Not so Baffled About the Activity-Inactivity Distinction

As one of the lawyers now representing the National Federation of Independent Business in the Eleventh Circuit, I was at yesterday’s oral arguments in Richmond. I had a somewhat different take on the discussion of the activity-inactivity distinction. Lyle Dennison’s account of the opening minutes is generally accurate, but there are two important qualifications. One that comes through a bit in his report is the panel’s frustration that counsel for Liberty was not directly answering its questions about the activity-inactivity distinction. So they kept reformulating their questions and prolonging the discussion, which led to the appearance, if not reality, of increasing “bafflement.” Still, there is no question that, during this exchange, the panel conveyed a tone of skepticism about the utility of the distinction.

The initial argument in the Liberty University case ran almost double the allotted time. By the time Solicitor General Katyal got up to argue the Virginia case, Presiding Judge Motz invited him to focus on the standing issue. Near the end of his presentation, however, something very interesting occurred. I wish I had the transcript, but I have transcribed a portion of this exchange from the recording on the Fourth Circuit’s website that you can access here.

Judge Motz said she had a question to ask on the merits: Did not the term “regulate” in the Commerce Clause presuppose (or was predicated upon) some activity to be regulated? Here is what I have taken from the recording:

My problem with that is, and I hear all that, but if you do not have activity, and for purposes now — instead of going back and telling me the sixteen reasons why you think this is an activity — just bear with me that this is not an activity, what do we do with the word “regulation”? Because, you know, that — although it has not been pressed with any great concern here — in the research that we’ve done and apparently has now been done in other cases that you’re going to face so you’re going to have to deal with the question, that has always assumed that there’s a predicate that’s going to be regulated, an activity, if you will, and the regulation is right — the power that Congress has is “to regulate,” and that’s right in the Constitution. That is a constitutional provision. The “activity” isn’t to be sure, but “regulation” would seem to think by John Marshall and others to imply a predicate to be regulated. If you don’t have this activity predicate, what do you do?

To this General Katyal said he did not have an immediate response as it was not in the multiple briefs filed in this case, and that he “would want to have a lot more time to think about it.” She then pressed him by saying “but it was in the Florida briefs” — to which I assume she was referring to the briefs in the Eleventh Circuit that had been filed about a week prior (interesting that she had read them) — and that “maybe you can think a little more about that regulation question” and address it in his rebuttal. Now this struck me at the time as an amazing moment. After receiving a polite “I don’t know” answer from the Solicitor General, Judge Motz basically instructed him to sit down and think about it and come up with an answer.

In his rebuttal, General Katyal said, even if you do think that Congress is regulating inactivity, with which he disagreed, Raich “went so far as to say that Congress can regulate even almost the textual opposite of what’s in the text of the Constitution: commerce in a single state as opposed to among states, that is Congress is permitted to regulate intrastate activity so long as” — at which point, Judge Motz interrupted with “but its the activity, see, that is still tied there. . . . and in our hypothetical situation, that I know you don’t agree with what we are talking about here, is can you regulate something that is not an activity?”

Katyal’s basic response to this was what matters is the effect on commerce, and the activity and inactivity distinction has never been the touchstone, and that under the Necessary and Proper Clause, Congress can fill in the gaps of a regulatory scheme to eliminate barriers. After some additional back and forth about child support orders that seem to require activity, Judge Motz said:

“We know, as I understand it, we wouldn’t have a Commerce Clause argument if Congress had straight-forwardly set up universal health care and required everybody to buy, right?” To which Katyal said “sure.” Judge Motz then replied, “They didn’t want to do that though. That wasn’t, apparently — well in any event, for whatever reason, they didn’t do that, so we don’t have that situation. We have instead this, what we have.” After Katyal replied that there may have been any number of policy reasons for this choice, which are beyond the purview of the courts, and that the Supreme Court says the test for this court is evaluate whether Congress had a rational means, as long as Congress’s means are rationally adopted to the ends, citing McCullough and Comstock. To this she replied: But “for the past fifty years they have attached to that, to the regulation [unintelligable] activity, and that is what we arguably don’t have here. . . and which distinguishes this case from all those cases.” In response, General Katyal again voiced his disagreement that there was no activity here and asserted the Necessary and Proper Clause.

This whole exchange was very interesting and it was the point where General Katyal clearly had the most difficulty. I thought it was highly significant that Judge Motz returned to this question at the end of several hours of argument that had moved far away from the merits, indicating that this was sincerely troubling her. Now, I am NOT asserting that Judge Motz is going to vote to strike down the individual mandate as unconstitutional, though it is worth remembering that she was the judge who wrote the Court of Appeals opinion in Comstock holding that the sexual predator’s law exceeded the power of Congress under the Necessary and Proper Clause, which was then reversed by the Supreme Court. Perhaps she was merely seeking help in writing an opinion to uphold the mandate. But she was quite clearly and genuinely bothered — not baffled — by the lack of activity.

While I am at it, let me recommend the brief we filed in the Eleventh Circuit on behalf of NFIB — in which the “regulation” point is made (though I cannot be certain that this was the brief to which Judge Motz was referring). It has some new and different argumentation that, whether or not it is correct, I hope won’t be too baffling. As Bill Murray said in Groundhog’s Day: “Anything different is good.”

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