D.C. Circuit finds no significant limit on commerce power

Jim Huffman Dean Emeritus, Lewis & Clark Law School
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With the D.C. Circuit’s decision this week in Susan Seven-Sky v. Eric Holder, the Obamacare table is finally set for the Supreme Court. Most Supreme Court watchers expect the Court to review, before the end of its current term, at least one of the several appellate court decisions on the constitutionality of the so-called “individual mandate.”

With the D.C. Circuit’s decision, the score is 2-1-1. The 6th and D.C. Circuits have found the law constitutional. The 11th Circuit has held that it is unconstitutional. And the 4th Circuit declined to review the issue for lack of standing on the part of Plaintiff Commonwealth of Virginia. Now that they are ahead on points, the Obama administration and defenders of the Patient Protection and Affordable Care Act are celebrating the D.C. Circuit ruling as a victory that will encourage the Supreme Court to uphold the law. But a careful reading of Judge Laurence Silberman’s milquetoast opinion could give them pause.

For starters, Silberman acknowledges the government’s concession that the mandate to purchase health insurance is unprecedented and that it (the government) can identify no limits on Congress’s power to require the purchase of other products or services. Nevertheless he seems to accept the government’s argument that the absence of precedent should not trouble us because the health care market is unique. It is unique, he reports, because virtually everyone is certain to participate sooner or later and because it is a market “where declining to buy a product disproportionately causes a national economic problem.” But it is not unique in the first sense — everyone participates in the food, housing and transportation markets as well, and it is not clear what it means to say that a failure to purchase health insurance “disproportionately causes a national economic problem.” Disproportionate to what?

In response to plaintiffs’ argument that the commerce regulation power does not extend to regulating inactivity, Silberman states that “[n]o 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 involving, or substantially affecting, interstate commerce.” In light of his earlier acknowledgment that the regulation of inactivity is unprecedented, it is not surprising that there is no Supreme Court precedent holding that the commerce power is limited to regulating activity. The question of regulating inactivity has never before been considered by the Court. Indeed, given that the regulation of inactivity is unprecedented, had an earlier Supreme Court addressed the question it would have been pure dicta and would violate the Court’s general rule against offering opinions on abstract questions.

True to his roots as a Reagan nominee to the bench, Silberman looks to both text and framer intent, but he fares poorly in applying both of these interpretive theories to the question before the court.

Article I, Section 8 of the Constitution grants Congress the power to “regulate commerce.” According to a framer-era dictionary, reports Silberman, “regulate” means “direct,” and “direct” means “to order; to command.” The individual mandate is an order or command requiring action and “nothing in the definition appears to limit that power only to those already active in relation to an interstate market. Nor is the term ‘commerce’ limited to only existing commerce.” So, concludes Silberman, “[t]here is therefore no textual support for appellants’ argument.” But this argument runs exactly counter to the textualist’s basic premise that what is not expressly included is excluded. By Silberman’s logic, what is not expressly excluded is included.

Silberman also recognizes that in using the phrase “commerce … among the states,” the framers “obviously intended to make a distinction between interstate and local commerce.” But he then abandons any pretense of relying on framer intent in noting that “Supreme Court jurisprudence over the last century has largely eroded that distinction.” The only limits Silberman finds on Congress’s commerce regulating authority preclude regulation of non-economic behavior and regulation of intrastate economic behavior where the aggregate impact is negligible. We know from Wickard v. Filburn (upholding the regulation of wheat grown entirely for consumption on the farm) that the latter category is probably an empty set.

Silberman is correct in his reading of the Commerce Clause case law, and therein lies the heart of the issue facing the Supreme Court when it considers the constitutionality of the individual mandate. Will the Court finally abandon the pretense that, despite all evidence to the contrary, Congress’s power under the Commerce Clause remains limited? Or will it take seriously the concept of a national government of enumerated and limited power within a federal system in which, in the words of the 10th Amendment, “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States, or to the people.”

Finally, Judge Silberman insists that the case has everything to do with government power and nothing to do with individual liberty. The plaintiffs’ objection to the individual mandate, says Silberman, “expresses a concern for individual liberty that seems more redolent of Due Process Clause arguments. But it has no foundation in the Commerce Clause.” He would have benefited from a more careful reading of the 11th Circuit’s opinion finding the individual mandate unconstitutional. That court wrote: “While these structural limitations are often discussed in terms of federalism, their ultimate goal is the protection of individual liberty.”

The 11th Circuit is on firm footing in connecting federalism with individual liberty. In the 1992 case of New York v. United States, the Court stated that “[t]he Constitution does not protect the sovereignty of States for the benefit of the States or state governments as abstract political entities … To the contrary, the Constitution divides authority between federal and state governments for the protection of individuals.” Earlier this year, Justice Anthony Kennedy wrote for a unanimous court in Bond v. United States that: “Federalism secures the freedom of the individual. It allows States to respond, through the enactment of positive law, to the initiative of those who seek a voice in shaping the destiny of their own times without having to rely solely upon the political processes that control a remote central power.”

Thanks to Judge Silberman (and concurring Judge Harry Edwards, who offers the peculiar and counter-intuitive theory that the necessary and property clause operates as a limit on the commerce power), the fundamental questions raised by Obamacare’s individual mandate could not be clearer. Have 80 years of Supreme Court deference to Congress’s appetite for power finally reduced the 10th Amendment and the concept of enumerated, and thereby limited, powers to a relic of history? Or do the values of federalism and individual liberty protected through divided government still inform the interpretation of our Constitution?

Jim Huffman is the dean emeritus of Lewis & Clark Law School, the co-founder of Northwest Free Press and a member of the Hoover Institution’s De Nault Task Force on Property Rights, Freedom and Prosperity.