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Tuesday, December 14, 2010

Federalism & healthcare: The dangers & benefits of confusing individual rights with federalism

Judge Hudson's opinion holding unconstitutional Obamacare's "purchase insurance" mandate (aka the "minimum essential coverage" rule) rests critically on the notion that there is some fundamental distinction between the feds' forcing action and requiring inaction. Somehow, a federal measure becomes less necessary and proper for the regulation of interstate commerce if the measure requires one to participate in such commerce than if the measure bars such participation.

At one level, this is deeply silly. Suppose that the feds do not forbid Farmer Filburn from consuming home-grown wheat but instead require him to consume wheat that has traveled in interstate commerce. Is it not obvious that the latter measure is more directly related to the regulation of interstate commerce than the former? At least with the "buy interstate wheat" mandate, there is some commercial activity being required. How can this not be regarded as interstate commerce?

I suspect that the real unwritten basis for Judge Hudson's opinion (and Randy Barnett's legal theory on which it is based) is the notion that, when the feds impose paternalistic or otherwise especially intrusive burdens, then their impositions ought to be reviewed with especially suspicious scrutiny under the doctrine of enumerated powers. Put another way, a libertarian theory of rights ought to be built into the limits on the federal government.

Is this mixing of rights theories and federalism theories wise?


Here is an advantage of the amalgamation of rights and federalism: Federalism becomes a sort of "libertarianism lite," a way to pursue libertarian goals by indirection. The feds are barred from traducing the libertarian, anti-paternalistic ideal, but the states can still experiment with meddlesome mandates or live-free-and-die rugged individualism. As activism goes, this devolution of controversial rights theories to the states has a certain moderation about it: The states can compete, and the best theory of rights can eventually win, one might argue, and the courts need not directly foist their preferences on the rest of us.

Here is the equally obvious disadvantage: Such a theory of federalism is structurally otiose, because it does not provide any account of whether subnational capacity to regulate the activity in question really reflects subnational preferences. If, for instance, healthcare mandates are affected by significant interstate economies, then one might predict that states will be incapable of imposing those mandates even if their citizens really want to do so. Such a collective action problem surreptiously enforces libertarianism without actually defending it explicitly: It is not libertarianism lite but rather libertarianism covert. Put another way, it is a sort of intellectual dishonesty likely to discredit federalism.

The antidote, of course, is some thoughtful account of how the states actually can address the issue that the feds are barred from addressing. Sadly, this ingredient is missing from Judge Hudson's opinion: there is no discussion of whether federal action might be "necessary" because state action is afflicted by external effects that lead to collective action problems. The opinion reads not like a defense of federal diversity but an attack on laws that force individuals to take actions (even obviously commercial actions).

As someone with libertarian inclinations, I endorse that latter attack. But using the doctrine of enumerated powers to advance this attack seems calculated to bring that doctrine into disrepute without really advancing the libertarian agenda in the long term.

Posted by Rick Hills on December 14, 2010 at 10:07 AM | Permalink

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Comments

Douglas writes --

Can you think of any legislation that you think the Federal Government ought to enact - because it would promote some substantive policy that you favor - that would be beyond the power of the Federal Government under the Commerce Clause?

For crying out loud, Douglas, practically that's all I do here at Prawfsblawg -- viz. post denunciations of laws centralizing policies that I favor, on the ground that principled federalists ought to hold their noses and tolerate experiments with policies that they do not like. For an example, see see this post.


Posted by: Rick Hills | Dec 16, 2010 8:21:43 AM

Prof. Hills - You make some interesting points, but please answer this: can you think of any legislation that you think the Federal Government ought to enact - because it would promote some substantive policy that you favor - that would be beyond the power of the Federal Government under the Commerce Clause? If not, then haven't you just read the Commerce Clause out of the Constitution?

Posted by: Douglas | Dec 15, 2010 8:12:35 PM

Farmer Filburn purchased his wheat, at cost, by growing it on his farm. Under the government's theory, the comparable situation would be if Farmer Filburn designed his own healthcare plan. For Wickard v Filburn to actually be comparable to the ACA, Farmer Filburn would have had to make the decision to not grow any wheat, period. Under the Obama Administration's logic, Farmer Filburn could be forced to purchase wheat or be penalized for not doing so, something which the Supreme Court did not state was acceptable under the Commerce Clause in that decision.

Posted by: Adam | Dec 15, 2010 1:48:45 AM

Libertarianism and federalism and reconcilable. As a general matter, freedom will increase if we have 50 states competing for me. Or, maybe only 5 states want to be free, because most would prefer living in Utah. Fine with me, but at least we have a choice to seek freedom-maximizing states.

As far as con law goes...The two positions are also reconcilable. Narrowly construe the Commerce Clause, and liberally construe Section 5 of the 14th Amendment. Narrowing the Commerce Clause limits federal power over local affairs, and broadly construing Section 5 ensures that states do not violate due process rights.

Posted by: Mike | Dec 14, 2010 4:18:40 PM

I thought your point was that the idea of action/inaction federalism based limitations on the commerce power were so silly as to raise the issue of whether there was hidden libertarianism driving Judge Hudson's opinion. Clearly this is not the case--such distinctions in federalism jurisprudence already exist, so there seems to be no reason to hunt for motivations beyond those laid out in his opinion.

As for originalism: You might have a point if originalist-based theories of federalism have the burden of showing that the ratifiers knew the federal government could handle certain areas but nevertheless left those to state control knowing full well that this would have the effect of devolving power upon individuals due to intractable collective action problems. This, of course, is not a burden originalists need carry. All they have to show is that the ratifiers believed it was a good idea to impose federalist based limitations on national power due to their belief that it was better to risk possible collective action problems than risk federal domination. I think the historical record is fairly clear on this point.

Printz and New York, of course, have nothing to do with libertarianism, nor does the invocation of their principles involve a necessary embrace of libertarianism. Any devolution of power falls to state majorities. If there is resultant increase in individual autonomy, it is only by way of majoritarian permission.

Posted by: Kurt Lash | Dec 14, 2010 3:52:25 PM

Kurt writes:

The issue is whether the Constitution allows a national resolution of all collective action problems. It is perfectly plausible that the Constitution, properly interpreted, does not.

Yes, but it is perfectly implausible -- both as a positive historical matter of original public meaning and as a normative matter -- to believe that the Constitution would privatize an entire area of human life by indirection and obfuscation, by devolving it to the states in the expectation that states would be incompetent to regulate the topic at all.

I can imagine that rational framers might say, "X should be governed entirely by private institutions, so both subnational and national laws that interfere with such decision-making are forbidden." National bills of rights say something along those lines. But I cannot imagine a rational framer saying, "we reserve power over X to the states -- because we know that they will actually be unable to regulate X at all, thereby surreptitiously inducing that area to be regulated entirely by private institutions."

There are normative theories of federalism plausibly maintaining that devolution to subnational government will indirectly protect property rights by allowing citizens to escape predatory governments through exit. Brennan and Buchanan outlined such a theory in their 1980 book, The Power to Tax. But the action/inaction distinction urged by Judge Hudson and Randy Barnett does nothing to advance this vision in a coherent way -- probably because an open avowal that redistribution of wealth should be beyond the power of every level of government would immediately brand the idea as a non-starter today. It is simply odd to say that the feds can prod people into participating in interstate commerce by telling people to stop doing something intrastate and non-commercial but not by the more honest and direct route of telling them to engage in interstate commerce.

As for Kurt's analogy to Printz, this seems to prove my point that Judge Hudson's doctrine is covert substantive due process doctrine masquerading as federalism doctrine. Anti-commandeering doctrine draws on the idea that state governments cannot be coerced into certain types of activity because of their special status as states. Extending Printz to private individuals would make sense only if individuals' special status as individuals bars such an intrusion on their personal autonomy. There is such a theory -- but one unrelated to federalism, sounding instead in substantive due process.

Posted by: Rick Hills | Dec 14, 2010 2:42:16 PM

Howard writes:

I have questioned this too-easy conflation of federalism and libertarianism and much of the legal and political debates of the last two years.

You and me both, Howard. (See, for instance, this post ).

And I really do like both libertarianism and federalism. I just think that they are like sardines and confectioners' sugar: Two great tastes that don't go great together. You've gotta choose between them.

Posted by: Rick Hills | Dec 14, 2010 2:20:28 PM

Federalism jurisprudence already contains a "forced action vs. forced inaction" dichotomy. Compare Printz and New York with Reno v. Condon. All three involved interstate commerce, but the two laws struct down involved coerced action, while the court upheld the law requiring inaction. The difference, of course, had to do with the degree of intrusion on powers reserved to the states under the Tenth Amendment.

The same issue is in play in Virginia v. Sebelius--whether forced action of this kind amounts to an undue intrusion on powers reserved to the states (more than the forced inaction in Wickard et al).

As far as the principles of federalism are concerned, the issue is not whether there are collective action problems which, as a matter of health care policy, would be best resolved at a national level. The issue is whether the Constitution allows a national resolution of all collective action problems. It is perfectly plausible that the Constitution, properly interpreted, does not. Whether that brings federalism into disrepute (as a matter of normative political theory) depends on whether (1) you agree that there really is a problem and (2) whether the collective action problems which exist under this Constitution outweigh the broader benefits of federalist limits on national power.

Posted by: Kurt Lash | Dec 14, 2010 2:17:49 PM

I have questioned this too-easy conflation of federalism and libertarianism and much of the legal and political debates of the last two years. When Rand Paul argued against the public accommodations provisions of the Civil Rights Act of 1964 and that sparked a debate, I kept asking for anyone to follow-up on whether he was opposed to all public accommodations anti-discrimination laws or only those passed by the federal government. Those are very different issues that no one is breaking out. As this post rightly suggests, Judge Hudson fell victim to that same conflation.

Posted by: Howard Wasserman | Dec 14, 2010 2:16:13 PM

John Dawdus writes:

It's not just "if you buy wheat, buy it from the interstate market." It's "you must buy wheat and it must be from the interstate market," and that's why they're different cases. In the second category of cases there is no preexisting interstate commerce to regulate. Is forcing new commerce the same as regulating existing commerce? It seems at least arguable that it's not.

Yes, that's Randy Barnett's logic. But note that there is interstate commerce in the second case, as your way of putting the problem reveals: The feds are ordering us to buy preexisting interstate stuff. How is this command not reasonably related to -- "necessary and proper for" -- the control of interstate commerce?

It is true, of course, that the person coerced into purchasing insurance is not themselves engaged in interstate commerce. But, as Justice Jackson noted in Wickard, that is entirely irrelevant: Roscoe Filburn was also not engaged in interstate commerce when the feds told him to burn his crop rather than consume it. If the feds can insist that one stop doing something that is intrastate and non-commercial as a way of promoting interstate commerce, then it seems to me utterly preposterous to say that the feds cannot force someone to do something interstate and commercial for the same legitimate end. The commerce that justifies the federal law need not be the activity (or inactivity) being regulated by the feds: The fallacy is to assume that, because X is not engaged in preexisting commerce, therefore a law coercing X is not necessary and proper for the regulation of interstate commerce.

Put another way, Wickard v. Filburn was obviously not a "commerce clause case": Instead, it was a "necessary and proper clause" case, in which the prospect of affecting commerce other than Farmer Filburn's activities (which were admittedly neither commercial nor interstate) justified the regulation of those activities.

The action/inaction distinction is, in short, orthogonal to the Necessary & Proper doctrine undergirding Wickard. That is not to say that the distinction is not a normatively useful one. It might even be relevant to substantive due process doctrine: Imagine, for instance, trying to promote the economy by forcing everyone to buy a car! But the distinction has zero to do with any plausible theory of federalism.

Posted by: Rick Hills | Dec 14, 2010 1:22:51 PM

How is that any different from classic Lochnerism? During the Lochner era, the Court was deeply skeptical of measures that rested on paternalistic notions that some groups (women, bakery workers, etc.) warranted legislative protection from an unfettered market. While dressed in Commerce Clause garb, Hudson's opinion reads much more like an early twentieth century substantive due process opinion, and it therefore carries with it all the same flaws that led the Court to reject that discredited jurisprudence in the New Deal.

Incidentally, how about Hudson's Tax Clause analysis: because Congress labeled it a "penalty," it is constitutionally a penalty and not a tax within Congress's tax power. Judge Hudson would have been better served by reading the debate between James Madison and Alexander Hamilton on the scope of the tax power, and, not to gild the lily, he might have then inquired and noticed that the U.S. Supreme Court endorsed Hamilton's view in the Butler case.

Posted by: Norman Williams | Dec 14, 2010 12:18:31 PM

It's not just "if you buy wheat, buy it from the interstate market." It's "you must buy wheat and it must be from the interstate market," and that's why they're different cases. In the second category of cases there is no preexisting interstate commerce to regulate. Is forcing new commerce the same as regulating existing commerce? It seems at least arguable that it's not.

Posted by: John Dawdus | Dec 14, 2010 12:08:38 PM

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