“Obama vs. the Commerce Clause”: an Answer to Richard Epstein

Unlike your average Tea Party “scholar,” who’s managed to convince himself that child labor laws are somehow an ungodly restriction on individual liberty, Professor Richard Epstein is a profoundly intelligent man. Which is why I take his constitutional arguments against ObamaCare deathly seriously. Epstein isn’t one to fantasize about a world where Lochner v. New York remains the law, or to rely on some zombified Tenth Amendment as an independent substantive barrier to federal action. No, unlike the majority of “constitutional conservatives,” Epstein operates in the real world. He’s still wrong.

His argument revolves around a Marshall court case — Gibbons v. Ogden, 22 U.S. 1 (1824) — where the Supreme Court put the Commerce Clause together with the Supremacy Clause to hold that in the realm of interstate commerce, state law yields to federal law. Couldn’t be simpler, or more clearly accurate. Professor Epstein pulls one limitation from the case, and builds out on it:

State inspection laws, health laws, and laws for regulating the internal commerce of a State, and those which respect turnpike roads, ferries, &c. are not within the power granted to Congress. […]

It is not intended to say that these words comprehend that commerce, which is completely internal, which is carried on between man and man in a State, or between different parts of the same State, and which does not extend to or affect other States. Such a power would be inconvenient, and is certainly unnecessary. Comprehensive as the word ‘among’ is, it may very properly be restricted to that commerce which concerns more States than one.

Emphasis mine — the underlined element represents the linchpin of Epstein’s argument. As he reads it, individual “inaction,” as in the failure to purchase insurance, is a decision that takes place inside the boundaries of a state, whose effects fail to “concern[] more States than one.” Consequentially, Congress may not regulate that decision by means of the individual mandate and therefore, “if Gibbons were still law, ObamaCare wouldn’t stand a chance before the Court.”

It’s an interesting construction of Gibbons‘ meaning in the overall constitutional structure, but one that ignores several other constitutional traditions, some of which also trace their histories to the Marshall Court. Specifically, Epstein overlooks the Necessary and Proper Clause, and fails to parse the distinction between constitutional inquiries concerning Congress’ legislative ends, and the means Congress may deploy to those ends. Gibbons speaks to the goals Congress may pursue, not the tools it may use to accomplish those goals. That latter inquiry, and the one that governs the individual mandate’s constitutionality, is comparatively broader.

Once Congress chooses a valid legislative target, its toolkit is circumscribed only by rationality. Under McCulloch v. Maryland, 17 U.S. 316 (1819), if a national problem properly falls within the Commerce Clause, Congress may deploy “appropriate” solutions to that problem. Per Chief Justice Marshall:

Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.

Emphasis mine, again. This is an issue of argument framing. Let’s assume that Epstein properly reads Gibbons. Still, the target of congressional action that must occur “among” rather than “within” the states isn’t the individual decision to opt out of the insurance markets — it’s the interstate insurance system itself. From there, Congress derives its power to mandate individual decisions taking place within state borders based on the Necessary & Proper Clause, provided such regulation is a rational means to the constitutional end. To be sure, it’s a strange thing that Congress may target instrastate activity in support of an interstate commerce issue, but that’s a power even more settled than the admittedly aberrational Wickard v. Filburn — which Epstein also has to wish away for his argument to hold together. Per no lesser a conservative light than Justice Scalia, in his concurrence Gonzales v. Raich, 545 U.S. 1 (2005), which bothers to cite all of Epstein’s favorite cases before concluding:

Our cases show that the regulation of intrastate activities may be necessary to and proper for the regulation of interstate commerce in two general circumstances.

ObamaCare is nothing so controversial as Epstein, or conservative America, would like to think. This is going to be a 6-3 decision at least, provided the government’s advocates frame it in the right way, and avoid Epstein’s trap. Which they will.

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9 comments

  1. There is an interstate insurance system?

    1. Ah, interstate insurance industry.

      1. Does the provision of insurance cross state lines? That an industry exists in two states isn’t sufficient for it to be interstate commerce. The entities in separate states have to have intercourse with each other. It’s like the difference between wiring electronic devices in parallel and wiring the states in series. Congress only has jurisdiction over the connections in a series circuit, not the wiring in parallel circuits, and never over the devices.

        So is insurance wired in series or in parallel?

        1. The insurance industry has been allowed to create two circuits to the same set of light bulbs, one serial and one parallel, and to toggle between them at will. Insurance advertising, in spite of disclaimers, is no less interstate than banking and credit card advertising. Reinsurance for health plans isn’t just interstate, it’s international. Any time an individual state attempts an expansion of coverage, the companies threaten to stop writing policies there (It happened when Washington changed the “pre-existing condition” regulations back in the 90s.) and take their business elsewhere. The companies act like they’re in interstate commerce and in fact are. They’re just hiding behind state insurance commissioners so they can make this argument.

  2. Marius, I was wondering about something related to that the other day: Assuming such a thing were at all politically feasible, would it be constitutional for Congress to lay a tax for the purpose of establishing a federal universal healthcare system? It seems like it should be possible under the General Welfare Clause, but it’s not entirely clear to me whether that clause gives a specific power to spend, and what the limitations are.

    I did note another part of Gibbons stating something to the effect that General Welfare can’t intrude on areas that are exclusive to the states, but that doesn’t seem all that well defined either, with the Tenth amendment and all.

    1. Absolutely legitimate. Well, the levy would be clearly constitutional. Creating an entirely public system designed to occupy the field, and push out competing industry, would be… dicey. The Court’s confronted things like that before (like the NYC subway case), but done away with the implications by a fancy bit of handwaving. I think there’s an argument that true socialism — state ownership of the means of production, to the exclusion of a competing private industry — is probably unconstitutional. If you mean, “could Congress constitutionally create a public system to compete with private insurance (a public option) under the General Welfare Clause,” the answer is absolutely yes!

    2. As we know, the right for the government to tax for a new program, is established. Although, what I find “amusing”, was that in order to not have a tax, to not “punish” everyone with another tax, they went this other route with the penalty..in some ways that should have made conservatives happy.

      Although, I’ve heard it debated before, that if they just changed the wording to be from a “penalty” to “tax”, it would have solved some of these issues. I’m not sure how far that argument goes though.

  3. I don’t know…Epstien should have also factored in Gonzalez v. Raich 2005 and Wickard v. Filburn 1942 into his assessment. An examination as to how current judges’ decisions/opinions, specifically Scalia and Kennedy, will apply to the health care reform cases would be a more viable approach to see how they reflect much more accurately the view of the Court of today rather than the its view 187 years ago.

  4. Actually, I really like reading your post. It’s all about on a constitutional matter. There are many limitations from every state in US and also they regulate states ability to raise taxes. Therefore, it’s much better for the people to include in the tax base. Anyway, It’s really make sense. Thank you for this post!

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