July 3, 2012 / 9:31 PM / 7 years ago

Analysis: Legal eagles redefine healthcare winners, losers

WASHINGTON (Reuters) - When the Supreme Court on Thursday upheld President Obama’s healthcare law under Congress’s power to tax, but not its power to regulate the economy, many conservatives were quick to hail the decision as a victory for more limited government.

Justice Elena Kagan walks down the steps of the Supreme Court with Chief Justice of the United States John Roberts following her formal investiture ceremony in Washington October 1, 2010. REUTERS/Larry Downing

By saying the Commerce Clause of the U.S. Constitution does not allow Congress to penalize people for “inactivity” - such as someone’s decision not to purchase health insurance - the thinking went, the court opened the door to challenges to laws that might attempt to do the same.

But over the past few days a more nuanced interpretation of the ruling’s impact has begun to emerge in discussions on legal blogs, among lawyers and in the country’s ivory towers. In this conversation, voices on the left and right are saying the ruling on the Commerce Clause issue, no matter how important, is largely academic. It won’t affect any current laws, won’t have an impact on any pending lawsuits, and in the unlikely event that the opinion spurs any immediate legal challenges, those challenges will likely fail.

“I’ve yet to see a list of vulnerable statutes, and I don’t think there are any,” said Jonathan Adler, a self-described libertarian and professor at Case Western Reserve University School of Law, who on Thursday characterized the decision as “losing the battle but winning the war.” In Adler’s view, imposing a new limit on Congress’ Commerce Clause powers is a victory, even if it isn’t “the first step toward reversing the New Deal.”

The conservatives’ about-face echoes the experience of liberals who initially feared that the Commerce Clause was the healthcare law’s ticking time bomb, which could unleash legal attacks on both existing and future legislation. Instead, in recent days, progressives are coming to realize the Commerce Clause section is no slam dunk for the right.

The day the ruling came down, Neal Katyal, the former acting U.S. Solicitor General, warned in an op-ed article in the New York Times that the Commerce Clause holding could jeopardize some future federal legislation. The opinion was only the third time in 80 years that the high court struck down a federal law for violating the Commerce Clause, he noted. But by Tuesday, in an interview with Reuters, Katyal acknowledged that the effect may be delayed and that he didn’t see any litigation coming out of the holding in the near term.

Geoffrey Stone, a professor at the University of Chicago Law School and a member of the National Advisory Council for the American Civil Liberties Union, had a similar reading. “The practical impact is, it won’t have much impact,” said Stone. The conservatives “won an argument, but it’s not an argument that’s likely to occur very often. And when it can, it’ll be circumvented like it was here,” he said.

It is fairly unusual for a ruling to have a delayed dramatic effect. The best example that Yale Law School professor Akhil Reed Amar could come up with was Marbury v. Madison in 1803. In that ruling, the high court established the concept of judicial review - the practice that allows courts to uphold or invalidate legislative and executive action - but it took 60 years for the court to ever use that power, said Amar.


Long before the Affordable Care Act made its divisive national debut, the Commerce Clause had been a source of friction between the left and right. Starting in the 1820s, Congress had relied on the provision to pass laws addressing issues ranging from interstate transportation to worker safety to civil rights. But while liberals celebrated the use of the Commerce Clause to expand protections for citizens, the provision became a bete noire for conservatives, who viewed it as an instrument for government overreach. In the 1930s and ‘40s, Congress relied on the Commerce Clause to bulletproof everything from federal labor laws to milk price regulations.

Although conservatives tried many times after the New Deal to narrow the reach of the Commerce Clause, it wasn’t until 1995, in U.S. v. Lopez, that they were successful. In that case, the court ruled that the Commerce Clause did not give Congress the right to ban the carrying of guns in school zones. There have been a handful of cases since then seeking to rein in the Commerce Clause, though none as definitive as the healthcare ruling.

Challengers conceivably could bring lawsuits under the newly redefined provision, but experts say it’s unlikely they would hold up in court.

David Driesen, a law professor at Syracuse University College of Law, writes for an environmental blog run by the Center for Progressive Reform. In a post on Friday, he raised the prospect of challenges brought under the Clean Air Act, which gives the government the authority to require companies to install pollution control devices. Asked Driesen: What would happen if a business argued that the Clean Air Act was forcing it to purchase a product in violation of the healthcare ruling?

Not much, he concluded. Such a challenge would be unlikely to topple environmental regulations because the pollution-control requirement would not be the same as regulating inactivity. Rather, it would regulate an ongoing activity -pollution-generating production - even as it required companies to purchase a product, Driesen wrote.

In a slightly more fanciful scenario, Andrew Koppelman, a liberal law professor at Northwestern University, posited an example of a deadbeat dad who could mount a creative legal argument to dodge child-support payments under interstate enforcement laws. The dad could challenge the federal enforcement laws on grounds that they penalize him for failing to pay for something.

That argument, too, would likely fail, suggested Andrew Pincus, a partner with the national law firm Mayer Brown who has argued in front of the Supreme Court many times. The deadbeat dad already had a legal obligation to support the child, and the court would simply be enforcing an obligation that already existed.


Meanwhile, yet another group of legal thinkers pontificating in the blogosphere has pronounced the will-it-or-won’t-it prognostication a waste of time. In this view, the debate is moot because the Commerce Clause section is not legally binding.

Under the concept of precedent, the reasoning and comments in legal opinions fall into two categories: material that’s critical to the outcome, which is precedent-setting, and material that is ancillary, which isn’t precedent-setting. Identifying the ancillary bits, referred to as dicta, can be a guessing game, and debates often arise among lawyers and judges over whether portions of decisions qualify as dicta.

In the healthcare opinion, a majority of the court found that Congress could require people to purchase health insurance under its power to tax. Roberts, who wrote the majority opinion upholding the healthcare law, also wrote that the Commerce Clause couldn’t be used to pass the individual mandate. Now, scholars are debating whether his Commerce Clause statements are dicta or not.

Some, such as Georgetown University Law Center professor Randy Barnett - one of the main legal architects of the healthcare challenge - say Roberts tried to couch his Commerce Clause finding as essential to the outcome and not dicta. He points to one clause in particular in the chief justice’s opinion: “Without deciding the Commerce Clause question, I would find no basis to adopt such a saving construction” under the tax power, Roberts wrote.

That rhetorical move does not necessarily make the Commerce Clause part of the ruling binding precedent, said Deborah Pearlstein, a professor at the Benjamin N. Cardozo School of Law. “That part of Roberts’ opinion was completely unnecessary to the holding of the court,” she said.

What’s more, the language may not be precedent without the backing of a majority of the justices, according to common law. In the 5-4 ruling upholding the law, none of the other justices signed onto the section of Roberts’ opinion dealing with the Commerce Clause.

The four conservative justices found that the Commerce Clause would not apply, but they had a different reasoning than Roberts. So it’s unclear whether the dissenting votes could even count toward a binding holding of the court.

That would give Roberts’ Commerce Clause comments even less weight under a strict legal analysis, said Steven Schwinn, a constitutional law professor at the John Marshall Law School.

“He really was out there on his own,” Schwinn said.

Editing by Eileen Daspin and Douglas Royalty

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