An In-depth Look at the Legal Rationale Behind the Supreme Court’s Healthcare RulingPosted: June 28, 2012
Michael Salvucci, Editor Emeritus
I want to preface this piece by first explaining that I’m looking at the Court’s ruling on the Affordable Care Act (hereinafter ACA) strictly through a legal lens. I will be addressing just one of the multitude of issues discussed by the Court, the individual mandate.
While broad based policy arguments have their place when debating law, they are usually left as a last ditch effort and you won’t find any here. If any of you listened to oral arguments in the spring on this case you’ll know that neither side’s attorneys made arguments such as: “But the system is broken and this is the fix,” “Everyone should have healthcare!” or “Obamacare is socialism at its worst!” Those arguments are left for the House and Senate floors, not the Court Room. The Bill has been passed by both houses and signed by the President, it is law. The question before the Court was, “is the law Constitutional?” To quote Chief Justice Roberts in the majority opinion, “We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions.” (Business, et al. v. Sebelius, 567 U.S. ___ (2012)). [since the opinion is so recent it only has a volume number, not a page number].
In a complicated opinion such as the ACA ruling, it is important to “count the votes” and figure out which parts of the opinion actually have the five votes needed for a majority. When I read such opinions I find it handy to have a pad of paper and pen to separate the issues and figure out which Justices are signing on to what. Five votes are needed for binding precedent, four is considered only as persuasive authority by lower courts.
Uphold the Mandate: 5 in favor of upholding the individual mandate.
**Five justices agreed that it falls under Congress’s Taxing and Spending Power. (Roberts, Ginsburg, Breyer, Sotomayor, Kagan);
However, only four justices agreed that it is also permissible under the Commerce Clause. (Ginsburg, Breyer, Sotomayor, Kagan).
Strike Down the Mandate:
**Four justices dissented and believed that the Mandate could not survive under either the Taxing and Spending Power, or the Commerce Clause. (Scalia, Thomas, Alito, Kennedy).
[There’s your 5-4 decision]
However, while Roberts agrees it’s permissible under the Taxing and Spending power, he joined the dissent in arguing that it violated the Commerce Clause. When you count the votes, that makes five justices, a majority, who agree that it is a violation of the Commerce Clause; binding precedent.
It comes as a surprise to many that Congress cannot simply pass any law it chooses. In fact, the types of laws Congress can pass are very limited and fit within a mere three categories: What is Necessary and Proper, the Commerce Clause, and the Taxing and Spending Power. I will leave the Necessary and Proper clause out of this discussion as it is rarely invoked and was not a major player in the ACA decision.
The Commerce Clause
Pursuant to the Commerce Clause (U.S. Const. art. 1, §8, cl. 3), Congress can only pass laws dealing with: (1) Channels of Commerce (interstate highways, riverways, etc); (2) Instrumentalities and Goods in interstate Commerce; and (3) IntRA state activity that has a substantial effect on intER state commerce that is (a) inherently commercial/economic; or (b) part of a national economic regulatory scheme. This is why there are very few Federal criminal laws that are not either (a) crimes against the United States; or (b) crimes taking place across state lines. For instance, Congress cannot pass a law banning firearms from schools. There is nothing inherently economic or commercial about possessing a gun within a school. (See United States v. Lopez, 515 U.S. 549 (1995)). A state, of course, could pass such laws at their will.
On the contrary, the Supreme Court has ruled that growing wheat falls under the Commerce Clause. Growing wheat within one state may have a substantial effect on interstate commerce across the many states and therefore can be regulated. (See Wickard v. Filburn, 317, U.S. 111 (1942)). [note the date—The New Deal greatly expanded the Commerce Clause]. However, can Congress mandate that you indeed grow wheat when you aren’t presently growing any? Therein lies the question that is at the heart of the ACA Commerce Clause debate, one that was not debated by the Court until now. Can Congress create commerce to regulate it? The answer from the majority of the court, no.
The question asked by the Justices at oral arguments was, “Is not buying health insurance commercial in nature?” Remember, it doesn’t have to be a good or even a channel, go back to the third prong of the Commerce Clause; activity within one state that has a substantial effect on interstate commerce, but that activity must to be inherently commercial. If it’s not inherently commercial, we don’t even get to ask whether or not it has a substantial effect on interstate commerce. Commerce is defined as the buying and selling of things. In not buying health insurance, you are not engaging in commerce. Therefore Congress cannot regulate your inaction and force you to buy health insurance. It’s that simple. The argument from the Government was that in not buying health insurance you are affecting interstate commerce by driving the price up for everyone else. This may very well be true; however, the Government is putting the cart before the horse. The act itself that leads to that effect on interstate commerce has to be commercial in nature. There is nothing commercial about not buying something. In fact, I can’t think of anything less commercial! Scalia writes in his dissent (which, remember, carries five votes on the issue of the Commerce Clause), “to say the failure to grow wheat (which is not an economic activity, or any activity at all) nonetheless affects commerce and therefore can be federally regulated, is to . . . extend federal power to virtually all human activity.” (Business, et al. v. Sebelius, 567 U.S. ___ (2012)). If inactivity is commercial activity, then there would theoretically be no end to what Congress could pass and the Commerce Clause would cease to have meaning.
The Taxing and Spending Power
The Taxing and Spending Clause states that “The Congress shall have the Power to lay and collect Taxes . . .” (U.S. Const. art. 1 §8 cl. 1). It is here that the ACA Mandate survives. The ACA Mandate calls for a fine to be levied on anyone who does not have health insurance. President Obama has been adamant in his campaigning in stating over and over again that this is not a tax. The reason he has done this is obvious, very few candidates win elections who openly assert they will raise or implement new taxes. What is interesting is the liberals of the court (plus Roberts) disagree with him where as the conservatives concur. (How often do you get to say that Justice Scalia agrees with President Obama??). However, ironically, it is because the Court found that it was indeed a tax that President Obama’s healthcare mandate survived. The ACA describes the payment as a “penalty,” not a “tax”, probably for similar reasons as President Obama, politicians from both sides of the aisle tend to be reluctant to vote for taxes. Chief Justice Roberts argues that the burden of the tax will be low, people have the option of not buying insurance and just paying the tax, and lastly, the payment is collected solely by the IRS. It is estimated that four million people will choose, by their own will, to pay the tax rather than buy insurance. The fact that Congress knew about this and that Congress apparently regards such failure to comply with the mandate as tolerable suggests that Congress did not intend to create four million outlaws. Therefore, it’s a tax, not a penalty.
Justices Scalia, Thomas, Alito, and Kennedy disagree. By Congress’s own words, they have imposed a penalty on those who fail to comply with the mandate. Scalia writes, “we have never—never—treated as a tax . . . [something that] explicitly denominates [itself] as a ‘penalty.’ Eighteen times in [the ACA] itself and elsewhere throughout the Act, Congress called the exaction in [the ACA] a ‘penalty’.” (Business et al. v. Sebelius, 567 U.S.___ (2012)).
I find myself agreeing with the dissenters here; the act, by its own words, is a mandate that carries with it a penalty that must be paid for non-compliance. Congress called it a penalty, the President called it a penalty, and it functions as a penalty. In my mind, it is just that, a penalty.
While I agree with the five justices who held that the ACA was a violation of the Commerce Clause, I cannot agree with the five who upheld it under the Taxing and Spending Power. There is a mountain of evidence pointing to the payment as being a penalty, including the bill’s own language. This issue was not even argued extensively at Oral arguments, merely 50 words were stated on the subject (scrupulously counted by Scalia which he states in his dissent). But, as my first year Constitutional Law Professor told my class, “You don’t have to like these outcomes, just understand them.”
Regardless of whether you are a Republican or a Democrat, liberal or conservative, my hope is that you read the actual opinions issued by the Court (in this case and in others) and when you do, look at them through the focused lens of the law and not the overly broad lens of public policy.
Michael Salvucci will be entering his third year of law school at New England Law | Boston. He served as Editor in Chief of The Beacon from 2008-2009 and is currently serving as the Managing Business Editor of the New England Journal on Criminal and Civil Confinement. He can be reached at Michael.a.Salvucci@nesl.edu