Bench Memos

Bipartisan Eleventh Circuit Panel Devastates the Individual Mandate

The Eleventh Circuit servers were overwhelmed when today’s decision overturning Obamacare was issued — and the 300-plus page decision is fairly daunting in and of itself. Here are some highlights from my first quick read.

The court recognized the importance of the issues at hand, agreeing with Justice Kennedy on the implications for individual liberty:

Therefore, in determining if a congressional action is within the limits of the Commerce Clause, we must look not only to the action itself but also its implications for our constitutional structure … While these structural limitations are often discussed in terms of federalism, their ultimate goal is the protection of individual liberty.

Judges Dubnia (a GHW Bush appointee) and Hull (a Clinton appointee) rejected the activity/inactivity distinction proposed by the individual and state plaintiffs, restating the question in terms of whether the government may control individuals’ economic decisions:

Properly formulated, we perceive the question before us to be whether the federal government can issue a mandate that Americans purchase and maintain health insurance from a private company for the entirety of their lives. These types of purchasing decisions are legion. Every day, Americans decide what products to buy, where to invest or save, and how to pay for future contingencies such as their retirement, their children’s education, and their health care.

Their description of the breadth of the government’s argument is chilling for anyone skeptical of the “overarching regulatory goals” that could trigger regulation of the everyday decisions of private individuals:

The government contends that embedded in the Commerce Clause is the power to override these ordinary decisions and redirect those funds to other purposes. Under this theory, because Americans have money to spend and must inevitably make decisions on where to spend it, the Commerce Clause gives Congress the power to direct and compel an individual’s spending in order to further its overarching regulatory goals, such as reducing the number of uninsureds and the amount of uncompensated health care.

Under this analysis, the government’s position is profoundly anti-choice:

Individuals subjected to this economic mandate have not made a voluntary choice to enter the stream of commerce, but instead are having that choice imposed upon them by the federal government.

The court reasoned that there is no stopping point to the government’s logic; it could allow Congress to mandate purchase of any conceivable product:

The question before us is whether Congress may regulate individuals outside the stream of commerce, on the theory that those “economic and financial decisions” to avoid commerce themselves substantially affect interstate commerce. Applying aggregation principles to an individual’s decision not to purchase a product would expand the substantial effects doctrine to one of unlimited scope. Given the economic reality of our national marketplace, any person’s decision not to purchase a good would, when aggregated, substantially affect interstate commerce in that good.  From a doctrinal standpoint, we see no way to cabin the government’s theory only to decisions not to purchase health insurance. If an individual’s mere decision not to purchase insurance were subject to Wickard’s aggregation principle, we are unable to conceive of any product whose purchase Congress could not mandate under this line of argument. Although any decision not to purchase a good or service entails commercial consequences, this does not warrant the facile conclusion that Congress may therefore regulate these decisions pursuant to the Commerce Clause.

The court makes a great point about the lack of a nexus between the regulated conduct — failure to purchase insurance — and interstate commerce. Instead of requiring a nexus, the individual mandate effectively requires the lack of a nexus, turning precedent on its head:

Under any framing, the regulated conduct is defined by the absence of both commerce or even the “the production, distribution, and consumption of commodities”—the broad definition of economics in Raich.

The court minces no words on its death blow:

In sum, the individual mandate is breathtaking in its expansive scope. It regulates those who have not entered the health care market at all. It regulates those who have entered the health care market, but have not entered the insurance market (and have no intention of doing so). It is overinclusive in when it regulates: it conflates those who presently consume health care with those who will not consume health care for many years into the future. The government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress’s enumerated power.

. . .

Ultimately, the government’s struggle to articulate cognizable, judicially administrable limiting principles only reiterates the conclusion we reach today: there are none.

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