January 31, 2011

Florida district court finds Individual Mandate unconstitutional

By Florida district court finds Individual Mandate unconstitutional

Author: Timothy Sandefur

Here’s the decision. I have not yet read it. When I do, I will have post comments here.

Judge Vinson’s decision is a very thorough, well-written, and interesting one, which I think every interested citizen should read. Judge Vinson clearly knew his opinion would be read by many non-lawyers, and it is written in an accessible style with much helpful discussion of the history of commerce clause precedent. In the end, he finds the Individual Mandate exceeds the commerce clause power because

It would be a radical departure from existing case law to hold that Congress can regulate inactivity under the Commerce Clause. If it has the power to compel an otherwise passive individual into a commercial transaction with a third party merely by asserting — as was done in the Act — that compelling the actual transaction is itself “commercial and economic in nature, and substantially affects interstate commerce,” it is not hyperbolizing to suggest that Congress could do almost anything it wanted. It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place. If Congress can penalize a passive individual for failing to engage in commerce, the enumeration of powers in the Constitution would have been in vain for it would be “difficult to perceive any limitation on federal power,” and we would have a Constitution in name only. Surely this is not what the Founding Fathers could have intended.

Judge Vinson also has an excellent reply to those who argue that one cannot actually opt out of the health care market. This is the argument made by, among others, the Michigan and Virginia District Courts that upheld the Individual Mandate. They both said that the Individual Mandate isn’t really a regulation of inactivity because you can’t avoid needing health insurance, so you aren’t really being inactive when you don’t choose to buy insurance; you’re really engaging in an activity which can be regulated. Judge Vinson answers that:

there are lots of markets — especially if defined broadly enough — that people cannot “opt out” of. For example, everyone must participate in the food market. Instead of attempting to control wheat supply by regulating the acreage and amount of wheat a farmer could grow as in Wickard, under this logic, Congress could more directly raise too low wheat prices merely by increasing demand through mandating that every adult purchase and consume wheat bread daily, rationalized on the grounds that because everyone must participate in the market for food, non-consumers of wheat bread adversely affect prices in the wheat market. Or, as was discussed during oral argument, 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. Similarly, because virtually no one can be divorced from the transportation market, Congress could require that everyone above a certain income threshold buy a General Motors automobile — now partially government-owned — because those who do not buy GM cars (or those who buy foreign cars) are adversely impacting commerce and a taxpayer-subsidized business. I pause here to emphasize that the foregoing is not an irrelevant and fanciful “parade of horribles.” Rather, these are some of the serious concerns implicated by the individual mandate that are being discussed and debated by legal scholars. For example, in the course of defending the Constitutionality of the individual mandate, and responding to the same concerns identified above, often-cited law professor and dean of the University of California Irvine School of Law Erwin Chemerinsky has opined that although “what people choose to eat well might be regarded as a personal liberty” (and thus unregulable), “Congress could use its commerce power to require people to buy cars.” When I mentioned this to the defendants’ attorney at oral argument, he allowed for the possibility that “maybe Dean Chemerinsky is right.” Therefore, the potential for this assertion of power has received at least some theoretical consideration and has not been ruled out as Constitutionally implausible.

A related argument accepted by some courts is that the decision not to buy insurance has an effect, through supply and demand, on the price of, and therefor the interstate market for, insurance, and Congress can control that market–so it can force you to buy insurance. Judge Vinson’s answer to that argument is clear and persuasive:

The problem with this legal rationale, however, is it would essentially have unlimited application. There is quite literally no decision that, in the natural course of events, does not have an economic impact of some sort. The decisions of whether and when (or not) to buy a house, a car, a television, a dinner, or even a morning cup of coffee also have a financial impact that — when aggregated with similar economic decisions — affect the price of that particular product or service and have a substantial effect on interstate commerce. To be sure, it is not difficult to identify an economic decision that has a cumulatively substantial effect on interstate commerce; rather, the difficult task is to find a decision that does not…. The important distinction is that “economic decisions” are a much broader and far-reaching category than are “activities that substantially affect interstate commerce.” While the latter necessarily encompasses the first, the reverse is not true. “Economic” cannot be equated to “commerce.” And “decisions” cannot be equated to “activities.” Every person throughout the course of his or her life makes hundreds or even thousands of life decisions that involve the same general sort of thought process that the defendants maintain is “economic activity.” There will be no stopping point if that should be deemed the equivalent of activity for Commerce Clause purposes.

…[I]f the decision to forego insurance qualifies as activity, then presumably the decision to not use that insurance once it has been obtained is also activity. The government acknowledged during oral argument in Virginia v. Sebelius that although people are required to buy health insurance under the Act, they are not yet required to use it.  But what happens if the newly-insured (as a class) do not seek preventive medical care? Because Congress found in the Act that the economy loses money each year “because of the poorer health and shorter lifespan of the uninsured,” it would seem only logical…that Congress may also regulate the “economic decisions” not to go to the doctor for regular check-ups and screenings to improve health and longevity, which, in turn, is intended and expected to increase economic productivity.

What to read next