HEALTHCARE LAW ANALYSIS

1 Commerce Clause
1.1 Relevant Constitutional Text (Article, Amendment, Section…)
1.1.1 Is it clear which part of the CON is implicated by the fact pattern we’re given?

Economic Reasoning Theory

The general theory is that law is best viewed as a social tool that promotes economic
efficiency, that economic  analysis and efficiency as an ideal can guide legal practice.  It also
considers how legislation should be used to improve market conditions  in return. Law and
economics offers a framework with which to model legal outcomes, and common objectives
with which to unify disparate areas of legal activity. The bringing together of legal theory and
economic reasoning has also created new research agendas in the fields of behavioral
economics: how rationality affects people’s behavior within legal scenarios; public choice
theory and how collective behavior should have an effect on legislation; and game theory:
understanding strategic action in a legal context.

To dramatize the stakes and intensity of the FDR-Court battles, Leuchtenburg serves up two delectable case
studies, each of which illustrates a different feature of the tension between the Administration and the “Old
Court.” Leuchtenburg's tale of the Rail Pension decision,33 invalidating Congressional efforts to require
railroad owners and railworkers to contribute to a common pension pool, highlights the Court's opposition
to social reform programs (pp. 26 -52). His account of Humphrey's Executor v. United States,34 prohibiting
the President from firing an FTC Commissioner without cause, suggests the existence of judicial animosity
towards Roosevelt's efforts to strengthen the administrative presidency (pp. 52- 82).

Leuchtenburg treats the five-to-four Rail Pension decision as monumental, signalling the Old Court's
disapproval of the New Deal. When the decision was issued on May 6, 1935, there was great uncertainty
about the Court's attitude towards the New Deal, as well as corresponding state reform efforts (p. 26). In
1934 and again in the first months of 1935, the Supreme Court had issued a series of mixed decisions, some
invalidating, and others approving, state and federal reform efforts.35 In Rail Pension, by admonishing
Congress for “fail[ing] to distinguish constitutional *244 power from social desirability,”36 the Court
appeared poised to strike down Social Security and other New Deal reforms. According to Leuchtenburg,
the decision's strident tone -- especially since it was written by the previously moderate Justice Owen
Roberts -- “sent shock waves through the White House and the New Deal agencies [and] . . . created deep
fissures between the executive branch and the Supreme Court” (p. 27). Indeed, within one week of the
decision, Attorney General Homer Cummings signalled the Administration's interest in striking back at the
Court,37 writing Assistant Attorney General Angus MacLean to learn whether “ ‘any study has been made
in this office of the right of the Congress, by legislation, to limit the terms and conditions upon which the
Supreme Court can pass on constitutional questions' ” (p. 51).38

96 Colum. L. Rev. 237, 243-44

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Healthcare Law Analysis Language

This report does not cover detailed commerce clause objections to the act.10 We address them only to the
extent they relate to the taxing power. The capitation and apportionment issues are separate from commerce
issues. Even if the act survives a commerce clause challenge, it still fails a capitation challenge.
Similarly, this report does not cover 10th Amendment state sovereignty objections. If the act survives a
sovereignty challenge, it still fails a capitation challenge. This report is also not about whether the act is an
abuse of congressional power in that it creates unfunded state mandates. Nor is it about a state’s standing to
challenge the act as an unapportioned capitation tax, or whether that challenge is ripe. Although we may
say a few words on those topics, we mostly leave them for others.

10th Amendment State Sovereignty Analysis

Limits of Congressional Power – Creates an unfunded state mandate, compared to

federal funding for various projects where Congress mandates state compliance on
regulations that would normally not fall within Congress’ enumerated powers or
necessary and proper clause which substantially enhances those enumerated
powers.

Congress’ enumerated powers have been interpreted very broadly by the courts
applying the necessary and proper clause

Health care reform is constitutional

By: Erwin Chemerinsky
October 23, 2009 04:59 AM EDT

Those opposing health care reform are increasingly relying on an argument that has
no legal merit: that the health care reform legislation would be unconstitutional.
There is, of course, much to debate about how to best reform America’s health care
system. But there is no doubt that bills passed by House and Senate committees are
constitutional.

Some who object to the health care proposals claim that they are beyond the scope
of congressional powers. Specifically, they argue that Congress lacks the authority to
compel people to purchase health insurance or pay a tax or a fine.

Congress clearly could do this under its power pursuant to Article I, Section 8 of the
Constitution to regulate commerce among the states. The Supreme Court has held
that this includes authority to regulate activities that have a substantial effect on
interstate commerce. In the area of economic activities, “substantial effect” can be
found based on the cumulative impact of the activity across the country. For
example, a few years ago, the Supreme Court held that Congress could use its
commerce clause authority to prohibit individuals from cultivating and possessing
HEALTHCARE LAW ANALYSIS

small amounts of marijuana for personal medicinal use because marijuana is bought
and sold in interstate commerce.

The relationship between health care coverage and the national economy is even
stronger and more readily apparent. In 2007, health care expenditures amounted to
$2.2 trillion, or $7,421 per person, and accounted for 16.2 percent of the gross
domestic product.

Ken Klukowski, writing in POLITICO, argued that “people who declined to purchase
government-mandated insurance would not be engaging in commercial activity, so
there’s no interstate commerce.” Klukowski’s argument is flawed because the
Supreme Court never has said that the commerce power is limited to regulating
those who are engaged in commercial activity.

Quite the contrary: The court has said that Congress can use its commerce power to
forbid hotels and restaurants from discriminating based on race, even though their
conduct was refusing to engage in commercial activity. Likewise, the court has said
that Congress can regulate the growing of marijuana for personal medicinal use,
even if the person being punished never engaged in any commercial activity.

Under an unbroken line of precedents stretching back 70 years, Congress has the
power to regulate activities that, taken cumulatively, have a substantial effect on
interstate commerce. People not purchasing health insurance unquestionably has
this effect.

There is a substantial likelihood that everyone will need medical care at some point.
A person with a communicable disease will be treated whether or not he or she is
insured. A person in an automobile accident will be rushed to the hospital for
treatment, whether or not he or she is insured. Congress would simply be requiring
everyone to be insured to cover their potential costs to the system.

Congress also could justify this as an exercise of its taxing and spending power.
Congress can require the purchase of health insurance and then tax those who do
not do so in order to pay their costs to the system. This is similar to Social Security
taxes, which everyone pays to cover the costs of the Social Security system. Since the
1930s, the Supreme Court has accorded Congress broad powers to tax and spend for
the general welfare and has left it to Congress to determine this.

Nor is there any basis for arguing that an insurance requirement violates individual
liberties. No constitutionally protected freedom is infringed. There is no right to not
have insurance. Most states now require automobile insurance as a condition for
driving.

Since the 19th century, the Supreme Court has consistently held that a tax cannot be
challenged as an impermissible take of private property for public use without just
HEALTHCARE LAW ANALYSIS

compensation. All taxes are a taking of private property for public use, but no tax
has ever been invalidated on that basis.

Since the late 1930s, the Supreme Court has ruled that government economic
regulations, including taxes, are to be upheld as long as they are reasonable.
Virtually all economic regulations and taxes have been found to meet this standard
for more than 70 years. There is thus no realistic chance that the mandate for health
insurance would be invalidated for denying due process or equal protection.

Those who object to the health care proposals on constitutional grounds are making
an argument that has no basis in the law. They are invoking the rhetorical power of
the Constitution to support their opposition to health care reform, but the law is
clear that Congress constitutionally has the power to do so. There is much to argue
about in the debate over health care reform, but constitutionality is not among the
hard questions to consider.

Erwin Chemerinsky is dean and distinguished professor of law at the University of

California, Irvine School of Law.
http:// www.politico.com/news/stories/1009/28620.html

2010 Cato Sup. Ct. Rev. 239, 268