So far in this series of posts, I have given a brief outline of congressional power generally and under the Commerce Clause specifically, discussed several salient precedents, and set forth arguments that the government could make in favor of the constitutionality of the individual mandate. (Previous posts are here: Post 1, Post 2, and Post 3.) In this post, I’ll cover the basic arguments that the challengers to the individual mandate’s constitutionality could make.
Congress’s commerce power is certainly broad, as can readily be seen from Gonzales v. Raich, 545 U.S. 1 (2005), and, given its record in Commerce Clause cases over the last 75 years, it’s hard not to conclude that the federal government has a sort of home-field advantage on this turf. But the constitutional challenge to the individual mandate is not frivolous. The challengers’ argument starts with a simple, startling observation that, as far as I know, is true: no federal law has ever required that private citizens enter into an economic transaction with a private entity, until now. If that is so, then (the challengers can argue) the Supreme Court cannot simply apply preexisting precedent, and the federal government cannot simply argue that the mandate is, in its constitutional aspect, analogous to other laws it has previously passed. Instead, the Court would have to extend the scope of its precedents in order to cover the government’s newfound assertion of congressional power.
Still, the challengers need to show that the mandate is genuinely different from exercises of the commerce power that have previously been upheld. Without a foothold in existing doctrine, the challengers are merely begging the question. I think they’ll find their foothold in the requirement that Congress regulate only economic activity that has a substantial economic effect. See United States v. Lopez, 514 U.S. 549, 560 (1995) (“Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained." (emphasis added)); United States v. Morrison, 529 U.S. 598, 610 (2000) (quoting Lopez), quoted in Raich, 545 U.S. at 25. Raich hewed to this rubric by holding that intrastate possession of marijuana that had not been purchased was nevertheless part of a larger class of “quintessentially economic” activity, and that Congress had the right to make a policy judgment that included the “narrower class of activities within the larger regulatory scheme.” Raich, 545 U.S. at 25-26 (internal quotations omitted). Raich distinguished its holding from the holdings of Lopez and Morrison, in which the statutes at issue had been struck down, by invoking this economic/non-economic distinction. See id. Accordingly, the challengers could argue, Congress cannot require that people purchase health insurance, because the decision whether or not to engage in economic activity is not itself an economic activity.
In the online debate that I discussed in my last post, Dean Chemerinsky asserts that, “if I decide to buy or not buy something, that is economic activity. Those not purchasing health insurance have a substantial economic effect on interstate commerce.” But this blurs the line between the two distinct requirements of the substantial economic effect test: that an activity be economic, and that it have a substantial economic effect on interstate commerce. Just because an activity has a substantial economic effect does not automatically make the activity economic; otherwise, the two parts of the test would collapse into one. See Lopez, 514 U.S. at 566-68 (suggesting that a robust economic/noneconomic activity distinction provides an important limitation on Congress’s enumerated powers).
This analysis dovetails into Dean Chemerinsky’s argument, summarized in my last post, that the holdings of Wickard v. Fillburn and Raich show that an activity can be considered “economic” even if it does not involve an economic transaction. While this is concededly true, it does not end the inquiry. The activity in both of those cases was regulable because the class of activity (growing wheat, in Wickard; possessing marijuana, in Raich) fell within Raich’s definition of economic activity: activity involving “the production, distribution, and consumption of commodities.” Raich, 545 U.S. at 17-21, 25-26 (internal quotations and citation omitted). By contrast, deciding whether to purchase health insurance does not seem to fall within this definition, any more than deciding whether to produce, distribute, or consume a commodity is itself an economic activity.
Taking another tack, Dean Chemerinsky argues that the cases which establish Congress’s power “to require that hotels and restaurants serve racial minorities” show that “the refusal to engage in an economic transaction” may be “deemed economic.” See Heart of Atlanta Motel, Inc. v. United States, 379 U. S. 241 (1964); Katzenbach v. McClung, 379 U. S. 294 (1964). But these cases pertained to hotel owners and restaurateurs who were already engaged in economic activity, and federal law simply told them that, if they chose to enter into economic transactions, they had to do so on a non-discriminatory basis. It was not compelling them to engage in those transactions in the first place. In other words, the laws at issue in these cases still regulated economic activity, because they told sellers of goods and services how to engage in economic transactions, not whether to do so.
And so, the challengers can argue, with the health care law. Congress can regulate how insurance companies engage in their economic transactions by, for instance, requiring that companies not discriminate against individuals with preexisting conditions. (Whether or not that provision of the law is wise, it is pretty clearly constitutional under current law.) In so doing, Congress has defined the parameters of an economic transaction—a fairly straightforward regulation of economic activity, and one that is akin to the anti-discrimination laws addressed in Katzenbach and Heart of Atlanta in an important respect: it prohibits the seller from differentiating among potential clients on the proscribed basis. Such regulation of economic activity is qualitatively different from requiring that an individual enter into an economic transaction in the first place—which, under the challengers’ argument, Congress has never had the power to do.
In a sense, the novelty of the individual mandate aids the challengers—if the mandate is truly unprecedented, then, by definition, no precedent could support it. But that’s a double-edged sword, because no precedent forbids it yet, either. Given that the history of the Commerce Clause in the 20th century was primarily a history of the commerce power’s expansion, the government has reason to hope. On the other hand, the Supreme Court may decide that the individual mandate goes too far by requiring that private citizens enter into economic transactions with other private entities.
My next post will tie up some loose ends in my summary of the Commerce Clause debate.
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