In National Federation of Independent Businesses v. Sebelius, the Supreme Court exhaustively analyzed Congress’s constitutional power to enact the watershed Patient Protection and Affordable Care Act (ACA or “Obamacare”). The ACA imposes a “shared responsibility requirement,” popularly known as the “Individual Mandate” (IM), which forces Americans to buy medical insurance or pay a “penalty.” The ACA’s text and legislative history, as well as the public defenses of it by President Obama and his supporters, consistently described the IM as a valid exercise of Congress’s power “[t]o regulate Commerce . . . among the several States.” This reliance on the Commerce Clause was understandable, as it has been interpreted since 1937 as giving Congress virtually plenary authority. Indeed, the modern Court has upheld every federal statute (with two trivial exceptions) after applying an extremely deferential standard of review: Could Congress have had a rational basis for concluding that the activity regulated, taken in the aggregate nationwide, “substantially affects” interstate commerce? This judicially-approved legislation addressed not merely national economic matters, but also seemingly non-commercial subjects like civil rights, crime, the environment, and health and safety. In National Federation, Justices Ginsburg, Breyer, Sotomayor, and Kagan sought to continue this lenient approach by ruling that Congress could reasonably have determined that Americans’ decisions about health insurance (including the failure to obtain it), when added up nationally, substantially affect the interstate economy. However, Chief Justice Roberts and his four conservative Republican colleagues held that the IM had exceeded the bounds of the Commerce Clause, which restricted Congress to regulating interstate commercial “activity”–as contrasted with the IM’s novel attempt to compel Americans who were inactive in a market to buy something they did not want. The Chief Justice then unexpectedly joined the four liberal Democrats in holding that the IM could plausibly be construed as a “tax” on those who did not buy medical insurance and therefore could be sustained under Congress’s power to “Lay and Collect Taxes.” The four dissenters barely concealed their anger at Chief Justice Roberts for switching sides (apparently at the eleventh hour due to intense political pressure) to save Obamacare on dubious Taxing Power grounds. Most Republican legal analysts had a similar reaction. They fretted that the Court had radically altered its Commerce Clause jurisprudence by refusing to defer to Congress’s policy judgments about an important national economic and social issue, which would invite similar challenges. It is impossible to say with any certitude whether such concerns are warranted. It may be that National Federation portends a shift to increasingly aggressive judicial imposition of serious Commerce Clause restraints. On balance, however, history and pragmatism suggest that this case will have a marginal jurisprudential impact. This conclusion rests primarily on the fact that, since the New Deal era, the Court has sustained all major Commerce Clause legislation, which forms the foundation of the modern administrative and social welfare state. Realistically, the Court would risk legal, political, social, and economic chaos by rolling back its precedent allowing such important federal laws. Thus, at most the conservative Justices can try to stem the tide of new Commerce Clause statutes. Yet recent experience suggests that even that modest goal will prove difficult to achieve, as the Rehnquist Court’s lone attempt to enforce an outer boundary on Congress’s power–that it could regulate only subjects that were “commercial” in nature–fizzled out within a decade. Likewise, National Federation’s new “activity” limit will probably have little lasting relevance, for three reasons. First, the ACA represented Congress’s only attempt in over two centuries to use the Commerce Clause to regulate “inactivity,” and there do not appear to be any similar federal statutes in existence or on the horizon. Second, even if Congress were to enact such a law, it would be invalidated only if five conservative Republican Justices happened to be on the Court. Third, the latter restriction on the Commerce Clause did not put a dent in Congress’s overall power, because Chief Justice Roberts peeled off to uphold the ACA through his creative interpretation of the Taxing Power. The Court will likely remain unwilling to strike down non-trivial federal statutes.
Robert J. Pushaw Jr. and Grant S. Nelson
The Likely Impact of National Federation on Commerce Clause Jurisprudence,
40 Pepp. L. Rev.
Available at: https://digitalcommons.pepperdine.edu/plr/vol40/iss4/3