Do the Court’s Commerce Clause and Necessary and Proper Clause Rulings in the Individual Mandate Case Matter?

As I pointed out yesterday, five justices, including Chief Justice Roberts, accepted all the plaintiffs’ major arguments against the individual mandate with respect to the Commerce and Necessary and Proper Clauses. But how much does that conclusion actually matter? My tentative view is that it will have little immediate effect, but may well be significant in the future.

One possible reason to dismiss the importance of the Court’s treatment of these issues is that it might have been mere dictum. After all, the Court upheld the mandate based on the Tax Clause, so the other two issues were not essential to the outcome. However, as co-blogger Jonathan Adler points out, Chief Justice Roberts’ controlling opinion explicitly holds that this analysis was essential to the outcome:

[T]hese analyses form an essential predicate to his ultimate conclusion that the mandate could be upheld as a tax. As the entire Court accepts, the most natural reading of the minimum coverage provision is as an economic mandate adopted pursuant to the Commerce Clause. It is only after rejecting the possibility that the mandate could be justified in this manner that the Chief returns to the text to see if it is susceptible to an alternative construction. Thus, the only reason the Chief Justice even considers whether the mandate could be considered a tax, the statutory text notwithstanding, is because of his prior conclusion on the Commerce and Necessary and Proper Clauses. Thus this decision provides five firm votes for meaningful limits on the most expansive of Congress’ powers.

One can still argue that the Commerce and Necessary and Proper analysis was dictum on the grounds that it was not seen as essential by the other four justices who voted to uphold the mandate. But to the extent that the Chief Justice’s opinion is controlling, as that of the majority justice who concurred on “the narrowest ground,” it is his position that matters. Moreover, as a practical matter, lower courts are unlikely to simply ignore a position that was forcefully endorsed by five Supreme Court justices in a major case.

Even if the Chief Justice’s Commerce and Necessary and Proper analysis does bind lower courts, it’s possible it will not have much effect in practice. As Roberts emphasizes, the mandate exceeded the scope of those powers because it sought to regulate inactivity. No other current federal law does the same thing on the basis of those two clauses. But, as I explained in this article, the power to impose purchase mandates is one that Congress would have strong incentives to abuse in the future. So even if this case’s CC/NP rulings will not endanger any present laws, they could cut off future mandates.

Obviously, Congress can circumvent the limits on Commerce Clause mandates by trying to structure future mandates on inactivity as taxes, utilizing Roberts’ reasoning on why the health insurance mandate is a tax as a guide. However, the jerry-rigged nature of Roberts’ analysis and the possibility that it was developed primarily to avoid having to strike down this particular statute makes it possible that the the Court will back off at least some of it in future cases. Even if it does not, having to use the tax power at least prevents Congress from punishing mandate violators with prison time instead of fines.

Moreover, the doctrinal impact of this decision potentially goes beyond mandates in one important sense. Chief Justice Roberts and (less clearly) the four dissenting justices all reaffirmed the proposition that laws authorized by the Necessary and Proper Clause must be “proper” as well as “necessary.” As Roberts put it, “Even if the individual mandate is ‘necessary’ to the Act’s insurance reforms, such an expansion of federal power is not a ‘proper’ means for making those reforms effective.” This was the central theme of the amicus brief I wrote for the Washington Legal Foundation. Roberts did not give anything approaching a comprehensive definition of “proper.” But his emphasis on the idea that it imposes independent limitations on congressional power could well lead to future litigation on the subject.

The greatest potential significance of the Court’s Commerce and Necessary and Proper ruling, however, lies less in the doctrinal details and more in the fact that five justices were willing to endorse a strong substantive limit on these powers. That is both symbolically significant and a potential signal for future cases.

Obviously, whether or not Roberts’ analysis will really have an effect on future cases depends in large part on future Supreme Court appointments and the political situation. If, for example, Barack Obama gets reelected in November and replaces one or more conservative Supreme Court justices with liberals, yesterday’s Commerce and Necessary and Proper ruling will likely be ignored or overruled. But for reasons David Bernstein emphasizes, it’s also possible that things will move in the opposite direction. Some liberal observers fear such a result. It is still too early to say whether this part of the individual mandate decision will turn out to be an outlier or a sign of things to come.

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