Now This Changes Everything: The Obamacare Oral Arguments Explained

Prior to Tuesday morning, journalists and experts spent quite a lot of time speculating about how Justice Scalia and Justice Roberts would vote on Obamacare. That was kind of like the media speculating about which 2008 presidential candidate would win Indiana and North Carolina. The results in those states were going to be close, and they mattered to the extent that they could dictate whether the election was considered a blowout. But the mere fact that the media was focused on Indiana and North Carolina meant that it was assuming that the states that were really going to swing the election—Ohio and Florida—were both already going to Obama.

In the same vein, there was much discussion about Scalia and Roberts before Tuesday morning because many experts were assuming that the vote that really mattered—Justice Kennedy’s—was pretty much in the bag for the supporters of Obamacare. But with nine words on Tuesday morning, Justice Kennedy changed everything. Less than five minutes into the arguments, Kennedy asked a simple question of the Obama Administration’s attorney: “Can you create commerce in order to regulate it?”

That question changed everything because it forced legal experts to shift the paradigm through which they were looking at the case. Prior to Tuesday morning, legal experts had essentially taken a first year law school approach to interpreting this case. In law school, students are taught to 1) identify the legal issue in a case, 2) look at previously decided cases to find a rule, 3) apply the rule to the facts in the current case. So, in the Obamacare case, the experts identified the legal issue as a Commerce Clause issue. They looked at the previously decided cases which I have written about, namely Wickard, Lopez, Morrison and Raich. From those cases they derived the rule in Commerce Clause cases: a court will first ask whether the federal government was regulating an interstate commercial market. If so, the court will ask whether the conduct involved in the case was rationally related to that commercial market. If both questions can be answered in the affirmative, the law is constitutional. Applying that rule, the experts reasoned that there is no question that the health care market is an interstate commercial market. There is also no question that an individual’s decision to purchase health insurance is rationally related to that market. Therefore, Obamacare must be constitutional.

So, here is what many of the experts missed: the Supreme Court only has to use the same rule it has articulated in previous cases if those previous cases involved the same issue as the present case. If, however, the Supreme Court concludes that the Obamacare case is not about the regulation of commerce, but something entirely different, such as the creation of commerce, the Court has more leeway to rule it unconstitutional. That is why Justice Kennedy’s question was such a bombshell. After almost no discussion on whether this case was about the regulation or creation of commerce, Kennedy asked a question premised on the assumption that the case is based on the creation of commerce. If one accepts that premise, it is somewhat difficult to see how the Obama Administration could win the case.

That is why most legal experts are now predicting that the Court will rule that the individual mandate is unconstitutional (expect a decision in June).

For the record, I did anticipate (in my post on the Raich case) that the Court might run in this direction with this case. But I would not be as bold as some other commentators have been in predicting the downfall of the individual mandate. Here are a few ways that it could still be saved:

  • Justice Kennedy could still vote to uphold it. He has written before (in the Lopez case) and he reaffirmed on Tuesday (on page 104 of the transcript) that he believes that Commerce Clause cases are matters of degree. He is not as concerned about clear rules as other justices. He would probably agree that the federal government could have enacted more intrusive health care legislation or equally intrusive health care legislation in a slightly different way. So, based on that logic, this case might land somewhere short of too much intrusiveness on the Kennedy dial of Commerce Clause power.
  • The Court could conclude that the Obama Administration’s argument fails under the Commerce Clause but succeeds under the taxing and spending power. Congress’s power to tax is very broad. The Court might just say that the individual mandate really just results in having to pay a tax. Congress cannot throw someone in jail for failing to buy insurance, but it can force that person to pay a tax, which is exactly what it did here (even though it used the word “penalty” instead of “tax”).
  • Chief Justice Roberts could vote to uphold the law even while Justice Kennedy votes to strike it down. This is unlikely but conceivable. Roberts seemed to be willing to buy, at least for the sake of argument, the Obama Administration’s claim that all people are currently in the health care market whether they want to be or not. I will provide a deeper analysis of Chief Justice Roberts’ views in a subsequent post.

For now, the bottom line is that the oral arguments did not go well for supporters of Obamacare. It is not certain that the individual mandate will be overturned, but that possibility looks much more likely now than it did a week ago.

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9 Responses to Now This Changes Everything: The Obamacare Oral Arguments Explained

  1. villagebear says:

  2. Doug Book says:

    Can’t see the court looking at this as a tax issue. Clearly the mandate is not a direct tax. And if indirect, it is far from uniform. Hell, Nevada doesn’t have to participate in ObamaCare at all and neither does most of San Francisco!
    I think Kennedy will go beyond any legalese and look at the case more simply. I believe he asked what the “limiting” factor was in the law. And Verrilli couldn’t answer it. None of the DOJ attorneys have been able to come up with an answer to any judge who asked that question and for good reason. Because ObamaCare is not about health, it’s about POWER and has been from the start. I believe Kennedy and Roberts will both see it just that way. Never mind the commerce clause or necessary and proper arguments (which Scalia shot to heck anyway). It is just not possible to provide congress limitless power over the American public.

  3. Suszek says:

    First of all, if you had read the transcripts, you would know that the opponents of Obamacare argued that the penalty is a direct tax. So, you seem to be on the side of the opponents of the bill, but you are failing to understand your own position.

    Second, taxes do not have to be “uniform” in the sense that you are using the word. A tax is uniform if it is generally applicable. Not everyone pays taxes on cigarettes, but that doesn’t mean that the tax is not uniform.

    Third, Verrilli articulated two limiting principles that the Court could adopt. Justice Breyer articulated a third.

    Fourth, I would be interested to hear how you would distinguish federal laws that are about “power” from federal laws that are about something else. It would seem that according to the Doug Book Theory of Constitutional Law, all laws that are about “power” are invalid, whereas all laws that are not about “power” are valid. Please explain how a court should objectively make that determination on a case-by-case basis.

  4. Doug Book says:

    Perhaps I should have added that the mandate is not a CONSTITUTIONAL direct tax. That was the argument of the respondents. Not Constitutional because the tax is not apportioned among the several states. Indeed your people on the court seem to agree that the mandate is not a tax, Ginsberg saying it is not a “revenue raising” mechanism and Breyer stating that the word tax itself is not mentioned anywhere in the law in connection with the mandate.

    Uniformity means taxes must be geographically uniform throughout the nation. It is obviously NOT required that each state pay the same total share. But the taxes must function “with the same force and effect in every place where the subject is found.” But the insurance penalty connected to the mandate in ObamaCare varies with location–those in Nevada, for example, not being subject to the penalty at all. it is therefore not Constitutional.

    I don’t recall saying that “all federal laws that are about power are invalid.” Obviously the congress is granted enumerated powers in the Constitution. Have you read it? But congress is NOT granted absolute, limitless, dictatorial power even though the Democrat super-majority congress elected in 2008 was in clear pursuit of it.

    The tax issue was a fallback argument taken by the Obamabots because the commerce clause argument was filled with nerve-wracking holes. As you may know, the DOJ also suggested the necessary and proper clause as a possible excuse for imposing a dictatorship in the US. As Scalia had given it great weight in his concurrence in Raich, DOJ attorneys figured they would throw that argument against the wall to see if it would stick.

  5. Suszek says:

    You did not specifically say that all federal laws about power are invalid. However, you did say that Obamacare is invalid because it is about power, not commerce. You are now saying that Obamacare is invalid because Congress “is not granted absolute, limitless, dictatorial power.” I am wondering whether you are interested in proposing a legal standard or whether you are just interested in throwing around inflammatory rhetoric. It’s easy to come up with crappy annoying slogans (such as “Obamabots”). Morons can do that. It takes intelligence to articulate a legal standard that relies on logic rather than rhetoric.

    I thought your legal standard here was that laws about power are invalid whereas other laws are valid. If that is not the case, give me a better one.

    By the way, what do you mean by “my people on the court”? Are “my people” lawyers? Americans? People who rely on logic as opposed to inflammatory rhetoric to interpret legal issues? Because any of those scenarios would make all nine justices “my people.”

  6. Doug Book says:

    The Obama Care individual mandate is unconstitutional because it not only fails the commerce, necc. and prop. and power to tax clause tests, it–as Scalia and others noted, “… violates an equally evident principle in the Constitution, which is that the Federal Government is not supposed to be a government that has all powers; that it’s supposed to be a government of limited powers.” This was in the Tuesday transcript, around page 28 as I recall. So although you attribute the thought to me above, it was actually Scalia’s comment. And I wholeheartedly agree with him.
    And legal standards? Well the Founders did that a long time before I took up the fight. It was they–probably Madison–who made certain it would be understood that the federal government would be one of limited powers. (Also these men were also VERY careful to make certain that they NEVER attributed to government any RIGHTS. Those belong to the people only.)

    In 2009-2010 the radical left found themselves with super-majorities in congress and the Manchurian Candidate they had worked so hard to elect, in the White House. They were not about to let such an opportunity to impose absolute power on the American public go to waste. ObamaCare was and remains nothing but the handiest means of imposing federal rule on the American people.

    From your unprovoked attacks on me I naturally assumed you were a fellow of the court’s far left. “Your people” would therefore be Ginsberg, Kagan, Breyer and Sotomeyer.

    And as only liberals describe facts as “inflammatory rhetoric,” I would guess that I’m right.

  7. Suszek says:

    You comment on my blog by suggesting that I don’t know what I’m talking about and I am the one who made unprovoked attacks on you?

    Yes, it is supposed to be a government of limited powers. Any idiot can quote Justice Scalia reciting that principle. The challenge is to determine what those limits are. You can’t just say that Obamacare is bad and the federal government is supposed to have limited powers, therefore the powers should be limited in such a way so as to ban Obamacare. You have to be able to say, X limit should ban Y law because that is a distinction found in the Constitution.

    So, only liberals use the phrase “inflammatory rhetoric”? I guess that makes Sean Hannity a liberal:

  8. Pingback: How Chief Justice Roberts Could Save Obamacare | more than twenty cents

  9. Pingback: The Obamacare Decision Full Text and Cheat Sheet | more than twenty cents

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