The following contribution to our post-decision symposium on the health care cases is written by David B. Kopel, adjunct professor of constitutional law, Denver University. Author of the Independence Institute amicus brief on state sovereignty and the Medicaid mandate.
I may be a law professor by vocation, but the bar review is in my blood. My parents, Jerry and Dolores Kopel, founded and for over a quarter-century directed the Colorado Bar Refresher (now part of the BAR/BRI empire). So let’s take a look at the concrete legal rules that have emerged from NFIB v. Sebelius, as they might be presented in a bar review outline, or perhaps in a little more depth in a student study aid for Constitutional Law I.
I. The power to regulate commerce among the several states
Article I, § 8: “The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;”
- That a person may (or almost certainly will) engage in commerce in the future does not mean that Congress can compel the person into commerce in the present. For example, almost all persons eventually consume some health care services. Congress cannot force them to consume a product today (expensive health insurance) because Congress thinks that they might eventually use something related to the product in the future.
- Moreover, all persons consume food. Unlike health care, food consumption is always ongoing. Yet Congress cannot force persons to purchase a particular type of food.
- Instrumentalities of interstate commerce. E.g., safety regulations or price controls for airplanes or ships.
- Channels of interstate commerce. E.g., prohibit interstate shipment of unsafe food or drugs.
- Activities which “substantially affect” interstate commerce. E.g., regulate collective bargaining at a steel mill, because a strike at the steel mill substantially affects the interstate shipment of goods and materials to and from the mill. N.L.R.B. v. Jones & Laughlin Steel Corp. (1937)
The “activity” test will almost always be relevant only to the third type of use of the Commerce Clause.
- Roberts (quoting Lopez): “Wickard has long been regarded as ‘perhaps the most far reaching example of Commerce Clause authority over intrastate activity.’”
- Joint Dissent: Wickard “always has been regarded as the ne plus ultra of expansive Commerce Clause jurisprudence. . . ” (Ne plus ultra is French for “not more beyond” or “go no further.” Some people say that the words were inscribed on the Pillars of Hercules at Gibraltar, as a warning for sailors. The term can also be used as praise: “His perfect scores of 800 on all his college admissions tests were the ne plus ultra of standardized test success.” In any case, the meaning is that the final limit has been reached.)
II. The Necessary and Proper Clause
Article I, § 8: “The Congress shall have Power . . . To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.”
But not “proper,” because in violation of McCulloch’s other rules.
- An incidental power is, by definition, not as “great” or “worthy” as the express power. So “manage my farm for a year” does not include the equally greater (or even greater) power to sell the farm.
- As applied to the ACA, the Constitution grants Congress the power to regulate commerce. The Constitution does not grant Congress the power to call commerce into being, or to compel commerce. Therefore, the individual mandate’s compulsion of commerce is not an “incident” of power to regulate commerce.
- Further, the power to compel involuntary commerce would be a “great substantive and independent power” (Roberts quoting McCulloch), as least as “great” as the power to regulate commercial activity. Ergo, the power to compel involuntary commerce is not an “incident” of the power to regulate interstate commerce.
III. The Spending Power
“The Congress shall have Power . . . to pay the Debts and provide for the common Defence and general Welfare of the United States;”
- Steward Machine Company v. Davis (1937) and South Dakota v. Dole (1987) express the anti-coercion rule, while finding that the conditional grants in those particular cases did not exert undue influence.
- NFIB is not the first case to apply the anti-coercion rule, but it is the first case to find a conditional grant unconstitutionally coercive.
- Traditional Medicaid is a program for certain especially vulnerable people (the blind, the disabled, some children, and some adults living in poverty). For the adults, many states provided only a fraction of full Medicaid coverage. Under the ACA, states had to expand Medicaid to cover all adults who had incomes below 133% of the federal poverty line.
- Thus, Medicaid was “transformed” into a broad program to provide full Medicaid coverage to able-bodied, childless, non-poor adults.
- Because of the transformation, the threat of cutting traditional Medicaid was too attenuated from Congress’s objective of getting the states to provide medical welfare to able-bodied non-poor adults.
IV. The Tax Power
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises . . . ; but all Duties, Imposts and Excises shall be uniform throughout the United States;” Art. I, § 8.
“No capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” Art. I, § 9. (The Sixteenth Amendment removes the apportionment requirement for taxes on incomes, such as taxes on real estate income.)
- A person who is subject to the “tax” is not considered to have violated the law in any way. (Solicitor General Verrilli described the individual mandate this way during oral argument. Chief Justice Roberts adopted this interpretation of the statute, while admitting that it was not the most natural reading.)
- The “tax” is low enough so that a person can make a “reasonable financial decision” to pay the tax instead of doing whatever is being taxed. The tax is not at a “prohibitory” level.
- The “tax” is collected by the Internal Revenue Service in the same manner as other taxes.
- No scienter requirement. Scienter is usually associated with crimes or other unlawful acts, and not with tax liability.
V. NFIB in broader context.
- Many lower federal courts have resisted Lopez, and some federal courts are reading District of Columbia v. Heller (2008) very narrowly too. Judges who consider Wickard v. Filburn to have been “a good start” rather than the outer limit may brush off the NFIB rules as “dicta.”
- Other judges may not, especially since the Roberts opinion does not aim to be innovative, but simply to enforce principles that have been part of the fabric of American constitutional law since the New Deal and before.
- The extent to which future courts follow the NFIB rules depends in part on the broader social and political culture in which the judges live, and in part on whether the judges are appointed by a President whose party sees the NFIB rules as restatements of obvious constitutional truths, or as dangerous limitations on the power of a beneficent Congress to legislate about any topic which a majority of Congress considers to be a national problem.
- The Court-packing plan was politically disastrous for Roosevelt, and after it was announced, Congress never enacted any major new item of New Deal legislation.
- Because Court deliberations were kept secret, Justice Owen Roberts was unfairly maligned as a spineless worm who caved to FDR’s anti-judicial threats. In fact, as legal historian Barry Cushman has explicated in his book Rethinking the New Deal Court: The Structure of a Constitutional Revolution (1998), Roberts had decided that the Fourteenth Amendment doctrine of liberty of contract, which had been used to invalidate minimum wage laws, had become incoherent and unusable, and so Justice Roberts decided to stop using it.
- If recent media reports are true, then the second Justice Roberts is the Justice who really did abandon what he considered to be a correct interpretation of the law, submitting to the threats of a President who attempted (this time successfully) to coerce the Supreme Court of the United States.