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Assessing the Reasoning of the Eleventh Circuit Opinion Striking Down Obamacare

Last week, a divided three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit held unconstitutional the linchpin of Obamacare, the so-called “individual mandate” provision that requires each person to obtain health insurance coverage or pay a sum of money to the U.S. Treasury.

The ruling conflicts with a decision last month from the Sixth Circuit (about which I wrote a prior column for Justia’s Verdict), and all but guarantees that the Supreme Court will take up the issue unless the statute is rewritten or repealed by Congress.

Indeed, many commentators are beginning to focus on precisely when the Supreme Court may grant review on the matter, and which Justices may be inclined to vote which way—questions that are undoubtedly important, especially as we enter a presidential election campaign.

But in the space below, I focus not on the horse-race aspect of the dispute (that is, questions of who will win and by what margin), but rather on the constitutional merits—the substantive arguments the Eleventh Circuit embraced and rejected.

A Summary of the Eleventh Circuit’s Most Important Commerce Clause Arguments

The Eleventh Circuit ruled that Congress, in imposing the mandate, violated federalism principles by overstepping its authority under the Commerce Clause (which permits Congress to “regulate commerce among the several states”) and the taxation authorization provisions of the Constitution.  I’ll save for another day an analysis of the taxation power issue (which itself warrants much discussion), and instead focus here on the Commerce Clause authority, in part because that seems to be the constitutional basis the federal government is urging the most strenuously.

In concluding that there is no Commerce Clause power to support Obamacare, the Eleventh Circuit relied on: (1) the unprecedented nature of the mandate in federal law; (2) the lack of a requirement in the mandate provision that each regulated individual be doing anything that affects the economy; (3) the related problem that if Congress could mandate purchase of healthcare, there would be no stopping point to federal power; and (4) the fact that insurance and healthcare are matters of traditional state concern.  I analyze each of these reasons in turn.

The Eleventh Circuit’s First Argument Against Obamacare: The Statute’s Novelty

The Eleventh Circuit observed that “[e]conomic mandates such as the one contained in the [healthcare] Act are so unprecedented . . . that the government has been unable, either in its briefs or at oral argument, to point this Court to Supreme Court precedent that addresses their constitutionality.”

For starters, even if this were true, I’m not sure what it would signify.  Novelty, of course, is not synonymous with unconstitutionality.  To be sure, if a congressional practice is deeply rooted in history, especially history dating back to the founding, then such a history may tend to cut in favor of the law’s constitutionality.  Laws without such statutory precedent may thus lack one argument on their side.  But all congressional laws—even novel ones—come to the federal courts bearing a presumption of constitutionality.  And the challengers must do more than characterize a law as newfangled to defeat that presumption.

More importantly, the novelty objection, such as it is, takes on a different cast when we expand our focus to include all congressional regulation and not just regulation under the Commerce Clause.  Congress is authorized to pass, and has in fact passed, laws mandating military, militia, and jury service, as well as participation in the Census—even though the Tenth Amendment and federalism principles, the same principles that undergird Congress’s limits under the Commerce Clause, insist on enumerated authority for these regulations.

Nor would it do to suggest that these other, permissible, Congressional mandates do not involve compelled purchases (assuming that matters).  Early federal militia Acts — laws no one seems eager to question — required would-be militia members, who were doing no more than simply existing, to show up for service outfitted with a minimum prescribed set of equipment, equipment that the individual was responsible for acquiring — that is, affirmatively obtaining, most likely through purchase — as part of the mandated service.  For example, the Militia Act of 1792 passed by Congress required able-bodied men to become militia members, who were then required to arm themselves with a musket, bayonet and belt, two spare flints, a cartridge box with 24 bullets, and a knapsack. Men owning rifles were required to provide a powder horn, 1/4 pound of gun powder, 20 rifle balls, a shooting pouch, and a knapsack.  The Eleventh Circuit did not mention, let alone deal with, laws like this.

More generally, as I pointed out in my prior column on the Sixth Circuit opinion, the word “regulate” (which occurs in the Commerce Clause) does not foreclose compulsion of activity, including compulsion of commercial activity.  “Regulate” in modern dictionaries means, among other things, to “direct.” When we turn to the Constitution itself as a possible dictionary, we see that it uses the word “regulate” in other settings (e.g., Congress’s power to regulate the value of currency) that include a power to mandate activity, even economic transactions.

The Eleventh Circuit’s Second Argument Against Obamacare:  The Absence of a Jurisdictional Hook

The Eleventh Circuit also faulted the mandate provision for lacking any “interstate tie or case-by-case inquiry. . . .  [T]he individual mandate is applied across-the-board . . . [and] contains no language which might limit its reach to a discrete set of activities that . . . have an . . . effect on interstate commerce.”  Should this lack of a “case-by-case” inquiry—sometimes called a “jurisdictional element” or “jurisdictional hook”—matter?

Imagine that Congress had written the healthcare law as follows:  “People who have not purchased healthcare may not enter into any workplace or place of business open to the public, or may not travel on roadways that connect to interstate transportation systems.  If they violate this prohibition, they must pay a fee to the federal Treasury.”

Would this be any less of a mandate in reality?  Do people have a genuine choice not to interact with other people, or use roads and channels of transportation and commerce?  And yet this kind of a law would certainly be upheld under current doctrine and even under the challengers’ theories.

Indeed, the kind of case-by-case jurisdictional element I describe here is much less gimmicky than many others that have been approved by the courts, insofar as the jurisdictional element of interaction with other people captures quite nicely Congress’s authentic policy reasons for wanting to mandate healthcare coverage—to reduce the spillover effects that arise when people without insurance have inadequate incentive to take care of themselves and thus place the rest of us in the position of being vulnerable to health and/or economic costs when we interact with them.

In a similar vein, would challengers to the mandate provision be satisfied if Congress rewrote the provision in antidiscrimination terms? What if the provision at issue read, “No citizen shall discriminate, in the goods and services he purchases, against healthcare policies offered by insurers.”  In other words, if you buy anything at all, then you’ve also got to buy healthcare.  You still have the option not to buy anything, so we’re not telling you what you have to do, only what you can’t do—buy things other than healthcare insurance, unless you’ve already obtained health coverage.

This antidiscrimination framing would make the Act’s language like that of many other statutes that have been upheld under the Commerce Clause (e.g., laws that prohibit discriminating on the basis of race if you choose to enter into any contracts), but does this framing really make the law more acceptable?

Perhaps an argument could be made that requiring Congress to go through these drafting gymnastics in order to avoid a direct “mandate” of commercial activity would serve federalism values underlying the Tenth Amendment and the doctrine of limited, enumerated federal powers.   But it’s hard to see why.  Sometimes encouraging Congress to make certain findings or write its statutory text in certain ways does carry with it the benefit of making Congress contemplate and weigh federalism values and/or put the affected states and American voters on clear notice that Congress is legislating in a way that might alter traditional mixes of federal and state regulatory exercise.

But no one has ever denied that Obamacare reflected a substantial new congressional regulation in the healthcare sector, and no one could deny that the mandate aspect of the law and its effect on individuals and states was fully appreciated, considered and vetted by Congress.  Nor could anyone argue that the mandate provision in particular was not well understood and advertised to the states and the American people; the provision did not, to use Chief Justice John Marshall’s words in the famous McCulloch v. Maryland decision, “steal upon an unsuspecting legislature, and pass unobserved” by either opponents in Congress or among the American electorate.

Given that everybody knew what Congress was requiring and why, the issue should be whether Congress can require it, not the particular words Congress uses to style the requirement.

The Eleventh Circuit’s Third Argument Against Obamacare:  The Alleged Lack of a Stopping Point

One major functional argument against the healthcare mandate advanced by the Eleventh Circuit had to do with the need to draw a line to prevent Congress from becoming omnipotent.  Without such a line, the argument ran, the concept of limited enumerated powers and the text of the Tenth Amendment would go by the boards.

I well understand the felt need for some tool for the courts to keep Congress within some finite bounds.  I think judicially enforced federalism limits on Congress are important.

But while I think courts should not abdicate a robust role in policing the boundaries of federalism, I think the tools judges should use must be of the right shape and size for the job.  And the line drawn by the Eleventh Circuit is inapt because it is neither required, nor particularly useful, in separating the permissible from the impermissible exercises of congressional authority.

The you-can’t-mandate-economic-activity line can’t be absolutely necessary (as its proponents seem to claim) to prevent Congress from having boundless power, because earlier cases, United States v. Lopez and Morrison v. United States, conclusively demonstrate that the Court can say “no” to Congress even where activity is involved.

In other words, there is no question but that the activity requirement was satisfied in Morrison, and yet, in that case, the Court still struck down the Violence Against Women Act on the (more plausible) ground that the regulated activity was not sufficiently connected to commerce.  The result and analysis in Morrison conclusively demonstrate that there are tools other than the activity/inactivity line that allow the courts to police Congress.

Of course, additional tools are welcome where they are helpful to the task involved.  But just as the activity/inactivity line is not required, neither is it remotely sufficient.

Consider, for example, a congressional law that requires persons to show up for military service.  So far, so good—Congress’s power to raise and support military troops has been understood to justify the draft.  As discussed above, that breach of the activity/inactivity line is difficult enough for healthcare challengers to explain away.  But imagine further that Congress mandates that the boys and girls and men and women who might be drafted must procure health insurance because the government wants to make sure that its future draftees are fit and ready for action right away.  If required health insurance is permissible under this reasoning, then the challenge to Obamacare dissolves, because, of course, Congress is entitled to use not just the Commerce Clause, but rather all powers within its enumerated panoply.  And if required healthcare is not justifiable under the power to raise armies, that result certainly does not stem from any activity/inactivity distinction; the draft itself obliterates that line.  Instead, it is because the relationship between raising armies and required healthcare is too strained.

More generally, if Congress is to be prohibited from doing anything and everything it might want, the limit cannot be found in any activity/inactivity line, but rather must come from some notion that there be a proximate nexus between the power Congress is given in the Constitution and the means Congress has chosen to implement that power.  Notions of proximate relationship—a limit on attenuation, if you will—make some sense and probably well explain the results in cases like Lopez and Morrison.  But if requirements of proximity and limits on attenuation are needed and sensible, they demonstrate that the proffered activity/inactivity line isn’t doing, and really can’t do, the work.

The Eleventh Circuit’s Fourth Argument Against Obamacare:  The Claim That Insurance and Healthcare Are Matters of Traditional State Concern

The Eleventh Circuit said that insurance generally and healthcare are matters of traditional state concern, and for that reason Congress must tread particularly carefully in these realms.  But given the comprehensive federal regulation of drugs and narcotics and medical devices, I’m not sure how plausible the Eleventh Circuit’s characterization is here.

Indeed, the Supreme Court had little trouble upholding the federal Controlled Substances Act in the context of homegrown medicinal marijuana a few years back, and didn’t seem to think that Congress was operating in a realm that was largely reserved for states when it reached that holding.

Moreover, and more generally, categories like “traditional state concern” are slippery, for what makes sense for the state or federal governments to regulate changes over time, as the economy, culture and demography of the nation evolve.

Illustrating this point is a famous string of cases involving state immunity from federal regulation in areas of “traditional [state] government functions.” After thrashing around for about a decade, the Supreme Court abandoned the category altogether, in large part because some things that states used to do (e.g., garbage collection) have been privatized, and other things that used to be dominated in the Nineteenth Century by the private sphere (e.g., education) have become a bigger part of what state governments do.  As Justice Blackmun observed, the distinction between “traditional [state] government functions” and other things is “unworkable in practice.”

Why the Eleventh Circuit Rejected the So-called “Necessary and Proper” Power

The Eleventh Circuit also rejected the federal government’s arguments that Obamacare’s insurance mandate helps implement—is “necessary and proper to”—Congress’s direct regulation of the healthcare insurance companies themselves.

The government’s argument went as follows:  Without a mandate, insurance companies cannot be expected to respect the Act’s ban on preexisting-condition discrimination, since customers would have a tremendous incentive to wait until they are sick to obtain coverage.

In response to this, the Eleventh Circuit said flatly:  “The individual mandate does not remove an obstacle to Congress’s regulation of insurance companies. . . . The uninsured and the individual mandate . . . do not prevent insurance companies’ regulatory compliance with the Act’s insurance reforms.”

But this response, while perhaps technically accurate, ignores reality. Maybe insurance companies wouldn’t literally be prevented from complying with the ban on preexisting-condition discrimination if the individual mandate were to be removed, but it is very hard to see how they could do so and still offer their products to all the customers who need them at an affordable price.

In other cases where the Court has upheld Congress’s implementation power because a particular regulation is made more sensible by something else Congress has done, the Court has never insisted that the implementing law be absolutely strictly necessary to compliance with the other law.  For that reason, this part of the Eleventh Circuit opinion might have been the most underdeveloped (and thus unconvincing) part of its analysis.

Undoubtedly, there is much more to be said about these issues, and about the taxation power issues, that are raised by Obamacare.  Happily, though, in the courts and in commentary, there is still a lot of time for debate and analysis before the questions are finally resolved.

Vikram David AmarVikram David Amar, a Justia columnist, is the Associate Dean for Academic Affairs and Professor of Law at the University of California, Davis School of Law. He is a 1988 graduate of the Yale Law School, and a former clerk to Justice Harry Blackmun. He is a co-author, along with William Cohen and Jonathan Varat, of a major constitutional law casebook, and a co-author of several volumes of the Wright & Miller treatise on federal practice and procedure. Before teaching, Professor Amar spent a few years at the firm of Gibson, Dunn & Crutcher.
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  • Ted Harvatin

    It seems to me that the government’s practical obstacle is going to be that their argument proves too much.  Everyone must buy a red, not blue, car. Because that will effect the market for red and blue pigment, and thus commerce.  Or nobody can eat french fries because the onion growers need help. I don’t know it’s going to be up to Anthony Kennedy. 

  • Crispian

    I found this analysis unresponsive to the arguments made by the 11th Circuit.

    You express confusion that the court raises the novelty of the regulation and the lack of legal precedent (your quote concerns the lack of legal precedent). Lack of legal precedent on a matter is important when a lower court is trying to determine constitutionality. It signifies a lack of legal guidance on the subject, a lack of support for constitutionality. And yes, a law is presumed constitutional, but in determining whether it truly is constitutional, a court needs to look at what the constitution says on the matter. If the constitution has never been read to support the proposition offered, it is reasonable to think maybe it doesn’t support that proposition. Obviously that isn’t the end of the matter and the court goes on (for many more pages) to thoroughly explain why the constitution isn’t read to support that proposition. The court actually cites law (Printz) to further explain the relevance of novelty: “the utter lack of statutes imposing obligations on the States’ executive (notwithstanding the attractiveness of that course to Congress), suggests an assumed absence of such power.” The court was surveying the law in an effort to find guidance. The kind of government mandate you raise was addressed on page 119 of the opinion.

    As for the jurisdictional hook, you question its value but don’t really reject its legal soundness (at least you call it “less gimmicky”). You talk about functional equivalents and semantics, but the legal concern is still present. It’s an interesting slight of hand that raises plenty of provocative questions but doesn’t show the court to be in error.

    Your discussion of the court’s concern for a lack of limiting principle is even murkier. This quote in particular caught my attention:

    “The you-can’t-mandate-economic-activity line can’t be absolutely
    necessary (as its proponents seem to claim) to prevent Congress from
    having boundless power, because earlier cases, United States v. Lopez and Morrison v. United States, conclusively demonstrate that the Court can say “no” to Congress even where activity is involved.”

    This sentence is simply incoherent. That the Court strikes down laws where economic activity is involved says nothing about the necessity (and even if not strictly necessary, about the utility)
    of the referenced limiting principle. And you appear to be conceding that the law is not regulating economic activity but rather trying to impose it so that it can regulate it. And again, we need to look at what in the Constitution authorizes such power. The 11th Circuit panel noted the lack of such support. You appear to advocate for more ad hoc decisions where the Court sort of arbitrarily imposes stopping points, because it is able to do so.

    As for the slipperiness of the argument that insurance and healthcare are matters of traditional state concern, one needs to keep in mind what is being addressed by the court (people not engaged in commerce). As for well-being, that has been traditionally a matter of state concern, even if Congress uses its power to regulate hospitals and medical devices. I concede that traditional state concerns have been eroded by actions of the federal government. That doesn’t prove anything in this instance.

    You reject the court’s rejection of the “Necessary and Proper” Power out of concern for practical effects. The court wasn’t blind to that concern and explained how striking down the mandate wasn’t fatal to the working of the bill. That striking down a portion of a law might cause some difficulty on someone (in this instance insurance companies) doesn’t mean it should be held constitutional.

    As for practical effects, it is mystifying when you write, “but it is very hard to see how [insurance companies can abide the law] and still offer their
    products to all the customers who need them at an affordable price.” It is hard to understand WITH the mandate how people can obtain affordable insurance. Even assuming compliance with the mandate, health insurance prices are expected continue their rise. If insurance were so affordable, the government wouldn’t have to force us to buy it.

 

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