PPACA & SCOTUS: An Executive Order Fix? (Warning: deep law discussion here)


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PPACA proponents protest I’ve long been a loud critic, within the unpaid progressive legal semi-pundit blogger community, of the Obama Administration’s decision to ground its right to impose a health insurance mandate in the Commerce Clause (aided by the Necessary and Proper Clause) rather than in the Taxing and Spending Clause.  Under the latter justification, PPACA (the Patient Protection and Affordable Care Act) would almost surely be considered constitutional.

Why did the Administration do this?  Partly, it might be that it did not want to be perceived as imposing a new tax — especially when the new tax would very likely end up saving people money.  (Under a PPACA) Possibly, it just thought that the Commerce Clause power was more appropriate, especially as it was deeply wedded to a neoliberal ideology favoring market solutions.  Regardless, it did not take seriously the notion that this was not a straightforward use of Commerce Clause power seriously — even after legal scholar Randy Barnett came up with the idea (which I certainly hadn’t foreseen) that PPACA’s mandate could be an expansion of the Commerce Clause because it forced people to engage in commerce and then regulated them as a result of that action.  This has sometimes been known as the “regulating inactivity” or as “forced purchase of private goods” or similar names.

My liberal friends in law have been distressingly complacent about believing that this was an absurd argument because the federal government has many times forced people to purchase things from private vendors: health insurance itself for merchant seamen during the John Adams Administration, requiring those drafted to purchase certain items, driver’s licenses, etc.  (Note: driver’s licenses are required by state governments, not the federal government, but the Taxing and Spending authority has been long accepted to allow the federal government to act in areas involving health, welfare, etc.  That’s why, for example, we have Medicare.)  What they apparently couldn’t get their heads around was that what their opponents were arguing that this represented an expansion if done through the Commerce power rather than through the Taxation power (or through other explicit powers, such as forming an Army and Navy, or implied powers attendant to those explicit ones.)

Now the Supreme Court is hinting that it wants not only to toss out the mandate, but to use that provision — which should have been unambiguously constitutional but was mislabeled in its justification — as the anchor whose rope is wrapped around the legs of the rest of the bill, so that when tossed overboard it drags the rest of the bill to its watery death.

I’ve published this essay elsewhere and sent it to a few brilliant constitutional lawyers I know.  I’m publishing it here because — well, we need a new story and this is what I have handy.  (Plus it might be of interest to some of you.  If this makes your eyes glaze over, don’t worry; that’s probably the most common effect it will have on people.)  Here we go — it was written last night starting at 1 a.m., which explains the time references.

Could President Obama snatch victory from the jaws of defeat by issuing an Executive Order?  (I’m “thinking out loud” here, late at night, so please bear with me.)  Let’s fancifully call this order the “Order Blocking Activation of Mandate Authority Under PPACA, Soliciting Enactment of Taxing and Spending Clause Obligation Undergirding Regulatory Treatment, or OBAMA UPSETS COURT.  (And lets call that “OUC” for short.)

Such an order, which has the force of law and is based on the President’s power to Faithfully Execute the Laws, might say roughly this:

The mandate in the PPACA that most citizens who are not otherwise covered by medical insurance, which invokes the Commerce Clause and the Necessary and Proper Clause, has raised constitutional questions about the degree of possible expansion of federal powers under those Clauses.  In deference to that concern, and based on my belief that the mandate would unquestionably be a lawful exercise of federal power under the Taxation and Spending Clause and the Necessary and Proper Clause, I therefore issue the following Executive Order:(1) The Executive Branch of the Federal Government will not enforce the provisions of PPACA mandating participation in the program until and unless one or more of the following occurs:

(a) A statute is enacted stating that the federal authority for issuing the mandates is grounded in the Taxing and Spending Clauses and the Necessary and Proper Clause rather than the Commerce Clause.

(b) A statute is enacted providing those covered by the mandate the option to purchase private health insurance offered through the Federal Government rather than by private entities.

(c) The Supreme Court declares the current operation of the mandate under the Commerce Clause (and N&P Clause) to be constitutional.

The President could then announce that a petition was being filed to the Supreme Court stating that the case at bar was either moot or not ripe based on the promulgation of “OUC,” the above Executive Order.

I have very little idea of whether “OUC” would work, although in additional to publishing it here I’m going to pass it along to some Con Law professors I know who will have a better idea of whether it would.  My reasoning is this:

(1) If the problem is that PPACA presents an uncabined potential expansion of the Commerce Clause, this “OUC” Executive Order would strike that dead.  The Commerce Clause (bolstered by the Necessary and Proper Clause) would no longer be the basis of the mandate as altered by the Executive Order.  The concern about forcing people into commerce with private entities so that they would be regulated by private entities goes away.

(2) What also goes away, of course, is the regulatory scheme of market expansion that undergirds the plan — but let’s be frank: the fact that that system provided no penalties for noncompliance means that insurers couldn’t be assured that they would actually get all of those new customers to expand the regulated market anyway.  (To the extent that getting people to sign up depending simply on moral suasion and appeals to patriotism, it still would.)  What this means is that insurance companies would freak out and start screaming.  However, there are fixes provided for in the very executive order itself — and their screaming could be for implementing one.

(3) Does this mean that Congress is being betrayed by the Executive Order?  No.  The President’s responsibility is to enforce the laws and respect the constitution.  If a part of the law isn’t enforceable, he can’t enforce it.  This is not the sort of Executive Order that Rick Perry was talking about, which could wipe away the duly enacted law based on his antipathy for it alone.  This would represent a proper exercise of the President’s executive power, eliminating only unconstitutional provisions, even if it arguably leaves us with a bill that would not have passed in the first place.  (That’s the gamble a legislature takes!)  Essentially, what it does is to insert the severability clause (regarding this requirement) that was missing from the bill itself.

(4) Congress is now in a tough spot.  The insurers are in substantial trouble if the don’t pass the proper justification for the bill (with or without a public option to avoid the “making people take part in the market and then engage in private commerce” issue entirely.)  At this point, the Supreme Court can’t save them.  The case is either moot (as there is no potential for “abusive” and uncabined extension of Commerce Clause powers) or not ripe (as, for now, no one would be subject to the mandate.)  The question of whether the Taxing and Spending authority would justify the mandate is not now before the Supreme Court.  My guess is that Congress has no real choice but to save the insurance industry by passing this alternative authorization for PPACA.  If it doesn’t — well, let it argue with insurers.

(5) [note: added here, not in the original] The Supreme Court might still decide that it can and should declare that the mandate provision of PPACA is unconstitutional, because an Executive Order could be repealed at any time.  (I think that this would be a mistaken deployment of the “capable of repetition yet evading review” basis for finding a live “case or controversy” — this was originally used in abortion rights cases where the plaintiffs were allowed to continue with a case regardless of whether they had given birth, miscarried, or had an abortion, because the case might stretch on longer than the time during which an abortion was safe.)   However, even if they did so, I don’t think that this would allow them, by any reasonable stretch of legal reasoning, to go after the rest of the bill.  The state of play after the order would be that Obama would, within his rights as Chief Executive, be refusing to enforce the provision.  They can kill that provision dead, but at that point it’s already severed from the policy being considered.

I can imagine various arguments against the President’s ability to do this, but so far I am not impressed with any of them.  It may seem like “dirty pool,” but he can do it — and, in fact, arguably has to do it to if a severable portion is unconstitutional.  This is always a problem when one has a severability provision in a contract or a law — can one live with the remainder if one portion is found to be void?  By preempting the Court’s actions, Obama would leave the Court without a live controversy.

An interesting metaphor occurred to me just now.  Justice Scalia said that if the heart — in his metaphor, the Commerce-Clause-justified mandate — is taken out, then the whole body dies.  But that, as Dick Cheney’s recent experience reminds us, is simply not so.  Cheney’s heart was taken out, and a new heart — in my metaphor, the Taxing-and-Spending-Clause-justified mandate — was transplanted in.  And, if Congress refuses to play along at all, the “patient” with an otherwise healthy circulatory system may still be able to be kept alive indefinitely on a heart-lung machine — metaphorically, the operation of PPACA without the mandate — for a long time.

Like I said — it’s very late here and I don’t know if I’m overlooking something major.  But the mere possibility of an OBAMA UPSETS COURT Executive Order, until someone points out compelling flaws in it — is what will help me sleep soundly tonight.

UPDATE: I’m happy to provide space for a contrasting viewpoint.  If you’d like to read a traditional Democratic neoliberal defense of PPACA, you’ll find a good one here.  This is brilliant and arrogant legal scholar Akhil Reed Amar writing in Slate about what he would have said to the Supreme Court had he been Donald Verrili.  It shows what happens when you start with the question “is this a valid economic regulation” rather than the question “upon what sort of slippery slope does this set us?”  I agree and disagree with various parts of it, some of which strikes me as handwaving and brazen assertions of doom to reputation — he just flat out dismisses the idea of there being a slippery slope here as unthinkable — but it shows you how the arguments would be made.  (Why Verilli fell short of this, I do not know.)  I do agree very much with his final Q&A:

Q: Are there any middle positions that might generate a broader consensus on the Court?

A: One possibility, perhaps, might build on various comments by Chief Justice Roberts and Justices Sotomayor, Kagan, Breyer, and others, at oral argument. The “mandate” should not be understood as free-floating requirement but simply as connected to the tax-penalty. In turn, the penalty can be upheld as a genuine revenue measure designed to bend down the cost curve. If the relevant statutory section needs in effect to be “reworded” to achieve this result, a judicial re-writing/re-reading of this section would be in keeping with various earlier cases, including the 2005 sentencing guidelines case ofU.S. v. Booker and the 2009 Voting Rights Act case of NAMUNDO v. Holder.  Both cases, in turn, can be seen as rooted in principles of judicial restraint and charitable interpretation famously put forth by Justice Brandeis in his concurrence in the 1936 Ashwander v. TVAopinion. With all due respect, several other possible approaches are also sketched out in an essay I wrote last summer for the Yale Law Journal online.

Keep an eye on this spot for more legal theory fun!


About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Deposed as Northern Vice Chair of DPOC in April 2014 (in violation of Roberts Rules) when his anti-corruption and pro-consumer work in Anaheim infuriated the Building Trades and Teamsters in spring 2014, who then worked with the lawless and power-mad DPOC Chair to eliminate his internal oversight. Expelled from DPOC in October 2018 (in violation of Roberts Rules) for having endorsed Spitzer over Rackauckas -- which needed to be done. None of his pre-putsch writings ever spoke for the Democratic Party at the local, county, state, national, or galactic level, nor do they now. One of his daughters co-owns a business offering campaign treasurer services to Democratic candidates and the odd independent. He is very proud of her. He doesn't directly profit from her work and it doesn't affect his coverage. (He does not always favor her clients, though she might hesitate to take one that he truly hated.) He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)