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Wednesday, January 12, 2011

Inactivity and the Commerce Clause

Opponents of the individual mandate assert that under the Commerce Clause, the federal government can regulate only activity, not inactivity.

Yet the federal government regulates inactivity under the Commerce Clause all the time.  Consider federal labor legislation that, under certain situations, prohibits employees from striking.  The employees aren’t doing anything – they’re doing nothing, and it’s precisely this inactivity that Congress prohibits.  The employees are compelled to engage in economic activity with another private party.  True, this power rests on direct regulation of interstate commerce, and not the substantial effects test, but it does suggest that the activity/non-activity distinction is not fundamental to Commerce Clause jurisprudence writ large.

Moreover, consider the case of “economic boycotts,” when people refuse to do business with other parties.  They are literally doing nothing, yet our widespread terminology explicitly describes this inactivity as “economic” and assumes that the boycott will have an economic effect.  The Supreme Court itself recognized this when it rejected Massachusetts’ refusal to do business with companies that did business in Burma.  Massachusetts was simply refusing to engage in certain economic transactions, yet the Court uananimously held that this inactivity conflicted with federal statutes enacted under the Foreign Commerce Clause.  If states can be ordered to engage in economic transactions under the Commerce Clause, it is not much of a stretch to conclude that the same power applies to individuals.

Posted by Carlton Larson on January 12, 2011 at 02:28 PM | Permalink


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Under the Commerce Clause Congress determines the uninsured and the cost of insurance is a burden on interstate commerce. Under the Commerce Clause and the Necessary and Proper Clause Congress requires the uninsured to purchase insurance. What identified individual right does this violate? Could not Congress go farther and require that every working American fund a program to provide medical insurance to the elderly?

Posted by: LeotheOrangeCat | Feb 4, 2011 2:40:24 PM

The mandate doesn't force anyone to do anything. Every American has a choice whether or not to purchase health insurance. The individual does not however have a choice as to whether they will be charged a tax surcharge, whether through reduction in dollar amount of the personal exemption or whatever the tax code may be. It only seems fair to charge people for being uninsured when all of us will foot the bill when those people require medical care they cannot offord to pay for. Isn't that the point of insurance, to protect against undue financial burden of a sudden unforseen large expense that must be paid. The government has the right to incentivise all sorts of behaviors through the tax code. This regulating inactivity thing is a silly arguement.

The problem with inactivity is that we as a society cannot prohibit citizens from receiving life saving emergency medical care and therefore cannot really allow incativity to be maintained. I think intellectually it would be satifiying to say you don't have to buy insurance, but unless you front the cash we will not give you life saving treatment after a car accident or in the event of a heart attack, etc. Or stated more clearly: buy insurance or we might let you die. That is morally and practically undoable therfore, buy insurance or pay a surcharge to cover such expenses you may incur that you cannot afford. Even the richest amongst us doesn't want to pick up the full bill for years of chemotherapy, transplant therapy, etc.

Posted by: Bryan | Feb 4, 2011 10:34:28 AM

Mr. Siegel's argument suggests that opponents are "dressing up" a Lochner argument as a Commerce one. Do you suggest that Raich and Morrison were also dressed-up Lochner arguments? Why?

Yes, there is some overlap between limiting the federal government's role and preserving "affirmative liberty" from other sources. But that does not mean that all Commerce Clause challenges are "dressed up," unless you start with the proposition that Wickard granted a police power and we should drop any pretense otherwise.

If there are Commerce limits at all, then there's room for litigation at the margins, and this case seems to be at that margin, even if not over it.

Posted by: not so fast | Jan 18, 2011 11:50:41 AM

Some have suggested that bars on strikes (such as exist for many-most public employees) violate the 13th Amendment, because they essentially compel groups of employees to continue to work. That argument hasn't gotten a lot of traction in the courts, but it's arguably analogous to what you're saying.

Posted by: Joseph Slater | Jan 13, 2011 6:12:07 PM

Excuse me -- Carlton. And my apologies for messing up your name.

Posted by: Demosthenes | Jan 13, 2011 2:24:25 PM

"Yet the federal government regulates inactivity under the Commerce Clause all the time. Consider federal labor legislation that, under certain situations, prohibits employees from striking. The employees aren’t doing anything – they’re doing nothing, and it’s precisely this inactivity that Congress prohibits."

Congratulations on constructing a very subtle straw man. Of course activity (or some compensatory penalty) can be compelled from those who are inactive, at all levels of government. If it couldn't be, then how would we enforce payment of child support, for example? The point, however, is that the people who can be so compelled have assumed a duty, and are not performing it. I do not think that is the case here.

For example: By taking the jobs they did, the federal employees you mention have performed a specific action which requires (as a consequence) the assumption of certain positive duties. Yet the performance of such duties is not required of them absolutely. They may opt out. Of course, if they do not wish to perform the duties, they may seek employment elsewhere, but that's the consequence of their decision.

What specific action did I perform that would compel me to assume the positive duty outlined by the individual mandate? Living? Breathing? Having health? So to "opt out," all I have to do is die? Or was it assuming American citizenship -- which, since I was born here, I didn't really have a choice in assuming? In which case, I suppose I could opt out by surrendering something which is my birthright? I do not claim that you take either of these positions, Carson, but the question remains: what action did I perform to take this duty upon myself?

Posted by: Demosthenes | Jan 13, 2011 2:23:16 PM

Quick and dirty summary of the debate so far:

(1) Congress passes a coordinated regulatory scheme aimed at managing the quality, quantity, and cost of one of the largest sectors of the economy. As such, it appears to be a quintessential example of the proper use of the Commerce power.

(2) Many people feel that one of the mechanisms in the regulatory scheme violates liberty rights but they are foreclosed from making that argument by, well, every case since Lochner.

(3) However, the law's opponents decide to dress up this liberty based argument as a federalism based argument because that area of the law has been more hospitable to challenging federal laws. In the best common law tradition, they find a way to divide the existing caselaw so that they might win.

(4) The inherent indeterminacy of law combines with the sharply partisan nature of the issue to make this doctrinal move appealing to half the political-judicial spectrum.

(5) Law, culture, and politics do their complicated dance, while we wait for the judges' scores.

Whether you think this is a tragedy, a comedy, or business as usual depends on your views not only of the merits of the legislation and the wisdom of the preexisting doctrine, but also on your views about the proper mechanisms of constitutional change.

Posted by: Andrew Siegel | Jan 13, 2011 11:56:38 AM

anon's point is right, to the extent that it points up that nothing stops the states from all sorts of wacky things, assuming no affirmative right as a barrier, and that most have not happened. Indeed, RomneyCare is exhibit A for this debate.

But anon does not "win the thread" on the law, because the whole point of the Commerce Clause debate is whether the feds have this power, absent a general police power. Even stipulating that the individual mandate is OK under Commerce, isn't it still the case that everybody pays at least lip service to the notion that the feds do not have the same police power as the states? By pointing to the states' power, anon's view flirts with just dropping the pretense and giving the feds a true, acknowledged police power, with no justiciable limits on Commerce at all. That would be, to some, fine, and no real difference from Wickard, but in theory, it's a radical break with the preservation of the "some limits exists out there" mantra.

On a practical level, though, the states' presumed power to do mandates points up yet another way the feds could have proceeded: mandate that each state adopt a mandate, subject to losing Medicaid and/or other spending. Just like the drinking age and speed limits, it would probably fly. But again, as I noted regarding the regulation of the doctor-patient transaction, Congress probably wanted to avoid the optics of that, so that was a risk. Had they gone the spending route, some states would make noises about withdrawing from Medicaid, as they have now, but no one is really willing to do it.

Posted by: not so fast | Jan 13, 2011 10:48:12 AM

anon wins the thread.

Posted by: Aspiring Prawf | Jan 13, 2011 12:13:52 AM

Steve, what stops California from ordering you to hire a personal trainer? Nothing, other than the political process. How's that worked out for you?

Posted by: anon | Jan 12, 2011 8:23:43 PM

After posting my earlier comment, it occurred to me that a better question would be: On your theory, why couldn't the government order me to hire a personal trainer? After all, that's compelling me "to engage in economic activity with another private party," which I gather is fine by your theory.

Posted by: Steve Bainbridge | Jan 12, 2011 7:38:24 PM

On your theory, why can't the government order me to exercise more and eat less? After all, being overweight increases the likelihood that I'll need medical services, which implicates economic activity. If the Supreme Court upholds the individual mandate, the combination of that decision with the expansive definition of commerce in use since Wickard will mean that there are essentially no limits on the government's ability to regulate anything except abortion, sodomy, and guns.

Posted by: Steve Bainbridge | Jan 12, 2011 7:35:32 PM

Uh, "Don in Phoenix"," you cannot possibly be serious.

On your theory of "action," a decision not to do something becomes an "action" if such inaction has a "publicly announced purpose" to influence someone else. But it is downright wacky to give Congress MORE power to coerce someone into acting when their deliberate inaction serves some persuasive purpose than when their inaction is simply the result of, say, their sloth or passivity lacking any publicly announced purpose. On your theory, Congress could force someone to buy insurance if that person was deliberately boycotting insurance companies to induce them to change their immoral practices, but Congress could not force someone to buy insurance if that person was simply a negligent slob who had no "publicly announced purpose" in inaction but had simply failed to get coverage out of sheer sloth.

At least, Randy Barnett's action-inaction theory had the virtue of making libertarian sense. This notion that "deliberate" inaction can be regulated but not "passive" inaction is really deeply weird -- a theory of protecting liberties not to act only when people do not care very much about the inaction. Try another one: this one isn't going to work.

Posted by: Rick Hills | Jan 12, 2011 6:43:01 PM

Strikes and boycotts are concerted ACTIONS, each with the publicly announced purpose of changing the policy of the target of said action. Try another one - this one isn't going to work.

Posted by: Don in Phoenix | Jan 12, 2011 6:32:12 PM

The difference I see is that all of the OP examples say that IF you do activity X, then you cannot do "inactivity" Y. Massachusetts could stop buying all widgets, but could not put out a request to buy bids from anyone BUT Burma. You can't contract to take a job and then go on strike. Those are all conditional mandates -- if X, don't skip Y. (Ture, as a practical matter MS needs widgets, just as almost everyone gets health care, but that's my next point.)

So with health insurance, Congress could have easily achieved the same mandate against "inactivity," if it regulated the broader activity context. For example, it could have said that the federal government was regulating all transactions for health care services to this extent: no one shall sell or purchase health care without showing proof of adequate insurance. Then plug in the rest of the scheme. That way, you get the same result, but you would preclude this entire constitutional challenge. All that you "give up" is that you do not touch the truly unplugged individual who seeks no health care. To the extent the law DOES include religious exceptions for the Christian Scientists etc., it does that, and to the extent that no one else truly forgoes health care, what are you giving up?

But Congress did not do that. I'm not saying that I'm sold on the challengers' side, either, because "unprecedented" does not mean "unconstitutional." But I do think that no example I've heard so far actually qualifies as a true mandate to get off your duff and go do something, other than something for the government directly, like pay taxes or get drafted. (And even taxes are conditional upon some action, whether earning income, transacting, etc.)

Query: Given that the "inactivity" charge was out there before passage, and the suit threatened, why not go the easier route I outlined? Perhaps (a) proponents considered the mandate challenge so frivolous it wasn't worth re-doing later in the game, (b) an actual concern that it would open some loophole, or (c) they did not want to be portrayed as directly governing the doctor-patient relationship, which is "sacred" at both the personal level and the traditionally-reserved-to-States level, as opposed to governing the less magical insurance relationship.

I suspect it's (c), and if that political choice carries legal consequences, so be it.

Posted by: not so fast | Jan 12, 2011 6:05:16 PM

BED writes:

Crosby rested on the Supremacy Clause, not Commerce clause. A state cannot ban trade when the federal sovereign has guaranteed by treaty that such trade shall be free and legal. Further, the state was not ordered to engage in economic activity, it was simply prohibited from banning that particular economic activity.

(1) Crosby was essentially an implied preemption case (or a "dormant foreign relations" case), in which the Court construed Congress' and the President's silence to preempt states from refusing to do business with companies in Burma. One can, of course, characterize Crosby's holding as merely "barring" the states from engaging in the "action" of discriminating against companies doing business in Burma. But that simply highlights the sheer silliness of the action/inaction distinction: One could equally well characterize the individual mandate as barring individuals from engaging in the "action" of discriminating in favor of no insurance against insurance.

(2) The doctrinal source of Crosby in some sort of "dormant foreign policy" restriction cannot possibly be germane to the issue, as the action-inaction distinction has nothing to do with the text of the Commerce clause, in particular. Indeed, as I have argued , it has nothing to do with federalism: It is just an opportunistic way to limit federal power for reasons rooted in libertarian theory.

So I agree with Carlton Larson that Crosby helps illustrate the irrelevance of the action-inaction distinction to the issue of Congress' powers.

Posted by: Rick Hills | Jan 12, 2011 5:04:21 PM

These are really big stretches. Federal anti-strike legislation regulates voluntary employment. The regulated activity is the subjects' voluntary employment, not the inactivity of refusing to work at a job they voluntary hold. The legislation essentially says, if you work a regulated industry, you have to actually work or you're fired. If you're not an employee, the law cannot apply to you.

Crosby rested on the Supremacy Clause, not Commerce clause. A state cannot ban trade when the federal sovereign has guaranteed by treaty that such trade shall be free and legal. Further, the state was not ordered to engage in economic activity, it was simply prohibited from banning that particular economic activity.

The individual mandate is different. The strongest argument Sebelius has is that everyone is engaged, in general, in the consumption of health care goods and services. But that's not certain. It's likely that everyone will at some point need medical attention, but it's not a certainty in the same way that NLRA can only apply to employees of the federal government.

Posted by: BED | Jan 12, 2011 4:00:15 PM

Crosby v. National Foreign Trade Council, 530 U.S. 363 (2000).

Posted by: Carlton Larson | Jan 12, 2011 3:35:03 PM

What is the name of the case?

Posted by: Praetor | Jan 12, 2011 3:29:32 PM

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