The Reasoning of the Eleventh Circuit’s Mandate Opinion

When a court hands down a 207-page majority opinion on a Friday afternoon in August, close scrutiny of its reasoning in the blogosphere generally waits for Monday. But I’ve given a quick read to the Eleventh Circuit’s majority opinion in the mandate case, and I thought it might be helpful to offer a tentative overview of the Eleventh Circuit’s reasoning. The opinion has a lot of background, and then the real analytical work starts around page 100.

1) The majority significantly downplays the proposed activity/inactivity distinction. As the Court says on page 109, “we are not persuaded that the formalistic dichotomy of activity and inactivity provides a workable or persuasive enough answer in this case.” The majority opinion is ultimately more focused on the idea that if the Affordable Care Act is upheld, then Congress has almost plenary authority in the area of economics and purchases relating markets — something the majority says Commerce Clause jurisprudence doesn’t allow.

2) Although the Eleventh Circuit agrees that cases like Wickard and Raich were based on the “aggregation” principle of how to assess a link with interstate commerce that Congress can regulate, the court concludes that it cannot apply the same methodology here because it would lead to the federal government having too much power:

Applying aggregation principles to an individual’s decision not to purchase a product would expand the substantial effects doctrine to one of unlimited scope. Given the economic reality of our national marketplace, any person’s decision not to purchase a good would, when aggregated, substantially affect interstate ommerce in that good. From a doctrinal standpoint, we see no way to cabin the government’s theory only to decisions not to purchase health insurance. If an individual’s mere decision not to purchase insurance were subject to Wickard’s aggregation principle, we are unable to conceive of any product whose purchase Congress could not mandate under this line of argument. Although any decision not to purchase a good or service entails commercial consequences, this does not warrant the facile conclusion that Congress may therefore regulate these decisions pursuant to the Commerce Clause. . . . Thus, even assuming that decisions not to buy insurance substantially affect interstate commerce, that fact alone hardly renders them a suitable subject for regulation.

3) The Eleventh Circuit also reasons that the Affordable Care Act is constitutionally suspect because it delves into a subject of traditional state regulation, namely the provision of health care:

The health care industry also falls within the sphere of traditional state regulation. A state’s role in safeguarding the health of its citizens is a quintessential component of its sovereign powers. The Supreme Court has declared that the “structure and limitations of federalism . . . allow the States great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons.” Gonzales v. Oregon, 546 U.S. 243, 270, 126 S. Ct. 904, 923 (2006) (quotation marks and citation omitted). Numerous Supreme Court decisions have identified the regulation of health matters as a core facet of a state’s police powers. See, e.g., Hill v. Colorado, 530 U.S. 703, 715, 120 S. Ct. 2480, 2489 (2000) (“It is a traditional exercise of the States’ police powers to protect the health and safety of their citizens.” (quotation marks and citation omitted). . . .

. . . Here, it is undisputed that the individual mandate supersedes a multitude of the states’ policy choices in these key areas of traditional state concern. Congress’s encroachment upon these areas of traditional state concern is yet another factor that weighs in the plaintiffs’ favor, and strengthens the inference that the individual mandate exceeds constitutional boundaries

4) The majority then rejects the argument that the individual mandate is part of an “essential part of a larger regulation of economic activity,” which Lopez indicates would allow regulation. The Court suggests in a passing statement that this is the work done by the Necessary and Proper Clause. (See top of 163-164) The problem, the majority reasons, is that the individual mandate is not trying to help Congress regulate insurance but rather to limit costs of that regulation:

An individual’s uninsured status in no way interferes with Congress’s ability to regulate insurance companies. The uninsured and the individual mandate also do not prevent insurance companies’ regulatory compliance with the Act’s insurance reforms. At best, the individual mandate is designed not to enable the execution of the Act’s regulations, but to counteract the significant regulatory costs on insurance companies and adverse consequences stemming from the fully executed reforms. That may be a relevant political consideration, but it does not convert an unconstitutional regulation (of an individual’s decision to forego purchasing an expensive product) into a constitutional means to ameliorate adverse cost consequences on private insurance companies engendered by Congress’s broader regulatory reform of their health insurance products.

5) Although the majority opinion offers a summary of the Necessary and Proper clause jurisprudence in its preliminary section, see pages 93-99, it does not return much to the Necessary and Proper clause afterwards in its analysis of why the majority thinks the mandate exceeds the Commerce Clause power. As far as I can tell, that is because the court treats the Commerce Clause cases as being essentially about the Necessary and Proper Clause, too. As a result, covering the Commerce Clause power implicitly covers the Necessary and Proper clause power. (Cf. Scalia’s concurring opinion in Raich). Based on a quick read, it seems the majority’s view is that the only other work done by the Necessary and Proper Clause in the Commerce Clause setting is to allow regulation outside interstate commerce that is an “essential part of a larger regulation of economic activity.” This view largely circumvents the deferential standard of the Supreme Court’s caselaw on the Necessary and Proper Clause such as Comstock, replacing it it with a question that triggers more careful judicial scrutiny: whether the regulation is an “essential” part of a larger regulation of economic activity. And the Court concludes that it’s not “essential,” and therefore not permitted within the Commerce Clause.

Anyway, that’s my quick read, and it’s entirely possible that I’ve missed something along the way. Corrections most welcome in the comment thread, of course.