The Top 10 Things to Take Away From Last Week’s Supreme Court Obamacare Ruling

Last Thursday’s landmark Supreme Court Obamacare ruling and its aftermath offer some key lessons for all of us, neophytes and veterans alike, who follow the Supreme Court.  Some teachings are forceful reminders of things we already knew (or should have known); others break new ground.  Here are my candidates for a “Top 10” list:

10. The Media Does a Poor Job of Predicting Supreme Court Results

The majority of mainstream media coverage of the anticipated ruling during the last few months seemed to assume that major parts of the law, especially the so-called individual mandate, would be struck down, and that the key question was whether other parts of the statute would remain intact.  Many of these assumptions derived from the tenor of the oral argument.  But it turns out Chief Justice Roberts said nothing at oral argument that was inconsistent with his ultimate decision to uphold the mandate.  Nor was prediction the media’s only gaffe; in their rush to get the headline out early, both CNN and Fox News misread the opinions and embarrassingly reported that the Court had struck down the mandate.

9.  Intrade Users Do a Poor Job of Predicting Supreme Court Results

In the weeks leading up to the ruling, the online predictions marketplace, Intrade.com, forecast a 70%–80% likelihood of Supreme Court invalidation of the mandate.  That was up from the 50%–60% Intrade range that had prevailed immediately following the oral argument, and way up from the 30% range that we saw before oral argument.  All of these forecasts proved to be too high, suggesting that Intrade—though it might do a good job with elections—may not be such a good mechanism for Supreme Court prognostication.

8. The Supreme Court Suffers More Problematic Leaks Than We’ve Been Willing to Admit 

One reason Intrade investors (and it’s not clear that a gigantic amount of money ever traded hands) may have bet that the mandate would be struck down was the report of rumors beginning in May that Justice Kennedy, in particular, had voted against the government in the conference after oral argument.  Leaks from the Court before a decision is announced are probably not unprecedented, but they are rare, and should be troubling.  So too should be the post-decision leaks of the past five days indicating that Chief Justice Roberts changed his position during the last few months.  Putting the questions of whether he did so, and if so, why, to one side, the Court is not served if its Justices and staff are so frustrated by forthcoming or past results that they feel the need to share those results with outsiders and to circumvent confidential Court processes, especially so soon after the events in question took place.

7. Justice Kennedy Is Not the Only Justice About Whom We Should Care in Big Cases 

Over the last year—indeed, the last six years—Justice Anthony Kennedy has most consistently been in the majority in hotly contested 5-4 rulings.  Chief Justice Roberts, on the other hand, has been in dissent in many significant criminal procedure decisions.  But in the Obamacare case that defined this term—and perhaps this decade—for the Court, Roberts ruled and Kennedy lost.  It is not an exaggeration to say that the Affordable Care Act case was—in terms of the number of people affected, the amount of money involved, and the symbolic, political and institutional stakes on the line—bigger than all the other seventy-some cases the Court decided this year put together.

6. Chief Justice Roberts Is Not Likely to Vote With the Liberals Consistently

It would be unwise to think that Chief Justice Roberts will side with the so-called “liberal” Justices in controversial cases very often; he remains a solidly conservative jurist whose vote in the Obamacare matter may, in some respects, free him up for the rest of his tenure on the Court to follow his conservative instincts, because the Obamacare ruling will have a long-lasting effect of immunizing him from the charge of partisan cronyism.

5. The Commerce Clause Doctrine That Got Made, While Symbolically Significant, May Not Be Terribly Meaningful

The position of the five Justices (Chief Justice Roberts, along with Justices Scalia, Kennedy, Thomas, and Alito) who opined that Congress cannot, under the Commerce Clause, regulate “inactivity”—but instead must limit itself to regulating preexisting economic activity—would seem to make states’ rights folks happy.  But this new Commerce Clause doctrine—in addition to making little sense—will not likely change the world very much.  As these five Justices pointed out, Obamacare’s regulation of inactivity was unusual if not unique, so there aren’t going to be a lot of other already existing federal statutes that are subject to attack on the ground that they regulate inactivity.  And going forward, Congress can always formally tie its regulation to an economic activity if it is careful.

For example, with respect to Obamacare itself, Congress could have said, not that everyone is mandated to procure insurance or else pay money into the Treasury, but rather than anyone lacking insurance who enters onto a roadway or into any place of business shall pay money into the Treasury.  Voila!  Regulation of activity.  The very ease of creating such alternative regulatory forms is why so many of us found it unthinkable that the activity/inactivity line  should doom Obamacare;  when the question is how, rather than whether, Congress can accomplish something, the doctrinal lines should be clearly and sensibly drawn by the Court in advance, lest federalism rulings devolve into judicial “gotcha” games.

So the real issue in this case was not what effect a requirement that Congress stick to regulating activity only would have in the future; the real issue was whether such a requirement would kill Obamacare itself, a law that was passed when no reasonable mind could have anticipated the Court would impose such a “Simon Says” requirement.  But since Obamacare survived (because five Justices found Congress’ taxation power sufficient, irrespective of Commerce Clause power), the activity/inactivity line isn’t worth losing much sleep over.

4.  The Spending Clause Doctrine That Got Made Could Be Big

By contrast, the new Spending Clause doctrine that got made in the Obamacare case—preventing Congress from discontinuing all Medicaid monies to states that refused to agree to new, expanded coverage—might be a bigger deal.  There are at least two possible ways to read the Court’s new Spending Clause gambit.  First, the Court might be saying that if Congress is ever going to reserve for itself the right to fundamentally alter a federal-state cooperative fiscal deal, it has to be much more explicit at the front end to warn states that they should not expect and rely upon continued funding under terms identical or similar to the initial deal.  If so, that ruling (like the Commerce Clause ruling) is but a legislative drafting guide for Congress for the future (albeit one that might impair Congress’ power to revise existing programs that have been around a while.)

The second possibility is that no matter how explicit Congress’ warnings are, Congress might not be able to rewrite conditional spending deals with states when states in fact have relied on past allocations to their significant detriment.  If Congress is required to maintain deals that it no longer likes, even when it has been crystal clear up front about the possibility that it might radically change funding formulas, simply because states are addicted to the federal funding, that would indeed suggest meaningful new, substantive, limits on Congress.  Such a doctrinal path may be defensible if federalism and protecting states from federal “coercion” are to remain meaningful goals, but it is certainly a new path that was not signaled very clearly in past Court rulings.  There are, to be sure, slippery slopes down such a path, but that (as I have argued about Congress’ power to regulate inactivity) need not be an insurmountable problem.

3. Hypocrisy in the Doctrine of Federalism Remains a Big Problem 

When we put the Commerce Clause and Spending Clause parts of the outcome together, we see that even within a single case, there is a lot of intellectual inconsistency in the federalism doctrine.  A majority of the Court rejects Congress’ power to regulate inactivity because that power presents slippery slopes.  But the same majority (plus two) accepts new limits on Congress’ ability to withdraw funds to states, even though those new limits will require difficult line-drawing.

In the Commerce Clause setting, a majority rejects that idea that the healthcare and healthcare insurance markets have unusual or unique qualities, legitimizing a mandate in those fields but not elsewhere.  And in placing limits on Congress’ ability to withdraw Medicaid funding, that same majority highlights how unusual, perhaps unique, the healthcare and Medicaid programs are.

In the Commerce Clause arena, a formalistic line between activity and inactivity is seized upon.  In the Spending Clause arena, formalism concerning whether a state technically has a choice over acceptance of funding that comes with new strings is rejected, in favor of a more functional analysis of whether states are in fact coerced because of their past reliance.  And so forth.

I personally think that formalistic approaches to federalism that are not undergirded by workable functional theories are unhelpful, but my main point here is that this area of law continues to lack a clear analytic framework that can be used to explain and predict results.

2. Congress Dodged a Bullet, and Should Be More Careful in the Future

Let’s face it:  the Court came within an eyelash of striking down the heart of the biggest federal regulatory law in decades. One reason for this is that five Justices, perhaps because the momentum of the litigation overwhelmed its analytics, embraced faulty reasoning—that was not really grounded in text, history, structure or precedent—in construing the Commerce Clause, and that some Justices seem unwilling to give clear notice in advance to Congress of the technical rules they are willing to impose on the legislative branch in federalism rulings.  But another reason is that Congress does not—and does not even seem to try to—take federalism limits on its powers seriously when it passes legislation.  Why no extensive hearings during Obamacare on the constitutional basis for the mandate?  Why no testimony (which I think would have been available) from leading conservative scholars before enactment suggesting that the mandate would be permissible? Why no explanation from Congress in the record showing there were ways in which it could have formally regulated activity to reach the same result? And why, if the mandate’s fiscal effects on individuals were clear for all to see (as they were), did Congress play games by avoiding the use of the word “tax” for a revenue-raising measure housed in the Internal Revenue Code and implemented by the Internal Revenue Service?  The federalism cases of the past 20 years make one thing clear: a large number of Justices are quite willing to enforce the Tenth Amendment, and Congress should not be so cavalier if it wants to avoid getting burned.

1. Chief Justice Roberts Was the Big Winner in This Ruling 

In giving Congress the benefit of the doubt and upholding the key aspects of Obamacare under the Taxation power clauses, while at the same time cutting back on established understandings of Commerce Clause power and Spending Clause power, Chief Justice Roberts claimed the current Supreme Court as his own, and began to build for himself a legacy of greatness.  Roberts was able to: 1) make some conservative law, consistent with his instincts about federalism; 2) do so in the context of a result that makes it hard for President Obama and others who differ from Roberts’s basic constitutional outlook to complain; 3) do so in a manner that enhanced the credibility of the Court as an independent, non-partisan arbiter.

He was also able to get 7 votes (including two Democrat appointees) to join in to invalidate under the Spending Clause the Medicaid expansion conditions of the Affordable Care Act, the only part of the Act that was trimmed back.  If the Court is going to strike down even a part of the most thoroughly vetted Congressional legislation of the modern era at a time of hyperpartisanship, how refreshingly healthy and remarkable to have a cross-ideological coalition of Justices doing it.

Importantly, Roberts was the only Justice who agreed with every single important thing the Court decided in the case.

None of these accomplishments is diminished by the fact that Roberts might have changed his mind since his initial post-argument stance.  There is nothing wrong with changing one’s mind as a Justice; it says nothing bad about his motivations, but rather only that he came to see the case differently the more he thought about the issues and arguments.  If anything, there should be more mind-changing after oral argument and the initial vote; remember, the draft opinions don’t circulate until later, and it is upon reading the opinions (and additional scholarly commentary that might not have been analyzed before argument) that Justices should decide which ones they really agree with.  Sometimes you think you have a bottom-line position, only to learn that “it won’t write.”

When we widen the focus to make historical comparisons, we see that Chief Justice Roberts shares, or at least appreciates, the instincts of some of his most revered predecessors.  Take John Marshall, whose two most enduring opinions are McCulloch v. Maryland and Marbury v. Madison.  Roberts’s opinion was similar to McCulloch (in which the Court decided Congress had the power to charter the Bank of the U.S.) in making clear that Congress’ powers are finite but broad, and that Congress must be given the benefit of the doubt so long as its objectives are legitimate and sincere, and the means it uses are likely to advance those objectives. Roberts’s ruling was similar to Marbury (the case known for cementing the Court’s competence to declare federal statutes invalid when they run afoul of the Constitution), in that the Marbury ruling allowed Marshall to move constitutional law toward his own ideological sympathies while reaching an immediate result that avoided a direct political confrontation with a President (Thomas Jefferson) who opposed Marshall’s constitutional vision.

Not all chief justices have been successful at pivotal moments in avoiding altercations with oppositional presidents.  Chief Justice Roger Taney (who authored the infamous Dred Scott ruling) picked, rather than passed up, fights with Abraham Lincoln.  And Chief Justice Charles Evans Hughes could not stop his Court from demolishing huge chunks of President Franklin Roosevelt’s early agenda.  Like these two men, Roberts was already Chief Justice when a watershed election swept a reform-minded president into the White House.  But unlike these two earlier chiefs, Roberts—following the lead of John Marshall—found a way to stand his intellectual ground without provoking a battle royal with the Chief Executive.