More on federalism and coercion in King v. Burwell—a response to Abigail Moncrieff [updated with a brief further rejoinder to Prof. Moncrieff's latest post]

|The Volokh Conspiracy |

Abigail Moncrieff, author of an important amicus brief on federalism issues in King v. Burwell, has written a post responding to Jonathan Adler's and my criticisms of the federalism arguments put forward by defenders of the federal government's position in the case. Abby seeks to defend claims that the plaintiff's interpretation of the ACA in King might lead to unconstitutional coercion of state governments, who would be forced to establish health insurance exchanges or give up federal subsidies for their residents.

Most of Abby's post responds to details of Jonathan's argument that are not critical to the points that I made. She does not, however, consider a point that is central to my critique: that the coercion theory cannot be used to justify an interpretation of the ACA that actually leaves states with fewer meaningful choices and expands federal power more than the one advanced by the plaintiffs.

It is also notable that Abby offers us what she herself calls a "concession." Both Jonathan and I emphasized a passage in New York v. United States (1992), where the Court indicated that federal statutes that incentivize states to regulate by imposing obligations on individual citizens rather than denying funds to state governments are not coercive. As the Court explained, the key distinction between regulatory statutes and conditional spending statutes is that, in the former case, "[t]he affected States are not compelled by Congress to regulate, because any burden caused by a State's refusal to regulate will fall on [private citizens], rather than on the State as a sovereign." Abby admits that "[i]f that line were serious, then plaintiffs' interpretation in King would be constitutionally unproblematic because the threatened regulatory regime would, indeed, apply directly against citizens rather than against the states."

But she then suggests that the Court isn't really serious about this, relying on Rick Hills' reply to one of my earlier posts. I responded to Rick here. The bottom line is that there is no reason believe the Court didn't mean exactly what it said.

She also relies on a passage in her amicus brief, where she states that "federal regulations that bind citizens are not actually less restrictive of states' powers than those that bind governments," and notes that the Supreme Court has ruled that constitutional limits on federal power are intended to protect individuals, not just state governments. Both points are true. But neither proves that the relevant passage in New York v. United States should be discounted, or that any burden that cannot be imposed on a state directly, also cannot be imposed through federal regulations that burden individuals. There are in fact many areas where the federal government can use the latter means to accomplish ends that cannot be done through the former. For example, current Supreme Court precedents, including New York, forbid federal "commandeering" of state government resources. But the federal government has a nearly unlimited power to impose income taxes on state residents that, as a practical matter, can reduce the resources available to the states just as much as direct commandeering of state treasuries would.

As I noted in my response to Rick, the distinction between direct coercion imposed by conditions on grants to state governments and indirect coercion imposed by regulation of private individuals may not be the best possible rule. I myself have long advocated an entirely different approach to limiting Congressional spending authority, by enforcing a narrower (and more originalist) conception of what it means to spend money to promote "the general welfare." But expanding current precedent to cover regulatory cases—if done consistently—would have fairly radical implications and lead courts to address difficult issues they might be unwilling or unable to deal with. In dealing with conditional spending cases, it is at least relatively easy to measure the extent of the coercion simply by looking at the amount of money involved and measuring it as a percentage of the state's overall budget. This is what the Court did in South Dakota v. Dole (1987) and NFIB v. Sebelius (2012). In regulatory cases, things are much more nebulous. It will often be difficult or impossible to come up with any objective measure of the extent of coercion imposed on states by such means.

Abby takes me and other commentators to task for linking to the amicus brief by state governments rather than her own. But the two briefs make similar coercion arguments, and the differences between them were not relevant to the points I wanted to make. As a law professor who has written numerous amicus briefs myself, I readily acknowledge that such briefs can be influential, and Abby's certainly has proven to be so. However, I thought that a brief endorsed by almost two dozen state governments is likely to have even greater significance than one written on behalf of several activist groups and a number of law professors. But I did not mean to denigrate Abby's influential brief, and am more than happy to link to both briefs in this post and urge interested readers to study them.

Finally, Abby incorrectly describes Jonathan and myself as "conservatives," even though both of us are in fact libertarians. I have a long history of disagreements with conservatives, including, most recently, on constitutional issues related to immigration and same-sex marriage. For some more general reasons why I do not endorse conservatism, see here.

UPDATE: Abby responds to this post here. Her main point in response to me is that "Constitutional federalism is not the same thing as states' rights or devolution" and that it doesn't necessarily guarantee states' the maximum degree of choice. I certainly agree that constitutional federalism generally is not the same thing as either states' rights or devolution. However, coercion doctrine specifically must be about the limitation of choice. If a state has been in some sense coerced by the federal government, it is because its choices have been unduly constricted relative to what they would have been absent the federal action. For that reason, as I argue above, and in my previous post, it makes no sense to argue that plaintiffs' interpretation of the ACA is coercive, but not that of the federal government, which restricts their choices more than the former does. The federal government's interpretation might be preferable for other reasons, and might be compatible with federalism in other respects. But it is not less coercive than the plaintiffs' position, but more so.

Abby suggests that her interpretation of coercion is supported by existing doctrine. But, as discussed above, existing doctrine does not extend coercion doctrine to regulatory as opposed to conditional funding pressures imposed on states. Doing so would have radical implications, for reasons already noted above. And if we drop the supposedly "formalistic" distinction between regulatory and conditional spending pressure, we should also drop the equally formalistic distinction between the former and cases where states are only implicitly forced to change their policies by federally imposed constraints.

In NFIB v. Sebelius, Chief Justice Roberts' controlling opinion states that "Spending Clause programs do not pose this danger [of coercion] when a State has a legitimate choice whether to accept the federal conditions in exchange for federal funds. In such a situation, state officials can fairly be held politically accountable for choosing to accept or refuse the federal offer. But when the State has no choice, the Federal Government can achieve its objectives without accountability" (emphasis added). If these principles are to be applied to regulatory pressures all, the key consideration remains the degree of choice left to the states. A law that constrains states' options may or may not be coercive under this approach. But a law that leaves states' with less meaningful choice cannot be less coercive than one that leaves them with more. Thus, if the plaintiffs' interpretation of the ACA is unconstitutionally coercive, the same must be true of the federal government's.

If, instead, we wish to go in a hyperformalistic direction and emphasize not limitation of choice, but whether federal coercion takes the form of using "state resources" to promote federal objectives, then it should be noted that, under the federal government's position in King, a federal exchange operates on behalf of the state and "stands in its shoes." That's how it can be considered an exchange "established by the state" under the IRS interpretation of the law. Thus, the federal exchange, in so far as it makes people eligible for federal subsidies under the ACA, itself becomes a kind of state resource.