JURIST Guest Columnist Ilya Somin of George Mason School of Law says that the recent appellate court decision finding the individual mandate constitutional undermines federalism, misconstrues the boundaries of congressional authority, and lays the groundwork for limitless federal mandates...
his week, the US Court of Appeals for the Sixth Circuit ruled
that the individual mandate of federal health care reform is constitutional. This is undeniably a setback for mandate opponents. The mandate requires nearly all Americans to purchase government-approved health insurance by 2014. Opponents of the law, including twenty-eight state governments and numerous private groups, have filed a variety of cases challenging its constitutionality. The Sixth Circuit was the first of several federal appellate courts to reach a decision in one of these cases, a suit brought by the Thomas More Law Center. Three other appellate courts are expected to issue their rulings within the next few months.
Before this decision, judges in these cases had split along ideological and partisan lines. Three liberal, Democrat-appointed trial judges have upheld the mandate, while two conservative, Republican-appointed judges have invalidated it. Even in the Sixth Circuit, two of the three judges fit the same pattern: Judge Boyce Martin, a Democrat-appointee who voted to uphold the law and Judge Daniel Graham, a Republican-appointee who dissented. Judge Jeffrey Sutton, however, a well-known conservative jurist, has now become the first exception to the trend. Like Martin, he voted to uphold the mandate as an exercise of congressional powers under the Commerce Clause of the Constitution, which gives Congress the power to regulate interstate commerce.
At the same time, the opinions by Martin and Sutton highlight a central weakness of the pro-mandate position in even more blatant form than previous opinions upholding the law. Their reasoning has very radical implications, giving Congress unlimited power to impose mandates of any kind, free of any structural limits on its authority. Their argument is also deeply at odds with the text of the Constitution. Unlike previous decisions upholding the mandate, which ruled that failing to purchase health insurance is "economic activity," Martin and Sutton conclude that Congress has the power to regulate inactivity as well, so long as the inactivity has some kind of "substantial" economic effect. For this reason, they reject the plaintiffs' argument that the individual mandate is unconstitutional because it regulates inactivitythe state of not having health insurance.
Opening the Door to Unlimited Federal Power
The Martin-Sutton approach opens the floodgates to an unlimited congressional power to mandate personal behavior. Any failure to purchase a product has some substantial economic effect, at least when aggregated with similar failures by other people. This is certainly true of failures to purchase broccoli, failures to purchase cars, failure to buy a movie ticket, and so on. Each of these choices affects the economy and leaves producers worse off than they would be if more people bought their products. Even failure to engage in noncommercial activity nearly always has such effects. A mandate requiring people to eat healthy food and exercise every day can be justified on the grounds that it would increase economic productivity and also increase the demand for healthy food products and gym memberships. The district court rulings in favor of the mandate all claim that health care is special in some way, in order to avoid this slippery slope. By contrast, Martin and Sutton take us all the way to the bottom of the hill in one fell swoop.
Obviously, Congress will not enact every conceivable harmful mandate that the Martin-Sutton reasoning would authorize. The risk of abuse is far from purely theoretical, however, since many interest groups can and will lobby for laws that compel people to purchase their products. Virtually any industry could benefit from a law forcing people to buy from them. Moreover, industry lobbyists out to make a profit could promote mandates by allying with public health activists, just as "bootleggers and baptists" famously worked together to promote Prohibition [PDF]. In that way, Congress could enact mandates requiring people to purchase healthy food or other products without having to admit that its goal was to benefit an influential industry lobby.
Judge Sutton and others have suggested that abusive mandates might be prevented by constitutional protections for individual rights. However, current precedent does not provide for an individual rights protection against laws that force people to buy products they do not want.
The Constitutional Text
The sweeping congressional power authorized by the Martin-Sutton rationale makes a hash of the text of the Constitution, which gives Congress the power to regulate "Commerce ... among the several states," not a blanket power to mandate anything that has a "substantial" economic effect.
At the time of the Founding, the framers and ratifiers of the Constitution consistently interpreted the Commerce Clause as only giving Congress the power to regulate transportation and trade in goods and services that crossed state lines. Even Alexander Hamilton took this view, the strongest advocate of broad federal authority among the Founding Fathers. This was also roughly the approach adopted by the Supreme Court during the first 150 years of American history.
The Martin-Sutton approach also makes most of the other congressional powers listed in Article I redundant. For example, there would be no need for a separate power to tax. After all, failure to give the government some of your money voluntarily surely has substantial economic effects. Therefore, virtually any tax could be imposed through the Commerce Clause, making the Tax Clause superfluous. Similarly, failure to serve in the armed forces surely has substantial economic effects. The Commerce Clause therefore authorizes Congress to impose a draft and purchase military equipment, thereby making the power to "raise and support" armies superfluous.
The Sixth Circuit ruling would still be defensible if it were compelled by Supreme Court precedent. However, both Martin and Sutton recognized that the Supreme Court has never previously ruled on a case involving a mandate of this type, and has also never previously addressed the issue of whether the Commerce Clause authorizes regulation of inactivity.
Since the 1930s, a series of flawed Supreme Court decisions have expanded congressional Commerce Clause authority well beyond what the text of the Constitution permits. These rulings allow the federal government to regulate almost any "economic activity." These cannot be used to uphold the individual mandate. Far from engaging in economic activity, people who decide not to purchase health insurance are actually refraining from doing so.
The most expansive Supreme Court Commerce Clause decision is its 2005 ruling in Gonzales v. Raich, which held that Congress had the power to ban possession of medical marijuana that had never crossed state lines or been sold in any market. Raich was a badly flawed ruling that extended federal power to unprecedented lengths. Despite this, it still stopped short of justifying the individual mandate. In Raich, the Court ruled that marijuana possession is "economic activity," defined as anything that involves "production, distribution, and consumption of commodities." People who do not buy health insurance are not thereby producing, consuming, or distributing a commodity of any kind. To the contrary, they have chosen not to do any of these things.
The rule that the Commerce Clause can only be used to regulate some sort of preexisting activity is not only consistent with precedent; it also makes good intuitive sense. A power to regulate interstate commerce presupposes that there is some commerce out there to regulate. Judge Sutton points out that "the power to regulate includes the power to prescribe and proscribe." Congress may indeed use the power to regulate interstate commerce to "prescribe and proscribe" the behavior of people engaged in interstate commercial activity. For example, it has used it to forbid racial discrimination by hotel and restaurant owners. However, it cannot use it to force people to engage in commercial transactions merely because they happen to live in the United States. The civil rights laws upheld by the Court do not require anyone to open up a new restaurant and start serving food.
Similarly, congressional power to make rules for the "regulation of the land and naval forces" is a power to regulate people who are already members of the armed forces, not a power enabling Congress to force civilians to join the military. The latter can only be done, if at all, under the separate power to "raise and support Armies." That is why the Founders thought that both powers were necessary. If the power to regulate an army included the power to raise an army, there would have been no need for a separate clause authorizing Congress to do the latter. The Constitution does not give Congress the power to "raise and support" commerce. In that field, it only has the power to regulate.
Reprising the "Health Care is Special" Argument
Martin and Sutton both also make the argument that a health insurance mandate is a special case because everyone will use health care at some point in their lives. Therefore, they claim it is not actually inactivity. As they describe it, refusing to buy insurance is the activity of "self-insurance"planning to pay for health care some other way. Similar arguments were made in previous rulings upholding the mandate. These arguments are extremely weak. The fact that most people eventually use health care does not differentiate health insurance from almost any other market of any significance. If you define the relevant "market" broadly enough, you can characterize any decision not to purchase a good or service exactly the same way. Notice that the two judges do not argue that everyone will inevitably use health insurance. Instead, they define the market as "health care." The same bait and switch tactic works for virtually any other mandate.
Consider the famous example of the broccoli mandate raised by Judge Roger Vinson of the US District Court for the Northern District of Florida in striking down the entire health care law. Not everyone eats broccoli. However, we all inevitably participate in the market for "food." Indeed, such participation is even more unavoidable than using health care. Therefore, a mandate requiring everyone to purchase and eat broccoli would be permissible under the federal government's argument. The same goes for a mandate requiring everyone to purchase General Motors cars in order to help the auto industry. There are many people who do not buy cars, but just about everyone participates in the market for "transportation."
The mere fact that people might eat some other type of food does not convert failure to eat broccoli into an activity that can be regulated under the Commerce Clause. Similarly, the fact that a person might acquire health care in some other way does not prove that failure to purchase health insurance is an activity. It also does not vitiate the radical implications of the Sixth Circuit's rejection of the activity-inactivity distinction, since neither actually concludes that congressional power to enact the mandate depends on health care's supposedly special nature.
Another Defeat for the Federal Government's Tax Clause Claim
Although the Sixth Circuit panel upheld the mandate under the Commerce Clause, it rejected the government's claim that the mandate is a valid exercise of the congressional power to tax. Judge Sutton and Judge Graham both conclude that the mandate is actually a penalty, not a tax. Judge Martin avoided addressing this issue directly, but did hold that the mandate is a penalty in the section of his opinion discussing the plaintiffs' standing to sue. So far, the tax argument has been rejected by every judge who has ruled on it, including those who have upheld the law on other grounds.
This unanimous judicial sentiment is correct. As recently as 1996, the Supreme Court reiterated the crucial distinction between a penalty and a tax. It ruled that "[a] tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the Government," while a penalty is "an exaction imposed by statute as punishment for an unlawful act" oras in the case of the individual mandatean unlawful omission. The individual mandate is a clear example of such a penalty: Congress requires people to purchase health insurance and then punishes them with a fine if they fail to comply.
In September 2009, President Barack Obama himself noted that "for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase." He was right. If the mandate qualifies as a tax, then Congress could require Americans to do almost anything on pain of having to pay a fine if they refuse. It could use this power to force citizens to buy virtually any product, whether it be broccoli, cars, or anything else.
Prospects for the Future
The Sixth Circuit decision and especially Judge Sutton's vote is a clear setback for opponents of the mandate. When and if the case gets to the Supreme Court, the mandate will be upheld if even one of the five conservative justices endorses Sutton's reasoning. The four liberal justices have all consistently refused to impose any meaningful federalism-based limits on congressional power. These dynamics give mandate supporters an important advantage.
On the other hand, the serious weaknesses in Sutton's argument make it far from inevitable that the Court's conservatives will endorse it. In his recent opinion for the Court in Bond v. United States, Justice Anthony Kennedya key swing voter in many close casesemphasized that constitutional constraints on federal power protect "the liberty of the individual" as well as "state sovereignty." If the Court adopts Judge Sutton's approach to the individual mandate, this crucial aspect of federalism will be gutted. Congress would then have an unlimited power to impose mandates of any kind, thereby undermining any protection federalism might provide against violations of individual liberty by Congress. Whether the justices are willing to bite that bullet remains to be seen.
Ilya Somin is an Associate Professor at George Mason University School of Law, where he teaches constitutional law and has written extensively on constitutional limits on federal power. He has filed amicus briefs on behalf of the Washington Legal Foundation, a prominent public interest law firm, a group of constitutional law scholars, and several members of Congress, in three of the cases challenging the health care mandate. He has written on this issue previously for JURIST Forum.
Suggested citation: Ilya Somin, Regulating Inactivity: A Radical Constitutional Departure, JURIST - Forum, July 1, 2011, http://jurist.org/forum/2011/07/ilya-somin-sixth-circuit-ruling.php.