The Volokh Conspiracy
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The "Bait and Switch" on the Affordable Care Act's "Findings"
A Flashback from Unprecedented to California v. Texas.
In California v. Texas, the so-called "findings" have played an important role in the severability debates. I discuss the history of these findings in my 2013 book, Unprecedented: The Constitutional Challenge to Obamacare. Here is an excerpt (pp. 49-51):
Before the Senate bill emerged from committee, the Democrats were so confident of the law's constitutionality that they made few efforts to prove it. No hearings were held about the law's constitutional implications until after it was enacted. However, a number of progressives were already wary of the Supreme Court. In the fall of 2009, Michael Myers, staff director and chief counsel to the Senate Health Committee, contacted Caroline Fredrickson, the executive director of the American Constitution Society. ACS, created as a liberal counterweight to the Federalist Society, promotes the values of "individual rights and liberties, genuine equality, access to justice, democracy and the rule of law." Myers asked Fredrickson to put together a series of "constitutional findings" to insert into the bill to explain why the ACA was constitutional. This could prove vital, as in recent years the Supreme Court had struck down laws as unconstitutional due to inadequate Congressional findings.
Fredrickson quickly contacted several leading scholars and policy experts, including Simon Lazarus of the National Senior Citizens Law Center (now at the Constitutional Accountability Center), David Lyle, who at the time was the deputy director of the ACS (and now works at Media Matters), and others. Over the course of two frenzied days, declarations to fend off charges of unconstitutionality were compiled. The Senate incorporated the ACS's points, as well as reports from Professor Mark Hall, into the law.
Ultimately, the 2,700-page Affordable Care Act contained three pages of constitutional findings to show that the "requirement to maintain minimum essential coverage" was constitutional. First, "the individual responsibility requirement provided for in this section . . . is commercial and economic in nature, and substantially affects interstate commerce." Second, the findings listed a number of "effects on the national and interstate commerce" that resulted from uninsured people shifting costs. Third, the "findings" stated that "the requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased [emphasis added]." The word "activity" would prove decisive. Fourth, "in United States v. South-Eastern Underwriters Association, the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation."
That was all the bill said on the topic of constitutionality. Tellingly, none of these official findings alluded to the tax power of Congress. All concerned the effects of the uninsured—and (somewhat incoherently) the effects of the mandate itself—on interstate commerce.
Though brief, these essential points served as the focus of much of the litigation and formed the core of the government's arguments as to why the law should survive. Their limited focus on interstate commerce helps explain why the tax power argument was slow to gain traction as the litigation progressed.
During the ACA litigation, the Obama administration viewed these findings as an inseverability clause. Solicitor General Verrilli's brief stated the issues directly:
In this case, however, it is evident that Congress's finding on the "essential" connection between the provisions, 42 U.S.C.A. 18091(a)(2)(I), "though directed at the antecedent constitutional question, can also be read to answer the severability question." Court-Appointed Amicus Br. 33. This is so because the finding rested on evidence showing that, unless paired with a minimum coverage provision, the guaranteed-issue and community-rating provisions would actually undercut Congress's goals because they would cause premiums to rise and coverage to decline. See pp. 10- 18, infra. As both a logical and practical matter, therefore, Congress's finding on the "essential" role of the minimum coverage provision in effectuating the guaranteed-issue and community-rating provisions effectively serves as an inseverability clause--albeit one limited to only those two provisions, given that Congress did not find the minimum coverage provision to be "essential" to any other part of the Act.
I don't recall that anyone in 2012 argued that the findings were not an inseverability clause. The debate turned on whether the Court was bound by that clause. Often the Court will disregard severability and inseverability clauses, legislative intent be damned. More recently, many people have argued that the findings are without question not an inseverbaility clause.
This position in the 2012 brief created an awkward moment for former Solicitor General during the California v. Texas arguments. Verrilli now represent the House of Representatives. And the House has argued that the findings are not an inseverability clause. Chief Justice Roberts accused Verrilli of a "bait and switch." Harsh words from the usually mild-mannered umpire.
Chief Justice Roberts began his questioning of the former solicitor general by going back to 2012. "Eight years ago, those defending the mandate"--that is Verrilli--"emphasized that [the mandate] was the key to the whole Act." Roberts did not refer to a "choice." He used the phrase "mandate" over and over again. This nomenclature was not a favorable sign for the former Solicitor General. Tempora mutantur, nos et mutamur in illis. "But now," Roberts countered, "the representation is that, oh, no, everything's fine without" the mandate." Here, Roberts sounded a bit peeved.
Then he dropped the boom. "Why the bait and switch?" Roberts asked if Congress was wrong in 2010 "when it said that the mandate was the key to the whole thing." He quipped if we "spent all that time talking about broccoli for nothing?" It's a shame the transcript does not note (laughter) line for virtual proceedings. Because that barb would have brought down the house.
Verrilli responded, nonplussed. He no doubt expected the attack. Congress made a "predictive judgment" in 2010 with a "carrot-and-stick approach." For example, there were "generous subsidies" and "attractive policies." But Congress also designed the "tax payment" as a "stick" if "you didn't enroll." Fast-forward to 2017. Congress made the judgment that the "carrots work without the stick."
Later, during a colloquy with Justice Kavanaugh, Verrilli cited the amicus brief of Bartow Farr, who "made very strong arguments in favor of" the position that the mandate was severable. But Verrilli did not acknowledge his position as SG.
I am grateful Verrilli argued, rather than Douglas Letter, the House General Counsel. I have urged that switch in the past. But I knew that Verrilli's one liability would be on the findings as an inseverability clause.
