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The Justices Are Not Writing On A Blank Slate

June 27, 2012
Will the Justices really wipe the venerated "Commerce Clause" slate clean? Source of Photo: Shift at ja.Wikipedia, http://goo.gl/jwdHR

In the final analysis, the Supreme Court did not erase the Obama Administration’s signature piece of legislation. The Court upheld it.  Source of Photo: Shift at ja.Wikipedia, http://goo.gl/jwdHR

When legal scholars consider instances over the past 25 years in which the Supreme Court has struck down federal legislation as unconstitutional, two cases come up most frequently: United States v Lopez, 514 U.S. 549 (1995), and United States v. Morrison, 529 U.S. 598 (2000). I decided recently to take a second look at those cases – and was surprised at what I found.

In Lopez, the Supreme Court struck down the Gun-Free School Zones Act, which made it a federal crime to possess a gun within 1,000 feet of school property.  In Morrison, the Court invalidated the section of the Violence Against Women Act that gave victims of gender-motivated violence a federal cause of action.

In each case, the Court held that Congress had exceeded its authority under the Commerce Clause because what it was regulating wasn’t “commerce.”  It was “acts of violence” or noneconomic conduct of a criminal character, matters over which the states have traditionally had jurisdiction.  However, I also found reaffirmation of the general principle that where Congress’ goal is to regulate commercial transactions or control prices or stabilize markets, its legislation will be upheld. In other words, where the transactions or markets Congress is regulating are economic in nature, its enactments will be sustained.

I found a second thing when I revisited Lopez. I also found Justice Kennedy’s concurring Opinion.  It is inspiring.  Here are the highlights of this lengthy opinion. Justice Kennedy makes four basic points:

Point #1:  After reviewing the history of the Commerce Clause and the jurisprudence concerning it, Justice Kennedy concluded that the Court was and should be committed to a “practical conception of the commerce power.”

“Commerce” was not intended to be “a technical legal conception,” he said, “but a practical one, drawn from the course of business.”[1]  Consistent with this view, he eschewed the practice in which the Court had engaged for many years of drawing “content based or subject matter distinctions, thus defining by semantic or formalistic categories those activities that were commerce and those that were not.” For example, he specifically rejected the distinctions that had once been made between

  • ‘transportation’ on the one hand, and “manufacture” or “production” on the other;  and between
  •  activities ‘directly’ affecting commerce and those only ‘indirectly’ affecting it.

Point #2:  Congress is owed considerable deference in determining how its powers under the Commerce Clause are to be exercised.

The powers conferred on the government by the Commerce Clause have been vested in Congress, not the Courts.  As a consequence, the Court has long recognized that Congress is owed considerable deference in determining when and how that power is to be exercised and when the states alone are to be left to regulate a field.

While “the States and the National Government both have authority to regulate certain matters absent the congressional determination to displace local law,” it is Congress’ obligation, not the Court’s, “in the first and primary instance” to determine the federal-state balance.  Put another way, the Commerce Clause “grants Congress … ample discretion to determine its appropriate exercise.”

In order to give proper effect to this deference, the Court has adopted the “rational basis” test.  Under that test, it does not ask whether the subject matter of specific legislation sufficiently affected interstate commerce to justify its enactment.   It is, instead, limited to asking whether Congress had a “rational basis” for concluding that it did.  If Congress did have a rational basis for so concluding, then it is deemed to have acted within the scope of its Commerce Clause powers.  If it didn’t have a rational basis for so concluding, then it can be found to have exceeded its powers under the Commerce Clause and the legislation it has enacted can be stricken.

This is the test nearly all of the Court’s current members have embraced and the Lopez and Morrison majorities applied.  The history of its application “counsels great restraint” before the Court determines that the Clause is insufficient to support an enactment.

Point #3:  In addition to deferring to Congress, it is important for the Court to adhere to its already established Commerce Clause jurisprudence.

Given the history of its decisions in this area, Justice Kennedy concludes that “the Court as an institution and the legal system as a whole have an immense stake in the stability of our Commerce Clause jurisprudence as it has evolved to this point.”  That means that judicial restraint counsels against calling into question “the essential principles now in place” regarding the commerce power, and against reverting to earlier “semantic or formalistic” artifices:

 “That fundamental restraint …forecloses us from reverting to an understanding of commerce that would serve only an 18th century economy…; it also mandates against returning to the time when congressional authority to regulate undoubted commercial activities was limited by a judicial determination that those matters had an insufficient connection to an interstate system.

In Justice Kennedy’s view, the holding in Lopez was a “limited” one that did not “call[ ] in question” the Court’s “practical conception of commercial regulation” or resurrect former obstacles to Congress’ exercise of its plenary power.

Point #4:  The Court should intervene to preserve the federal-state balance only where Congress has clearly exercised powers that are not its own but belong exclusively to the States.

While acknowledging that the duty to maintain the balance between national and state power is entrusted “in the first and primary instance” to Congress, Justice Kennedy perceives the courts as having a back-up role to play – in especially clear-cut and egregious cases.  Thus, “when one or the other level of Government has tipped the scales too far” and trespassed upon the other’s exclusive territory, the Court may be required to intervene to say which side of the Federal/State divide certain powers fall on.

That was the case in Lopez.  There, Congress sought to take over “an area of traditional state concern, … having nothing to do with the regulation of commercial activity” and, in so doing, it ““foreclose[d] the States from experimenting and exercising their own judgment in an area to which States lay claim by right of history and expertise.”  The Court was, accordingly, obliged to intervene to vindicate federalism.

The same is not true of the Affordable Care Act for at least two reasons.  First, the Act’s nexus to commerce is incontrovertible.  Second, as I have already demonstrated, here , States have not in any event been foreclosed from experimenting in the creation and operation of insurance exchanges or otherwise attaining the Act’s goals.  Accordingly, short of a challenge to the Act “as applied,” the Court has neither cause nor occasion to intervene on these grounds.

* * *

UPDATE:  This morning the United States Supreme Court upheld all but one provision of the Affordable Care Act – 42 U. S. C. §1396c.  That provision would have permitted the Secretary of Health & Human Services to take away a State’s existing Medicaid funding if it did not agree to a proposed Medicaid expansion.  The provision was found to be severable and the remainder of the Act upheld. The upshot is that States have three options when it comes to the Medicaid Program: 1) They can choose to participate in the expansion and receive additional federal funding; 2) They can choose not to participate in the expansion and maintain their current level of funding; or 3) They can choose not to participate in the program at all and forego federal funding altogether.

As to the more sensational provisions of the Act, the line-up was as follows: Five members of the Court, including the Chief Justice, voted to uphold the so-called mandate as an exercise of Congress’ power to “lay and collect Taxes.”  Four members of the majority (Ginsburg, Breyer, Sotomayor & Kagan) believed that it could also be sustained under the Commerce Clause.  Justices Scalia, Kennedy, Thomas & Alito issued a joint dissent, arguing that the Act should have been stricken in its entirety.


[1]   All of the quotes in this blog post are from Lopez.  For reasons of time and readability, I am not including legal citations.  On request, I will glad to provide a version that does include them.

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