Monday, March 26, 2012

Understanding the Health Care Litigation, Part Two

Round one is over, and the world waits anxiously for round two tomorrow in what is the most important Supreme Court case since Brown v Board of Education, and maybe since Marbury v Madison.

Today's Arguments

Today the Supreme Court heard arguments on whether it should or should not decide the health care cases because of the federal Anti-Injunction Act.  This law, passed in 1867, essentially provides that a tax cannot be challenged until it is paid.  One court found that, since the penalty (the alleged "tax") imposed by the Patient Protection and Affordable Care Act (ACA) for not buying health insurance does not take effect until 2014, and since therefore no one had been forced to pay the tax yet, the challenge to the law is not yet "ripe" for decision. 

All the parties challenging the law and the federal government agreed that the the case is ready to be decided, so the Supreme Court had to appoint an attorney, Robert Long, to argue that the the Anti-Injunction Act barred the proceedings.  Things didn't go too well for him.

From the questioning, it was fairly apparent that the justices want to reach the merits of the ACA litigation.  Justice Sotomayor asked Mr. Long to describe the "parade of horribles" that would occur if the court decided to reach the merits.  Much fumbling ensued, leading Justice Scalia to observe "there will be no parade of horribles."  Justice Breyer pointed out that the statute calls it a penalty, not a tax, and Justice Ginsburg observed that it is not a revenue-raising measure since, if everyone obeys the law, there will be no revenue associated with the penalty.

When the Solictor General, Donald Verrilli, argued that the penalty is not a tax, Justice Alito snagged him with the conflicting positions taken by the Administration.  To get the case heard, Verrilli argued the penalty is not a tax; but to get the law upheld, Verrilli argues the penalty is a tax, an inconsistency upon which Justice Alito seized:
General Verrilli, today you are arguing that the penalty is not a tax. Tomorrow you are going to be back and you will be arguing that the penalty is a tax. Has the Court ever held that something that is a tax for purposes of the taxing power under the Constitution is not a tax under the Anti-Injunction Act?
 So what was Verrilli's answer to that?  It turns out, the same words can mean different things on different days:
Tomorrow the question is whether Congress has the authority under the taxing power to enact it and the form of words doesn't have a dispositive effect on that analysis. Today we are construing statutory text where the precise choice of words does have a dispositive effect on the analysis.
Based on the tenor of the questioning, I think there is little doubt the court will brush aside the Anti-Injunction Act in order to get to the meat of the case.

Arguments Over The Individual Mandate

Today's argument was one hour and 29 minutes long. Tomorrow, the court has allotted two hours for the main event -- the argument over the individual mandate.

The ACA requires that virtually every living person in America -- except for illegal aliens and some other, incredibly narrow, categories -- must buy health insurance.  For the first time in the history of this nation, the federal government is requiring Americans to engage in commerce merely because they are alive.

There are a lot of requirements that arise once a person decides to participate in commerce, but there has never before been a law forcing people to make economic decisions.

The argument over the individual mandate --- also known as the mandatory coverage issue -- will focus on whether the federal government has the power to impose the mandate based on the Commerce Clause or the Necessary and Proper Clause. 

Article I, Section 8 of the Constitution provides:

The Congress shall have Power - To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
This provision only permits the Congress to make laws that are necessary to carry out its other powers, so to find the mandate "necessary and proper," the court will have to decide whether the mandate is permitted under Congress's other powers, which sends us right back to the Commerce Clause, Article I, Section 8:

The Congress shall have Power [...] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
Commerce doesn't exist to be regulated until people engage in commerce.  The ACA forces people to engage in commerce, then regulates them.  There has never been a law like it, and the only reason there is any argument about its constitutionality is the Supreme Court's historical and ridiculous distortion of the Commerce Clause in the support of political aims.

The modern, nearly limitless, interpretation of the Commerce Clause had its genesis in the 1942 case of Wickard v Filburn.  The U.S. government had established a Depression-era scheme designed to prop up the price of wheat, and it worked.  In 1941, wheat producers cooperating with the "Agricultural Adjustment" program received $1.16 a bushel, compared to the world market price of $.40 a bushel. 

The federal regulations established wheat production limts based on acreage.  Filburn was a farmer who decided to grow more than his allotment, but he grew the wheat for his own use; he did not sell any of the wheat in interstate commerce.   Nonetheless, the court found that Filburn had violated the law, which was a valid exercise of government power under the Commerce Clause.  The court reasoned that, if Filburn had not grown the excess wheat for his own use, he would have had to buy wheat on the open market.  Although Filburn alone might not have been able to affect the market, the cumulative effect of thousands like him would be substantial.  Therefore, Congress has the authority to regulate a completely intrastate market if the cumulative effect of such activities would have a substantial effect on interstate commerce.

Thus, constitutional doctrine was founded on the "what-if-everyone-did-that" argument, explaining at least in part why Wickard v Filburn makes most lists of the worst Supreme Court decisions in history.

The health care cases go beyond Wickard.  Way beyond Wickard.  If the ACA is upheld as a constitutional exercise of Commerce Clause authority, there is nothing the federal government can't require under the same theory.  The government can tell us what to eat, what to wear, what to do, how many children to have -- there will be no limit.

To put it in Wickard terms, upholding the ACA would mean the government could not only tell us not to produce excess wheat, it could force us to stop producing wheat altogether and buy that wheat only from government-sponsored exchanges.  That is, it could if the anti-gluten forces don't get there first.

In other words, this case is huge.  The hugest.  Stay tuned.

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