The Commerce Clause in Full

Last week I started a rather ambitious project of analyzing the arguments in Florida et al. v. US DHHS, the lawsuit in which 20 states are suing the federal government over the health care reform bill, now law as the Patient Protection and Affordable Care Act.

The most interesting argument that they counselors Rivkin and Casey advance for the plaintiffs is that Congress has exceeded its powers granted to it under the commerce clause in requiring an individual to participate in an economic transaction with a third party. I think there will be lots of novel argumentation on both sides of this issue, ranging from framers' intent to statutory construction and even, if we wish really hard, a natural law discussion. However, before we can delve into this upcoming debate, we have to buckle down and understand the commerce clause as it stands in modern jurisprudence.

Article I section 8 provides the authority to congress "To make all laws necessary and proper for carrying into execution" the set of powers enumerated throughout the Constitution, which for our purposes includes "power to lay and collect taxes, duties, imposts, and excises" and "to regulate commerce with foreign nations, and among the several states, and with the Indian Tribes." The commerce clause has always been the most expansive source of congressional power.
The most recent court test of Congressional authority under the commerce clause of which I am aware is Gonzales v. Raich, 545 U.S. 1 (2005). The opinion, delivered by Justice Stevens, traces the development of our understanding of the commerce clause Raich at 16. Initially a prohibition on state trade wars, see Gibbons v. Ogden, 22 U.S. 1 (1824), the commerce clause expanded with the industrialization, infrastructure, and amount of commerce in the late 19th century. Congress thus has the power to regulate persons or things in interstate commerce, the channels of interstate commerce, and any activities which have a substantial effect on interstate commerce. Perz v. United States 402 U.S. 146 (1971).

The commerce clause power was most broadly expanded during the New Deal era. As part of an attempt to put a floor under grain prices, Congress passed a law limiting the amount of grain that could be grown per acre. Roscoe Filburn, a wheat farmer, exceeded his quota, intending to feed his grain to chickens he was raising on the property. In Wickard v. Filburn, 317 U.S. 111 (1942), the Supreme Court upheld the law. "Even if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce." Id., at 125. Any activity, if taken in the aggregate that has a substantial effect on the flow of, materials in, or conditions relating to interstate commerce are fair game for the Congress to regulate under the Commerce Clause.

For decades, this standard was the controlling precedent on commerce clause doctrine. A generation of law school students learned the standard, went out and litigated, pursued PhDs, returned to law schools to teach, and taught their students the same standard. 53 years passed before the next restriction on congressional power under the commerce clause occurred. But before we get there, it is worth meditating on a couple more commerce clause cases.

Several important civil rights cases were decided not on the plain language of the 14th amendment, which granted Congress the authority to ensure the equal protection of the laws to citizens of the United States, but upon the commerce clause power. Katzenbach v. McClung 379 U.S. 294 (1964) preserved an anti-discrimination measure of the civil rights act by holding that a restaurant is subject to congressional authority because it serves food which has moved in interstate commerce. In Heart of Atlanta Motel, Inc v. United States 379 U.S. 241 (1964), a more clear cut instance of interstate commerce regulation, the Supreme Court held that Congress could legislate against moral wrongs--or in fact, could legislate on almost any subject--as long as the object of the law touched substantially on interstate commerce.

The first limits to be articulated on the scope of the commerce clause appeared in United States v. Lopez 514 U.S. 549. The Supremes struck down the Gun-Free Schools Act which prohibited the possession of a firearm within a school zone. Despite arguments at the bar that guns would have a profound negative effect on education and the subsequent labor market, the Supreme Court decided that schools were a decidedly non-economic subject. Because the Gun-Free Schools Act was a standalone measure and not, in the Court's words, "an essential part of a larger regulation of economic activity," it was well outside the Court's authority to legislate such a ban on guns within school zones. The legality of guns in school zones would be left up to the states to decide.

Similarly, the Violence Against Women Act of 1994, which established additional criminal penalties enforceable in federal and state courts against perpetrators of gender-based violence, was struck down by the Court in United States v. Morrison 529 U.S. 598 (2000). Despite explicit Congressional findings which established a cost on interstate commerce when these crimes were committed, the Supreme Court decided that the activity itself was essentially criminal, and not economic. The noneconomic nature of the crimes "was central to [the] decision" Morrison 529 U.S., at 610. The balloon of commerce clause authority seemed to be expanding into some severe constraints. The question remained, would it be popped at the next instance?

The Supreme Court answered this question with a resounding 'no' in Gonzales v. Raich 545 U.S. 1 (2005). At issue was the right of a California woman to grow and consume marijuana in compliance with the state's medical marijuana law. The Ninth Circuit declared the activity was fundamentally in a non-economic class, and that the class of activity was regulated by the permission of a prescribing physician, who acts as a differentiation between medicinal and economic cultivation activities Raich v. Ashcroft 352 F.3d 1222. Raich was not seeking to overturn the Controlled Substances Act, under the authority of which federal agents raided her home and arrested her, but merely claiming that the activity of cultivating medicinal marijuana for personal use was not included in its scope. While the Ninth Circuit was sympathetic to this argument, the Supreme Court was not.

Justice Stevens in his opinion specifically held that because the prohibition on local cultivation is part of a broader regulatory scheme, it is constitutional.

It is difficult to see a positive outcome for the plaintiffs in FL v. US DHHS if the issue at hand is whether Congress exceeded its Commerce Clause authority in executing the individual mandate:

1. No one disputes that the nature of health insurance defines it as within a commercial class of activity.
   
2. The individual mandate is part of a broader regulatory scheme.
   

As always, I'd love to hear back from you.


Next up, the arguments of Rivkin and Casey about taxation.