The Volokh Conspiracy

On behalf of the Independence Institute, Rob Natelson and I wrote an amicus brief on the Medicaid mandate currently before the Supreme Court. (The ACA requirement that states must drastically expand Medicaid eligibility, or lose all their federal matching funds for Medicaid.) Here’s the Summary of Argument:

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.

This past week, the Department of Education announced it would allow states to obtain waivers under the No Child Left Behind Act, but “would set a “high bar on flexibility.”. (HT: Neal McCluskey) According to the announcement:

states can get relief from provisions of the Elementary and Secondary Education Act—or No Child Left Behind (NCLB)—in exchange for serious state-led efforts to close achievement gaps, promote rigorous accountability, and ensure that all students are on track to graduate college- and career-ready.

Specifically, according this fact sheet, a State may receive flexibility if it develops a “rigorous and comprehensive plan” to address “three critical areas” the Department of Education believes will “improve educational outcomes for all students, close achievement gaps and increase equity, and improve the quality of instruction.” Encouraging school districts to emphasize these three “critical areas” may or may not be a good idea, but it is highly problematic if (as it appears) the Department of Education is imposing these conditions without statutory authorization.

The NCLB Act allows for waivers of statutory and regulatory requirements placed on state recipients of federal education funds in Section 9401.  This provision identifies things a state must do to be eligible for a waiver, including showings a state must make, but it does not impose any of the conditions detailed in the Department of Education’s announcement. For example, Section 9401 requires a state to explain how the waiver will enable the state to ” increase the quality of instruction for students” and “improve the academic achievement of students,” but the Department of Education’s new requirements seem to go much farther than this. Moreover, nothing in Section 9401 appears to authorize the Secretary of Education from setting additional conditions on waiver requests.  So has the Department of Education over-stepped its bounds? It has before.

In Virginia Department of Education v. Riley (4th Cir. 1997), an en banc panel of the U.S. Court of Appeals for the Fourth Circuit held that the Department of Education could not impose conditions on the receipt of federal funds under the Individuals with Disabilities Education Act (“IDEA”) beyond those expressly identified or authorized in the statute itself. According to the court, “Language which, at best, only implicitly conditions the receipt of federal funding on the fulfillment of certain conditions is insufficient to impose on the state the condition sought.” Since, the court found, “at most” the statute “only implicitly” conditioned state receipt of funds on additional requirements, it could not be imposed on a non-consenting state. The court emphasized that this clear-statement rule was particularly important in an area, such as education, that is the traditional province of the states.

Is the Department of Education repeating the mistake it made in Riley? It appears that way to me, but some caveats are in order. First, it is possible that the Department of Education could defend these conditions as an explication or elaboration of the waiver requirements in the statute. I think this is a stretch given the actual statutory language, particularly in light of Riley, but it’s possible. Second, a state would probably have to seek a waiver without fulfilling all of the new requirements and get denied before it could challenge the new conditions in court. This makes a challenge less likely — and certainly a ways off. Moreover, the Department of Education could try and deflect any legal challenge by denying that it has formally adopted these conditions as actual requirements and not basing any future waiver denial on a state’s failure to meet the new conditions. Finally, I should note that I relied upon the provision identified by the Department of Education in explaining the policy, but I may have over-looked some other provision in NCLB that could be cited as authority for this waiver requirement.

UPDATE: I accidentally published a horribly garbled version of this post. I apologize and it has been fixed.

Yesterday, federal district Judge Norman Moon of the Western District of Virginia upheld the Obamacare individual mandate against a constitutional challenged filed by Liberty University and several private plaintiffs. For the most part, Judge Moon’s reasoning closely follows that of Michigan district Judge George Caram Steeh in the recent Thomas More Law Center decision. Both judges upheld the mandate under the Constitution’s Commerce Clause alone on the grounds that failure to purchase health insurance, even if it doesn’t qualify as “economic activity,” is an “economic decision” that has substantial effects on interstate commerce. I outlined my objections to Judge Steeh’s reasoning here and here, and will not repeat them in detail in this post. Here is the most important flaw:

“Economic decisions,” [Steeh] reasoned, include decisions not to engage in economic activity. This approach would allow the Commerce Clause to cover virtually any choice of any kind. Any decision to do anything is necessarily a decision not to use the same time and effort to engage in “economic activity.”

If I choose to spend an hour sleeping, I necessarily choose not to spend that time working or buying products. Under Judge Steeh’s logic, the Commerce Clause authorizes Congress to force workers to get up earlier in the morning so that they would spend more time on the job.

Judge Moon also contends that the mandate should be upheld under Gonzales v. Raich and Wickard v. Filburn. In reasoning thus, he simply ignores the various ways in which Raich does not in fact cover the mandate case, which I analyzed in detail here. To briefly summarize, Raich gave Congress the power to regulate virtually any kind of “economic activity” and a wide range of “noneconomic” activities, but said absolutely nothing about regulation of inactivity, which is what the mandate does. His reliance on Wickard is even more dubious, since Wickard involved regulation of economic activity narrowly defined (commercial farming); I discuss this point in more detail in my amicus brief on behalf of the Washington Legal Foundation and a group of constitutional law scholars, submitted in the anti-mandate case filed by the state of Virginia (pp. 11-12).

Interestingly, Judge Moon follows Florida District Judge Roger Vinson in ruling that “the better characterization of the exactions imposed under the Act for violations of the employer and individual coverage provisions is that of regulatory penalties, not taxes.” This rejects the federal government’s claim that the mandate should be upheld because it is a tax that Congress has the power to impose under the Tax Clause.

Finally, Moon ruled that both Liberty University and some of the individual plaintiffs have standing. This contributes to an increasing trend under which every judge who has considered the case has ruled that plaintiffs have standing so long as they are state governments, private individuals who do not have health insurance, or employers who do not provide their employees the kind of health insurance benefits that the law requires.

Between this decision and the Michigan case, anti-mandate plaintiffs have now lost the first two district court rulings that addressed the merits of the mandate litigation. However, it is highly likely that they will win at least one and probably both of the next two decisions: those in the cases brought by the Commonwealth of Virginia and a coalition of twenty state governments and the National Federation of Independent Business. Both the Virginia and Florida judges have issued preliminary rulings expressing strong skepticism about the federal government’s arguments. The New York Times reports that the Obama administration expects that there is a high probability that they will lose one or both of these cases at the district level.

As should by now be obvious, no district court is going to resolve this issue definitively. All of these cases will next be addressed by federal courts of appeals. And there is a high likelihood that the matter will ultimately be resolved by the Supreme Court (a virtual certainty if even one federal appellate court strikes down the mandate). If the plaintiffs lose all the district court decisions, that could create momentum for the federal government that will be difficult to overcome. Court of appeals judges might hesitate to upset what would seem like an emerging judicial consensus. Such an outcome is, however, highly unlikely given the situation in the two cases filed by state governments.

I continue to believe that the Supreme Court is more likely to uphold the mandate than strike it down. But the course of the litigation so far shows that there is no consensus on the issue among judges and other experts, and that the plaintiffs have a much better chance of winning than many commentators (myself included) initially thought.

UPDATE: For those interested, the ACA Litigation Blog has a more complete summary of Judge Moon’s ruling that covers various minor issues that I have decided not to include in this post.

Yesterday, I published an op ed on the state of the individual mandate litigation in the Richmond Times-Dispatch:

When 21 states and several private groups initiated lawsuits challenging the constitutionality of the Obama health care law earlier this year, critics denounced the suits as frivolous political grandstanding. But it is increasingly clear that the plaintiffs have a serious case with a real chance of victory.

The suits focus primarily on challenges to the new law’s “individual mandate,” which requires most American citizens to purchase a government-approved health insurance plan by 2014 or pay a fine….

The judges considering the Florida and Virginia cases have both issued rulings rejecting the federal government’s motions to dismiss the suits and indicating that the mandate can’t be upheld based on current Supreme Court precedent. By contrast, Michigan district Judge George Caram Steeh wrote a decision concluding that the mandate is constitutional. But even he agreed that the case raises an “issue of first impression.”

The op ed focuses primarily on the recent district court decisions in the Virginia, Michigan, and Florida cases, which I blogged about in more detail here, here, and here. So there will be few new points for those who have closely followed my previous VC writings on the mandate litigation. My main purpose in the op ed was to briefly analyze the three rulings and explain why the anti-mandate plaintiffs have a strong case that could well prevail, even though they still face an uphill struggle.

I would add that the results of the recent election modestly increase the chances that the plaintiffs will win. Federal courts are unlikely to strike down a major federal policy initiative that has strong presidential, congressional, and popular support. But last week’s elections brought to power a House majority that opposes the Obama health care plan, strengthened plan opponents in the Senate, and reaffirmed that it remains unpopular (although the election turned primarily on the economy, the health care plan probably increased the magnitude of the Democrats’ defeat). A recent AP poll found that 52% of likely voters oppose the plan, with 41% supporting it, and strong opponents greatly outnumbering strong supporters.

Ideally, such “legal realist” factors should not influence judicial decision-making. But the historical evidence suggests that they often do. Judges are unlikely to strike down the mandate merely because the political winds are blowing against it. But those inclined to do so for other reasons are now less likely to be deterred by fear of a showdown with a president, Congress, and public opinion unified against them.

There are several interesting aspects of today’s Florida federal district court ruling rejecting the government’s motion to dismiss a challenge to the Obama health care plan’s individual mandate brought by 20 states and the National Federation of Independent Business. First, as Randy Barnett emphasizes, this ruling, like the similar Virginia decision before it, further undercuts claims that the lawsuits against the mandate are either frivolous or clearly precluded by existing precedent. Even the recent Michigan district court ruling upholding the mandate conceded that it was a case of “first impression” (although the judge also tried to argue that the mandate ultimately does fit under current doctrine).

I. Judge Vinson Rules that the Mandate is Not a Tax.

Second, Judge Roger Vinson rejected outright the federal government’s claim that the mandate is a “tax” that is authorized by Congress’ authority under the Tax Clause. Instead, he concludes that it is a regulatory penalty, a point that I emphasized in my amicus brief in the Virginia case on behalf of the Washington Legal Foundation and a group of constitutional law professors:

Because it is called a penalty on its face (and because Congress knew how to say “tax” when it intended to….), it would be improper to inquire as to whether Congress really meant to impose a tax. I will not assume that Congress had an unstated design to act pursuant to its taxing authority, nor will I impute a revenue-generating purpose to the penalty when Congress specifically chose not to provide one. It is “beyond the competency” of this court to question and ascertain whether Congress really meant to do and say something other than what it did.

As the Supreme Court held by necessary implication, this court cannot “undertake, by collateral inquiry as to the measure of the [revenue-raising] effect of a [penalty], to ascribe to Congress an attempt, under the guise of [the Commerce Clause], to exercise another power.” See Sonzinsky, supra, 300 U.S. at 514. This conclusion is further justified in this case since President Obama, who signed the bill into law, has “absolutely” rejected the argument that the penalty is a tax…. To conclude, as I do, that Congress imposed a penalty and not a tax is not merely formalistic hair-splitting. There are clear, important, and well-established differences between the two. See Dep’t of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 779-80, 114 S. Ct. 1937, 128 L. Ed. 2d 767 (1994) (“Whereas [penalties] are readily characterized as sanctions, taxes are typically different because they are usually motivated by revenue-raising, rather than punitive, purposes.”); Reorganized CF&I Fabricators of Utah, Inc., supra, 518 U.S. at 224 (“‘a tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government,’” whereas, “if the concept of penalty means anything, it means punishment for an unlawful act or omission”).

Notice that at least in this instance, President Obama’s preenactment claims that the mandate is not a tax have come back to bite him.

The federal government now will not be able to rely on the tax argument at the summary judgment stage of the litigation before Judge Vinson (though they will of course be able to raise it again on appeal). Judge Vinson concluded that he had to resolves the tax issue at this early stage of the litigation in order to address the federal government’s claim that, because this was a tax case, the court lacked jurisdiction under the Anti-Injunction Act.

II. The Commerce Clause and Necessary and Proper Clause Arguments.

The federal government will, of course, be able to raise their Commerce Clause and Necessary and Proper Clause arguments. Here, too, however, Judge Vinson raised serious doubts about the government’s arguments, even though he emphasized that these issues cannot be fully considered at this stage of the process. In his view, the government’s claim that the mandate is clearly supported by existing precedent in this area is “not even a close call.” He emphasized the novel nature of the mandate:

I have read and am familiar with all the pertinent Commerce Clause cases, from Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 6 L. Ed. 23 (1824), to Gonzales v. Raich, 545 U.S. 1, 125 S. Ct. 2195, 162 L. Ed. 2d 1 (2005). I am also familiar with the relevant Necessary and Proper Clause cases, from M’Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 4 L. Ed. 579 (1819), to United States v. Comstock, — U.S. —, 130 S. Ct. 1949, 176 L. Ed. 2d 878 (2010). This case law is instructive, but ultimately inconclusive because the Commerce Clause and Necessary and Proper Clause have never been applied in such a manner before. The power that the individual mandate seeks to harness is simply without prior precedent.

Vinson’s analysis of the Commerce Clause precedents (pp. 62-64 of his opinion) is very similar to my discussion of them in our amicus brief (Part I), though I don’t claim any direct influence. As Vinson emphasizes, the prior cases “involved activities in which the plaintiffs had chosen to engage. All Congress was doing was saying that if you choose to engage in the activity of operating a motel [Katzenbach v. Heart of Atlanta Motel] or growing wheat [as in Wickard v. Filburn], you are engaging in interstate commerce and subject to federal authority.” In this case, by contrast, “[t]he individual mandate applies across the board. People have no choice and there is no way to avoid it….. It is not based on an activity that they make the choice to undertake. Rather, it is based solely on citizenship and on being alive.” There is a slight error in Vinson’s analysis here. Wickard did not hold that growing wheat for use on a commercial farm was itself “interstate commerce.” Rather, it could be regulated because it was intrastate state economic activity that, in the aggregate, has a “substantial effect” on interstate commerce.

Finally, Judge Vinson ruled that all the plaintiffs had standing (continuing a trend from the previous two cases), dismissed three weak federalism-related claims put forward by the state plaintiffs, and refused to dismiss their claim that the funding provisions of the act violated constitutional restrictions on “coercion” of states through conditional federal spending grants. Vinson concluded that this latter argument was just barely strong enough to get to the summary judgment stage. For reasons I may blog about later, I believe that the states’ coercion argument is correct under the text of the Constitution, but highly unlikely to prevail under current Spending Clause doctrine.

Obviously, this is only a ruling on a motion to dismiss. Judge Vinson could end up accepting the government’s Commerce Clause or Necessary and Proper Clause arguments when he decides later whether to grant summary judgment (though I think that improbable based on what he wrote in today’s opinion). Whatever he decides, the case will be appealed to the Eleventh Circuit Court of Appeals. It is quite likely that the issue will eventually be decided by the Supreme Court. It is still my view that the Court is more likely to uphold the mandate than strike it down, though the latter is far from impossible. That said, today’s ruling is certainly a victory for the anti-mandate plaintiffs.

UPDATE: Orin Kerr asks why Judge Vinson didn’t seriously address the federal government’s Necessary and Proper Clause argument, other than to say that the relevant precedents don’t cover the issues raised by this case. It’s a reasonable question. I agree that he should have focused on it more. On the other hand, it’s important to remember that this was merely a motion for dismissal and he only needed to consider the argument to the extent of showing that the issue can’t be clearly and easily resolved in the federal government’s favor. Moreover, the federal government’s own brief in favor of dismissal gives short shrift to the Necessary and Proper argument (less than 1 page buried near the end of a 50 page brief). The Justice Department instead emphasizes the Commerce Clause and Tax Clause arguments, both of which Vinson considers at length. I suspect Vinson also believed that much of what he said in reference to the Commerce Clause issue also applies to the Necessary and Proper Clause. The opinion (pp. 62-64) seems to consider the two issues in tandem, though this point is not as clear as it should be. In sum, it seems to me that neither Judge Vinson nor the Obama Justice Department shares my and Orin’s view that this is the federal government’s best argument.

My comment on today’s decision, granting the motion to dismiss on some counts, and while allowing other counts to proceed. Like Randy’s comment, my comment is posted on the blog of the site Health Care Lawsuits, which is hosted by the Independent Women’s Forum.

The court entirely rejected the administration’s claim that the penalty for disobeying the mandate is justified under the federal tax power. As the court noted, Congress went out of its way to specify that the penalty is not a tax. Second, the court ruled that it is proper for the plaintiffs to be heard in their challenge to the mandate, which goes into effect in 2014. The court cited extensive precedent showing that when a future harm is certain, courts can act in the present to protect citizens from that harm. The court rejected the argument that the various employer mandates violate the constitutional sovereignty of states; as the court noted, the law simply treats states like other large employers, and so making states provide the same health benefits as other large employers must provide is no different from making states pay the same minimum wage as all other employers.

While federal spending programs may set conditions on grants to states, Supreme Court precedent states that the grants must not be coercive. Here, the court agreed that the states had raised a plausible legal argument which should be allowed to go forward:  the health control presents states with the unacceptable choice of massively increasing their own Medicaid spending on millions of more people, or of losing all funding for the traditional Medicaid program. Finally, the court agreed that the challenge to the individual mandate could go forward, because the mandate was “unprecedented.” Never before has Congress attempted to use its power of regulating interstate commerce to force people to buy a particular product. Because there is no judicial precedent in support of such a mandate, the plaintiffs had raised a plausible constitutional challenge which should be allowed to go forward.

The court’s ruling is not a final decision on the constitutional merits, but it is a solid, meticulously researched, and carefully-reasoned decision declaring that the opponents of the health control law have raised legitimate constitutional objections.

Today, we filed an amicus brief in Virginia v. Sebelius, one of the cases challenging the constitutionality of the Obama health care plan’s individual mandate, which requires nearly all Americans to purchase health insurance by 2014 or pay a fine. I wrote the brief on behalf of the Washington Legal Foundation, a leading pro-free market public interest law firm, and fourteen prominent constitutional law scholars (this was the pro bono project that I finished right before my wedding).

The brief signers include VC co-conspirators Jonathan Adler, David Kopel, and Todd Zywicki, along with other well-known constitutional law scholars such as James Ely (Vanderbilt), Kurt Lash (University of Illinois), Gary Lawson (BU), Steven Presser (Northwestern), and others. Also among the signers is Professor Steven Willis of the University of Florida, coauthor of an important article explaining why, even if the mandate is a tax, it is not a tax authorized by the Constitution. Co-blogger Randy Barnett is filing his own amicus brief along with the Cato Institute and Competitive Enterprise Institute.

If nothing else, I hope the brief will help dispel the myth that there is an expert consensus to the effect that the mandate is constitutional (see also here). It should by now be obvious that many well-known and highly respected scholars believe otherwise.

The brief covers all three provisions of the Constitution that the government claims authorize the mandate: The Commerce Clause, the Tax Clause, and the Necessary and Proper Clause. Part I addresses the Commerce Clause and includes what I think is the most thorough discussion so far of why the mandate is not authorized by the Supreme Court’s broadest-ever Commerce Clause decision, Gonzales v. Raich (pp. 6-10). Part I also addresses many other relevant Commerce Clause decisions, including lower court cases. Part II covers the Tax Clause, emphasizing that the mandate is a regulatory penalty, not a tax as defined by Supreme Court precedent (pp. 16-21). Finally, Part III discusses the Necessary and Proper Clause. Among other things, it explains why the mandate runs afoul of the five part test established in the Supreme Court’s most recent Necessary and Proper Clause decision, United States v. Comstock, which I also discussed in detail in this article.

Because this is a district court brief, we take the Supreme Court’s current precedents as given and do not consider the possibility that that precedent might be flawed. Obviously, a district judge has no authority to overrule or cut back Supreme Court decisions. My own view, and that of many of the WLF brief signers, is that current precedent has numerous defects and often gives the federal government far more power than the text and original meaning of the Constitution actually permit. But even under Court’s overly permissive current doctrine, the mandate has serious flaws.

Although the early skirmishing has so far gone against the government, it is quite possible that the Supreme Court will ultimately uphold the mandate. But if it does, it won’t be for lack of strong arguments the other way.

UPDATE: I should note that the scholars who signed the brief are far from an exhaustive list of those who believe the mandate is unconstitutional. Rather, they were ones whom I could reach and persuade to sign on short notice. WLF and I decided not to reach out to potential signers until we had a nearly complete draft. There are other prominent legal scholars who believe the mandate is unconstitutional who did not sign because they are writing their own amicus briefs (as in the case of co-blogger Randy Barnett), because I was not able to reach them in time, or possibly because they don’t want to sign on to some of the specific points I made even if they agree with the bottom-line conclusion. Among the other well-known scholars who believe the mandate is unconstitutional are Richard Epstein, Michael McConnell, and Jonathan Turley.

The Washington Examiner recently posted my op ed on Monday’s ruling in the Virginia health care lawsuit, which I previously discussed in this post:

Monday’s federal district court decision refusing to dismiss a lawsuit challenging the constitutionality of the Obama health care plan is an important step forward for opponents of the plan.

The suit by the state of Virginia focuses primarily on a challenge to the “individual mandate” element of the plan, which requires most American citizens and legal residents to purchase a government-approved health insurance plan by 2014 or pay a fine for noncompliance……

Judge Henry Hudson wrote that the individual mandate “literally forges new ground and extends Commerce Clause powers beyond its current high watermark.” As he put it, “No reported case from any federal appellate court has” ruled that Congress has the power to “regulate a person’s decision not to purchase a product….”

The legal battle over the Obama health care plan is far from over.

Nonetheless, Hudson’s ruling is a victory for those who believe that the individual mandate is unconstitutional. It makes it difficult to argue that the lawsuits against the mandate are mere political grandstanding with no basis in serious legal argument.

Federal District Judge Henry Hudson’s opinion refusing to dismiss Virginia’s lawsuit challenging the constitutionality of the Obama health care plan has several interesting aspects. The suit focuses primarily on a challenge to the “individual mandate” element of the plan, which requires most American citizens and legal residents to purchase a government-approved health insurance plan by 2014 or pay a fine for nocompliance. Here are a few of the most important points covered in the opinion.

First, Hudson rejected the federal government’s claim that Virginia did not have standing to challenge the mandate. Although states are generally not allowed standing to litigate the interests of their citizens, Hudson argues that Virginia has standing because the federal health care bill conflicts with a recently enacted Virginia state law, the Health Care Freedom Act. This, he argues, is enough to give Virginia standing, overcoming the sorts of federal government standing arguments that I discussed in this post. This argument may have negative implications for the other major lawsuit against Obamacare, filed by 20 states and the National Federation of Independent Business. Most of those states do not have state laws comparable to the Health Care Freedom Act. NFIB, however, has individual members who are subject to it, such as self-employed businessmen. In addition, the other states could try to establish standing by relying on the broad theories of state standing endorsed by the Supreme Court in Massachusetts v. EPA. Hudson also rejects the federal government’s argument that the lawsuit isn’t “ripe” for adjudication because the individual mandate will not come into effect until 2014. He points out that the new federal law will force both individuals and the state government to make adjustments to their health insurance plans even before that.

Second, Hudson agrees with co-blogger Randy Barnett that the individual mandate isn’t clearly covered by existing Supreme Court precedent under either the Commerce Clause or federal government’s power to tax. He argues that this provision “literally forges new ground and extends Commerce Clause powers beyond its current high watermark.” He takes the same view of the government’s Tax Clause argument:

While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate – and tax – an individual’s decision not to participate in interstate commerce. Neither the US Supreme Court nor and federal circuit court of appeals has squarely addressed this issue. No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not to purchase a product…

I previously criticized the Commerce Clause and Tax Clause rationales for the individual mandate here.

Judge Hudson’s decision does not decide the case in Virginia’s favor. It merely denies the federal government’s motion to dismiss the suit on the grounds that the state’s arguments are too weak to justify a full-scale consideration of the merits. It is also possible that Hudson will ultimately decide the case in the federal government’s favor. Moreover, any decision made by the district court will surely be appealed to the Fourth Circuit Court of Appeals and ultimately the Supreme Court.

Nonetheless, Hudson’s ruling is a victory for Virginia and others who contend that the individual mandate is unconstitutional. It also makes it more difficult to argue that the state lawsuits against the mandate are merely political grandstanding with no basis in serious legal argument.

That’s the decision this afternoon, based on equal protection principles applied to the federal government through the Fifth Amendment’s Due Process Clause.  Section 3 of the Defense of Marriage Act of 1996 established a federal definition of marriage for the first time.  This meant that the federal government could refuse to grant validly married same-sex couples the federal benefits and privileges accorded opposite-sex married couples.  I’m still looking at the decision and will probably post soon.

UPDATE: In a companion case, the same judge has ruled that DOMA intrudes on the Tenth Amendment powers of the states.  Very interesting.

In a recent post, I suggested that Obamacare will be almost impossible to repeal through political action. History shows that it is extremely difficult to eliminate entitlements. In addition, repeal would require Republican congressional majorities and a Republican president; I doubt we will get both simultaneously for years to come. Although various state governments and conservative and libertarian activists are planning to file legal challenges to the bill, I also doubt that lawsuits alone can achieve that goal. The Supreme Court is reluctant to take on the political branches of government on major issues that are a high priority for Congress and the president. When it has done so in the past (as in the 1930s), it has usually lost.

But while neither legal nor political action is likely succeed by itself, a two-track strategy combining the two stands a better chance. Unlike most high-profile policy initiatives enacted with strong presidential and congressional support, Obamacare is generally unpopular. Polls show substantial opposition to it, with opponents outnumbering supporters by 10 to 20 points (see here and here). If majority opinion continues to oppose the bill and Republicans make big gains in November as a result, the courts might be less hesitant to strike it down. They will not face any political retribution if they strike down a bill that most of the public and a new congressional majority actually opposes. Indeed, their public standing might even increase if they did so. As co-blogger Randy Barnett puts it:

[I]f this legislation is popular, they are unlikely to strike it down. But if it is deeply unpopular, and one or both houses of Congress flip parties as a result, then the legislation is much more vulnerable. Assuming the Supreme Court follows the election returns, as “realists” claim.

We should also remember that litigation is likely to center on the bill’s mandate requiring individuals to purchase health insurance even if they prefer not to. This is one of the least popular elements of the bill, a fact that would give the courts further political cover. Eliminating the individual mandate might eventually destabilize other parts of the bill. Without the mandate, insurance companies might start lobbying for repeal of other elements of the plan (since the bill would no longer be a huge bonanza that gives them many additional customers). If the ban on excluding coverage of preexisting conditions is maintained, the elimination of the mandate would incentivize citizens to wait until they get sick to purchase insurance. It’s unlikely that such a system could persist for long.

In my view, the individual mandate is unconstitutional because it exceeds Congress’ powers under both the Commerce Clause and the Tax and Spending Clauses. I believe that courts should strike it down regardless of the political situation.

As a practical reality, however, courts are unlikely to strike down major legislation if doing so will produce a massive backlash from the other branches of government. Thus, a strong political effort is probably necessary for litigation to succeed. Such two-track efforts have a long history. For example, The NAACP coupled its litigation strategy against segregation with a longterm political effort designed to win greater support for racial equality among white voters. Brown v. Board and later decisions could never have happened without complementary political changes.

Even a successful political strategy doesn’t necessarily guarantee victory in court. The conservative majority on the Supreme Court is a narrow one (5-4), and it’s certainly possible that one or more conservative justices will refuse to strike down the individual mandate even if the political winds are favorable. And the political battle itself will be far from easy. It’s likely that voters will take a more favorable view of the Obama administration and its policies as the economy begins to improve over the next several years.

If I had to guess, I would say that Obamacare is more likely to survive than not, for reasons I summarized here. But a two-track strategy that combines litigation with political action has a much better chance of success than either taken alone.

Most defenses of the constitutionality of the health insurance mandate rely on Congress’ powers under the Commerce Clause, an approach I criticized here. Some, however, also claim that Congress has the power to enact it under the Tax and Spending Clause (e.g. – Jack Balkin), which gives Congress the power to To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” There are two problems with this argument: the health care mandate is not a tax, and it does not promote the general welfare.

The so-called “tax” in the proposed health insurance mandate is really just a penalty for failing to comply with the requirement to purchase health insurance. It is even referred to as a “penalty” in some versions of the bill. If any regulatory measure with a monetary penalty for refusal to comply is considered a tax, then many of Congress’ other powers under Article I of the Constitution would be superfluous, since Congress could essentially regulate anything that fell within the subject matter of this clause simply by imposing money penalties on those who fail to comply, coupled with prison sentences for those who refuse to pay the money. For example, the Spending Clause gives Congress the power to tax in order to “provide for the common Defence.” Yet elsewhere in Article I Congress is also given the power to “raise and support armies” and to regulate the land and naval forces. Even more importantly, a financial penalty for failure to obey the law is not seen as a “tax” in ordinary language either today, or at the time of the Founding. The text and original meaning of the Constitution therefore cut against the view that the health insurance mandate is a tax.

Even if the mandate does count as a tax, it still can’t be justified under the Tax and Spending Clause because it does not pay the national debt, provide for the common defense, or promote the general welfare of the nation. It’s pretty obvious that the mandate doesn’t fall within the first two of these categories. It can only be defended by arguing that it promotes the “general Welfare.” In cases such as South Dakota v. Dole, the Supreme Court has defined “general welfare” as more or less anything Congress says it means. This is badly mistaken for several reasons. The most important problem is that it renders the rest of the Spending Clause itself superfluous. If the General Welfare Clause gives Congress the power to tax and spend for any purposes it likes, surely that includes the power to do so for purposes of providing for “the common defence” and paying the national debt. After all, Congress could surely have a plausible belief that paying the national debt and defense spending promote the general welfare in some sense. Yet these powers are separately enumerated, which implies that the General Welfare Clause must not be interpreted so broadly as to make Congress’ other powers redundant. As James Madison put it in Federalist 41, the broad interpretation of the General Welfare Clause also makes much of the rest of Article I redundant, as well:

Some, who have not denied the necessity of the power of taxation, have grounded a very fierce attack against the Constitution, on the language in which it is defined. It has been urged and echoed, that the power “to lay and collect taxes, duties, imposts, and excises, to pay the debts, and provide for the common defense and general welfare of the United States,” amounts to an unlimited commission to exercise every power which may be alleged to be necessary for the common defense or general welfare. No stronger proof could be given of the distress under which these writers labor for objections, than their stooping to such a misconstruction.

Had no other enumeration or definition of the powers of the Congress been found in the Constitution, than the general expressions just cited, the authors of the objection might have had some color for it; though it would have been difficult to find a reason for so awkward a form of describing an authority to legislate in all possible cases. A power to destroy the freedom of the press, the trial by jury, or even to regulate the course of descents, or the forms of conveyances, must be very singularly expressed by the terms “to raise money for the general welfare.”

But what color can the objection have, when a specification of the objects alluded to by these general terms immediately follows, and is not even separated by a longer pause than a semicolon? If the different parts of the same instrument ought to be so expounded, as to give meaning to every part which will bear it, shall one part of the same sentence be excluded altogether from a share in the meaning; and shall the more doubtful and indefinite terms be retained in their full extent, and the clear and precise expressions be denied any signification whatsoever? For what purpose could the enumeration of particular powers be inserted, if these and all others were meant to be included in the preceding general power? Nothing is more natural nor common than first to use a general phrase, and then to explain and qualify it by a recital of particulars. But the idea of an enumeration of particulars which neither explain nor qualify the general meaning, and can have no other effect than to confound and mislead, is an absurdity, which, as we are reduced to the dilemma of charging either on the authors of the objection or on the authors of the Constitution, we must take the liberty of supposing, had not its origin with the latter.

If the General Welfare Clause doesn’t give Congress the power to spend money on whatever purposes it thinks might be beneficial, what does it mean? In my view, James Madison was roughly correct to argue that the Clause simply gives Congress the power to spend money for purposes of implementing its other powers under Article I (the rest of Article I merely gives Congress the power to promote those objectives through regulatory measures, but not through spending). For a modern defense of that view, see this article by John Eastman. In addition, I think it’s also plausible to argue that the General Welfare Clause gives Congress the power to spend for unenumerated purposes that really do provide universal or nearly universal benefits. The example I like to use when I teach constitutional law is asteroid defense (which may not be covered by the “common defense” section of the Spending Clause, because that provision may refer only to protection against enemies, as opposed to natural phenomena). Whatever its other virtues, the health care mandate certainly doesn’t qualify on this ground, since it clearly imposes net harms on many people, such as those who would prefer not to purchase health insurance, those who don’t wish to purchase coverage as broad as the mandate requires, and others.