Commerce Clause Jurisprudence Through the Centuries

Try to fit a square peg in a round hole — that is the challenge facing attorneys preparing to argue over the constitutionality of the Patient Protection and Affordable Care Act’s “individual mandate” in front of the U.S. Supreme Court on March 27.

Congress’s requirement that individuals purchase health insurance from private companies is a “heretofore untested power: an economic mandate,” the U.S. Court of Appeals for the Eleventh Circuit said when it struck down the minimum coverage provision last August.

While other courts, including the Sixth and D.C. circuits, have acknowledged the novelty of the provision while simultaneously finding it constitutional, the lack of a historical analogue makes it difficult for either side to wrap itself fully in the court’s prior Commerce Clause jurisprudence.

The parties are also aiming at a moving target—a history of decisions that fluctuate between a broad take on Congress’s commerce power and a willingness to rein in the legislature when it goes too far.

The court’s Commerce Clause jurisprudence has been like a pendulum, one expert told Bloomberg BNA. The question is where the current court finds itself on the spectrum.

Commerce Clause Decisions Marked by Swings

Since the 1800s, the court has “swung back and forth between a nationalist perspective,” in favor of broad federal authority, and a “federalist perspective,” championing limits on federal power in favor of state control, Erwin Chemerinsky, founding dean of the University of California, Irvine School of Law, told Bloomberg BNA .

We are currently in a “federalist era,” Chemerinsky explained, and “I think that the Affordable Care Act cases will indicate how far the pendulum is swinging,” he added.

These shifts owe as much to political and ideological forces as they do to complicated theories on constitutional law, Professor David Bernstein, George Mason University School of Law, Arlington, Va., told Bloomberg BNA.

For instance, if approval ratings for both President Obama and the PPACA were hovering around 70 or 80 percent, the court probably wouldn’t have touched this case, he said.

But it did, and there are some who think that the issue was settled long before the swings that marked the last two centuries.

Professor Akhil Reed Amar, Yale Law School, told audience members at a Feb. 16 media briefing co-hosted by Bloomberg Law that the Supreme Court’s decision in McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316 (1819), provides a viable defense of the PPACA.

If you take McCulloch seriously, then the arguments against the PPACA’s individual mandate fall apart, Amar said.

Marshall Starts on Nationalist Note

Famously, McCulloch upheld the incorporation of a national bank based, in part, on Congress’s Commerce Clause authority.

Chief Justice John Marshall rejected the idea that Congress is limited to powers expressly bestowed by the Constitution and said that the legislature has implied powers—like incorporating a bank—that are derived from its “great powers,” including the power to regulate commerce.

“Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional,” he wrote.

Five years later, Marshall again took an expansive view of the Commerce Clause, this time in Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1 (1824).

Commerce is more than just the traffic of goods—commodities exchanging hands—Marshall said. It must be read to include elements such as navigation, in this case, transportation of goods by steamboat.

Congress’s power persists even when such navigation occurs within the borders of a particular state, Marshall said, “so far as that navigation may be, in any manner, connected with `commerce … among the several states.’ ”

As Chemerinsky told Bloomberg BNA, Gibbons ushered in a nationalist era of Commerce Clause jurisprudence, lasting until the 1890s.

During that time, “not one federal law was struck down as exceeding the commerce power,” he said.

However, that trend stalled after a series of cases, including United States v. E. C. Knight Co., 156 U.S. 1 (1895), and Carter v. Carter Coal Co., 298 U.S. 238 (1936), in which the court began to draw distinctions between “commerce” and intrastate activities such as “production,” “manufacturing,” and “mining,” which produce only “indirect,” as opposed to “direct” effects, on interstate commerce.

Mr. Filburn’s Wheat

But then came a case that has recently received a lot of attention, mainly because the backstory evokes the same kinds of concerns about government overreaching that hold sway with opponents of the individual mandate.

In Wickard v. Filburn, 317 U.S. 111 (1942), the court upheld fines levied against the owner of a small farm for growing too much wheat, in violation of federal allotments meant to stabilize prices.

The farmer, Roscoe Filburn, claimed that he never intended to take the excess wheat to market. Rather, the grain was to feed his livestock, feed his family, and for planting the following year.

Thus, Filburn argued, Congress had exceeded its Commerce Clause powers by regulating a commodity that would never become commercialized.

But the court saw things differently. It veered away from giving “controlling force to nomenclature,” discarding labels like “manufacturing” and “production” that emphasize the intrastate nature of certain activities.

Instead, it focused on the “actual effects” of the excess wheat on interstate commerce. While Filburn’s personal consumption might be minimal when considered in a vacuum, “his contribution, taken together with that of many others similarly situated, is far from trivial,” the court held.

The court also said that the task of creating winners and losers in a large-scale, commercial regulatory scheme is a job for Congress, not the courts. With words that seem particularly relevant in the current debate, the court said:

It is said, however, that this Act, forcing some farmers into the market to buy what they could provide for themselves, is an unfair promotion of the markets and prices of specializing wheat growers. … The conflicts of economic interest between the regulated and those who advantage by it are wisely left under our system to resolution by the Congress under its more flexible and responsible legislative process. (emphasis added)

Gender, Guns, and Attenuated Links

The nationalist era ushered in on the back of Wickard lasted for more than 50 years.

“From 1937-1995, not one law was struck down as exceeding the scope of Congress’s commerce power,” Chemerinsky told Bloomberg BNA.

But then the pendulum swung again, he said, most notably with the court’s decisions in United States v. Lopez, 514 U.S. 549 (1995), and United States v. Morrison, 529 U.S. 598 (2000).

In Lopez, the court struck down a provision of the 1990 Gun-Free School Zones Act that made it a federal crime to possess a firearm in the vicinity of a school.

Morrison, on the other hand, invalidated a portion of the 1994 Violence Against Women Act—specifically, the creation of a federal civil remedy available to victims of gender-motivated violence.

Relying heavily on Lopez, the court in Morrison drew a line between the regulation of economic and noneconomic activity.

Lopez‘s review of Commerce Clause case law demonstrates that in those cases where we have sustained federal regulation of intrastate activity based upon the activity’s substantial effects on interstate commerce, the activity in question has been some sort of economic endeavor,” the court said in Morrison.

Further, the court found that the links between gun possession and gender-motivated violence on one hand, and interstate commerce on the other, were too attenuated to support Congressional action.

This distinction has become a major part of PPACA opponents’ arguments against the statute.

As Michael A. Carvin, Jones Day, Washington, D.C., who represents the private respondents in the individual mandate case, told the audience at the Bloomberg Law briefing: Economic inactivity—not buying insurance—has less to do with commercial markets than the guns at issue in Lopez.

`An Instant From the Interstate Market’

The last and perhaps the most important piece of the puzzle is a case reminiscent of Wickard—it also involved the cultivation of a crop for personal use.

In Gonzales v. Raich, 545 U.S. 1 (2005), two medical marijuana users in California challenged the federal government’s enforcement of the Controlled Substances Act against them with respect to their possession of the drug. Their actions were shielded by the state’s own Compassionate Use Act, which allows marijuana use for medicinal purposes, they said.

Specifically, they argued that because their marijuana was either home-grown, or procured from local growers at no cost, it had no association with the larger commercial markets for either illicit or medicinal marijuana.

Taking a step back from its federalist approach in Lopez and Morrison, the court rejected that theory. Congress’s overall goal of regulating controlled substances was a legitimate one, it said, and it only needed a “rational basis” for concluding that locally-grown marijuana would hamper its objective.

Even more intriguing was the concurrence written by Justice Antonin Scalia.

That opinion, which melded the justice’s views of the Commerce Clause and the Necessary and Proper Clause, said: “Where necessary to make a regulation of interstate commerce effective, Congress may regulate even those intrastate activities that do not themselves substantially affect interstate commerce.”

That includes “even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce,” Scalia said.

The marijuana in question is a fungible commodity that “is never more than an instant from the interstate market,” Scalia said. Relying on states to ensure that it never crosses the line into commercial channels “might disappoint [Congress's] most important designs,” he pointed out, quoting McCulloch.

Chemerinsky told Bloomberg BNA, “I think Raich is most important in saying that Congress only need have a rational basis for believing that there is a substantial effect on commerce. If the court adheres to this, it makes it much easier to uphold the Affordable Care Act,” he said.

“But the question is will the Court follow Raich or will it distinguish it on the ground that growing marijuana was deemed `economic activity’ because it was producing a commodity that is bought and sold in interstate commerce, while people not buying insurance is not economic activity,” he added.

The economic versus noneconomic activity distinction is just the latest in a series of lines drawn by a court trying to understand the Commerce Clause better.

Explicit versus implied powers, direct versus indirect effects on commerce, commerce versus production, manufacturing, mining, and other designations, have all come and gone—eventually rejected by the court.

Raich, it would appear, at least put a damper on the economic versus noneconomic activity distinction in the context of laws enacted as part of an otherwise permissible national regulatory scheme.

The pendulum is swinging, but it remains unclear if it has reached its apex.

What is clear, George Mason’s Bernstein told Bloomberg BNA, is that concerns over the strength of the arguments put forward by the PPACA’s opponents have been put to rest.

The challengers had to come up with an “intellectually respectable argument,” Bernstein said.

The fact that you now have a split among the federal courts, coupled with the court’s allotment of six hours of oral argument—two for the minimum coverage provision alone—means that the challengers’ arguments are definitely being taken seriously, Bernstein explained.

But without any precedents directly on point, the case may be a “wild card,” he said.

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