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Analysis: The Supreme Court upholds the health reform act (really)

Well, that was interesting.

I'm in Berlin, on vacation, but at 4:00 PM [Thursday] turned on a television (to CNN International) to see what the Court would say. The word came down soon - the mandate is unconstitutional. Then, the mandate may be constitutional. Then, the mandate is constitutional. There followed some similar confusion about the Medicaid expansion - the Court held that it was constitutional but might be applied unconstitutionally, then that it was unconstitutional, and then that it was unconstitutional but the unconstitutionality was easily cured.

Even an hour after the case was announced, CNN's Chief Legal Correspondent, Jeffrey Toobin, got the Medicaid part wrong, stating that the Court held Medicaid expansion unconstitutional without noting that it held the expansion could go ahead, albeit with a smaller stick. While he was talking, I kept waiting for him to apologize for announcing definitively, immediately after the oral argument, that "Obamacare is dead." I'm still waiting. To see my own (partial) confession of error in a much less confident prediction (as well as a bit of crowing about something I got right), you'll have to read to the end of this post.

So, first lesson from this decision: the press is really bad at reading Supreme Court decisions. We already knew that, but this was a particularly egregious example, at least on CNN. For future reference, if you are really interested in good and often fast legal analysis, check out SCOTUSblog. That's where I got my first accurate take on the decision. It also gave me a link that allowed me to download the decision, complete with four separate opinions. You can get that, too, either directly from the Supreme Court's webpage or, usually, from a link in a SCOTUSblog post on a decision.

But you don't have to, if you don't want to. I've now read - or at least skimmed - the 193 pages of syllabus plus opinion and am prepared to tell you what they mean, at least as a legal matter. I'm not prepared to guarantee I'm right, but I will promise to be better than CNN's first hour of coverage - and a lot shorter than the Justices.

Overview and bottom line
You may remember that the Court asked for three days of argument on four questions, listed below along with what we now know are the answers. (For more than you want to know about those issues, and the arguments, see my earlier blog posts here or at the Law and Biosciences blog.)

  1. Does the Anti-Injunction Act keep the Court from deciding the constitutionality of the individual mandate until the various penalties imposed by various parts the Act are actually imposed (probably in 2014)? No.
  2. Is the "individual mandate" within the powers the Constitution confers on the Congress? No for the Commerce Clause and the Necessary and Proper Clause, but yes for the Taxing Power.
  3. Does the Act's required expansion of State Medicaid programs violate the Constitution? Yes, but only if the Administration tries to take away existing Medicaid funding from states that choose not to expand their programs.
  4. If some provisions of the Act are unconstitutional, are those provisions "severable," allowing the rest of the Act to go into effect, or "inseverable," forcing the whole legislation to fall? Relevant only to the punitive enforcement of the Medicaid expansion and the rest of the Act is severable from that provision.

The Court issued four opinions. Chief Justice Roberts (I keep wanting to write "Dread Pirate Roberts" in homage to A Princess Bride, but that would be wrong on many levels) wrote a 59-page opinion. He had five votes for his anti-tax injunction act and taxing power analysis (i.e., that part is "law"), had three votes for the Medicaid discussion, and had only his vote for his discussion of the Commerce Clause. Justice Ginsburg wrote a 61-page opinion that said, in a section joined by Justices Breyer, Sotomayor, and Kagan, the individual mandate was constitutional under the Commerce Clause. She was joined only by Justice Sotomayor on her position that the Medicaid expansion was, under any circumstances, constitutional. Justices Scalia, Kennedy, Thomas, and Alito wrote a 65-page opinion - unusually issued as a joint opinion and not as an opinion written by one justice and joined by others - that found the whole Act unconstitutional. (By the way, for those keeping score at home, the names of the justices joining, or writing, opinions are listed in order of their seniority as members of the Court, except that the Chief Justice is always the most senior. That's just how the Court does it.) And Justice Thomas wrote a (mercifully short) additional opinion, restating his position from earlier cases that the Court keeps using the wrong standard to judge the reach of the Commerce Clause.

The legal bottom line: the Act is constitutional. The positions five justices took on the reach of Congress's power under the Commerce Clause and Necessary and Proper Clause make it unlikely that Congress will rely on those clauses if it tries to justify forcing people to buy things, but it hasn't used that tactic for at least 200 years. States will have the choice of participating in the expanded Medicaid program - and we'll have an enjoyable time watching some state politicians try to decide whether to participate in hated "Obamacare" or to turn down billions of dollars from the federal government, and ultimately, in part, from their own citizens' federal taxes, to pay for healthcare for their poorer citizens (money that will go to their doctors and hospitals). Overall, it is victory for the Act and, at least at first blush, for the Obama Administration. Personally, I think it is a good result, both as a matter of law and policy, but more on that latter. Let's look at what the justices said about the questions.

The anti-tax injunction act
Some, including the majority of the Fourth Circuit panel that heard one of the Health Reform cases, had argued that the anti-tax injunction act, forbidding a court from enjoining a federal tax before it had been applied, deprived the courts of the power to hear these suits. As widely predicted, the Supreme Court disagreed. It was the only point on which all nine justices agreed, although they agreed for different reasons. The majority (the Chief Justices and the four liberals) held, with some useful precedent, that a provision can be a tax for constitutional purposes without being called a tax or actually being a tax for purposes of the (statutory, not constitutional) limitation on early injunctions against taxes. The joint dissent held that it couldn't be considered a tax for any reason. Justice Ginsburg and her three colleagues joined this part, Section II, of the Chief's opinion, making it "The Opinion of the Court."

Herein ends the Court's agreement.

The individual mandate
Justice Ginsberg and three colleagues make the case that the mandate is constitutional under both (or either) the Commerce Clause or the Necessary and Proper Clause. The joint dissent make the case that it is constitutional under neither. It is a four to four tie - broken by Chief Justice Roberts. He concludes, at pages 16-31 of his opinion, which is Section III(A) that it is not constitutional under either the Commerce Clause or the Necessary and Proper Clause, thus prompting one set of reports about the case's outcome. But then, after a brief interlude about constitutional interpretation and the roles of Court and Congress in Section III(B), in Section III(C), from pages 33 to 44, he says "never mind - it's constitutional as a tax."

In Section III(A), the Chief Justice pushes, very hard, the idea that this is forcing someone to make commerce instead of "regulating" commerce. (So does the joint dissent.) The Chief notes that the Constitution allows Congress to regulate the Army and Navy only after first giving them the power to create the Army and Navy; it did not assume that the power to regulate necessarily meant the power to create. The Chief Justice's opinion points out that although activity and inactivity may be logically the same, our Framers were practical men (and thus not logicians?). Justice Ginsburg undertakes to argue that logical position. I think she has the better side of the case, but she only had four votes. Thus, these appeals were not resolved on the ground of that the Commerce Clause justified Congress's action.

The Necessary and Proper Clause didn't work either. The Chief Justice spent several pages and put forward several arguments on this clause. Justice Ginsburg made some solid counterarguments. Personally, I thought the Necessary and Proper Clause seemed more of a stretch, but it could have gone either way. It went against that Clause.

But, as far as opponents of the Act are concerned, the Chief Justice's left hand took away what his right hand had given. He found the Act constitutional as a tax, even though it was not denominated as a tax and even though he (and everyone else on the Court) had found that it was not a tax for purposes of the Anti-Tax Injunction Act. Justice Ginsburg and her three colleagues joined him, giving Section III(C) of his opinion five votes and making it "The Opinion of the Court." Note the joint dissenters, for whatever reason, did not join Section III(A), on the Commerce Clause and the Necessary and Proper Clause and it is not "The Opinion of the Court." And that's not just my take - that's how the Clerk of the Supreme Court parsed it in writing the syllabus to the case.

Chief Justice Roberts continued, in a section joined by no one, to grapple with Justice Ginsburg's question - "If the Act is constitutional under the Taxing Power, why did you even discuss the Commerce Clause and Necessary and Proper Clauses." Given the Court's general reluctance to discuss legal issues not necessary for the outcome, that was a fair question. The Chief Justice's response was plausible, if not necessarily compelling - the taxing power was a big enough stretch that he would not have adopted it if he hadn't concluded first that the other two sources of power did not apply.

The Medicaid expansion
Surprisingly to many, the Medicaid expansion was held (sort of, kind of) unconstitutional (but not really). In his Section IV(A), the Chief Justice held that the Medicaid expansion was unconstitutionally coercive in that it authorized the Secretary of the Department of Health and Human Services to deprive states that did not expand Medicaid, as required in this Act, of all federal money from Medicaid, for the older parts of the statutes as well as the new ones. That federal money amounts to 10 to 15 percent of all the funds states spend in any given year. Losing it would hurt so much that the threat is coercive. Health reform's Medicaid expansion, says Section IV(A), is unconstitutional.

But then, in Section IV(B), again doing his best Emily Litella, the Chief says "never mind." The offending provision, Section 1396(c), can just be struck. The Court will not allow the Secretary to withhold funds from that states were due under "old" Medicaid just because they do not choose to expand into "new" Medicaid.

The joint dissent agrees wholeheartedly with Section IV(A) and disagrees even more strongly with Section IV(B); Justice Ginsburg, joined by Justice Sotomayor, are the reverse. Interestingly, Justices Breyer and Kagan do not join that part of Justice Ginsburg's opinion but instead join the Chief Justice's opinion as to all of Part IV. The joint dissent does not join with the Chief Justice's opinion in Part IV(A) and Justices Ginsburg and Sotomayor do not join Part IV(B), so neither part gets five votes and neither "The Opinion of the Court."

Justice Ginsburg does a very nice job of pointing out problems, both of logic and of implementation in the Chief's position. (I particularly like her reference to the most famous line of the justice I clerked for, Justice Stewart, when she said "The instruction The Chief Justice, in effect, provides lower courts: You will know it when you see it." And, yet, it does seem right that there be some check on coercive uses of the spending power. Whether this is the right way to create that check is not clear to me, but I can understand why Justices Breyer and Kagan joined the Chief Justice on this point.

As to severability, also in Section IV(B), the Chief Justice, having found only the punitive aspect of Medicaid expansion unconstitutional, considers only whether it is severable from the rest of the statute. He concludes it is, both because there is a separate severability clause in Section 1396 and because he concludes Congress would have wanted the Act to go forward even with states having the option to adopt the (still very attractive) Medicaid expansion.

The joint dissent not only abhors this result, it discusses at some great length why, if the individual mandate were unconstitutional, the whole bill (including the irrelevant Christmas tree ornaments added to it) would have to be struck.

Final speculations and reflections
Here are a few final thoughts, first substantive, then "Court inside baseball," and then political, ending with my assessments of my earlier predictions.

First, overwhelmingly the most important thing about this opinion is not its precedents, but the fact that the health reform act survived. I say that for two very different reasons: On the one hand, the Act, though not perfect, is a crucial start to addressing one of our biggest domestic issues, both for the people's welfare and the country's finances. Having to start over in looking for a solution could be disastrous as the collapse of the health care financing "system" keeps getting closer. The Affordable Care Act is only a start. It will need many changes. But it is a start.

On the other hand, the precedents are not very important. Some of them, in a technical sense, are not even precedents. The Chief Justice's positions on the Commerce Clause, the Necessary and Proper Clause, and even the Medicaid Expansion are not part of "the Opinion of the Court" because none of them got five votes. Future Courts are not bound by them. Now, if the issues arise again soon, that won't matter, because a majority of the justices did accept the Chief's positions on those points. But that won't be true fifty years from now, or even, necessarily, five or ten. I don't understand why the joint dissenters did not join the Chief's opinion on Sections III(A) and IV(A) to give him a majority.

But even if we do view those as binding precedents, they may not amount to much. The Commerce Clause (and Necessary and Proper Clause - always the bridesmaid) holdings are much more important symbolically than practically. Congress has not tried to require people to buy things for over 200 years. (Professor Einar Elhauge found some interesting statutes from the 1790s about merchant seaman being forced to buy insurance, but that's more than 200 years ago.) Apart from health insurance, it is hard to see when and why Congress ever would try to do this again. And, if they wanted to, they could just call it a tax, or, better yet, call it something ambiguous (a penalty?) and let the Court decide, based on a part of the Chief Justice's opinion that was the Opinion of the Court, that it can be viewed as a constitutional use of the taxing power.

The Medicaid decision may be more important. There is a lot of "cooperative federalism" in the United States, situations where the federal government pays states and local governments to help them do things. This potentially could strike down some of those statutes. But I'm guessing not. Medicaid really is hugely bigger and more important than other similar federal statutes and this may mark a point "just beyond the line," that the Court will never again find reached. I am reminded of the really quite novel constitutional holdings in Bush v. Gore, which, on their faces, could have upset election law substantially. But they haven't. Great cases make, in various ways, bad law.

As to the "Inside Baseball," a couple of thoughts might be relevant. First, some of the early reports talked about the great length of the opinions. They were long, but not astoundingly so. The Roberts opinion was 59 pages, the Ginsburg opinion was 61 pages, and the joint dissent was 65. (Justice Thomas wrote a nicely, and appropriately, terse two pages.) For a case of this complexity - and unprecedented three days of argument on four different issues - and national interest, 193 pages seems actually a bit short. To have only four opinions - really only three significant ones - seems positively self-denying of the justices.

Second, there are some clues that the joint dissent was originally written as a majority, or as an opinion that wanted to be a majority. Its very long discussion of severability if the mandate were stricken down was entirely irrelevant in the context of how this case came out - barely interesting for even academic reasons. And, perhaps most tellingly, in its discussion of the Commerce Clause, it rebuts the arguments of Justice Ginsburg's opinion, which it calls, nine times, between pages 13 and 16, "the dissent." Maybe it was a dissent on the Commerce Clause point, but, as the usage in the Chief Justice's opinion makes clear, it is the joint dissent that is the dissenting opinion. I think they either had their fifth vote (Chief Justice Roberts) and lost him, or they wrote their opinion as a quasi-majority opinion to entice him to join.

Large chunks of the Ginsburg opinion also look as though they might have been prepared as a majority opinion. My guess is that both sides wrote what they hoped would be majority opinions and that Chief Justice Roberts eventually chose among them. Presumably, given the "dissent" errors in the joint dissent, he made that decision fairly late, perhaps sometime last week.

And what of the Chief Justice? Whether his eventual vote was cast early or late, what does this decision tell us about him? He comes off, I think, as the statesman Chief Justice that many of us hoped for when he was appointed - or, at least, as very politically astute. What that means for his position in history, only history will say.

The opinion is well-written. It starts with a nice civics lesson for citizens about how the Court and Congress operate. And it provides something for everyone - some nice symbolic victories (Commerce Clause, Medicaid expansion coercive - that one may, or may not, be more than symbolic) for the opponents, some nice(r) practical victories (the Act is alive) for the supporters. He avoids the partisan result with all the justices voting for the position of the parties of the presidents who appointed them. And he kicks a hot potato back to Congress and away from the Court.

To the Court and, in this election year, to the people. What are the political consequences of this decision? I don't have a clue. I can make up stories about an energized base, but that could be either Republican or Democratic. I can make up stories about voters confirmed in their views that the Republicans, or the Democrats, were right in the policy and political fights over the Act. And I can make up stories about the mandate, Massachusetts, and Governor Romney - I noted that Justice Ginsburg did single out the Massachusetts plan for praise, though not mentioning the Governor who enacted it. My guess is that ultimately it helps the President a bit not to have his key accomplishment held unconstitutional, but that it probably energizes the Republican base more than the Democratic one. And that what happens between now and November in the economy will be far more important than any political consequences of this decision.

And, finally, how did my predictions turn out? I said:

I feel highly confident that the Court is not going to use the Anti-Injunction Act to avoid hearing this case.

I was right. (But so was everyone else.)

On the main event, my best guess is that the individual mandate will be upheld, five to four or six to three. It is not a confident guess. My second best guess is that it will be struck down, five to four and I'd put the chances between those two at about 60/40.

That looks good, but I followed it immediately with:

But I do suspect, ultimately, Justice Kennedy is slightly more likely than not to side with the statute - and Justices Ginsburg, Breyer, Sotomayor, and Kagan.

Hmm, wrong on Justice Kennedy, but also (kind of) wrong on Chief Justice Roberts, though I did think he might vote for the mandate. I was also wrong in thinking the case would be decided on the Commerce Clause instead of the Taxing Power. The Chief Justice fooled me there - and everyone else.

On the Medicaid expansion, I said:

I think the Court will uphold the Medicaid expansion, perhaps by a seven to two vote. . . . I could see, though, the Court giving a partial victory on this issue to the states. It could say, for example, that the expansion isn't unconstitutional "on its face" (in the abstract), but that states could come back later, after it is implemented, and make a case that it was unconstitutional as applied. Or they could adopt Justice Breyer's idea and point to serious Administrative Procedures Act limitations on the discretion of the Secretary of HHS. That would provide some kind of partial limiting factor, if not principle, as well as providing a bit of political balance.

I'm going to claim this as a victory, particularly since most people expected no problems for the expansion.

On severability, I said:

If the mandate is upheld, severability isn't an issue (except perhaps for Medicaid).

Bingo on that one. (Well, almost "bingo" - the Medicaid severability issue was only a small one.)

All in all, I am fairly pleased with my predictions - but more pleased with the outcome of the case.

Hank Greely, JD, is a Stanford law professor and an expert on the legal, ethical, and social issues surrounding health law and the biosciences. He is director of the Center for Law and the Biosciences, and he chairs the steering committee of the Stanford Center for Biomedical Ethics.

Previously: Supreme Court mostly upholds Affordable Care Act, Stanford experts respond to Supreme Court’s decision on health law and The Supreme Court on health reform: Summing up
Photo by tedeytan

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