President Barack Obama was all smiles when he signed the Patient Protection and Affordable Care Act (PPACA) into law at a special ceremony in the East Room of the White House on March 23, 2010. “With all the punditry, all of the lobbying, all of the game playing that passes for governing in Washington,” Obama declared, “it’s been easy at times to doubt our ability to do such a big thing, such a complicated thing.”
It turns out there was a much better reason to doubt the federal government’s ability to do such a big, complicated thing: the Constitution of the United States of America. Barely two years after the president’s health care overhaul was enacted, his solicitor general, Donald Verrilli, stood before the nine justices of the U.S. Supreme Court and tried desperately to salvage the law. When the clock ran out on Verrilli’s time, Obama and his supporters faced a challenge they hadn’t expected: Their sweeping conception of federal authority had to contend with a robust libertarian legal movement that insisted Congress may not exercise powers the Constitution does not grant.
At issue was a lawsuit originally filed by Florida and 12 other states on the very day Obama signed the PPACA. Although the suit challenged several components of the legislation, its main target was the controversial “requirement to maintain minimum essential coverage.” Also known as the “individual mandate,” this provision would force all Americans to obtain medical coverage meeting minimum standards set by the government. To justify the health insurance mandate, the PPACA cited the Constitution’s Commerce Clause, which authorizes Congress “to regulate commerce…among the several states.” By the time the legal challenge reached the Supreme Court, a total of 26 states had joined it, along with the National Federation of Independent Business and several individuals.
While it might seem inevitable in hindsight that the Supreme Court would weigh in on the constitutional merits of the individual mandate, that outcome was far from preordained. “When the idea for the challenge was created,” says Orin Kerr, a conservative George Washington University law professor and former clerk to Supreme Court Justice Anthony Kennedy, “it was understood to be a long shot.” The legal challengers faced all sorts of obstacles along the way, including the daunting task of persuading federal courts to plunge into the highly political thicket of health care reform. “We were confident that if we got one ruling against [the law], it would go to the Supreme Court,” says Ilya Shapiro, a lawyer and senior fellow at the libertarian Cato Institute, who wrote multiple amicus briefs supporting the challenge and provided early legal advice to Florida and the other state challengers.
Some PPACA supporters didn’t think Shapiro and his allies would score even that one victory. Back in October 2009, a reporter asked Rep. Nancy Pelosi (D-Calif.), then the speaker of the House, “Where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?” Her reply: “Are you serious?” Nadeam Elshami, Pelosi’s communications director, later amplified the response, telling CNS News, “You can put this on the record: That is not a serious question.”
It seemed serious enough to me as I sat in the Supreme Court on March 27, 2012, watching one justice after another grill the solicitor general about the individual mandate’s constitutional defects. Verrilli was not taking heat only from the Court’s most conservative members; he also faced extremely tough questioning from Justice Kennedy, the right-leaning moderate who often casts the crucial fifth vote in tight cases. “When you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way,” Kennedy asked Verrilli as a hushed courtroom looked on, “do you not have a heavy burden of justification to show authorization under the Constitution?”
Suddenly, the legal challenge didn’t seem like such a long shot anymore. How did the challengers beat the odds? By constructing a potent, case-specific legal strategy on a foundation of painstaking libertarian legal scholarship built over the course of three decades.
‘Commerce Among the Several States’
On its face, the Commerce Clause seems like a straightforward proposition. Article 1, Section 8 of the U.S. Constitution grants Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” The Framers and ratifiers of the Constitution understood that middle part, “among the several states,” to mean that Congress may regulate commerce that crosses state lines but not the economic activity that occurs within each state.
In Federalist 42, James Madison explained that without the Commerce Clause, Congress would be powerless to clear away the tariffs, monopolies, and other interstate trade barriers erected by various state governments under the Articles of Confederation. “A very material object of this power,” he wrote, “was the relief of the States which import and export through other states from the improper contributions levied on them.” Madison and the other Framers believed that if the new United States was going to make it, the federal government needed to secure what today we might call a domestic free trade zone.
Compared to the decentralized Articles of Confederation, the Commerce Clause was a very significant grant of power to the new federal government, but it was not a blank check. As Alexander Hamilton, normally a champion of broad federal authority, explained in Federalist 17, the Commerce Clause did not extend congressional power to “the supervision of agriculture and of other concerns of a similar nature, all those things, in short, which are proper to be provided for by local legislation.” The Commerce Clause gave Congress no power to touch intrastate economic activity. Indeed, the Framers understood “commerce” to refer to the trade or exchange of goods, including transportation, not to commercial endeavors such as farming or manufacturing.
That original understanding held sway for a century and a half, until the Supreme Court dramatically expanded the federal government’s powers under the Commerce Clause in the 1942 case Wickard v. Filburn. At issue in Wickard was Congress’ attempt, via the Agricultural Adjustment Act of 1938, to inflate crop prices by limiting the amount farmers were permitted to grow. Among those farmers was Roscoe Filburn of Montgomery County, Ohio, who violated the law by planting twice the amount of wheat allowed by his quota. In his defense, Filburn noted that he did not send that extra wheat off to the market. Instead he consumed it entirely on his own farm, either by feeding it to his animals or turning it into flour for use in his kitchen. Yet according to the Supreme Court, those actions still counted as “commerce…among the several states.” Filburn’s extra wheat may not have crossed any state lines, Justice Robert Jackson wrote for the majority, but he and other similarly disobedient farmers nevertheless exerted a “substantial economic effect” on the interstate wheat market by growing what they otherwise might have bought.
Wickard opened the door to a wide variety of government actions that would have previously been seen as unconstitutional under the Commerce Clause, including federal penalties for local crimes like loan sharking and federal wage controls for state and municipal employees. In the 2005 case Gonzales v. Raich, the Supreme Court arguably went further than Wickard did by upholding the federal ban on marijuana, even as applied to plants grown by patients for their own medical use in states that allow such cultivation. Taken together, Wickard and Raich mean that Congress possesses vast powers to regulate the American economy, including purely local activities that in the aggregate can be said to affect interstate commerce. Congress relied on the language of these rulings in drafting the PPACA. As Section 1501 of the law puts it, the individual mandate “is commercial and economic in nature, and substantially affects interstate commerce.”
But there’s a catch. As the libertarian and conservative lawyers who crafted the legal challenge to the PPACA emphasized, Wickard and Raich are not the only Commerce Clause precedents that matter.
‘We Start With First Principles’