The Sixth Circuit’s Big Rulings on Obamacare and Affirmative Action: The First in a Two-Part Series of Columns

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Posted in: Civil Rights

Last week was huge for the United States Court of Appeals for the Sixth Circuit; it handed down two blockbuster decisions, both of which might end up in the Supreme Court.

The first, and more publicized, of the cases came down on June 29 and upheld the federal government’s power to pass Obamacare.  The second decision, issued two days later, struck down a Michigan initiative that attempted to ban public universities and government employers in that state from undertaking any race-based affirmative action programs.

In the space below, I analyze the first of these two extremely noteworthy decisions; in my next column, I will offer thoughts on the second.

The Federal Patient Protection and Affordable Care Act (PPACA) Upheld

In Thomas More Law Center v. Obama, the Sixth Circuit, by a 2-1 vote, rejected an attack on the comprehensive federal healthcare reform law—the Patient Protection and Affordable Care Act (PPACA or Act)—passed in 2010.

The high-profile challenges to the PPACA that have been filed throughout the country sound—as a matter of law, if not political rhetoric—in federalism, rather than in a rights-based libertarianism.  That is, the plaintiffs in these cases do not challenge a state government’s power to pass such a law, but the federal government’s authority to do so.

And, as folks who’ve been following these litigations know, the focal point for the constitutional attacks has been the so-called individual-mandate provision of the federal statute—the provision that requires individual citizens to procure basic health insurance, lest they be obligated to pay a prescribed amount of money into the federal Treasury.  More specifically, the plaintiffs challenging the Act say the mandate is unique among federal statutes, and that Congress lacks any enumerated power to impose such a requirement.

The Sixth Circuit, however, found federal authority in the Commerce Clause, which allows Congress “[t]o regulate Commerce . . .  among the several States,” because whether someone is insured affects national markets for healthcare and healthcare insurance (which comprise a huge chunk of the national economy), and because persons who lack insurance can free-ride on the rest of us who have coverage (especially since, under the Act, insurance providers are prevented from denying anyone coverage on account of a current or preexisting condition).  Accordingly, the Sixth Circuit concluded that Congress was within its rights in mandating participation by everyone in this particular market.

But what of the idea that mandating activity is not the same as regulating it, and the related idea that if Congress can mandate the purchase of healthcare coverage, then it can mandate anything?  The Sixth Circuit rejected this proposed distinction between regulation and mandate, as well as the slippery slope the plaintiffs warned of, if the distinction weren’t embraced.

As concurring Judge Jeff Sutton pointed out, “the relevant text of the Constitution does not contain such a limitation.”  Moreover, he observed, healthcare may be an unusual or unique product because of the free-rider problem.  And on top of all that, distinguishing between economic activity (which everyone concedes can be regulated) and inactivity can be tricky in a world where many people choose to be covered by insurance some of the time, but to go “naked”  at other times.

One Reason the Ruling Is Likely to Be Significant:  Judge Sutton’s Vote to Uphold

Just how much does the Sixth Circuit ruling matter?  Quite a lot—for a number of separate, yet related, reasons:

First is the makeup of the Sixth Circuit panel.  One of the two judges who voted to uphold the law was a Democratic appointee, but Judge Sutton (whom I just mentioned and who provided a necessary second vote) is a Republican appointee.  Picking up a Republican judge was big for the Administration, because it shows that the constitutional issues presented here might transcend party ideology.

And Judge Sutton is not just any Republican judge:  He is a former clerk to conservative legal icon Justice Antonin Scalia and a prominent leader of the conservative wing of the lower federal judiciary.  Sutton himself made his bones (and his name) when he was a practicing lawyer in forging new protections for states’ rights and new limitations on federal authority that were a key part of the “new federalism” for which the Rehnquist Court is properly known.

That the Obama Justice Department could win over a “movement” conservative, especially on an issue of federalism, bodes well for presidential success if the case is ever heard by the likes of Justice Anthony Kennedy, whose vote would seem necessary to any successful effort to undo Obamacare in court.

A Second Reason the Ruling Is Likely to Be Significant:  Judge Sutton’s Broad Reasoning

The second reason this ruling deserves notice is the breadth of the reasoning employed by Judge Sutton. As Time Magazine writer Massimo Calabresi points out, Judge Sutton’s writing “meticulously destroys the central and essential argument of the opponents of Obama’s healthcare law.”

To be sure, at one point Judge Sutton does suggest that viable “as-applied”challenges to the healthcare law (as distinguished from the “facial” challenge that was actually brought) may still be litigated, on the individual behalf of particular persons who can show they have the financial resources to self-insure and who thus are not affected by the free-rider incentive.  But the reasoning of the rest of his opinion would make it hard for any such “as applied” challenges to succeed. (In legal parlance, “facial challenges” seek to invalidate a statute altogether, whereas  “as-applied” challenges take aim at the application of the law only as to the particular plaintiff or plaintiffs before the court.)

A Third Reason for the Ruling’s Significance:  The Dissent Was By a District Court Judge

A third reason this ruling may be important is the fact that the lone dissenter in the Sixth Circuit case was not a court of appeals judge, but rather a district court (trial) judge sitting as an appellate judge to help out an understaffed court of appeals.

Why does it matter that the dissenter wasn’t a full-time court of appeals judge, if his vote counted just as much as those of the other two members of the panel?  Because the primary job of district court judges is not deciding complex and pure questions of law (which are the kind of questions at the heart of the Obamacare cases).  Instead, district court judges facilitate settlements, hold trials, make factual findings, and provide interpretations of legal questions that serve as placeholders (thoughtful placeholders, one hopes) until appellate judges can weigh in on the law.  Of course, my point here is not that district court judges can’t be good legal analysts or scholars—many are.  Rather, it is that, as a group, they don’t have a chance to develop the same level of skill at rendering pure legal judgments as appellate judges do.  So it is important that of the appellate judges who have looked at Obamacare, the score is not 2-1, but rather 2-0, with  appointees of both political parties on the same side.

A Fourth Reason This Ruling May Well Be Important:  When It Was Issued

A fourth important aspect of the ruling is when it came down.

Many observers have plausibly suggested that the Sixth Circuit acted fast so as to facilitate the Supreme Court’s ability to quickly accept and resolve this case if it so desires.  Maybe this is so (although it is hard to think the Supreme Court would want to take this case in a year leading up to an election.)  In any event, perhaps more important than the timing of lower court decisions is their sequence.

Since the Sixth Circuit was the first appellate court to rule, the Sixth Circuit’s action (and especially the broad opinion of a recognized conservative jurist upholding the law) may make it less likely that another circuit (say, the Eleventh) will invalidate Obamacare.  Judge Sutton’s opinion makes a powerful case for Congress’s power under the Commerce Clause, and sets the judicial standard with which other judges will have to grapple before being able to come out differently.  (Notably, the dissent in the Sixth Circuit didn’t even try to take on Sutton’s presentation, and the dissent is much less effective for that reason.)

And if neither the Eleventh nor the Fourth Circuit (the two other federal appellate courts hearing Obamacare cases) strikes the law down, then it is quite possible the Supreme Court will not even take the matter up in the foreseeable future.  (Under this scenario, there would be no split in the Circuits, and no invalidation of a prominent Act of Congress, and the Court would be well aware that voters themselves can weigh in on Obamacare as a policy matter in the 2012 election — all factors which may counsel in favor of restraint by the Court.)

A Final, Interesting Aspect of the Sixth Circuit Obamacare Decision: The Arguments That the Majority Judges Declined to Make in Favor of the Statute

Finally, it is worth mentioning that as broad as the Sixth Circuit’s ruling and Judge Sutton’s opinion are, many plausible arguments in favor of Obamacare were not embraced therein.

First, as to the Commerce Clause, the appeals court could have observed that the plaintiffs’ argument that congressional power to “regulate” commerce cannot include a power to “mandate” commerce does not square with all the other places the Constitution uses the word “regulate.”

“Regulate” in modern dictionaries means, among other things, to “direct.” Moreover, when we turn to the Constitution itself as a possible dictionary, we see that it uses the word “regulate” at least sometimes in ways that include a power to mandate activity.  The militia in which Congress can compel membership, for example, is referred to as one that is “well regulated” in the Second Amendment.  Congress’s power in Article I to “regulate the value” of money would seem to permit Congress, under certain circumstances, to require individuals to exchange their currency for something else Congress reasonably believes would provide stability to the monetary system of the country.   Congress’s power to adopt rules for the “regulation” of the land and naval forces undeniably allows Congress to mandate activity on the part of otherwise disinclined and inactive men and women in the armed forces when such mandates are reasonably helpful to the national defense.  Congress’s power to make “regulation” of the Supreme Court’s appellate jurisdiction would seem to permit Congress to require the Supreme Court to affirmatively act.  And “needful Rules and Regulations respecting” federal properties that Congress is empowered to make would, the Court has said, include all those things that states can do under their police powers, and challengers to the healthcare law seem to concede that states, such as Massachusetts, can mandate purchase of healthcare, just as states can mandate vaccination and compulsory education under the state’s police powers.

Second, Judge Sutton explicitly rejected Congress’s power to tax as a basis for upholding the law, simply because Congress and the President did not seem to use the “T-word” in the political dialogue surrounding the enactment, and in key places in the statue itself.  But as my brother Akhil Amar has pointed out, this gambit seems flawed:  “[T]he Constitution itself does not always use the T-word when referring to taxes, broadly defined.  It also uses the words ‘excises,’ ‘duties,’ and ‘imposts’ in the opening sentence of Article I, section 8, and elsewhere refers generally to all generic ‘Bills for raising Revenue.’  If the critics’ Simon-says word game were accepted—if every tax must explicitly say ‘tax’—then the Constitution itself would be unconstitutional, because the Constitution itself does not always and invariably use the T-word.”

Moreover, those who reject the tax power as a basis for Obamacare (as Judge Sutton did) should answer a basic question Akhil has posed:  “If Congress can tax me, and can use my tax dollars to buy a health insurance policy for me, why can’t it tell me to get a policy myself (or pay extra taxes)?” There may be an answer to this basic logical point, but none of the judges who have declined to accept Congressional tax authority here has yet offered one.

Obamacare’s legal journey is far from over, but the first major stop—the Sixth Circuit—proved to be a friendly one.  In my next column, I will examine how another legally and socially vexing issue—race-based affirmative action—was received there during the same week.

  • jkpaz

    ‘Legal’ analysis … using the term Obamacare?