The Oath: The Obama White House v. The Supreme Court

by Jeffrey Toobin

  But the bill came back to life, and in March Obama and the Democrats finally won passage. The denouement came when the House approved a revised measure on Sunday, March 21, by a vote of 219–212. That same day, Perrelli e-mailed invitations to Katyal and others to convene, at long last, the health care litigation planning group. At 6:19 that evening, Katyal forwarded the invitation to Kagan and wrote, “I think you should go, no? I will, but feel like this is litigation of singular importance.” A minute later, Kagan e-mailed Katyal back, asking him for his phone number.

  When Kagan and Katyal spoke that evening, she said she had decided to stay away from the health care litigation—which was why, two months earlier, she had written to him, “You should do it.” Kagan didn’t want to be involved or even informed about work on this issue. Little more was said between them, but the reason for Kagan’s decision was clear. She had been a finalist for the Souter seat the previous year. Stevens was dropping hints that he was going to leave in a matter of weeks. Kagan had a very real chance of being nominated for the Court, and the health care case was likely to come before the justices, sooner rather than later. She wanted to preserve her opportunity to take part. If she became a justice, Kagan did not want to have to recuse herself, so she was not going to participate at all in planning the health care litigation.

  Later, when the challenge to the health care law did wind up in the Supreme Court, some liberals argued that Thomas should recuse himself from the case because of his wife’s political activities. In short order, conservatives began asserting in response that Kagan should recuse herself because she must have participated in planning the defense of the law when she was solicitor general. It was a plausible argument. After all, Katyal himself had noted that the case was of “singular importance,” and the solicitor general served, in effect, as the chief legal strategist for the Justice Department. As his e-mails showed, Katyal believed that Kagan should help to defend the law.

  In light of all that followed, then, Kagan’s e-mail—“You should do it”—ranks among the most consequential of such messages in American history. It was contemporaneous proof that the future justice had not participated in planning the defense of the law. Katyal’s recollections of their exchanges backed her up. If Kagan had gone to even a single meeting where the legal defense of the health care law was discussed—even if she just sat there and didn’t say a word—she would have been required to recuse herself from participating in the case as a Supreme Court justice. (Justices are not bound by the same formal ethics rules as other federal judges, but attendance at such a meeting would have created a very clear case for recusal.) As would later become clear, the loss of Kagan’s vote would have meant the loss of the case for her side. Without her, at least the individual mandate of the Affordable Care Act would have been invalidated. The e-mail trail kept Kagan in the case.

  ——

  That still left the question of how the Justice Department should defend the law. Even in the initial stages, the issue split the Obama lawyers into two camps. The internal differences were largely generational.

  The principal constitutional justification for the health care legislation was the commerce clause of Article I, which authorizes Congress to “regulate Commerce … among the several States.” After 1937, when the Court adopted Franklin Roosevelt’s conception of the Constitution, the justices gave nearly unlimited scope to Congress’s power under the commerce clause. In the famous case of Wickard v. Filburn, from 1942, the Court upheld congressional power to regulate how much wheat a farmer could grow—even if he didn’t sell the wheat at all but rather used it to feed his own livestock. “If we were to be brutally frank,” Justice Robert H. Jackson, the author of Wickard, wrote in a letter to a friend shortly after the decision, “I suspect what we would say is that in any case where Congress thinks there is an effect on interstate commerce, the Court will accept that judgment.”

  That clause became almost a blank check for Congress. By the days of the Warren Court in the 1960s, the justices routinely ignored the commerce clause as a meaningful limit on the power of Congress. As the Court held in 1964, upholding the Civil Rights Act, the test was simply whether the activity sought to be regulated is “commerce which concerns more States than one and has a real and substantial relation to the national interest.” For decades, every act of Congress passed that test.

  This wasn’t just an abstract legal issue. The commerce clause was freighted with political significance. Among liberals, a broadly defined commerce clause was the indispensable constitutional provision for activist government. This sentiment was especially strong at the Justice Department, including among those lawyers who took initial charge of defending the health care law. They had grown up with the commerce clause as a settled issue, and they regarded any threat to its interpretation as a challenge to their entire worldview.

  Neal Katyal didn’t see it exactly the same way.

  As the health care litigation began, Katyal had just turned forty years old, which may have been the most important thing about him with reference to the case. The son of immigrant parents from India, raised in Chicago, mother a physician, father an engineer, Katyal was the legal world’s version of a prodigy. A champion debater at Dartmouth, he went on to a standout career at Yale Law School, which brought him a clerkship with Stephen Breyer. He served in the Clinton administration and then became a tenured professor at Georgetown University Law Center. He was blessed, occasionally cursed, with abundant self-confidence. And his legal career took place entirely during the new era of conservative hegemony at the Supreme Court.

  Katyal himself was a Democrat, and a proud member of the Obama administration, who was determined to help protect the president’s legacy. But he wanted to do so in a way that reflected the courts as they were—full of conservatives—not as he wished they would be. And that brought him into conflict with his colleagues at the Justice Department.

  As much as liberals embraced a broad conception of the commerce clause, conservatives disdained it—and they had won a couple of important recent victories. In 1995, Rehnquist cobbled together a five-justice majority to strike down a federal law on commerce clause grounds for the first time in decades. In United States v. Lopez, the Court said Congress could not make it a federal crime to possess a firearm near a school. Five years later, in United States v. Morrison, the same five justices said that victims of gender-based violence could not file federal lawsuits against their attackers. In both cases, the majority said that the conduct Congress sought to regulate was too remote from actual interstate commerce to be constitutional. Both Lopez and Morrison were, in their way, originalist decisions—that is, the conservative majority was guided by what it said was the intent of the framers in crafting the commerce clause.

  To defend the health care law, Katyal endorsed several heresies against the liberal orthodoxy. He embraced the holdings in Lopez and Morrison, even though many in the Justice Department still regarded them as nefarious departures from a true reading of the commerce clause. Even more controversially, Katyal was a kind of originalist himself. He thought conservatives had no right to sole claim on the framers of the Constitution as their political forebears. He thought liberals could claim the mantle of the framers, too—and he wanted to do so in the health care case.

  Even for lawyers, these abstractions can mean very little, but for Katyal they translated into clear challenges in the defense of the ACA. Specifically, Katyal came to believe that the administration would win its case only if it could answer two simple questions: Are there any limits on what Congress can do under the commerce clause? And if the health care law is constitutional, does that also mean that Congress could mandate that every American eat broccoli as well?

  Some two dozen lawsuits challenging the Affordable Care Act were filed in 2010. A few were clearly frivolous, but several were well financed and artfully argued. On the day Obama signed the bill, Bill McCollum, the attorney general of Florida, brought a case in federal court on behalf
of his state and eventually twenty-five other states. Choosing his forum with care, McCollum filed the lawsuit in Pensacola, which had some of the most conservative judges in the country. There, Roger Vinson, a 1983 Reagan appointee, declared the entire law unconstitutional. According to the government’s theory, Vinson wrote, “Congress could require that people buy and consume broccoli at regular intervals, not only because the required purchases will positively impact interstate commerce, but also because people who eat healthier tend to be healthier and are thus more productive and put less of a strain on the health care system.” Around the country, several other judges upheld the law, some judges invalidated parts of it, and the appeals to the circuit courts began. (Almost without exception, district judges appointed by Democratic presidents upheld the law and those appointed by Republicans struck it down.)

  When Kagan was nominated to the Supreme Court, in May 2010, Katyal became acting solicitor general, and he took responsibility for arguing all of the appeals of the health care cases in the circuit courts. Drafting the briefs was a contentious process within the Justice Department. Traditional liberals wanted to concede little on limits of the commerce clause; Katyal felt they needed to acknowledge the changed world that included Lopez and Morrison. On June 1, 2011, Katyal defended the law in the Sixth Circuit, based in Cincinnati. The exchanges were typical of the questions he received in every court.

  “I hear your arguments about the power of Congress under the commerce clause and I’m having difficulty seeing how there is any limit to the power as you’re defining it,” said Judge James L. Graham, a district judge sitting by designation on the appeals court. “And I’m starting with the premise that just about everything that human beings do, about every human function I can think of, has some economic consequences.” It was the key question: What was the limit of the commerce clause?

  To Katyal, the answer was embedded in both Lopez and Morrison. Those cases related to noneconomic activities at the core of state functions: neither one regulated any actual economic activity. As Katyal told the judge, “What Lopez and Morrison say, is you’ve got to be economic in nature, and that it can’t be the aggregation of a whole bunch of uneconomic activities. Zero plus zero plus zero is always going to equal zero. Here’s what we’re saying: we’re saying in this [health care] market, what Congress is regulating is not the failure to buy something but the failure to secure financing for something that everyone is going to buy.” Every American was going to buy health care at one time or another; the law simply regulated those transactions, before and after they took place.

  Katyal also took on the “broccoli question.” Opponents of the law said if the Congress was allowed to force people to buy insurance, legislators could make people buy General Motors cars, or cell phones, or broccoli—anything at all.

  Health care was different, Katyal replied. “Congress made a specific finding, that people without insurance are causing everyone’s premiums to rise to the tune of $1,000 per family, you and me, because hospitals have to take these people,” he said. “And that makes this market different than many of the examples that we were talking about. The real question is, Can Congress regulate, in a market in which it knows that everyone is participating, that is, the health care market?”

  “That’s a generality,” Judge Jeffrey Sutton, a conservative former Scalia clerk, said, “that’s true of food, transportation, shelter markets.”

  “That’s one aspect, but what sets up the cost shifting is not just that everyone needs it but that providers can’t opt out of it,” Katyal said. “So the food and transportation markets—I can’t show up at the broccoli store without money and say, ‘Give me broccoli.’ ” It was a compelling—and winning—argument. Sutton, the pedigreed conservative, wrote the opinion upholding the law.

  Still, the political splits in the judiciary ultimately showed through in their various decisions on the health care law. Like the Sixth Circuit, the D.C. Circuit upheld the law, and the Fourth Circuit dismissed the case on procedural grounds. But once a three-judge panel of the Eleventh Circuit ruled that the individual mandate was unconstitutional, it was inevitable that the Supreme Court would hear the case. (The justices almost always grant certiorari in cases where a circuit court has declared a federal law unconstitutional.)

  As acting solicitor general, Katyal had made one last important decision about how to handle the health care case. The issue was timing. The government can almost always contrive ways to delay appeals, and there were ways to keep the case away from the Supreme Court, at least until after the 2012 election. But Katyal canvassed his peers at the Department of Health and Human Services and other federal agencies and found that they were spending tens of millions of dollars a month preparing to implement the ACA. It was simply irresponsible to let the legal uncertainty around the law linger. The agencies needed a definitive answer about whether the law was valid or not. So Katyal, after consulting the White House, decided to press ahead. On November 14, 2011, the justices agreed to review the Eleventh Circuit decision, consolidated all of the remaining appeals, and put the case down for argument in the spring.

  But Katyal wouldn’t be there to argue it.

  Kagan was nominated to the Supreme Court in May 2010 and confirmed in August. During those months and several more that followed, Obama did not nominate a successor. Katyal wanted the job, but it eventually became clear that he wasn’t going to get it.

  Katyal was still best known for his lonely and ultimately successful crusade on behalf of Salim Hamdan, the Guantánamo detainee, in the Supreme Court. Just as the solicitor general post became available, Liz Cheney, the daughter of the former vice president, attacked Katyal for being part of what she called the “Al Qaeda Seven,” Justice Department lawyers who had, during the Bush years, done pro bono work challenging legal aspects of the war on terror. Of course, the profession has a long and distinguished history of encouraging the representation of unpopular clients—and several Republican lawyers, like Ted Olson, rebuked Cheney for impugning the lawyers who upheld this tradition—but Cheney’s attacks made Katyal controversial.

  In any event, Obama had a safer choice for solicitor general. Don Verrilli came to Washington to do good and stayed to do well. After compiling a distinguished academic record at Yale College and Columbia Law School, he clerked for two liberal legends, J. Skelly Wright, on the D.C. Circuit, and William Brennan, on the Supreme Court. Verrilli then went to work at the law firm of Jenner & Block, always meaning to do public service some day. Unlike most other corporate lawyers, Verrilli maintained a serious commitment to pro bono work throughout his career—he even argued five death penalty cases before the Supreme Court—but he found himself well into middle age without ever having done what he came to Washington to do. When Obama was elected, he vowed that he would go to work at the Justice Department even if it meant sweeping the hallways.

  That turned out to be unnecessary. Verrilli worked first as associate deputy attorney general and then moved to the White House to work as a deputy to his friend Bob Bauer, the White House counsel. Verrilli had argued a dozen cases in the Supreme Court. His background in corporate law made him easy to confirm in the Senate. Unlike Katyal, Verrilli was without enemies. Finally, after dithering about his choice for solicitor general for eight full months, Obama nominated Verrilli on January 26, 2011. He was confirmed five months later. Obama had his lawyer for the health care case.

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  BROCCOLI

  For all the grandeur of the Supreme Court’s façade, the courtroom itself has a kind of intimacy. The lawyer’s lectern is less than ten feet in front of the chief justice; the press seats begin about the same distance from Sotomayor, the justice to Roberts’s extreme right; the justices’ guests sit about as close to Kagan, who is on the opposite side. When the courtroom is completely full (which it rarely is), there are only about five hundred people inside and their collective presence gives the room an unmistakable barometric instability. The place buzzes. The justices
notice.

  In major cases, the justices are like themselves, only more so. The tension, the adrenaline, the stakes—all serve to exaggerate the quirks of their personalities. Court convened on Monday, March 26, 2012, for the first of three days of arguments in the health care case—the most important any of the justices had heard. Health insurance for thirty million people, to say nothing of the political future of the President of the United States, was riding on the outcome. Five justices remained from the Court that decided Bush v. Gore, but by the time that case was argued, on Monday, December 11, 2000, the Court had already voted to issue a stay to stop the recounts in Florida. The result of the argument that followed was largely a foregone conclusion. Not so in health care. According to Court protocol, the justices do not discuss cases with one another before they are argued. So no one—including the justices—knew how this one was going to come out.

  First, though, there was an overture. Roberts had divided the argument by subject, and the first one was the most obscure. When the initial cases against the ACA were filed, the government argued that the suits were barred by a little-known 1867 law called the Anti-Injunction Act. In short, the law bars lawsuits challenging the legality of taxes before the taxes are actually due. In those first cases, the government asserted that the fee that individuals had to pay for failing to comply with the individual mandate—that is, for refusing to buy health insurance—was a tax. The lawsuits, the government contended, could therefore not proceed until the taxes were actually imposed, in 2015. But Katyal, when he was controlling the case as acting solicitor general, switched the government’s position. He said for purposes of the Anti-Injunction Act, the law was not a tax but rather a penalty, and thus the Court could now hear the challenge to its constitutionality. Verrilli, the new solicitor general, stuck with that position, which in turn created a new complication.