It’s not about regulating markets, after all! It’s about regulating the individual!

by Beverly Mann

Ah! It’s not about regulating markets, after all! It’s about regulating the individual!

ATLANTA — In perhaps the weightiest of the dozens of challenges to the Obama health care law, a panel of appellate judges grappled Wednesday with the essential quandary of the case: if the federal government can require Americans to buy medical insurance, what constitutional limit would prevent it from mandating all manner of purchases and activities?
Kevin Sack, New York Times, Jun. 8

In my last post, Markets and the ACA: Why the Supreme Court Will Uphold the ACA, I wrote:

[Santa Clara law prof. and ACA-litigation blogger Brad Joondeph is] right (see my earlier post), but only if, as he says earlier, the market for health insurance is defined so narrowly that health insurance is viewed as a commodity, a product, independent of the product’s purpose and effect. And then, the constitutional issue would not, I think, be whether Congress has the authority under the Commerce Clause, aided by the Necessary and Proper Clause, to regulate the health insurance market, but instead whether this violates some other constitutional limitation. You know: the slippery-slope-to-government-compelled-consumption-of-broccoli argument.

Turns out I was onto something.

Dan posted the post on Thursday, a day after the oral argument in the 11th Circuit court of Appeals in what is broadly viewed as the key ACA lawsuit because the plaintiffs include 26 states and because the trial-court judge, Pensacola-based Roger Vinson, struck down the entire ACA because he ruled that the Act’s individual-mandate requirement is unconstitutional and said the entire statute is too dependent on the individual-mandate provision to “sever” that provision from the rest of the statute. But I’d written my post on Tuesday, in anticipation of the oral argument, and posted it on my blog that day.

But from reports I’ve read about the oral argument on Wednesday, it looks to me like that appellate panel will decide the case not on the basis of the limits of the Commerce Clause but instead on a more general civil liberties ground. They may cloak it as a Commerce Clause issue—and certainly that is what Paul Clement, the attorney representing the 26 states wants the court to do—but, really, given the questioning and comments from the swing judge on that appellate panel, and therefore the basis on which that panel will decide the case, this would be an improper conflation of Commerce Clause issues and what is known as “substantive due process” issues. And I think, ultimately, it is the substantive due process question on which the Supreme Court will decide the case. This is so even though conservative legal types detest the very concept of substantive due process.

Substantive due process is a doctrine of constitutional law that holds that there are limits, inherent within the Constitution, to the extent to which the government can interfere with basic personal choices, irrespective of how much procedural due process that individual is accorded. It’s a concept completely independent of procedural due process—the right to due process of law before the courts can strip you of life, liberty or property.

Procedural due process is all about the limits of what courts can do. Substantive due process, by contrast, is almost always about the limits of what a legislature can do. The doctrine holds that there are some personal choices that are inviolate under the Constitution. It is the much-ridiculed-by-right-wingers legal principal on which Roe v. Wade was based. Roe v. Wade, for its part, was based on a 1965 Supreme Court case called Giswold v. Connecticut, which created the substantive-due-process right of individuals to make deeply personal decisions for themselves and struck down as an unconstitutional violation of that privacy right a state statute that prohibited the use of contraceptives. And it is the principal on which in an eloquent 2003 opinion, Lawrence v. Texas, by Justice Kennedy, the Court struck down Texas’s anti-sodomy criminal statute.

Rehnquist, Scalia and Thomas dissented in Lawrence on the ground that, in their view, there is no such substantive-due-process right—no privacy right concerning intimate personal decisions—in the Constitution. Scalia and Thomas might change their minds, though, but only about the intimate decision not to buy health insurance, especially because that right is just too similar to the intimate right not to eat broccoli.

The 11th Circuit panel members are Joel Dubina, a conservative Reagan appointee to the district (trial-court level) court and a G.H.W. Bush appointee to the appellate court, whose daughter is a freshman Alabama congresswoman who campaigned on a promise to try to repeal the ACA; Frank (female, despite her name) Hull, a moderate Clinton appointee; and Stanley Marcus, a moderate-to-conservative G.H.W. Bush appointee to the district court and Clinton appointee to the appellate court.

According to one report I read, Marcus early in the hearing said he viewed the central issue in the case—the constitutionality of the individual-mandate provision—as less a Commerce Clause issue than a civil liberties issue: Does the mandate violate the civil liberties of individuals by requiring them to obtain healthcare insurance? That’s a different question, and a broader one, I think, then whether Congress has the authority under the Commerce Clause, aided by the Necessary and Proper Clause, to mandate the purchase of healthcare insurance by those who can afford to buy it. Congress may have that authority under the Commerce Clause, but the legislation still might be unconstitutional if it violates another provision of the Constitution, here presumably the substantive due process right to be compelled to buy something. Presumably, because no one, least of all Clement, used the term “substantive due process right”. But he sure the words “compel,” “liberty” and “individual.” Early and quite often:

“The Commerce Clause only gives Congress the power to regulate, not to compel.” …

“It boils down to the question of whether the federal government can compel people into commerce to better regulate the individual.” …

“In 220 years, Congress never saw fit to use this power, to compel a person to engage in commerce.” …

“The whole reason we do this is to protect individual liberty.” …

When Hull said she believed the decision not to buy insurance involved some “economic activity” that impacts the healthcare market (and that therefore, under the Supreme Court’s interpretation of Commerce Clause powers, Congress has the authority under the Commerce Clause, coupled with the Necessary and Proper Clause, to regulate), Clement reportedly responded that, despite this, Congress has no constitutional authority to force people to act to buy coverage.

Clement attempts to thread a needle.

In 2005, in Gonzales v. Raich, the Court held that under the Commerce Clause, aided by the Necessary and Proper Clause, Congress has the power to prohibit an individual from growing marihuana, not for sale, much less for sale in interstate commerce but instead for his personal use, because this effects the interstate market for marijuana. Only O’Connor and Thomas dissented. The challengers to the constitutionality of the ACA’s individual-mandate provision have focused on the “compel” part; sure, the Congress can prohibit activity something under the Commerce Clause, but it can’t compel activity under the Commerce Clause. But once you acknowledge that the failure to obtain health insurance impacts the interstate market for healthcare by directly impacting who pays the uninsureds’ emergency medical costs, you’ve pretty much conceded—logically, at least—that the Commerce Clause, assisted by the Necessary and Proper Clause, allows Congress to regulate this, irrespective of whether it does this by compelling the purchase of insurance or instead in some other way.

This is true whether the acknowledger is the lawyer for the challengers to the constitutionality of the law or instead the judges hearing the case.

All three of the judges on that panel acknowledged the obvious: that the failure to obtain health insurance impacts the interstate market for healthcare by directly impacting who pays the uninsureds’ emergency medical costs. And Clement didn’t deny it. So much for, “It boils down to the question of whether the federal government can compel people into commerce to better regulate the individual.” It boils down to that only if the federal government isn’t compelling people into commerce also to better regulate the healthcare-coverage market. Most laws, federal as well as state and local ones—including the federal one at issue in Raich—regulate the individual. Whether they better regulate the individual or not.

Clement understands this, of course, but also recognizes the need for a straw to grasp at other than the Commerce Clause one. Thus the civil liberties straw, which the judges themselves offered the statute’s challengers even before Clement (who argued after the federal government’s lawyer, acting solicitor general Neal Katyal, did) began his argument:

Marcus: “If they could compel this, what purchase could they not compel?” …

Dubina: “I can’t find any case like this. If we uphold this, are there any limits [on the power of the federal government]? …

Marcus: “I can’t find any case [in which the courts upheld the constitutionality of] telling a private person they are compelled to purchase a product in the open market…. Is there anything that suggests Congress can do this?”

Well, no, not precisely. But there are Supreme Court cases that upheld what, for civil liberties purposes, amounts to the same thing. They’re the cases that upheld the constitutionality of the Social Security Act and the Medicare Act by allowing the government to compel contributions to these separate funds, which are not part of the general tax revenue fund (OK, in theory, anyway), for the sole purpose of insuring a retirement income and health insurance for those over age 65. True, the specific “enumerated” Constitutional authority Congress used to enact those laws was the taxing power, not the commerce-regulation power. But that matters only if the commerce-regulation power isn’t broad enough to reach this. If it is—and under Supreme Court precedent, it is, if the failure to have health insurance significantly impacts the healthcare market, which it does—then this distinction is without a difference. You know. A meaningful (or as lawyers say, a material) difference.

In questioning Katyal, the judges were asking for a so-called “limiting principle,” a logical line beyond which federal regulatory authority cannot go. But if the issue is individual liberty, is it really logical to have that line depend on whether the compelled payment is for a product in the open market rather than for a similar product issued by the government? Isn’t the civil liberties issue really what the goal and effect are? That’s certainly the issue in most civil-liberties challenge to the constitutionality of a statute. Why isn’t it, here?

Blowing away the smokescreen erected by the focus on the individual-mandate provision’s use of private insurance—and isn’t it just a smokescreen, really?—why does this infringe on liberty more than the Social Security and Medicare taxes do?

The bottom line, in my opinion, is that the Commerce Clause gives Congress the power to regulate, including the power to compel, without infringing on civil liberties, if what Congress is compelling is what it could compel through its taxing power, without infringing on civil liberties. Congress couldn’t (to use the conservatives’ preferred example) compel Americans, via the tax code, to eat broccoli. Or to buy it. That pretty clearly would violate substantive due process rights, a.k.a. individual liberty rights, even if under the taxing power Congress otherwise would have that authority. But Congress could, for example, extend Medicare to all Americans and amend the Medicare tax law to pay for it, without violating the Constitution’s individual-liberty guarantees.

That’s the limiting principle. At least it should be.

Postscript regarding Paul Clement

In his May 8 article about Wednesday’s oral argument in the 11th Circuit in the ACA case in which Paul Clement is representing 26 states in challenging the constitutionality of the statute, New York Times reporter Kevin Sack wrote that those states are paying Clement $250,000 to handle the appeal in that court and eventually in the Supreme Court.

That’s a stunning amount, even though the amount each state will pay is relatively small. These are two appeals in a single case that involves, entirely, arguments of law. There is no trial transcript, nor trial-court orders on motions, nor volumes of business records—the things that usually raise appellate legal fees to astronomical heights. And the legal arguments are the standard ones being discussed ad nauseam in legal circles. Clement’s hourly fee on this will turn out to be something close to $1,000, I’d bet.

Maybe lines like, “It boils down to the question of whether the federal government can compel people into commerce to better regulate the individual,” as he told the panel on Wednesday, makes this guy worth his price. But if so, it’s only because the judges will assume that since he’s Paul Clement rather than, say, another lawyer, that line makes sense.