Outside the Beltway

ObamaCare Goes Before The Supreme Court: A Preview

Starting tomorrow morning, the Supreme Court dives into the most significant case that has been before it in many years.

Doug Mataconis · Sunday, March 25, 2012 · 22 comments

Starting tomorrow morning at 10:00am, the nine Justices of the United States Supreme Court will begin the first of an historic three-day, six-hour hearing on the constitutionality of the Patient Protection And Affordable Care Act. The most prominent issue before them, of course, will be the Constitutionality of the individual mandate and the question of whether the Interstate Commerce Clause, which has been interpreted very broadly by the Court over the past 70 years or so, gives Congress the authority to force individuals to purchase health insurance. That issue alone with take up two hours of the Court’s time on Tuesday, but it’s not the only issue that they’ll be considering, and it’s hardly the only one that could decide the fate of the law itself, or what the Court ends up doing when it releases it’s decision at the end of its term in June.

As I noted before, the Supreme Court will be making audio and transcripts of each days hearings available approximately two hours after each hearing is concluded, so we’re likely to get near instant analysis of each days hearings along with much speculation about what the tenor the proceedings might mean for the outcome of the case. One of my first pieces of advice would be to not be quick to judge how a case will turn out by what questions are asked during the hearings, or which side the “experts” on cable television proclaim the winner or loser of a particular days arguments. For one thing, past Supreme Court oral arguments have made it clear that you can’t always tell how a case is going to turn out based on the questions that get asked during a hearing or a perception as to which side seems to be “doing better.” This is a phenomenon I can personally attest to after about two decades of arguing before trial and appellate courts. Quite often, Justices and Judges ask questions for reasons that don’t necessarily have anything to do with how they end up deciding a case. For another, by the time Court convenes tomorrow these Justices will have read all the briefs submitted by the parties and by those who have intervened in the case. After arguments are concluded, they will discuss the case among themselves and begin hammering out a decision. That’s where the real work gets done. Nonetheless, there will be more than enough post-hearing analysis to discuss I am sure.

Here’s a rundown of each day’s arguments.

Day One: Does The Anti-Injunction Act Bar Courts From Hearing Challenges To The Mandate Before A Penalty Has Been Imposed?:

The arguments that will be heard tomorrow morning originate from a provision of the Internal Revenue Code called the Anti-Injunction Act which provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.” I.R.C. § 7421(a).  Most of the Courts that have considered this argument have rejected it on the ground that, although the penalties that would be imposed on an individual for not obtaining insurance would be collected by the Internal Revenue Service, the penalty was not a tax. In all of the cases challenging the PPACA, both the challengers and the government have taken the position that the AIA does not apply. Nonetheless, last year the Fourth Circuit Court of Appeals ruled in Liberty University v. Geithner that the AIA barred challenges to the law until such time as the Internal Revenue Service had actually imposed a penalty. As I noted in a subsequent post, if the Court were to determine that the AIA applied here it would effectively mean that suits challenging the law were barred until 2014 at the earliest, and possibly much later. Because neither the Federal Government nor the parties challenging the law are taking the position that the AIA bars challenges to the law, the Court has appointed special counsel to argue in favor of that proposition.

In his post last week previewing Monday’s argument, which I recommend you read in full, Lyle Denniston puts the issue before the Court this way:

As the Justices prepare for the opening argument next Monday on the health care law, they may well be asking themselves two fundamental questions: first, how important is it for us to resolve, right away, the constitutional dispute over the individual insurance mandate, and, second, even if that is really important, can we?  The first is a policy question, the second is legal, but the questions – like so much of the Affordable Care Act’s myriad provisions — are interrelated.   And, while the Court generally does not pay a lot of attention to the political consequences of what it does, it almost certainly moves into the constitutional controversy over health care with the full realization that it will be ruling in the very midst of a nationwide political debate over the role of the federal government, with health care at the center.  Will that realization shape the answer to either of the core questions?

(…)

While those opposing contentions would seem to give the Court a clear-cut choice — rule now because Congress meant for it to do so, or wait because that is the judicious thing to do — neither one bears directly on the question of whether the Court’s institutional reputation requires it to find a way to steer around the potential political consequences.  The Court knows, from its own recent internal discussions about campaign finance, that it is itself an issue in this presidential and congressional campaign over its decision two years ago in Citizens United v. Federal Election Commission, turning loose hundreds of millions in political spending.  There may well be risks in stirring up another grievance in the political realm, especially when it is avoidable.

As I said in the post linked above, if the Court wishes to do so the AIA argument provides it with a very easy and perfectly legitimate way to stay out of a contentious political dispute in the middle of a Presidential Election. Indeed, I cannot recall the last time the Supreme Court was forced to deal with an issue that was, in essence, the central issue in an election in the year that election was taking place. To the extent that Chief Justice Roberts and his brethren are concerned with preserving the institutional integrity of the Court during a time of extreme political polarization, the AIA argument may be quite appealing.

Day Two: Is the individual mandate to purchase health insurance a proper exercise of Congressional power?

This is the issue that likely most comes to mind for people when they think about the legal challenges to the PPACA. Indeed, it’s an issue that has been debated countless numbers of times in countless numbers of forums since the day that the first lawsuit challenging the constitutionality of the act was filed in Richmond, Virginia in March 2010. We’re all familiar with the arguments, and we all have our own opinions. Personally, I think the mandate is an unacceptable expansion of federal power over the lives of individuals. Unfortunately, after 70 years of Commerce Clause precedent that has essentially led to the Supreme Court acting as a rubber stamp for Congress in a manner that is far from the check and balance that it was created to be, it’s entirely possible that the Court would uphold the mandate. Indeed, most of the District Courts and Circuit Courts of Appeal that have considered the merits of the mandate have upheld it as Constitutional. The notable exception being the District Court in Florida and the 11th Circuit Court of Appeals. Of course, the fact that most of the courts below it have ruled a certain way tells us nothing about how the Supreme Court will rule. Lower Courts are bound by existing Supreme Court precedent. The Supreme Court creates precedent, and is always free to overrule old precedent or distinguish it in such a manner that it’s effect is limited.

Because it is the Court of last resort, the question that the Supreme Court will have to consider is the extent to which it creates a precedent here that becomes too far reaching. If it upholds the mandate, then, as more than one critic of the law has noted, it would seem that there are no longer any limits to the power of Congress and the entire Madisonian system of limited government, separation of powers, and checks and balances will be rendered meaningless. If it strikes down the mandate, it will have to deal, at least as a preliminary matter, with the question of how to reconcile that holding with 70-odd years of precedent. Would the Court finally strike down the ill-conceived and badly reasoned holding in Wickard v. Filburn? And what of the holding in the more recently decided, and equally ill-advised, Gonzalez v. Raich?

In yet another highly recommended preview post,Lyle Denniston says this:

It seems quite rash to argue that this will be an easy case for the Court, as some observers do.   Those observers, though, are among those who favor the mandate as a matter of social policy, and their constitutional theorizing flows from that preference.   It seems equally rash to say that the decision on the mandate will inevitably break down along ideological lines, with the conservatives on the Court voting to strike it down, and the liberals voting to uphold it.   Those predictions flow from the perception that this is a very politicized Court, mired in ideological conflict.

Moving away from those simplistic expectations, a good starting point could be the realization that the Court certainly knows that it is confronting a historic moment, and appreciates fully the need to rise to the occasion.   Not many cases with consequences this deep and pervasive come along, even in a lifetime of judging, and a Justice worthy of holding the job senses that such occasions demand measured judgment, along with a healthy skepticism that one’s predecessors have already settled the matter with binding precedent.

This is where the punditry of post-argument analysis is likely to do the most damage. It will be very easy to break this argument down into liberal v. conservative grounds, or to argue that past precedent makes the outcome in this case easy to determine. Neither one of those facts is apparent, and any lawyer worth his salt will tell you that you can never walk into a case knowing how it’s going to turn out in the end. That seems all the more true when you’re talking about what is, without exaggeration, the most important case on the limits of Federal power that the Court has heard in decades.

Day Three, Part One: What Happens To The Rest Of The PPACA If The Court Finds The Mandate Unconstitutional?

The final day of oral argument is divided into two parts. In the first, the Court considers the question of what happens to the PPACA as a whole if it finds the individual mandate unconstitutional. Most courts that have considered the issue have ruled that the mandate was severable from the rest of the law despite the fact that the law itself does not contain a severability clause. However, in the 11th Circuit case, the District Court had found that the law was not severable and that, because the mandate was unconstitutional, the entire law had to be declared void. It’s somewhat of an important point because, if there is no severability then parts of the law such as the pre-existing condition and coverage for children until their 26 provisions would be struck down as well. At the same time, even proponents of the law have admitted that, as a practical matter, the law itself would be unworkable without the mandate.

Denniston summarizes the argument this way:

[A]ssuming, for the moment, that the Court turns aside the Anti-Injunction Act challenge, and votes to strike down the mandate, it has an almost dizzying array of choices about its next step beyond that.  But the two options that seem least likely are the federal government’s idea that the Court need not rule at all on the severability question, and a suggestion that no one seems to have embraced but that is mentioned in some of the filings — that the Court send that question back to the lower courts for some new analysis, perhaps including additional fact-finding.  Amicus Farr has gone far to undermine the government suggestion that it should take a pass on the severability issue as an act of restraint, especially since Farr does not accept the government’s quite novel argument about how the states and private challengers are not in a position to ask for much, if anything, on the point.  Farr also has made a fervent plea for the Court to end the national uncertainty over the fate of the remainder of the ACA if the mandate is stricken.

The Court, of course, has the complete option to accept, reject or ignore the arguments made by Farr, even though it invited him to make them.  But the reality is that the Court is very careful in selecting lawyers to perform that unusual role, and it has a good deal of respect for what it hears from them.   It also usually has great respect for what the federal government’s lawyers ask of it, but in this instance, the arguments about avoiding the severability question altogether, even if the mandate goes, seem quite strained.  Perhaps the only appeal of that line of argument is that it might spare the Court the agony of sorting through the remainder of the Act.

If the Court sees its own role as very limited, once it pared the mandate from the Act, it has a stark choice available as an ultimate gesture: strike down the entire Act as the states and private challengers want and leave the aftermath to Congress, or uphold all of the remainder of the ACA as Farr has suggested and leave it to Congress to weigh whether to revise what is left to avoid a cataclysmic failure of the entire health care project.   Those seem like unattractive alternatives to a Court that sometimes sees itself as preferring minimalist outcomes.

Given that the Justices read the same news we do, one has to think that they have no more confidence in the ability of Congress to fix a broken system than any of us do. Nonetheless, how they decide this issue could end up being the judicial equivalent of splitting the baby.

Day Three, Part II: The State Objections To Medicaid Expansion

The final issue that the Court will hear is one that has not received a lot of attention in the popular press. It concerns the challenges that were filed by the states in the Florida litigation challenging the provisions of the PPACA that increase the state’s burdens under Medicaid. The challenges are based on Tenth Amendment and other grounds, and include issues related to unfunded mandates that have been a point of dispute between Washington and the states for several years.

Denniston summarizes the arguments this way:

In taking on the states’ challenge to the Medicaid expansion, the Court may have felt an institutional obligation to sort out the coercion theory after all these years.   It has clearly embraced the theory in the past, but only in a quite abstract way, almost as if it were something necessarily held in reserve, but never to be actually employed except as a caution to federal legislators.  But it has to be fully aware, not only because of the claims now before it against the Medicaid changes in the ACA, but also because of a continuing flow of state challenges over the years, that the theory is not a dead issue, at least not with a good many states.

What the hearing on Medicaid may entail, then, is a fairly intense examination by the Court of the constitutional origins of the theory, what it may do to separation-of-powers concerns, and — despite the states’ attempt to reassure the Court that this won’t happen — what other kinds of federal spending programs could be put in jeopardy if the coercion concept is given practical new force.   The government, somewhat inexplicably, has not sought to raise to a very high pitch the potential threat to other programs, but most of the amici on the government’s side have endeavored to do so.    The argument by the states that they really are seeking only to use a coercion theory for this one federal program does not sound entirely convincing, when one realizes that the states for years have been chafing under some of the conditions attached to federal programs in which they participate.

While this is the least “sexy” of the issues the Court will confront over the coming three days it is just as important as all the others, perhaps more so. Ever since the advent of the Great Society, the issue of unfunded mandates has been a point of boiling contention between Washington and the states, with even Democratic-controlled legislatures and Governors objecting at the extent to which their budgets are placed outside their control by mandates imposed upon them by Congress for which no funding is provided. I will admit that this is perhaps the one aspect of the PPACA legal disputes that I have not followed closely, so I really have no idea how the Court may end up leaning here. Nonetheless, it’s worth paying as much attention to this final issue as the others.

In the two years since the PPACA became law, the issue of its Constitutionality has been debated, discussed, argued, and written about by nearly everyone, including James Joyner, Steven Taylor, and myself here at OTB. Starting tomorrow, the Supreme Court will begin the process of perhaps finally bringing closure to that issue. Depending on what it decides, we could be looking at the most important week in Supreme Court history in a generation.