Transcript of Rivkin speech before Federalist Society Convetion 2010

(from November 18, 2010)

“Can the federal government tell Americans – you have to eat three servings of vegetables and fruits, every day? Or does that exceed the commerce, either working by itself or augmented by the Necessary and Proper Clause?

That’s the exact question that Senator Tom Coburn asked Elena Kagan at her confirmation hearing.  Her response was, and I quote: “Ummmmm.”  The Department of Justice, which is now defending the Obamacare individual mandate in the courts, has a more direct answer: Yes, the government can force you to get your fruits and vegetables.  And that answer, believe it or not, is actually more dangerous to our constitutional health than you think.  Let me explain.

The legal challenge to the individual mandate is about much more than health care.  It is about much more than even federalism and our system of dual sovereignty, which is the key feature of the American constitutional architecture.  It is about all of that, of course, but, at the most fundamental level, it is about the vitality of our Constitution.

If the government’s legal arguments are accepted, the constitutional barriers against unlimited federal power would be torn to shreds. Little or nothing would be beyond Congress’s reach, whole swaths of the Constitution would be rendered superfluous, and even the Bill of Rights, both in its original and expanded post-Civil War configuration, would be robbed of its vitality.  In short, we are talking about a constitutional revolution, an unprecedented usurpation of power.

The individual mandate violates the most fundamental constitutional principles of limited powers and dual sovereignty; it violates centuries of established case law; and it is entirely unprecedented, fundamentally different from every law to regulate commerce that Congress has ever enacted from the very first day of our Republic up until the day Obamacare was passed.  Indeed, if DOJ is right, the Framing generation’s efforts in drafting the Constitution and the Bill of Rights, and all of Congress’s legislating in the decades and centuries since are, at best, largely incoherent, and, at worst, superfluous.  In light of all of these insurmountable problems, I am confident that the individual mandate must and will be struck down.

In our litigation, DOJ filed its motion for summary judgment earlier this month, and what it argues is simply astonishing.  Their bottom line, of course, is that Congress can regulate commerce by forcing people to engage in commerce and then regulating them.  In other words, doing nothing is an economic activity that Congress can reach through the Commerce Clause and the Necessary and Proper Clause.

This argument has at least five major constitutional consequences, all of which violate both fundamental principles and settled case law.

First, it eviscerates dual sovereignty, and it destroys federalism, the key feature of our constitutional architecture.  The Constitution, in the words of James Madison, preserved for the States’ a “residual and inviolable sovereignty,” often referred to as the police power.  As Justice Anthony Kennedy recently explained: “The Constitution delegates limited powers to the National Government and then reserves the remainder for the States (or the people), not the other way around.  And the powers reserved to the States are so broad that they remain undefined.”  This broad police power belongs to the States and the States alone.

Indeed, regulating inactivity, regulating people not based upon what activities they voluntarily engage into but compelling them to act, is the very essence of police power.  Another attribute of police power is that, unlike a regulation of individuals based upon their activities, it cannot be avoided.  Nothing captures this distinction better that the fact that all one has to do, when dealing with a federal statute regulating a particular activity or commodity – be it wheat or weed – is not to engage in this activity or do anything with regard to that commodity and you have just opted out of the federal regulatory vortex.  By contrast, when the State of Massachusetts requires all adults to receive a smallpox vaccination, there is no opting out – if you are an adult and you are within the borders of Massachusetts, the vaccination mandate applies to you.

The individual mandate takes an unprecedented step in claiming this police power for the federal government.  Never before has Congress reached out to regulate individuals, solely for being alive and breathing, under its commerce power or the Necessary & Proper Clause or both combined.  The individual mandate goes far beyond the laws at issue in Lopez, Morrison, and Raich.

For that reason, DOJ’s legal justifications go far beyond anything ever before offered.  The essence of DOJ’s argument is that any inactivity, any failure by an individual to acquire a particular good or service, is within the scope of the commerce power so long as the inactivity can be linked to any economic effect.  This is worse than the kind of “inference piled upon inference” argument that the Court rejected in Lopez.  DOJ argues that only a single inference will suffice: even failure to do anything has some economic consequences, which, in the aggregate, can be quite palpable.  One obvious problem, of course, is that, since in a modern economy, every individual decision, every inactivity has some economic consequences, no meaningful principle can be found, and all of them can be swept in under the Commerce Clause.

Recognizing this problem, at least tacitly, the government in defending Obamacare in litigation is relying more and more on the Necessary and Proper Clause and doing a couple of very unusual things with it.  To begin with, it is creating its own necessity to justify application of the Clause.  That necessity is curtailing cost-shifting—the prospect that some people would use health care services and fail to pay for them, shifting the cost onto others. But why is cost-shifting such a big problem?

The answer is other government regulations that Congress passed as part of Obamacare.  There would be no special necessity if Congress had not included provisions that require insurers to issue insurance to anyone and that disallow insurers from varying premiums for preexisting conditions.

This is very different from the Necessary and Proper Clause applied in Raich.  DOJ most certainly misreads Raich as standing for the proposition that Congress may do anything, including reaching inactivity, as part of a larger statutory scheme.   The rule of Raich, as explained by Justice Scalia, is that “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce.”  DOJ takes this as a drafting guide: to accomplish any end, however unlawful, just stick it in an all-encompassing program.  This trivializes Lopez and Morrison.

It is also passing strange that the Constitution would preclude the imposition of certain legal requirements, standing alone, while countenancing those same requirements when they are put forward as a part of a large complicated statutory scheme.  Put differently, Congress may take any step it likes, so long as it’s a big step.  And it is even better, under DOJ’s logic, for Congress to have a statute featuring very ambitious regulatory goals and badly drafted or even counterproductive regulatory provisions that draw upon Congress’ legitimate enumerated powers; the bigger the regulatory gap, the more palpable is the need for the general police power to close it.  I shudder to think how many different individual mandates it would take to accomplish the intended purposes of “The Happiness and Welfare of all Americans Act of 2011.”

Another unusual thing here is that, unlike the situation in all of the prior Necessary and Proper Clause cases, the mandate is not actually “necessary,” in any sense, to implement the insurance industry regulations contained in Obamacare, and DOJ does not seriously challenge that fact.  It argues merely that the absence of a mandate would “amplify incentives” for individuals to engage in cost-shifting.  Everything amplifies some incentive.  This is very different from the Necessary and Proper Clause that Chief Justice Marshall described in McCullough v. Maryland.

Second, the government’s argument rips out whole sections and clauses of the Constitution.  Chief Justice Marshall stated in Marbury v. Madison that “It cannot be presumed that any clause in the constitution is intended to be without effect,” yet the Department of Justice would do just that.  Under DOJ’s view of the commerce power, all but two of the power-vesting clauses of Article I, section 8, would be rendered mere surplusage, subsumed into the Commerce Clause and Necessary and Proper Clause.  I guess the Framers were just not intelligent enough to figure this out.  Meanwhile, a half-dozen other constitutional provisions, identified by the Court in Printz, “presuppose the continued existence of the states and . . . those means and instrumentalities which are the creation of their sovereign and reserved rights.”  These would also become constitutional artifacts.

Third, the view that Congress can force citizens into economic activity turns the Bill of Rights on its head.  The Bill of Rights augments the far broader and more fundamental structural protections inherent in the original constitution—that is the enumeration of powers.  The Department of Justice would leave the Bill of Rights intact, while finally eviscerating those structural protections.  The Bill of Rights is inadequate to fill that gap, since it does very little to constrain government’s ability to regulate under its commerce power.  DOJ’s unstated thesis is that the smart and astute individuals who carefully framed the Bill of Rights with the goal of protecting individuals against the abusive exercise of government power somehow missed a loophole big enough to drive a truck through: Congress’s power to compel economic activity.  So while Congress could not compel you to profess your love of fruits and vegetables, it could compel you to buy them.  The Framers could not have imagined such a thing.

Fourth, it calls into question the competence and sanity of every single Congress before President Obama took office.  Congress has always regulated indirectly and often partially when relying on its commerce power.  An example: rather than simply mandate that flood-plain residents purchase insurance, Congress required flood insurance only as a condition of securing and maintaining a mortgage from a federally regulated financial institution.  The federal minimum wage, child labor law, securities law, and even the prohibition on filled milk are also tied to interstate commerce and activities; none are direct mandates on inactive individuals.  And yet, it would have been so easy and efficient, so very direct, to just mandate these things.  Obviously, the Congresses that drafted and passed these statutes had no idea what they were doing.

Fifth, if DOJ’s arguments about the mandate’s constitutionality are accepted, the end result would fundamentally rework the relationship between the federal government and the citizens, and the nature of citizenship itself.  The few enumerated powers under which the government regulates individuals as individuals, as distinct from regulating the activities in which they engage, all relate to the traditional common law-derived duties and attributes of citizenship: jury duty, serving in the militia or military during war or invasion.  These powers are narrow.  And it is worth noting here that, even when augmented by the Necessary and Proper Clause, these narrow enumerated citizenship-related powers are inherently limited in nature and do not pose the risk of morphing into general police power.  By contrast, the Commerce Clause has been construed so expansively that the need for a limiting principle is all the greater.

Moreover, federal authority relating to jury duty and military service inherently involve citizen participation in governmental activities and yet, DOJ now cites them as precedent for requiring people to buy things or even requiring one group of private individuals to do something for another group of private individuals. This alters the very nature of citizenship. Until now, citizens had reciprocal duties to the government in the service of protecting their nation and the rights that it affords to all citizens.  In DOJ’s view, citizens have a duty to do whatever the government tells them to do, a duty that may extend to enriching other private parties.  Again, this is unprecedented in the United States.  To paraphrase one of Justice Scalia’s famous lines, a country where having people buy health insurance or any other kind of insurance is viewed as a core duty of citizenship is not “a country I would recognize.”

The bottom line is that, to defend the individual mandate, DOJ has ended up disparaging the constitutional text, innumerable court decisions, over 200 years of legislative practice, and our system of dual sovereignty.  That is a lot for any court to swallow.

Understandably, DOJ is nervous that the courts won’t buy its legal argument that Congress can regulate everything and even nothing.  So it’s come up with a second argument that it claims is narrower and has a built-in limiting principle.  Here’s the argument, and I quote: “The health care market is unique.”  I read it as a plea to the court: “Give us this case, this is a one-off, if you uphold the statute, it would have no consequences in the future, nothing like this would ever happen again because health care is so very unique.”

But the health care market isn’t unique.  Not by a long-shot.  DOJ says it’s unique because everyone participates in the health care market.  Unlike, say, the markets for foodstuffs, clothing, shelter, transportation.  This is nonsense – every existing market, even for luxuries and certainly for necessities of life, features an inevitable participation in it by a sufficiently large portion of the population.  If it were otherwise, that market would not exist.

DOJ also says health care is unique because there’s cost-shifting: people visit the emergency room, and then taxpayers or other patients wind up paying for it.  But there’s cost-shifting in every insurance market and in every credit market—think about the guy who defaults on his credit card.  Indeed, cost-shifting is a ubiquitous feature of all markets where credit is extended to market participants and where purchases of goods and services do not have to be paid for  at the time they are received.  Such is the modern economy, and in every market participation or non-participation by individuals affects pricing and costs.

So, there really is no limiting principle: The federal government can force you to enter any market. And rest assured, whatever “unique” attributes of that market happen to motivate Congress to act today will surely be “found” applicable by future Congresses whenever they see other “crises” in other “markets” demanding their intervention.

Hypocrisy is a sort of homage that vice pays to virtue. DOJ is hypocritical when it pays lip service to constitutionalism and enumerated powers and then fails to even attempt to offer some limit—any limit—on the commerce power.  The reason that it has not come forward with any limiting principle is that the individual mandate admits of none.  This is readily apparent to all of us who know that there is a judicially enforceable meaningful limit on federal power.  And that is why the Department of Justice will lose.


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