A Weak Mandate That’s Strong Enough?

In Chief Justice John Roberts’ decision in National Federation of Independent Business v. Sebelius, he explains that, in arguing that the individual mandate should be “upheld as within Congress’s enumerated power to “lay and collect Taxes[,]” the Government did not claim that the taxing power allows it to mandate that individuals purchase insurance.  Rather, the Chief Justice explains, the Government contended that “the mandate is not a legal command to buy insurance.”  Under this argument, “going without insurance [is] just another thing the Government taxes, like buying gasoline or earn­ing income.”

As Nathan Cortez highlighted, Chief Justice Roberts’ conclusion that the “shared re­sponsibility payment” that individuals who do not secure health insurance will owe is a tax hinged in part on the fact that “for most Americans the amount due will be far less than the price of insur­ance, and, by statute, it can never be more.”  The Chief Justice emphasized that “[i]t may often be a reasonable financial decision to make the payment rather than purchase insurance…”  The shared responsibility payment is more tax than penalty because it lacks a scienter requirement and because it “is collected solely by the IRS through the normal means of taxation–except that the Service is not allowed to use those means most sugges­tive of a punitive sanction, such as criminal prosecution.”

That “[t]he individual mandate survives as a tax” is for sure a victory for those who support the Patient Protection and Affordable Care Act.  Yet, as Dave Hoffman points out here, victory in a broader sense will hinge on the Act’s success.  And the very fact that the individual mandate is weak enough to be characterized, fairly, as not a mandate at all, raises the spectre of, as Professor Hoffman puts it, “disastrously bad adverse selection problems, coupled with a talking point (taxes & costs going up) to hammer liberals with for the next decade.”

The possibility that relatively healthy individuals and small employers with relatively healthy employees will opt out of purchasing health insurance — at all or through the Act’s health insurance exchanges — causing health insurance premiums to rise, the market to contract, and the exchanges to be destabilized is not a new concern.  In March of this year, for example, Avik Roy argued at his blog at Forbes that “[b]ecause the mandate is weakly enforced, small in size, and gradually put into place, whereas the pre-existing condition mandate takes effect immediately, Obamacare creates the recipe for an adverse selection death spiral.”  Now that the Supreme Court has upheld the Act, these concerns will take on a new urgency for federal and state regulators, insurers, and others.

In fact, just hours after the Court handed down its decision, John Reichard and Rebecca Adams at CQ HealthBeat were reporting that Cigna is planning a lobbying campaign with the goal of convincing lawmakers to strengthen the mandate.  Reichard and Adams report that

“Cigna also plans to lobby state governors, state legislatures, the Obama administration and Congress to require waiting periods of up to six months if a health care plan enrollee decides to drop out of a plan and then decides he or she wants to get back in, said Tom Richards, president of Cigna’s individual and family plan division. Efforts in Congress likely won’t occur until next year, he said.

In other words, a person who dropped out of a plan could come back into it during the next open enrollment period but would have to wait for some specified period — perhaps six months — before they would be covered for a pre-existing medical condition. That would keep people from dropping coverage and then re-enrolling quickly if they got sick so they could be covered for that illness.”

Reichard and Adams quote Ron Pollack, the Executive Director of Families USA, who noted that instead of or in addition to pre-existing condition waiting periods, those who wait to purchase health insurance could be charged a higher rate, as is the case with Medicare Part B.

The individual mandate is not the only arrow in the Affordable Care Act’s quiver, however, and it remains to be seen whether these additional measures are necessary.  The Act’s premium subsidies, for example, will provide a strong incentive to individuals to participate in the health insurance market.  The “3 Rs” — the reinsurance, risk corridor, and risk adjustment programs — are also important, as they are designed to, as Timothy Jost explains here, ease the transition to the exchanges and to a market without medical underwriting and with premium tax credits.  The final “R,” risk adjustment, will provide a mechanism to reduce problematic concentration of risk in the exchanges on an ongoing basis.

“The reinsurance program will [ease the transition] by collecting assessments from insured and self-insured group health plans and paying out funds to individual plans that cover high-risk individuals. The risk corridor program will collect funds from issuers of qualified health plans (primarily but not exclusively plans in the exchanges) that have lower-than-expected claims costs and pay out those funds to issuers of qualified health plans with higher-than-expected costs. It will thus stabilize the experience of these plans over the first three years when insurers will have a difficult time predicting exactly how to set their premiums.

Finally, the third ‘R’ program, risk adjustment, will on a permanent basis move funds from issuers in the nongroup and small group market (other than grandfathered plans) with lower-than-average-risk populations to those with higher-risk populations; this will discourage risk selection and compensate insurers that cover sicker enrollees.”

If the 3 Rs, and, in particular, the risk adjustment program, work as intended, a weak individual mandate may be strong enough.

Facial vs. Applied in the Supreme Court Health Care Reform Cases

In addressing the constitutionality of statutes, courts create and develop constitutional doctrine.  Sometimes that doctrine works in a way that tests the constitutionality of a statutory provision in all of its applications, deciding either that it is unconstitutional “on its face,” so that it cannot be applied in any circumstances, or that it is constitutional in all of its applications.  But frequently that doctrine instead tests the constitutionality of a statutory provision “as applied,” sorting between constitutional and unconstitutional applications of the statute, thereby allowing the statute to be applied to the extent it is constitutional, but only to that extent.  The first approach calls for an all-or-nothing up-or-down decision; the second allows a statutory provision to be used in some, but not all, situations.  The first approach raises the stakes; the second approach lowers them.  The second approach also takes advantage of what courts are especially well-designed to do (and that legislatures are especially ill-equipped to do): focus on the particular – the particular applications of particular statutory provision in particular cases.

One of the issues lurking in the health care cases to be decided next week that has not received much press attention is which of these two ways the Court will address the constitutionality of the individual mandate.  Everyone — including the parties — seems to seek and expect  an up-or-down determination regarding the constitutional validity of the individual mandate.   There are many reasons to think that the Supreme Court will oblige.  Existing Commerce Clause doctrine dating back to at least Wickard (the wheat case) is shaped in a way that discourages as-applied challenges; prior successful challenges under the Commerce Clause such (Lopez, the Gun-Free School Zones case, and Morrison, the Violence Against Women case) have been facial challenges; and the as-applied challenge in Raich (the medical marijuana case) was soundly rejected.

In light of all this, odds are that the Supreme Court will either find the individual mandate constitutional on its face, following cases like Wickard and Raich, and foreclosing the possibility of as-applied challenges, or unconstitutional on its face, following cases like Lopez and Morrison, and foreclosing the possibility that it could be constitutionally applied in some instances.

But not necessarily. Judge Sutton, a Circuit Judge who was appointed by President Bush and had clerked for Justice Scalia, concluded that the right approach was to sort between the constitutional and unconstitutional applications of the individual mandate, not to declare that it is unconstitutional on its face and cannot be applied in any circumstance, and not to declare that it could be constitutionally applied in all circumstances.  Because the Court is being asked to articulate a principle for the first time, it is freer to capitalize on its comparative competence, follow the path illuminated by Judge Sutton, and render a decision that lowers the stakes rather than raises them.

[Ed. Note: Professor Hartnett's paper on the subject, Facial and As-Applied Challenges to the Individual Mandate of the Patient Protection and the Affordable Care Act, originally published in the University of Richmond Law Review, can be found here, the abstract can be found here.]

Illegal Immigrants, Mental Illness and Due Process

Starting in 2010, states began addressing illegal immigration by rewriting their laws on the books.  Over the past two years, two states – Alabama and Arizona – have passed strict anti-immigration laws, and both states have had their laws challenged in court with split results.  Just last week, the Kansas legislature’s committee on House Federal and State Affairs reviewed new bills which would require police officers to verify citizenship and would criminalize the harboring of illegal immigrants.  Mississippi, which estimates it has 90,000 illegal immigrants living within its borders, has also discussed passing an anti-immigration bill which would force police officers to detain those who fail to produce identification.

With more illegal immigrants becoming ensnared in the growing detainment and deportation framework nationwide, the question of how they should be treated, once detained, is unavoidable.  How their mental health conditions affect their due process rights is one of the issues near the top of this list.

Four decades ago, the United States Supreme Court held that an incompetent criminal defendant could not be held by the state indefinitely while the state waited for him to become competent to stand trial.  Instead, the court held, the detention must only be held for a “reasonable period of time necessary to determine whether there is a substantial probability that he will attain that capacity in the foreseeable future.”  Jackson v. Indiana, 406 U.S. 715, 738 (1972).  The court added that if the individual’s competence is unlikely to be restored, then the state must civilly commit the individual or release the defendant.  Id.

However, today, contrary to the spirit of Jackson, those subject to removal proceedings who are declared incompetent to proceed are left in a lurch.  Many represent themselves during the proceedings – according to the Department of Justice, about 60 percent.  Further, the hearings are often complicated by language barriers.  Without counsel and unable to understand the proceedings, the result:  indefinite detention, or (arguably) worse, immediate deportation.

The lack of guidance – and dearth of procedural protections in this area – has even left judges seemingly frustrated.  Immigration judge Renee L. Renner, in dismissing a removal proceeding against Ever Martinez Rivas, wrote that “[t]he Attorney General has provided little guidance regarding steps to take to protect the rights and privileges of the alien.”  Likewise, in her decision, U.S. District Court Judge Dolly Gee noted “the absence of any systemic guidelines setting forth what is a ‘reasonable accommodation’ for unrepresented mentally incompetent aliens.”  See Franco-Gonzales v. Holder, — F.Supp.2d —-, 2011 WL 5966667, at *12 (C.D. Cal. May 4, 2011).

But help could be on the way.  Recently, purported class action lawsuits were filed by the ACLU, Public Counsel Law Center, and others, seeking representation for severely mentally disordered detainees.  Although many of the court documents remain sealed, in a May decision, Judge Gee went on to order that mentally incompetent detainees must receive a custody hearing – in which the court would review the appropriateness of the detainee’s current custody – and must be given the services of a qualified representative (an attorney, law student or law graduate, or “accredited representative”).  Id. at *11.  Subsequently, in late November 2011, Judge Gee granted class certification to the detainees in the lawsuit (individuals with severe mental disorders currently detained in California, Washington, and Arizona).  Franco-Gonzales v. Holder, No. CV 10-02211 (Order Re:  Plaintiffs’ Motion for Class Certification) (Dkt. 348) (Nov. 21, 2011).  Last week, the proceedings were stayed so that the parties could pursue a potential settlement.  Id. (Order Staying Proceedings) (Dkt. 372) (Feb. 13, 2012).

The lawsuit seems to be a vital first step in building a more equitable system for incompetent detainees.  And while litigation continues, the cases serve as a reminder to Americans to seek not only clear, enforceable guidelines governing removal and/or paths to citizenship, but also fair and clear procedures that govern deportation hearings themselves – especially for those who often are faced not only with language and cultural differences, but also the formidable challenge of severe mental disorder.

Clarifying the AIA question

I have had a great deal of off-line correspondence with several readers about the applicability of the Anti Injunction Act to all of the lawsuits challenging the minimum essential coverage provision. Thanks to everyone who has written; it has been extremely helpful.

I remain convinced, at least at this point, that the AIA poses a very serious threat to the Supreme Court’s hearing of any challenge to the individual mandate. That said, I think I have a clearer idea of the issues that will determine the resolution of that issue.

* First, and perhaps most important, there is a very real dispute as to whether one should see the mandate (codified at 26 USC 5000A(a)) as a stand-alone legal obligation, or instead merely as part of a provision that, taken as a whole, gives those persons covered by the provision a choice between acquiring health coverage and paying a penalty.

* Second, this matters greatly, for if 5000A(a) is truly a stand-alone legal obligation, it obviously is not a “tax” within the meaning of the Anti-Injunction Act (or the General Welfare Clause). It is simply a  command, an “economic mandate” in the words of Randy Barnett.

* Conversely, if the best way to see 5000A is in its entirety, giving “applicable individual[s]” a choice between either (a) buying insurance, or (b) remitting the applicable exaction on their tax return, then the provision might well be a “tax” within the meaning of the AIA, consistent with the reasoning of Judge Motz’s opinion in Liberty University.

There is much more to this issue. I think this question functions as a basic threshold, over which all other analysis of the AIA question must cross.

[Ed. Note: This post originally appeared on the aca litigation blog, an invaluable resource in following the various lawsuits pending against the Patient Protection and Affordable Care Act (PPACA or ACA). Bradley W. Joondeph, Professor of Law at Santa Clara Law School, publishes the aca litigation blog.]

The Anti-Injunction Act Complications

[Ed. Note: We are pleased to welcome the work of Bradley W. Joondeph to HRW. He is a Professor of Law at Santa Clara Law School who publishes the aca litigation blog, an invaluable resource in following the various lawsuits pending against the Patient Protection and Affordable Care Act (PPACA or ACA). He specializes in Tax and Constitutional Law and is a well regarded author on the topics of federalism, judicial behavior, and American constitutional development. He has had extensive experience with the Supreme Court, having served as judicial clerk to the Honorable Sandra Day O’Connor. He also served as clerk for the Honorable Deanell Reece Tacha of the United States Court of Appeals for the Tenth Circuit.]

The big news from [last Friday's] two decisions was not that Virginia lacks standing; that was a problem lurking in that case from the beginning, a nettlesome issue going all the way back to Judge Hudson’s first opinion (in August 2010) rejecting the United States’s motion to dismiss on 12(b)(1) grounds. Virginia would have stood on much stronger ground had it also alleged an injury in fact from the effect of the minimum essential coverage provision’s necessarily pushing more Virginia residents onto the state’s Medicaid rolls, and thus imposing a significant financial cost on the state. But the Commonwealth failed to do this, instead resting on the claim that it had standing based on the alleged “conflict” between its Virginia Health Care Freedom Act and the individual mandate. This was a weak argument from the beginning, and the Fourth Circuit’s holding was entirely unsurprising.

What is surprising–perhaps not on the merits, but in relation to the attention the issue has received to date, from the courts and the parties–is the court’s holding in Liberty University v. Geithner that federal courts lack any subject matter jurisdiction over a suit seeking to enjoin enforcement of the individual mandate because such jurisdiction is precluded by the Anti-Injunction Act. In this respect, there are some important points worth noting:

* This is a potential problem in every lawsuit currently challenging the individual mandate. That is, if the Fourth Circuit’s analysis is correct, then the Supreme Court would lack jurisdiction to hear any private plaintiff’s claim that the minimum coverage provision exceeds Congress’s enumerated powers until after a taxpayer was assessed a penalty under ACA 1501, paid the penalty, and sued the federal government for a refund. The case thus would not reach the Supreme Court until somewhere in the neighborhood of 2015 or 2016.

* It is conceivable, though, that the AIA does bar suits brought by state governments. Of course, state governments have problems establishing standing under Article III, as discussed above. But if the states could overcome the Article III hurdle, it might be that they (unlike private plaintiffs) could avoid the AIA bar. (I remember Judge Hudson analyzing this issue in his August 2010 ruling denying the United States’s motion to dismiss. Obviously, I need to look at it more carefully now.)

* One solution is that which Kevin Walsh has just proposed, which you can read here. In essence, Congress could pass a law repealing the AIA (since it is a statutory bar to jurisdiction) as applied to the ACA lawsuits. As Kevin documents, such a “retroactive” restoration of jurisdiction appears to be viable, even if there actually was not jurisdiction when the case was initially filed in the district court. (I agree with Kevin that Democrats and the President likely have an incentive to appear publicly to support this. But I am not sure there is quite the bipartisan consensus in fact to which Kevin refers. I can think of several reasons that most Democrats would much rather this case be decided by the Supreme Court in 2013 rather than June 2012.)

* What does the Justice Department do now? It has already essentially flip-flopped on this question–initially arguing that the AIA precluded subject matter jurisdiction, but then changing its tune, most notably in the letter brief it filed with the Fourth Circuit after oral argument. Does it now wish to flip back, given that the argument now seems to have gained greater credibility? Or is there too high a political cost for the administration in appearing to run from a fight on the merits? Or is there just too much to gain politically from delaying Supreme Court review (something the Court might well welcome) and pushing the decision past the 2012 election, such that it is worth taking whatever the hit will be from appearing so irresolute? I’m sure the DOJ lawyers working on this case were happy to have prevailed yesterday. But they simultaneously had a new strategic headache thrown into their laps.

There is much more to say, but I need to look into the various legal questions with more care. For now, it suffices to say that the Fourth Circuit’s decision may well have complicated matters considerably, at least if Judge Motz’s analysis proves difficult for the Supreme Court to refute.

UPDATE: One other point worth emphasizing: Probably the most important analytic move in Judge Motz’s opinion was to hold that the meaning of “tax” for purposes of the Anti-Injunction Act and the meaning of “tax” for purposes of the General Welfare Clause (relevant to whether the individual mandate is a valid exercise of Congress’s taxing power) are distinct. More specifically, the category of “taxes” (or exactions) to which the AIA applies is potentially much broader than that under the General Welfare Clause. Most (and perhaps all–I would need to go back and check carefully) of the other judges to have analyzed the AIA issue thus far have treated the issues as one and the same. (Recall Judge Vinson’s opinion in October 2010, where he held that the individual mandate imposed a “penalty” rather than a “tax,” and thus concluded from this both that the AIA was inapplicable and that the individual mandate could not be justified by the taxing power.) My suspicion is that Judge Motz’s analysis on this point will be much harder to refute than the government’s claim that the mandate is a valid exercise of the taxing power.

This post first appeared on the aca litigation blog.

Yes, the Federal Exchange Can Offer Premium Tax Credits

Whatever else the Affordable Care Act may accomplish, it has provided endless entertainment for law professors. The latest ACA kerfuffle involves the discovery by critics of the ACA of an ACA drafting error that would seem to deprive millions of uninsured Americans of tax credits to purchase health insurance and invalidate regulations recently proposed by HHS and the Treasury Department. The mistake is found in section 1401 of the ACA, which creates a new section 36B of the IRC. Two subsections of 36B ((b)(2)(A) and (c)(2)(A)(i)) suggest that premium tax credit eligibility under the ACA depends on the applicant being enrolled in a qualified health plan “through an Exchange established by the State under section 1311.” This would in turn suggest that individuals enrolled in a qualified health plan through a federal exchange established under section 1321(c) would not be eligible for premium tax credits, contrary to the recent proposed regulations.

That this is a drafting error is obvious to anyone who understands the ACA. Section 1311 of the ACA requests the states to establish American Health Benefit Exchanges and sets out the duties of the exchanges. Section 1321 of the ACA, however, provides that if a state elects not to establish and exchange or fails to do so, HHS must “establish and operate” an exchange in such a state and “take such actions as are necessary to implement” the other requirements of title I of the ACA, which includes section 1401. There is no coherent policy reason why Congress would have refused premium tax credits to the citizens of states that ended up with a federal exchange. None of the CBO reports scoring the ACA suggest that premium tax credits would only be available though 1311 state exchanges and not through 1321 federal exchanges. It is, finally, highly unlikely that the House, whose bill included only a federal exchange, would have approved a bill that only provided tax credits through state exchanges but not through the federal exchange.

No one pretends that the ACA is a model of statutory drafting. The bill, for example, contains three section 1563’s. No one intended the current ACA to become the final law. It was the Senate bill, enacted after the House bill, which was to go through conference before the final ACA was enacted. The election of Scott Brown in Massachusetts, and the adamant refusal of the Republicans to allow the legislation to become law without a supermajority in the Senate, doomed efforts to craft a final bill. Of course, major pieces of legislation are often replete with drafting errors. They are commonly followed by technical correction bills, which are often adopted by unanimous consent. If Congress were functioning as a normal deliberative governing body rather than as the legislative equivalent of trench warfare, errors in the ACA would long ago have been fixed.

But now we seem to be stuck with the textualists delight: a statute whose words clearly say what Congress clearly did not mean.

Is there a way out of this quandary? One possibility is to simply recognize that this is a drafting error. The Supreme Court has occasionally recognized that it is appropriate to exercise common sense in recognizing that “a busy Congress is fully capable of enacting a scrivener’s error into law.” Koons Buick, Pontiac, GMC, Inc. v. Nigh, 543 U.S. 50, 65 (2004) (Stevens concurring). But we do not need to rely on the courts to correct this error. Congress corrected it itself.

Four days after Congress passed the Patient Protection and Affordable Care Act, it enacted the Health Care and Education Reconciliation Act of 2010. Section 1004 of HCERA amended section 36B(f) of the IRC to impose on exchanges established under section 1311(f)(3)—that is, state exchanges—and under section 1321(c)—that is federal exchanges, the obligation to report to the IRS and to the taxpayer information regarding tax credits provided to individuals through the exchange. In this later-adopted legislation amending the earlier-adopted ACA, Congress demonstrated its understanding that federal exchanges would administer premium tax credits.

Section 36B(g) gives the Secretary of the Treasury the responsibility of issuing regulations to implement section 36B. This includes the authority to reconcile ambiguities in the statute, such as the inconsistency between subsections (b), (c), and (f) of 36B. In proposed regulations published on August 17, Treasury has proposed to recognize as eligible for premium tax credits any individual who is enrolled in a qualified health plan through an exchange and who meets other eligibility requirements, and adopts the HHS proposed definition of an exchange, which includes a federally-assisted exchange.

Under the Chevron rule, this official construction of an ambiguous statute should be accorded deference by any reviewing court. In fact, however, there will be no judicial review of this determination. It is not possible to conceive of a person who would be injured in fact by this interpretation of the rule such that they could present a case or controversy under Article III. The possibility, expressed by some, that a state official might be able to challenge the IRS rule should be put to rest by Thursday’s Fourth Circuit ruling, reaffirming long established Supreme Court precedent holding that state officials do not have the authority to serve as “roving constitutional watchdog[s].”

Why the 11th Circuit’s Opinion on Health Care Reform Self-Destructs

Like a tragic literary figure, the 11^th Circuit’s opinion declaring the individual mandate unconstitutional is doomed to failure by its own internal contradictions.  What follows is a series of quotes directly from the opinion, paired to show how desperately the majority twisted logic in order to find its path to a unsupportable conclusion:

1.  On the key necessary and proper argument, the court obfuscated as follows:

The government’s argument derives from a Commerce Clause doctrine of recent [1995] vintage: . . . the “essential part of a larger regulation of economic activity” language in Lopez. . . . Raich [is the] the only instance in which a statute has been sustained by the larger regulatory scheme doctrine.

HOWEVER, the court was well aware that

The Supreme Court’s most definitive statement of the Necessary and Proper Clause’s function remains Chief Justice Marshall’s articulation in McCulloch v.Maryland: 17 U.S. (4 Wheat.) 316, 421 (1819).

2.  Wearing this historical and precedential blinder, the court framed the relevant test as whether the mandate is “essential” to the ACA’s overall regulatory scheme:

[W]e conclude that the Supreme Court’s “larger regulatory scheme” doctrine embodies an observation put forth in the New Deal case of Jones & Laughlin Steel Corp.: “Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control.” . . . [The failure to purchase insurance] in no way “burdens” or “obstructs” Congress’s ability to enforce its regulation of the insurance industry. . . . The government’s assertion that the individual mandate is “essential” to Congress’s broader economic regulation is further undermined by components of the Act itself.

BUT, of course, “essential,” “burden,” and “obstruct” are not the operative tests.  Instead, the court itself explained earlier in its decision that a much more lenient rational basis test applies:

“the Necessary and Proper Clause makes clear that the Constitution’s grants of specific federal legislative authority are accompanied by broad power to enact laws that are ‘convenient, or useful’ or ‘conducive’ to the authority’s ‘beneficial exercise.’” . . . On the breadth of the Necessary and Proper Clause, the Comstock Court noted that The Supreme Court must determine whether a federal statute “constitutes a means that is rationally related to the implementation of a constitutionally enumerated power.” “[T]he relevant inquiry is simply ‘whether the means chosen are reasonably adapted to the attainment of a legitimate end under the commerce power’ or under other powers that the Constitution grants Congress the authority to implement.”

The court never invokes or applies this test, even though (and perhaps because) it is one that the government easily meets.

3.   On whether the mandate relates to commerce:

[W]e are not persuaded that the formalistic dichotomy of activity and inactivity provides a workable or persuasive enough answer in this case. Although the Supreme Court’s Commerce Clause cases frequently speak in activity-laden terms, the Court has never expressly held that activity is a precondition for Congress’s ability to regulate commerce–perhaps, in part, because it has never been faced with the type of regulation at issue here. . . . As an inferior court, we may not craft new dichotomies … not  recognized by Supreme Court doctrine. . . .

BUT, of course the decision was all about a new categorical limit:

[T]he Act is forcing market entry by those outside the market . . . Until Congress passed the Act, the power to regulate commerce had not included the authority to issue an economic mandate. Now Congress seeks not only the power to reach a new class of “activity”–financial decisions whose effects are felt some time in the future–but it wishes to do so through a heretofore untested power: an economic mandate. . . . [T]his distinction . . . in truth [] strikes at the heart of whether Congress has acted within its enumerated power. 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. . . . Never before has Congress sought to regulate commerce by compelling non-market participants to enter into commerce so that Congress may regulate them. . . . The individual mandate does not wait for market entry.

4.  On the slippery slope concern:

To connect this conduct to interstate commerce would . . .  allow Congress to regulate anything. . . . To give but one example, Congress could undoubtedly require every American to purchase liability insurance, lest the consequences of their negligence or inattention lead to unfunded costs (medical and otherwise) passed on to others in the future . . .

BUT, why is this any real concern, considering:

The fact that Congress has never before exercised this supposed authority is telling . . . Few powers, if any, could be more attractive to Congress than compelling the purchase of certain products. Yet even if we focus on the modern era, when congressional power under the Commerce Clause has been at its height, Congress still has not asserted this authority.  Even in the face of a Great Depression, a World War, a Cold War, recessions, oil shocks, inflation, and unemployment, Congress never sought to require the purchase of wheat or war bonds, force a higher savings rate or greater consumption of American goods, or require every American to purchase a more fuel efficient vehicle . . . .

5.  On the mandate’s fit with legislative purposes, the court complained that:

the individual mandate’s attempt to reduce the number of the uninsured and correct the cost-shifting problem is woefully overinclusive.

BUT, the court also criticized the mandate for being underinclusive:

Even if the individual mandate remained intact, the “adverse selection” problem identified by Congress would persist not only with respect to [the] eight broad exemptions, but also with respect to those healthy persons who choose to pay the mandate penalty. . . . Additionally, Congress has hamstrung its own efforts to ensure compliance with the mandate by opting for toothless enforcement mechanisms.

6.  The court thought the mandate is not necessary to regulate insurers because:

[T]he conduct regulated by the individual mandate–an individual’s decision not to purchase health insurance and the concomitant absence of a commercial transaction–in no way “burdens” or “obstructs” Congress’s ability to enforce its regulation of the insurance industry.

BUT, the court conceded there is universal agreement that the mandate is needed to combat adverse selection:

Distinguished economists have filed helpful briefs on both sides of the case. While they disagree on some things, they agree about the theory of adverse selection. They agree some relatively healthy people refrain from, or opt out of, buying health insurance more often than people who are unhealthy or sick seek insurance. This results in a smaller and less healthy pool of insured persons for private insurance companies.

AND, in an analogous regulatory arena (flood insurance), the court went to some length to explain that:

Without an “individual mandate,” the flood insurance program has largely been a failure. . . . One key reason for this low participation is not surprising. . . . People living in a flood plain know that even if they do not have insurance, they can count on the virtually guaranteed availability of federal funds.

7.  Finally, on the government’s burden of persuasion, the court reflexively said:

We, as all federal courts, must begin with a presumption of constitutionality . . . We are loath to invalidate an act of Congress, and do so only after extensive circumspection.

BUT of course how it really thought and reasoned was:

[T[he government has been unable, either in its briefs or at oral argument, to point this Court to Supreme Court precedent that addresses the[] constitutionality [or economic mandates]. . . . The government’s position . . .  affords no limiting principles in which to confine Congress’s enumerated power. . . . [T]he government’s insistence that we defer to Congress’s fact findings underscores the lack of any judicially enforceable stopping point . . . . At best, we can say that the uninsured may, at some point in the unforeseeable future, create [a] cost-shifting consequence. Yet this readily leads to a scenario where we must “pile inference upon inference” to sustain Congress’s legislation . . . . The government’s factbased criteria would lead to expansive involvement by the courts in congressional legislation, requiring us to sit in judgment over when the situation is serious enough to justify an economic mandate.

Cross-posted, originally appearing on Balkinization.

Mark A. Hall, J.D., is the Fred D. & Elizabeth L. Turnage Professor of Law at Wake Forest University School of Law and a regular contributor to Seton Hall Law School’s Health Reform Watch.  He is one of the nation’s leading scholars in the areas of health care law and policy and medical and bioethics and also teaches in the MBA program at the Babcock School and is on the research faculty at Wake Forest’s Medical School. He regularly consults with government officials, foundations and think tanks about health care public policy issues, and was recently awarded the American Society of Law, Medicine and Ethics distinguished teaching award. He is the author or editor of fifteen books, including Making Medical Spending Decisions (Oxford University Press), and Health Care Law and Ethics (Aspen). He has published scholarship in the law reviews at Berkeley, Chicago, Duke, Michigan, Pennsylvania, and Stanford, and his articles have been reprinted in a dozen casebooks and anthologies.

The Changing Landscape of Health Information Regulation

There is an impressive new issue of the American Journal of Law & Medicine out, with top names in the field participating in a symposium entitled “Marketing Health: The Growing Role of Commercial Speech Doctrine in FDA Regulation.”  I also wanted to recommend a piece from Simon Stern and Trudo Lemmens on pharma ghostwriting, which is getting a lot of play in Canada.  Titled “Legal Remedies for Medical Ghostwriting: Imposing Fraud Liability on Guest Authors of Ghostwritten Articles,” the piece could lead to some interesting litigation opportunities.  Here is the abstract:

Ghostwriting and guest authorship of medical journal articles raise serious ethical and legal concerns, bearing on the integrity of medical research and evidence used in legal disputes. Ghostwriting involves undisclosed authorship, usually by medical communications agencies or a pharmaceutical sponsor of the published research; guest authorship involves taking authorial credit for the published work without making a substantial contribution to it. Commentators have objected to these practices because of concerns involving bias in ghostwritten clinical trial reports and review articles. We also note the effects of ghostwritten articles on questions involving the legal admissibility of scientific evidence. Efforts to curb ghostwriting practices, undertaken by medical journals, academic institutions, and professional disciplinary bodies, have thus far had little success and show little promise.These organizations have had difficulty adopting and enforcing effective sanctions, for specific reasons relating to the interests and competencies of each kind of organization.

Because of those shortcomings, a useful deterrent in curbing the practice may be achieved through the imposition of legal liability on the ‘guest authors’ who lend their names to ghostwritten articles. We explore the doctrinal grounds on which such articles might be characterized as fraudulent. A guest author’s claim for credit of an article written by someone else constitutes legal fraud, and may give rise to claims that could be pursued in a class action based on the Racketeer Influenced and Corrupt Organizations Act (RICO). The same fraud could support claims of “fraud on the court” against a pharmaceutical company that has used ghostwritten articles in litigation. This doctrine has been used by the U.S. Supreme Court to impose sanctions on the authors and corporate sponsors of a ghostwritten article. We discuss the potential penalties associated with each of these varieties of fraud.

This promises to inspire some difficult legal challenges to industry practices that have long been considered undesirable as a policy matter.

The Ban on Off-Label Promotion after Sorrell v. IMS Health

In the wake of Sorrell v. IMS Health, in which the Supreme Court invalidated on First Amendment grounds a Vermont law barring drug companies from using physician-specific prescribing data to craft physician-specific sales pitches, lawyers on both sides of the case have weighed in on the opinion’s implications for the Food & Drug Administration’s ban on off-label promotion.  In doing so, they build upon an exchange between the dissent and the majority in Sorrell.  Writing in dissent, Justice Breyer argued that the fact that the Vermont ban is “speaker-based” (i.e., that it only applies to drug companies) should not mean that it is subject to heightened scrutiny, because in the regulatory context it is not unusual for rules to apply only to regulated entities.  By way of example, Justice Breyer cites the ban on off-label promotion, which limits what manufacturers but not others can say to doctors about unapproved uses.  In response, the majority suggests that the government “might defend” the ban on the ground that it “will prevent false or misleading speech.”  The majority then reiterates that Vermont’s interest in banning data mining “instead turns on nothing more than a difference of opinion” between the state and the companies about the truthful marketing messages to which doctors should be exposed.

In an article for BNA’s Pharmaceutical Law & Industry Report, Lisa Blatt and colleagues (who represented PhRMA, one of the respondents in the case) contend that: “Sorrell builds on prior Supreme Court precedent in establishing a strong foundation to argue that a pharmaceutical company’s truthful, non-misleading information about its products cannot be subjected to content-based and speaker-based restrictions.”  And they predict (correctly) that “[t]he implications of Sorrell for the FDA’s off-label promotion regulatory regime may be tested in litigation, as well as in new regulations, in the months ahead.”  On July 14, 2011, as reported here, the Second Circuit ordered supplemental briefing on the implications of Sorrell for its pending decision in United States v. Caronia, a criminal case in which a sales representative was convicted of conspiring to misbrand the sleep aid Xyrem by promoting it for a number of off-label uses.  On the regulatory front, on July 5, 2011, seven leading pharmaceutical companies filed a citizen petition asking “the Commissioner of Food and Drugs to clarify FDA regulations and policies with respect to manufacturer dissemination of information relating to new uses of marketed drugs and medical devices.”

In a very provocative blog post at The Incidental Economist, Kevin Outterson (who wrote an amicus brief on the side of the petitioner in Sorrell on behalf of, among others, the New England Journal of Medicine) appears to concur with Blatt that “[i]n the wake of Sorrell … we can expect the FDA to relax rules against off-label promotion.”  Professor Outterson characterizes the Supreme Court’s decision as a radical adjustment of the regulatory balance between the FDA and the companies it regulates.  Under our current system, data on the safety and efficacy of drugs is largely generated privately, as a condition of marketing approval.  The ban on off-label promotion is a key component of the system, because it provides manufacturers with a powerful push to continue to study their products after they are initially approved for sale.  Without it (or, even more radically, without any requirement that a manufacturer establish that a drug is efficacious before marketing it), we’ll either need to find other ways to incentivize private sector research or spend more public money on the study of drugs, both easier said than done.  Professor Outterson suggests a third way, that: “the US could simply free ride off the studies produced to satisfy Europe’s Phase III approval process.”  As he points out, however, “[t]hat would work only so long as the EU didn’t make the same changes.”

Perhaps naively, I am hopeful that the ban on off-label promotion will survive the coming wave of legal challenges largely intact.  In addition to its role in incentivizing research (a neutral function which distinguishes it from the data mining law at issue in Sorrell), I think that the ban serves as an important prophylactic against false and misleading product promotion.  (I elaborate on this argument here.)  This preventive role further distinguishes the ban on off-label promotion from the law invalidated in Sorrell.

Contractual Liability and Clinical Trial Reimbursement in Italy

Contractual Liability and Clinical Trial Reimbursement in Italy

By: Christopher J. Asakiewicz, Esq. and Anna Pinkhas, Esq. [1]

In the Italian Ministerial Decree of July 14, 2009 (the “Decree”) the Ministry of Labour, Health and Social Policy sets forth a number of statutory requirements relating to insurance in human clinical trials conducted in Italy. In order to safeguard the clinical participants the Decree expanded on and formulized into law a requirement previously established by the European Union, which provides that a clinical trial can be initiated in the Member States only when provisions have been made for insurance or indemnity to cover the liability of the investigator and sponsor towards clinical trials subjects. [2] However prudent and protective of clinical participants the Decree is, its implementation into Italian law has led to significant delays in the negotiation of the indemnification clauses in clinical trial agreements because of improper interpretation, an interpretation that delays the introduction of possible life saving medicines into the country and the European marketplace.

Indemnification is a critical part of the clinical trial agreements between clinical trial sponsors, investigational sites and, sometimes, the principal investigator. Generally, indemnification language in any agreement seeks to impute liability to a contractual party for acts or omissions and to defend, hold harmless and compensate the other party for any loss that such party may suffer during the performance of the contract that results from said acts or omissions. Indemnification provisions in a clinical trial agreement differ among varying sponsors and investigational sites. Generally, the provisions are mutual. A mutual indemnification provision will have the sponsor indemnify for personal injury or illness to study patients that relates to the study or the study drug, and likewise, the other party will indemnify the sponsor for any negligence or willful misconduct for which it is responsible.

Drafting and negotiating an indemnification clause can be both difficult and tedious, as the clause’s meaning is particularly important during litigation. Frequent confusion, however, between indemnification and study subject reimbursement further complicates and delays negotiations. A clinical trial agreement generally also includes a provision where the sponsor agrees to reimburse the institution for any reasonable and necessary medical expenses incurred by the investigational site for the treatment of patients’ illness or injuries related to the study or the study drug.  The purpose of such subject injury language is to address reimbursement of expenses incurred to treat an adverse event. [3] This reimbursement language is meant to swiftly compensate such injuries without regard for party fault so the patient can receive care immediately or continue to receive the highest standard of care.

Indemnification, on the other hand, is to assume responsibility and the costs incurred in litigation or from claims that resulted from the fault attributable to the wrongdoing of the indemnifying party. Although these two scenarios are clearly distinguishable, confusion arises over the Italian regulation because of misunderstanding about the nuances of indemnification as compared to subject injury reimbursement. The Decree states that the promoter, or the sponsor, of the clinical trial shall provide insurance to cover “any civil liability of investigator and promotor of the clinical trial, without excluding any damage which may be unintentionally caused by accident e/o be attributed to negligence, imprudence or inexperience.” [4] In other words, the clinical trial sponsor is required by the Decree to be insured to sufficient limits for not only willful or reckless conduct, but also for negligent unintentional acts or omissions. [5] Many Italian sites interpret this language to mean they are not responsible for their own negligence and therefore remove their indemnification obligation of the sponsor, the promotor, from the clinical trial agreements. However, the Decree only governs reimbursement to study subjects by the insured in the event of injuries, and does not limit contribution as well as the investigational site’s indemnity of the sponsor for those third party claims which fault is attributable to either it or its actors.

Article 1 states: “The insurance policy is to grant specific cover in connection with the reimbursement of damages caused to the subjects by the clinical trial activities throughout the entire duration thereof.”

[6] The Decree’s purpose is therefore not to forgive or excuse liability, but only to safeguard participants by ensuring that a damaged party obtains reimbursement immediately. It is incorrect to interpret the legislation’s purpose as being a limit on the scope of the Institution’s liability with respect to its own actions, as the Decree further states “[t]his restriction shall not in any event impair the right of the damaged party to seek reimbursement of damages from the person liable therefor.” [7] Exclusion language which relates to negligence, imprudence or inexperience of the investigator serves to make the insurance policy a no-fault policy, assuring participants appropriate compensation and reimbursement for their injuries or illness without having to litigate the cause of the injury or prove fault. [8]

The patient’s clinical trial injury and treatment expenses will be immediately reimbursed by the policy. But, as the Decree does not limit the remedies at law, and corresponding insurance policy’s only purpose is to compensate the participant immediately, the site can still be held liable by a court for its actions. In the situation, when the sponsor was required to compensate, but is not the determined cause, the sponsor is entitled seek contribution or indemnity for such actions’ expenses from those actors responsible. The Italian Civil Code also supports the notion that the site can still be held liable, as Article 2053 provides that any willful or negligent conduct, causing an unjust harm to third parties, obliges the tortfeasor to compensate the damages. [9]

To resolve this confusion between indemnification and clinical trial injury reimbursement, the authors recommend that a sponsor with sites operating in Italy, (i) obtain an insurance policy covering all treatment expenses incurred by patients and associated with injuries related to the study drug or protocol procedures, and (ii) ensure that any indemnification provision in the clinical trial site’s contract does not exclude the institution or the investigators from liability. The Italian Civil Code and Decree are both in agreement that those persons liable for causing harm to a third party are obligated to compensate for those damages. The sponsor through clinical trial insurance can therefore immediately reimburse the patient’s costs, then, in accordance with the mutual indemnification, the sponsor or the insurer may seek to subrogate or recoup through contribution such expenses which are attributable to the investigational site or investigator and outside the sponsor’s control. [10]

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[1] DISCLAIMER: Both authors are admitted to practice law in the state of New Jersey and draft and negotiate international clinical agreements as well as counsel on patient disclosures for pharmaceutical companies. The views and opinions expressed are solely those of the authors and shall not be attributed to any other party, company or entity. The expressed opinions are for informational purposes only, and not meant to nor intended to be an advertisement, solicitation, legal advice, authority nor services of any kind to any Client, including any person or entity in any state, country or sovereign nation. Such information is not meant to create an attorney-client relationship. the reader must not act nor rely upon these materials without seeking professional legal counsel.

[2] See Art. 3(2)(f) Directive 2001/20, of the European Parliament and of the Council of  4 April 2001 on the approximation of the laws, regulations and administrative provisions of the Member States relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use, 2001 O.J. (L 121) 34, 37 ( “provision has been made for insurance or indemnity to cover the liability of the investigator and sponsor. “); See also Art. 3(1)(f) Decreto Legislativo, 24 June 2003, n. 211, G.U. 09 Aug 2003 (It.) (“provision has been made by the trial sponsor for insurance to cover the third-party liability of the investigator and the sponsors in the event of claims for damages by trial subjects.”).

[3] “adverse event” means any untoward medical occurrence in a patient or clinical trial subject administered a medicinal product and which does not necessarily have a causal relationship with this treatment.

[4] Art. 1(2) Decreto Ministeriale 14 July 2009, n. 213, G.U. 14 September 2009 (It.) (Italian Ministerial Decree, Minimum requirements for insurance policies which safeguard participants to clinical trials of medicinal products.).

[5] See Art. 2(2) D.M. n. 213/2009 (It.) (“Insurance shall provide for an insured limit for the reimbursement of damages not lower than Euro 1 million per participant, although the following minimum limits for each individual protocol are required, not less than: a) Euro 5 million if trial participants are less than or equal to 50; b) Euro 7 million five hundred thousand if the trial participants are more than 50 but less than 200; c) Euro 10 million if the trial participants are more than 200.”).

[6] Art. 1(2) D.M. n. 213/2009 (It.) (emphasis added).

[7] Art. 1(6) D.M. n. 213/2009 (It.) (emphasis added).

[8] “no-fault insurance” is any type of insurance contract under which insured’s are compensated for losses, regardless of fault in the incident generating said losses.

[9] Art. 2043 Codice civile [C.c.] (It.) (Italian Civil Code).

[10] See Blacks Law Dictionary (9^th ed. 2009) (1) (SUBROGATION “1. The substitution of one party for another whose debt the party pays, entitling the paying party to rights, remedies, or securities that would otherwise belong to the debtor.”).

Florida, Full Speed Ahead

The Associated Press reports that the 11^th Circuit Court of Appeals has agreed to expedite hearing on Judge Vinson’s recent ruling in Florida– which found the Health Care Law unconstitutional. Judge Vinson’s Opinion in the case has been described as “A Tea Party Manifesto” on the pages of this blog. The 11^th Circuit set an even faster hearing track than the government requested. According to A.P.,

the federal government must file its first set of court papers on the issues in the case by April 4, and the state of Florida has until May 4 to file its papers. The federal government would file additional papers by May 18.

The appeals court said it had not made a decision on a request that the initial review be held before all 10 federal judges.

Sooner rather than later we’ll come to know the power of the Commerce Clause coupled with “Necessary and Proper.”

For further elucidation on the subject, I highly recommend Professor Mark Hall’s commentary, Commerce Clause Challenges to Health Care Reform.

Judge Vinson’s Tea Party Manifesto

On first read, the most striking aspect of Judge Vinson’s ruling today is not its remedy — striking the Affordable Care Act in its entirety — but the impression one gets that the opinion was written in part as a Tea Party Manifesto.  At least half of the relevant part of the opinion is devoted to discussing what Hamilton, Madison, Jefferson and other Founding Fathers would have thought about the individual mandate, including the following remarkably telling passage (p. 42):

It is difficult to imagine that a nation which began, at least in part, as the result of opposition to a British mandate giving the East India Company a monopoly and imposing a nominal tax on all tea sold in America would have set out to create a government with the power to force people to buy tea in the first place.

As I’ve written elsewhere, the same Founders wrote a Constitution that allowed the federal government to take property from unwilling sellers and passive owners, when needed to construct highways, bridges and canals.  But Judge Vinson dismissed those and other examples with the briefest of parenthetical asides:  “(all of [these] are obviously distinguishable)” (p. 39).    Instead, he twice cites and quotes the lower court opinion in Schechter Poultry (pp. 53, 55), which struck down the National Industrial Recovery Act, at the height of the Great Depression and the pinnacle of Lochner jurisprudence.

Still, it’s fair enough to conclude, absent controlling precedent, that being uninsured might not constitute interstate commerce.   What’s harder to swallow is the judge’s rejection of the Necessary and Proper Clause.  In refusing to sever the individual mandate, he not only concedes the mandate “is indisputably necessary to the Act’s insurance market reforms, which are, in turn, indisputably necessary to . . . what Congress was ultimately seeking to accomplish,” he astonishingly devotes about ten pages (63-74) to hammering home the mandate’s necessity, explaining, for instance, that:

this Act has been analogized to a finely crafted watch . . . . It has approximately 450 separate pieces, but one essential piece (the individual mandate) is defective and must be removed. It cannot function as originally designed. There are simply too many moving parts in the Act and too many provisions dependent (directly and indirectly) on the individual mandate and other health insurance provisions — which, as noted, were the chief engines that drove the entire legislative effort — for me to try and dissect out the proper from the improper

So if the mandate is so clearly necessary, why is it not “proper.”  The answer, as in Virginia’s Judge Hudson’s opinion, is a virtual tautology:  because the Commerce Clause does not permit it.  Here are critical excerpts:

the Clause is not an independent source of federal power (p. 58) . . . Ultimately, the Necessary and Proper Clause vests Congress with the power and authority to exercise means which may not in and of themselves fall within an enumerated power, to accomplish ends that must be within an enumerated power. (p. 60)

In light of [United States v. South-Eastern Underwriters], the “end” of regulating the health care insurance industry (including preventing insurers from excluding or charging higher rates to people with pre-existing conditions) is clearly “legitimate” and “within the scope of the constitution.” But, the means used to serve that end must be “appropriate,” “plainly adapted,” and not “prohibited” or inconsistent “with the letter and spirit of the constitution.” . . . The Necessary and Proper Clause cannot be utilized to “pass laws for the accomplishment of objects” that are not within Congress’ enumerated powers.  (p. 62)

The defendants have asserted again and again that the individual mandate is absolutely “necessary” and “essential” for the Act to operate as it was intended by Congress. I accept that it is.   Nevertheless, the individual mandate falls outside the boundary of Congress’ Commerce Clause authority and cannot be reconciled with a limited government of enumerated powers. By definition, it cannot be “proper.”  (p. 63)

My full rebuttal is here, but in brief: none of this is consistent with Comstock, which allows the federal government to commit mentally ill former prisoners to civil treatment, despite the clear absence of any general federal civil commitment power.  And this is inconsistent with Lopez and with Justice Scalia’s concurrence in Raich, which note that regulation, otherwise forbidden, of local noneconomic activities, can be justified when this is “an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were regulated.”  Thus, we still await a convincing explanation of why rejecting the “necessary and proper” defense is consistent with recent Supreme Court opinions, authored or joined by most of the conservative justices.

Commerce Clause Challenges to Health Care Reform

The following article, forthcoming in U. Penn. L. Rev., pinpoints the strongest arguments for and against federal power under the Commerce Clause to mandate the purchase of health insurance:   http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1747189

Among the key points I make in defense of this federal law are:

1.            The “commerce” in question is simply health insurance, and not the non-purchase of insurance as challengers have framed it.  Because “regulate” clearly allows both prohibitions and mandates of behavior, mandating purchase is lexically just as valid an application of the clause as is prohibiting purchase or mandating the sale of insurance.

2.            Although existing precedent might allow a line to be drawn between economic activity and inactivity, there is no reason in principle or theory why such a line should be drawn in order to preserve state sovereignty.  Purchase mandates, after all, are as rare under state law as under federal law.

3.            Challengers do not seriously dispute the constitutional validity of the ACA’s regulation of insurers or the economic necessity of the mandate in order for that regulation to be effective.  In fact, they essentially concede the mandate’s necessity by asking to strike the entire law if it is declared invalid.  Accordingly, the mandate would pass the tests for constitutional necessity articulated by at least seven of the Justices in the Comstock opinion last year, and might even pass the necessity test embraced by Justices Thomas and Scalia.

4.            An important challenge, not yet clearly discussed by court opinions to date, is that the mandate does not, strictly speaking, simply “carry into execution” Congress’ other regulatory powers, but is the exercise of a distinct power.  However, both modern and historical precedents under the Necessary and Proper Clause are not limited narrowly to merely implementation measures.  Both Comstock and a series of decisions under the Postal Power are good examples to the contrary since they authorize independent federal powers that expand the range of purposes and measures permitted by express Congressional powers.

5.            There is no coherent basis for declaring a purchase mandate to be constitutionally “improper,” and a categorical ban on regulating inactivity would contradict the implicit reasoning underlying several other established precedents — such as those upholding the draft and the Congressional subpoena power.   Also, federal eminent domain allows compelled transactions justified in part by the Necessary and Proper clause’s expansion of the commerce power, when applied, for instance, to citizen’s refusal to sell land for use in constructing highways, bridges, and canals.

6.            Using the 10th Amendment to justify a categorical prohibition of purchase mandates (as Randy Barnett has argued) would be no more convincing than using the 9th or 5th Amendments (substantive due process).  Instead, such a move would, for the first time and contrary to precedent, make the 10th a protector of individual liberties rather than just federalism concerns, and would radically enforce an absolute right to economic liberty, regardless of level of legislative justification or judicial scrutiny (see point 9).

7.            Slippery slope concerns are no greater here than for any other of a range of expansive federal powers.  Instead, the novelty of the mandate subjects it to greater political constraint, and so “parade of horribles” concerns may be even more unrealistic than similar settings where the Court has rejected them.

8.            Grounding the mandate in the Necessary and Proper clause helps to confine its precedential effect by emphasizing it’s necessary role in the ACA’s particular regulatory scheme that, in other respects, clearly resides within the core of the conventional commerce power.  This essential supportive and interconnected role is not shared by free-standing mandates to purchase American cars or broccoli, for instance.

9.            Counteracting imaginary slippery slope concerns about absurd hypothetical laws are the legitimate concerns about insurmountable barriers that a prohibition of purchase mandates would erect.  Forbidding Congress from any purchase mandate could cripple necessary efforts, for instance, to require preventive measures in the face of a massive pandemic that threatened tens of millions of lives.

Interviews with Virginia Attorney General and White House Health Reform Director

In case you missed it: courtesy of PBS, a minute and 45 seconds of recap and then interviews with White House health reform director Nancy-Ann DeParle and Virginia Attorney General Ken Cuccinelli on the constitutionality (or lack thereof) of the individual mandate. Attorney General Cuccinelli brought the suit against the mandate that won in Virginia federal court last week. (It takes a moment or two to buffer).

From Justice Story: A Postal Power Parable on Mandating Health Insurance

This just in:  Stirred by the arguments of Randy Barnett, Ilya Somin, Judge Hudson and others, Justice Joseph Story — miraculously from the grave! — has filed an amicus brief in the 4^th Circuit appeal on the constitutionality of mandating the purchase of health insurance.  Of note, he wrote his brief in the form of a parable about Congress’ power under the postal clause to build roads — an issue that was hotly contested 2 centuries ago.   Defenders of states’ rights argued that the power to “establish Post Offices and post Roads” conveyed only the power to designate which existing state roads to use for postal routes, and not the power to acquire land and build new federal roads.  From the faint echoes of this historical debate, Justice Story appears to suggest there are lessons to learn about the modern Commerce Clause (emphases added):

The grounds of the [more restrictive position] seem to be as follows. The power given under the confederation never practically received any other construction. Congress never undertook to make any roads, but merely designated those existing roads, on which the mail should pass. At the adoption of the constitution there is not the slightest evidence, that a different arrangement, as to the limits of the power, was contemplated. . . . when a road is declared by law to be a mail-road, the United States have a right of way over it; . . . It was thought necessary to insert an express provision in the constitution, enabling the government to exercise jurisdiction over ten miles square for a seat of government, and of such places, as should be ceded by the states for forts, arsenals, and other similar purposes. It is incredible, that such solicitude should have been expressed for such inconsiderable spots, and yet, that at the same time, the constitution intended to convey by implication the power to construct roads throughout the whole country, with the consequent right to use the timber and soil, and to exercise jurisdiction over them . . .  The terms of the constitution are perfectly satisfied by this limited construction, and the power of congress to make whatever roads they may please, in any state, would be a most serious inroad upon the rights and jurisdiction of the states. It never could have been contemplated. . . . The power to create the office does not necessarily include the power to carry the mail, or regulate the conveyance of letters, or employ carriers. The one may exist independently of the other. A state might without absurdity possess the right to carry the mail, while the United States might possess the right to designate the post-offices, . . .

Yet, no man ever imagined such a construction to be justifiable.  And why not? Plainly, because constitutions of government are not instruments to be scrutinized, and weighed, upon metaphysical or grammatical niceties. They do not turn upon ingenious subtleties; but are adapted to the business and exigencies of human society; and the powers given are understood in a large sense, in order to secure the public interests. Common sense becomes the guide, and prevents men from dealing with mere logical abstractions. . . .

Under the constitution congress has, without any questioning, given a liberal construction to the power to establish post-offices and post-roads. It has been truly said, that in a strict sense, “this power is executed by the single act of making the establishment. But from this has been inferred the power and duty of carrying the mail along the post-road from one post-office to another. And from this implied power has been again inferred the right to punish those, who steal letters from the post-office, or rob the mail. It may be said with some plausibility, that the right to carry the mail, and to punish those, who rob it, is not indispensably necessary to the establishment of a post-office and a post-road. This right is indeed essential to the beneficial exercise of the power; but not indispensably necessary to its existence.” . . .  If the practice of the government is, therefore, of any weight in giving a constitutional interpretation, it is in favour of the liberal interpretation of the clause.

The fact, if true, that congress have not hitherto made any roads for the carrying of the mail, would not affect the right, or touch the question. . . . But the argument would have it, that, because this exercise of the power, clearly within its scope, has been hitherto restrained to making existing roads post-roads, therefore congress cannot proceed constitutionally to make a post-road, where no road now exists. This is clearly what lawyers call a non sequitur. It might with just as much propriety be urged, that, because congress had not hitherto used a particular means to execute any other given power, therefore it could not now do it. If, for instance, congress had never provided a ship for the navy, except by purchase, they could not now authorize ships to be built for a navy, or à converso. . . . If they had never erected a custom-house, or court-house, they could not now do it. Such a mode of reasoning would be deemed by all persons wholly indefensible. . . .

It is said, that there is no reason, why congress should be invested with such a power, seeing that the state roads may, and will furnish convenient routes for the mail. When the state-roads do furnish such routes, there can certainly be no sound policy in congress making other routes. But there is a great difference between the policy of exercising a power, and the right of exercising it. But, suppose the state-roads do not furnish . . . suitable routes for the mails, what is then to be done? Is the power of the general government to be paralyzed? Suppose a mail-road is out of repair and founderous, cannot congress authorize the repair of it? If they can, why then not make it originally? Is the one more a means to an end, than the other? If not, then the power to carry the mails may be obstructed; nay, may be annihilated by the neglect of a state. . .

The supposed silence of the Federalist proves nothing. That work was principally designed to meet objections, and remove prejudices. . . .

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