While I agree with much of the thrust of the Four Dissenters’ argument, and I believe it to be better argued than Chief Justice John Roberts’ concerning the Commerce Clause (with which they agreed) and his argument concerning the Taxing Clause (with which they disagreed), they proceed from a false premise, and so their entire argument must fail. I’ll get to that false premise in a bit. First though, I want to look at their arguments concerning those two clauses. I’m deliberately eliding the matter of the Medicaid expansion, staying strictly with the Individual Mandate. The Four Dissenters’ opinion, and the entire ruling, with all dissents, can be read here.
The Dissenters began their argument with this summary of the question:
This case is in one respect difficult: it presents two questions of first impression. The first of those is whether failure to engage in economic activity (the purchase of health insurance) is subject to regulation under the Commerce Clause. ….
They opened their actual dissent with this [citations generally omitted in this post]:
What is absolutely clear, affirmed by the text of the 1789 Constitution, by the Tenth Amendment ratified in 1791, and by innumerable cases of ours in the 220 years since, is that there are structural limits upon federal power—upon what it can prescribe with respect to private conduct…. Whatever may be the conceptual limits upon the Commerce Clause…, they cannot be such as will enable the Federal Government to regulate all private conduct….
… The striking case of Wickard v. Filburn,…which held that the economic activity of growing wheat, even for one’s own consumption, affected commerce sufficiently that it could be regulated, always has been regarded as the ne plus ultra of expansive Commerce Clause jurisprudence. To go beyond that, and to say the failure to grow wheat (which is not an economic activity, or any activity at all) nonetheless affects commerce and therefore can be federally regulated, is to make mere breathing in and out the basis for federal prescription and to extend federal power to virtually all human activity.
As for the constitutional power to tax and spend for the general welfare: The Court has long since expanded that beyond (what Madison thought it meant) taxing and spending for those aspects of the general welfare that were within the Federal Government’s enumerated powers, see United States v. Butler….
And they concluded, in this opening salvo:
The Act before us here exceeds federal power…in mandating the purchase of health insurance….
Then they began their explanation of their dissent. First quoting the Commerce Clause, they then noted of the Individual Mandate
If this provision “regulates” anything, it is the failure to maintain minimum essential coverage. One might argue that it regulates that failure by requiring it to be accompanied by payment of a penalty. But that failure—that abstention from commerce—is not “Commerce.” To be sure, purchasing insurance is “Commerce”; but one does not regulate commerce that does not exist by compelling its existence.
It doesn’t get any clearer than that. Chief Justice Roberts noted this, as well, in his Commerce Clause unconstitutionality ruling.
In Gibbons v. Ogden,…Chief Justice Marshall wrote that the power to regulate commerce is the power “to prescribe the rule by which commerce is to be governed.” That understanding is consistent with the original meaning of “regulate” at the time of the Constitution’s ratification, when “to regulate” meant “[t]o adjust by rule, method or established mode[.]”
This is a point Justice Ruth Bader Ginsburg failed to grasp in her dissenting concurrence. The Dissenters drove the point home with this:
We do not doubt that the buying and selling of health insurance contracts is commerce generally subject to federal regulation. But when Congress provides that (nearly) all citizens must buy an insurance contract, it goes beyond “adjust[ing] by rule or method,…or “direct[ing] according to rule”…; it directs the creation of commerce.
Then the Dissenters proceeded to the nature of imposing a requirement to behave in a particular way, which is Constitutionally permitted (by Court precedent) only when there is no more efficient way of achieving the desired end. The fallacy of the government’s position that the Individual Mandate is Necessary and Proper was demonstrated by the ease with which the Dissenters offered simple, less intrusive, alternatives to the command to purchase [emphasis added].
…Congress might protect the imperiled industry by prohibiting low-cost competition, or by according it preferential tax treatment, or even by granting it a direct subsidy.
Here, however, Congress has impressed into service third parties, healthy individuals who could be but are not customers of the relevant industry, to offset the undesirable consequences of the regulation.
They emphasize the point [emphasis added, again]:
…the Commerce Clause, even when supplemented by the Necessary and Proper Clause, is not carte blanche for doing whatever will help achieve the ends Congress seeks by the regulation of commerce. And…the scope of the Necessary and Proper Clause is exceeded not only when the congressional action directly violates the sovereignty of the States but also when it violates the background principle of enumerated (and hence limited) federal power.
It’s like they were lecturing first-year law students. In a very real sense, they seem to have been:
The Government was invited, at oral argument, to suggest what federal controls over private conduct (other than those explicitly prohibited by the Bill of Rights or other constitutional controls) could not be justified as necessary and proper for the carrying out of a general regulatory scheme. … It was unable to name any.
The Four Dissenters then moved on to another of the government’s justifications for the Individual Mandate.
The Government’s second theory in support of the Individual Mandate is that §5000A is valid because it is actually a “regulat[ion of] activities having a substantial relation to interstate commerce,…i.e.,…activities that substantially affect interstate commerce.“
Here the Dissenters could have struck a stout blow for judicial restraint and argued for a restoral of the Commerce Clause’s return to its original meaning, pre-Jones & Laughlin and Wickard, but they failed to do so. Instead, they accepted the (false) premise of these two cases—the false premise of the government’s case—and so invalidated their entire argument, even though they had come to the more-or-less right ruling. They should have challenged the government’s premise that “substantially affect interstate commerce” is the basis from which to proceed. I’ll expand on this point later.
Instead, they took the government’s premise seriously, and argued on that basis. Given that premise, the Dissenters’ argument is sound, however.
…the basic idea is that §5000A regulates “the way in which individuals finance their participation in the health-care market.” …
The primary problem with this argument is that §5000A does not apply only to persons who purchase all, or most, or even any, of the health care services or goods that the mandated insurance covers. Indeed, the main objection many have to the Mandate is that they have no intention of purchasing most or even any of such goods or services and thus no need to buy insurance for those purchases.
Returning to the concept of inactivity as active participation, they repeated their earlier argument:
…the decision to forgo participation in an interstate market is not itself commercial activity (or indeed any activity at all) within Congress’ power to regulate. It is true that, at the end of the day, it is inevitable that each American will affect commerce and become a part of it, even if not by choice. But if every person comes within the Commerce Clause power of Congress to regulate by the simple reason that he will one day engage in commerce, the idea of a limited Government power is at an end.
Wickard v. Filburn has been regarded as the most expansive assertion of the commerce power in our history. A close second is Perez v. United States,…which upheld a [Federal] statute criminalizing the eminently local activity of loan-sharking. Both of those cases, however, involved commercial activity. To go beyond that, and to say that the failure to grow wheat or the refusal to make loans affects commerce, so that growing and lending can be federally compelled, is to extend federal power to virtually everything.
Having dispensed with the constitutionality of the Individual Mandate under the Commerce Clause, the Dissenters could have stopped at there, and been fine. However, they moved on to the government’s secondary argument of “it’s a tax and permissible under the Taxing Clause.”
They began with an early exposure of the government’s pseudo-logic:
The Government contends, however, as expressed in the caption to Part II of its brief, that “THE MINIMUM COVERAGE PROVISION IS INDEPENDENTLY AUTHORIZED BY CONGRESS’S TAXING POWER.” … The phrase “independently authorized” suggests the existence of a creature never hitherto seen in the United States Reports: A penalty for constitutional purposes that is also a tax for constitutional purposes. In all our cases the two are mutually exclusive. The provision challenged under the Constitution is either a penalty or else a tax.
It is important to bear this in mind in evaluating the tax argument of the Government and of those who support it: The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so.
It is well that the Dissenters emphasized this; this is a point the Roberts completely missed in his desperation to find a way, any way, under his application of the “fairly possible” doctrine, to count the Individual Mandate constitutional under the Taxing Clause. They note one of the critical limits on judicial power that five Justices failed to heed:
…we cannot rewrite the statute to be what it is not. “‘”[A]lthough this Court will often strain to construe legislation so as to save it against constitutional attack, it must not and will not carry this to the point of perverting the purpose of a statute…” or judicially rewriting it.'” … In this case, there is simply no way, “without doing violence to the fair meaning of the words used,”…to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty.
Our cases establish a clear line between a tax and a penalty: “‘[A] tax is an enforced contribution to provide for the support of government; a penalty…is an exaction imposed by statute as punishment for an unlawful act.'”
…we have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax. We have never held that any exaction imposed for violation of the law is an exercise of Congress’ taxing power—even when the statute calls it a tax, much less when (as here) the statute repeatedly calls it a penalty.
And just to saucer and blow it,
…the question is, quite simply, whether the exaction here is imposed for violation of the law. It unquestionably is.
They concluded by repeating an earlier argument:
…to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it.
Having forcefully dispensed with the government’s position, and effectively dissented from the majority opinion on the Taxing Clause constitutionality of the Individual Mandate, the Dissenters considered themselves done here. But as I wrote earlier, they committed a grave error and failed their opportunity for true judicial restraint, instead continuing the judicial activism that underlies the government’s—and Roberts’ and his other colleagues’—fundamental argument.
Jones & Laughlin held that
Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.
Wickard held that a (farm) product produced for personal consumption on the private property of the consumer was subject to Federal control under the Commerce Clause both for the reason of its claimed effect on interstate commerce and because that effect upset the government’s policy of controlling prices in the economy.
Here is the false premise to which I alluded earlier. The Commerce Clause’s allocation to Congress of the capacity to ensure that all the States played by the same rules in their mutual commerce in no way authorized that Congress to reach inside any State to govern wholly local activities—vis., production in a local factory or farm—much less to reach inside an individual citizen of any State and dictate to that citizen what he might or might not do.
The “substantial effect” meme is a purely speculative one. That factory or farm that produces goods for consumption solely within a State is not engaging in interstate commerce, even if it is producing goods substantially like those of another factory or farm which does sell for interstate consumption. It can have no effect on interstate commerce. Moreover, even were it to have an effect, that local behavior is beyond the Congress’ reach, rather tautologically, in Congress’ efforts to ensure that interstate commerce is regular, that all States function within a common set of requirements.
The fact that production and consumption decision—or today the decision not to consume (or produce)—is made by a private citizen also places that decision, and the related subsequent behavior, beyond the reach of the Federal government. Justice James Clark McReynolds, in his dissent in Jones & Laughlin exposed the error of the Court’s opinion:
We are told that Congress may protect the ‘stream of commerce’ and that one who buys raw material without the state, manufactures it therein, and ships the output to another state is in that stream. Therefore it is said he may be prevented from doing anything which may interfere with its flow.
This, too, goes beyond the constitutional limitations heretofore enforced. If a man raises cattle and regularly delivers them to a carrier for interstate shipment, may Congress prescribe the conditions under which he may employ or discharge helpers on the ranch? The products of a mine pass daily into interstate commerce; many things are brought to it from other states. Are the owners and the miners within the power of Congress in respect of the latter’s tenure and discharge? May a mill owner be prohibited from closing his factory or discontinuing his business because so to do would stop the flow of products to and from his plant in interstate commerce? May employees in a factory be restrained from quitting work in a body because this will close the factory and thereby stop the flow of commerce? May arson of a factory be made a federal offense whenever this would interfere with such flow? If the business cannot continue with the existing wage scale, may Congress command a reduction? If the ruling of the Court just announced is adhered to, these questions suggest some of the problems certain to arise.
And if this theory of a continuous ‘stream of commerce’ as now defined is correct, will it become the duty of the federal government hereafter to suppress every strike which by possibility it may cause a blockade in that stream?
By the time of Wickard, Roosevelt’s court-packing effort had succeeded, and there was no one to speak for Americanism and individual liberty. As I said, here was the Four Dissenters’ chance, and they passed it by.