GOVERNINGWorks (GWorks)—[00:00:38:04] What did the Supreme Court decide in the last Term’s health care case (National Federation of Independent Business v. Sebelius)?

And on the Individual Mandate, which is the requirement that, by 2014, most Americans have health insurance, the Supreme Court upheld that provision—even though the provision was always kind of misunderstood.

The provision as it was enacted by Congress was never truly a mandate in the sense that by not buying health insurance you would be breaking the law. Instead the provision always said, ‘you will have health insurance or,’ and if...this is if you’re a covered person…, ‘if you don’t, then you’re going to have to pay a tax.’

And what the Supreme Court said is that structure, which is essentially a tax for failing to do something, is Constitutional. They said that 5-to-4, with the four members of the Court’s Left joined by Chief Justice [John G.] Roberts, [Jr.], who wrote the Opinion.

The Court by another 5-to-4 majority, Chief Justice Roberts and the Court’s more conservative members, held that the Individual Mandate couldn’t be sustained as a regulation of “interstate Commerce” [Article I, Section 8, paragraph 3], which is Congress’s principle regulatory authority...power under the Constitution. They concluded that the Constitution, when it allows Congress to regulate commerce, doesn’t allow Congress to require the creation of commerce. And that was what would be required by an individual mandate. And that is, you would be required to buy health insurance. They weren’t regulating the health insurance you were purchasing.

But, the bottom line was that this structure of ‘buy health insurance or pay a tax’ was upheld. So, that’s the first piece of the Supreme Court’s decision.

[00:02:43:20] How is it constitutional for Congress to ‘create and regulate’ an activity with its [Article I, Section 8, paragraph 1] power to ‘lay and collect Taxes’ but not with its [Article I, Section 8, paragraph 3] power to ‘regulate Commerce’?

[00:02:52:20] There isn’t a big practical difference that comes from the fact the Court upheld the Individual Mandate provision under the Taxing Power and refused to uphold it under the Commerce Power.

It seems odd that, you know, it would not be authorized under one provision of the Constitution but it would be under another. The reason is that the Supreme Court wasn’t looking at this as a question of ‘did it violate individual rights.’ So, we have a Fourth Amendment that protects against ‘unreasonable searches and seizures,’ for example. And no matter what power Congress might use to enact a law, whether under the Commerce Power or the Taxing Power, if it violates individual rights, then it’s invalid.

What was going on here was that the government was looking for some basis to justify the adoption of the law. And so, the Supreme Court looked at one basis, the principal one that was offered, the Commerce Clause, and said that doesn’t work. You can’t create commerce under that Constitutional power of Congress’s.

But, the Court said, ‘Yes. Under the Taxing Power, Congress has an almost plenary authority. It can tax basically, almost no matter what it wants to do. It can’t adopt ‘penalties’ under the Taxing Power. But, it can adopt taxes and it can adopt taxes that are intended to influence personal behavior. And here they’ve adopted a tax that’s intended to influence you to buy health care.’

And it’s kind of an argument that only lawyers could love and that is that this one box doesn’t work. But, the lawyers found another box under which it could be sustained.

So, the upshot is that the Individual Mandate survives.

Now, there is one practical consequence to rejecting one theory of the Commerce Clause and accepting another, the Taxing Power, and that it really focuses people for the first time on this fact that you can refuse to buy the health insurance. And, particularly in the early years, the tax is not very much. It’s only, you know, $60 for most people right out of the box, I think.

And then it focuses people on another provision that says that, if you refuse even to pay the tax, you can’t go to jail for tax evasion. The IRS (Internal Revenue Service) can garnish a tax rebate of yours; they can make harassing phone calls. But, the government’s ability to enforce the tax is actually very limited. And so, it is possible that there will be people, you know, supporters of the Tea Party, for example, who will, as a matter of principle, just refuse to pay the tax—excuse me, will refuse to buy the health insurance and may even refuse to pay the tax.

So, there’s also the second part of the case, which is really not one that people expected there to be much action in and that it turns out there was.

This is the very significant expansion of Medicaid eligibility under the Affordable Care Act. And, Congress provided that most of the costs, initially all of the costs, for the expansion of the Medicaid rolls would be paid for by the federal government. But, Congress had said to the states, ‘Well, you don’t have to take this Medicaid money. But, if you decide not to, then we can take away not just this Medicaid money but all your Medicaid money.’

And the Supreme Court, really for the first time, and it did this in the Sebelius case by a 7-to-2 majority, said that’s too much extortion to try and make the states change their Medicaid eligibility that much under the threat of losing all of their Medicaid money. And so this has to be interpreted as essentially an option, that the states have the ability to make a decision about this pool of money without endangering all of the money.

And what that means is probably not a huge amount. There may be some states, like Texas, that have very conservative governors, that may decide to turn down the new money as a matter of principle and not expand their Medicaid rolls. But almost every state...they’re just not going to turn down billions of dollars to provide health care to their citizenry. So, there are going to be some states, perhaps, that will not take the new Medicaid funding.

The big impact of that decision is probably going to be felt in other areas of the law because Congress does this all the time. It pulls back on the purse strings. It offers you...it...money but it makes it contingent on doing all kinds of things. The classic example really is highway funding: ‘If you don’t make your drinking age this; if you don’t make your maximum speed limit that.’ There are numerous provisions in the US code where Congress threatens the states with yanking money out from underneath them, if they don’t comply with Congressional directives. And you can probably expect to see a lot more lawsuits about that.

[00:07:48:00] What do you make of the concern about how Chief Justice Roberts voted in the health care case?

[00:07:53:00] So, there have been all kinds of rumors and allegations and supposed leaks from the Court about what happened in the voting in the health care case, focused almost entirely on the idea that the Chief Justice had voted to invalidate the mandate and changed his mind. And the claim that he did so out of fear for the Court’s reputation.

At the threshold, you have to be incredibly doubtful about the accuracy of this. These are all completely unsourced things from people who have agendas, who are trying to spin things in their own favor and when the Court again is just not in a position to respond because it never comments on things like this.

If you were ask me kind of what I bet happened here, is I expect you can tell a little bit from the Opinion assignments. And so, we know that the Chief Justice almost certainly had the majority from the very beginning. And, my guess is that he, coming out of the box, out of the Oral Argument, was confident that he didn’t think the statute could be upheld under the Commerce Clause. He was confident in the Medicaid ruling. And he was struggling with what to do about the taxing authority. And that both the Left and the Right thought that they had a very good chance of him coming down on their side. And he eventually resolved that in favor of upholding the statute in the course of the writing process. And that conservatives inside the Court were apoplectic about that. And they have spun it as the Chief not doing that in a kind of judicial capacity but in a political capacity of trying to protect the Court’s reputation.

Now that doesn’t really make a lot of sense in the...in the sense that it’s not...the Affordable Care Act wasn’t the world’s most popular statute. It wasn’t that Americans were clamoring for it to be upheld. And so it seems very unlikely...I think that the Chief is certainly aware of the consequence of the decision in terms of it...it I think builds the Court’s reputation as a non-partisan institution. But, I don’t think that that would have driven his decision. I think he’s an incredible serious guy, has that reputation. And I think that it really...the whole set of rumors really reflects very poorly on those who have participated in the leaks and, you know...wouldn’t be surprising if they diminished themselves in his eyes and the eyes of others because it’s so irresponsible and it’s kind of a wild accusation.

It seems like that the leaking of that claim started a couple of months before the decision itself where someone or some people were trying to put word out that the Chief was wobbly and that he might vote to uphold it for reasons of the Court’s reputation. And so that there was a, by at least one person, a real concerted effort to kind of pressure him internally and externally, which is very, very unfortunate and unseemly.

I do think that...it’s conservatives who are upset, some subset of conservatives who are upset with the Chief for the moment. But, that’s going to pass, I think, very quickly. He is a very solidly conservative Justice, if you just look at the pattern of his votes in the time there. And he will...nothing is fundamentally different about that. And, kind of, folks on the Left, liberals, Progressives who are excited are about his decision are going to fall out of love with him just as quickly as they’ve fallen in love with him because he is who he is. And, I think that, you know, one consequence of this, hopefully, was that there will be less leaking. But, conceivably, a consequence of it will be that there’s more because this happened, no one seems to have been burned by it and, you know, a new culture could emerge of trying to influence the Court from, you know, leaks from within which would I think be very unfortunate.

[00:12:36:13] Does the health care decision signal a shift in how the Supreme Court understands the extent of ‘the legislative Powers’?

[00:12:43:13] Maybe.

Right. So, you can look at the decision in the fashion of saying, ‘We’re going to finally put some breaks on Congress’s Commerce Power,’ which is really been the principle tool it’s used for the expansion of the entire Regulatory State. ‘And, we’re not going to completely hobble Congress because it can do things through taxation but it’s going to be held really accountable for doing that because there’s such resistance to things labeled ‘taxes.’’

And so you could...Marbury v. Madison is a very similar situation where, by kind of using...varying one power and disclaiming another, actually the Court produced a very particular outcome, a much more subtle, sophisticated way without seeming to claim a lot of power for itself, the Supreme Court ended up with Judicial Review.

The difficulty with that reading of this decision, I think, is that the limitation on the Commerce Power that’s articulated in the decision is not really a very significant one. The whole point of the Plaintiffs, the states, the National Federation of Independent Business is that Congress had never done this before. It had never ordered the creation of commerce. And there really isn’t any reason to expect that Congress was on the brink of doing that in other contexts. When the economy really cratered, they didn’t order people to buy cars. It was a very unusual provision.

Now, if the Court’s Commerce Clause holding portends a rebirth in a line of cases that says ‘We’re serious about, for the first time in a century, paying attention to limits on the Commerce Power,’ if this is the first of many decisions, well then it will be very meaningful.

When Chief Justice [William H.] Rehnquist passed away and [retired Associate Justice] Sandra Day O’Connor left the Court, the principal movers behind recognizing limits on Federal Power kind of left the Court. And we haven’t really seen previous indications that their replacements, in Chief Justice Roberts and and [Associate Justice] Sam Alito, really were going to re-work the law in this area and re-balance power between the states and the federal government in limiting the Commerce Clause. But, if that’s not true, if they’re now quite serious about that, then that will be the lasting legacy of this decision, together with the limitation on Congress’s spending power, the ability to yank back the Medicaid money and what that will mean in other contexts.

But, for the moment, the Commerce Clause decision really is a one-off. And I don’t read it as more than a one-off because it’s not part of a larger body of decisions over the past five years where a majority of the Supreme Court has said, ‘We are serious. Congress, you are going too far. You are trying to do too much under this Commerce Clause power. We’re going to put the breaks on you.’

—End of Part Four—

GWorks Interviews: Tom Goldstein

Part One: That Guy With the Web Site

Becoming a Supreme Court litigator

Part Two: SCOTUSblog—Without Papers

Founding a Web site dedicated to

the Supreme Court of the United States,

the site’s evolution and the challenge of

covering the Court without a press pass

Part Three: Courting Media

What the Court does and might do

in a changing media environment

Part Four: To Your Health

The Supreme Court decision

in the last Term’s health care case—

understanding the Court through a case

(National Federation of Independent Business v. Sebelius)

Part Five: Airing|Erring

How media (mis)understood

the health care decision

Part Six: Limits

Is the Supreme Court’s last Term

a sign of a new willingness to limit

Federal Power, what role will the Court

play in the coming election and how

can we best understand the Court

For more interviews,

please visit GWorks Interviews

EDITOR’S NOTES

GWorks Interviews: Tom Goldstein was filmed Wednesday 25 July 2012 in the offices of Goldstein & Russell, PC in the District of Columbia. GWorks would like to thank Mr Goldstein for his generous participation and Max Mallory for his work to make this interview happen.

Photo: Tom Goldstein. Courtesy Tom Goldstein.

Photo: SCOTUSblog. Courtesy SCOTUSblog.

1 Tom Goldstein is a founding partner of Goldstein & Russell, PC, a Washington, DC law firm that focuses on Supreme Court litigation. He is also Publisher of SCOTUSblog, the Web site he founded with Amy Howe, Mr Goldstein’s wife, law partner and SCOTUSblog Editor.

GWorks Interviews is a series dedicated to exploring governance issues of interest with persons given to thinking about and having relevant experience. GWorks invites a GWorks Interviewee to respond in depth to questions. GWorks does not edit the substance of what an interviewee says. GWorks edits GWorks Interviews only for editorial and technical considerations including style, length and productions issues. For more, please visit GWorks Interviews.