Wednesday, June 29, 2011

The Health Care Mandate’s Big Win in the Sixth Circuit

Andrew Koppelman

On Wednesday, the Obama Administration won its first Court of Appeals battle over the constitutionality of the health care mandate. A divided three-judge panel of the Sixth Circuit held that Congress has the power to require individuals to purchase health insurance or pay a penalty. The result is obviously correct, for reasons I’ve explained elsewhere (see “Bad News for Mail Robbers: The Obvious Constitutionality of Health Care Reform,” Yale Law Journal Online), and Judge Boyce Martin’s lead opinion is brief and elegantly reasoned. The other opinions, however, contained some strange claims about constitutional law.

Let’s begin with the scorecard. The Administration defended the mandate on two grounds: It is a permissible exercise of the Article I power to “regulate Commerce … among the several states,” and the penalty is a tax, which is also specifically authorized. Judge Martin accepted the first argument, and so deemed it unnecessary to address the second one. Judge Jeffrey Sutton rejected the tax argument, but accepted the commerce argument. Judge James L. Graham, a District Court judge on temporary assignment to the Sixth Circuit, rejected both arguments and thought the law unconstitutional. The panel’s holding thus is identical with Sutton’s, since he had a majority (Martin’s vote on the commerce question, Graham’s on the tax question) to support each of his conclusions.

The big news is Sutton’s vote to uphold the law. This is the first time in this protracted battle that voting on the constitutionality of health care did not follow party lines. And Judge Sutton is no ordinary Republican: He is a former law clerk for Antonin Scalia and a George W. Bush appointee, far enough to the right that 41 Senators voted against his confirmation. (He was the only exception to the partisan pattern of health care decisions. Martin is a Democrat; Graham is a Republican.)

Martin’s analysis is the simplest, relying on two well-established doctrines: “Congress may regulate economic activity, even if wholly intrastate, if it substantially affects interstate commerce,” and “Congress may also regulate even non-economic intrastate activity if doing so is essential to a larger scheme that regulates economic activity.” The decision to go uninsured has a massively substantial effect: “Congress found that the aggregate cost of providing uncompensated care to the uninsured in 2008 was $43 billion.” This private conduct has to be regulated in order to effectuate the larger legislative scheme, just as, for example, the ban on private possession of child pornography is necessary to regulate that market. Martin relies on clear and very recent Supreme Court authority.

Sutton joins the result, but he agonizes about it. He works through the arguments intelligently and conscientiously, and his courage is admirable. He won’t be treated so nicely at Federalist Society meetings from now on. But some of his claims should not go unchallenged.

His reasoning on the tax question is strained. He places enormous weight on the fact that Congress did not call the mandate a tax, even though he acknowledges that the Supreme Court said in 1948 that “[t]he question of the constitutionality of action taken by Congress does not depend on recitals of the power which it undertakes to exercise.” He dismisses as dictum the Court’s declaration in 1974 that it has “abandoned” the “distinction … between regulatory and revenue-raising taxes.” And he concedes that the distinction is entirely formalist and meaningless, since Congress could have imposed exactly the same result by using different language: “Congress might have raised taxes on everyone in an amount equivalent to the current penalty, then offered credits to those with minimum essential insurance. Or it might have imposed a lower tax rate on people with health insurance than those without it.” This is the kind of thing that gives formalism a bad name.

He also is oddly respectful of the bizarre and often-repeated claim that the commerce power applies only to individuals who are already engaged in commerce. “Of all the arguments auditioning to invalidate the individual mandate, this is the most compelling.” But he punctures it summarily, noting that the Supreme Court upheld regulation of medical marijuana even though Angel Raich, the defendant who grew her own medical marijuana, “never entered any markets, whether interstate or intrastate.”

For the most part, his reasoning is sound. He systematically demolishes the notion that Congress can only regulate activity, not inactivity. He observes that this distinction appears nowhere in the Constitution, and spends several pages showing how unworkable it is in practice. He notes its strange results: Does this mean that courts must invalidate the federal law enforcing interstate child support obligations? Inactivity, after all, is what deadbeat dads are all about.

He acknowledges “the lingering intuition … that Congress should not be able to compel citizens to buy products they do not want.” States, however, may require individuals to buy health insurance, and two have. “Sometimes an intuition is just an intuition.”

Judge Graham, too, was unable to digest the activity/inactivity distinction. He also admits that there is a national problem that only Congress can solve. Then his reasoning goes completely off the rails. “That problems are felt nationwide,” however, “does not mean that Congress can try to solve them in any fashion it pleases.” This flies in the face of the basic principle, first articulated by the Supreme Court in 1819 and reaffirmed just last year, that Congress can choose any convenient means for carrying out its enumerated powers, without micromanagement by the courts.

Graham thinks that those who go without health insurance are immune from regulation because they have done nothing economic. They “are strangers to the health insurance market,” and they have merely “made a decision to accept risk.” Evidently it doesn’t matter that their decision to go without insurance is an economic one with economic effects, or that the risk they are accepting is the risk of imposing large health care costs on other people. The fact that they are getting a free ride at everyone else’s expense is a “problem … of Congress’s own creation,” because federal law requires emergency rooms to provide care regardless of ability to pay. Evidently, if we were only willing to let people bleed to death on the street, all this unpleasantness could have been avoided.

This piece was cross-posted to Jonathan Cohn's New Republic blog.

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