise of the spending power would be unconstitutional.
The states assert that Obamacare’s Medicaid expansion crosses that line. State dependency on federal dollars has created a situation hazardous to federalism, creating a situation whereby states no longer have meaningful independence in areas traditionally reserved to them. While states are theoretically free to turn off the federal spigot, the states argue, doing so would mean financial suicide and devastation to their dependent populations.
While no coercion existed in Dole, it involved a withholding of only five percent. In the case of Obamacare, states don’t lose five percent, they lose all Medicaid dollars. But advocating Dole-based coercion claims has proven tough sledding. Because Dole provided no guidance about how to spot the magic moment when strings transmogrify encouragement into coercion, coercion claims get little traction in lower courts. Does coercion hinge on the percentage of federal funds withheld? Does it matter whether alternative sources of funding are available, such as state income taxes or charitable contributions? As one U.S. Court of Appeals put it, “[C]an a sovereign state which is always free to increase its tax revenues ever be coerced by the withholding of federal funds"”or is the state merely presented with hard political choices?” Given the paucity of guidance, the best shot for this argument is at the Supreme Court level. Until then, expect failure on this intriguing federalism challenge to Obamacare.
As the foregoing analysis shows, the lawsuits challenging Obamacare are far from frivolous. They raise serious and legitimate constitutional concerns relating to the principle of limited government and, concomitantly, the meaning of federalism.
Recommended Citation: Elizabeth Price Foley, Limited government, federalism, and the Affordable Care Act, SCOTUSblog (Aug. 9, 2011, 6:13 PM), http://www.scotusblog.com/2011/08/limited-government-federalism-and-the-affordable-care-act/