May 24, 2013

Obamacare before the Supreme Court: “The Emperor Has No Clothes!”

Courtroom illustration shows Deputy Solicitor General Edwin Kneedler speaking to Justice Antonin Scalia and Chief Justice John Roberts of the U.S. Supreme Court in Washington

In a case of “the Emperor has no clothes,” the justices played the part of the skeptic to the Obama Administration’s protestations of Obamacare’s constitutionality.  With the oral arguments on constitutionality of the Affordable Care Act over, let’s take a look back at the reactions to the arguments:

First, the crux of the argument? That the government cannot regulate “inactivity,” an angle that has been pushed by Georgetown professor Randy Barnett:

On Monday, as the court began three days of arguments, questioning by the nine justices suggested they were ready to review the law now rather than wait until it has fully kicked in. That lays the groundwork for arguments for the challenge championed by Professor Barnett: that Congress’s power to set rules for commerce does not extend to regulating “inactivity,” like choosing not to be insured.

Apparently, the Supreme Court is buying the argument, much to the Obama Administration’s dismay.

In “Obama’s Supreme Court Disaster,” Adam Serwer says that the government’s lawyer Donald Verilli should be glad that the Supreme Court doesn’t allow cameras in the court room; his performance was that bad.

Stepping up to the podium, Verrilli stammered as he began his argument. He coughed, he cleared his throat, he took a drink of water. And that was before he even finished the first part of his argument. Sounding less like a world-class lawyer and more like a teenager giving an oral presentation for the first time, Verrilli delivered a rambling, apprehensive legal defense of liberalism’s biggest domestic accomplishment since the 1960s—and one that may well have doubled as its eulogy.

Investors Business Daily feels bad for Verilli, but doesn’t blame him. The Affordable Care Act just isn’t constitutional, the editorials says.

We almost felt sorry for Donald Verrilli, the solicitor general who had to defend the constitutionally indefensible. Over three days of intense interrogation by nine Supreme Court justices, Verrilli failed to muster a single coherent, reasonable argument in support of the ObamaCare law’s constitutionality.

Instead, his shambling, unfocused talking points left the government case in disarray — underscoring what a poorly conceived, badly designed law this was in the first place, and why it must be overturned.

Some think that the disasterous arguments have put the Obama Administration on the defensive over the heart of Obamacare, the individual mandate on Americans to buy healthcare insurance.

That’s a purely political argument to a constitutional question. [White House Press deputy press secretary] Earnest  offered no defense along the lines of the precedential history of Congress and the commerce clause. It is the reach and scope of commerce-clause authority that is at the heart of the high court’s scrutiny of the health care law.

A week ago, ACA supporters were looking forward to a triumph. Now, they’re counting their losses. What happened?

Perhaps the most telling moment was during a question from Justice Kennedy. Ilya Shapiro describes it:

By this point the government’s head appellate advocate was on his heels, dodging increasingly skeptical queries, until Justice Kennedy delivered what in poker would be seen as the key “tell”:

JUSTICE KENNEDY: I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

Although you can’t hear it on the audio recording, the audience gasped.

Just like that, the headlines started changing.

The law isn’t dead, yet though, say supporters.

As Mark Twain might say, reports of Obamacare’s demise are greatly exaggerated. While the conservative justices expressed considerable reservations about the law’s scope, Justice Kennedy, the key swing vote, also noted, near the very end of the argument, that the unique context of the healthcare market may be sufficient to validate the “individual mandate.” The biggest challenge the government has faced in defending the law has been the articulation of a limiting principle, and by argument’s end it seemed that Justice Kennedy might have heard one that he could sign on to. If he does vote to uphold the law, it’s possible that Chief Justice Roberts will join him, in the interest of not having the case decided by a single vote, in which case the vote would be 6-3.

On the other hand, Dr. Milton Wolf in the Washington Times is more than sanguine about the demise of Obamacare. He’s predicting complete overturn, and, if not, the downfall of America.

The die is cast: Obamacare will not survive. This is not a prediction of how the Supreme Court will rule on President Obama’s health care takeover, mind you. It’s the harsh reality that if Obamacare does not die a judicial or political death – or better yet, both – it will die an economic death, and if it does, it will take America down with it.

Obamacare’s costs are exploding in the land where budgets already have burst. The $900 billion bargain-basement 10-year cost estimate that Mr. Obama promised for his overhaul recently ballooned to $1.8 trillion. Of course, these are still just estimates, and considering that the government underestimatedMedicare’s cost by a factor of 10, who really knows how massive the final price tag will be?

Welcome to the United States of Greece, where our $15.6 trillion national debt has surpassed the size of our total economy.

Which begs the question: if not Obamacare, what? Healthcare reform is clearly necessary. In the Chicago Tribune,

“One way or another, Congress will have to revisit it in toto,” Justice Antonin Scalia said of the health law.

One way or another.

That should be a clarion call in Washington. The prospect that the court will strike down all or part of the law known as Obamacare hands political leaders of both parties a formidable challenge — and a vast opportunity: a second chance to get health care reform right.

On that point, James Pethokoukis asks “What will Republicans do if the Supreme Court kills healthcare” reform and suggests that perhaps combining Rep. Paul Ryan’s plan (block grants to states for Medicare0 with future president Mitt Romney’s plan (known as the “Hubbard Plan“) might be workable.

The Hubbard Plan has five elements: 1) allow all Americans to deduct from income taxes all their healthcare expenditures—premiums, employee contributions, out-of-pocket costs, etc.; 2) deregulate insurance markets to foster nationwide, portable health insurance; c) making health information more available; d) control anti-competitive behavior such as hospital mergers; e) malpractice reform.

In the meantime, stay tuned. The law hasn’t been overturned, yet, and still may stand. While you’re waiting, jog on over to the Sweaty Federalist for his snark on some of the arguments being made to uphold the law.

[AEI] [Glenn Hubbard] [Mother Jones] [Washington Times] [Investors Business Daily] [National Journal] [The Nation] [Chicago Tribune] [New York Times]

The Constitutionality of the Individual Mandate: The Very One-Sided Fordham Debate. [video]

There are few things in politics or the law quite so enjoyable as watching one use words to bludgeon and destroy a weak or faulty idea.

Recently (as in, on Monday of this week) the University of Utah‘s SJ Quinney College of Law hosted the Fordham Debate. The topic for the two Ivy League educated scholars who would take up opposing sides?

Be it resolved that the individual mandate provision of the Patient Protection and Affordable Care Act is constitutional under the commerce clause of the U.S. Constitution.

Yeah. Pretty much the lodestone for the entire political right’s anger at the elected left and why Obama, for all his panache, brilliance, and Vulcan-like demeanor, has lost the blessing of nearly  a majority of Americans.

And we all love debates, right?

In favor of the resolution (that the individual mandate is constitutional) was David Orentlicher, a JD/MD with two of his degrees from Harvard.  He is the Samuel R. Rosen Professor of Law, Co-director of the William S. and Christine S. Hall Center for Law and Health at Indiana University Robert H. McKinney School of Law – Indianapolis.

Opposing the resolution was Jonathan Adler, a Yale (and George Mason)  man, an attorney, professor, and director of the Center for Business Law and Regulations at Case Western Reserve University School of Law (as well as a regular contributor to the Volokh Conspiracy, which says a lot in itself).
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Seriously. Did Orentlicher even have a chance? Was he paid to put forth weak arguments and avoid more than a passing reference to any law (statute, common, or constitutional)?

English: Barack Obama signing the Patient Prot...

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Having earned my JD from SJ Quinney and listened to my share of left leaning professors pontificate, I was more than a bit surprised that a more able defender of Obama’s biggest legislative accomplishment. In the end, though, his argument boiled down to something like this: the healthcare plan won’t work without the individual mandate, so therefore it’s legal. 

Never-mind precedent or the constitution…

Take an hour, and watch the debate. I think  you’ll enjoy, and learn from, the arguments both for and against the individual mandate part of the Affordable Care Act (may it die a quiet death before the Supreme Court this year).

Federalism and the Republicans: Who needs RINOs when you can have FINOs?

Can the Republican Party still be the party of “small is better” government if it isn’t willing to stick to its guns when the policy is one of its favored issues? Such as, for example,  tort reform?

I hate it when I hear Republicans at the federal level attack Democrats on the size and scope of federal powers, especially when that Republican is:

A) not Ron Paul (and I’m not pulling for Paul for President; on the contrary); or

B) has been in office for longer than half a decade (there are some exceptions, but they are rare).

Other than that, few Congressional Republicans have much credibility on the scope of federal reach. I agree with cutting funding to ACORN and Planned Parenthood like any other Republican, but I don’t agree that Republicans are “without sin” in keeping the federal reach short when it comes to their own sacred cows. They often just have different sacred cows.

All too often it seems like Republicans are too willing to pick and choose when small government is appropriate. Federalism–that we are as states bound by contract (the constitution) with powers divided between the national and state governments–limits what the federal government can do. Most recently, and most popularly, Republicans have attacked the Affordable Healthcare for America Act (aka “Obamacare,” as cited last night by Anderson Cooper and the Act’s detractors) on grounds of being beyond the scope of the federal government’s powers. While the Commerce Clause allows a lot, it doesn’t allow a healthcare mandate, they say.

Along those same lines, would it allow a tort reform mandate? Senate Republicans are pushing back against Obama’s jobs bill with their own version, and while it’s probably DOA, that does change that it’s probably just as much a violation of the Republican mantra against unlimited federal power as Obamacare is.

The law’s own justification for its constitutional authority should be chilling to anyone committed to limited federal power. The bill’s findings state that health care and health insurance are industries that “affect interstate commerce,” and conclude that Congress therefore has Commerce Clause power to regulate them — even when it involves an in-state transaction between a doctor and patient, governed by in-state medical malpractice laws. Is there any industry that couldn’t be found to have an effect on interstate commerce? The agriculture and manufacturing industries, long considered the paradigmatic areas not covered by the Commerce Clause, certainly fall under federal power under this broad analysis.

Randy Barnett, writing in the Washington Examiner, calls it “Fair weather” federalism, and he notes that it will violate Congressional Republicans’ “Pledge to America” that promises to only pass bills that meet constitutional muster. It is part of their “HEALTH” Act to regulate state medical malpractice rules.

The problem is that torts have been a state regulated arena for the duration of the republic. The HEALTH Act would place limits on malpractice awards. (Ironically, I can hear the Democratically strong trial attorneys lobby screaming in rage at this violation of federalism…)

But tort law — the body of rules by which persons seek damages for injuries to their person and property — has always been regulated by states, not the federal government. Tort law is at the heart of what is called the “police power” of states.

What constitutional authority did the supporters of the bill rely upon to justify interfering with state authority in this way? Not their own assessment of the Commerce Clause, which grants Congress the power “to regulate commerce . . . among the several states.”

The answer to that question is the New Deal era Substantial Effects doctrine, a “subcategory” of the Commerce Clause, created during the 1940s to account for the growth in government reach during the Great Depression. Primarily concerned with regulatory law, it emerged out of cases dealing with steel strikes and agricultural production (specifically, corn) when the Supreme Court decided that  products crossing state lines would have a sufficiently substantial effect on commerce that Congress could regulate them under the Commerce Clause.

With the exception of only a few conservative Justices, including Justice Clarence Thomas (a hobbit crossing Mordor?), the Supreme Court hasn’t looked back, and Congress has, for the most part, been left to regulate what it will. ”This test, if taken to its logical extreme,” Thomas wrote in 1995, “would give Congress a ‘police power’ over all aspects of American life. . . . [T]he power we have accorded Congress has swallowed Art. I, Section 8.”

Says Barnett

Indeed, if Congress now can regulate tort law, which has always been at the core of state powers, then Congress, and not the states, has a general police power.

This issue concerns constitutional principle, not policy: the fundamental principle that Congress has only limited and enumerated powers, and that Congress should stay within these limits.

Which leads me back to the beginning: how can we trust Republicans any more than Democrats when they pick and choose when they want the federal government to expand beyond its constitutionally limited reach?  To Barnett I give the last word:

With friends like these, constitutional federalism does not need enemies.  Can we coin a new pejorative FINO:  “Federalists in Name Only”?   Oh well, I guess not.   But the best thing that can be said about this proposal is that it won’t become law.

[National Review Online] [Washington Examiner][Volokh Conspiracy]

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“Unconstitutional,” says the 11th Circuit.

Unconstitutional”

The news making its way through the legal blogosphere, and the online news outlets, is that the 11th Circuit has ruled the individual mandate part of the Patient Protection and Affordable Care Act (the “Act”) is unconstitutional.

Let me underscore that: only the individual mandate was found unconstitutional. The rest of the law has been, for now, left untouched.

The Washington Post called it one of the “most significant legal setbacks to the Obama administration’s health-care overhaul.”

If  you’re short on time, read at least the excerpts of the 2-1 decision  (of a very lengthy opinion) over at the Volokh Conspiracy. In short the Act is:

[...] the individual mandate was enacted as a regulatory penalty, not a revenue-raising tax, and cannot be sustained as an exercise of Congress’s power under the Taxing and Spending Clause. The mandate is denominated as a penalty in the Act itself, and the legislative history and relevant case law confirm this reading of its function.

Further, the individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional.

Etc, etc…and, here’s the part the right will love:

This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives. “

Too bad this didn’t come out yesterday. The Iowa Republican debate would have been that much more juicy with the ruling hanging in the air, even with the Supreme Court still in the Act’s future.

If  you have more time, here are a few more commentaries you might look at:

From Utah Political Summary’s Curt Bentley:

One of the more odd things about the majority opinion — at least in my humble opinion — is its use of an overinclusiveness argument.  Over/underinclusiveness is a consideration in individual rights cases, but, in my opinion, has no real role to play when it comes to evaluating a Congressional action under the Commerce Clause.  The over/underinclusiveness analysis is designed to get at the sincerity of a legislature’s expressed motivations.  For example, if a legislature regulates more broadly (or narrowly) than necessary to solve a particular problem, one can infer that it may be dislike for a certain group, rather than a desire to solve the stated problem, that motivates the legislature action.

Jonathan Turley, expressing concerns about federalism issue the Act affects opined that

I view the health care legislation as presenting a new type of federal claim and one that could leave few things as protected by federalism by expanding Congress’ enumerated powers to an unprecedented scope.

In other words, if the feds can do this, what can’t they do? (And, I would add, what does that mean for the 10th Amendment?

Ilya Somin, also at Volokh, noted that this wasn’t a partisan decision:

Significantly, Judge Frank Hull, a Clinton appointee has now become the first Democratic-appointed judge to vote to strike down the mandate, balancing Republican Sixth Circuit Judge Jeffrey Sutton who voted to uphold it. The decision further undermines claims that the individual mandate suit is a sure loser that goes against a supposed expert consensus that the mandate is clearly constitutional.

Jonathan Adler says “Hear, hear!

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