The Volokh Conspiracy

That’s the title of a new article by Gary Lawson and me, forthcoming in a symposium issue of Boston University’s American Journal of Law & Medicine. The Journal has a large readership among medical professionals who are interested in legal issues relating to medicine. Accordingly, if you have been following the VC’s debate on the ACA over the past couple years, most of what is in the article will already be familiar to you. Here is the abstract:

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.

So said the unanimous Supreme Court in United States v. Linder, 268 U.S. 5 (1925). The opinion was written by McReynolds, and joined by the progressive Justices Brandeis and Holmes, along with the rest of the Court.

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.

Federal district Judge Christopher Connor of the Middle District of Pennsylvania just issued an opinion striking down Obama health care plan individual mandate. It is available here. Timothy Sandefur has some helpful commentary on the decision here. As Sandefur mentions, Connor’s opinion is unusual for striking down the mandate despite rejecting the view that upholding it would give Congress unlimited authority to enact other mandates. My own view is that upholding the mandate would indeed lead to an unconstrained slippery slope of this kind, as I explained here. On the important severability question, Connor argues that the preexisting conditions coverage requirement cannot be severed from the mandate, but that the rest of the bill can be.

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.

On Thursday, the Fourth Circuit Court of Appeals issued two decisions dismissing challenges to the Obama health care plan’s individual mandate on jurisdictional grounds. All three judges on the panel were Democratic appointees, including two chosen by President ObamaNeither ruling reached the merits of the question of whether the individual mandate is constitutional. Virginia v. Sibelius is by far the better known case, because it was brought by the Virginia state government. But Liberty University v. Geithner is perhaps more interesting.

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.

My RegBlog post on the 11th Circuit’s recent decision striking down the individual mandate is now available here. The post considers the the ruling in more detail than my previous commentary on the subject.

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.

Newsday has published an op ed I wrote on the 11th Circuit decision striking down the individual mandate. Because of very tight space constraints, I was unable to cover many of the nuances of the decision. But the op ed does summarize my main thoughts on it:

Last week’s Eleventh Circuit Court of Appeals decision striking down the individual mandate in President Barack Obama’s health care plan is an important milestone. The court correctly recognized that there is no way to uphold the mandate without giving Congress unlimited power to mandate anything….

The ruling was co-authored by Judge Frank Hull, who became the first Democratic judge to vote to strike down the mandate. This undercuts already dubious claims that the lawsuits are frivolous; her opinion signals that the arguments against the mandate are strong enough to persuade at least one appellate judge likely to favor it on political grounds.

Since another federal appellate court, the Sixth Circuit, recently upheld the law, it’s extremely likely that the Supreme Court will decide to hear the case within the next year….

Defenders of the mandate claim this is a special case because everyone eventually uses health care at some point. But the argument relies on shifting the focus from health insurance to health care. The same bait-and-switch tactic can justify any other mandate.

For example, not everyone eats broccoli. But everyone does participate in the market for food. Therefore, a mandate requiring everyone to purchase and eat broccoli would be permissible under the federal government’s logic, as would any other purchase requirement. As the Eleventh Circuit puts it, “the government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life.” Whatever we do, we are always implicitly making decisions not to purchase some product or other, and those choices all have economic effects.

SCOTUSblog has just posted my contribution to their symposium on the individual mandate litigation. I interpreted the assignment as focusing primarily on the future prospects of the individual mandate challenges, rather than on the question of whether they deserve to win. So I focused primarily on the former question, even though some other participants in the symposium seem to have concentrated more on the latter. For those interested in my take on the normative question, I summarized it here. Here’s an excerpt from the SCOTUSblog post:

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 Scotusblog is running a series of essays, “The Constitutionality of the Affordable Care Act.” Contributors so far are Dawn Johnson (Indiana U.), Bradley Joondeph (Santa Clara U., and manager of a very useful blog on the ACA litigation), Bob Levy (Cato), Charles Fried (Harvard), and me. There are many more essays still to come, that will be posted throughout the week. My essay examines some of the questions that the Court will face in granting cert., the tax issue, and the issue of the state coercion in Obamacare’s new Medicaid mandates. Conspirators Adler, Kerr, and Somin are among some other scholars who have essays that should be posted soon.

The Jurist has just published an op ed I wrote criticizing the recent Sixth Circuit decision upholding the individual mandate:

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.

Today’s 2-1 Sixth Circuit Court of Appeals decision upholding the constitutionality of the individual mandate is undeniably a setback for mandate opponents. Up until now, judges’ votes in the mandate cases had split along ideological and partisan lines. Every conservative Republican judge had voted to strike it down, while every liberal Democrat voted to uphold it. Even in the Sixth Circuit, two of the three judges fit the same pattern (Judge Boyce Martin, and Judge Graham in dissent). But Judge Jeffrey Sutton, a well-known conservative judge has now become the first exception to it. Like Martin, he voted to uphold the mandate as an exercise of Congress’ powers under the Commerce Clause.

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.

Ilya Shapiro is senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review. On Monday, I interviewed him for 39 minutes about Cato’s litigation program on constitutional issues, his traveling the country during the last year to debate the health control law, and the constitutional issues involved in the challenge to that law. The MP3 podcast is available here.

Yale law professor Akhil Amar is one of the truly great constitutional law scholars of his generation, and I benefited enormously from taking his classes when I was in law school. Unfortunately, his recent LA Times article defending the constitutionality of the Obamacare individual mandate is not an example of his better work. I was going to write a response. But most of what I planned to say has already been well said in this post by Timothy Sandefur of the Pacific Legal Foundation (though I would have preferred it if both Amar and Sandefur had dialed down some of their rhetoric). I will add just a couple of points to Sandefur’s critique.

First, Amar asserts without any supporting argument that the mandate is a “tax” because the framers intended to create a “sweeping taxing power.” That, however, fails to come to grips with all the many reasons why the monetary fine imposed by the mandate is a penalty, not a tax. Under Amar’s analysis, pretty much any mandate can be considered a tax so long as the penalty for violating it is a monetary fine. That conclusion is at odds with both the text of the Constitution and Supreme Court precedent as recent as 1996. For details, see the amicus brief I recently wrote on behalf of the Washington Legal Foundation and several members of Congress in the Thomas More Law Center case (pp. 19-26). The framers may have a created a “sweeping” power to impose taxes for a variety of purposes, but that doesn’t mean that any monetary penalty automatically qualifies as a tax.

Second, Amar’s weakest argument comes when he tries to analogize Judge Roger Vinson’s decision striking down the mandate to the Dred Scott case:

In 1857, another judge named Roger distorted the Constitution, disregarded precedent, disrespected Congress and proclaimed that the basic platform of one of America’s two major political parties was unconstitutional. The case was Dred Scott vs. Sanford, involving a slave who sued for his freedom because he had lived with his master in places where Congress had banned slavery. In an opinion by Chief Justice Roger Taney, the court not only ruled against Scott, saying that even free blacks were not citizens and therefore had no right to sue; it also declared the Missouri Compromise, which had outlawed slavery in Northern territories, unconstitutional.

History has not been kind to that judge. Roger Vinson, meet Roger Taney.

I agree that both Vinson and Taney are named Roger. Otherwise, the analogy doesn’t work at all. Perhaps the most important difference is that Dred Scott involved congressional power over federal territories, where Congress has plenary power similar to that which state legislatures have within their own states. Article IV, Section 3, Clause 2 of the Constitution gives Congress the “Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States.” Thus, the usual constitutional limits on federal authority did not apply. The Dred Scott situation would be analogous to the individual mandate case only if the mandate were limited to the District of Columbia and federal territories such as Guam (in which case it would probably be constitutional).

In addition, Vinson did not strike down “the basic platform of one of America’s two major political parties.” He merely invalidated one of many possible ways to achieve that party’s policy objectives in the field of health care, a point Vinson himself took care to emphasize in his opinion. The Democrats are left with many other options for extending government control over health care, and even for forcing insurance companies to cover people with preexisting conditions. By contrast, Dred Scott foreclosed pretty much any way for the federal government to ban slavery in the territories short of disobeying the Court. Whether Vinson “distorted the Constitution” or “disregarded precedent” depends on the validity of Amar’s other arguments, which I think are not very compelling for the reasons outlined by Sandefur. But even if Vinson was guilty of these sins, the only similarity to Taney’s performance in Dred Scott would be that both judges got a case wrong. By that standard, any mistaken judicial decision striking down a federal law can be analogized to Dred Scott.

UPDATE: I wrote this post before seeing David Bernstein’s recent post criticizing Amar’s op ed, which also takes aim at the Dred Scott analogy, albeit on somewhat different grounds. For what it’s worth, I think David’s critique and mine are mutually reinforcing. There is a serious case to be made in defense of the mandate. But analogies to Dred Scott don’t do much to advance the discussion.

Today’s Florida district court ruling that the individual mandate is unconstitutional is by far the best court opinion on this issue so far. Judge Roger Vinson provides a thorough and impressive analysis of the federal government’s arguments claiming that the mandate is authorized by the Commerce Clause and the Necessary and Proper Clause, and explains the flaws in each. He had already rejected the government’s claim that the mandate is constitutional because it is a tax in a previous ruling. So far, all three federal courts that have considered the tax argument have rejected it, instead ruling (in my view correctly) that the mandate is a penalty.

This is perhaps the most important of all the anti-mandate lawsuits because the plaintiffs include 26 state governments and the National Federation of Independent Business.

One of the best parts of today’s opinion is Judge Vinson’s critique of the federal government’s argument that the mandate is constitutional under the Commerce Clause because the Clause gives it the power to regulate “economic decisions”:

The problem with this legal rationale, however, is it would essentially have unlimited application. There is quite literally no decision that, in the natural course of events, does not have an economic impact of some sort. The decisions of whether and when (or not) to buy a house, a car, a television, a dinner, or even a morning cup of coffee also have a financial impact that — when aggregated with similar economic decisions — affect the price of that particular product or service and have a substantial effect on interstate commerce. To be sure, it is not difficult to identify an economic decision that has a cumulatively substantial effect on interstate commerce; rather, the difficult task is to find a decision that does not….

The important distinction is that “economic decisions” are a much broader and far-reaching category than are “activities that substantially affect interstate commerce” [which Supreme Court precedent allows Congress to regulate]. While the latter necessarily encompasses the first, the reverse is not true. “Economic” cannot be equated to “commerce.” And “decisions” cannot be equated to “activities.” Every person throughout the course of his or her life makes hundreds or even thousands of life decisions that involve the same general sort of thought process that the defendants maintain is “economic activity.” There will be no stopping point if that should be deemed the equivalent of activity for Commerce Clause purposes.

Judge Vinson has a similarly compelling answer to the government’s claim that choosing not to purchase health insurance is an “economic activity” because everyone participates in the health care market at some point:

[T]here are lots of markets — especially if defined broadly enough — that people cannot “opt out” of. For example, everyone must participate in the food market. Instead of attempting to control wheat supply by regulating the acreage and amount of wheat a farmer could grow as in Wickard, under this logic, Congress could more directly raise too low wheat prices merely by increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized on the grounds that because everyone must participate in the market for food, non-consumers of wheat bread adversely affect prices in the wheat market. Or, as was discussed during oral argument, Congress could require that people buy and consume broccoli at regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend to be healthier, and are thus more productive and put less of a strain on the health care system. Similarly, because virtually no one can be divorced from the transportation market, Congress could require that everyone above a certain income threshold buy a General Motors automobile — now partially government-owned — because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business….

As Vinson explains, both the “economic decisions” argument and the “health care is special” argument ultimately amount to giving Congress the power to mandate virtually anything, and therefore conflict with the text of the Constitution and Supreme Court precedent. I addressed both arguments in more detail here. Judge Vinson also notes that the scenarios he raises are not merely a “parade of horribles,” but have a realistic basis, a point that I discussed in this recent post.

Turning to the Necessary and Proper Clause, Judge Vinson concedes that the individual mandate is “necessary” under existing Supreme Court precedent, but argues that it isn’t “proper” because the government’s logic amounts to giving Congress virtually unlimited power. I think this is exactly right; Vinson’s analysis is actually very similar to my own in this post (which is not to even suggest that he got the idea there).

Vinson also notes that the mandate probably runs afoul of the five part test recently outlined by the Supreme Court in United States v. Comstock, though he ultimately does not base his ruling on this point. I advanced a similar interpretation of Comstock and its implications for the mandate case in this article (pp. 260-67). Overall, Judge Vinson’s analysis of the Necessary and Proper Clause is a big improvement on Judge Henry Hudson’s performance in the recent Virginia ruling striking down the mandate.

Unlike Judge Henry Hudson in the Virginia case, Judge Vinson ruled that the mandate is not “severable” from the rest of the health care bill, and therefore invalidated it in its entirety. I think this may be somewhat too sweeping. However, Vinson is on strong ground in ruling that the mandate cannot be severed from the bill’s provisions forcing insurance companies to cover people with preexisting conditions. As he emphasizes, the federal government itself has repeatedly stressed this point in the litigation.

Finally, Judge Vinson rejected the 26 states’ argument that the funding provisions of the bill are unconstitutionally “coercive.” I may have more to say on this issue in a later post.

As I have often noted in the past, this decision is just another step in an ongoing legal battle. Ultimately, the issue of the individual mandate will be resolved by the courts of appeals and probably by the Supreme Court. Still, Judge Vinson’s ruling is a victory for opponents of the mandate. It’s also extremely well-written, and thereby provides a potential road map for appellate judges who might be inclined to rule the same way.

UPDATE: Co-blogger Orin Kerr takes Judge Vinson to task for holding that the mandate is not “proper” because it leads to unlimited federal power. Orin claims that this is is inconsistent with the “words” of Supreme Court precedent, citing a dissent by Justice Thomas in Gonzales v. Raich. However, the words of actual Supreme Court precedent repeatedly emphasize that Congress’ power is not unlimited. For example, in United States v. Lopez, the Court emphasized that ““The Constitution . . . withhold[s] from Congress a plenary police power that would authorize enactment of every type of legislation.” In its most recent Necessary and Proper Clause decision, United States v. Comstock, the Court similarly stated that there is no reason to “fear that our holding today confers on Congress a general ‘police power, which the Founders denied the National Government and reposed in the States’” (quoting United States v. Morrison); the Court emphasized that the regulation it was upholding was “narrow” in scope. Gonzales v. Raich itself gives Congress virtually unlimited power to regulate “economic activity,” but does not address the issue raised by the mandate case. Thus, if Judge Vinson is right that the federal government’s argument for the mandate would give Congress unlimited power, then the mandate indeed conflicts with the words of Supreme Court precedent.

Orin is also wrong to suggest that Vinson “used a first principle to trump existing Supreme Court caselaw.” Vinson in fact discussed those precedents, including Raich, in great detail, and noted how the individual mandate case is distinguishable from them (e.g. – the discussion of Raich on pp. 36-44 of his opinion).

As I have argued elsewhere, both Comstock and Raich give Congress vastly greater authority than is actually authorized by the Constitution. But going way too far down this road is not the same as authorizing completely unlimited congressional power. At the very least, it certainly isn’t what the words of the relevant Supreme Court precedents say they have done.

UPDATE #2: I have corrected an unfortunate typo in the title of this post.

UPDATE #3: In an update to his post, Orin insists that Judge Vinson failed to consider existing precedent, which in Orin’s view imposes only “symbolic” limits on congressional power. All I can say is that Vinson in fact discusses current precedent in great detail and explains why it doesn’t cover the mandate case. Moreover, nowhere does that precedent state that the remaining limits to federal power are purely symbolic and would not strike down any significant congressional policies. Thus, if Vinson is correct in concluding that the argument for the individual mandate would give Congress unconstrained authority to mandate anything it wants, then the mandate really is contrary to existing precedent. At the very least, existing precedent certainly doesn’t require upholding the mandate. I discussed the relevant precedent in more detail here, here, and here.

For those who may be interested, I have written an amicus brief in Thomas More Law Center v. Obama, one of the cases challenging the constitutionality of the Obama health care bill’s individual mandate. I wrote the brief on behalf of the Washington Legal Foundation and twelve members of the House of Representatives. It is available here. The case is currently before the Sixth Circuit Court of of Appeals.

Because of space constraints, we chose to focus only on the federal government’s two main arguments – the claims that the mandate is justified by Congress’ powers under the Commerce Clause and the Tax Clause. The brief includes a detailed refutation of what has become the government’s central argument under the Commerce Clause: the assertion that the mandate is constitutional because going without health insurance is an “economic decision” (pp. 14-18). I first presented the key arguments in this section right here on the VC, though of course the brief goes into much greater detail.

Although we could not cover the federal government’s Necessary and Proper Clause argument in this brief, it was the main focus of the excellent amicus brief filed by co-blogger Randy Barnett and the Cato Institute. WLF and I presented our own take on the Necessary and Proper Clause issues in the amicus brief I wrote for them and a group of prominent constitutional law scholars in the Virginia anti-mandate case.

Here are a few thoughts on today’s federal district court ruling striking down the constitutionality of the Obamacare individual mandate. In my view, the strongest parts of Judge Henry Hudson’s opinion are those where he rejects the federal government’s arguments under the Commerce Clause and the Tax Clause.

On the Commerce Clause, federal government lawyers argued that the mandate is justified because the state of not having health insurance qualifies as economic activity due to the fact that most people will eventually use health care in some form or other. As Judge Hudson points out,“the same reasoning could apply to transportation, housing, or nutritional decisions. This broad definition of the economic activity subject to congressional regulation lacks logical limitation and is unsupported by [the Supreme Court's] Commerce Clause jurisprudence.” The same logic would justify forcing people to purchase cars on the grounds that everyone eventually uses the market for transportation, or forcing them to blog on the grounds that everyone uses the market for information in some way. I addressed this point more fully here.

Judge Hudson also does a very good job of explaining why the government’s claim that the mandate is a tax runs counter to existing Supreme Court precedent distinguishing taxes from regulatory penalties. The mandate is pretty clearly an example of the latter. Here, his reasoning is similar to that which I advocated in the amicus brief in the case that I wrote on behalf of the Washington Legal Foundation and a group of constitutional law scholars (pp. 16-21). As the Supreme Court explained as recently as 1996 in its most recent ruling distinguishing between taxes and penalties, “[a] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government.” By contrast, it went on to say, “if the concept of penalty means anything, it means punishment for an unlawful act or omission.” It’s hard to think of a much clearer example of a fine used as “punishment for an unlawful act or omission” than the individual mandate. Various earlier Supreme Court decisions cited by Judge Hudson and in my brief take a similar view.

The weakest part of Judge Hudson’s opinion is his analysis of the government’s Necessary and Proper Clause argument, which merely claims that the Necessary and Proper Clause only authorizes legislation that is linked to an enumerated power, but does not really explain why the mandate is not. In my view, a far better answer to the government’s argument is that the mandate isn’t “proper” even if it is “necessary” and that it runs afoul of the five part test recently outlined by the Supreme Court in United States v. Comstock. I discussed both points in some detail in the amicus brief (pp. 25-30), and in a shorter form here. In fairness to the judge, his neglect of this point may have been due to the fact that the federal government gave it short shrift in their brief (allocating less than two pages to it buried in the middle of a fifty page brief). While co-blogger Orin Kerr and I believe that this is the government’s strongest argument, few other commentators seem to agree. In today’s New York Times Room for Debate forum on Hudson’s opinion, none of the contributors (including four prominent scholars who support the individual mandate) even mentioned this issue. Still, the opinion can and should have addressed this point much better.

Judge Hudson ruled that invalidating the mandate does not require invalidation of any other part of the health care bill. I’m not a real expert on the relevant law of “severability.” So it’s hard for me to say whether this part of decision is correct. Still, it is relevant that the bill doesn’t contain any severability clause of the sort normally used to ensure that the other parts of a law stay in place if one part is invalidated as unconstitutional. Moreover, a few other parts of the law are so closely connected to the mandate that it’s hard to imagine that they are truly severable from it. The best example is the regulation forcing insurance companies to accept customers with preexisting conditions. Interestingly, the White House recently issued a statement claiming that these two provisions are not in fact severable (though federal government lawyers apparently argued otherwise in the litigation before Judge Hudson). My tentative view is that the White House is correct on this issue, and Judge Hudson is wrong.

Finally, it goes without saying that today’s ruling is just one phase in a lengthy legal struggle. Ultimately, the issue will be decided by the federal courts of appeals, and very likely the Supreme Court. At the same time, it is significant that we now have a district court decision striking down the mandate, with a second one likely in the case filed by twenty state governments and the National Federation of Independent Business. The judge presiding over that case has already indicated considerable skepticism about the government’s arguments, and rejected the Tax Clause claim outright. If the district courts had all uniformly upheld the mandate, appellate judges might have hesitated to challenge such a broad emerging judicial consensus. As things actually stand, the issue remains up for grabs. That in itself is a major change from just a few months ago, when conventional wisdom dismissed the anti-mandate lawsuits as frivolous grandstanding with virtually no chance of success.

The New York Times Room for Debate blog has posted a forum where various scholars weigh in on today’s district court decision striking down the individual mandate. It includes contributions by co-blogger Randy Barnett and myself. My piece briefly discusses the Commerce Clause and Tax Clause aspects of the ruling:

Judge Henry Hudson’s decision today struck down as unconstitutional the “individual mandate” included in the health care bill enacted earlier this year; the mandate requires most Americans to purchase government-approved health insurance plans by 2014. The most powerful parts of Judge Hudson’s ruling reject the federal government’s arguments claiming that the mandate is justified by Congress’ powers to impose taxes and regulate interstate commerce…..

The federal government claims that forcing people to purchase health insurance regulates economic activity because everyone eventually uses health care in some form. But as Judge Hudson points out, “the same reasoning could apply to transportation, housing, or nutritional decisions. This broad definition of the economic activity subject to congressional regulation lacks logical limitation.” The same reasoning would give Congress the power to force everyone to purchase a car because everyone eventually uses some form of “transportation.”

Judge Hudson is equally persuasive in rejecting the argument that the mandate is authorized by Congress’ power to impose taxes. As he notes, it is actually a financial penalty for refusing to comply with a regulation. In September 2009, President Obama himself stated that “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.

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.

My colleague Erik Jensen, who has forgotten more about the Taxing Power than I’ll ever know, has a new paper on whether the individual mandate is a “tax” for constitutional purposes.  Here’s the abstract:

This article, prepared for a symposium at the Salmon P. Chase College of Law, Northern Kentucky University, considers whether the Taxing Clause provides an alternative constitutional basis, as some have recently argued, for the individual mandate in the Patient Protection and Affordable Care Act of 2010 – the requirement, going into effect in 2014, that most individuals acquire satisfactory health insurance or pay a penalty. The article concludes that the Taxing Clause arguments are misguided. At best, the Clause can provide authority for the penalty, not for the mandate as a whole. Furthermore, the article questions whether the penalty will be a tax at all – if not, the Taxing Clause is obviously irrelevant – or, if it will be a tax, whether constitutional limitations on the taxing power will be satisfied. In particular, the article takes seriously whether the penalty might be a capitation tax, a form of direct tax that would have to meet an onerous apportionment rule to be valid. And the article argues that the penalty will not be a “tax on incomes” exempted from apportionment by the Sixteenth Amendment. The bottom line is this: relying on the Taxing Clause makes the analysis of the individual mandate more complicated than it needs to be, and the focus of constitutional analysis should return to where it has always belonged: the Commerce Clause.

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.

The final event at the annual meeting of the Southeastern Association of Law Schools was a Federalist Society panel on the constitutionality of the centralized health control law. Participants were Randy Barnett (Georgetown, VC), Jack Balkin (Yale),  Gillian Metzger (Columbia), and me (Denver, VC). The moderator was  Bradley A. Smith (Capital). Available here. The recording is 93 minutes, although the event itself ran a little longer. While the focus was on the two state suits (Virgina, and the 20-state coalition), we also discussed some of the additional issues raised by the five other suits, such as due process rights to medical privacy and decision-making.

Some have argued that it does not matter whether the individual mandate is a constitutional exercise of the power to regulate “commerce . . . among the several states” because the mandate — or, more properly, the penalty for failing to comply with the requirement to obtain health insurance — is within Congress’ power to tax.  But is this so?  Steven J. Willis and Nakku Chung of the University of Florida have a forthcoming article in Tax Notes in which they argue that if the penalty is a tax, it is a “direct tax” for purposes of Article I, section 9 and is therefore unconstitutional.  Specifically, they argue that the tax is neither an income tax nor an excise tax, nor a proportional capitation tax, and is therefore not a constitutional exercise of the federal taxing power. (Hat tip: Lawrence Solum)

University of Colorado Law Professor Paul Campos decries what he calls “the recent conversion of so many Federalist Society types to the virtues of aggressive judicial review of legislative enactments” in the wake of the enactment of Obamacare. Campos’ claim of a “recent conversion” could hardly be more wrong. If there’s one thing that most “Federalist Society types” have been consistent about over the years, it’s judicial enforcement of, well, federalism. For years, many of us have repeatedly argued for stronger judicial enforcement of the limits to Congressional power under the Commerce Clause and the Tax and Spending Clause, the two provisions most commonly cited as constitutional authorizations for the Obama health care bill. That’s why we defended decisions such as United States v. Lopez and United States v. Morrison and decried cases such as Gonzales v. Raich.

For example, I’m a member of the Society and also sit on the Executive Committee of its Federalism and Separation of Powers Practice Group, the branch of the Society that most directly focuses on these issues. I’m also a constitutional law scholar who writes extensively on federalism. And I have consistently argued for strong judicially enforced limits on congressional power in both fields, including with respect to policy initiatives favored by Republican administrations, such as the War on Drugs, the federal ban on partial birth abortion, and others. Most of the other people who are members of the Practice Group leadership hold at least roughly similar views to mine on these issues. The same goes for the majority of the Federalist Society-affiliated conservative and libertarian scholars who have written on these matters for the last 15-20 years or longer.

On these questions, as on many others, there is a diversity of opinion in Fed Soc circles and among right of center legal scholars. There are a few (e.g. – Lino Graglia) who oppose nearly all judicial review, including on federalism issues. Overall, however, the need for strong judicial enforcement of federalism limits on congressional power is one of the issues that most unites conservative and libertarian legal scholars and jurists. It brings together such otherwise disparate people as social conservative lawprof John Eastman (longtime chair of the Practice Group Executive Committee), and libertarians like co-blogger Randy Barnett and myself.

Campos may be on to something in criticizing loose conservative political rhetoric against “judicial activism,” which sometimes makes it seem as if conservative Republicans are opposed to virtually any strong form of judicial review. I myself have argued that “judicial activism” is not an analytically useful concept. One of the problems with the term is that it can refer to either judicial rulings that overrule the decisions of the political branches or those that impose the judge’s policy preferences on the law. Under the latter definition, a decision upholding an unconstitutional law that the judge favors on policy grounds is just as “activist” as one that strikes down a constitutional law because the judge opposes it. In my view, most conservatives who attack “judicial activism” mean to criticize judges’ imposition of their policy preferences, not judicial overruling of statutes as such.

Be that as it may, most “Federalist Society types” have been pretty consistent in supporting judicial enforcement of federalism for a long time now. For many of us, the need to keep federal power within constitutional bounds is a big part of why we became Federalist Society types in the first place.

As I discussed in this post, some academic defenders of the health care bill’s insurance mandate claim that it is constitutional as an exercise of Congress’ power to tax. That argument has been advanced by by prominent scholars such as Jack Balkin, Vik Amar (in a recent debate with me), and others. It may therefore be of some interest that President Obama, himself a former constitutional law professor, forcefully denied that the mandate is a tax in this September 2009 ABC News interview:

[George] STEPHANOPOULOS: …Under this mandate, the government is forcing people to spend money, fining you if you don’t. How is that not a tax?

OBAMA: Well, hold on a second, George. Here — here’s what’s happening. You and I are both paying $900, on average — our families — in higher premiums because of uncompensated care. Now what I’ve said is that if you can’t afford health insurance, you certainly shouldn’t be punished for that. That’s just piling on. If, on the other hand, we’re giving tax credits, we’ve set up an exchange, you are now part of a big pool, we’ve driven down the costs, we’ve done everything we can and you actually can afford health insurance, but you’ve just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that’s…

STEPHANOPOULOS: That may be, but it’s still a tax increase.

OBAMA: No. That’s not true, George. The — for us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase. What it’s saying is, is that we’re not going to have other people carrying your burdens for you anymore than the fact that right now everybody in America, just about, has to get auto insurance. Nobody considers that a tax increase….
[emphasis added].

Obama’s statement probably won’t make much difference in court. Still, it’s noteworthy that Obama, like me, apparently believes that the mandate is not a tax but a penalty for noncompliance with a regulatory mandate – similar in that respect to the fines state governments impose on those who refuse to purchase auto insurance. The difference between the two, of course, is that state government powers are not limited to those granted in the federal Constitution. Congress’ are.

I recognize the slight distinction between saying that the mandate is not a tax and saying that it’s not a “tax increase,” as Obama did. However, the mandate does not simultaneously lower the taxes of those covered by it. So if it’s a tax at all, it’s a tax increase. Obama appears to recognize this when he analogizes it to state auto insurance mandates, which also don’t in any way lower the taxes paid by those subject to the regulation.