The Search for a Limiting Principle for Federal Power: Collective Action Problems

Many of those who urge the Supreme Court to uphold the constitutionality of the individual mandate recognize that the Court is unlikely to take this step without identifying a “limiting principle” that cabins the scope of federal power in some meaningful way. While some deride the search for a limiting principle as unnecessary, others recognize that the Supreme Court has repeatedly reiterated the need for a limiting principle in its enumerated powers jurisprudence. In Gibbons v. Ogden, for exmaple, Chief Justice John Marshall noted that “the enumeration presupposes something not enumerated,” making clear that enumerated powers are necessarily limited powers. More recently, in United State v. Lopez, the Court rejected the government’s proffered justification for the Gun Free School Zones Act because it contained no such limiting principle. As Chief Justice Rehnquist explained, “if we were to accept the Government’s arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate.”

One of the more popular limiting principles proposed by progressive academics in support of the individual mandate is that the federal government is authorized to act where action is (or could be) necessary to solve a collective action problem among the states. As Jeffrey Rosen put it in his exchange with Randy, the Court could uphold the mandate and Congress would still be unable to regulate non-economic activity “where there are no collective action problems that make it impossible for the states to act on their own.” The case for a “collective action federalism” of this sort has been made at greater length by Neil Siegel and Robert Cooter in the Stanford Law Review, and by Professor Siegel on these pages.

The theory of collective-action federalism, particularly as articulated by Cooter and Siegel, is elegant and compelling. It outlines an internally coherent constitutional architecture that has much to recommend it. Yet it has one fundamental problem (in addition to those identified by Ilya below): The theory of collective-action federalism cannot provide a plausible account of the Court’s current federalism jurisprudence. Were the Supreme Court to uphold the individual mandate on these grounds, it would repudiate the rationales of several recent Supreme Court opinions, including some written by Justices Scalia and Kennedy.

The collective-action theory of the federal government’s enumerated powers seems plausible if one only looks at the Court’s recent Commerce Clause cases. On the one hand, neither Lopez nor Morrison dealt with the sort of problem beyond the capacity of state governments. Wickard and Raich, on the other hand, dealt with national markets in commodities that states could not effectively regulate (or so our federal representatives could have rationally concluded). So far so good, but his hardly exhausts the universe of enumerated powers cases.

Although the collective action theory of federalism may be able to account for Lopez and Morrison, it is utterly unable to account for New York v. United States or Printz v. United States. Both cases involved clear collective action problems related to economic activities, and in both cases the laws were struck down on federalism grounds. The law in New York was an effort to induce states to provide for the disposal of low-level radioactive waste, which no state wanted to do on its own. It was based on an agreement among several states expressly predicated on the idea that collective action was necessary to solve the problem. No matter, for it sought to commandeer the states. The law in Printz could likewise be seen as an effort to solve a collective action problem as no state would be able to prevent the purchase of guns without a background check if individuals could easily cross state lines to purchase a gun elsewhere.

In neither case was the existence of a collective action problem enough to save the law. In each case the Court concluded that the federal law at issue was not “necessary and proper” to carry into execution an exercise of the federal government’s power to regulate commerce among the states despite the existence of a collective action problem. Cooter and Siegel did not even try to account for these cases in their Stanford Law Review piece. Indeed, neither case is cited (nor are the sovereign immunity cases, which likewise press against their theory).

The collective action theory also has problems explaining the outcomes of recent decisions in which the Court construed the scope of federal statutes narrowly so as to avoid potential constitutional problems. In SWANCC v. Army Corps of Engineers and Rapanos v. United States, a majority of the Court adopted a narrowing interpretation of the scope of regulatory jurisdiction over “waters of the United States” under the Clean Water Act to avoid an interpretation of the act that could exceed the scope of the federal government’s Commerce Clause power. The theory of federal power necessary to uphold such a broad assertion of regulatory authority could likewise justify federal regulation of local land-use. Yet under the collective action theory of federalism, the Court’s concerns were unwarranted, as federal legislators could reasonably believe that states would not adopt sufficiently stringent regulations governing water pollution, wetlands development, or even land-use generally, due to fears of interstate competition. As above, the collective action theory of federalism would readily embrace assertions of federal power the Supreme Court has recently rejected.

In sum, the collective action theory of the federal government’s enumerated power may be a coherent theory, but it cannot be reconciled with the whole of the Supreme Court’s federalism jurisprudence of the past twenty years. If a majority of the Court is to find a limiting principle for the scope of federal power that will both uphold the individual mandate and be consistent with existing precedent, they will have to look elsewhere.

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