Rather than considering the full range of constitutional issues in the case, we decided to focus on why the mandate falls outside the scope of Congress’ powers under the Necessary and Proper Clause because it is not “proper.” We thought that an in-depth analysis of this crucial, underemphasized issue would be more useful than a brief that covered multiple issues in a more superficial way and that would overlap far more with other briefs filed in the case. As far as I know, this is the only amicus brief that focuses solely on the issue of propriety.

The problem of propriety is the main flaw in the federal government’s claim that the Necessary and Proper Clause authorizes the mandate – which is otherwise the strongest constitutional argument in favor of the mandate. It is striking that the Justice Department largely ignores the issue of propriety in their brief for the Petitioners. As explained more fully in our brief, the federal government’s position essentially transforms the Necessary and Proper Clause into just a “Necessary Clause.” This goes against logic, the text of the Constitution, the original meaning, and Supreme Court precedent. We hope to focus more attention on this weakness in the federal government’s case.

The question whether the Patient Protection and Affordable Care Act (“PPACA”) is “unconstitutional” is thorny, not simply because it presents intriguing issues of interpretation but also because it starkly illustrates the ambiguity that often accompanies the word “unconstitutional.” The term can be, and often is, used to mean a wide range of things, from inconsistency with the Constitution’s text to inconsistency with a set of policy preferences. In this article, we briefly explore the range of meanings that attach to the term “unconstitutional,” as well as the problem of determining the “constitutionality” of a lengthy statute when only some portions of the statute are challenged. We then, using “unconstitutional” to mean” inconsistent with an original social understanding of the Constitution’s text (with a bit of a nod to judicial precedents),” show that the individual mandate in the PPACA is not authorized by the federal taxing power, the federal commerce power, or the Necessary and Proper Clause and is therefore unconstitutional.

Another interesting finding from the survey is that a majority of Americans also believe that the Supreme Court will strike down the mandate.  In other words, according to this poll, a majority of Americans will be surprised and disappointed if the individual mandate is upheld.

(LvWSJ)

By imposing the Medicaid mandates in the Affordable Care Act (“ACA”), Congress exceeded the scope of its enumerated powers. If allowed to stand, those mandates could be the death-knell for the Constitution’s finely calibrated system of federalism. The states truly would be little more than agencies for Congress to “commandeer” at will.

The Founders created and the People ratified a Constitution protecting the States’ role as limited “sovereigns.” As this Court has ruled repeatedly, the states’ sovereign “independence” entitles them to make decisions within their sphere based on their own policy judgments, free of federal coercion. As explained below, this rule and the closely-related principle of federal non-coercion is of particular constitutional importance in financing health and social services.

In sustaining the Medicaid mandates, the United States Court of Appeals for the Eleventh Circuit overlooked both Founding-Era constitutional principle and modern Supreme Court doctrine. It also overlooked aspects of the Medicaid mandates that particularly aggravate their coercive qualities. Insofar as the ACA authorizes withdrawal of all Medicaid funds from States that choose not to submit to the Medicaid mandates, that statute slashes at the heart of American federalism. It is unconstitutional and void.

Intelligent comments are welcome, although experience suggests that there will also be plenty of comments from twits who have not read the brief, yet proclaim their absolute certainty about supposedly fatal errors in its legal reasoning. Rob’s summary of brief is available on his blog.

Even before Obama, health care was the most heavily regulated and subsidized industry in the United States, and there is plenty of room for free market reforms that can drive down costs by increasing competition. Some of the possible options are described in an important book by Cato Institute health care scholars Michael Tanner and Michael Cannon. They include breaking the connection between health insurance and employment created by government favoritism for employer-linked plans, and allowing individuals to purchase insurance across state lines, which would make insurance more portable and increase competition between insurance providers. As University of Chicago economist John Cochrane points out, there are also free market reforms that could alleviate the problem of coverage for preexisting conditions – the issue that is often cited as a justification for the mandate. And that’s just a small sample of the many available options. Many additional proposals are covered at John Goodman’s blog, among other places (Goodman is one of the best-known free market-oriented health care economists).

Obviously, the range of policies that are politically feasible in the near future is a lot narrower than the range of theoretically possible options. Even so, at least some pro-market reforms are likely to be as much or more politically viable as socialized medicine. If liberals could not push the latter through when the left was riding high in 2009 and Democrats had overwhelming majorities in both houses of Congress, it is highly unlikely that they will enact it at any time in the foreseeable future.

To the extent that socialized medicine is politically feasible, it may well become more rather than less so as a result of the individual mandate. Under the mandate, government must define the level of coverage that everyone is required to buy, including defining which medical conditions and treatments are included. This opens the door for constant lobbying by health care providers and other interest groups to ensure that their particular treatments are covered by the mandate. As more and more is mandated, the price of insurance goes up, and so too will political pressure for increasing government subsidies and government-provided insurance. Insurance costs have in fact gone up as a result of the Massachusetts “Romneycare” mandate that is the model for the federal reform.

Predicting the political future is a difficult business, so it’s possible that my expectations are wrong. At this point, however, it seems at least as likely that the continuation of the mandate will make socialized medicine more probable than that the opposite will happen.

Finally, if getting rid of the individual mandate really will bring on the advent of socialized medicine, why don’t any liberal activists and health care experts support it? There are plenty of left-wingers who would prefer socialized medicine to the Obama plan. If they think that the repeal of the latter would lead to the former, then they should form a coalition with Obamacare opponents on the right and work to get it repealed. A small number of liberals are in fact willing to get rid of the mandate, most notably Howard Dean. But even Dean doesn’t claim that abolition of the mandate would lead to socialized medicine. He merely thinks that the mandate is a political liability for Democrats and that the Obama plan can work just as well without it. The extreme rarity of left-wing support for repeal of the mandate suggests that few liberals genuinely believe that getting rid of it is likely to lead to socialized medicine.

Obviously, none of this is directly relevant to the constitutional arguments against the mandate. It is logically possible that the mandate is both unconstitutional and the only politically feasible alternative to socialized medicine. But that scenario seems highly unlikely. The spectre of socialized medicine should not deter free market advocates from either pursuing the constitutional case against the mandate or trying to repeal it politically.

UPDATE: I should acknowledge co-blogger Jonathan Adler’s September post making a similar argument.

As I’ve noted before, whether a mandate is “necessary” to increase coverage and control costs absent a single-payer system is a separate question from whether it is a “necessary and proper” means of carrying into execution the federal government’s enumerated powers.

It’s not a frequent topic of discussion, but doctors die, too. And they don’t die like the rest of us. What’s unusual about them is not how much treatment they get compared to most Americans, but how little. For all the time they spend fending off the deaths of others, they tend to be fairly serene when faced with death themselves. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care they could want. But they go gently.

Of course, doctors don’t want to die; they want to live. But they know enough about modern medicine to know its limits. And they know enough about death to know what all people fear most: dying in pain, and dying alone. They’ve talked about this with their families. They want to be sure, when the time comes, that no heroic measures will happen—that they will never experience, during their last moments on earth, someone breaking their ribs in an attempt to resuscitate them with CPR (that’s what happens if CPR is done right).

Almost all medical professionals have seen what we call “futile care” being performed on people. That’s when doctors bring the cutting edge of technology to bear on a grievously ill person near the end of life. The patient will get cut open, perforated with tubes, hooked up to machines, and assaulted with drugs. All of this occurs in the Intensive Care Unit at a cost of tens of thousands of dollars a day. What it buys is misery we would not inflict on a terrorist. I cannot count the number of times fellow physicians have told me, in words that vary only slightly, “Promise me if you find me like this that you’ll kill me.” They mean it. Some medical personnel wear medallions stamped “NO CODE” to tell physicians not to perform CPR on them. I have even seen it as a tattoo.

This issue is of interest to me in part because of personal experience. When my grandfather was in his terminal illness about a decade ago, we found it difficult to ensure that he would not be given the kind of excessive and unnecessary treatment Murray describes above. At one point, I went so far as to request to see the doctor on duty, explain that I am a lawyer, and emphasize that my father had the legal right to make decisions to refuse care on behalf of my grandfather, who was then unable to make choices for himself. After that, things went smoothly, and my father’s instructions (based on my grandfather’s own oft-expressed wishes) were followed. But it took some doing.

A key lesson of this experience is that it’s important for the rest of us to do what Murray explains doctors do: think about what sort of care you want and don’t want during your terminal illness, and try to plan ahead. Most if not all states have “living wills” and/or other laws that allow you to leave advance instructions for situations when you are hospitalized and lack the capacity to make decisions at the time. It’s also useful to have a friend or family member available to make sure that your instructions for refusing certain types of care are actually being followed.

Before concluding, I should emphasize that this post is an exception to my usual rules for choosing blogging topics. I am not expert on this topic, and the point I’m making isn’t an original one. I may violate my blogging principles, but at least I disclose it when I do! If readers want to discount what I say here, I can’t very well complain. Nonetheless, Murray is an expert and his article is a good opportunity for laypeople to learn from the decisions other experts make in a situation that many of us are likely to face at some point in our lives – either for ourselves or in helping friends and family members.

At issue was the federal Harrison Anti-Narcotic Law, which taxed opium and coca leaves, and their derivatives. Ostensibly as part of the tax scheme, the Act also required registration of those drugs. A physician lawfully dispensed one tablet of morphine and three tablets of cocaine to a female patient who was an addict. The trial court instructed the jury that Dr. Linder’s actions would be lawful if the drugs were dispensed as painkillers for stomach cancer or an ulcer, but not simply because the patient was an addict. As the Supreme Court observed, the indictment “does not question the doctor’s good faith nor the wisdom or propriety of his action according to medical standards. It does not allege that he dispensed the drugs otherwise than to a patient in the course of his professional practice or for other than medical purposes. The facts disclosed indicate no conscious design to violate the law, no cause to suspect that the recipient intended to sell or otherwise dispose of the drugs, and no real probability that she would not consume them.”

The Court pointed out that “Congress cannot, under the pretext of executing delegated power [here, the Tax Power], pass laws for the accomplishment of objects not intrusted to the federal government. And we accept as established doctrine that any provision of an act of Congress ostensibly enacted under power granted by the Constitution, not naturally and reasonably adapted to the effective exercise of such power, but solely to the achievement of something plainly within power reserved to the states, is invalid and cannot be enforced.” This was supported by a string cite starting with McCulloch v. Maryland.

In the instant case, the power to tax cocaine and morphine carried with it incidental powers to effectuate that tax, and the effectuation of the tax was the sole legitimate use of incidental powers. Incidental powers could not be construed to control a physician’s decision about properly taxed and registered products:

“Obviously, direct control of medical practice in the states is beyond the power of the federal government. Incidental regulation of such practice by Congress through a taxing act cannot extend to matters plainly inappropriate and unnecessary to reasonable enforcement of a revenue measure. The enactment under consideration levies a tax, upheld by this court, upon every person who imports, manufactures, produces, compounds, sells, deals in, dispenses or gives away opium or coca leaves or derivatives therefrom, and may regulate medical practice in the states only so far as reasonably appropriate for or merely incidental to its enforcement. It says nothing of ‘addicts’ and does not undertake to prescribe methods for their medical treatment. They are diseased and proper subjects for such treatment, and we cannot possibly conclude that a physician acted improperly or unwisely or for other than medical purposes solely because he has dispensed to one of them in the ordinary course and in good faith, four small tablets of morphine or cocaine for relief of conditions incident to addiction. What constitutes bona fide medical practice must be determined upon consideration of evidence and attending circumstances. Mere pretense of such practice, of course, cannot legalize forbidden sales, or otherwise nullify valid provisions of the statute, or defeat such regulations as may be fairly appropriate to its enforcement within the proper limitations of a revenue measure.”

Thus, said the Court, Linder was different from previous cases in which the Court had upheld the prosecution of physicians whose prescription of large quantities of drugs was obviously a sham, for no medical purpose, and simply to serve as a conduit for drugs to the general public.

It is not surprising that Linder was relied in several cases finding that Congress had exceeded tax power. U.S. v. Butler (1936); Hopkins Federal Savings & Loan Ass’n v. Cleary (1935); U.S. v. Constantine (1935); Trusler v. Crooks (1926).

Significantly, after 1937, the Court continued to rely on Linder, and in upholding other statutes, to distinguish them from the mis-application of the statute in Linder. “While there has long been recognition of the authority of Congress to obtain incidental social, health or economic advantages from the exercise of constitutional powers, it has been said that such collateral results must be obtained from statutory provisions reasonably adapted to the constitutional objects of the legislation. Linder v. United States.” Cloverleaf Butter v. Patterson (1942).

Linder appears the very first paragraph of a case familiar to many VC readers, United States v. Miller (1939). Citing, inter alia, Linder, the Miller opinion says that the federal tax and tax registration system for certain firearms does not “usurp[] police power reserved to the States.”

In U.S. v. Kahriger (1953), Linder is a “But see” footnote for this sentence: “Unless there are provisions, extraneous to any tax need, courts are without authority to limit the exercise of the taxing power.” I think that’s a misreading of Linder. The Court’s point in Linder was that micro-managing a physician’s decision about when to write a prescription was in fact “extraneous to any tax need.” So Linder and Kahriger are not inconsistent.

In a case decided after Kahriger, the Court upheld a gambling device tax, expressly distinguishing it from Linder, because the gambling tax is “certainly not a mere ruse designed to invade areas of control reserved to the states.” U.S. v. Five Gambling Devices (1953).

The most important case which relies on Linder is Ashwander v. Tennessee Valley Authority (1936) (upholding the TVA). There, the majority opinion by Chief Justice Hughes affirms that “The Congress may not, ‘under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the government.’ Chief Justice Marshall, in McCulloch v. Maryland, 4 Wheat. 316, 423; Linder v. United States, 268 U.S. 5, 15, 17.”

Justice Brandeis’s concurrence in Ashwander is, to this day, regarded as the most important guidance for the judicial principles of abstention. Number 7 of the “Ashwander principles” is that a court should attempt to construe a statute so as to avoid a constitutional problem, and for this proposition, Justice Brandeis cited Linder, among other cases.

In short, even if one takes the view that cases upholding certain aspects of the New Deal and the Fair Deal enjoy some sort of supra-precedential status that earlier cases do not, Linder is part of the fabric of those privileged cases.

In short, the Necessary and Proper Clause expressed the well-known agency law doctrine of principals and incidents. That is, the grant of power to an agent (and the federal government was an agent of the people, to exercise certain delegated powers) was considered to include incidental powers. (Unless the parties specified to the contrary.) To be an incidental power, a power had to be subsidiary to, inferior to, and “less worthy” (in the language of the time) than the principal power. So if A delegates to B the power to manage A’s farm for five years, B could lease part of the farm to C for a few years, but B could not sell the farm. The power to sell the farm is not an “incident” of the power to manage a farm. It is a power that is as great as the power to manage the farm.

Thus, the first half of Chief Justice Marshall’s opinion in McCulloch wrestles with the question of whether the power to establish a corporation (here, the 2d Bank of the United States) can be considered an “incident” of the enumerated congressional powers. This portion of the opinion is often expurgated from constitutional law textbooks. But not from Randy Barnett’s Constitutional Law: Cases in Context.

So is the power to order people to engage in commerce with certain corporations “incidental” to the enumerated power “to regulate Commerce . . .  among the several States”? Lawson and I argue that the power to compel intrastate commerce is of at least equal “dignity” as the power to regulate voluntary interstate commerce. Thus, the individual mandate cannot be justified a “necessary and proper” to the exercise of the power to regulate interstate commerce.

Further, the word “proper” affirms the agency/fiduciary law rule that an agent  must act reasonably, and when he is acting on behalf of several principals must treat the principals equally. So in Rooke’s Case, it was unreasonable that the entire costs of a water control project were imposed on a single landowner, when other landowners also benefited from the project. In Leader v. Moxon (1773) paving commissioners were unreasonable when they ordered a road repair that effectively buried the doors and windows of the plaintiff’s house, making plaintiff bear the entire burden of a project that was supposedly for the benefit of him and others. In the Founding era, government creation of a monopoly was the paradigm example of a government act that was not “proper,” because the monopolist was benefited to the detriment of everyone else.

In 1787, a consumer could at least choose not to buy the monopolist’s product.  ”The conclusion is clear: if a commercial monopoly—which citizens may avoid by not purchasing the product monopolized—is constitutionally void as ‘improper,’ then far more ‘improper’ is a mandate for the benefit of political favorites, which none but other political favorites may avoid. . . . [C]oerced commerce with congressionally favored oligopolists is constitutionally improper and void.”

Thus, if the Supreme Court follows the original meaning of the Necessary and Proper clause, and McCulloch v. Maryland‘s accurate exposition of that meaning, the Court will not rule in favor of the individual mandate as a necessary and proper exercise of the power to regulate interstate commerce.

What happens if the IRS goes ahead with its proposed fix?  Would anyone have standing to challenge this violation of the law?  Normally the answer would be no, as no taxpayer would have standing to challenge an IRS decision to give preferential tax treatment to someone else.  But in this case standing is likely because, as discussed here, premium assistance is tied to the enforcement of the employer mandate in a way that would give a penalized employer standing to sue.  So if the IRA goes ahead, this is another PPACA issue that will end up in court.

NOTE: Here is SCOTUSBlog’s health care litigation page, and here is the ACA Litigation blog which is also a useful resource on the litigation.

When the Rosenbaum case began in 2009, I wrote this post countering one of the most common arguments against legalized organ sales: the claim that it would “exploit” the poor. Here’s a summary (details of each point are in the original post):

The arrest of Brooklyn Rabbi Levy Izhak Rosenbaum for trying to broker the sale of a kidney has rekindled public debate over the possibility of legalizing organ markets. This is an issue I teach every year in my Property class. Each time, one of the most common objections raised is the claim that organ markets must be banned because they will lead to “exploitation” of the poor…..

There are several major problems with the argument: it is inconsistent with allowing poor people to engage in far riskier activities for pay; it doesn’t even begin to prove that preventing the “exploitation” is an important enough value to justify the deaths of thousands of people for lack of organs; and it overlooks the fact that poor organ donors are likely to benefit from organ markets. Finally, even if all these points are unpersuasive, the exploitation argument still can’t justify banning organ sales by the nonpoor as well.

I realize, of course, that for many people, the most important objection to organ markets is not exploitation of the poor but rather a visceral emotional hostility. It is difficult to argue against gut feelings of disgust. Almost by definition, they are hard to influence by rational argument. Still, I would ask those who feel this way to keep in mind two points:

First, many social and technological changes that are widely accepted today were once greeted with similar visceral hostility. Consider cases like equality for women and interracial marriage. Some leading critics of organ markets, such as medical ethicist Leon Kass, also once argued that in vitro fertilization should be banned, because they found it disgusting as well. Today, IVF is an almost universally accepted method for enabling therwise infertile people to have children. Even Kass has made his peace with it. That doesn’t prove that all negative visceral reactions are necessarily wrong. But it does suggest that we should be very careful about basing policy on them.

Second, even if you think that your visceral hostility to organ sales is well-founded, it is still necessary to ask whether satisfying it is worth the sacrifice of thousands of lives every year. Many otherwise distasteful practices may be defensible if they save innocent lives. To justify a ban on organ sales, it’s not enough to prove that such sales are somehow flawed or even immoral. Whatever values are promoted by a ban have to be weighty enough to justify condemning thousands to an early death.

The most powerful argument against upholding the constitutionality of the individual mandate may be that this will open the door to compulsory broccoli purchases. Many people are unfamiliar with the relevant Commerce Clause cases, but everyone seems to know about the broccoli hypothetical.

The hypothetical on the other side of this litigation, though, is just as powerful. Suppose that a dangerous epidemic breaks out that reduces interstate commerce by curtailing travel and other interactions for fear of contagion. A private company develops an effective vaccine that many people refuse to buy. Is Congress prohibited from ordering everyone in the country to buy the vaccine under the proposed activity/inactivity distinction?

It so happens that I address the very issue Gerard raises in a forthcoming article on slippery slopes and the individual mandate. I have two answers to his question. First, Congress can still pass a vaccination requirement that applies to everyone who crosses state lines. Crossing state lines is clearly an “activity” and an interstate activity to boot. Second, as a practical matter, state governments would have very strong political incentives to enact vaccination laws in the face of a “dangerous epidemic.”

Gerard anticipates my second point, and finds it unsatisfying because it “sounds a lot like ‘This is a non-issue because Congress will never order you to buy broccoli.’ Either both responses are valid or neither is. One can’t be adequate and the other not.” Not so. The claim that a slippery slope is politically infeasible may be right in one scenario and wrong in the other because some policies are more politically viable than others. As I explain in this post, Congress has strong incentives to enact purchase mandates that benefit influential interest groups. The insurance mandate was itself adopted in part because of backing by the health insurance industry. By contrast, state governments are unlikely to sit on their heels in the face of a raging epidemic. Any state that does so is likely to lose business, and its politicians are likely to suffer retribution at the polls. Even the most ignorant voters tend to notice a rampaging epidemic that the government has failed to control.

Obviously, state governments could do a poor job of addressing an epidemic even in spite of good incentives. But the same is true of Congress.

UPDATE: I have made a few, mostly stylistic, changes in this post.

UPDATE #2: It’s a fair point to suggest, as some commenters do, that under my logic, Congress could enact the individual insurance mandate by restricting it to people who cross state lines. I think that would be permissible under current Commerce Clause doctrine, even if it might not be under the text and original meaning. However, many people could still evade the mandate by avoiding interstate travel. Not everyone crosses state lines regularly. Moreover, a health insurance mandate tied to travel would seem weird to many people, which in turn would reduce its political feasibility (not so with a vaccination mandate tied to travel, since it’s easy to see that part of the purpose of such a mandate is to stop the spread of an epidemic across state lines). More generally, requiring mandates to be tied to “economic activity” of some sort reduces the risk of harmful mandates because mandates with “tie-ins” tend to disincentivize whatever activity they are tied to. The more onerous the mandate, the greater the disincentive. For example, a mandate tied to employment will tend to increase unemployment. Congress will not always be willing to pay that price.

My answer to what the Supreme Court should do is:

The Court should re-affirm Gibbons v. Ogden, which followed the original understanding of the interstate commerce clause: “commerce” means mercantile exchange, plus some closely-related subjects, such as navigation. Among the subjects which are not interstate commerce, according to Gibbons, are “health laws of every description.” The Court should then over-rule South-Eastern Underwriters (1944), which broke from long-established precedent, and declared that even purely intrastate insurance was interstate commerce. Because South-Eastern claimed to be following original meaning, the modern Court should simply point out that none of the original sources cited by the South-Eastern opinion remotely support the contention that all forms of insurance are “commerce.”
 
Finally, Congress should explain that the Necessary and Proper clause underscores the unconstitutionality of the mandate. As McCulloch v. Maryland demonstrated, the original meaning of the clause affirms the Congress may exercise powers which are incidental to an enumerated power. The power to compel a private person to engage in commerce with a private company is not an incident of, or lesser than, the power to regulate voluntary interstate commerce. Further, government-created monopolies were, in the Founding Era, a paradigmatic example of improper government action. Therefore, it is not constitutionally “proper” to force citizens to spend their money on a government-favored Big Insurance oligopoly.

The rationale for the above can be found in my articles Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, 121 Yale Law Journal Online (forthcoming 2011)(with Gary Lawson); “Health Laws of Every Description”: John Marshall’s Ruling on a Federal Health Care Law, 12 Engage 49 (June 2011) (with Robert G. Natelson); Commerce in the Commerce Clause: A Response to Jack Balkin, 109 Michigan Law Review First Impressions 55 (2010) (with Natelson); and Health insurance is not ‘commerce’: A single erroneous Supreme Court precedent from 1944, South-Eastern Underwriters, should be overturned, National Law Journal, March 28, 2011 (with Natelson) (available on Lexix/Nexis).

Since Scotusblog is trying to get people to comment on its own website, I’m not opening comments on this post, and I encourage you to share you thoughts over at Scotusblug.

We now have three district courts and one court of appeals that have voted to strike down the mandate, and three district courts and one court of appeals that have voted to uphold it. Of the twelve federal judges who have considered the question, six have gone one way and six the other, with ten of the twelve (including Judge Connor) splitting along partisan and ideological lines.

It is now more clear than ever that there is no expert consensus on this subject, and that this is not a frivolous case that only ignorant or misguided extremists could possibly support.

UPDATE: The court in question is actually the Middle District of Pennsylvania, not the Eastern District, as I originally stated in the post. I apologize for the error, which has now been corrected.

The American colonists believed that Parliament had full authority to regulate external commerce, such as by imposing protectionist tariffs. The colonists also believed that Parliament had no authority to impose domestic taxes in the colonies (such as the Stamp Act). The colonists had a very firm sense of the distinction, and ended up going to war over Parliament’s refusal to respect that distinction. Because the Obamacare mandate is designed purely to control behavior, and not to raise revenue (even if it, like a protectionist tariff on French clothing does ultimately raise a little revenue), the Obamacare mandate is a type of commerce regulation, and not a tax in the constitutional sense. That, at least, is what the original meaning tells us.

Of course whether the individual mandate actually qualifies as a regulation of “commerce…among the several States” is a separate issue. The original meaning question for the mandate’s penalty is a commerce issue, not a tax issue.

ACA Section 1401 provides that eligible taxpayers may receive income tax credits for purchase of insurance “through an Exchange established by the State under Section 1311.” Section 1311 calls upon states to establish health insurance exchanges. It does not provide for the federal government to create health care exchanges. Rather, a separate provision of the act, Section 1321, provides that if a state does not “elect” to create an exchange that meets federal requirements, the federal government shall then “establish and operate” an exchange. Thus, under a plain reading of the text, the ACA only provides for tax credits for state-run exchanges, and if states fail to create exchanges, there are no tax credits for insurance bought on a federally run exchange.

This is potentially significant for several reasons. The individual mandate requires all Americans to purchase health insurance. Even if the mandate is successful at reducing adverse selection, health insurance premiums are still expected to rise due to other provisions in the law.   Higher premiums could make it difficult for many Americans to comply with the mandate. For this reason, Congress not only called upon states to create exchanges, it also authorized tax credits to offset the cost of health insurance premiums for those with incomes between 100 and 400 percent of the poverty level.   But if these tax credits are only available for insurance purchased through state-based exchanges, many will be left high-and-dry in states that don’t create their own exchanges — and this could be a big problem. According to one recent report, only ten states had passed legislation to create qualifying exchanges through August 2011. (See also here.)

As David Hogberg reports in IBD, this has led some to believe the limitation of tax credits to state-based exchanges is a mistake. Under this theory, Congress meant to provide tax credits for any exchange-purchased insurance, because Congress wanted lower-income individuals to be able to purchase health insurance (and comply with the mandate). This may be true. As Vanderbilt’s James Blumstein tells IBD (and I discussed in this paper), the exchange-related provisions of the law were not written all-that-carefully. Nonetheless, federal agencies lack the authority to unilaterally revise statutory mistakes. (A point Cato’s Michael Cannon also makes here.)  Congress may have wanted to make tax credits more widely available — just as it may have wanted those making less than poverty-level income to be eligible for exchanges as well — but that is not what Congress did.

The IRS may be inclined to argue that the failure to include a reference to federally run exchanges or Section 1321 in Section 1401 was a “scrivener’s error” that should be disregarded. But this is a difficult argument to make in this case for several reasons. First, a “scrivener’s error” is supposed to be that – a purely clerical error that could be attributed to a failed transcription or something of that sort. An example would be mistaking the relevant subsection in a statutory cross-reference – say mistaking “(i)” for “(ii)” or “Section 36B(B)(I)(b)” for “Section 36(B)(I)(b),” or screwing up punctuation. The alleged error here is more significant, however. Not only did Congress forget to include any reference to Section 1321, it also expressly stated that the tax credits were for insurance purchased through “an Exchange established by the State.” So a legislator reviewing the relevant language could not claim that they did not realize the statutory cross-reference excluded federal exchanges because the clear text of the statute does as well. In other words, any legislator who actually bothered to read the bill before voting would have seen the limitation.

Another problem for the “scrivener’s error” argument is that it is usually dependent on showing that it is implausible, and not merely unlikely, that the statutory provisions were a mistake. As the Supreme Court explained in U.S. Nat. Bank of Oregon v. Independent Ins. Agents of America, Inc., 508 U.S. 439 (1993), this will be shown in the “unusual” case in which there is “overwhelming evidence from the structure, language, and subject matter of the law” that Congress could not have consciously adopted the language in the statute. Similarly, in Appalachian Power Co. v. EPA, 249 F.3d 1032 (D.C. Cir. 2001), the D.C. Circuit explained that:

We will not . . . invoke this rule to ratify an interpretation that abrogates the enacted statutory text absent an extraordinarily convincing justification because . . . the court’s role is not to correct the text so that it better serves the statute’s purposes, for it is the function of the political branches not only to define the goals but also to choose the means for reaching them. . . . Therefore, for the [agency] to avoid a literal interpretation . . ., it must show either that, as a matter of historical fact, Congress did not mean what it appears to have said, or that, as a matter of logic and statutory structure, it almost surely could not have meant it. [internal quotations and citations omitted]

Given what’s in the ACA, this is a showing that the IRS and HHS would have a hard time making. While it is certainly plausible – perhaps even likely – that many in Congress wanted tax credits for the purchase of health insurance to be broadly available, there is also ample evidence that the ACA was designed to induce states to create exchanges of their own. For example, Section 1311 directs states to create exchanges. Further, as Blumstein notes, under the ACA the federal government could sue to force a state to create an exchange. As in other policy areas, the federal government can’t force states to comply, so it uses a combination of positive and negative incentives – in this case, subsidies for creating exchanges and the threat of a federally run exchange if a state does not create one on its own. In this context, limiting the availability of tax credits to insurance purchased in state-run exchanges can be seen as just an added inducement. Much like the Clean Air Act threatens states with the loss of highway funds if they fail to adopt sufficiently stringent pollution control programs, the ACA as written threatens states with the loss of tax credits for state residents if they do not create an exchange. Such a policy may not be wise or fair – and may undermine the goal of getting more people insured – but it takes far more than that to justify ignoring a statute’s plain text.

Neither the IRS nor HHS has addressed these concerns as far as I’m aware, nor has anyone else. I’ll certainly do a follow-up post if such arguments are out there. I noted that the ACA’s text limits subsidies to state exchanges at a conference on health care reform and the states last fall, and no one suggested I was in error, but that does not mean I am right. It’s also possible there’s some other overlooked provision of the ACA that could be used to solve this problem. If so, I couldn’t find it, but I’ll also post an update if such a provision is found. In the meantime, the limitation of tax credits to those who purchase their insurance in state-run exchanges could be unwelcome news to those in the majority of states yet to create exchanges of their own.

I should also note that I have not addressed what would happen if the IRS were to just go ahead and finalize regulations providing for tax credits beyond those authorized by the ACA’s text. Under such a scenario, standing to challenge the IRS’ action in court would certainly be a big issue. As a general matter, there is no standing for a taxpayer to challenge a tax benefit conferred upon someone else. But the IRS, like all federal agencies, has an independent obligation to comply with the law, and I do not know of anyone who has argued that the IRS may create tax credits at will just because it thinks that’s what Congress meant to do and such actions are not easily challengable in court. Just imagine the sorts of mischief such a doctrine could unleash.

In the Virginia case, the Fourth Circuit dismissed Virginia’s challenge to the mandate because they ruled that the state lacked standing to challenge it. Virginia had based its standing on argument on the grounds that it had passed a state law exempting Virginians from being forced to buy health insurance. Normally, states automatically have standing to challenge federal laws that supersede their own legislation. But the Fourth Circuit ruled that the Virginia law was not a genuine exercise of state sovereignty, but merely a symbolic protest against the federal individual mandate. In my view, Virginia’s motives for passing the law should have been irrelevant to the question of how it affected standing. Moreover, a decision not to regulate is just as much an exercise of sovereign authority as a decision to impose a regulation. In addition, I think Virginia should also have gotten standing on entirely unrelated grounds. It could have taken advantage of the “special solicitude” for state governments that the Supreme Court established in Massachusetts v. EPA. Virginia probably erred in putting all of its standing eggs in one basket. It should have emphasized Massachusetts v. EPA as well as its anti-mandate law.

Be that as it may, this decision is unlikely to matter much in the long run. Even if the Supreme Court also rejects Virginia’s suit for lack of standing, there are lots of other anti-mandate plaintiffs – both state governments and individuals – who clearly do have standing, as the Fourth Circuit admits (at least in the case of the individuals). So the issue will get to the Supreme Court one way or another.

Liberty University v. Geithner is more interesting because it is the first court decision to endorse the federal government’s argument that the individual mandate is a tax. Up till now, that argument has been consistently rejected by every judge who has ruled on it, including several who concluded that the mandate is constitutional on other grounds. The majority opinion only ruled that the mandate qualifies as a “tax” as defined by the Anti-Injunction Act, which forbids court challenges to “taxes” prior to the time when the IRS tries to actually collect the money. According to the majority, the AIA defines taxes more broadly than the Constitution, and encompasses all fines that are collected by the IRS through the normal tax enforcement system. I think Judge Andre Davis’ dissenting opinion does a good job of rebutting this extremely broad interpretation of the AIA. And I think it likely that the Supreme Court will side with him and the other nine judges who have ruled the same way rather than with the Fourth Circuit majority. However, if the latter prevails, it could make it impossible for individuals to challenge the mandate until it takes official effect in 2014.

In a concurring opinion, Judge James Wynn goes further than the majority (which he also joined), and argues that the mandate is a tax not just under the AIA, but under the Constitution. He has thereby become the first of the eleven federal judges who have considered this question who endorsed the constitutional tax argument. The other ten judges (including Judge Davis) all concluded that the mandate is a regulatory penalty, not a tax. Obviously, if the federal government wins on this point, the mandate would be constitutional even if it is not authorized by the Commerce Clause or the Necessary and Proper Clause.

On balance, I think Wynn’s argument is wrong. For reasons I explain here, the federal government’s Tax Clause argument (which Wynn echoes) is unpersuasive:

As recently as 1996, the Supreme Court reiterated the crucial distinction between a penalty and a tax. It ruled that “[a] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government,” while a penalty is “an exaction imposed by statute as punishment for an unlawful act” or – as in the case of the individual mandate – an unlawful omission. The individual mandate is a clear example of a penalty, where Congress requires people to purchase health insurance, and then punishes them with a fine if they fail to comply.

In September 2009, President Obama himself noted that “for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase.” He was right. If the mandate qualifies as a tax merely because it punishes violators with a fine, then Congress could require Americans to do almost anything on pain of having to pay a fine if they refuse. It could use this power to force citizens to buy virtually any product, including broccoli, General Motors cars, or anything else.

Even if the individual mandate does somehow qualify as a tax, it is not one of the types of taxes that Congress is authorized to impose. The Constitution gives Congress the power to enact several types of taxes: Excise taxes, duties and imposts, income taxes, and “direct taxes” that must be apportioned among the states in proportion to population.

No one, including the federal government, claims that the individual mandate is a duty or an impost. The individual mandate is not an income tax because an income tax must target some “accession to wealth,” in the words of Commissioner of Internal Revenue v. Glenshaw Glass Co., the leading Supreme Court case on the subject. The fine imposed by the mandate does not target any accession to wealth or flow of income. It simply forces individuals to pay a penalty if they disobey the federal government’s regulatory requirement. The fact that low-income individuals are exempted does not change this analysis. A fine for jaywalking would not become an income tax if low-income individuals were exempted from it…..

It is even more implausible to suggest that the mandate is an excise tax. Excise taxes apply to economic transactions or the use of property of some kind. For example, a tax on the sale of alcoholic beverages qualifies as an excise. The individual mandate does not tax any kind of activity, use of property or economic transaction….

If the mandate is not a tariff, impost, income tax, or excise tax, it is either a direct tax or no tax at all. And if it is a direct tax, it would be an unconstitutional one, because it is not apportioned among the states in proportion to population as the Constitution requires.

The Supreme Court may well end up endorsing the individual mandate, though the anti-mandate plaintiffs also have a real chance to win. If the pro-mandate side does prevail, it probably won’t be on the tax argument.

RegBlog is a relatively new website established by the University of Pennsylvania Program on Regulation. For VC readers who may be interested, it has lots of good commentary by scholars and public officials on a variety of regulatory issues.

However, if all goes according to plan (which doesn’t always happen when it comes to the media), I should have an op ed out on the case tomorrow and a longer post at RegBlog, an excellent new site focusing on regulatory issues sponsored by the University of Pennsylvania’s program on regulation. I have also made some brief comments in the media here and here. The former story also contains comments by co-blogger Orin Kerr.

For what it’s worth, my overall impression is that the opinion does a great job of explaining why the mandate can’t be justified by the Commerce Clause or the Tax Clause. I especially like the court’s explanation as to why the highly deferential “rational basis” test does not apply to this case:

Rational basis review is not triggered by the mere fact of Congress’s invocation of Article I power; rather, the Supreme Court has applied rational basis review to a more specific question under the Commerce Clause: whether Congress has a “rational basis” for concluding that the regulated “activities, when taken in the aggregate, substantially affect interstate commerce.” [quoting Gonzales v. Raich]. ….[C]ourts must initially assess whether the subject matter targeted by the regulation is suitable for aggregation in the first place….[citing relevant language from United States v. Lopez and United States v. Morrison]….

The wholesale deference the government would have us apply here cannot be squared with the Supreme Court’s decisions in Morrison and Lopez. Here, “Congress’ findings are substantially weakened by the fact that they rely so heavily on a method of reasoning that [courts] have already rejected as unworkable if we are to maintain the Constitution’s enumeration of powers.” Morrison…. It is highly instructive that the Lopez and Morrison Courts rejected a similar cost-shifting theory now propounded by the government. In examining the actual relationship between gun possession and interstate commerce, the Lopez Court refused to accept what it referred to as the government’s “cost of crime” theory…. It did so despite the government’s argument that the “costs of violent crime are substantial, and, through the mechanism of insurance, those costs are spread throughout the population….” Similarly, in Morrison the Supreme Court considered a stockpile of congressional findings attesting to the link between domestic violence and medical costs frequently borne by third parties.

I discussed this issue in more detail in the amicus brief (pp. 10-13) I wrote in the case on behalf of the Washington Legal Foundation and a group of constitutional law scholars (including co-bloggers Jonathan Adler and Todd Zywicki, and recent guest blogger Kurt Lash). I’m happy to see this issue get such a thorough and thoughtful treatment, since I think it hasn’t gotten the attention it deserves previously.

I think the Court’s analysis of the government’s Necessary and Proper Clause argument is not as good. Unfortunately, they largely ignored the biggest weakness in the federal government’s position, that the mandate is not “Proper” even if it is “necessary.” The court’s Necessary and Proper Clause analysis is also somewhat confusing and not well organized. Nontheless, the opinion does make some good points on the Clause that I will discuss in my RegBlog post.

Hopefully, I will also find time to do some posts here on issues that could not be included in the Regblog post and the op ed, both of which are subject to tight word limits.

Wickard is striking not for its similarity to our present case, but in how different it is. Although Wickard represents the zenith of Congress’s powers under the Commerce Clause, the wheat regulation therein is remarkably less intrusive than the individual mandate.

Despite the fact that Filburn was a commercial farmer and thus far more amenable to Congress’s commerce power than an ordinary citizen, the legislative act did not require him to purchase more wheat. Instead, Filburn had any number of other options open to him. He could have decided to make do with the amount of wheat he was allowed to grow. He could have redirected his efforts to agricultural endeavors that required less wheat. He could have even ceased part of his farming operations. The wheat-acreage regulation imposed by Congress, even though it lies at the outer bounds of the commerce power, was a limitation—not a mandate—and left Filburn with a choice. The Act’s economic mandate to purchase insurance, on the contrary, leaves no choice and is more far-reaching.

Although this distinction appears, at first blush, to implicate liberty concerns not at issue on appeal, in truth it strikes at the heart of whether Congress has acted within its enumerated power. Individuals subjected to this economic mandate have not made a voluntary choice to enter the stream of commerce, but instead are having that choice imposed upon them by the federal government. This suggests that they are removed from the traditional subjects of Congress’s commerce authority, in the same manner that the regulated actors in Lopez and Morrison were removed from the traditional subjects of Congress’s commerce authority by virtue of the noneconomic cast of their activity.

This departure from commerce power norms is made all the more salient when we consider principles of aggregation, the chief addition of Wickard to the Commerce Clause canon. Aggregation may suffice to bring otherwise nonregulable, “trivial” instances of intrastate activity within Congress’s reach if the cumulative effect of this class of activity (i.e., the intrastate activity “taken together with that of many others similarly situated”) substantially affects interstate commerce. Wickard, 317 U.S. at 127–28, 63 S. Ct. at 90. Aggregation is a doctrine that allows Congress to apply an otherwise valid regulation to a class of intrastate activity it might not be able to reach in isolation. . . .

The question before us is whether Congress may regulate individuals outside the stream of commerce, on the theory that those “economic and financial decisions” to avoid commerce themselves substantially affect interstate commerce. Applying aggregation principles to an individual’s decision not to purchase a product would expand the substantial effects doctrine to one of unlimited scope. Given the economic reality of our national marketplace, any person’s decision not to purchase a good would, when aggregated, substantially affect interstate commerce in that good. From a doctrinal standpoint, we see no way to cabin the government’s theory only to decisions not to purchase health insurance. If an
individual’s mere decision not to purchase insurance were subject to Wickard’s aggregation principle, we are unable to conceive of any product whose purchase Congress could not mandate under this line of argument.96 Although any decision not to purchase a good or service entails commercial consequences, this does not warrant the facile conclusion that Congress may therefore regulate these decisions pursuant to the Commerce Clause. See [Lopez] at 580, 115 S. Ct. at 1640 (Kennedy, J., concurring) (“In a sense any conduct in this interdependent world of ours has an ultimate commercial origin or consequence, but we have not yet said the commerce power may reach so far.”).

Thus, even assuming that decisions not to buy insurance substantially affect interstate commerce, that fact alone hardly renders them a suitable subject for regulation. See, e.g., Morrison, 529 U.S. at 617, 120 S. Ct. at 1754 (“We accordingly reject the argument that Congress may regulate noneconomic, violent criminal conduct based solely on that conduct’s aggregate effect on interstate commerce.” (emphasis added)). Instead, what matters is the regulated subject matter’s connection to interstate commerce. That nexus is lacking here. It is immaterial whether we perceive Congress to be regulating inactivity or a financial decision to forego insurance. Under any framing, the regulated conduct is defined by the absence of both commerce or even the “the production, distribution, and consumption of commodities”—the broad definition of economics in Raich. 545 U.S. at 25, 125 S. Ct. at 2211. To connect this conduct to interstate commerce would require a “but-for causal chain” that the Supreme Court has rejected, as it would allow Congress to regulate anything. Morrison, 529 U.S. at 615, 120 S. Ct. at 1752.

The fact that Congress has never before exercised this supposed authority is telling. As the Supreme Court has noted, “the utter lack of statutes imposing obligations on the States’ executive (notwithstanding the attractiveness of that course to Congress), suggests an assumed absence of such power.” Printz, 521 U.S. at 907–08; see also Va. Office for Prot. & Advocacy v. Stewart , 563 U.S. __, __, 131 S. Ct. 1632, 1641 (2011) (“Lack of historical precedent can indicate a constitutional infirmity.”) . . . . Few powers, if any, could be more attractive to Congress than compelling the purchase of certain products. Yet even if we focus on the modern era, when congressional power under the Commerce Clause has been at its height, Congress still has not asserted this authority. Even in the face of a Great Depression, a World War, a Cold War, recessions, oil shocks, inflation, and unemployment, Congress never sought to require the purchase of wheat or war bonds, force a higher savings rate or greater consumption of American goods, or require every American to purchase a more fuel efficient vehicle. See Printz, 521 U.S. at 905, 117 S. Ct. at 2370 (“[I]f . . . earlier Congresses avoided use of this highly attractive power, we would have reason to believe that the power was thought not to exist.”).

Traditionally, Congress has sought to encourage commercial activity it favors while discouraging what it does not. This is instructive. Not only have prior congressional actions not asserted the power now claimed, they “contain some indication of precisely the opposite assumption.” Id. at 910, 117 S. Ct. at 2372. Instead of requiring action, Congress has sought to encourage it. The instances of such encouragement are ubiquitous, but the example of flood insurance provides a particularly relevant illustration of how the individual mandate departs from conventional exercises of congressional power.

In passing the National Flood Insurance Act of 1968, Congress recognized that “from time to time flood disasters have created personal hardships and economic distress which have required unforeseen disaster relief measures and have placed an increasing burden on the Nation’s resources.” 42 U.S.C. § 4001(a)(1). Despite considerable expenditures on public programs designed to prevent floods, those programs had “not been sufficient to protect adequately against growing exposure to future flood losses.” Id. § 4001(a)(2). In response to this problem, however, Congress did not require everyone who owns a house in a flood plain to purchase flood insurance. In fact, Congress did not even require anyone who chooses to build a new house in a flood plain to buy insurance. Rather, Congress created a series of incentives designed to encourage voluntary purchase of flood insurance. These incentives included requiring flood insurance before the home owner could receive federal financial assistance or federally
regulated loans. See id. § 4012a(a), (b)(1).

Without an “individual mandate,” the flood insurance program has largely been a failure. . . . Nevertheless, despite the unpredictability of flooding, the inevitability that floods will strike flood plains, and the cost shifting inherent in uninsured property owners seeking disaster relief funds, Congress has never taken the obvious and expedient step of invoking the power the government now argues it has and forcing all property owners in flood plains to purchase insurance.

Contrast flood insurance with the very few instances of activity in which Congress has compelled Americans to engage solely as a consequence of being citizens living in the United States. Given the attractiveness of the power to compel behavior in order to solve important problems, we find it illuminating that Americans have, historically, been subject only to a limited set of personal mandates: serving on juries, registering for the draft, filing tax returns, and responding to the census. These mandates are in the nature of duties owed to the government attendant to citizenship, and they contain clear foundations in the constitutional text. Additionally, all these mandates involve a citizen directly interacting with the government, whereas the individual mandate requires an individual to enter into a compulsory contract with a private company. In these respects, the individual mandate is a sharp departure from all prior exercises of federal power.

The draft is an excellent example of this sort of duty, particularly as it is one upon which the Supreme Court has spoken. In the Selective Draft Law Cases, the Supreme Court reviewed challenges to the draft instituted in 1917 upon the entry of the United States into World War I. 245 U.S. 366, 38 S. Ct. 159 (1918). The Court rejected these challenges on several grounds, primarily based on the long history of the draft both in the United States and other nations. Id. at 379–87, 38 S. Ct. at 162–64. But it also pointed to the relationship between citizens and government: “It may not be doubted that the very [c]onception of a just government and its duty to the citizen includes the reciprocal obligation of the citizen to render military service in case of need and the right to compel it.” Id. at 378, 38 S. Ct. at 161.

It is striking by comparison how very different this economic mandate is from the draft. First, it does not represent the solution to a duty owed to the government as a condition of citizenship. Moreover, unlike the draft, it has no basis in the history of our nation, much less a long and storied one. Until Congress passed the Act, the power to regulate commerce had not included the authority to issue an economic mandate. Now Congress seeks not only the power to reach a new class of “activity”—financial decisions whose effects are felt some time in the future—but it wishes to do so through a heretofore untested power: an economic mandate.

Having established the unprecedented nature of the individual mandate and the lack of any Supreme Court case addressing this issue, we are left to apply some basic Commerce Clause principles derived largely from Wickard, Lopez, Morrison, and Raich.

Significantly, Judge Frank Hull, a Clinton appointee has now become the first Democratic-appointed judge to vote to strike down the mandate, balancing Republican Sixth Circuit Judge Jeffrey Sutton who voted to uphold it. The decision further undermines claims that the individual mandate suit is a sure loser that goes against a supposed expert consensus that the mandate is clearly constitutional.

It is now extremely likely that the Supreme Court will end up hearing the case, as the Court cannot allow a situation where the mandate is valid in some parts of the country but not in others. I recently opined on the case’s prospects in the Supreme Court here.

I will try to post additional commentary on the decision as soon as possible. Unfortunately, this is a very busy day, and it may take a while to fully study the 300 pages of the majority and dissenting opinions.

UPDATE: The very lengthy opinion is here.  The court split 2-1.  Judges Hull and Dubina jointly issued the opinion of the court.  Judge Marcus dissented.  The court concludes the mandate cannot be justified under either the taxing power or commerce power, but that the mandate is severable from the rest of the health care reform law.  The court also rejects the argument that the law’s expansion of Medicaid is unconstitutionally coercive to the states.  Of note, the court did not split completely along partisan lines.  Judge Dubina was nominated by President George H.W. Bush.  Judges Hall and Marcus were nominated by President Bill Clinton.

UPDATE: The opinion concludes:

We first conclude that the Act’s Medicaid expansion is constitutional. Existing Supreme Court precedent does not establish that Congress’s inducements are unconstitutionally coercive, especially when the federal government will bear nearly all the costs of the program’s amplified enrollments.

Next, the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.

Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional. This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated congressional powers. “Uniqueness” is not a constitutional principle in any antecedent Supreme Court decision. The individual mandate also finds no refuge in the aggregation doctrine, for decisions to abstain from the purchase of a product or service, whatever their cumulative effect, lack a sufficient nexus to commerce.

The individual mandate, however, can be severed from the remainder of the Act’s myriad reforms. The presumption of severability is rooted in notions of judicial restraint and respect for the separation of powers in our constitutional system. The Act’s other provisions remain legally operative after the mandate’s excision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

Accordingly, we affirm in part and reverse in part the judgment of the district court.

SECOND UPDATE: Judge Marcus’ dissent begins:

Today this Court strikes down as unconstitutional a central piece of a comprehensive economic regulatory scheme enacted by Congress. The majority concludes that Congress does not have the commerce power to require uninsured Americans to obtain health insurance or otherwise pay a financial penalty. The majority does so even though the individual mandate was designed and intended to regulate quintessentially economic conduct in order to ameliorate two large, national problems: first, the substantial cost shifting that occurs when uninsured individuals consume health care services — as virtually all of them will, and many do each year — for which they cannot pay; and, second, the unavailability of health insurance for those who need it most — those with pre-existing conditions and lengthy medical histories.

In the process of striking down the mandate, the majority has ignored many years of Commerce Clause doctrine developed by the Supreme Court. It has ignored the broad power of Congress, in the words of Chief Justice Marshall, “to prescribe the rule by which commerce is to be governed.” Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 196 (1824). It has ignored the undeniable fact that Congress’ commerce power has grown exponentially over the past two centuries, and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy. It has ignored the Supreme Court’s expansive reading of the Commerce Clause that has provided the very foundation on which Congress already extensively regulates both health insurance and health care services. And it has ignored the long-accepted instruction that we review the constitutionality of an exercise of commerce power not through the lens of formal, categorical distinctions, but rather through a pragmatic one, recognizing, as Justice Holmes put it over one hundred years ago, that “commerce among the states is not a technical legal conception, but a practical one, drawn from the course of
business.” Swift & Co. v. United States, 196 U.S. 375, 398 (1905).

The approach taken by the majority has also disregarded the powerful admonitions that acts of Congress are to be examined with a heavy presumption of constitutionality, that the task at hand must be approached with caution, restraint, and great humility, and that we may not lightly conclude that an act of Congress exceeds its enumerated powers. The circumspection this task requires is underscored by recognizing, in the words of Justice Kennedy, the long and difficult “history of the judicial struggle to interpret the Commerce Clause during the transition from the economic system the Founders knew to the single, national market still emergent in our own era.” United States v. Lopez, 514 U.S. 549, 568 (1995) (Kennedy, J., concurring).

The plaintiffs and, indeed, the majority have conceded, as they must, that Congress has the commerce power to impose precisely the same mandate compelling the same class of uninsured individuals to obtain the same kind of insurance, or otherwise pay a penalty, as a necessary condition to receiving health care services, at the time the uninsured seek these services. Nevertheless, the plaintiffs argue that Congress cannot do now what it plainly can do later. In other words, Congress must wait until each component transaction underlying the costshifting problem occurs, causing huge increases in costs both for those who have health care insurance and for health care providers, before it may constitutionally act. I can find nothing in logic or law that so circumscribes Congress’ commerce power and yields so anomalous a result.

Although it is surely true that there is no Supreme Court decision squarely on point dictating the result that the individual mandate is within the commerce power of Congress, the rationale embodied in the Court’s Commerce Clause decisions over more than 75 years makes clear that this legislation falls within Congress’ interstate commerce power. These decisions instruct us to ask whether the target of the regulation is economic in nature and whether Congress had a rational basis to conclude that the regulated conduct has a substantial effect on interstate commerce.

It cannot be denied that Congress has promulgated a rule by which to comprehensively regulate the timing and means of payment for the virtually inevitable consumption of health care services. Nor can it be denied that the consumption of health care services by the uninsured has a very substantial impact on interstate commerce — the shifting of substantial costs from those who do not pay to those who do and to the providers who offer care. I therefore respectfully dissent from the majority’s opinion insofar as it strikes down the individual mandate.

The public debate over the constitutionality of the individual mandate tends to focus on whether it is a permissible exercise of the power to “regulate commerce . . . among the several states.” This is no surprise. The commerce power is the most used and most expansive federal power. Fights over the scope of the Commerce Clause take place on familiar terrain. In the end, however, the constitutionality of the mandate is likely to turn on the scope of a less explored provision, the Necessary and Proper Clause.

The symposium also features contributions from co-conspirators Ilya Somin and David Kopel. Rumor has it Orin Kerr might be contributing something as well.

The Supreme Court may hear at least one of the cases challenging the constitutionality of the Obama health care bill’s individual mandate sometime during the next year. If it does, the result will have major implications for our system of constitutional federalism. If the federal government prevails, Congress is likely to have an unlimited power to impose mandates of any kind. If the plaintiffs win, the Court will have reaffirmed the importance of constitutional limits on federal power….

Every judge who has ruled on the issue has recognized that Congress has never previously imposed a comparably sweeping mandate under the Commerce Clause, and that the Supreme Court has never ruled on the issue of whether Congress has a general power to regulate inactivity. Given the deep ideological divisions over the case and the lack of precedent clearly on point, the Court could easily rule either way.

Nonetheless, the federal government probably has a better chance than the plaintiffs. The Court’s four most liberal Justices have consistently refused to recognize any meaningful limits on Congress’s powers under the Commerce Clause. Thus, the mandate will be upheld if even one of the five conservatives votes in its favor. And the conservatives have often been a fractious bunch in federalism cases….

At the same time, it is also possible that the conservative Justices will be unwilling to uphold the mandate because doing so is likely to give Congress unconstrained authority to impose virtually any other mandate. In the recent case of Bond v. United States, Justice Anthony Kennedy – a key swing voter – emphasized that constitutional constraints on federal power protect “the liberty of the individual” as well as “state sovereignty.” If the Court gives Congress unlimited power to impose mandates, that principle will be gutted. Thus, the Justices are likely to uphold the mandate only if they can find some way to do it without giving Congress a blank check to impose future mandates at will. Unconstrained congressional authority to impose mandates also goes against the text and original meaning of the Constitution, a consideration that might sway the originalists on the Court.

SCOTUSlog has also recently published several other contributions to the Symposium, including this one by co-blogger Jonathan Adler, and this one by Cory Andrews of the Washington Legal Foundation, with whom I have worked on several amicus briefs in the individual mandate cases on behalf of WLF, a group of constitutional law scholars, and several members of Congress. Obviously, the symposium also includes various contributions by prominent defenders of the mandate, with more to come. Check it out!

This week, the US Court of Appeals for the Sixth Circuit ruled that the individual mandate of federal health care reform is constitutional. This is undeniably a setback for mandate opponents….

Before this decision, judges in these cases had split along ideological and partisan lines…. Judge Jeffrey Sutton, however, a well-known conservative jurist, has now become the first exception to the trend….

At the same time, the opinions by Martin and Sutton highlight a central weakness of the pro-mandate position in even more blatant form than previous opinions upholding the law. Their reasoning has very radical implications, giving Congress unlimited power to impose mandates of any kind, free of any structural limits on its authority.

The Jurist has also published a piece by Charles Fried defending the decision. I criticized a previous Charles Fried column defending the mandate in this post.

Orin recognizes that the Supreme Court majority in fact fails to even mention the presumption in many controversial cases where it strikes down federal laws, such as United States v. Lopez and Boumediene v. Bush. I would add to that list such other cases as Reno v. ACLU, New York v. United States, and Printz v. United States – the latter two being major federalism cases. The Court did briefly mention the presumption at the start of its opinion in Morrison v. United States (I corrected my error on that point in an update to my previous post), but then completely ignores it in its actual analysis of the legal issues in the case. Thus, it seems clear that the Court routinely ignores the presumption in cases where it strikes down federal laws.

Orin suggests that the Court may be applying the presumption even in cases where it goes unmentioned. That is theoretically possible, but highly unlikely in reality. If the Court were applying a presumption of constitutionality in closely contested cases such as Lopez, Boumediene, Printz, and New York (all 5-4 or 6-3 decisions that were highly controversial), one would expect the justices to at least mention that fact. Unlike judicial review, the presumption and its application are not uncontested background assumptions that nearly all jurists agree on. Rather, the degree of deference due to Congress is one of the main contested issues in federalism and separation of powers cases, including the ones listed above.

In my previous post, I suggested that the Court chooses not to apply the presumption in situations where the majority believes the challenged statute “gone beyond the bounds of both previous decisions and the text of the Constitution itself.” Orin responds that that wasn’t true in Boumediene because the statute struck down in that case “was actually just restoring the prior law before the Supreme Court creatively read its statues a few years earlier.” Orin’s interpretation of the statute may be correct. But it’s not the view taken by the Supreme Court majority, which had interpreted the prior law as not allowing the kinds of military tribunals that were explicitly permitted by the statute struck down in Boumediene. Even more importantly, the prior statute was itself a recent innovation arising from the War on Terror. In the Supreme Court majority’s view, it was not supported by previous judicial precedent or by longstanding practice. The majority opinion actually refers to what it calls “the lack of a precedent on point.”

Finally, Orin suggests that the presumption of constitutionality is merely about “who has the burden of proof,” and wrongly interprets me as saying that a burden of proof makes no difference. What I actually said, in the comments to my previous post was this:

If the presumption merely means that those challenging a law must present some proof of some kind that it’s unconstitutional, then it makes little difference. Realistically, no court is likely to strike down a law without at least some showing of that type. However, those who argue for the presumption usually imply a significantly higher burden of proof, such as that the law must be upheld unless its unconstitutionality is unambiguously clear.

If Orin believes that the presumption requires only the sort of minimal burden of proof I described in my comment, then the difference between our views has little practical significance. I still think that the presumption doesn’t apply at all [in some cases] (as it didn’t in Lopez, Printz, Boumediene, etc.). But there is little meaningful difference between not applying it at all, and interpreting it to require some minimal proof of some kind. Realistically, no federal court is likely to strike down a law if the challengers have no argument at all against it. If, on the other hand, Orin would require a more substantial burden, things are different.

UPDATE: I should emphasize that the point is not just that the Court failed to explicitly mention the presumption of constitutionality in the cases I listed. Even more importantly, it also failed to apply the doctrine with or without mentioning it, even though it would clearly have been relevant if it did apply. Nowhere in these opinions is there any indication that the majority was deferring to Congress or presuming that Congress’ statute was constitutional.

Nevertheless, Orin is right in pointing out that some Supreme Court decisions say that a presumption of constitutionality should be applied to congressional legislation. On the other hand, many Supreme Court decisions, including Morrison and Lopez, strike down federal legislation without any reference to the presumption. The presumption was also conspicuous by its absence when the Court struck down large parts of the Detainee Treatment Act in Boumediene v. Bush.

If such a presumption had been applied in those cases, the Court would probably have had to reach a different result. For example, in Lopez there was a plausible argument that a statute banning the possession of guns in a school zone was constitutional under previous precedents that the Lopez majority did not wish to overturn, because such possession has important economic effects. Justice Breyer did a good job of articulating this point in his dissenting opinion.

How can we reconcile those cases where the Court applies the presumption of constitutionality with those where it doesn’t? The cynical answer is that the Court applies the presumption in cases where it wants to uphold the challenged statute and ignores it in cases where the majority wants to strike the law down. I suspect that this factor really does account for much of the variation between cases.

Less cynically, one might argue that the justices apply the presumption in cases where they think the statute is supported by well-established precedent, but not where Congress has gone beyond the bounds of both previous decisions and the text of the Constitution itself. Applying this logic to the mandate case, I think it can be said that the presumption does not apply if you believe that the mandate is an unprecedented expansion of federal power that goes beyond previous precedent and is not supported by the text of the Constitution. Alternatively, if you think that the mandate is fairly similar to previous statutes that have been upheld by the Court or that it is authorized by the text of the Constitution, the presumption would apply.

The key question to ask is whether this case is more like Lopez, Morrison, and Boumediene, or whether it is more similar to those cases where the Court has applied the presumption, such as Watson v. United States v. Watson, a case cited by Orin. For what it’s worth, I think Watson is a clear example of a case where the majority thought that the challenged statute was constitutional on the merits, with or without a presumption of constitutionality. The Court emphasized that it was supported by common law principles and by many decades of precedent.

This, of course, suggests that the presumption applies only to those statutes that the courts are likely to uphold anyway. However, such an approach is consistent with the way the Court has applied the presumption over the last several decades. It’s hard to point to any cases where the Court has used the presumption to uphold a congressional statute that it was otherwise inclined to strike down. As currently used by the Court, the presumption of constitutionality is mostly a way to seal the deal on a case the government was likely to win anyway. It turns a strong case into a slam dunk. But it can’t be used to transform a probable loss for the federal government into a win.

Obviously, it is still possible to argue that the mandate should be upheld even without applying the presumption. The point of this post is simply that the presumption adds little or nothing to the federal government’s case.

UPDATE: It turns out that the Supreme Court did briefly mention the presumption at the start of its opinion in Morrison v. United States [HT: Hans Bader]. I apologize for the error. At the same time, the presumption seems to play little if any role in the Court’s analysis of the decision. It is not mentioned at all after this one line near the beginning: “Due respect for the decisions of a coordinate branch of Government demands that we invalidate a congressional enactment only upon a plain showing that Congress has exceeded its constitutional bounds….. With this presumption of constitutionality in mind, we turn to the question whether §13981 falls within Congress’ power under Article I, §8, of the Constitution.”

In his post below, Ilya writes:

By Judge Sutton’s reasoning, the Supreme Court should have rejected the facial challenges brought inUnited States v. Lopez and United States v. Morrison. In Lopez, the Court struck down a federal law banning possession of guns in a school zone as going beyond Congress’ authority under the Commerce Clause. But surely some of the people whom that law could have been applied to were using guns that were purchased in interstate commerce or had brought the guns into a school zone in order to facilitate an interstate economic transaction (e.g. — bringing in a gun in order to protect their sale of illegal drugs imported from abroad).

This is not merely a hypothetical. It is, in fact, what happened in Lopez. Alfonso Lopez was not just some kid who happened to bring a gun to school.  Rather, as the Fifth Circuit’s opinion explains, he was a courier who had been paid to deliver the gun to a gang member.  He was a delivery boy engaged in a commercial transaction.   As a consequence, his possession was within the scope of the  Commerce Clause power.  Had Congress passed legislation prohibiting this sort of economic transaction, his Commerce Clause argument would have failed.  The reason his Commerce Clause challenge prevailed was not because his conduct was beyond the scope of the Commerce Power. Rather, it prevailed because the statute at issue (the Gun-Free School Zones Act) was not itself a proper exercise of that power.  What the statute prohibited — possession, as such, in a school zone — was beyond the scope of the power, even though the statute reached conduct that could be reached constitutionally.

What the Court’s handling of Lopez reveals is that the key question in a Commerce Clause challenge is the nature of the exercise of federal power, not whether, in a given case, the plaintiff’s conduct could be regulated or prohibited constitutionally.  This is why the GFSZA was invalidated when challenged by someone who was engaged in reachable conduct.  It is also why the Lopez Court noted the lack of a jurisdictional element (e.g., a provision limiting the prohibition to gun possession “substantially related” to interstate commerce).  The purpose of a jurisdictional element is to preserve a statute’s constitutionally by confining its exercise to those activities within the scope of the Commerce Clause power. (See, e.g., the Supreme Court’s unanimous opinion United States v. Jones.)  Thus, a statute prohibiting the commercial possession of guns in or near a school is constitutional, but a statute imposing a blanket prohibition on gun possession in or near a school is not.  In the former instance Congress is engaged in a constitutional exercise of its power, in the latter it is not, even though the statutes overlap.  Yet under Judge Sutton’s approach, the GFSZA should have been upheld because it would be constitutional to prohibit participation in commercial gun transactions like the one in which Lopez was engaged.

The traditional test for a facial challenge is whether there is any set of circumstances in which the statute’s application would be constitutional.  As Lopez shows, the proper way to apply this test is not to ask whether the statute reaches otherwise reachable conduct — commercial gun possession, the purchase of insurance, etc.  Rather, the question is whether the class of activities expressly subject to regulation — that is, the conduct which brings an individual within the scope of the statute at issue — is itself within the scope of the Commerce power.  As the Supreme Court has reiterated time and again (albeit mostly in cases upholding statutes against Commerce Clause challenge), what matters is what Congress did, not the specific conduct of the individual challenging the statute’s constitutionality.  This is why Lopez prevailed.  Incidentally, it is also why Angel Raich lost.  For in Gonzales v. Raich there was no question that Congress could regulate interstate commerce in drugs.  Once the Court concluded that the class of activities subject to the statute — the sale, production, distribution and possession of a controlled substance — was within the scope of the Commerce power [supplemented by the Necessary & Proper clause], Raich had to lose.  Indeed, there is no Commerce Clause precedent in which the Supreme Court has upheld the broader statute but invalidated its application to a specific individual.  If the relevant statutory provision is a permissible exercise of the Commerce power, the challenge fails.

The above illustrates why the key issue is defining the class of activities subject to federal control.  Listen to the oral arguments in the various Circuit Courts and notice how acting-Solicitor General Neil Katyal takes pains to define the class of activities subject to regulation in economic terms — as “financial decisions about how and when health care is paid for”.   Judge Martin’s decision does much the same, characterizing the class of activities as “the practice of self-insuring for the cost f health care delivery.”  The problem, in my view, is that these characterizations are not consistent with the statutory provision, as neither accurately characterizes the class as a whole Congress has sought to regulate.

It may be the case that most of those subject to the individual mandate are making “financial decisions” about how and when to pay for their health care or are engaged  in self-insurance, but the statute does not limit its application to such people, nor can all those subject to the mandate be characterized in such terms.  Not only are there those who would otherwise never purchase health insurance.  There are also those who, for whatever reason religious or otherwise, will never purchase health care. [See, e.g., Mead v. Holder at p. 6.]  (Indeed, under Cruzan, they have a fundamental right to refuse even potentially life-saving care.)   That Congress can reach most of those without insurance through other means is immaterial, just as it was immaterial that Congress could have prohibited what Alfonso Lopez actually did had it only passed a different statute.  What matters is the statute that Congress actually passed, and whether the class of activities over which Congress asserted its authority is, as a class, subject to federal jurisdiction.

So, contrary to Katyal’s protestations at the various oral arguments and the opinions of Judges Martin and Sutton, the class of activities at issue is the mere presence in the country without qualifying health insurance, and the question really is whether Congress may mandate the purchase of a given good or service.  In other words, the question is whether such a mandate itself is facially constitutional as an exercise of federal power, not whether we can identify a range of situations in which such a mandate could be constitutionally applied. [As-applied challenges should be reserved to claims that the mandate violates some other constitutional provision, such as the First or Fifth Amendment, in its application to specific individuals, e.g. someone with religious objections to medical care.]

[For those interested in more this question, I recommend the work of a former student: Nathaniel Stewart, Turning The Commerce Clause Challenge "On Its Face": Why Federal Commerce Clause Statutes Demand Facial Challenges, 55 Case Western Reserve Law Review 161 (2004).]

POST-SCRIPT: Just in case it was not clear, the argument above is not sufficient to establish the unconstitutionality of the individual mandate. The point is rather to identify some of the problems with the way some of defended its constitutionality. Although I believe the mandate should be held unconstitutional, I have long conceded that this is a difficult case, particularly in light of Gonzales v. Raich, and one that implicates first principles about the nature of federal power and the Constitution.

SECOND POST-SCRIPT: I should also have noted that what this argument does is shift the focus from the Commerce Clause to the Necessary & Proper Clause. If a class of activities extends beyond the scope of the Commerce Clause itself (as I believe the class subject to the mandate does), the question becomes whether the broader class can be justified as Necessary & Proper to the overall scheme. Under Gonzales v. Raich, there is a strong argument in defense of the mandate on these grounds. Short of overturning Raich (which I would love to see the Court do), the strongest counter-arguments are that mandating the purchase of a good or service is not “proper” to the execution of an enumerated power and that the argument for the mandate rests on an effectively unlimited conception of federal power that contravenes one of the motivating principles of Lopez and Morrison.

THIRD POST-SCRIPT: Some of the commenters below suggest my view requires a somewhat-radical “all-or-nothing” approach to Commerce Clause challenges. Yes and no. It is perhaps radical and “all-or-nothing” in that I believe that a given prohibition is either within the scope of enumerated powers or it is not. But what is “all-or-nothing” is a given statutory provision, not a statute in its entirety. This remains strong medicine, but makes my position slightly less radical in its implications. What would this have meant for Gonzales v. Raich? This is a good question, and one I engaged in this article (see pages 770-776). My first preference would have been for the Court to invalidate the prohibition on possession, thereby requiring Congress to add a jurisdictional element. Two alternatives that are less doctrinally satisfying, but perhaps easier to swallow, would have been either to hold that the CSA did not reach non-commercial possession (effectively reading a jurisdictional requirement into the statute), or to have recognized a separate class of activities authorized by state law that could be analyzed independently. Either of these alternatives would have required a bit of work (particularly the latter), as there’s little basis for either in the relevant case law.

NOTE: I’ve cleaned up the original post in a few places to make it a bit more clear.

For now, whatever else may be said about plaintiffs’ activity/inactivity theory of commerce power, they have not shown that the individual mandate exceeds that power in all of its applications. Congress may apply the mandate in at least four settings: (1) to individuals who already have purchased insurance voluntarily and who want to maintain coverage, but who will be required to obtain more insurance in order to comply with the minimum-essential-coverage requirement; (2) to individuals who voluntarily obtained coverage but do not wish to be forced (at some indeterminate point in the future) to maintain it; (3) to individuals who live in States that already require them to obtain insurance and who may have to obtain more coverage to comply with the mandate or abide by other requirements of the Affordable Care Act; and (4) to individuals under 30, no matter where they live and no matter whether they have purchased health care before,who may satisfy the law by obtaining only catastrophic-care coverage. The valid application of the law to these groups of people suffices to uphold the law against this facial challenge.

While future challenges to the law have hills to climb, nothing about this view of the case precludes individuals from bringing as-applied challenges to the mandate as the relevant agencies implement it…..

Sutton appears to be arguing that the plaintiffs’ claim that the mandate is an unconstitutional regulation of inactivity does not apply to the first three of the above situations because people who fall into these categories have already engaged in activity in the health insurance market. Therefore, the mandate could be imposed on them even under the plaintiffs’ reasoning.

Sutton’s analysis rests on a misinterpretation of the plaintiffs’ argument. The key point is not that a given plaintiff hasn’t engaged in economic activity, but that the regulation imposed by Congress does not require any such activity as a prerequisite for covering them. The fact that some of the individuals covered by the mandate could be regulated by a more narrowly drawn law (e.g. – one that covered only people who had already purchased health insurance) does not mean that the present mandate is constitutional as applied to them. Their having previously engaged in economic activity that Congress could regulate is purely coincidental. It is not the reason why the mandate applies to them, under the terms of the law itself.

By Judge Sutton’s reasoning, the Supreme Court should have rejected the facial challenges brought in United States v. Lopez and United States v. Morrison. In Lopez, the Court struck down a federal law banning possession of guns in a school zone as going beyond Congress’ authority under the Commerce Clause. But surely some of the people whom that law could have been applied to were using guns that were purchased in interstate commerce or had brought the guns into a school zone in order to facilitate an interstate economic transaction (e.g. – bringing in a gun in order to protect their sale of illegal drugs imported from abroad). In Morrison, the Court invalidated a federal law creating a civil penalty for gender-motivated crimes of violence. But some of the people covered by the law might have committed their crimes on interstate trains or buses or committed them for the purpose of interfering with women engaged in interstate economic transactions. By Judge Sutton’s reasoning, Lopez and Morrison struck down laws that did not ” exceed” Congress’ power “in all of [their] applications.”

The Court ruled the way it did in Morrison and Lopez because the challenged laws, as actually written, did not require any kind of connection to interstate commerce as a legal prerequisite for their application. The fact that some potential defendants happened to have such a connection was legally irrelevant. The same reasoning applies to the individual mandate. Judge Sutton’s approach, by contrast, would rule out virtually all facial challenges to any law, so long as there is even one conceivable situation where the law leads to a prosecution that could have been constitutional with a more narrowly drawn statute.

UPDATE: To illustrate my point a bit further, consider a hypothetical statute giving police the power to break into any house any time they want. In my view, that statute would be facially invalid. By contrast, Judge Sutton would have to uphold it against a facial challenge because some of the searches allowed by the statute would involve cases where the search was “reasonable” under the Fourth Amendment (e.g. because the authorities had probable cause to believe that a crime had recently been committed on the premises).

UPDATE #2: It is not entirely clear why Judge Sutton thinks that the plaintiffs’ argument does not apply to his fourth category, people under the age of 30 who are only required to purchase “catastrophic” health insurance coverage under the law. Not having catastrophic coverage is no more “economic activity” than is not having a broader insurance policy. If the plaintiffs’ theory applies to the latter case, it applies to the former as well. Judge Sutton seems to think that the two are different because congressional legislation requires some providers to provide emergency health care treatment for free. But it is not clear why this distinction should have any constitutional significance. If Congress required some supermarkets to provide free broccoli, would that justify a broccoli purchase mandate?

UPDATE #3: Co-blogger Jonathan Adler makes some related points here. As Jonathan notes, Alfonso Lopez, the defendant in United States v. Lopez was in fact engaged in an economic transaction (he was paid to deliver the gun in question to a gang member).

At the same time, Martin and Sutton’s opinions highlight a central weakness of the pro-mandate position in even more blatant form than previous opinions upholding the mandate. Their reasoning has extremely radical implications. Unlike previous decisions upholding the mandate, which ruled that failing to purchase health insurance is “economic activity,” Martin and Sutton conclude that Congress has the power to regulate inactivity as well, so long as the inactivity has some kind of “substantial” economic effect.

The Martin-Sutton approach thereby opens the floodgates to an unlimited congressional power to impose mandates of any kind. Any failure to purchase a product has some substantial economic effect, at least when aggregated with similar failures by other people. This is certainly true of failures to purchase broccoli, failures to purchase cars, failure to by a movie ticket, and so on. Even failure to engage in noncommercial activity nearly always has such effects. For example, a mandate requiring people to eat healthy food and exercise every day can be justified on the grounds that it would increase economic productivity and also increase the demand for healthy food products and gym memberships. The district court rulings in favor of the mandate all embraced some version of the “health care is special” argument [or at least the argument that not purchasing health insurance is "economic activity"] in order to avoid this slippery slope problem (albeit, unsuccessfully, in my view). By contrast, Martin and Sutton take us all the way to the bottom of the hill in one fell swoop.

Obviously, Congress will not enact every conceivable harmful mandate that the Martin-Sutton reasoning would authorize. But the risk of abuse is far from purely theoretical, since many interest groups can and will lobby for laws that compel people to purchase their products.

The sweeping congressional power authorized by Martin and Sutton’s opinions makes a hash of the text of the Constitution, which gives Congress the power to regulate interstate and foreign commerce, not a blanket power to mandate anything that has a “substantial” economic effect. It also makes most of the rest of Congress’ Article I powers superfluous. For example, there would be no need for a separate power to tax. After all, failure to give the government some of your money voluntarily surely has substantial economic effects. Therefore, virtually any tax could be imposed through the Commerce Clause, without the need for a separate Tax Clause. Similarly, failure to serve in the armed forces surely has substantial economic effects. The Commerce Clause therefore authorizes Congress to impose a draft and purchase military equipment, thereby making the power to raise armies superfluous.

The Sixth Circuit ruling would be defensible if it were compelled by Supreme Court precedent. However, both Martin and Sutton admit that the Supreme Court has never previously ruled on a case involving a mandate of this type, and has also never previously addressed the issue of whether the Commerce Clause authorizes regulation of inactivity. Therefore, it’s hard to defend their reasoning on the grounds that it was somehow compelled by precedent.

Martin and Sutton also both make the argument that a health insurance mandate is special case because everyone will use health care at some point in their lives. This part of their reasoning adds little to previous statements of the same argument, which I criticized here. It also does not vitiate the radical implications of their rejection of the activity-inactivity distinction, since neither actually concludes that Congress’ power to enact the mandate depends on health care’s supposedly special nature.

Much of Judge Sutton’s Commerce Clause argument relies heavily on the notion that the plaintiffs’ case must fail as a “facial” challenge to the mandate because some possible applications of the law are constitutional even under his interpretation of the plaintiff’s own theory of the case. He leaves the door open to “as-applied” challenges, suggesting that the mandate may still be unconstitutional as applied to people who have not previously purchased health insurance. I may take up this aspect of Sutton’s argument in a follow-up post.

Finally, it’s worth noting that Sutton and Judge Graham both reject the government’s claim that the mandate is a valid exercise of Congress’ power to tax, instead concluding that it is a penalty. Judge Martin avoids addressing this issue directly, but does hold that the mandate is a penalty in the section of his opinion discussing standing. So far, the tax argument has been rejected by every judge who has ruled on it, including those who have upheld the law on other grounds.