The Incidental Unconstitutionality of the Individual Mandate

A recent Yale Law Journal Online article by Northwestern law professor Andrew Koppelman argues that the Obamacare individual mandate is obviously constitutional, especially in light of how McCulloch v. Maryland construed the Necessary and Proper clause. Bad News for Mail Robbers: The Obvious Constitutionality of Health Care Reform (April 2011).

Gary Lawson (Boston Univ.) and I partially agree:

Professor Koppelman evidently believes that the constitutionality of the individual mandate begins and ends with McCulloch v. Maryland. He is absolutely right about that. He simply has the wrong beginning and ending.

Professor Koppelman gets the beginning wrong because he starts his analysis in the middle of the McCulloch opinion instead of where John Marshall began. Chief Justice Marshall‘s famous discussion in McCulloch of the causal connection required by the word “necessary” was preceded by a seven-page analysis of the constitutionality of a federal corporation under the Necessary and Proper Clause. Those seven pages dealt with an issue that Marshall recognized had to be addressed before he decided whether a corporation was a causally “necessary” (or otherwise “proper”) means for implementing federal powers. The threshold question was whether the power to incorporate was incidental or principal.

Our article, Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, elucidates the original meaning of the Necessary and Proper clause, which Chief Justice Marshall considered so important, but which professor Koppelman overlooked:

The Necessary and Proper Clause incorporates basic norms drawn from eighteenth-century agency law, administrative law, and corporate law. From agency law, the clause embodies the venerable doctrine of principals and incidents: a law enacted under the clause must exercise a subsidiary rather than an independent power, must be important or customary to achievement of a principal end, and must conform to standard fiduciary obligations.

From administrative law, the Necessary and Proper Clause embodies the closely-related principle of reasonableness in the exercise of delegated power, which independently requires conformance with a similar set of fiduciary norms, including the norms of acting only within delegated jurisdiction and of treating all persons subject to a public agent‘s power impartially.

Evidence from eighteenth-century corporate law – and the Constitution was widely recognized in the founding era as a type of corporate charter – confirms these conclusions about the meaning of the phrase “necessary and proper for carrying into Execution . . . .”

The power to order someone to purchase a product is not a power subordinate or inferior to other powers, such as the power to regulate voluntary commerce. The power to compel commerce is at least as significant – or, in eighteenth-century language, as “worthy” or of the same “dignity” – as the power to regulate insurance pricing and rating practices. It is therefore not incidental to other powers exercised by Congress in the PPACA and must be separately enumerated if it is to exist.

Second, the doctrine of principals and incidents and the principle of reasonableness both embody the fiduciary norm that agents exercising delegated power must treat multiple principals subject to those agents’ power impartially. Interpreting the Necessary and Proper Clause to allow Congress to force private dealings with preferred sellers of products fails that basic fiduciary norm, as illustrated by founding-era concerns about Congress invalidly using the Necessary and Proper Clause power to create monopolies.