Tag: Commerce Clause

Liberty Wins First Skirmish in the Obamacare Legal Battle

As Michael already noted, Judge Henry Hudson of the Eastern District of Virginia denied the government’s motion to dismiss Virginia’s legal challenge to Obamacare.  Notably, Judge Hudson agreed with Cato senior fellow Randy Barnett (see here, here, and here) that the government’s assertion of Commerce Clause authority for the individual mandate is unprecedented:

The guiding precedent is informative, but inconclusive. Never before has the Commerce Clause and Necessary and Proper Clause been extended this far. At this juncture, the court is not persuaded that the Secretary has demonstrated a failure to state a cause of action with respect to the Commerce Clause element.

And that goes for the government’s arguments generally:

While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate–and tax–a citizen’s decision not to participate in interstate commerce. Neither the U.S. Supreme Court nor any circuit court of appeals has squarely addressed this issue. No reported case from any federal appellate court has extended the Commerce Clause or Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce. Give the presence of some authority arguably supporting the theory underlying each side’s position, this Court cannot conclude at this time stage that the Complaint fails to state a cause of action.

In other words, at this first, early stage of litigation, Virginia’s lawsuit survives and the government has a real fight on its hands.  Read the whole opinion here

Now, this ruling does not decide the merits of the case and is not binding on any other court in any of the other Obamacare lawsuits – on Friday, for instance, Florida is due to file its brief opposing the government’s motion to dismiss the 20-state suit – but it is a beachhead in the fight against big government.  Judge Hudson’s opinion should finally silence those who maintain that the legal challenges to Obamacare are frivolous political ploys or sour grapes. The constitutional defects in the healthcare “reform” are very real and quite serious. Never before has the government claimed the authority to force every man, woman, and child to buy a particular product - and indeed such authority does not exist (as Cato’s amicus brief argued).

I look forward to further favorable rulings as the various lawsuits progress.  For further commentary, see Ilya Somin, Josh Blackman, and Hans Bader.

Federal Judge Denies Obama Administration’s Motion to Dismiss Virginia’s ObamaCare Lawsuit

From The Los Angeles Times:

RICHMOND, Va. (AP) — Virginia’s lawsuit challenging the Obama administration’s health care reform law has cleared its first legal hurdle.

U.S. District Judge Henry Hudson on Monday denied the Justice Department’s request to dismiss the lawsuit.

Virginia Attorney General Ken Cuccinelli claims that Congress does not have the authority under the Constitution’s Commerce Clause to require citizens to buy health insurance or pay a penalty.

The Virginia General Assembly passed legislation this year exempting state residents from the coverage mandate.

More than a dozen other state attorneys general have filed a separate lawsuit in Florida challenging the federal law, but Virginia’s lawsuit is the first to go before a judge.

New York Times vs. the Constitution

Last Monday, the New York Times ran an editorial, “The Republicans and the Constitution,” lamenting how Elena Kagan’s nomination ”has become a flashpoint for a much larger debate about the fundamental role of American government.”  (I, of course, was hoping that this was the direction the debate would go.)  The Old Gray Lady was particularly aghast that Congress’s expansive use of the Commerce Clause was being maligned.  Don’t those retrograde obstructionists know that as long as the government passes laws the progressive elite – especially the New York Times editorial board – deigns beneficial, no silly constitutional arguments can possibly be germane?

As you could expect, I found quite a bit to quibble with here, so I wrote a letter to the editor.  My letter wasn’t published, but you can still read it here:

Your editorial  stumbles onto an inconvenient truth: The debate over Elena Kagan’s nomination is indeed one about the “fundamental role of American government.”  That’s a good thing!  The opposition to Kagan is not based on petty partisanship or the politics of personal destruction but instead on principled concerns about whether the nominee sees any constitutional limits on federal power.

You rightly focus on the Commerce Clause aspect of this issue because so many federal excesses have been perpetrated in that provision’s name.  But if Congress can, under the guise of regulating activities that “substantially affect interstate commerce,” tell farmers what to grow in their backyards—as the Supreme Court said in the 1942 Wickard v. Filburn case—is it really so “silly” for Senator Coburn to ask a judicial nominee whether, in the name of lowering healthcare costs, Congress can require that we all eat nutritious foods?

You’re also correct that the Court recently approved Congress’s ability to confine sex offenders—but it did so, narrowly, under the Necessary and Proper Clause, after Solicitor General Kagan abandoned the Commerce Clause argument that had been wholly rejected in the lower courts.

And so, as you say, a vote against Kagan is indeed about more than her or President Obama—but that doesn’t mean it’s a vote against various statutes that you like.  There are good reasons for arguing that some of these laws weren’t good ideas, but that’s beside the point.  The point is that there’s a difference between law and policy and that raising the issue of constitutionality is not an “ideological fuss” or “excuse” but goes to the core of this nation’s first principles. 

The Constitution creates a government of delegated and enumerated—and therefore limited—powers, and so much of the discontent in the country is about the basic question of where the government gets the power to do whatever it wants.  Let the debate continue!

Here are some related thoughts from Cato adjunct scholar Tim Sandefur, reacting to the same editorial.

Government Essentially Concedes Commerce Clause Challenge to Obamacare, Calls Individual Mandate a Tax

This Sunday’s New York Times had a fascinating story about how the defense of the individual mandate has shifted from the Commerce Clause – even though the law itself is replete with boilerplate about “economic activity” – to Congress’s taxing power.  Here’s the first paragraph (h/t Jonathan Adler):

When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”

This is huge.  After months of arguing that cases like Wickard v. Filburn (Congress can regulate the wheat farmers grow for personal consumption) and Gonzales v. Raich (Congress can regulate personal growth of state-allowed medicinal marijuana) justify the requirement that every man, woman, and child buy a health insurance policy, government lawyers (and spokesmen) now say the mandate is just a regulation accompanying a lawful tax (the penalty you pay for not buying insurance).  After I spent most of April and May criss-crossing the country debating the constitutionality of Obamacare, it turns out that my opponents were barking up the wrong tree!

But don’t just take it from me.  Here’s Georgetown law professor and Cato senior fellow Randy Barnett’s dissection of the Times story and its significance.  An excerpt:

Now there are cases that say (1) when Congress does not invoke a specific power for a claim of power, the Supreme Court will look for a basis on which to sustain the measure; (2) when Congress does invoke its Tax power, such a claim is not defeated by showing the measure would be outside its commerce power if enacted as a regulation (though there are some older, never-reversed precedents pointing the other way), and (3) the Courts will not look behind a claim by Congress that a measure is a tax with a revenue raising purpose. 

But I have so far seen no case that says (4) when a measure is expressly justified in the statute itself as a regulation of commerce (as the NYT accurately reports), the courts will look look behind that characterization during litigation to ask if it could have been justified as a tax, or (5) when Congress fails to include a penalty among all the “revenue producing” measures in a bill, the Court will nevertheless impute a revenue purpose to the measure. 

Now, of course, the Supreme Court can always adopt these two additional doctrines. It could decide that any measure passed and justified expressly as a regulation of commerce is constitutional if it could have been enacted as a tax. But if it upholds this act, it would also have to say that Congress can assert any power it wills over individuals so long as it delegates enforcement of the penalty to the IRS. Put another way since every “fine” collects money, the Tax Power gives Congress unlimited power to fine any activity or, as here, inactivity it wishes! (Do you doubt this will be a major line of questioning in oral argument?) 

Well, at least they’re not (yet) relying on Rep. John Conyers’s “Good and Welfare Clause.”  (Conyers, remember, is a lawyer and chairman of the House Judiciary Committee).

For a concise legal argument against the use of the taxing power to justify the individual mandate, see Cato’s amicus brief supporting Virginia’s challenge to the health care reform.  And for a great resource on all the state lawsuits against the new law, see this new blog/website run by Santa Clara law professor Brad Joondeph.

Free Trade Begins at Home

When pundits discuss “free trade,” most people think of international trade, eliminating tariffs, import quotas, and the like. That’s because the Constitution’s Commerce Clause – the one Congress has been using and abusing for decades – grants the government the power to “make regular” trade between the several states.  For example, Oklahoma can’t ban imports of beef from coming across the Red River and New York can’t have a different licensing regime for long-haul tracks entering from New Jersey rather than Pennsylvania.

While this commerce- (and liberty-) enhancing feature of our federal system has required a Supreme Court reminder for traditional wine retailers in recent years, Americans have generally taken for granted that buying and selling products between American jurisdictions is perfectly normal.

It may surprise you to learn, then, that in Lake Elmo, Minnesota, proprietors of a 40-year-old family farm that yields flowers, pumpkins and Christmas trees, are facing fines and 90-day jail sentences for attempting to sell their products in that town.  The reason?  Part of their farm lies outside city limits, and in Lake Elmo it’s illegal for farmers to sell products – even from their own land – unless they were grown within the city.  You can view a short video about their story here:

Thankfully, our friends at the Institute for Justice are stepping up to defend these folks for making a living by engaging in domestic free trade.  This blatant protectionism is harmful and foolish when practiced with foreign trading partners, and is all the more repugnant when practiced against one’s own neighbors who provide the community with valuable goods and services.  That these law-abiding entrepreneurs face potential jail time for the crime of “selling produce across city lines” is anathema to the Constitution.

You can read Cato’s work on agricultural free trade here

George Will Has Questions for Elena Kagan

George Will has some excellent questions for Supreme Court nominee Elena Kagan. 

Here’s an excerpt:

The government having decided that Chrysler’s survival is an urgent national necessity, could it decide that Cash for Clunkers is too indirect a subsidy and instead mandate that people buy Chrysler products?

If Congress concludes that ignorance has a substantial impact on interstate commerce, can it constitutionally require students to do three hours of homework nightly? If not, why not?

Can you name a human endeavor that Congress cannot regulate on the pretense that the endeavor affects interstate commerce? If courts reflexively defer to that congressional pretense, in what sense do we have limited government?

In Federalist 45, James Madison said: “The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite.” What did the Father of the Constitution not understand about the Constitution? Are you a Madisonian? Does the doctrine of enumerated powers impose any limits on the federal government? Can you cite some things that, because of that doctrine, the federal government has no constitutional power to do?

It is unfortunate that Will’s column did not make the hard copy of today’s Washington Post.  (The column is dated today, but it’ll likely appear in his regular Sunday space.) Senators on the Judiciary Committee need to read this stuff.

Obamacare Is Unconstitutional

The very day President Obama signed the Patient Protection and Affordable Care Act, aka Obamacare, Virginia’s attorney general filed a lawsuit in federal court challenging the constitutionality of the health care overhaul. Virginia’s complaint alleges, in relevant part, that the PPACA’s requirement that every individual purchase health insurance or pay a fine – the “individual mandate” – is unconstitutional because Congress lacks the power to enact it.

The U.S. Government filed a motion to dismiss, claiming that Virginia lacked standing to bring this suit but also that the Commerce Clause, the Necessary and Proper Clause, and Congress’ taxing power all justify the individual mandate. Virginia responded, in relevant part, that the Commerce Clause does not grant Congress unbridled authority to regulate inactivity and force every man, woman, and child to enter the marketplace or face a civil penalty.

Cato, joined by the Competitive Enterprise Institute and Georgetown law professor (and Cato senior fellow) Randy Barnett, filed a “memorandum” – not called a “brief” because this is district (trial-level) court – supporting Virginia’s position and explaining that neither of the Government’s fallback positions legitimizes the individual mandate. We point out that the Necessary and Proper Clause is not an independent source of congressional power, but enables Congress to exercise its enumerated powers. Similarly, the taxing power does not authorize the individual mandate because the non-compliance penalty is a civil fine – and it would be unconstitutional even if it were a tax because it is neither apportioned (if a direct tax) nor uniform (if an excise tax). Moreover, Congress cannot use the taxing power as a backdoor means of regulating an activity unless such regulation is authorized elsewhere in the Constitution.

You can read our memorandum here.  The Government now has an opportunity to reply to the arguments raised by Virginia and those supporting its position (including us), and then the court will entertain oral arguments on the motion to dismiss.  We can expect a ruling this fall.