Thursday, July 12, 2012

The ACA, DOMA, and Traditional Subjects of State Concern

Neil Siegel

It seems like years ago that the Eleventh Circuit invalidated the ACA’s minimum coverage provision. In doing so, the court invoked the “Supreme Court’s Commerce Clause jurisprudence” for the proposition that, “in assessing the constitutionality of Congress’s exercise of its commerce authority, a relevant factor is whether a particular federal regulation trenches on an area of traditional state concern.” The court then determined that “insurance qualifies as an area of traditional state regulation”; that “[t]he health care industry . . . falls within the sphere of traditional state concern”; and that “the narrower category of ‘health care’ is an area of traditional state concern.” The Eleventh Circuit added “this federalism factor” to “numerous indicia of constitutional infirmity” and held that the minimum coverage provision was beyond the scope of the commerce power.

By contrast, when the ACA litigation reached the U.S. Supreme Court, no Justice responded by characterizing the ACA as operating in an area of traditional state concern; no Justice did what the Eleventh Circuit may have thought it had to do. On the contrary, Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan, stressed that “the Federal Government plays a lead role in the health-care sector, both as a direct payer and as a regulator.” Moreover, Chief Justice Roberts made no mention of traditional subjects of state regulation in his decisive opinion, even as he concluded that the ACA’s minimum coverage provision was beyond the scope of the Commerce Clause and the Necessary and Proper Clause. And the joint dissenters—Justices Scalia, Kennedy, Thomas, and Alito—invoked traditional areas of state concern only in making general points about the need for limits on the Spending Clause, in the part of their opinion that considered the ACA’s expansion of Medicaid. They declared the minimum coverage provision beyond the scope of the Commerce Clause, the Necessary and Proper Clause, and the Taxing Clause without invoking traditional subjects of state concern.

This is all for the good, even if it may suggest some inconsistency on the part of the conservatives. In a new essay, I defend two claims about different methods of defining the expanse and limits of the Commerce Clause. First, approaches that privilege traditional subjects of state regulation are unworkable and undesirable. The approaches are unworkable in light of the frequency with which the states and the federal government regulate the same subject matter in our modern world of largely overlapping state and federal legislative jurisdiction. Either a regulated area is never of exclusive state concern, or else the answer will turn on arbitrary (and increasingly narrow) definitions of the breadth of the area at issue. Moreover, if “traditional” is redefined to mean a subject of predominant, though not exclusive, state concern, then the inquiry will often prove indeterminate.

In addition to being unworkable, approaches that privilege traditional subjects of state regulation are undesirable. They are undesirable because the question of customary allocation is unrelated to a principal reason why Congress possesses the power to regulate interstate commerce: solving collective action problems involving multiple states. Justice Ginsburg, in what will come to be regarded as one of the most important opinions of her career, gave powerful voice to this understanding of the Commerce Clause in her ACA opinion.

These two problems—unworkability and undesirability—are evident in the way that the Eleventh Circuit invoked regulatory custom. (They are also evident in Judge Boudin’s opinion invalidating Section 3 of DOMA, as I discuss in the paper.) The areas of “health insurance” and “health care” are not of exclusive state concern, and it is impossible to lose—or to win—a competition requiring skillful lawyers or judges to describe them as more state than federal, or more federal than state. Nor does it matter who is right.

More promising are the approaches that view congressional authority as turning on either commercial conduct or collective action problems facing the states. My second claim is that these two approaches have advantages and disadvantages, and that the choice between them exemplifies the more general tension between applying rules and applying their background justifications. I have defended a collective-action approach to Article I, Section 8 here, here, and here. My primary purpose in this essay is to clarify the jurisprudential stakes in adopting one method or the other, and to identify the problems that advocates of each approach must address.

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