May 18, 2011

How and why the activity/inactivity distinction works

By How and why the activity/inactivity distinction works

Author: Timothy Sandefur

Most of the focus in lawsuits challenging the constitutionality of the Individual Mandate have focused on the question of whether Congress can force people to buy health insurance under its power to “regulate commerce.” Opponents of the law, including PLF, argue that this phrase allows Congress only to set the rules for economic activities people voluntarily undertake, but not to force people to undertake those activities in the first place: in short, the federal government can regulate activity, but not inactivity. And that was the holding of the Florida and Virginia federal judges who found the Individual Mandate unconstitutional. The other side says that there’s nothing in the Constitution that bars the federal government from controlling inactivity, and that the difference between the two is “conceptually quite complicated,” or in the words of one federal court, simply a matter of “semantics.”

Of course, at some level, the activity/inactivity distinction does break down. In terms of metaphysics, existence itself is a form of activity, since to exist means to persist through time. That’s why the word “be” is classified in the dictionary as a verb—an action word—even though “being” doesn’t seem to most people like a kind of activity. In a very technical sense, merely existing is a kind of activity. And as the Michigan trial court observed in upholding the individual mandate, not engaging in activity certainly does have economic consequences.

But in the context of the Obamacare lawsuits, the activity/inactivity distinction is not a clever argument about metaphysics—it’s just a variant on a well-known legal tool: the method of breaking off infinitely long chains of causation.

This is something familiar to tort lawyers, who use legal concepts like “foreseeability” or “proximate cause” to cut off the indefinite consequences of any legal act. See Harvey S. Perlman, Interference With Contract And Other Economic Expectancies, 49 U. Chi. L. Rev. 61, 70 (1982).  It’s familiar to regulators of public utilities or antitrust regulators who sometimes have to draw lines to define a “market” within the economy, even though, on closer examination, there’s no clear boundary. See James McKie, Regulation And The Free Market: The Problem of Boundaries, 1 Bell J. of Econ. & Mgt. Sci. 6 (1970). In short, lawyers often draw distinctions between different kinds of acts or transactions, not only because of inherent, natural differences, but because drawing the line here rather than there serves certain overall policy goals. (In fact, everyone does this. When we describe any object or action as belonging to one category instead of another, we do so because describing it that way furthers some purpose. That does not mean the differences are unreal; just that those differences become relevant only in relation to our goals.)

In Lopez, Morrison, and Raich, the leading Supreme Court decisions on the limits of the Commerce Clause, the Court held that the federal government could regulate minute, barely significant, actions because as a group, those actions have an effect on the economy. But the Court also made clear that Congress could do this only if those actions are economic in nature. It drew this economic/non-economic distinction not from the text of the Constitution (which of course does not use that word), but from the advantages that sprang from drawing the line in that spot—specifically, that drawing the line here allowed Congress to (in Justice O’Connor’s words) regulate more than nothing and less than everything. Drawing the line here was also basically consistent with the Constitution’s language and served the judiciary’s goal of policing the constitutional boundary without intruding into the realm of policy-making. In short, it’s relatively easy for courts to tell when something is not economic in nature, and thus bar Congress from expanding its powers. That’s what’s known as a “judicially manageable standard.”

For the same reasons, it makes a lot of sense, when trying to determine what Congress can do under the Commerce and Necessary and Proper Clauses, to draw the line at the activity/inactivity distinction. While at a certain level, inactivity blends into activity—just as economic and non-economic sometimes overlap—in the vast majority of cases, it’s very easy to judge the difference between acting and not acting. It is empirically verifiable, in most cases, whether a person has voluntarily acted or not. Drawing the line here is relatively easy for courts, and avoids drawing them into complicated policy-making decisions. And, like the economic/non-economic distinction in Lopez and other cases, the activity/inactivity distinction prevents Congress from expanding its power into a general police power.

Too much time has been spent trying to find clever ways of breaking down the distinction between activity and inactivity. Certainly there are unusual circumstances in which it’s hard to tell the difference, and certainly inactivity can have effects on the economy. But that isn’t the real question. The question is a simple cost-benefit analysis of whether to draw the line here or somewhere else. Drawing the line at the activity/inactivity distinction could hardly be a simpler matter. It’s a judicially manageable standard, it’s consistent with the language of the Constitution (which uses words other than “regulate” when it allows Congress to force actions) and the intent of the Framers, it minimizes the courts’ interference in policymaking, it prevents the over-expansion of Congressional power, and in fact it would not cast doubt over any other federal statute, since Congress has never tried to force people to engage in commerce in any other law! Drawing the line anywhere else would be far more complicated, would create uncertainty by adopting a much fuzzier boundary, would draw courts into unnecessary policymaking, and would set a potentially dangerous precedent, expanding federal authority into a generalized police power.

At bottom, the activity/inactivity distinction is plain common sense. But it’s also easier, cheaper, faster, safer, and more consistent than any alternative.

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