Monday, March 26, 2012

Healthlawpalooza, Part 1: The Main Points

By Mike Dorf


Today the Supreme Court begins the first of three days of oral arguments on issues surrounding the constitutionality of the minimum coverage provision (aka the "individual mandate") of the Patient Protection and Affordable Care Act.  Over the last week I have been giving sound bites to the press covering the arguments, but the truth is I have only one substantially new point to add to what I--and many others--have been saying for the last couple of years.  My post tomorrow will elaborate that one new thing, but for today I thought it would be useful to recount what I believe are the main points:

1) Today's argument will focus on the tax Anti-Injunction Act.  As a matter of plain old statutory construction, the Anti-Injunction Act objection to the Court's even resolving the merits now is reasonably strong--at least given the terms in which the issue has heretofore been argued.  Yet delaying merits adjudication would potentially lead to the waste of billions of public and private dollars, and so there is a strong practical imperative for the Court to reach the merits.  The cleanest way for that to have happened would have been for Congress to enact a special-purpose exception to the Anti-Injunction Act, but apparently the politics on the Hill wouldn't permit that.  The Court still has a principled way to reach the merits without twisting the Anti-Injunction Act by placing emphasis on the fact that where, as here, the exaction at issue has not yet been triggered, a suit to block the law would not be a suit to block the "assessment" or "collection" of taxes.  Neil Siegel and I elaborated this argument earlier in the year in the Yale Law Journal Online.

2) Tomorrow the Court will turn to the merits of the challenges to the minimum coverage provision.  The Court could--and in my view should--duck the Commerce Clause question by simply upholding the minimum coverage provision as a tax.  It's true that there are old cases limiting the ability of Congress to regulate through taxes, but the more recent cases make clear that so long as an exaction has some revenue-generating purpose, then it is sustainable as a tax.  And this makes sense.  As a policy matter, it is preferable for the government to tax socially harmful activities (such as gambling or cigarettes) than socially valuable ones.  To be sure, there is the caveat raised in Professor Buchanan's recent Verdict column, that sometimes a tax on a productive activity like work can incentivize people to work more, but certainly there should be no constitutional rule forbidding Pigovian taxes or other taxes that have regulatory effects.  And in any event, even if one requires that the revenue effects be substantial, that standard is met here.  The penalty for failure to obtain minimum coverage is substantially smaller than the cost of obtaining health insurance, and so its regulatory impact is not enormous: Many people will choose to pay the penalty rather than buy insurance.  Thus a substantial purpose and effect of the penalty provision is to defray some of the cost that the uninsured impose on the health care system, which puts the penalty at the core of the taxing power.  I must admit that I find it a little bit mysterious that even lower court judges who thought the law valid on Commerce Clause grounds have tended not to be sympathetic to the tax power argument.

3) As far as the Commerce Clause argument goes, after all that has been said, I remain convinced that the plaintiffs' proffered distinction between regulations of activity and inactivity should be rejected, for the reasons I first elaborated in November 2009.  If anything, doctrinal developments since then--especially the Comstock decision--buttress that conclusion.  To my mind, the activity/inactivity distinction was always a libertarian argument masquerading as a federalism argument.  For reasons I also elaborated in fall 2009, I do not think the libertarian argument is sound on its own terms, but it is not even properly presented in the current litigation.  Accordingly, if this were a low-stakes case, I would confidently predict that the Supreme Court would uphold the law, probably by an 8-1 margin--with only Justice Thomas, who expressly takes a pre-New Deal view of federal power, dissenting.

4)  What are the stakes?  The constitutional stakes are quite low.  As I explained in a column last fall, the question whether Congress can regulate "inactivity" is unimportant over the long run.  The Supreme Court should not adopt a rule forbidding Congress from imposing affirmative obligations for three chief reasons: a) the distinction is made up out of more or less nothing other than language taken out of context from prior cases; b) the distinction has no logical connection to the Commerce Clause and would need to be accompanied by exceptions for the draft, for mandatory vaccinations, for federal jury duty, and potentially other vital mandates; and c) the distinction would serve no functional purpose.  But because of factor c), if the Court nonetheless were to adopt the activity/inactivity distinction, it would make little difference over the long run.  As in other contexts where the Court has imposed formal limits that serve little or no functional purpose, Congress could readily evade the limit by restructuring an affirmative obligation as an incentive, a tax, or a condition of some otherwise regulable activity.  Sure it's a bad idea for the Supreme Court to make up pointless doctrines, but the Court has done it before and, so long as those doctrines can be evaded, no one is much the worse for it.

5) But that's over the long run.  Over the short to medium run, the political stakes are very high.  The ACA is the most significant expansion of a federal health program in at least two generations, purchased at considerable political cost to the Democratic Party in Congress and President Obama.  Although Congress could re-write the ACA so as to reimpose the substance of the mandate after a Supreme Court decision striking it down, we know that in fact Congress wouldn't do so--at least not unless and until there were a very substantial shift in the balance of power in Congress.  With low doctrinal stakes and high political stakes, the case is, as I said in last fall's column, more similar to Bush v. Gore than any case in recent memory.

6) For that reason, I have difficulty making a confident prediction about the outcome.  Evaluated through the frame of ordinary doctrine, the litigation looks like a slam-dunk for the government.  But evaluated through the political frame of Bush v. Gore, the result seems about as predictable as a 7-10 first-round matchup of March Madness.

7 comments:

Paul Scott said...

I am curious about your expression of predictability if looked at through a political frame.

The votes are the same as they were in Bush v. Gore. Is there a reason to think Kennedy might be more principled when it comes to health care or that he likes Obama more than he liked Gore? If not, and Kennedy votes his political party as he did in Bush, why is it hard to predict an outcome?

I understand why you say it is hard to predict if you are saying "I cannot predict whether the Court will decide the case on its merits or on politics." Is that what you meant to suggest or are you suggesting that even if the case was decided on politics, as was Bush v. Gore, are you saying that the alignment of those politics might not mirror Bush v. Gore?

If the later, I am interested to know what you think is in play.

Michael C. Dorf said...

I think I meant something in between. I don't think any of the Justices will ask themselves "what's best for my party?" I don't think they consciously did that in Bush v. Gore either. So what I meant was it's hard to know whether and how the political stakes will subconsciously affect them.

Adam S. said...

On the merits and from a reputational standpoint, I can't see how the Court invalidates any aspect of the law --- it would destroy entirely whatever patina of impartiality remains. And that is because, from a doctrinal sense, it seems hard to see how Scalia could distinguish his N&P concurrence in Raich. And the Morrison majority's rejection of the Wickard-type arguments (including their refusal to defer to congressional fact-finding) would seem very distinguishable here --- it can't seriously be doubted that health insurance and the provision of health care more generally has an enormous effect upon interstate commerce.

One question on procedural facts (unclear from initial review of scotus briefing) --- did any of the district courts make factual findings as to the effects of that having or not having health care has upon interstate commerce? I would think those findings, if they exist, would be very relevant to Wickard/Morrison.

ben said...

agree that the law is best sustained under the taxation power. not sure that position will get more than a plurality. not sure anything will get more than a plurality...

so sozinski v. US (tax intended to ban machine guns) and US v. sanchez (tax to ban marijuana) are no longer good law because the purpose of those tax acts was exclusively to regulate and were intended not to raise any revenue whatsoever?

Michael C. Dorf said...

ben: Sonzinsky and Sanchez say that even a NEGLIGIBLE revenue purpose is enough. I was merely stating that even if the standard were higher--requiring a "substantial" revenue purpose--it's satisfied here. Presumably the plaintiffs would say that Sonzinsky and Sanchez are different because the govt could have regulated machine guns and marijuana pursuant to the Commcerce Clause, but this argument is directly contradicted in Sanchez, where the Court says: "Nor does a tax statute necessarily fall because it touches on activities which Congress might not otherwise regulate."

darrowret said...

The problem with sustaining the independent mandate as a tax is that, for political reasons, Congress made it rather clear that that's not what they were intending.Put another way, the constitutional vulnerability of the ACA was a self-inflicted wound by the Democrats in Congress and the Obama Administrations. As ye sow, so shall ye reap.

Dewaite Houwad said...

And that is because, from a doctrinal sense, it seems hard to see how Scalia could distinguish his N&P concurrence in Raich. And the Morrison majority's rejection of the Wickard-type arguments (including their refusal to defer to congressional fact-finding) would seem very distinguishable here --- it can't seriously be doubted that health insurance and the provision of health care more generally has an enormous effect upon interstate commerce. Windows 7 Key
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