Tuesday, December 14, 2010

Healthcare Mandate Ruling

I've read Judge Henry Hudson's 42-page opinion striking down Obamacare's "individual mandate" to purchase health insurance. Virginia v. Seblius, CA No. 3:10CV188 (E.D.Va Dec. 13, 2010). And, notwithstanding the chortling from the right, I'm not impressed, for two reasons.

First, Federal judges in other districts have either dismissed similar challenges or validated the same provision. One can argue that the previous cases were less consequential. Recall that, in April, I predicted the mandate ultimately would be upheld. (Importantly, however, Hudson's ruling is consistent with an earlier Florida decision rejecting classification of the mandate as a tax; such a classification might provide a stronger Constitutional rationale and/or less scrutiny on appeal.)

Second, and most important, Judge Hudson's decision is surprisingly thin on precedent. The ruling rests on two holdings:
  • Commerce Clause: Hudson says the mandate can't be grounded on Congressional authority over interstate commerce:
    Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In so doing, enactment of the Minimum Essential Coverage Provision exceeds the Commerce Clause powers vested in Congress under Article I.
    Virginia v. Seblius, Slip Op. at 24; see also id. at 37 ("no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person's decision not to purchase a product"). Admittedly, as Hudson implies, the absence of on-point citation stems from the fact that (in my words) it's almost "a case of first impression." Still, Judge Hudson misses a case I cited, United States v. Bishop, 66 F.3d 569 (3d. Cir.), cert. denied, 516 U.S. 1032 (1995), where a Federal car-jacking criminal law was deemed a valid exercise of Commerce Clause authority. And, even apart from the Bishop case, Hudson never seriously seeks textual support from the various Supreme Court cases on the Commerce Clause. The closest he comes is to seize on the word "activities" from Perez v. United States, 402 U.S. 146, 150 (1971) ("activities affecting commerce"), to suggest that non-action isn't an activity. Virginia v. Seblius, Slip Op. at 21. But one could just as easily argue that deciding not to purchase -- say, by declining employer-sponsored coverage, or choosing not to "call right now; operators are standing by!" -- is an activity that affects commerce. Yes, I know that this reading would bring many aspects of life under the Commerce Clause--but insurance is unquestionably interstate commerce, so it's at least plausible that, in regulating the market for health insurance, Congress could have the power to force minimum coverage.

  • Necessary and Proper: Hudson also rejects the government's reliance on the Article I, Section 8, clause 18 power to "make all laws which shall be necessary and proper for carrying into execution the foregoing powers." He says:
    If a person’s decision not to purchase health insurance at a particular point in time does not constitute the type of economic activity subject to regulation under the Commerce Clause, then logically an attempt to enforce such provision under the Necessary and Proper Clause is equally offensive to the Constitution.
    Virginia v. Seblius, Slip Op. at 19. Yet, as Orin Kerr says at the Volokh Conspiracy:
    Judge Hudson does not cite any authority for this conclusion: He seems to believe it is required by logic. But it is incorrect. The point of the Necessary and Proper clause is that it grants Congress the power to use means outside the enumerated list of of Article I powers to achieve the ends listed in Article I. If you say, as a matter of "logic" or otherwise, that the Necessary and Proper Clause only permits Congress to regulate using means that are themselves covered by the Commerce Clause, then the Necessary and Proper Clause is rendered a nullity. But that’s not how the Supreme Court has interpreted the Clause, from Chief Justice Marshall onwards.
    I don't fully agree with Kerr; as fellow Volokh blogger Jonathan Adler says, "one needs to identify some alternative limit" to the authority granted by the necessary and proper clause. But the point is that Hudson didn't try to tease the test out of some prior ruling--which is a judge's job. (Indeed, Hudson's opinion cites last term's Comstock case, which takes an expansive view of the ambit of that provision.)
Conclusion: Like a majority of Americans, I'm no fan of Obamacare. Yet, as much as I dislike the mandate, the contending legal principle for conservatives is deference to Congress. And it's not clear to me that the Constitution prohibits the Federal government, when trying to improve the workings of the health insurance market, from mandating purchase of insurance. (Again, I think that approach utterly wrong-headed, but idiotic isn't illegal.)

Because Judge Hudson found the mandate to purchase health insurance severable from the remainder of Obamacare, Virginia v. Seblius, Slip Op. at 40, he both left the remainder of the law standing and did not issue an injunction against enforcing the law. But, without the mandate, can the rest of Obamacare survive?

One thing is certain: the ruling will be appealed to the Fourth Circuit. But that will take a year, so it may be 2013 before this issue is addressed by the Supreme Court--which now seems a sure thing. Where, if the current composition of the Court doesn't change, it will be decided by Justice Kennedy.


O Bloody Hell said...

> the standard is whether Congress logically concluded the activity has an interstate effect.

Not to argue you with regards what The Law is, This is a flat-out ridiculous notion.

a) The fox now gets to decide if the henhouse is off limits or not? And where the boundaries of the henhouse lie?

b) My taking a crap in the backyard effects interstate commerce. It means my s*** doesn't get processed by the local water department, and they don't get to sell the reprocessed waste to whomever they sell it to for purposes as fertilizer (or whatever it gets used as)... which means some company somewhere doesn't get to pay state, local, and federal taxes on it.

My pooping location therefore is a matter for Congressional regulation.

Methinks it's beyond obvious this WAS NOT AND NEVER COULD BE what the Founding Fathers meant by this clause.

If it's not getting transported across interstate lines (this, mind you, includes digitized IP on the internet) -- if funds for it are not getting commingled with funds from other states -- that seems like a rational distinction for what qualifies as "interstate commerce".

Your court decision's idea? Not so much.

Note to Congress: Keep your hands off my ASS.

Warren said...

The Commerce Clause is being treated like the Butterfly Effect. In fact, that's what it should be called: The Commerce Clause Butterfly Effect.

Everything you do seems to have some impact on interstate commerce. It's nuts.

Anonymous said...

As Carl knows, we disagree on this. I've litigated 10th Amendment/ Commerce Clause cases, and received a rare drive-by reference to the Necessary and Proper Clause by the Supreme Court.

I think the Mandate goes beyond Wickard v. Filburn, which is pretty close to a Butterfly Effect. A Bridge Too Far? Only Anthony Kennedy knows.

@nooil4pacifists said...

If the decision comes down to whether the "Butterfly Effect" is interstate commerce, the mandate will be upheld--as Anony says, Wickard v. Filburn says that. The only way to strike the mandate is what Judge Hudson did--say that non-action can't be commerce. As I've said, there's no case support for this proposition--so it will depend on what Justice Kennedy had for breakfast on the morning of the oral argument. BTW, Charles Lane has a pretty balanced piece on Hudson's ruling and its implications here.

Warren said...

Reductio ad absurdum: Breathing impacts air quality so there's nothing I can do that doesn't fall under the Interstate Commerce Clause.