Commerce Clause Conundrum

In declaring unconstitutional the new requirement for Americans to buy health insurance, federal Judge Henry Hudson rests his decision on one of the most widely applied clauses in the Constitution.

Does his interpretation hold up?

Hudson ruled Monday that the Commerce Clause does not give Congress the authority to make people buy something. The Clause itself serves as the basis for a vast swath of federal regulatory statute, and it states, simply, that:

The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes

The Commerce Clause has been interpreted quite broadly over the years, to the point where "interstate" holds little distinctive meaning in the eyes of judges. Courts have so thoroughly established the precedent that one economic action by one person, even if it happens only within one state, can affect the broader economy of any good in question, that the Commerce Clause generally applies to all economic activity.

Hudson's problem with the federal government's argument is that this is a novel application of the Commerce Clause, in that it actually forces people to buy something.

He writes:

Earlier in this opinion, the Court concluded that Congress lacked power under the Commerce Clause, or associated Necessary and Proper Clause, to compel and individual to involuntarily engage in a private commercial transaction, as contemplated by the Minimum Essential Coverage Provision [i.e., the requirement to buy insurance]. The absence of constitutionally viable exercise of this enumerated power is fatal to the accompanying sanction for noncompliance. ...

A thorough survey of pertinent constitutional case law has yielded no reported decisions from any federal appellate courts extending the Commerce Clause or General Welfare Clause to encompass regulation of a person's decision not to purchase a product, notwithstanding its effect on interstate commerce or role in a global regulatory scheme. The unchecked expansion of congressional power to the limits suggested by the Minimum Essential Coverage Provision would invite unbridled exercise of federal police powers. At its core, this dispute is not simply about regulating the business of insurance--or crafting a scheme of universal health insurance coverage--it's about an individual's right to choose to participate.

There are more ins and outs, including whether or not the individual mandate is enforced by a "tax" or a "penalty," but that's the crux of Hudson's ruling: a lack of precedent for forcing people into commercial engagement.

There is, however, some precedent.

As Georgetown constitutional law professor Louis Michael Seidman pointed out, the 1964 Civil Rights Act forced businesses into economic engagement when it outlawed racial discrimination in business. Some restaurants didn't want to engage in commerce with black people, but the federal government forced them to (coincidentally, this was the portion of the law to which Sen.-elect Rand Paul objected).

In another case, Wickard v. Filburn, the federal government tried to penalize a farmer for growing wheat on his own property simply for him and his family to eat. He wasn't selling it. But the federal government wanted to drive up the price of wheat, and the Supreme Court ruled that the government was within its powers to penalize him for this noncommercial activity and force him, instead, to buy his wheat from the interstate wheat economy, which Congress governs. That decision was handed down in 1942, but the Supreme Court reaffirmed it (cited it to support the logic of a ruling) in 2005, in its ruling on the Raich medical marijuana case.

Judges can decide on their own how directly those ruling apply, and the Supreme Court can always go back on previous decisions if the justices feel it appropriate.

But those are the relevant decisions in which a vaguely similar issue was confronted, in case you were wondering if there's any historical context for the issue that's now being forced.