Issues, Outcomes, and the Healthcare Decision

[In response to some comments, I’ve made a few edits [marked with strikeouts] to make what I was trying to say a little clearer – DGP]

So it turns out that this little brouhaha about whether the Court has issued a “holding” in regard to the question of whether the commerce clause authorizes Congress to regulate “inactivity” is related to a peculiar little phenomenon affecting multi-judge courts that Steve Salop and I wrote about many years ago.

Here’s the basic situation. For simplicity’s sake, assume a 3-judge (rather than a 9-judge) Court, with hypothetical Judges Roberts, Ginsburg, and Scalia. [To apply this to the Supreme Court, just assume each of the 3 hypothetical judges is joined in all examples below by 2 others.] The court hears a hypothetical case – say, a challenge to the constitutionality of the Affordable Care Act as beyond Congress’ power. The government defends on two alternative grounds: it’s valid under the commerce clause, or, alternatively, under the taxing power.

The 3 Justices divide as follows: Roberts believes the statute valid under the taxing power (and doesn’t express any opinion about the commerce clause); Ginsburg believes the statute is valid under the commerce clause (and doesn’t express any opinion about the taxing power); Scalia believes neither the commerce nor the tax power encompasses the statute (because, say, it’s a regulation of inactivity and therefore beyond the commerce clause, and because it doesn’t impose a “tax” within the meaning of the taxing power).

Case 1                                  valid under the c.c.?              valid under the tax power?

Roberts                                                                                                                Y

Ginsburg                                                 Y

Scalia                                                       N                                                           N

This happens not infrequently in decided cases, and the result is that the government prevails (2-1), but there’s no “holding” by the Court on either of the constitutional issues.

Now suppose that for whatever reason, Roberts decides to express his opinion about the commerce clause, and he agrees with Scalia:

Case 2                                  valid under the c.c.?              valid under the tax power?

Roberts                                                    N                                                          Y

Ginsburg                                                 Y

Scalia                                                       N                                                           N

That’s a little more peculiar. The government still wins, of course – but now, the Court has apparently held decided that the statute is not valid under the commerce power. (But since it has upheld the statute, it must have “implictly” held  decided that it’s valid under the tax power, no?)

Things get truly bizarre if Ginsburg, too, decides to express her opinion on the taxing power issue, and it turns out that she agrees with Scalia on that one:

Case 3                                  valid under the c.c.?              valid under the tax power?

Roberts                                                   N                                                            Y

Ginsburg                                                 Y                                                            N

Scalia                                                       N                                                           N

Uh-oh! Now you have a true anomaly: the government still wins 2-1 (i.e., the statute is constitutional), but the Court has apparently held decided that it is (a) not valid under the commerce clause, and (b) not valid under the tax power (each by 2-1 majorities). Or to put it differently (as we did in our paper): the government wins if the Court engages in “outcome-voting,” because for 2 out of 3 Justices “government wins” is their preferred outcome; the government loses if the Court engages in “issue-voting” (because on each issue there is a 2-1 majority in favor of the challenger). And, as an empirical matter, courts seem to (almost) always employ outcome-voting.

Are these two decisions on the issues before the court in case 3 “holdings”?  If they are, then, among other unfortunate and paradoxical consequences of this view of things, if the same statute comes before the Court the day after this decision is handed down, the Court is bound by stare decisis to hold that it is unconstitutional (by applying the two prior holdings that it’s not valid under either power)!

This anomaly is unavoidable in any system that (a) uses multi-member courts that (b) use outcome-voting, and in which (c) discrete issue-specific “holdings” are extracted from court opinions. The legal system has some tools that reduce the scope of the anomaly: the general rule, for example, that a judge’s opinion is non-binding dicta, and not part of a binding holding, when it is not “necessary” to the final judgment. That rule means that many cases that actually fall within the Case 3 category (if all judges were to express their opinions on all issues) end up looking like Case 1 cases (because judges don’t waste time expressing opinions on issues not necessary to their outcome-based decision), and Case 1 cases are merely peculiar, and not truly paradoxical.

Which brings us to the healthcare deicision. In the actual decision, we don’t have the full-blown Case 3 anomaly, because Ginsburg (plus 4 others) agreed with Roberts on the taxing power question:

Nat’l Fed. Ind. Bus. v Sebelius

valid under the c.c.?              valid under the tax power?

Roberts                                                   N                                                            Y

Ginsburg + 4                                         Y                                                            Y

Scalia + 3                                                N                                                           N

But it does raise the question: why did Ginsburg and colleagues feel the need to join Roberts’ opinion on the taxing power? [And if they hadn’t, would we have been spared all this talk about how the healthcare decision shows that Obama has “increased taxes”?]