Thursday, April 8, 2010

Is the individual mandate constitutional? Part 2

In my last post, I gave a brief overview of the limitations on congressional power generally, and on the Commerce Clause power specifically. I noted that Congress may invoke its Commerce Clause power to regulate three categories: 1) the use of the channels of interstate commerce; 2) the “instrumentalities of interstate commerce;” and 3) activities that “substantially affect” interstate commerce. See, e.g., United States v. Lopez, 514 U.S. 549, 558-59 (1995).

The individual mandate obviously doesn’t fit into either of the first two categories, but that shouldn’t particularly concern its proponents; the substantial economic effects test is the most frequently used category to justify congressional action pursuant to the Commerce Clause.

There are literally thousands of pages of Supreme Court opinions on the Commerce Clause, many of which pertain in whole or in part to the substantial economic effects test. Since I can’t canvass each of these opinions in depth, this post will instead summarize three cases that are more or less representative of the Court’s precedents in this area. I had originally intended to analyze the application of these precedents to the individual mandate in this post, but given its length as is, I will leave that analysis for a subsequent post.

The 1942 case Wickard v. Filburn provides a good example of the expansive reading of congressional power under the Commerce Clause that emerged during the New Deal. The Agricultural Adjustment Act of 1938 required farmers to produce only a certain amount of wheat, in an attempt to restrict the volume of wheat in the market and thereby to control wheat prices. In Wickard, the Supreme Court held that the Act could regulate the excess wheat that a commercial farmer grew on his own farmland for the purpose of personal consumption rather than sale. The Court reasoned that the farmer would otherwise purchase his wheat in the open market, and that, when he was considered along with similarly-situated farmers in the aggregate, their participation in the wheat market (or lack thereof) would affect interstate supply and demand (and would thereby affect prices that Congress was trying to regulate). The Court also noted the potential that a change in prices would shift some of that excess wheat into the interstate market, thereby affecting the volume of wheat in that market (and also affecting prices). See 317 U.S. 111, 114-19, 128-29 (1942).

In the 1995 case United States v. Lopez, by contrast, the Supreme Court, for the first time in sixty years, struck down a federal statutory provision on the ground that Congress had exceeded its Commerce Clause power. The statute had outlawed possessing a firearm within 1,000 feet of a school. The government argued that the law regulated an activity that had a substantial economic effect because possession of a firearm in a school zone might result in violent crime (and crime imposes costs on the economy and may inhibit travel) or otherwise hamper public education (which leads to a less productive citizenry and thus to a less productive national economy). The Court ruled that upholding a law that had, in its view, such an attenuated connection to interstate commerce would convert Congress’s power under the Clause into a general police power, a power that the Constitution does not delegate to Congress. 514 U.S. at 563-64, 567-68.

Finally, Gonzales v. Raich, a Supreme Court case from 2005, held that Congress’s power under the Commerce Clause allows it to outlaw the possession of marijuana for medical reasons that the medical patient litigants had either grown, or obtained for free, wholly within a state (California), even where such possession was legal under state law. Drawing parallels with Wickard, the Court ruled that exempting the litigants in Raich from the provisions of the federal Controlled Substances Act, which bans the manufacturing, possession, distribution, or sale of marijuana (and may generally do so because those activities either constitute interstate commerce in and of themselves or else have a substantial effect on the interstate market for marijuana), would leave a “gaping hole” in that Act and hinder Congress’s ability to regulate the interstate market. 545 U.S. 1, 17-22 (2005).

Notably, courts need only apply rational basis scrutiny to the government’s claim that a regulated activity has a substantial economic effect on interstate commerce. E.g., id. at 22 (citing, inter alia, Lopez, 514 U.S. at 557). The rational basis test, which is used in many areas of constitutional law, is notoriously lenient to the legislature; virtually any reason that can be adduced by a legislature in support of its enactment will do.

In my next post, I’ll discuss how the existing Commerce Clause precedent may be applied to the individual mandate.

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