Parsing the Commerce Clause

NFIB v. Sebelius, the 2012 Supreme Court decision rejecting nearly all of the constitutional challenges to the Affordable Care Act, has (at least) two bits of interest to infolaw folks. First, the majority opinion finds that the ACA‘s individual mandate cannot be sustained under the Commerce Clause. Congress regulates all manner of infolaw issues under the Commerce Clause, perhaps most notably trademarks. Second, the Court strikes down the Medicaid expansion provision, finding essentially that it is an unconstitutional condition on Congress’s spending largesse. This is fascinating for those of us interested in how Congress uses its spending powers to shape speech. I’m going to tackle what I see as a puzzle in the majority’s Commerce Clause analysis, with the usual disclaimer: I’m not expert in the structural aspects of the Constitution.

What is the new Commerce Clause rule / test / model?

My view of the Commerce Clause, until now, was that Congress could regulate anything except guns in schools and violence against women. Lopez and Morrison seemed like the start of a campaign to set meaningful limits on the Commerce Clause, but the effort sputtered, and arguably was interred with Gonzales v. Raich (the medical marijuana case, also argued by Randy Barnett). In NFIB, Chief Justice Roberts finds that the individual mandate creates commerce rather than regulating it. He buys into the action / inaction distinction, finding Congress can regulate only where there is activity in commerce, else we enter a realm of nearly unlimited federal power.

Readings of the case have tended to track the author’s normative position on how the Commerce Clause ought to operate. I’m mostly interested in testing it: how can we apply this new understanding to the wave of cases that are about to appear on the federal courts’ dockets? With implementation, I see two problems: one temporal, and one in market definition. I think the majority opinion is unhelpfully formalistic on both counts, and will be difficult to apply in practice.

Temporal: the Obama administration argued that participation in the health care system is inevitable: death, taxes, physician waiting rooms. Roberts’ opinion refuses to take a stochastic approach: just because people may participate in the future, he writes, does not give Congress leave to regulate. This is simplistic. It’s time-slicing. Virtually everyone has been and will be a participant in the market for health care in some way: services, medical devices, over the counter drugs, chiropraxy, etc. Nearly everyone in this country was born in a health care facility: we start life as market participants. So, when may Congress regulate? Discretely, or continuously? If it’s the former, then Congress is essentially limited to regulating transactions: only when money changes hands. This narrows greatly the scope of federal power. To give one vexed example from IP, it suggests that Congress simply may not regulate uses of trademarks that do not involve transactions. If I create my own Nike shirt and wear it on the street, Nike may not sue me for dilution or likelihood of confusion. Perhaps that’s the result under NFIB, but I doubt it. The problem is that Roberts does not adequately address this time-slicing problem: there is no such thing as continuous participation in commercial activity, even for firms. Most close up shop on weekends. If the company turns out the lights, does the Commerce Clause power dry up until Monday?

Market definition: what constitutes the relevant market? Is it purchase of health care services? Health insurance? Dianetics? The majority opinion criticizes the administration’s defense of the mandate as necessary because the insurance and delivery markets are inextricably intertwined. Yet, the Court does not tell us how to figure out where Congress overreaches. For example, I bought coffee from Starbucks. Starbucks is engaged in interstate commerce, and I’ve just transacted with them. Even aside from the health benefits of caffeine, can Congress now regulate my health care purchases because I’ve participated in interstate commerce? That outcome would be troubling because it means only a recluse could avoid federal regulation (and, if Wickard v. Filburn is right, he better not grow his own crops. Or medical marijuana.).

So, Congress must regulate more narrowly. But how much more so? And can regulated entities challenge laws by claiming they operate in a different industry – health insurance rather than delivery? (HMOs are a nightmare for that.) Consider Heart of Atlanta Motel, which upheld federal anti-discrimination law. Restaurants operating near interstate highways must serve black and white customers equally. But if I run the Real Racist Roast Beef Shop, I might argue that anti-discrimination law penalizes me for inaction. I have opted not to engage in the roast beef market for black customers. Congress may not compel me to move out of my inertia to enter that market. This argument is naturally ridiculous. But it points up a weakness in the action / inaction argument: everything depends on having a methodology for defining what constitutes a market in which one is active, or not. The Court’s opinion does not offer one.

I dislike much of Constitutional law because I think it is simply politics with a thin (sometimes very thin) sheen of legal analytical cover. This forces courts and scholars into a series of just-so stories, inventing jurisprudential epicycles to explain the path of legal doctrine. The cynic’s view of these cases is that the Supreme Court majorities dislike marijuana and universal health care, and they’re willing to bend the doctrine to match their normative preferences. Different umpires have different strike zones, and each umpire’s strike zone varies game to game.

I would like, as a normative matter, to see more rigor in the Commerce Clause. Federalism matters. There are at least two ways the Court might chart a more principled path. First, it might focus on the limit of regulation to international and inter-state commerce. That means that Wickard should be overruled: growing crops for your own family may cause infinitesimal alterations to the wheat market, when you otherwise would have bought your bread at Walmart, but it’s simply too attenuated to be inter-state commerce. Second, the Court might emphasize “commerce.” That would mean that Lopez and Morrison are rightly decided. Violence against women and guns in schools are both troubling issues, but they’re not commercial. There aren’t any transactions there. There would need to be work thinking about how to deal with indirect effects, such as in the Real Racist Roast Beef Shop, but we lawyers get paid to tread slippery slopes. And lastly, the Court needs to discard – at least behind the curtain – the pretense that each ruling is only about the case before them. They are telling Congress when they can and cannot run the railroad, and so some (supposed) judicial modesty needs to be sacrificed for clarity, and predictive power.

The Commerce Clause battle is yet to be joined: there has been a wave of criticism of the majority’s analysis. Future cases will chart whether this is a sea change, or merely a Lopez / Morrison detour. I can’t wait.

2 Responses to “Parsing the Commerce Clause”

  1. I like the observations made. It also seems to me that in historical times the court had more principle based decisions and as time went on they became less so. Do you see that in the evolution of the caselaw?

  2. >>I dislike much of Constitutional law because I think it is simply politics with a thin (sometimes very thin) sheen of legal analytical cover. <<

    Bush v. Gore anyone? 🙂 I agree with your statement 99 times out of 100 cases but this is why the Roberts decision in NFIB v. Sebelius is so incredibly vexing. Roberts crossed political lines to craft his decision yet, instead of wading right into the deep end with an expansive reading of the Commerce Clause, tried to throw some bones back toward his conservative allies. Where the court goes from here is anyone's guess. I not sure Roberts even knows himself.