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Without Precedent

The Supreme Court weighs Obamacare.

Mar 26, 2012, Vol. 17, No. 27 • By ADAM J. WHITE
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If the Supreme Court finds that the individual mandate is justified under neither the Commerce Clause nor the Necessary and Proper Clause, then the government has one remaining defense: its constitutional power to “lay and collect Taxes, Duties, Imposts, and Excises.” At first glance this argument may seem difficult to press with a straight face, given the administration’s own repeated insistence that Obama-care is not a tax. During the legislative debates, President Obama told his on-air interlocutor, George Stephanopoulos, “I absolutely reject [the] notion” that the mandate is a tax increase. More recently, the president’s acting budget director testified to Congress that the individual mandate is not a tax.

Nevertheless, the administration argues before the Court that the mandate is a tax, because the penalty for failing to buy insurance would be collected via the Internal Revenue Code: “It is fully integrated into the tax system, will raise substantial revenue, and triggers only tax consequences for non-compliance. .  .  . The Court has never held that a revenue-raising provision bearing so many indicia of taxation was beyond Congress’s taxing power, and it should not do so here.”

The challengers point to the text of the Obama-care enforcement provision, which describes the consequences of disobeying the mandate as a “penalty.” It is levied not to raise revenue but to penalize those who fail to obey the mandate’s command. Nor is it collected through ordinary tax enforcement procedure. And so it is not a “tax.”

If the Court fails to affirm the individual mandate under either the Commerce Clause, the Necessary and Proper Clause, or the Tax Clause, then the Court must turn to the question of remedy: Should only the individual mandate be struck down, or should the Court strike down Obama-care in its entirety? To borrow the technical term, is the individual mandate “severable” from the rest of Obama-care?

The government concedes that if the mandate falls, then the law’s “guaranteed-issue” and “community-rating” provisions, entitling all comers to insurance coverage, must fall with it; “without a minimum coverage provision, the guaranteed-issue and community-rating provisions would drive up costs and reduce coverage, the opposite of Congress’s goals.” But it urges the Court to leave the rest of the law intact. The challengers, by contrast, point to Obama-care’s lack of a “severability clause,” boilerplate language declaring Congress’s intent that the remainder of a law be left intact after any one provision is struck down; more generally, they argue that the law’s myriad provisions were intended to hang together as a whole. None of them would have been enacted without the mandate ensuring that people could not “game” the system by declining to buy health insurance until they are actually in need of health care.

Finally, the Court must decide whether a separate federal statute precludes the Court from hearing the case at all. The Anti-Injunction Act bars federal courts from hearing cases filed “for the purpose of restraining the assessment or collection of any tax.” Dating back to the Reconstruction Era, this law ensures that federal tax disputes are routed to one of the specially designated courts: the U.S. Tax Court, the U.S. Court of Federal Claims, or a U.S. District Court, and only after the I.R.S. levies the tax on the taxpayer. The government has abandoned this tack, but out of an abundance of caution, the Court appointed an outside lawyer to fully brief the argument that the case is jurisdictionally barred by the Anti-Injunction Act.

Those are the issues confronting the Court on the question of the individual mandate. They come to the Court from not just one federal court of appeals, but several. Technically speaking, the case arrived on petitions challenging the decision of the U.S. Court of Appeals for the Eleventh Circuit, the Atlanta-based court that struck down the individual mandate as violating the Commerce Clause, Necessary and Proper Clause, and Tax Clause. But other federal circuits have grappled with the issues in lawsuits separately brought to their own district courts. The D.C. Circuit and the Ohio-based Sixth Circuit each affirmed the mandate under the Commerce Clause. And the mid-Atlantic Fourth Circuit dismissed two cases: A suit brought by private parties was deemed barred by the Anti-Injunction Act, and a suit brought by Virginia’s attorney general was dismissed for lack of jurisdictional “standing.”

In these cases, the most interesting opinions were issued by prominent conservative judges who declined to strike down the individual mandate. The D.C. Circuit’s Laurence Silberman and Brett Kavanaugh (appointed by Reagan and George W. Bush, respectively) and the Sixth Circuit’s Jeffrey Sutton (also a Bush appointee) penned a remarkable set of opinions. Even in refraining from employing judicial power to strike down the mandate, the judges did not hide their worries about an assertion of federal power that they conceded was effectively unlimited, and that posed a stark challenge to the idea that our constitutional republic is one of limited, enumerated federal powers. And they did not hesitate to blame the Supreme Court for this predicament.

Judge Sutton conceded that the individual mandate was an unprecedented assertion of power, yet he concluded that the Supreme Court’s inconsistent Commerce Clause precedents sufficed to affirm the individual mandate. Those precedents were, to Sutton, a sign of a feckless Supreme Court adept at “frequently adopting limits on [Congress’s] authority and just as frequently abandoning them, all while continuing to deny that Congress has unlimited national police powers”; he challenged the Court to either “stop saying that a meaningful limit on Congress’s commerce powers exists or prove that it isn’t so.” But until the Court draws such a line, he concluded, the existing precedents leave room for the government to allow “necessity” to give “birth to an inventive (and constitutional) congressional solution.”

Judge Sutton’s doubts were largely echoed by Judge Silberman. Writing the majority opinion for the D.C. Circuit (which was joined by Judge Harry Edwards, a Carter appointee), Silberman recognized the individual mandate’s “novelty” and “lack of any doctrinal limiting principles,” yet he concluded that neither defect was fatal. The individual mandate would be affirmed not because of Supreme Court precedents commanding this result, but rather because of the absence of precedents commanding a decision in favor of the challengers: “No Supreme Court case has ever held or implied that Congress’s Commerce Clause authority is limited to individuals who are presently engaging in an activity”​—​as opposed to “inactivity”​—​“involving, or substantially affecting, interstate commerce.”

Silberman’s decision was a matter of placing the burden of proof on challengers who, absent Supreme Court precedents in their favor, simply could not carry the burden. Even if the individual mandate is unprecedented, Silberman would “presume” it to be constitutional in the absence of clear precedent, until the Supreme Court definitively says otherwise.

Next to Judge Sutton, Judge Silberman’s criticism of the Supreme Court was muted but not altogether absent. In affirming the mandate, Silberman pointed to the Supreme Court’s broadly deferential Commerce Clause jurisprudence. Because those precedents authorize Congress to proscribe commercial “activity,” Silberman concluded, no Court-recognized limits exist to check Congress’s “symmetrical” power to prescribe such activity. On that point, he cited the Supreme Court’s ambivalence in Raich, a 2005 decision affirming the federal government’s regulation of personal, noncommercial use of marijuana. That decision provided no limits against Congress’s regulating a person who is “not participating in any local or interstate market,” Silberman wrote.

While purporting to comply with the Court’s precedents, Silberman was subtly reiterating criticisms he had pressed years earlier, in the pages of the Atlantic just months after Raich was decided. In his remarks to the interviewer, and in prior opinions quoted in the article, Silberman fulminated against “every one” of the justices, who fail litigants by issuing broadly worded rulings lacking precise constitutional rules, and fail as well to clarify ambiguities left in a long line of conflicting precedents.

In declining to strike down the mandate, Silberman was joined by his younger colleague, Brett Kavanaugh, but for very different reasons. Unlike Silberman, Kavanaugh declined to reach any conclusions regarding the individual mandate’s constitutional merits; instead, he concluded that the case should have been dismissed for lack of jurisdiction under the Anti-Injunction Act, placing the constitutional issues beyond the courts’ reach until after the IRS begins collecting the mandate penalty.

Yet after exhausting the jurisdictional issue, Judge Kavanaugh offered tentative thoughts on the Commerce Clause issue, a question “extremely difficult and rife with significant and potentially unforeseen implications for the Nation and the Judiciary.” He agreed that the mandate is “unprecedented,” that it upsets longstanding balances of state and federal power, and that the government’s position lacked any meaningful limiting power, leaving the constitutional door open not just to criminal sanctions for violating the Obama-care mandate, but also to the federal government’s creation of countless other possible mandates. Yet even after recognizing all of this, Kavanaugh nodded to the contrary argument that the courts “should be just as cautious about prematurely or necessarily rejecting the Government’s Commerce Clause argument,” because judicial enforcement of the Commerce Clause against the federal government “is a rare, extraordinary, and momentous act for a federal court.”

The candid equivocations offered by Sutton, Silberman, and Kavanaugh are themselves the reflection of the equivocating themes and tendencies at the root of this case. The judges recoiled from the notion of unlimited federal power, yet they hesitated to insert the courts into a hotly contested policy fight. And because each of these appellate judges is committed to following precedent, their task was made effectively impossible by the absence of helpful Supreme Court precedents. Obama-care’s individual mandate simply pressed beyond the Court’s precedents, into uncharted constitutional territory.

But where the lower-court judges could blame disconcerting results on the Supreme Court’s Commerce Clause ambivalence, the Supreme Court justices enjoy no such luxury. They have nowhere to turn but to themselves. When faced with an unprecedented issue, it falls to them to set the precedent.

And no matter how long the line of precedents may be on a given issue, there may eventually arise a dispute that strains previous judicial reasoning beyond the breaking point. The best description of this situation was offered 90 years ago, in Justice Benjamin Cardozo’s The Nature of the Judicial Process:

Every new case is an experiment; and if the accepted rule which seems applicable yields a result which is felt to be unjust, the rule is reconsidered. .  .  . The principles themselves are continually retested; for if the rules derived from a principle do not work well, the principle itself must ultimately be re-examined.

When Supreme Court precedents are the problem, lower-court judges are able to avoid this difficult choice by pointing to the High Court’s inapt precedents and doing their best to fit the case within the precedents’ ill-tailored contours. But when the Supreme Court faces a question without useful precedent, it has no choice but to fall back on first principles​—​or, in Senator Obama’s formulation, “one’s deepest values, one’s core concerns, one’s broader perspectives on how the world works.”

The Court’s previous Commerce Clause decisions did not confront the justices with such a stark choice. While each case offered minor innovations, and the 1990s Court was willing to impose Commerce Clause limits that the Court previously eschewed, those cases arose in a familiar context​—​federal regulation of existing economic-related activity​—​and each involved the government restraining activity, not commanding it. It was one thing to ask the Court whether Congress could regulate to restrain people from selling wheat, possessing firearms, committing acts of violence against women, or buying medical marijuana—the federal restrictions at issue in the famous Commerce Clause cases. Those cases simply spoke nothing to the question of what the government may require people to do. Those cases offer no basis on which to affirm the individual mandate, or to strike it down.

With Obama-care the government raced beyond the premises and contexts of old cases, attempting to reshape the structure of federal government in an innovative, unprecedented way. But not for the first time​—​not even for the first time in recent memory. NFIB v. Sebelius is not simply the latest Commerce Clause case. It is the latest case in a remarkable string of cases confronting the Roberts Court with an unprecedented assertion of government power, and leaving the Court with the difficult task of how to preserve our constitutional structure.

In 2002, reacting to the corporate implosions at Enron, WorldCom, Tyco, Global Crossing, and elsewhere, President Bush signed the Sarbanes-Oxley Act. Among the act’s many reforms was a particular constitutional innovation: the creation of an independent agency, the Public Company Accounting Oversight Board, within another independent agency, the Securities and Exchange Commission. Independent agencies were themselves no 21st-century innovation; they dated back at least to the New Deal agencies, if not to the Interstate Commerce Commission in the 19th century, and they had enjoyed the Court’s imprimatur since at least 1935. But until 2002, Congress had never gone so far as to put one independent agency within another independent agency, giving the new creation a double layer of protection against presidential oversight.

Private parties filed a lawsuit challenging this innovation, in Free Enterprise Fund v. PCAOB, a case that reached the Supreme Court in 2009. The new, doubly independent board’s lawyers defended the agency by citing the older precedents, but the Court dismissed them as inapt: “Perhaps the most telling indication of the severe constitutional problem with the [board] is the lack of historical precedent for this entity.” And although Congress’s innovation was simply to add one more layer of the independence that the Court had endorsed years ago, this was a bridge too far: “This novel structure does not merely add to the Board’s independence but transforms it.”

And such a bridge would lead to ominously uncharted territory: “If allowed to stand, this dispersion of responsibility could be multiplied. If Congress can shelter the bureaucracy behind two layers of good-cause tenure, why not a third?” The government, for its part, was unable to identify any useful limiting principle, unwilling “to concede that even five layers” of independence “would be too many.” In short, the Court was left with a choice, and in the face of uncertainty it chose to draw a prudential line in the constitutional sand; it struck down the agency’s second layer of independence.

As the Free Enterprise Fund case was pending in the courts, another unprecedented government action occupied the justices: the litigation over the detention of alleged terrorists at Guantánamo. In those cases, the mere fact of detention was not unprecedented; instead, the constitutional novelty owed to the context surrounding modern detention. The global war on terror was “a national and international security emergency unprecedented in the history of the American Republic,” as the Court later described it. But some of the considerations that give the war its unprecedented character​—​the amorphous enemy force, the uncertain definition of victory, the manner in which terrorist detainees were swept up, and their detention at a U.S.-controlled base so close to the United States and so distant from the theater of battle​—​undermined the administration’s ability to convince the Court to stand by old wartime precedents.

The architects of the administration’s legal strategy sought to create a detention framework that accorded with the letter of existing law. As John Yoo reflected in his memoir, citing examples from the Civil War and World War II, “it is well-settled that the President, as commander in chief, has the power to determine how to defeat the enemy. This includes who to detain and how to detain them.” But the nature of the global war on terror, and the peculiar status and history of the U.S. facilities in Cuba, cast new light on the old precedents, at least among some of the justices worried by the implications of unfettered presidential wartime power.

Justice Kennedy alluded to some of these concerns in a concurrence in Rasul v. Bush (2004), when he urged that Guantánamo Bay was “in every practical respect a United States territory .  .  . far removed from any hostilities,” and therefore was not analogous to the American-administered German prisons at issue in the World War II precedent. His skeptical view of old precedents came into full focus in Boumediene v. Bush (2008), where he wrote a majority opinion recognizing the detainees’ constitutional right to challenge their captivity in federal court. “It is true that before today the Court has never held that noncitizens detained by our Government in territory over which another country maintains de jure sovereignty have any rights under our Constitution,” Justice Kennedy and four other justices conceded. “But the cases before us lack any precise historical parallel.”

The third example comes from yet another disparate Roberts Court decision: the election-speech case, Citizens United. There, the constitutional innovation came not in a statute, or even an administration policy, but an oral argument. In reviewing the Federal Election Commission’s position that campaign-finance laws empowered it to prohibit corporate election-related communications in the weeks preceding a federal election, Chief Justice Roberts and Justices Kennedy and Alito urged that such regulatory power had no apparent limits, and taken to its logical limit would empower the government to ban books. Rather than assuage the justices’ concerns, counsel for the government only confirmed them, agreeing that if an advocacy corporation published material advocating a candidate’s election, then the corporation “could be barred from using its general treasury funds to publish the book.”

That admission, like the government’s creation of independent agencies within independent agencies, and its wartime detention policies, stretched the old precedents past the breaking point. This “assertion of brooding governmental power,” Justice Kennedy later wrote for the Court, was troubling not because it cannot be reconciled with the Court’s precedents, but because it “cannot be reconciled with the confidence and stability in civic discourse that the First Amendment must secure.”

For all of the differences among those three cases (including the lineup of justices forming the Court’s majority), a common thread is evident. In each, the government had attempted to ground an unprecedented assertion of power in the letter of old precedents. In each, the change involved a fundamental innovation in the structure of government, be it the nature of regulatory agencies or the First Amendment freedoms that check the elected branches. And in each, the justices lacked useful rules guiding their decision, leaving them to exercise judgment rooted in more fundamental principles. The Court responded in each case by exercising prudence, drawing a new line in the constitutional sand, and requiring the government to step back to a more limited assertion of power.

In consciously avoiding rapid, radical change to the institutions of government, the Roberts Court’s prudence might be described as Burkean. But it should not be pigeonholed as strictly conservative in the ideological sense, for the Court’s insistence upon checking precipitous constitutional change is consistent even with prominent liberal theories of constitutional change.

Even Bruce Ackerman, a vigorous proponent of the “living constitution,” concedes that the Supreme Court needs to intervene to slow hasty constitutional overhauls by the elected branches. In his seminal work, We the People: Transformations, he argued that FDR’s New Deal reforms achieved constitutional legitimacy only after the Supreme Court struck down the first round of hasty, overreaching reforms. As Ackerman explains, FDR’s failure to secure the public’s consent to his constitutional reformation required the Court to rightly intervene, thus forcing FDR and Congress to engage the public in sustained, thorough deliberations before his constitutional reforms could be legitimated. Just as President Obama and Speaker Pelosi sought to evade a full airing of Obamacare, FDR and the New Deal Democrats were at first unwilling to undertake the “higher lawmaking” necessary for momentous reforms—and were rightly rebuked by the Court.

FDR and the New Deal Democrats, rooted in a broad electoral base, commenced an extended discussion of the reforms’ place in the constitutional tradition. This began with the ordinary work of partisan politics, but by the 1934 midterm elections, “the revolutionary character of the New Deal reforms was now obvious to any thinking American.” The Democrats’ “smashing victory” at the midterms offered a preliminary ratification for FDR’s constitutional changes, but even that was not enough.

Ackerman saw the Supreme Court as retaining a critical voice in the constitutional dialogue. The Court responded vigorously in 1935, striking down the New Deal reforms in a set of cases handed down on “Black Monday.” In three decisions reached not along partisan lines, but unanimously, the Court struck down the National Industrial Recovery Act, the Farm Bankruptcy Act, and the president’s attempt to fire one of the Federal Trade Commission’s five independent commissioners. In the first case, the Court held that the breadth of power delegated to the newly created National Recovery Administration was “without precedent,” going far beyond even the broad grants of power previously conferred upon the Federal Radio Commission and other regulatory agencies. In the second case, Justice Louis Brandeis wrote for the Court that after “centuries” of consistency in bankruptcy law, including reforms that followed each “major or minor depression,” no reform had gone as far as the Farm Bankruptcy Act in abrogating the rights of lenders, and therefore no prior law limiting lenders’ rights was sufficiently “analogous” to the New Deal’s attempted reform. And in the third case, the Court rejected the administration’s invocation of old precedents allowing the president to remove agency officials, concluding that the FTC office at issue in the case before the Court was simply not analogous to offices at issue in cases cited by the administration, because the FTC wielded far broader powers needing insulation against partisan presidential control.

One can argue about the merits of the Court’s decisions in those cases; indeed, two of the three precedents were eventually abandoned by the Court. But as Ackerman recognized, the importance of the Court’s action was not the substance of the decisions, but the “deeper wisdom” of the process that the justices imposed. “In joining hands with his more conservative brethren, Brandeis and his fellow ‘liberals’ were making it clear that the New Deal was proposing to do more than nibble around the edges of the laissez-faire constitutional tradition.” Under Ackerman’s theory, FDR and Congress could not legitimately enact and entrench their constitutional reforms without first engaging “the People” in a sustained constitutional dialogue proportionate to the magnitude of the constitutional reforms at issue, and it took the Court to force them to take those steps toward legitimacy.

As we now know, the debate over Obama-care fell far short even of this liberal standard for higher constitutional lawmaking. The individual mandate was a dramatic change to constitutional structure and practice. As Vice President Biden recognized in his own brand of constitutional rhetoric, the individual mandate was “a big f​—​ing deal.”

But instead of engaging the public in a sustained constitutional dialogue intended to achieve broad consensus, the administration and congressional Democrats avoided the substance of the debate at every turn. President Obama told a national television audience that the individual mandate was not a tax, only to reverse positions after Obama-care was signed. Speaker Nancy Pelosi urged that Congress “pass the bill so you can find out what is in it”; later, when asked to consider the possibility that the mandate might be unconstitutional, she dismissively responded, “Are you kidding me?”

And perhaps most significantly, the president secured the crucial final votes in favor of the bill by striking a deal with Rep. Bart Stupak and other pro-life congressmen, promising to respect rights of conscience by not requiring religious organizations to pay for their employees’ birth control and abortifacients. As Stupak himself now recognizes, the administration broke that agreement by issuing Health and Human Services regulations requiring religious organizations to pay for precisely those services.

The renewed debate sparked by HHS’s regulations may well be decisive. For the administration’s latest actions encapsulate precisely the concerns embodied in the Roberts Court’s decisions regarding Sarbanes-Oxley, Guantánamo, and preelection book banning, as well as the New Deal Court’s unanimous refusal to simply acquiesce to FDR. Unprecedented powers asserted by the government threaten to give rise to stark abuses of power​—​some foreseeable, perhaps many more unforeseeable. Faced with similarly novel assertions of government power in previous cases, the Court drew a constitutional line in the sand, out of an abundance of caution. The Court’s review of the individual mandate poses no less a challenge, and merits no less a response.

Adam J. White is a lawyer in Washington, D.C. His profile of Justice Samuel Alito, “The Burkean Justice” (Weekly Standard, July 18, 2011), was included among the “Exemplary Legal Writing” honors awarded annually by the Green Bag.

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