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Monday, December 19, 2011

A Structural Defense of the Individual Mandate

I’ve had the chance to debate the constitutionality of the individual mandate a couple of times over the last year, and on each occasion my opponent (arguing against the ACA) has relied both on Randy Barnett’s (et. al.) activity/inactivity distinction, and on Timothy Sandefur’s (et. al.) claim that the mandate does not “regulate” commerce.  And on each occasion I have conceded that, though these are valid observations (there is, in fact, a difference between “activity” and “inactivity”), they are not particularly relevant to an argument about the constitutional architecture of federalism.   An argument about federalism is, after all, principally an argument about constitutional structure, and so I think we should lean most heavily on the structural modality of constitutional interpretation, rather than the doctrinal or textual modalities.  And when we turn to structure, I don’t think Barnett or Sandefur’s objections present much of a worry.

You probably know that Charles Black revitalized the structural interpretive modality in his Edward Douglass White lectures at LSU in 1968, published under the title Structure and Relationship in Constitutional Law.   Briefly put, the modality draws inferences from the structural relationships the Constitution establishes between democratic institutions.  A paradigmatic example of the form as applied to federalism (which Black utilized) is found in the second half of Marshall’s opinion in McCulloch:  A state cannot tax a federal entity because it amounts to taxation without representation—the “federal” citizens of other states have no voice in the Maryland legislature.  Simple, clean, constitutional structure. 

I have long thought that the Commerce Clause is best understood in structural terms.  It establishes the federal government’s institutional authority (or supremacy, if you prefer) over economic questions that the states are ill equipped to resolve amongst themselves.   These include problems of externalization, protectionism, race-to-the-bottom, internationalism, etc…  In such cases, the federalist solution is resort to a higher, transcendent authority, which must establish baseline kinds of standards.   Now, admittedly, the word “commerce” does suggest that this structural inference is limited to commercial or “economic” kinds of problems; and in this respect I think the Lopez Court got things right.  But it is hard to see how the behavior (be it activity or inactivity) that causes the commercial problem is structurally relevant at all.  Likewise, it is not structurally clear why the “regulation” (normalization, prescription, mediation) of an interstate commercial problem can only target certain kinds of behaviors.

In fact, I think these doctrinal and textual attacks on the mandate in the name of federalism are disingenuous.  Rather, the real motivation behind these arguments is discomfort with any government—either state or federal—forcing us to buy something.   I think objectors are really just as upset about a Massachusetts mandate as they are about a federal one (maybe the latter is worse based only on scope).   But the structural modality suggests that the Commerce Clause points primarily to jurisdictional authority, not substantive authority, concerns.  If the targeted problem is commercial, and it is one the states are poorly equipped to handle between themselves, then it falls within federal jurisdiction.  Once a problem is within that jurisdiction, the federal government’s authority is plenary (leaving aside inapposite 10th Amendment questions)—it can do anything a state government could do.

With this in mind, all the chatter about the feds making us eat broccoli or buy particular cars is best seen not as federalism problem, but as a substantive due process problem.  People just don’t think that’s the kind of thing any government should do—make us buy things or enter into particular contracts.  Again, that’s a substantive due process question, one that we have debated for over a century.  Since 1937, the Court has been very deferential to legislative decisions on economic/contractual matters, and, while it’s possible, I think it’s unlikely the Justices will revive Lochner here.  So if you don’t want to have to eat broccoli or buy a Ford, your remedy is probably where it has been for 75 years—at the ballot box.


Posted by Ian Bartrum on December 19, 2011 at 10:43 PM | Permalink


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Asher (one of my former prodigies who's gone on to bigger and better things),

I think the jurisdictional hook for federal tort reform lies in the substantial effects that some types of tort judgments have on interstate commerce. Personally, this would not be enough for me, but it seems to fit easily within the broad powers that the Court and many PPACA commenters have tended to see. The best example would be products liability cases, which almost always involve interstate transactions (consider Justice Neely's classic choice of law "analysis" in which he instructed lower courts to always pick the rule most favorable to West Virginia claimants, which would typically disadvantage out-of-state defendants). Medical malpractice reform could be justified as a measure to keep doctors from fleeing states in search of more defendant-friendly jurisdictions, as well as a national health care savings measure (the savings would be tiny, but I have no doubt Congress could persuade itself otherwise). Some types of tort claims might seem immune from preemption, but many of these claims are insured, presenting the possibility of a interstate effects argument.

Abstractly, your point about market transactions and state-ordered judgments is appealing, but I do not think that distinction is as tenable now as it might have been a hundred years ago.

Now, one might hope that notions of federalism or comity would restrain the Court from jumping to the conclusion that Congress could preempt state tort law. And if we were talking about implied preemption, I think this would work. But, if Congress explicitly displaces state tort law, it's going to be hard to square a Commerce Clause objection with the far-reaching claims made by current PPACA supporters. There might be other objections, but a decision to uphold PPACA will take a powerful one off the table.

Posted by: Adam Scales | Dec 21, 2011 10:46:10 AM

Perhaps I'm missing something rather obvious, but it strikes me that there are two crucial differences between federal insurance mandates and federal tort reform. First, the latter does not regulate economic activity (or economic inactivity). It might seem odd to say that juries ordering defendants to pay large sums of money to plaintiffs is not economic activity. Certainly damages awards have economic effects. But intuitively, and I would surmise in the eyes of the Court, there's a big difference between market transactions and court-ordered damages for breaches of tort law. If damages awards are economic activity, are fines as well? Could Congress regulate traffic ticketing on intrastate roads if it could show that ticketing substantially affected interstate commerce? Second, there are, obviously considerable structural problems with federal tort reform that aren't present in the mandate, and that I don't imagine would sit well with the current Court. Whether they'd address these problems frontally and overrule Garcia, or whether those concerns would simply drive their Commerce Clause analysis, I think they'd lead to a very different outcome than you're likely to see for the mandate in June.

Posted by: Asher | Dec 21, 2011 12:36:20 AM

I agree with Jonathan's points.

While I have certainly not hesitated to gently suggest a certain opportunistic quality in the arguments of PPACA supporters - indeed, I'm about to in a moment - I do think it has some limitations. I agree with Ian that most people who oppose the mandate have problems with state mandates, too. As an insurance professor - of which there are really quite few in this debate - I can tell you that while my problems with mandates are partially the ones you suggest (government exceeding its proper reach), they generally rest on separate grounds. In Massachusetts, I object to people being forced to buy crappy insurance they do not want. There is no great solution to this problem, and my objections do not go to validity - I think states can require people to buy crappy insurance in order to appear to be extending coverage somewhat more widely than they really are. Possibly, Michigan could make me buy a GM car, too - though I'd look for any weapon to hand to resist that in court.

But, even taking Ian's refinement of the purposes of the Commerce Clause into account (it's a nice functional account that does not, in my view, capture the notions of accountability and legitimacy that underlie this limited grant of power), I don't see mandated broccoli as responsive to a structural concern (unless one includes the re-election prospects of broccoli-growing representatives in Congress). Yes, health care is stronger stuff, but Ian's structural characterization of the Commerce Clause also has an any-weapon-to hand-quality; it might work for the health care mandate, but not many other things we might imagine.

Does it work, for example, on tort reform? It's been my sense for several years that a number of politicians, journalists and the occasional law professor - who could not be politically sympathetic to tort reform's pro-industry character - have been willing to toss the tort system over the side in order to get heath care reform. It's hard for me to believe that many who have commented approvingly here on the "plenary" reach of the Commerce Clause would have done so five years ago in the context of a federal malpractice reform law. Or congressional efforts to cap non-economic damages at some arbitrary number.

Perhaps that trade-off is worth it, though I don't feel that way myself. But I do wonder whether PPACA's proponents will be as quick to spot a "race to the bottom" with respect to states' differing degrees of safety-related regulation of abortion providers. If PPACA is upheld, I think some "structural" responses to that variation will look quite attractive to congressional majorities.

Finally, to return to Ian's own point about opportunism among PPACA opponents (they would resist mandates at any level), I think there are counterexamples, and tort reform is one of them. I strongly detest most forms of damages caps. However, I think state legislatures have the right to impose them, notwithstanding the very creative uses of "open courts" provisions in state constitutions. (Briefly, these innocuous-looking provisions have often been invested with a substantive due process-like character to invalidate legislative incursions into tort law). So, I'd definitely vote against tort reform as a citizen or legislator, but would uphold it under state constitutional challenge. I have no problem holding this position at the same time I'm quite convinced that tort reform exceeds the powers invested by the Commerce Clause for some of those pesky broccoli-and-car-related reasons that Ian dismisses (i.e., federal tort reform would rest on a very expansive view of interstate commercial regulation). I can't speak for all opponents of the mandate, but I imagine that - far from the cacophony of the ongoing primaries - one can find many people who feel the same way about state v. federal mandates.

Posted by: Adam Scales | Dec 20, 2011 9:40:59 AM

Ian, I think what you say makes a lot of sense, and I also think that the structural modality is (here and usually) the way to go. To be fair, though, at least *some* who oppose the mandate do so not because they think *any* government lacks the power to impose the mandate, but because the federal government does (a variation on this would be the different-modality argument that, policy-wise, a state-level mandate makes more sense -- works better -- than a national one). This seems to be the "vibe" of the conditional-spending challenge, if not the Commerce Clause challenge, no?

Posted by: Rick Garnett | Dec 20, 2011 8:53:48 AM

I'm all in favor of structural arguments, but it seems an argument this broad still has some broccoli-problems. First, one can make the free-rider justifications for a broccoli mandate (mandating fresh vegetable purchases could help keep supplies stable and prices low), but could also be used to justify comprehensive federal land-use control. In other words, it's not particularly compatible with the idea of limited powers.

Second, free-rider arguments, in this context, cut against one fundamental aspect of the federalist design: interjurisdictional competition. Does a state's failure to adopt specific policies represents a proper competitive outcome or state inability to adopt a desired policy? Unless courts are expected to delve into contested social science research on specific policy questions, any time a state does not adopt a policy the feds want, the feds can step in.

Third, the fundamental difference between a mandate at the state level and one at the federal level is the possibility of exit. I can't speak for other opponents of the mandate, but I'm entirely comfortable with the idea that there are lots offensive and objectionable things that states can do but the feds cannot, and mandating activity to overcome alleged free-rider problems among individuals is one of them.


Posted by: Jonathan H. Adler | Dec 20, 2011 7:24:31 AM

Preface: I don't disagree with you. In fact, I mostly agree with you. I think your doctrinal analysis is spot on. My intuition is that it would be widely accepted in a vacuum. Trite, in fact (no offense!).

But. Go back in time. Wouldn't law professors have said something very similar prior to Lopez? And wouldn't they all (or at least mostly) have been wrong?

I guess that's my problem. Your take -- and again, mine in the first instance as well -- is so "duh!", I'm really concerned at this point that we're missing something plaintly obvious.

Posted by: Anon, good nurse! | Dec 20, 2011 1:29:22 AM

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