by Marcia Coyle
Barnett and other academics who supported his legal theory kept up a steady stream of posts on widely read and influential Internet legal blogs, primarily the conservative Volokh blog, in which they attacked the constitutional basis for the health care proposal before and after it became law. They faced pushback from liberal and progressive blogs, such as Balkinization and the American Constitution Society. The debate soon spread to other blogs and the arguments were picked up by journalists in their coverage of the health care legislation, and later by members of Congress and even by the federal courts ruling on the legal challenges to the law.
Barnett, who also was among those advocating the individual right view on guns and the Second Amendment in law review articles and elsewhere at least a decade before, became the public face of the expert opposition to the health care law, appearing on news shows, talking on radio, and engaging in debates. He frequently faced off with Walter Dellinger, acting solicitor general in the Clinton administration and the lawyer who defended the District of Columbia’s handgun ban in the Roberts Court’s landmark Second Amendment case. Dellinger, a constitutional law scholar, entered the fray on behalf of the Obama White House and did a better job defending and explaining the health care law to the public than anyone in the White House itself.
And yet, until the federal courts began ruling in the health care lawsuits, the arguments by Barnett, Rivkin, and McCollum were considered outside the mainstream or “off the wall,” not just by liberals and progressives supporting the law but even by a number of conservative scholars and Republican lawmakers. Former Reagan solicitor general Charles Fried of Harvard Law School, for example, famously promised in an appearance on Fox News to eat his Kangaroo leather hat on camera if the Supreme Court struck down the law, so certain was he of its constitutionality.
“As this developed, we faced considerable resistance by colleagues on the right who again had this mind-set that, well, if it involves economics, then Congress can do it,” said Casey. “You found that on both sides of the aisle [in Congress].” His partner, Rivkin, agreed, adding, “Nobody took it seriously. We got slammed and ridiculed a bit.”
And there were good reasons for skepticism of their arguments, reasons related to the Supreme Court and its history of interpreting the commerce clause. No Supreme Court in history had ever recognized an “activity-inactivity” distinction in analyzing Congress’s power under the commerce clause.
The meaning and scope of the commerce clause, which is inextricably linked to the development of the nation’s economy and its ability to address problems national in scope, has been debated for more than a century.
The Articles of Confederation, the precursor to the Constitution, left the regulation of commerce to the states, and that was not working well for the fledgling nation. The states were acting to protect and enhance their own economies in ways that often thwarted the national interest. The Framers’ response to the problem was the commerce clause which, as James Madison, the father of the Constitution, explained in an 1829 letter “grew out of the abuse of the power by the importing States in taxing the non-importing, and was intended as a negative and preventive provision against injustice among the States themselves, rather than as a power to be used for the positive purposes of the General Government, in which alone, however, the remedial power could be lodged.”7
The Constitution creates a national government of limited powers. Congress’s powers are enumerated in Article I, Section 8. In clause 3 of Section 8, the so-called commerce clause, Congress is given the authority “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Congress is also given the power “To make all Laws which shall be necessary and proper for carrying into Execution” the commerce power—the so-called necessary and proper clause, also in Article I, Section 8, as clause 18. Over time, the Supreme Court has interpreted those two clauses to allow Congress to regulate: the channels of interstate commerce, such as roads and waterways; the instrumentalities of interstate commerce, for example, cars and ships, as well as persons or things in it; and other economic activities that “substantially affect” interstate commerce. Justice Thomas, even before the health care case came to the Court, had never accepted that third category, arguing that it is inconsistent with original understanding of Congress’s powers.
The Supreme Court’s commerce clause rulings, like its campaign finance decisions, have swung like a pendulum over time, from granting Congress wide latitude to deal with the needs of the national government to restricting its authority and back again. The case that set the stage for broad congressional power over national issues was the justices’ 1824 ruling in Gibbons v. Ogden, a dispute involving rival steamboat ferries on the Hudson River. Chief Justice John Marshall, known as the “Great Chief Justice” and someone whom Chief Justice John Roberts Jr. has sometimes embraced as a model, interpreted the commerce clause for the first time, giving meaning to its words. He also read Congress’s commerce clause power as broadly as possible, writing: “It is the power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the Constitution.”
By the end of the nineteenth century, however, the pendulum had swung to the other extreme and the Court began limiting Congress’s authority, a period that became known as the Lochner era and that endured for nearly forty years. That era was marked by the Court’s protection of economic rights, rights of contract and property. The justices wielded a heavy ax, striking down state and federal regulations of working conditions. The era was named for the now widely discredited 1905 decision in Lochner v. New York. In that case, the justices invalidated the New York Bakeshop Act, which prohibited bakers from working more than ten hours per day or sixty hours per week, because the act interfered with the right of contract between employer and employee. And in 1918 in Hammer v. Dagenhardt, the Court struck down a federal law designed to end child labor by prohibiting the movement in interstate commerce of any good made by children under the age of fourteen.
The Court’s restrictive approach to Congress’s commerce clause power brought the justices into a major confrontation with President Franklin Roosevelt, who was dealing with the nation’s crippling crisis, the Great Depression, by seeking creative legislative initiatives to get the country back on its economic feet. The Court’s laissez-faire approach to the economy ran headlong into Roosevelt’s hands-on approach. The Court, not easily dissuaded from its narrow view of Congress’s commerce power, struck down the Farm Bankruptcy Act of 1934, the National Industrial Recovery Act of 1935, and a tax on agricultural processors in the Agricultural Adjustment Act of 1933. A frustrated Roosevelt threatened to pack the Court with justices who would approve his initiatives, a threat that badly backfired with the general public.
In 1937, the Lochner era ended when the Court, ruling 5–4 in National Labor Relations Board v. Jones & Laughlin Steel Corp., upheld the National Labor Relations Act of 1935. The board had charged the steel company with discriminating against workers who were union members. The New Deal Court abandoned its view that labor relations had only an indirect effect on commerce and, for the first time, held that Congress could regulate intrastate employment activities that had “a close and substantial relation to interstate commerce.”
The pendulum swung even farther toward broader commerce power in 1942 in a case that would loom large in the legal battle over the health care law. Roscoe Filburn was an Ohio farmer who raised dairy cattle and poultry and planted winter wheat, part of which he sold and the rest he kept for use on his farm. The new Agricultural Adjustment Act imposed an acreage allotment on wheat farmers in order to keep wheat prices from crashing. Filburn’s wheat harvest violated his allotment and he was penalized 49 cents per bushel. The farmer sued, arguing that the wheat grown over the allotment stayed at home and did not enter comm
erce. When his case reached the Supreme Court, Justice Robert Jackson ruled for the government, writing in Wickard v. Filburn: “But even if [Filburn’s] activity be local, and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce, and this irrespective of whether such effect is what might at some earlier time have been defined as ‘direct’ or ‘indirect.’ ” The decision is viewed by some as a turning point or a “high-water mark” in the Court’s commerce clause jurisprudence.8
If Congress could use its commerce clause power to reach Roscoe Filburn’s home use of wheat with its minimal connection to interstate commerce, how could it not use the same power to reach individuals who do not buy health insurance but free-ride off of those who do, increasing costs in one of the largest interstate markets today? the Obama administration and supporters would argue later in the health care case.
For the next nearly sixty years, Congress’s commerce power grew in scope and became the basis for federal regulation of the environment, food and drugs, securities, and other areas. Racial discrimination had a substantial effect on interstate commerce, the Court ruled, when it upheld the landmark Civil Rights Act of 1964 which banned discrimination in public places, such as motels and restaurants.
However, the pendulum swung back in 1995 when the Rehnquist Court struck down the federal Gun-Free School Zone Act, which banned possession of a firearm near a school zone, because Congress had exceeded its commerce clause authority. The decision, United States v. Lopez, was part of the Rehnquist Court’s “federalism revolution” in which five justices—Rehnquist, O’Connor, Kennedy, Scalia, and Thomas—prevailed in a series of bitterly fought cases cutting back Congress’s lawmaking powers under both the commerce clause and Section 5 of the Fourteenth Amendment while enhancing the rights of states. Lopez was followed in 2000 by United States v. Morrison, in which the same five justices invalidated the civil damages remedy for victims in the federal Violence Against Women Act. In both Lopez and Morrison, the majority held that the laws’ connection to interstate commerce was too insubstantial. Congress “may not regulate noneconomic . . . conduct based solely on that conduct’s aggregate effect on interstate commerce,” wrote Chief Justice Rehnquist in Morrison.
The Court had not struck down a federal law on commerce clause grounds in nearly sixty years, and the two rulings shocked the political and legal establishments. However, the ground under Congress soon shifted again. Five years later, in Gonzales v. Raich, the Rehnquist Court held that Congress did have authority under the commerce clause to prohibit the local cultivation and local use of homegrown marijuana for medical purposes even where it complied with state law. The difference this time was Justice Scalia, who switched sides, joining the Court’s liberal wing—Stevens, Souter, Ginsburg, and Breyer. The case of that old Ohio farmer, Roscoe Filburn, played a key role in the decision. Whether it is marijuana or wheat, Stevens wrote, production of a commodity meant only for home use can have a substantial effect on the national market for that commodity. Congress had a rational basis to believe that failure to regulate that type of marijuana would affect the price and demand for marijuana in the national market and leave a huge hole in federal enforcement of the Controlled Substances Act, concluded Stevens.
Scalia, in a concurring opinion, explained why he believed the situation in Raich differed from those in Lopez and Morrison. In Raich, he explained, Congress was regulating purely intrastate activity—home use of marijuana—in order to control the interstate market in marijuana. Neither Lopez nor Morrison, he wrote, involved “control over intrastate activities in connection with a more comprehensive scheme of regulation.”
Randy Barnett, who was leading the debate against the health care legislation, had argued and lost the Raich case in 2005; it was a defeat not easily accepted. “My interest in the commerce clause came about because of the Raich case,” he recalled. “In the late 1990s, I started working first with the Open Cannabis Buyers Club and their commerce clause challenge to the Controlled Substances Act. Then two other lawyers and myself brought the Raich case on behalf of Angel Raich. That was how I started to learn a lot about it.”9
Lopez and Morrison, restricting Congress’s commerce power, would become weapons in the arsenal of those challenging the new health care law. Wickard and Raich, with their broader view of Congress’s authority, would be claimed by the law’s supporters.
The Roberts Court had little experience with commerce clause cases in its first four terms. However, coincidentally, a month before the health care law was enacted, the justices heard arguments in a case whose decision later that May encouraged White House and Justice Department lawyers and other health care supporters about their future chances before the justices. In United States v. Comstock, the justices were asked to decide whether Congress had exceeded its power when it enacted a law authorizing federal courts to order the civil commitment of sexually dangerous prisoners after they had served their prison sentences. A 7–2 majority, led by Breyer, said Congress was within its authority. Breyer relied on the necessary and proper clause, which, he wrote, “makes clear that the Constitution’s grants of specific federal legislative authority are accompanied by broad power to enact laws that are ‘convenient, or useful’ or ‘conducive’ to the authority’s ‘beneficial exercise.’ ” The civil commitment law, he explained, was a necessary and proper means of exercising the authority that Congress has to create federal criminal laws, to punish their violation, to imprison violators, and to protect the public.
Only Justices Thomas and Scalia dissented, with Thomas writing that the necessary and proper clause empowers Congress to enact only those laws that “carry into execution” one of the enumerated powers in the Constitution. There was no such link between the civil commitment law and the legislative powers enumerated in Article I, Section 8, he said.
White House and Justice Department lawyers believed the Comstock decision bolstered one of their defenses of the health care law: the individual mandate was a necessary and proper means of accomplishing the comprehensive market reforms in the law, and those reforms clearly fell within Congress’s enumerated power to regulate interstate commerce. Roberts had joined the Comstock majority and that suggested he might be open to the government’s necessary and proper clause argument. And if Scalia remained faithful to his concurrence in Raich, the medical marijuana case, they thought, he might seriously entertain their argument that the individual mandate was an integral part of a comprehensive scheme of economic regulation just as medical marijuana fell within the government’s comprehensive regulation of the market for controlled substances.
• • •
With the signing of the Affordable Care Act and the filing of the lawsuits, the race to the Supreme Court was on. The White House immediately started holding strategy meetings, and so did the Justice Department, with close communication between the two. That closeness was unusual but not surprising, given the high stakes and significance of the massive health care program. The White House wanted to know what was being done.
In another unusual step, Attorney General Eric Holder contacted Robert Weiner, a partner in the Washington law firm of Arnold & Porter, and asked him to join the department to oversee the defense of the health care law. Weiner, a former senior counsel in the Clinton White House and former Thurgood Marshall clerk, had broad experience in dealing with complex litigation and public policy issues, such as global warming, financial reform, and national security. He agreed to take on the new job as the associate deputy attorney general, and he was as passionate about the health care law’s constitutionality as David Rivkin and Bill McCollum were about its unconstitutionality.
“My view from the beginning was if the courts applied the law as it stood, we would win,” he recalled. “Whether courts would apply the law at each level was not as clear.” The decision by the Republican state attorneys general to file their challenge in the federal court in Pensa
cola—which had no real connection to the case—was not accidental, he added.10
The Justice Department assembled a broad group of its lawyers with trial and appellate experience to participate in weekly strategy sessions. The department’s Office of Federal Programs, headed by Ira Gershengorn, took the lead on defense of the law at the first level of courts: the district court.
Like their opponents, the department lawyers faced some early, important procedural questions and two particularly crucial substantive ones. The first substantive question involved the Anti-Injunction Act (AIA), an 1867 law that bars lawsuits that try to block the assessment or collection of any federal tax. Taxpayers who object to a tax can have their day in court after they pay the tax by suing for a refund. The theory behind the law is that without the lawsuit prohibition, the government would be tied up in court fighting tax challenges and never be able to collect the revenue it needs to operate. If the AIA applied, the courts would not be able to consider any challenges to the health care law until the penalty for not having health insurance—enforced by the Internal Revenue Service—showed up on income tax returns in 2015.
Lawyers in the department’s tax division pushed to have the government argue that the AIA applied, not because they wanted to delay court action on the health care lawsuits, but because they needed to protect the fundamental purpose of the AIA and not risk having it undermined. “They said that they had a very strong institutional interest in making [AIA] arguments in a variety of contexts and they should be made,” said a lawyer close to the discussions.
The second crucial issue in the defense of the law was whether to raise Congress’s power to tax as a basis for the individual mandate. Another group in the strategy sessions pushed to include the argument that the individual mandate was a constitutional exercise of Congress’s power to tax and spend for the public welfare as well of its commerce power. “The theory was that two arrows in your quiver are better than one,” recalled the lawyer. “That faced a lot of pushback given what the president had said about a tax.” He was referring to the Obama administration’s public, and very political, position that the mandate was not a tax but a penalty, and that the new law did not increase taxes.