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Friday, December 09, 2011

"Coercion" & the Challenge to the ACA's Medicaid Expansion

Greetings again to Prawfs readers.  I'm here in my individual capacity; Law Review Review postings will continue to be, er, slow until the spring submission season approaches.   First up, I wanted to thank Glenn for linking to his short essay with Jim Blumstein, which I take to be more a statement of their points of disagreement than a shared argument.  Blumstein, like the state plaintiffs in the ACA litigation, claim that the Medicaid expansion provisions of the health care reform legislation are unconstitutional because Medicaid "coerces" states into accepting the conditions attached.   

Taken literally, these kinds of coercion arguments are hard to take seriously.  There are other reasons, perhaps, to look more closely at conditional spending--e.g., maybe there are externalities that states don't take into account when they accept grants.  But let's focus on coercion.  And, heck, just to make things really simple, let's pretend that each state were controlled by just one person, for whom it would be conceptually coherent to identify a state of mind such as "freely chosen" or "coerced."   (Let's call that dude "MedVo.") 

As I understand it, the coercion arguments says that the more money the feds offer states, the more coerced the states are.  That's kind of intuitive: who wants to turn down billions of dollars?  But it's an intution that relies on a single person's subjective feeling of temptation -- in other words, it neglects the power dynamics of cooperative ventures.

Suppose I need our friend MedVo and his 49 pals (plus one other sorta-friend who they tax but don't let vote) to agree unanimously to do something -- let's call it buying dinner.  MedVo knows I can't get dinner without his vote.  Maybe he'll ask that I pay him some of the costs of buying dinner.  Heck, if the other friends are hungry enough, they'll pay him some of the costs of their dinners, too.  So, if MedVo gets paid a giant amount of money through this dinner program, that might be evidence not that he was "coerced," but instead that he had tremendous hold-up power. 

Now, let's stop being coy and call "dinner" what it usually is in reality, which is "redistributive spending."  States have to get together collectively to create redistributive programs, because if they don't there will be a race to the bottom.   

Put another way, the coercion argument, if accepted, would inherently bias federal power against redistributive spending, or indeed against any activity that requires coordinated and collective state action.  And the very costliness of bribing states inherently limits the extent to which the federal government can rely on them -- especially if the federal government has no direct regulatory alternative, and the states know that. 

The hold-up point also answers the "change in mid-stream" argument Glenn & Jim raise.  In any long-term cooperative venture, as a contracts scholar could tell you, there are opportunities for holdups on both sides.  "MedVo" has sunk investments into the Medicaid system, but so have the other states that want the system to go on working.  To claim he's been coerced because he's accepted more costs (in this case, only 10% of them!) ignores the power of his own implicit threats.  Maybe sometimes one side has more power than the other.  But the size of the grant doesn't really tell us anything about that. 

(And let me now give credit to Bob Cooter, Rick Hills, and Neil Siegel for laying out most of the intellectual groundwork for this post.  For more from me, see here and here.)               

Posted by BDG on December 9, 2011 at 02:59 PM in Constitutional thoughts | Permalink

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Comments

Thanks Brian for a very nice post. As I said in the earlier post I did, I don't have a strong dog in the fight and was more interested in our NEJM piece in explaining the cert grant and the arguments likely to be made to the medical and health policy audience.
That said, as I see it the problem for the court, the plaintiffs, but also for the government, is trying to articulate a spending clause theory in which not every federal-state cooperative program is coercion, but coercion is also not a meaningless concept.
I am curious whether you are of the view that the coercion discussion in Dole is a mistake (i.e., there can never be coercion in a constitutionally meaningful sense in this context), or whether you think there are cases with facts like Dole or the ACA where there really would be coercion, and what those cases would look like?

Posted by: I. Glenn Cohen | Dec 12, 2011 5:45:04 PM

(perhaps the most egregious, frivolous constitutional challenge of the modern era)

I read a discussion of this ruling put forth by Cato, fwiw, and they surely didn't think so. As to it winning that award, hmm .. doubtful.

Posted by: Joe | Dec 11, 2011 2:48:45 PM

Do you believe that the attorneys who presented the constitutional challenge in Whitman v ATA should have been subject to Rule 11 sanctions?

Also, do you think that the attorneys who presented the challengers in FAIR v. Rumsfeld deserved Rule 11 sanctions (perhaps the most egregious, frivolous constitutional challenge of the modern era, which did not even draw the support of even the most liberal justices)?

Posted by: FRCP | Dec 11, 2011 4:04:30 AM

they tax but don't let vote

Or, rather, let vote, but not on an equal basis.

Posted by: Joe | Dec 10, 2011 5:05:02 PM

Thanks for your pithy post. I'll suggest mine as well, which takes up the same views: http://www.concurringopinions.com/archives/2011/12/jumping-ahead-to-coercion.html

Posted by: NLH | Dec 10, 2011 1:35:06 PM

Yes, I think the commerce clause arguments were frivolous at the time they were first raised. It's always possible for courts to move arguments that are "off the wall" when they are initially argued into the field of legitimate debate, though in theory it shouldn't be lower courts that do that. Descriptively it's pretty common to see district and even the occasional appellate court go way off the reservation with some new idea, e.g., the D.C. Circuit & its fleeting reinvention of the non-delegation doctrine a few years ago.

And, although I know you're just asking your second question to be a jerk, I'll answer you honestly anyway. I view Blumstein's arguments as wrong but not absolutely foreclosed by existing law.

Posted by: BDG | Dec 10, 2011 10:22:28 AM

1. Do you still believe that any attorney that presents a constitutional challenge to the mandate should or will face Rule 11 sanctions?

2. Do you think that the attorneys presenting the coercion argument should or will face Rule 11 sanctions?

For reference, see:

http://prawfsblawg.blogs.com/prawfsblawg/2010/04/why-tax-cheats-love-the-ag-suits-challenging-health-care-reform.html

Posted by: FRCP | Dec 9, 2011 7:03:24 PM

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