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August 16 2011

The Individual Mandate Ruling - Round I

Hadley Heath

It took me a few days to work my way through Friday's ruling from the 11th Circuit Court of Appeals.  There's other good reading out there for those who are interested, but I decided to break my analysis down into three rounds here on Inkwell.  Today, in Round I, I'll give an overview of the ruling and get started by summarizing part of the 11th Circuit's ruling (namely, precedents in case law that relate to the Commerce Clause). 

The majority opinion is organized into seven parts. 

  1. Standing
  2. The Act (The Affordable Care Act)
  3. Constitutionality of Medicaid Expansion
  4. Supreme Court's Commerce Clause Decisions
  5. Constitutionality of the Individual Mandate under the Commerce Power
  6. Constitutionality of the Individual Mandate under the Tax Power
  7. Severability

Let's hone in on the individual mandate.  As Anna as already noted on Inkwell, the main outcomes of this consideration (spoiler alert!) are thus: Congress cannot regulate a decision not to buy something as a part of commerce regulation (part 5), the individual mandate is not a tax (part 6), and finally, the mandate is "severable" from the all of the other parts of the law, parts which the court upheld as Constitutional (part 7).

Although it's difficult to summarize this lengthy ruling in a few blog posts, it's important to examine how the court got to its conclusions.  So I will try to give you the Cliffnotes version!

In this post, I'll review part 4 of the ruling, the part that deals with Commerce Clause case law.  In Round II in this short series, I'll move to part 5 of the 11CA decision that deals with the application of the Commerce Clause to the individual mandate.  In Round III, I'll discuss why the individual mandate is not a tax, and whether or not it can or should be severed from the rest of ObamaCare.

Several precedential decisions on the Commerce Clause repeatedly show up in the ObamaCare cases, complaint after complaint, decision after decision.  This 11CA ruling is no different, as judges realize they must (and eventually the Supreme Court must) reconcile seemingly divergent decisions (and actually divergent doctrines) on this short but now complex clause in the Constitution.

The several cases are:

  • Wickard v. Filburn (1942) - This case expanded Commerce Clause power by ruling that the U.S. may regulate wheat production, even for self-use, under the Commerce Clause.
  • U.S. v. South-Eastern Underwriters Association (1944) - This case is notable because it was the first to recognize insurance as "commerce."  The decision stated that any part of the insurance business that is "interstate" may be subject to regulation by Congress.  This of course, could have opened a can of worms.  But the following year in 1945, to allay fears of federal regulation in insurance, Congress passed the McCarran-Ferguson Act to reaffirm that regulation of the insurance business was for states - not Congress - to do.
  • Heart of Atlanta Motel v. U.S. (1964) - Another expansive case: The Court determined that Commerce Clause empowered the U.S. to force private businesses to follow the Civil Rights Act and offer services to Blacks.
  • U.S. v. Lopez (1995) - After decades of decisions that upheld or expanded Congress' Commerce Clause power, this case set limits.  The Court ruled that the federal Gun-Free School Zone Act's regulations about gun possession did not pass Constitutional scrutiny because they were non-economic in nature and did not have a substantial impact on interstate commerce.
  • U.S. v. Morrison (2000) - This case also limited the Commerce Clause power, by reapplying the logic of Lopez: It invalidated part of the Violence Against Women Act, saying the provision in question was non-economic in nature and therefore outside of Congress' commerce regulation power.
  • Gonzales v. Raich (2005) - The facts of this case were very similar to those in Wickard, and so was the outcome.  This time the Court ruled that the U.S. may criminalize cannabis production, even for self-use, under the Commerce Clause.  Even though the plaintiffs were using the marijuana for medicinal purposes approved of by the state of California, the Court ruled the Congress could criminalize their actions because of the effect their cannabis production (and any cannabis production in this class of activity) would have on interstate commerce and the larger federal regulatory scheme aimed at controlling certain substances.

Typically, the federal government relies on the more expansive rulings (Wickard, Heart of Atlanta, Raich) to bolster support for the Constitutionality of the individual mandate, while challengers of the mandate rely more on Lopez and Morrison

How did the 11th Circuit sort this out?  You'll have to wait until tomorrow to read my Round II blog in this series.  Or - and I encourage you if you have time - pick up reading the ruling around page 99!

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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