Instructions: The year is 1936. As part of his New Deal series of economic reforms, President Franklin D. Roosevelt signed into law the Health Security Act of 1934. You are a law clerk for the conservative Justice James McReynolds, one of the so-called “Four Horsemen” who routinely find the President’s expansions of federal power unconstitutional. A case challenging the constitutionality of the Health Security Act was recently argued before the Supreme Court. You have been assigned to write a memo of no more than 1,000 words to Justice McReynolds addressing five specific issues regarding the constitutionality of the Health Security Act.
The Health Security Act (“HSA”) of 1934 has the stated purpose of ensuring that all Americans have access to affordable health insurance. The HSA has four key provisions:
Section 1 – “Requirement to maintain minimum essential coverage”
After January 1, 1937, a person over the age of 18 shall ensure that he has a qualified health insurance plan. The Labor Department shall publish a rule defining what constitutes a qualified health insurance plan.
Section 2 – “Shared responsibility payment”
If a person fails to maintain a qualified health insurance plan, then there is hereby imposed on the person a penalty of $1 a month. The penalty shall be paid to the Internal Revenue Service with the person’s annual tax return.
Section 3 – “State Exchanges”
All states are required to establish an “exchange” to allow people to purchase health insurance. The state-run exchanges are required to open offices in each state capital, and in all cities with more than 100,000 residents. The states are required to staff these offices with trained and qualified “navigators” who can assist people signing up for health insurance plans.
Section 4 – “Agricultural Readjustment Act”
Congress makes a finding that broccoli is the most healthful vegetable, and seeks to stimulate its production and consumption. All public and private schools are required to teach students that they should eat broccoli daily. Further, all children under the age of 18 in public and private schools are required to eat one serving of broccoli for lunch every day school is in session. For every day the child refuses, the child’s parents shall be required to purchase one serving of broccoli.
Minutes after President Roosevelt signed the Health Security Act into law, three lawsuits were filed in federal district court:
The first lawsuit, filed by the “Liberty League,” a private group opposed to the New Deal, challenged the constitutionality of sections 1 and 2 of the HSA, alleging that Congress lacks the power to enact the HSA under the Commerce Clause, the Necessary and Proper Clause, and the Taxing Power.
Roscoe Filburn, an Ohio farmer, and his 13-year old son, Frankie Filburn, file suit, challenging section 4 of the HSA. Both insist that they hate broccoli, and don’t want to eat or buy it. Filburn also claims that by sending his son to a private school, he does not want his son to learn about the horrors of broccoli. They both assert that Section 4 violates the Due Process Clause of the Fifth Amendment. They do not raise any claims under any other constitutional provision.
The Attorney General of Texas files a suit challenging section 3 of the HSA, alleging that by forcing Texas to open the exchanges, and hire the navigators, the HSA intrudes on Texas’s sovereignty, and violates the Tenth Amendment and principles of federalism. .
The challenges are all rejected in the lower courts, and are appealed to the Supreme Court.
Shortly after the case is argued before the Supreme Court, in a fireside chat President Roosevelt announces his “Court Packing” plan. He proposes a new law that would allow him to appoint a new Justice to the Supreme Court for every Justice over the age of 70. That would give Roosevelt the opportunity to appoint five new Justices of his own choice, and shift the balance of the Court. The law is virtually assured of passing in Congress.
Justice Owen Roberts,who had in the past found the President’s programs unconstitutional, confided in his colleagues that though he agreed with the HSA was unconstitutional in his entirety, he was considering changing his vote to uphold the HSA to avert a clash between the Court and the President that could impact the Court’s legitimacy. Justice Roberts is “wavering” about whether or not he will uphold the President’s signature piece of legislation.
Justice McReynolds was assigned to write the majority opinion on behalf of his fellow Horsemen, Pierce Butler, George Sutherland, and Willis Van Devanter, and the swing vote, Justice Owen G. Roberts. Justice McReynolds has asked you to write a bench memo that addresses the five issues noted below. Though you have a feeling how Justice McReynolds wants to vote, you have an independent mind, and are assigned to write a memo based on the constitutionality of the HSA under existing precedents in 1936. In other words, offer an objective assessment of the case law. Because McReynolds is a jerk, he imposes a strict word limit–the entire memo can be no more than 1,000 words. Because each of the five issues has an equal value, allocate your word count appropriately.
Address whether Congress has the power to enact Sections 1 and 2 of HSA under the Commerce Clause and the Necessary and Proper Clause of Article I, Section 8.
Address whether Congress has the power to enact Sections 1 and 2 of HSA under the the Taxing Power of Article I, Section 8.
Address whether Sections 4 of HSA violate the Due Process Clause of the Fifth Amendment.
Address whether Section 3 of HSA violates the the Tenth Amendment, and the principles of federalism in our Constitution.
Prepare a note that Justice McReynolds can send to Justice Roberts, explaining why he should not change his vote. Pay special attention to the separation of powers, the legitimacy of the Supreme Court, principles stare decisis, and how the Court will be perceived if he does, or does not switch in vote in response to Roosevelt’s proposal.
1. Commerce and Necessary & Proper Clauses
The HSA operates only on individuals. However, the Liberty League would have standing as an association under Article III to bring suit on behalf of its members, who will suffer a concrete injury in fact, which is caused by the HSA, and that injury will be redressed by a favorable ruling.
The HSA mandate is not a valid exercise of Congress’s commerce power.
First, health insurance is not interstate commerce. In Gibbons, Marshall defined commerce broadly as “intercourse” among the states, including intercourse within one state that is “intermingled with” another state. The Court in E.C. Knight, found that manufacturing is not commerce, as this would invade the powers of the states under the 10th Amendment. In Hammer, the Court struck down a federal law on goods made with child labor, finding that Congress can’t regulate manufactured goods within one state. Carter, decided earlier this year, held that laws regulating the “production” of coal is not interstate commerce. Congress can also regulate the “instrumentalities” (Shreveport) and “channels” (Champion) of interstate commerce. All of these cases support the conclusion that health insurance sold and used within one state is not an article, instrumentality, or channel of interstate commerce, and Congress lacks the power to regulate it.
Second, in an unprecedented assertion of federal power, Congress is regulating inactivity. Traditionally, this has been the authority of the state police power, rather than the federal government.
Sections 1 and 2 are not saved by the Necessary and Proper Clause. In M’Culloch, Marshall found that Congress can enact all laws that are necessary and proper incidents to carrying into execution an enumerated federal power. Marshall rejected the strict Madisonian understanding of N&P, and adopted the broad Hamiltonian approach that equates “necessary” with “convenient.” This power is quite broad.
While the HSA mandate may in fact be “necessary” in order to implement universal health insurance, it’s coercive nature of forcing people to buy insurance renders it not “proper.” N&P should not be understood to confer a “great substantive and independent power” on the federal government.
2. Taxing Power
Congress’s powers to regulate activity, or even inactivity, are much greater under its Taxing Power than under its Commerce powers.
In Bailey, the Court struck down an excise tax on the profits of factories that employed child laborers as an invalid regulatory tax. The Court found that a law designed to penalize or suppress conduct, which is reserved to the state’s police power, cannot be sustained as a tax. As the Court stressed in Bailey, an expensive “penalty” becomes more than a “mere penalty,” and becomes an unconstitutional “regulation and punishment.”
Section 1 and 2 of HSA fais as a tax (even though it is not labelled as a tax), because it is attempting to coerce conduct. It also fails as a penalty, as it operates as a form of punishment.
As well, Congress’s delegation of authority to define what constitutes a qualified health insurance plan, without any intelligible principle to guide the Labor Department, violated the non-delegation doctrine (Schechter Poultry).
3. Due Process
The 5th Amendment’s Due Process clause, as applied to the federal government, is applied consistently with the 14th Amendment’s Due Process Clause (Adkins).
Section 4 of HSA violates Due Process in three ways.
First, it violates a parent’s right to direct the education and upbringing of his children. Meyer. It also infringes on the right of the schools to teach children. Pierce.
Second, by forcing a child to eat broccoli, Congress is violating his bodily integrity. Though, if the state has the power to force people to be vaccinated (Jacobson), or sterilize them (Buck), in pursuit of the common welfare, mandatory broccoli may be represent a smaller burden on individual liberty.
Third, forcing the parents to purchase broccoli is a violation of their individual liberty, as the federal government cannot compel someone to buy anything. This assertion of power is unprecedented.
4. 10th Amendment
Under the 10th Amendment, Congress lacks the power to direct, or command the Republic State of Texas to open offices, or hire navigators. Traditionally the regulation of insurance has been solely within the state police power, and beyond the scope of the federal government’s powers under the Commerce, Necessary and Proper, and Taxing powers. As Madison recognized in Federalist No. 51, a separation of powers between the federal and state governments is a key to reducing the risk of factions. “Ambition must be made to counteract ambition.” Although, there is language in Justice Holmes’s opinion in Holland, suggesting that Congress has broad powers to infringe on state sovereignty if acting pursuant to a treaty.
5. Justice Roberts
There are three reasons why Roberts should not change his vote. First, stare decisis compels the Court to stand by it precedents. It would be inconsistent to now find that an insurance policy is commerce. Second, millions of Americans rely on a consistent rule of law. Suddenly changing the direction of commerce in this case would impact numerous other efforts by the federal government to intrude on state sovereignty, and individual liberty. After all, liberty finds no refuge in a jurisprudence of doubt. Third, and perhaps most importantly, a sudden change following the President’s announcement of his Court-packing scheme would politicize the Court, and make the Justices subject to further attacks from the White House. If Roosevelt learns that he can bully the Justices, the Constitution is lost.
Although, in the event that Roberts decides to uphold the law, I offer two alternative rationales that do not require changing his mind on the commerce clause. First, notwithstanding Bailey, Roberts can save the law as a constitutional tax by rewriting the statute. Second, because the HSA does not go into effect until 1937, and no one has paid the penalty yet, no would have standing, and the entire case should be dismissed as unripe.