Unprecedented: ObamaCare & the Commerce Clause

Ever since the passage of the healthcare reform bill, conservatives have been calling for a legal challenge of the bill in federal courts. Indeed, 14 state attorneys general have announced a lawsuit against the federal government over the legislation, which they claim is an unconstitutional breach of state sovereignty and an over-expansion of federal power.

Critics of this decision, including Secretary of Health and Human Services Kathleen Sebelius, accuse the GOP of political posturing, hoping to continue their obstructionist stance against the Obama agenda, or using the lawsuit to further their careers. AG Bill McCollum certainly stands to gain – the bill is unpopular here in Florida, and his position in the polls for the Gubernatorial race is moving in a promising direction.

But underlying the typical partisan bickering is a very interesting legal question: Do the states have a case? Is the healthcare legislation unconstitutional, and how will the courts rule?

This isn’t an easy question to answer, and it’s much deeper than the superficial political questions of the government’s role in healthcare. There are far-reaching implications of a decision on one key issue: the individual mandate. The President often refers to his reform effort as unprecedented, and for once, conservatives agree; literally, there is no legal precedent for this type of mandate.

To begin, it is important to understand the powers enumerated in the Constitution by the Commerce Clause, and perhaps more importantly, the Supreme Court’s jurisprudence on the subject.

“[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes”

The Supreme Court, historically, has given Congress considerable flexibility when it comes to this provision, particularly during the industrialization and modernization of the US, when trade and commerce between states expanded. Early considerations of direct versus indirect commerce were abandoned in favor of a broader interpretation, which essentially gave the federal government complete control over the economy. This was the case with New Deal-era case law, such as Wickard v. Fillburn (1942), which held that Congress could regulate agricultural products, even those that are grown only for personal consumption.

This precedent held firm and many considered the Commerce Clause to be “settled law”. However, the issue was re-opened in United States v. Lopez (1995). Here, three specific powers were identified and outlined:

1. Congress may regulate the use of channels of interstate commerce.
2. Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce.
3. Congress has the power to regulate activities that have substantial relation to interstate commerce.

The test outlined in (1) is the power of Congress to manage and regulate roads, ports, highways, etc. Part (2) refers to the power to manage things like regulatory agencies, unions, trade commissions, and place restrictions on industries and businesses engaged in commerce. The most pressing issue arises from (3), which gives Congress the ability to regulate any and all economic activities that are deemed have a “substantial” impact on the national economy. It is here that the healthcare bill proponents find their most promising ally. There is no denying that healthcare represents a truly substantial portion of our economy, and most certainly passes the test outlined in the Lopez case.

Be that as it may, there is a notable distinction – the individual mandate attempts to regulate commerce that citizens are not engaged in; that is, citizens are not participating in economic activity when they do not purchase health insurance. As with Lopez, and the later case of United States v. Morrison (2000), the Supreme Court has held that the Commerce Clause does not extend to “noneconomic activity”. Economic activity has been defined as “the production, distribution, and consumption of commodities” [Gonzales v. Raich (2005)]. With the mandate, it is not the activity which penalizes them, but the inactivity.

It is on these grounds that the 14 attorneys general are claiming that the bill is beyond the scope of the powers enumerated by the Commerce Clause. How can Congress regulate commerce that citizens are not engaged in? President Obama is right – this is unprecedented. There is nothing in existing case law that applies to the particulars of this situation, and it is certain to be a contentious debate if brought before the Supreme Court.

Proponents of the reform bill must tread carefully, for a precedent that allows this type of mandate has far reaching implications that go well beyond the arguments over fixing the healthcare system and providing coverage for the uninsured. At stake here is a question of federal power, which many agree is already overreaching and excessive.

“We pause to consider the implications…” wrote Chief Justice William Rehnquist in the majority opinion of Lopez, “…[under a broader interpretation of the Commerce Clause] Congress could regulate any activity that it found was related to the economic productivity of individual citizens: family law (including marriage, divorce, and child custody) for example”.

“The concern we expressed in Lopez,” Rehnquist wrote in the Morrison opinion, “that Congress might use the Commerce Clause to completely obliterate the Constitution’s distinction between national and local authority, seems well founded.”