Archive for the ‘Law’ Category

Did the 13th Amendment Stay in Mississippi Too Long?

February 18, 2013 1 comment

Making news today under the sensational headline “Mississippi Finally Gets Around to Abolishing Slavery” is the story of an investigation by two Magnolia State residents that revealed that their state never “officially” ratified the Thirteenth Amendment to the United States Constitution.

Section one of the Thirteenth Amendment provides:

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Article V of the Constitution governs the constitutional amendment process and provides two avenues for amending the Constitution: an amendment may be proposed either 1) by two-thirds of Congress or 2) through a constitutional convention on a vote of two-thirds of the state legislatures. Ratification either is by three-fourths of the state legislatures or three-fourths of constitutional conventions in each of the states. Article V appears to leave open the possibility that Congress may prescribe other means by which an amendment may be ratified.

According to the National Archives, Congress delegated the Archives responsibility for administering the ratification process. The Archives describes a relevant part of the ratification process as follows:

When a State ratifies a proposed amendment, it sends the Archivist an original or certified copy of the State action, which is immediately conveyed to the Director of the Federal Register. The OFR examines ratification documents for facial legal sufficiency and an authenticating signature. If the documents are found to be in good order, the Director acknowledges receipt and maintains custody of them. The OFR retains these documents until an amendment is adopted or fails, and then transfers the records to the National Archives for preservation.

A proposed amendment becomes part of the Constitution as soon as it is ratified by three-fourths of the States (38 of 50 States). When the OFR verifies that it has received the required number of authenticated ratification documents, it drafts a formal proclamation for the Archivist to certify that the amendment is valid and has become part of the Constitution. This certification is published in the Federal Register and U.S. Statutes at Large and serves as official notice to the Congress and to the Nation that the amendment process has been completed.

Assuming these “formalities” constitute legally required steps in the amendment process, a proposed amendment does not become part of the Constitution until three-fourths of the states, acting through their legislatures or constitutional conventions, send a proper copy of their ratifying action to the Archivist.

After a vote of two-thirds of Congress, the proposed Thirteenth Amendment went to the states in 1864. Nearly two years later, when Georgia became the twenty-seventh state to ratify the amendment, the amendment was adopted and became a part of the Constitution. Mississippi did not ratify the amendment before Georgia did; in fact, it, along with other states like New Jersey, Delaware, and Kentucky, originally rejected the proposed amendment.

Over time, states that had not ratified the amendment did so, and those that initially rejected it reversed course and ratified it. Mississippi did so in 1995. As today’s story revealed, however, the Mississippi Secretary of State failed to notify the Archivist of their ratification action under the process described above, leading to the attention-grabbing statement that Mississippi had not “officially” ratified the Thirteenth Amendment and abolished slavery.

That view of this story likely is inaccurate.

First, once Georgia properly ratified the proposed amendment in 1865, the amendment became a part of the Constitution and, as such, the supreme law of the land. See U.S. Const. art. IV, s 2. The stance of the Mississippi legislature with respect to slavery was irrelevant because the Thirteenth Amendment applied in that state, just as it did in every other state, regardless of its decision on ratification.

Second, Mississippi probably did all it needed to do to “officially” ratify the Thirteenth Amendment– an act as symbolic in Mississippi as it was in every other state that decided to ratify the amendment after 1865– when three-fourths of its legislature voted for ratification in 1995. Under the Archives’ own description of the role of the notification procedure in the amendment process, the requirement for notice to the archivist would seem to be extinguished once a sufficient number of states had provided the requisite notice such that the amendment was adopted.

All Mississippi needed to ratify the Thirteenth Amendment was a three-fourths vote of its legislature. Having completed that in 1995, well after the adoption of the amendment, no further action was needed to make that ratification “official.”

Categories: Current, Law, Legal

Preeminent Domain

June 28, 2012 2 comments

Briefly: I have tried to come up with ideas, conduct research, and write legal material fit for publication in the past, see e.g., here and here, but I was not successful until I collaborated with a senior colleague beginning last year, and I found myself in print last month, see here. The Michigan Real Property Review published our article on the effects of certain state constitutional amendments and legislation passed in the wake of the United States Supreme Court’s decision in Kelo v. New London, 545 U.S. 469 (2005). In short, our conclusion is that Michigan law currently treats private landowners very favorably when it comes to compensation for the taking of real property.

The full article is available here.

Categories: Discourse, Law, Legal, Privatize

Standing Our Ground on “Bad Laws”

April 23, 2012 1 comment

Reader JJM sent along a New York Times editorial entitled “Embarrassed by Bad Laws,” which argues that Florida’s now-infamous “‘Stand Your Ground’ self-defense law[]” is a) a “bad law”; b) the result of a nationwide, state-level lobbying by the American Legislative Exchange Council (“ALEC”) and the National Rifle Association; and c) the real reason why many of ALEC’s corporate supporters are distancing themselves from the policy group.

“Bad facts make bad law” is a common utterance of dissenting judges who believe that the majority has reached the wrong legal conclusion because the case before the court involves unusual or extreme facts atypical of the situations to which the law or legal conclusion is most likely to apply.

Bad facts may also make “bad law”; in other words, bad facts like the tragic circumstances surrounding the death of Trayvon Martin may lead the court of public opinion’s multitude of judges to declare a law bad. In the Martin case, Florida’s “stand your ground” law is “bad” because it created an incentive for George Zimmerman to kill Martin (assuming Zimmerman knew of the law, which isn’t an unreasonable assumption given Zimmerman’s status as a neighborhood watch person, whatever that means) or it created a legal situation in which Zimmerman is unlikely to be punished for his actions. (The judges of the court of public opinion rarely are as precise as we might like them to be, but these seem to be the two main reasons why someone might decide the Florida law is bad.)

It’s easy to imagine a factual situation in which an aggressive self-defense law would not be “bad,” and even might be considered praiseworthy. For example, if such a law saved from prosecution an older woman who defended herself from a home invader by striking him with a hammer she happened to grab when the invader later died as a result of the strike, it likely would be considered “good,” or at least “just” or “fair” if it received any attention at all.

What these examples highlight is that our popular opinion of a law is likely to be a mere reflection of our opinion about the actors in the underlying fact situation to which the law is applied, and for the most part in Martin’s case, the good and bad roles in the underlying fact situation set up pretty starkly and uncontroversially.

This isn’t to say that there aren’t actually bad laws, but it is interesting that no one seems to have examined the text of the law in question. It is available here, and the applicable provision appears to be subsection (3), which reads:

A person who is not engaged in an unlawful activity and who is attacked in any other place where he or she has a right to be has no duty to retreat and has the right to stand his or her ground and meet force with force, including deadly force if he or she reasonably believes it is necessary to do so to prevent death or great bodily harm to himself or herself or another or to prevent the commission of a forcible felony.

Exploring all of the different and competing policy factors internal and external to this penal statute to decide whether it is a good law or a bad one is beyond the scope of this post. For now, I think it’s enough to note that the provision doesn’t appear to be a bad one on its face and recognize that our popular opinion of the law as a “bad law” likely has more to do with a narrow consideration of its application to one set of facts (and indeed, one telling of those facts). Had the stronger, armed Zimmerman attacked the weaker, unarmed Martin unprovoked, as many assume, but then suffered a fatal injury at the hands of Martin in a scuffle following the initial attack, it seems unlikely that this law would have come under such sudden public scrutiny. Moreover, if the popular telling of the actual encounter between Zimmerman and Martin is accurate, this provision probably doesn’t apply. According to that narrative, Martin never attacked Zimmerman, and without a predicate attack, Zimmerman’s right to stand his ground never arises, and his reasonable belief as to the necessity of his use of defensive force is irrelevant.

Categories: Current, Discourse, Law

Remembering to Vote: Memory and Suffrage

February 29, 2012 Leave a comment

Last month, the Supreme Court heard oral arguments in three consolidated cases, Perry v. PerezPerry v. Davis, and Perry v. Perez, all having to do with state and federal elections in Texas. The cases are complicated for a number of reasons, and they even seemed to give the usually confident justices some trouble, as Lyle Denniston’s report on the oral arguments for SCOTUSblog indicates. The situation is complicated in terms of both procedural and substantive law, as there are challenges to Texas’ policies on different grounds in different courts, with a number of different entities all advancing their own remedial proposals, all with a pressing deadline that requires some solution in time for state primaries ahead of this fall’s general election. At the root of these cases, though, are fundamental questions about the Voting Rights Act of 1965, a central piece of the civil rights legislation of the 1960s that already has been facing some fundamental questions in the last few years. In 2006, after much debate, Congress voted to extend the expiring legislation for another twenty-five years, and in 2009, the Supreme Court avoided ruling on the constitutionality of a key provision of the Act while expressing doubts about its ongoing constitutionality. See Northwest Austin Mun. Util. Dist. No. 1 v. Holder, 557 U.S. ___ (2009).

Voting Rights Act litigation usually focuses on one or both of two sections of the Act. Section 2 contains the Act’s general rule against voting discrimination. Section 5, the more controversial of the two, requires certain identified jurisdictions, typically in the South, to seek approval from the Attorney General before making changes to election procedures.

In an excellent and extensive piece that followed the Northwest Austin decision, Joel Heller outlined the Voting Rights Act’s legal landscape and argued that the interpretive tools and sources of authority upon which the Court relies in its Voting Rights Act (“VRA”) cases “present historical, ideological, and statistical perspectives on the question of the continued necessity of § 5, with an especial focus on the South. They tell divergent stories about history, race and  voting.” Joel Heller, Faulkner’s Voting Rights Act: The Sound and Fury of Section Five, 3 (2011), avalilable here. What’s missing, according to Heller, is “the region’s literature. Yet many of these works, in particular the novels of William Faulkner, address some of the same concerns as the VRA. Specifically, a prominent theme in Faulkner’s work is the power of memory in the South and the ongoing influence of the past on contemporary actions and attitudes.” Id.

As a legal matter, Heller argues that it’s appropriate for courts to consider literature:

Literature can serve as a probative tool for understanding and evaluating policy because it is often, like law, a response to social problems. Especially with a measure like § 5 that touches on such fundamental matters in American society as racial equality and voting rights, Congress and the courts should make every effort and consult every relevant source in order to understand fully the issues at stake. As a chronicler of the pre-VRA South that Congress was responding to when it enacted and reauthorized § 5, Faulkner could prove a valuable resource in this undertaking. Ignoring his examinations of the role of memory in this context risks losing out on the insights of a uniquely astute observer of Southern culture and psychology.

Id. at 4.

The ongoing question in VRA § 5 litigation is whether the prophylactic measure still is needed, and this inquiry requires a court to determine what evil remains present in the governed jurisdictions and whether that evil necessitates the continued application of § 5. Heller continues:

Just as § 5 is a solution uniquely concerned with the past, Faulkner’s novels show that the lingering power of the past is also part of the problem. Rather than punishing the sons for the sins of the fathers, § 5 can be seen as targeting the independent concern of a past-haunted society and the uncertain results which the unchecked power of memory can produce in the present. . . . By focusing on the extent to which “things have changed in the South,” the Court ignored the possibility that, for some, “the past is never dead, it is not even past.”

Id. at 4-5. In short, Heller has identified a theme common to the creation, implementation, and judicial interpretation of § 5 and Faulkner’s novels: “the question of how the past and memories of it continue to shape current attitudes and actions.” Id. at 28.

Heller’s article is thorough and thoughtful, and after thinking about it for four or five months, I still find little to add to it or comment upon. As a matter of mere judicial mechanics, strict jurists may reject the notion that judges should consider much beyond the language of the statutes and rules at issue in the case, but they would completely miss the point of the article. Moreover, where courts in VRA § 5 cases already routinely are considering things beyond the narrow scope of legal authority, judges’ abilities to define the bounds of permissible authority for consideration are diminished. In this vein, Heller has made his case for the necessity of the inclusion and consideration of material like Faulkner’s works, which speak to the very inquiry in which the courts in these cases are engaging in both a historical and thematic manner.

The full text of the article is available for download here.

Behind the Curtain: Class Actions and the NBA Lockout

November 21, 2011 1 comment

I have written before about class actions, the most popularly familiar form of aggregate dispute resolution. See here; see also here. They are one of the most interesting areas of legal procedure because they are relatively new and, as a result, still developing in meaningful ways. Class actions are a creation of Federal Rule of Civil Procedure 23 (and subsequent state analogues), enacted in 1966, nearly thirty years after the enactment of the general, modern Federal Rules of Civil Procedure, and three interacting planes of activity guide their development. There is a constitutional level: the Constitution’s due process guarantees constrain the dispute-resolution process. There is a rule-based level: the class action, so different from traditional, one-on-one litigation, is a creation of Rule 23. (I also would put other legislation, like CAFA, on this level.) And there is a “business” level: the motivations of the litigants, which often are or act like businesses, sets up, drives, and shapes (through developing litigation strategies) the judicial interpretations of the Constitution, Rule 23, and other legislation, and even triggering new legislation. There are any number of reasons why this area might be called “complex litigation,” and the ever-shifting, interactive push of these three levels of activity certainly creates complexity.

Class actions have been in the news lately, first with the lawsuits filed against law schools by former students, and, more recently, the antitrust complaint professional basketball players filed against the NBA. David Boies, the high-profile litigator who previously represented the NFL against the class of football players that sued it this summer and Jamie McCort in her divorce from Los Angeles Dodgers owner Frank McCort, is serving as class counsel in the players’ class action against the NBA.

In an interesting publicity move, Boise and Billy Hunter, leader of the now-disbanded players’ union, held a small press conference with twelve members of the media last Tuesday to discuss the players’ case against the NBA. Boies apparently walked through the complaint with those present and offered his commentary and legal strategy explanations. While he certainly was posturing with the public (no doubt Hunter’s aim in calling the meeting), Boies’ remarks hit on a number of class action legal issues. Jonathan Abrams, on Grantland‘s Triangle blog, has helpfully presented Boies’ comments in context with relevant portions of the complaint itself. It’s a bit lengthy, so rather than reprint it here, I encourage you to read it in full: “NBA Lockout Talking Points From The Players’ Attorney.”

One of the first things Boies mentioned was the issue of forum selection. To have the authority to hear a case, a court must have jurisdiction. Often, however, there will be more than one court that could properly exercise jurisdiction over a case, and that secondary distinction is termed one of venue. Plaintiffs often have a choice of venue, or forum, and the decision operates on multiple levels. There is strategy involved: even though the case is in federal court, the federal court may be required to apply certain aspects of state law, so geographic location becomes important. Similarly, if the trial is to be before a jury, plaintiffs may find they prefer juries in certain states over those in others. Plaintiffs also may be angling toward certain judges if they are known to be expert (or not expert) in a certain variety of procedural or substantive law. The cosmetics also matter: where outside perception is relevant, where a plaintiff sues can affect appearances in the mind of the public. Any number of other factors may influence the decision of where to sue, and Boies’ statement on forum selection hit on a few of them:

There were a number of people who wanted to be in California. Billy [Hunter] has a great fondness for Oakland. He lives out there. One of the key representatives, Mr. Powe, is a resident out there in Richmond, California, which is in the Oakland division of the Northern District of California. I also think that we think that district has a practice in moving cases along very quickly. They’ve got a lot of expertise in antitrust cases and we think it will be a good forum for us to proceed with this lawsuit.

A major issue in class action litigation is defining the represented class. Because class actions almost always settle once the court certifies the class, the certification stage is the real battle. The defendant’s aim, therefore, is to show that the group of plaintiffs lacks the cohesion required for certification under Rule 23 by emphasizing the differences in the situations of the would-be class members. Conversely, the plaintiffs will try to emphasize commonality and similarity across the proposed class. When there are undeniable differences, plaintiffs have other techniques, including the creation of subclasses. In the NBA suit, the complaint names the plaintiffs as “Carmelo Anthony, Chauncey Billups, Kevin Durant, Kawhi Leonard, Leon Powe and all those similarly situated,” and Boies explained:

I think it was people who believed they wanted to participate as plaintiffs and there were people whose lawyers believed would fairly represent the interests of the class. For example, although it’s not actually a legal requirement necessarily, in general when you’ve got a class action, you want to have a mix of people. For example, one of the subclasses in the complaint are players under contract because players under contract have particular claims that are based on the fact that the owners got together and all agreed that they would breach those contracts. So they have a certain set of claims. You then have NBA players who are not under contract and they have many of the same claims, but some different ones. And then you have the so-called rookie subclass of people coming into the league.

The remainder of the remarks from Boies and Hunter and excerpts from the complaint deal with the substantive law and factual history of the dispute. It’s a neat way to catch up on what’s been happening with the NBA labor dispute and get a sense of where it may go from here, at least as far as the litigation is concerned. Even if you don’t like watching the NBA, I recommend the NBA lockout– it’s much more interesting and entertaining.

Categories: Current, Information, Law, Legal, Sports

Whither Private Sector Efficiency?

April 7, 2011 2 comments

An article on the front page of yesterday’s USA Today described the new budget plan Republicans introduced earlier this week that would “dramatically revamp the twin health care pillars of the Great Society, taking a huge political risk that could reverberate all the way to November 2012 and beyond.” Richard Wolf and Kelly Kennedy, “GOP seeking dramatic changes in Medicare and Medicaid,” USA Today (April 6, 2011). Behind the economic leadership of Rep. Paul Ryan, House Budget Committee Chairman, the Republicans are proposing fundamental changes to the federal Medicare and Medicaid programs. “‘Our goal here is to leave our children and our grandchildren with a debt-free nation,’ said Ryan, 41, of Wisconsin. ‘At stake is America.'” Id.

For those who have tracked the recent rise of fiscal conservatism among Republicans at the national level, news that they are targeting large government programs for reductions is unsurprising. What might be surprising, however, are some of the effects of the GOP plan to privatize Medicare and shift Medicaid to state-level administrators:

Medicare, the government-run health insurance program covering about 47 million seniors and people with disabilities, would be run by private insurers and would cost beneficiaries more, or offer them less. Medicaid, the federal-state program covering more than 50 million low-income Americans, would be turned over to the states and cut by $750 billion over 10 years, forcing lesser benefits or higher co-payments. Social Security eventually would be cut, too.

Id. If these projected outcomes are accurate, they raise questions about the Republicans’ application of conservative fiscal theory.

During George W. Bush’s presidency, Republicans remembered well enough that they favored low taxes, but they appeared to forget why they took that position. In doing so, they created a deficit by continuing to spend at high levels rather than reduce spending to match the reduction in tax receipts.

If USA Today is right that the twin pillars of The Great Society are Medicare and Medicaid, where does that leave Grace?

Now, Ryan and his colleagues appear to have reconnected low taxes and low spending but forgotten why they favor low spending. The idea behind a push for lower taxes and spending, of course, is that it forces government to shrink and permits the private sector to expand. This is desirable because, from the proponents’ perspective, the private sector can provide goods and services more efficiently (cheaper and more effectively) than would be possible in the public sector (i.e., government). The economic calculus of privatization can be complicated, but the results presented in the above article– higher costs and reduced services– do not sound like efficiency gains.

Under conservative economic theory, small government is desirable, not as an end itself, but because it reduces regulatory roadblocks that inhibit the private sector. The stated results of the Republicans’ plan for Medicare and Medicaid imply that they have lost track of the practical goal the application of their theories is supposed to achieve. If the predicted results are accurate, it seems that Republicans either have unsuccessfully applied their theories or reframed small government as an end itself. Remedying the former may simply require more careful work on the part of policy makers and their economists and other advisors. The latter, however, requires a new theoretical justification.

One view, perhaps of an anarchist variety, is that the government is but another (albeit large and special) player in a market that does not distinguish between a public sector and a private one. Under that view, it may not be surprising that there are some goods and services that a traditionally “private” entity or group of entities can provide most efficiently, or that there are others that the entity known as “government” can provide most efficiently, and still others that some combination of the two can provide most efficiently. See, e.g., public-private partnerships. Looking at things in this way, the possibility that government, with its special access to virtually all individuals in the market, could provide the most cost-effective insurance program based on its economies of scale, may not be so surprising. This may not be the actual case here, but the stated results of the Republican plan to privatize services and shift them to the states– increased costs and decreased services– suggest it is a possibility.

If small government itself is a goal, detached from private-sector efficiency gains, for the new group of House Republicans, their “pro-business” stance appears much less principled.

Categories: Action, Current, Law, Politics, Privatize

Virginia is For Healthy, Non-Federally Funded Lovers

December 26, 2010 5 comments

Earlier this month, Judge Henry Hudson of the United States District Court for the Eastern District of Virginia ruled that Congress lacks the authority to “require[] that every United States citizen [with limited exceptions] maintain a minimum level of health insurance coverage” or else face “a penalty included with the taxpayer’s annual return.” Virginia v. Sebelius, No. 3:10-cv-00188-HEH 1 (E.D. Va 2010). An extended summary of the decision and my own observations follow.

In challenging the law, Virginia (referred to in the opinion as “the Commonwealth”) advanced three arguments. The first was a Commerce Clause argument that the Article I power to regulate interstate commerce (along with recognized expansions of that power under the Necessary and Proper Clause) does not permit Congress to “requir[e] an otherwise unwilling individual to purchase a good or service from a private vendor,” and that “failure, or refusal…to elect to purchase health insurance is not economic activity historically subject to federal regulation under the Commerce Clause.” Id. at 3-4. The second was a taxation argument that Congress’ power to tax under the General Welfare Clause does not authorize what actually is “a penalty untethered to an enumerated power,” which “is mischaracterized as a tax.” Id. at 4. The third was a state autonomy argument that the Minimum Essential Coverage Provision (“the Provision”) directly conflicts with a Virginia health care law, is “an unlawful exercise of police power, encroaches on the sovereignty of the Commonwealth, and offends the Tenth Amendment to the U.S. Constitution.”

In evaluating the Commerce Clause argument, the court had previously noted that the Provision “appears to forge new ground and extends the Commerce Clause powers beyond its [sic] current high water mark.” Id. at 11. In defending the Provision as a permissible exercise of Congress’ authority to “regulate activities that substantially affect interstate commerce,” id. (citing Perez v. U.S., 402 U.S. 146, 150 (1971)), Secretary of Health and Human Services Kathleen Sebelius (“the Secretary”) argued that it was permissible under the aggregation theory supported by the Supreme Court’s most expansive Commerce Clause rulings, Wickard v. Filburn, 317 U.S. 111 (1942) and Gonzales v. Raich, 545 U.S. 1 (2005), Sebelius at 11-16.

The aggregation theory “is conceptually based on the hypothesis that the sum of individual decisions to participate or not in the health insurance market has a critical collective effect on interstate commerce. Congress may regulate even intrastate activities if they are within a class of activities that, in the aggregate, substantially affect interstate commerce.” Id. at 12. In Wickard, the Supreme Court upheld Congress’ authority to regulate personal cultivation and consumption of wheat because it reduced the amount commercially produced wheat in interstate commerce (that farmer Filburn would have had to purchase had he not produced his own supply), thus contributing to an aggregated substantial effect on interstate commerce. Raich applied similar reasoning to the (illegal, the Court seemed to ignore) market for marijuana. “When Congress decides that the total incidence of a practice poses a threat to a national market, it may regulate the entire class.” Raich, 545 U.S. at 17 (internal quotation marks omitted).

Along this line of reasoning, the Secretary, while “sidestep[ping] the independent freestanding constitutional basis for the Provision,” argued that the Provision is “a necessary measure to ensure the success of its larger reforms of the interstate health insurance market.” Sebelius at 12, n. 5.

In the Secretary’s view, the key elements of health care reform are coverage of those with preexisting conditions and prevention of discriminatory premiums on the basis of medical history. These features, the Secretary maintains, will have a material effect on the health insurance underwriting process, and inevitably, the cost of insurance coverage. Therefore, without full market participation, the financial foundation supporting the health care system will fail, in effect causing the entire health care regime to “implode.” Unless everyone is required by law to purchase health insurance, or pay a penalty, the revenue base will be insufficient to underwrite the costs of insuring individuals presently considered as high risk or uninsurable. Therefore, under the Secretary’s reasoning, since Congress has the power under the Commerce Clause to reform the interstate health insurance market, it also possesses, under the Necessary and Proper Clause, the power to make the regulation effective by enacting [the Provision].

Id. at 13; see also here.

In evaluating the Commerce Clause arguments, the court first observed the limitations of Congress’ power under the Necessary and Proper Clause. Authority exercised under the Necessary and Proper Clause must bear a rational relationship to a constitutionally enumerated power and cannot violate an independent constitutional prohibition. Sebelius at 17 (citing U.S. v. Comstock, 130 S.Ct. 1949, 1956-57 (2010)). In other words, legislation cannot be necessary and proper for being necessary and proper– it must be necessary and proper to carry out a power of Congress the Constitution specifically authorizes, here, the authority to regulate interstate commerce. The court here tracks Virginia’s Commerce Clause reasoning, which is grounded in the Court’s recent, more restrictive Commerce Clause decisions, U.S. v. Lopez, 514 U.S. 549 (1995) and U.S. v. Morrison, 529 U.S. 598 (2000), and is less concerned with the aggregation theory at play in Wickard and Raich. Recognizing that Wickard and Raich establish the “outer boundaries” of Congress’ Commerce Clause power, the court also noted the restrictive prescriptions of Lopez and Morrison that Commerce Clause authority is confined to activities truly economic in nature and with “a demonstrable effect on interstate commerce.” Sebelius at 21-22. For the Provision to be valid under this analysis, the decision to refuse to purchase health care insurance must be such an activity. Id. at 22. In reaching its holding, the court observed

Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market. In doing so, enactment of [the Provision] exceeds the Commerce Clause powers vested in Congress under Article I.

Id. at 24 (and dismissing the argument that the collective effect of an aggregate of such inactivity reaches a constitutional level). For the court, it followed from the fact that regulation of this decision is beyond the historical reach of the Commerce Clause that the Necessary and Proper Clause could not bootstrap it into Commerce Clause regulatory jurisdiction. Id. The Necessary and Proper clause “grants Congress broad authority to pass laws in furtherance of its constitutionally-enumerated [sic] powers. This authority may only be constitutionally deployed when tethered to a lawful exercise of an enumerated power….[I]t must be within the letter and spirit of the Constitution.” Id. (citations and quotation marks omitted) (citing Comstock, 130 S.Ct. at 1956-57; McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 421 (1819)). The court ruled that the Provision “is neither within the letter nor the spirit of the Constitution. Therefore, the Necessary and Proper Clause may not be employed to implement this affirmative duty to engage in private commerce.” Id.

The court also rejected the Provision on the second line of support– whether the “penalty” is an exercise of Congress’ power to “tax”– finding that “although purportedly grounded in the General Welfare Clause, the notion that the generation of revenue was a significant legislative objective is a transparent afterthought.” Id. at 32.

The legislative purpose underlying this provision was purely regulation of what Congress misperceived to be economic activity. The only revenue generated under the Provision is incidental to a citizen’s failure to obey the law by requiring the minimum level of insurance coverage. The resulting revenue is extraneous to any tax need. The use of the term “tax” appears to be a tactic to achieve enlarged regulatory license.

Id. at 32-33 (quotation marks and citation omitted). Although the Secretary took the position that the “penalty” was a tax before this court, the legislative history of the Affordable Care Act (“the ACA”) betrays inconsistency on this point. Indeed, the court pointed “unequivocal denials by the Executive and Legislative branches that the ACA was a tax.” Id. at 33. Contrary to the Secretary’s argument, the words tax and penalty “are not interchangeable…and if an exaction [is] clearly a penalty, it cannot be converted into a tax by the simple expedient of calling it such.” Id. at 35 (quoting U.S. v. La Franca, 282 U.S. 568, 572 (1931)). As a penalty, it must be connected to some other enumerated power besides the General Welfare Clause, and since the court already found that it was not a necessary and proper exercise of Congress’ Commerce Clause power, the court again rejected the Provision: “The absence of a constitutionally viable exercise of this enumerated power is fatal to the accompanying sanction for noncompliance.” Id. at 37.

The court did not discuss the third, state autonomy issue.

As a final matter, the court addressed the issue of severability– whether it can carve out and invalidate the Provision, while permitting the rest of the ACA to stand. (“Generally speaking, when confronting a constitutional flaw in a statute, we try to limit the solution to the problem, severing any problematic portions while leaving the remainder intact.” Id. at 38 (quotation marks omitted) (citing Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 130 S.Ct. 3138, 3161 (2010)).) Interestingly but not surprisingly, Virginia and the Secretary swap positions on this issue. In the face of invalidation of the Provision, the Secretary argued for severability, while Virginia reminded the court of the Secretary’s frequent argument that the Provision is the “linchpin” of the ACA’s regulatory scheme. For a variety of reasons, including the complexity and broad and varied sweep of the ACA, the court endeavored to sever as narrowly as possible only the Provision and those other, “directly-dependent provisions” making specific reference to the Provision. Id. at 40.

Judge Henry Hudson, U.S. District Court, Eastern District of Virginia

When Judge Hudson released his decision earlier this month, a reader asked what it meant for the future of the ACA. Concern among supporters of the act was not surprising, especially given the nonspecific headlines of the day, but the scope of this ruling is, for the moment, quite limited. Federal district courts are trial-level courts, so his ruling is binding only on the parties to the case. On this point, Hudson specifically denied Virginia’s request to halt implementation of the Provision, relying instead on the strength of a declaratory judgment that the Provision is unconstitutional. Although some may see the thrust of Hudson’s ruling as bold, he is reasonable rather than brash throughout and strikes a note of humility in the end, recognizing the larger reality that the case “turns on atypical and uncharted applications of constitutional law interwoven with subtle political undercurrents. The outcome of this case has significant policy implications. And the final word will undoubtedly reside with a higher court….In this Court’s view, the award of declaratory judgment is sufficient to stay the hand of the Executive branch pending appellate review.” Id. at 40-41. Hudson’s first bite at the apple likely will have a meaningful influence on the subsequent review, as a matter of discourse and anchoring. He makes clear early on, however, that because of the posture of the case– cross-motions for summary judgment– “the dispute at hand is driven entirely by issues of law.” Id. at 2. While appellate courts usually defer to a trial judge’s interpretation of the facts as presented at trial, they generally review matters of law de novo (anew), giving no deference to the trial judge. The panel of the U.S. Court of Appeals for the Fourth Circuit will feel free to write on a clean slate when it reviews this case.

Virginia v. Sebelius received a lot of attention for its outcome, but four other federal district courts previously had rejected similar challenges, although their reasoning differed, making Sebelius something of an outlier. These trial-level decisions are but the first act of what is likely to be at least a three-act judicial play that eventually will reach the Supreme Court. The Court is likely to wait to rule until it is presented with multiple, conflicting rulings across the circuit courts of appeals, a process that could take months or years.

Although there may be a gap in the court’s opinion (the failure to expressly consider alternative constitutional bases for Congress’ authority to enact the Provision as part of the ACA), I find it, on the whole, to be persuasive and a reasonable application of precedent.

For further reading about this case, see here and here. For tangentially relevant information on this site, see herehere, and here. Thanks to the reader who directed my attention to Judge Hudson’s opinion. Please use the comment section, below, for your reactions and questions.

Categories: Current, Discourse, Law, Privatize