What the Eleventh Circuit says about Necessary and Proper


Author: Timothy Sandefur

In considering the Obamacare lawsuits, I’ve tended to separate the Commerce Clause arguments and the Necessary and Proper Clause arguments in my mind. Under the Commerce Clause, the question is whether a law is a “regulation” of “commerce” “among the several states,” or not—while in the Necessary and Proper context, the question is whether a law is both necessary and proper to effectuating a regulation of commerce. Yet as Justice Scalia observed in his separate opinion in Raich v. Gonzales, the two really do interrelate, and the Eleventh Circuit’s decision today looks at them together.

Thus the court applies the precedent from last year’s Necessary and Proper case, United States v. Comstock, which used five different factors to evaluate whether a federal law—in that case, a rule governing the incarceration of federal prisoners—was “necessary and proper.” The Eleventh Circuit finds that the Individual Mandate does not meet the standards set forth in Comstock. For example, while Comstock relied on the long history of operating federal prisons, there is no longstanding history of federal involvement in health insurance regulation—until the 1940s, it was entirely a state concern. Nor does the Individual Mandate accommodate state concerns, the way the law in Comstock did: “Here, it is undisputed that the individual mandate supersedes a multitude of the states’ policy choices in these key areas of traditional state concern. Congress’s encroachment upon these areas of traditional state concern is yet another factor that weighs in the plaintiffs’ favor, and strengthens the inference that the individual mandate exceeds constitutional boundaries.” And while the Comstock decision emphasized the narrow scope of the law in that case, the Individual Mandate is a breathtaking expansion of federal power to govern all individual choices.

Most crucial in the Necessary and Proper analysis is the Raich case, in which the Supreme Court upheld the federal government’s power to deprive individuals of the right to access much-needed pain-relief medicine that was legal under state law, because doing so was “essential” to the success of a federal legislative scheme. But, writes the Eleventh Circuit, the Raich decision was not intended to “g[i]ve Congress carte blanche to enact unconstitutional regulations so long as such enactments were part of a broader, comprehensive regulatory scheme. We do not construe the Supreme Court’s ‘larger regulatory scheme’ doctrine as a magic words test, where Congress’s statement that a regulation is ‘essential’ thereby immunizes its enactment from constitutional inquiry. Such a reading would eviscerate the Constitution’s enumerated powers and vest Congress with a general police power.

This is an especially important point, because four justices in Raich applied rational-basis, rubber-stamp, magic-words, Congress-can-do-whatever-it-wants scrutiny to the CSA, but Justice Scalia in his separate opinion, did not. He didn’t really say what kind of scrutiny it was, but he appeared to provide a serious review, concluding, understandably, that since Congress wanted to ban all of the drugs on the CSA list, it was essential that it also ban marijuana that was not actually bought and sold across state lines. That’s a very different issue than the one here—unless, of course, the Raich case sets up rubber-stamp, rational-basis scrutiny. The Eleventh Circuit holds that Raich did not do this. Instead, the “essentiality” test in Raich is really just an echo of

An observation put forth in the New Deal case of Jones & Laughlin Steel Corp.: “Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.”

The Individual Mandate does not meet this test because “the conduct regulated by the individual mandate…in no way ‘burdens’ or ‘obstructs’ Congress’s ability to enforce its regulation of the insurance industry.” Many of the provisions in Obamacare would survive without the Mandate, which is “designed not to enable the execution of the Act’s regulations, but to counteract the significant regulatory costs on insurance companies and adverse consequences stemming from the fully executed reforms”—that is, to patch up holes that the other provisions of Obamacare blasted in the insurance market. And the many exemptions to the Mandate, as well as the “toothless enforcement mechansism” further undermine the argument that the Mandate is “essential.”

In my view, this is the most difficult part of the challenge to the Individual Mandate. The Necessary and Proper Clause is not a model of clarity, and the few precedents that exist—only three cases, really, Raich, Comstock, and McCulloch v. Maryland—are very deferential to the government. The major obstacle for opponents of the Mandate is the “essentiality” test in Raich. But the Eleventh Circuit must be correct that something other than anything-goes rational-basis scrutiny applies to that question. If it does not—if Congress can simply declare any activity whatsoever to be an “essential” part of a federal legislative scheme, then the entire enumeration of powers in the Constitution is a waste of time; Congress will then enjoy the kind of generalized police power that the framers specifically chose to deny it.