Federal Judge Declares Individual Health Care Mandate Unconstitutional: The Legal Arguments

While others here have reported the story (Patrick Edaburn, Jerry Remmers, Rick Moran), my purpose is to overview the key points in the decision.  The accuracy of my predictions about the outcome of this case give me much-needed hope for the outcome of my upcoming ConLaw exam.

Overall, the judge’s decision seems well-crafted as an appeal to the longstanding trends in Commerce Clause decisions from the Supreme Court’s more conservative wing.  In particular, the judge repeatedly emphasizes the necessity to impose some limits on the Commerce Clause to prevent it from being the exception that swallows up and digests any and all limits on Congress’ constitutional authority.  As an overarching argument, it appears well-founded to be persuasive to a majority on the Supreme Court that would include perennial swing vote Justice Kennedy.

There are four main legal points in the decision as as follows:

1. The attempt to require consumers to enter the market for health insurance is a regulation of economic inactivity that is beyond Congress’ power to regulate economic activity under the Commerce Clause.  The judge noted that if the Commerce Clause were to be extended to regulate inactivity as well as activity, there would literally be no ground in any area of human life that would be beyond Congress’ regulatory reach, including decisions about personal nutrition.

2. The Necessary and Proper Clause does not save the individual mandate because it only gives Congress the power to use all “necessary and proper” means to pursue ends that are within Congress’ constitutional reach.  Having found that regulation of economic inactivity is outside of Congress’ constitutional reach, the fact that the individual mandate may be necessary and proper means to regulate it does not remove that fundamental unconstitutionality.

3. The imposition of an excise “tax” as a “penalty” (the terms are used interchangeably in the text of the statute) to enforce the individual mandate does not bring it within the reach of Congress’ Tax Power.  Basically, the court calls Congress disingenuous, highlighting slipshod text and rather obvious contrivances designed to reclassify a regulatory penalty as a “tax”.  But the court cites a strong list of Supreme Court cases that say quite clearly that Congress just can’t convert a penalty into a tax by merely labeling it as one.  Since the primary function of the penalty is to punish those who do not comply with the individual mandate rather than to generally raise revenue (the court notes that revenue raising is merely an “afterthought” and those who closely observed the manueverings in Congress at the time will generally agree), it cannot be fairly classified within the constitutional definition of a “tax”.

4. The individual mandate can be severed, thus making the unconstitutionality of the individual mandate non-fatal to the rest of the health care reform bill.

1-3 are clear victories for conservatives opposed to the health care reform package and the legal ground as laid out by the court appears very strong, both objectively speaking (in the court’s analysis of precedent) and subjectively (in its likelihood to appeal to a Supreme Court majority that everyone concedes will finally decide this issue).  #4 represents a disappointment for conservatives, many of whom hoped that the unconstitutionality of the individual mandate would bring down all of health care reform like a house of cards.  Nonetheless, that hope was probably overreach in the first place, since it would require the court to simultaneously take a non-activist and an activist approach.  (While that is not impossible, see the procedural maneuvering in Citizens United for example, it usually weakens a lower court significantly.)

Anyway, this case has several years of further proceedings before it will be decided at the Supreme Court.  But as of today, conservative critics appear to have a very strong hand.