Instant Analysis or Oral Arugment: HHS v. Florida (Individual Mandate)

March 27th, 2012

The transcript is here. Here we go!


Verilli starts off coughing and stumbling. Unreal. Apparently he was sweating and took a glass of water. He talks about how the current health care market fails.

Scalia asks why aren’t those problems the federal government address them directly. SG says the act regulates the means by which health care is purchased.

JUSTICE SCALIA: Why aren’t those problems that the Federal Government can address directly?

Then Kennedy jumps in and asks if you can create commerce in order to regulate it?

JUSTICE KENNEDY: Can you create commerce in order to regulate it?

GENERAL VERRILLI: That’s not what’s going on here, Justice Kennedy, and we are not seeking to defend the law on that basis.

In this case, the — what is being regulated is the method of financing health, the purchase of health care. That itself is economic activity with substantial effects on interstate commerce. And –

Scalia pushes the boundaries of this theory. SG thinks the health care market is just unique.

JUSTICE SCALIA: Any self purchasing? Anything I — you know if I’m in any market at all, my failure to purchase something in that market subjects me to regulation.

Roberts asks about emergency services–you don’t know when you’ll need it. Can gov require you buy a cell phone?

CHIEF JUSTICE ROBERTS: Well, the same, it  seems to me, would be true say for the market in emergency services: police, fire, ambulance, roadside assistance, whatever. You don’t know when you’re going to need it; you’re not sure that you will. But the same is true for health care. You don’t know if you’re going to need a heart transplant or if you ever will. So there is a market there. To — in some extent, we all participate in it.

So can the government require you to buy a cell phone because that would facilitate responding when you need emergency services? You can just dial 911 no matter where you are?

GENERAL VERRILLI: No, Mr. Chief Justice. think that’s different. It’s — We — I don’t think we think of that as a market. This is a market. This is market regulation. And in addition, you have a situation in this market not only where people enter involuntarily as to when they enter and won’t be able to control what they need when they enter but when they -CHIEF
JUSTICE ROBERTS: It seems to me that’s the same as in my hypothetical. You don’t know when you’re going to need police assistance. You can’t predict the extent to emergency response that you’ll need. But when you do, and the government provides it. I thought that was an important part of your argument,

that when you need health care, the government will make sure you get it. Well, when you need police assistance or fire assistance or ambulance assistance, the government is going to make sure to the best extent it can that you get it — get it.
GENERAL VERRILLI: I think the fundamental difference, Mr. Chief Justice, is that that’s not an issue of market regulation. This is an issue of market regulation, and that’s how Congress, that’s how Congress looked at this problem. There is a market. Insurance is provided through the market system

Then Alito asked about another type of insurance we will all need- burial insurance:

ALITO: Do you think there is a, a market for burial services?
GENERAL VERRILLI: For burial services?
GENERAL VERRILLI: Yes, Justice Alito, I think there is.
JUSTICE ALITO: All right, suppose that you and I walked around downtown Washington at lunch hour and we found a couple of healthy young people and we stopped them and we said, “You know what you’re doing? You are financing your burial services right now because eventually you’re going to die, and somebody is going to have to pay for it, and if you don’t have burial insurance and you haven’t saved money for it, you’re  going to shift the cost to somebody else.” Isn’t that a very artificial way of talking about what somebody is doing?

ALITO: And if that’s true, why isn’t it equally artificial to say that somebody who is doing absolutely nothing about health care is financing health care services? . . .

ALITO: I don’t see the difference. You can get burial insurance. You can get health insurance. Most people are going to need health care. Almost everybody. Everybody is going to be buried or cremated at some point. What’s the difference?

There is cost shifting with burial insurance too!

GENERAL VERRILLI: Well, one big difference, one big difference, Justice Alito, is the — you don’t have the cost shifting to other market participants. Here -JUSTICE
ALITO: Sure you do, because if you don’t have money then the State is going to pay for it. Or some -GENERAL
VERRILLI: That’s different.
JUSTICE ALITO: Or a family member is going to pay.

You’d think SG could have had better answers prepared… I bet Kagan wishes she was on the other side of the bench. Not really. But you know. A friend at argument told me Barnett’s jaw dropped when he heard the burial insurance hypothetical.

Alito makes a strong public choice argument–that the point of the mandate is to subsidize insurance companies (hello rent-seeking!)

So the mandate is forcing these people to provide a huge subsidy to the insurance companies for other purposes that the act wishes to serve, but isn’t — if those figures are right, isn’t it the case that what this mandate is really doing is not requiring the people who are subject to it to pay for the services that they are going to consume? It is requiring them to subsidize services that will be received by somebody else.
GENERAL VERRILLI: No, I think that — I do think that’s what the Respondents argue. It’s just not right. I think it — it really gets to a fundamental problem with their argument.

OMG. Kennedy said unprecedented!

JUSTICE KENNEDY: Could you help — help me with this. Assume for the moment — you may disagree. Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act to go into commerce. If that is so, do you not have a heavy burden of justification?
I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

SG tried to define the healthcare unique market quite broadly:

So two things about that, Justice Kennedy. First, we think this is regulation of people’s participation in the health care market, and all — all this minimum coverage provision does is say that, instead of requiring insurance at the point of sale, that Congress has the authority under the commerce power and the necessary proper power to ensure that people have insurance in advance of the point of sale because of the unique nature of this market

Scalia tried to separate health care elements, and asked about broccoli!

JUSTICE SCALIA: Why do you — why do you define the market that broadly? Health care. It may well be that everybody needs health care sooner or later, but not everybody needs a heart transplant, not everybody needs a liver transplant. Why -GENERAL

VERRILLI: That’s correct, Justice Scalia, but you never know whether you’re going to be that person.
JUSTICE SCALIA: Could you define the market — everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli.

GENERAL VERRILLI: No, that’s quite different. That’s quite different. The food market, while it shares that trait that everybody’s in it, it is not a market in which your participation is often unpredictable and often involuntary. It is not a market in which you often don’t know before you go in what you need, and it is not a market in which, if you go in and — and seek to obtain a product or service, you will get it even if you can’t pay for it. It doesn’t –

Scalia isn’t buying SG’s distinction:

JUSTICE SCALIA: Is that a principal basis for distinguishing this from other situations? I mean, you know, you can also say, well, the person subject to this has blue eyes. That would indeed distinguish it from other situations. Is it a principle basis?
I mean, it’s — it’s a basis that explains why the government is doing this, but is it — is it a basis which shows that this is not going beyond what — what the — the system of enumerated powers allows the government to do.

Breyer returns to the issue of whether Congress can create commerce, and then regulate it! To Breyer, Congress can make you do anything!

JUSTICE BREYER: All right. So if that is your difference — if that is your difference, I’m somewhat uncertain about your answers to — for example, Justice Kennedy asked, can you, under the Commerce Clause, Congress create commerce where previously none existed.
Well, yeah, I thought the answer to that was, since McCulloch versus Maryland, when the Court said Congress could create the Bank of the United States which did not previously exist, which job was to create commerce that did not previously exist, since that time the answer has been, yes. I would have thought that your answer — can the government, in fact, require you to buy cell phones or buy burials that, if we propose comparable situations, if we have, for example, a uniform United States system of paying for every burial such as Medicare Burial, Medicaid Burial, CHIP Burial, ERISA Burial and Emergency Burial beside the side of the road, and Congress wanted to rationalize that system, wouldn’t the answer be, yes, of course, they could.

JUSTICE BREYER: And the same with the computers or the same with the — the cell phones, if you’re driving by the side of the highway and there is a federal emergency service just as you say you have to buy certain mufflers for your car that don’t hurt the environment, you could — I mean, see, doesn’t it depend on the situation?

Not even SG would go there!

GENERAL VERRILLI: My responsibility — and I would defend them on a rationale like that, but I do think that we are advancing a narrower rationale.

BOOM- AMK asks if there are any limits on the Commerce Clause:

JUSTICE KENNEDY: Well, then your question is whether or not there are any limits on the Commerce Clause. Can you identify for us some limits on the Commerce Clause?

SG stutters  a bit to start. This should’ve been a cold memorized answer.

GENERAL VERRILLI: Yes. The — the rationale purely under the Commerce Clause that we’re advocating here would not justify forced purchases of commodities for the purpose of stimulating demand. We — the — it would not justify purchases of insurance for the purposes — in situations in which insurance doesn’t serve as the method of payment for service

Tony ain’t buying:

JUSTICE KENNEDY: But why not? If Congress — if Congress says that the interstate commerce is affected, isn’t, according to your view, that the end of the analysis.

SG’s answer was not persuasive to the Chief:

GENERAL VERRILLI: No. The, the — we think that in a — when — the difference between those situations and this situation is that in those situations, Your Honor, Congress would be moving to create commerce. Here Congress is regulating existing commerce, economic activity that is already going on, people’s participation in the health care market, and is regulating to deal with existing effects of existing commerce.

CHIEF JUSTICE ROBERTS: That — that it seems to me, it’s a — it’s a passage in your reply brief that I didn’t quite grasp. It’s the same point. You say health insurance is not purchased for its own sake, like a car or broccoli; it is a means of financing health care consumption and covering universal risks. Well, a car or broccoli aren’t purchased for their own sake, either. They are purchased for the sake of transportation or in broccoli, covering the need for food. I — I don’t understand that distinction.
GENERAL VERRILLI: The difference, Mr. Chief Justice, is that health insurance is the means of payment for health care and broccoli is

CHIEF JUSTICE ROBERTS: Well, now that’s a

significant — I’m sorry.
GENERAL VERRILLI: And — and broccoli is not the means of payment for anything else. And an automobile is not -CHIEF
JUSTICE ROBERTS: It’s the means of satisfying a basic human need, just as your insurance is a means of satisfying -GENERAL
VERRILLI: But I do think that’s the difference between existing commerce activity in the market already occurring — the people in the health care market purchasing, obtaining health care services — and the creation of commerce. And the principle that we are advocating here under the Commerce Clause does not take the step of justifying the creation of commerce. It’s a regulation of the existing commerce.

RBG asks about cost-shifting as the basis beneath the law, but Scalia says the same rational applies to cars:

GENERAL VERRILLI: That — that absolutely is a justification for Congress’s action here. That is existing economic activity that Congress is regulating by means of this rule.
JUSTICE SCALIA: General Verrilli, you -you could say that about buying a car. If — if people don’t buy cars, the price that those who do buy cars pay will have to be higher. So you could say in order to bring the price down, you are hurting these other people by not buying a car.
GENERAL VERRILLI: That is not what we are saying, Justice Scalia.
JUSTICE SCALIA: That’s not — that’s not what you’re saying.
SCALIA: I thought it was.
I thought you were saying other people are going to have to pay more for insurance because you’re not buying it.

In the midst of a long solliloquy, Sotomayor made a 1% Joke!

Because virtually no one, perhaps with the exception of 1 percent of the population, can afford the massive cost if the unexpected happens.

Kagan asks about alternative ways of dealing with the cost shifting?

JUSTICE KAGAN: General, you’ve talked on -a couple of times about other alternatives that Congress might have had, other alternatives that the Respondents suggest to deal with this problem, in particular, the alternative of mandating insurance at the point at which somebody goes to a hospital or an emergency room and asks for care.
Did Congress consider those alternatives? Why did it reject them? How should we think about the question of alternative ways of dealing with these problems?

SG keeps going back to means, and that Congress should receive deference (paging Lochner!):

GENERAL VERRILLI: I do think, Justice Kagan, that the point of difference between my friends on the other side and the United States is about one of timing. They have agreed that Congress has Article I authority to impose an insurance requirement or other -or other penalty at the point of sale, and they have agreed that Congress has the authority to do that to achieve the same objectives that the minimum coverage provision of the Affordable Care Act is designed to achieve. This is a situation if which we are talking about means. Congress gets a substantial deference in the choice of means, and if one thinks about the difference between the means they say Congress should have chosen and the means Congress did choose, I think you can see why it was eminently more sensible for Congress to choose the means that it chose.

AMK asks about single payer national health service, and whether it is using the tax payer:

JUSTICE KENNEDY: I’m not sure which way it cuts. If the Congress has alternate means, let’s assume it can use the tax power to raise revenue and to just have a national health service, single payer. How does that factor into our analysis? In the one sense, it can be argued that this is what the government is doing; it ought to be honest about the power that it’s using and use the correct power. On the other hand, it means that since the Court can do it anyway — Congress can do it anyway, we give a certain amount of latitude. I’m not sure which the way the argument goes.

SG says the Court has upheld other similarly novel and *gasp* unprecedented Act!

But beyond that, in the sense that it’s novel, this provision is novel in the same way, or unprecedented in the same way, that the Sherman Act was unprecedented when the Court upheld it in the Northern Securities case; or the Packers and Stockyards Act was unprecedented when the Court upheld it, or the National Labor Relations Act was unprecedented when the Court upheld it in Jones and Laughlin; or the — the dairy price supports in Wrightwood Dairy and Rock Royal

Scalia pulls back and says, that all those cases involved commerce!

SCALIA: Oh, no, it’s not. They all involved commerce. There was no doubt that was what regulated was commerce. And here you’re regulating somebody who isn’t covered [I heard *commerce* not covered].
By the way, I don’t agree with you that the relevant market here is health care. You’re not regulating health care. You’re regulating insurance. It’s the insurance market that you’re addressing and you’re saying that some people who are not in it must be in it and that’s — that’s difference from regulating in any manner commerce that already exists out there.

Scalia then asks about the distinction between “necessary” and “proper.” (This is a point Ilya Somin raised in his WLF Amicus)

JUSTICE SCALIA: Wait. That’s — that’s -it’s both “Necessary and Proper.” What you just said addresses what’s necessary. Yes, has to be reasonably adapted. Necessary does not mean essential, just reasonably adapted. But in addition to being necessary, it has to be proper. And we’ve held in two cases that something that was reasonably adapted was not proper because it violated the sovereignty of the States, which was implicit in the constitutional structure.

The argument here is that this also is — may be necessary, but it’s not proper because it 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. And that’s what all this questioning has been about. What — what is left? If the government can do this, what, what else can it not do?

GENERAL VERRILLI: This does not violate the norm of proper as this Court articulated it in Printz or in New York because it does not interfere with the States as sovereigns. This is a regulation that — this is a regulation -JUSTICE
SCALIA: No, that wasn’t my point. That is not the only constitutional principle that exists.
SCALIA: An equally evident constitutional principle is the principle that the Federal Government is a government of enumerated powers and that the vast majority of powers remain in the States and do not belong to the Federal Government. Do you acknowledge that that’s a principle?

GENERAL VERRILLI: Of course we do, Your Honor.
JUSTICE SCALIA: Okay. That’s what we are talking about here.

SG was answering a different question then Scalia asked. This was an anti-commandeering answer. Scalia was asking about N&P. I like that. So there are apparently several different principles to inform the “proper” aspect of N&P.

 JUSTICE SCALIA: I mean, the Tenth Amendment says the powers not given to the Federal Government are reserved, not just to the States, but to the States and the people. And the argument here is that the people were left to decide whether they want to buy insurance or not.

And Verrilli answers with LOCHNER (just emailed David Bernstein):

GENERAL VERRILLI: But this — but, Your Honor, this is — what the Court has said, and I think it would be a very substantial departure from what the Court has said, is that when Congress is regulating economic activity with a substantial effect on interstate commerce that will be upheld. And that is what is going on here, and to embark on — I would submit with all due respect, to embark on the kind of analysis that my friends on the other side suggest the Court ought to embark on is to import Lochner-style substantive due process –

CHIEF JUSTICE ROBERTS: The key in Lochner is that we were talking about regulation of the States, right, and the States are not limited to enumerated powers. The Federal Government is. And it seems to me it’s an entirely different question when you ask yourself whether or not there are going to be limits in the Federal power, as opposed to limits on the States, which was the issue in Lochner.

Did the Chief just issue a qualified defense of Lochner? SG didn’t mean Lochner in the sense of state/federal. He meant the Court was scrutinizing economic regulations. Oh boy. Liberals are going to go nuts over this.

AMK brings it back to the law of torts, and no affirmative duties:

JUSTICE KENNEDY: But the reason, the reason this is concerning, is because it requires the individual to do an affirmative act. In the law of torts our tradition, our law, has been that you don’t have the duty to rescue someone if that person is in danger. The blind man is walking in front of a car and you do not have a duty to stop him absent some relation between you. And there is some severe moral criticisms of that rule, but that’s generally the rule.
And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases and that changes the relationship of the Federal Government to the individual in the very fundamental way.

Roberts makes the point that people are forced to buy more products then they will need:

CHIEF JUSTICE ROBERTS: Well, but it’s critical how you define the market. If I understand the law, the policies that you’re requiring people to purchase involve — must contain provision for maternity and newborn care, pediatric services, and substance use treatment. It seems to me that you cannot say that everybody is going to need substance use treatment, substance use treatment or pediatric services, and yet that is part of what you require them to purchase.
GENERAL VERRILLI: Well, it’s part of what the statute requires the insurers to offer. And I think the reason is because it’s trying to define minimum essential coverage because the problem -CHIEF
JUSTICE ROBERTS: But your theory is that there is a market in which everyone participates because everybody might need a certain range of health care services, and yet you’re requiring people who are not — never going to need pediatric or maternity services to participate in that market.

SG kept going back to giving Congress latitude and deference Lochner. Word.

GENERAL VERRILLI: The — with respect to what insurance has to cover, Your Honor, I think Congress is entitled the latitude of making the judgments of what the appropriate scope of coverage is. And the problem here in this market is that for — you may think you’re perfectly healthy and you may think that you’re not — that you’re being forced to subsidize somebody else, but this is not a market in which you can say that there is a immutable class of healthy people who are being forced to subsidize the unhealthy. This is a market in which you may be healthy one day and you may be a very unhealthy participant in that market the next day and that is a fundamental difference, and you’re not going to know in which

CHIEF JUSTICE ROBERTS: I think you’re posing the question I was posing, which is that doesn’t apply to a lot of what you’re requiring people to purchase: Pediatric services, maternity services. You cannot say that everybody is going to participate in the substance use market and yet you require people to purchase insurance coverage for that.

GENERAL VERRILLI: Congress has got –Congress is enacting economic regulation here. It has latitude to define essential, the attributes of essential coverage. That doesn’t — that doesn’t seem to me to implicate the question of whether Congress is engaging in economic regulation and solving an economic problem here, and that is what Congress is doing.

He seems to be stuttering here. He seems dumbfounded that the Court would scrutinize an economic regulation.

SG is talking more about cost-shifting. His response to Scalia seems wrong:

Telephone rates in this country for a century were set via the exercise of the commerce power in a way in which some people paid rates that were much higher than their costs in order to subsidize -JUSTICE
SCALIA: Only if you make phone calls.
GENERAL VERRILLI: Well, right. But — but everybody — to live in the modern world, everybody needs a telephone. And the — the same thing with respect to the — you know, the dairy price supports that — that the Court upheld in Wrightwood Dairy and Rock Royal. You can look at those as disadvantageous contracts, as forced transfers, that — you know, Isuppose it’s theoretically true that you could raise your kids without milk, but the reality is you’ve got to go to the store and buy milk. And the commerce power -as a result of the exercise of the commerce power, you’re subsidizing somebody else

Lactose intolerant parents unite!

So Kagan interrupts SG here, almost bailing him out.

Woo Jersey and Kentucky!

SCALIA: — I don’t know why you think that they’re never going to buy it.
GENERAL VERRILLI: That’s the problem, Justice Scalia. That’s — and that’s exactly the experience that the States had that made the imposition of guaranteed-issue and community rating not only be ineffectual but be highly counterproductive. Rates, for example, in New Jersey doubled or tripled, went from 180,000 people covered in this market down to 80,000 people covered in this market.
In Kentucky, virtually every insurer left the market. And the reason for that is because when people have that guarantee of — that they can get insurance, they’re going to make that calculation that they won’t get it until they’re sick and they need it, and so the pool of people in the insurance market gets smaller and smaller. The rates you have to charge to cover them get higher and higher. It helps fewer and fewer — insurance covers fewer and fewer people until the system ends.
This is not a situation in which you’re conscripting — you’re forcing insurance companies to cover very large numbers of unhealthy people

Nino proposes an alternative legislative judgment—Scalia sees the law as a “self-created” problem.

SCALIA: You could solve that problem by simply not requiring the insurance company to sell it to somebody who has a — a condition that is going to require medical treatment, or at least not -not require them to sell it to him at — at a rate that he sells it to healthy people.
But you don’t want to do that.
GENERAL VERRILLI: But that seems to me to say, Justice Scalia, that Congress — that’s the problem here. And that seems to be -JUSTICE
SCALIA: That seems to me a self-created problem.
GENERAL VERRILLI: Congress cannot solve the problem through standard economic regulation, and that — and — and I do not think that can be the premise of our understanding of the Commerce Clause -JUSTICE
VERRILLI: — this is an economic problem –

JUSTICE SCALIA: — whatever problems Congress’s economic regulation produces, whatever they are, I think Congress can do something to counteract them. Here, requiring somebody to enter — to enter the insurance market.

SG sounds really, really frustrated here:

GENERAL VERRILLI: This is not a — it’s not a problem of Congress’s creation. The problem is that you have 40 million people who cannot get affordable insurance through the means that the rest of us get affordable insurance. Congress, after a long study and careful deliberation, and viewing the experiences of the States and the way they tried to handle this problem, adopted a package of reforms. Guaranteed-issue and community rating, and — and subsidies and the minimum coverage provision are a package of reforms that solve that problem.
I don’t — I think it’s highly artificial to view this as a problem of Congress’s own creation.

It was also passed over the most razor thin margins on an earlier version of the law that no one read and was never meant to be voted on because Ted Kennedy passed away. But, deference anyway.

CJ asks about the limitation of their argument, with some more talk about Lochner.

CHIEF JUSTICE ROBERTS: Well, now why is that? Congress could — once you — once you establish that you have a market for health care, I would suppose Congress’s power under the Commerce Clause meant they had a broad scope in terms of how they regulate that market. And it would be — it would be going back to Lochner if we were put in the position of saying no, you can use your commerce power to regulate insurance, but you can’t use your commerce power to regulate this market in other ways. I think that would be a very significant intrusion by the Court into Congress’s power.

So I don’t see how we can accept your -it’s good for you in this case to say oh, it’s just insurance. But once we say that there is a market and Congress can require people to participate in it, as some would say — or as you would say, that people are already participating in it — it seems to me that we can’t say there are limitations on what Congress can do under its commerce power, just like in any other area, all — given significant deference that we accord to Congress in this area, all bets are off, and you could regulate that market in any rational way.

Isn’t that the essence of the rational basis test?

CHIEF JUSTICE ROBERTS: And you’re worried — that’s the area that Congress has chosen to regulate. There’s this health care market. Everybody’s in it. So we can regulate it, and we’re going to look at a particular serious problem, which is how people pay for it. But next year, they can decide everybody’s in this market, we’re going to look at a different problem now, and this is how we’re going to regulate it. And we can compel people to do things — purchase insurance, in this case. Something else in the next case, because you’ve — we’ve accepted the argument that this is a market in which everybody participates.

SG tries to move onto his tax argument, but Scalia goes back to CJ’s question.

JUSTICE SCALIA: Can — can I tell you what the something else is so — while you’re answering it? The something else is everybody has to exercise, because there’s no doubt that lack of exercise cause — causes illness, and that causes health care costs to go up.
So the Federal government says everybody has to — to join a — an exercise club. That’s — that’s the something else.

Boy that slope is slippery!

GENERAL VERRILLI: No. The — the position we’re taking here would not justify that rule, Justice Scalia, because health club membership is not a means of payment for — for consumption of anything in — in a market.
CHIEF JUSTICE ROBERTS: Right. Right. That’s — that’s exactly right, but it doesn’t seem responsive to my concern that there’s no reason — once we say this is within Congress’s commerce power, there’s no reason other than our own arbitrary judgment to say all they can regulate is the method of payment. They can regulate other things that affect this now-conceded interstate market in health care in which everybody participates.

The Chief called SG out for repeating himself:

JUSTICE ROBERTS: — unless I’m missing something, I think you’re just repeating the

idea that this is the regulation of the method of payment. And I understand that argument. And it may be — it may be a good one. But what I’m concerned about is, once we accept the principle that everybody is in this market, I don’t see why Congress’s power is limited to regulating the method of payment and doesn’t include as it does in any other area.
What other area have we said Congress can regulate this market but only with respect to prices, but only with respect to means of travel? No. Once you’re — once you’re in the interstate commerce and can regulate it, pretty much all bets are off.

GENERAL VERRILLI: But we agree Congress can regulate this market. ERISA regulates this market. HIPAA regulates this market. The — the market is regulated at the Federal level in very significant ways already. So I don’t think that’s the question, Mr. Chief Justice. The question is, is there a limit to the authority that we’re advocating here under the commerce power, and the answer is yes, because we are not advocating for a power that would allow Congress to compel purchases

Not advocating today. But what about tomorrow? And Advocates don’t make laws. Congress does. Advocates just defend them. SG had no good answer to this question. Or this one from Alito:

JUSTICE ALITO: Could you just — before you move on, could you express your limiting principle as succinctly as you possibly can? Congress can force people to purchase a product where the failure to purchase the product has a substantial effect on interstate commerce — if what? If this is part of a larger regulatory scheme? Was that it? Was there anything more?

Seriously. This is a question he should have been able to answer in 5 seconds. The fact that he can’t says something. SG gave a long answer that was far from succinct, and far from limiting.

Sotomayor (thankfully) changed the topic to the taxing power.

Nino chides Barry:

JUSTICE SCALIA: The President said it wasn’t a tax, didn’t he?
GENERAL VERRILLI: Well, Justice Scalia, what the — two things about that, first, as it seems to me, what matters is what power Congress was exercising. And they were — and I think it’s clear that — that the — the — they were exercising the tax power as well as -JUSTICE
SCALIA: You’re making two arguments. Number one, it’s a tax; and number two, even if it isn’t a tax, it’s within the taxing power. I’m just addressing the first.
GENERAL VERRILLI: If the President said -JUSTICE
SCALIA: Is it a tax or not a tax? The President didn’t think it was.
GENERAL VERRILLI: The President said it

wasn’t a tax increase because it ought to be understood as an incentive to get people to have insurance.
I don’t think it’s fair to infer from that anything about whether that is an exercise of the tax power or not.

Kagan, repeating a point she made yesterday, noted that Congress determined to not call it a tax:

KAGAN: I suppose, though, General, one question is whether the determined efforts of Congress not to refer to this as a tax make a difference. I mean, you’re suggesting we should just look to the practical operation. We shouldn’t look at labels. And that seems right, except that here we have a case in which Congress determinedly said this is not a tax, and the question is why should that be irrelevant?
GENERAL VERRILLI: I don’t think that that’s a fair characterization of the actions of Congress here, Justice Kagan. On the — December 23rd, a point of constitutional order was called to, in fact, with respect to this law. The floor sponsor, Senator Baucus, defended it as an exercise of the taxing power. In his response to the point of order, the Senate voted 60 to39 on that proposition.
The legislative history is replete with members of Congress explaining that this law is constitutional as an exercise of the taxing power. It was attacked as a tax by its opponents. So I don’t think this is a situation where you can say that

Congress was avoiding any mention of the tax power.
It would be one thing if Congress explicitly disavowed an exercise of the tax power. But given that it hasn’t done so, it seems to me that it’s — not only is it fair to read this as an exercise of the tax power, but this Court has got an obligation to construe it as an exercise of the tax power, if it can be upheld on that basis.

What obligation? CJ calls BS on SG:

CHIEF JUSTICE ROBERTS: Why didn’t Congress call it a tax, then?
JUSTICE ROBERTS: You’re telling me they thought of it as a tax, they defended it on the tax power. Why didn’t they say it was a tax?
GENERAL VERRILLI: They might have thought, Your Honor, that calling it a penalty as they did would make it more effective in accomplishing its objective. But it is — in the Internal Revenue Code it is collected by the IRS on April 15th. I don’t think this is a situation in which you can say -CHIEF
JUSTICE ROBERTS: Well, that’s the reason. They thought it might be more effective if they called it a penalty.

Sotomayor asks further about a limiting principle–talking over Sotomayor:

And Nino asks about commerce clause blah blah blah:

JUSTICE SCALIA: You’re saying that all the discussion we had earlier about how this is one big

uniform scheme and the Commerce Clause blah, blah, blah, it really doesn’t matter. This is a tax and the Federal Government could simply have said, without all of the rest of this legislation, could simply have said everybody who doesn’t buy health insurance at a certain age will be taxed so much money, right?
GENERAL VERRILLI: It — it used its powers together to solve the problem of the market not -JUSTICE
SCALIA: Yes, but you didn’t need that.
GENERAL VERRILLI — providing for the -JUSTICE
SCALIA: You didn’t need that. If it’s a tax, it’s only — raising money is enough.
GENERAL VERRILLI: It’s justifiable under its tax power.
JUSTICE SCALIA: Extraordinary.

Nino said “Extraordinary” under his breath. SG was off his A-Game.


After a brief pause, Clement is up!

CHIEF JUSTICE ROBERTS: Thank you, gentlemen. We’ll take a pause for a minute or so, Mr. Clement.
CHIEF JUSTICE ROBERTS: Why don’t we get started again.
Mr. Clement.

Clement was smooth in his opening:

MR. CLEMENT: Mr. Chief Justice and may it please the Court. The mandate represents an unprecedented effort by Congress to compel individuals to enter commerce in order to better regulate commerce.
The Commerce Clause gives Congress the power to regulate existing commerce. It does not give Congress the far greater power to compel people to enter commerce to create commerce essentially in the first place.
Now, Congress when it passed the statute did make findings about why it thought it could regulate the commerce here, and it justified the mandate as a regulation of the economic decision to forego the purchase of health insurance. That is a theory without any limiting principle.

Sotomayor asks about the fact that one cannot buy insurance at the point of consumption:

JUSTICE SOTOMAYOR: All right. So what do you do with the impossibility of buying insurance at the point of consumption. Virtually, you force insurance companies to sell it to you?

MR. CLEMENT: Well, Justice, I think there is two points to make on that. One is, a lot of the discussion this morning so far has proceeded on the assumption that the only thing that is at issue here is emergency room visits, and the only thing that’s being imposed is catastrophic care coverage; but, as the Chief Justice indicated earlier, a lot of the insurance that’s being covered is for ordinary preventive care, ordinary office visits, and those are the kinds of things that one can predict.

So there is a big part of the market that’s regulated here that wouldn’t pose the problem that you’re suggesting; but, even as to emergency room visits, it certainly would be possible to regulate at that point. You could simply say, through some sort of mandate on the insurance companies, you have to provide people that come in — this will be a high-risk pool, and maybe you will have to share it amongst yourself or something, but people simply have to sign up at that point, and that would be regulating at the point of sale.

Kagan asked more about timing, and whether Congress should receive deference about its choice:

JUSTICE KAGAN: Well, Mr. Clement, now it seems as though you’re just talking about a matter of timing; that Congress can regulate the transaction, and the question is when does it make best sense to regulate that transaction?
And Congress surely has within its authority to decide, rather than at the point of sale, given an insurance-based mechanism, it makes sense to regulate it earlier. It’s just a matter of timing.
MR. CLEMENT: Well, Justice Kagan, we don’t think it’s a matter of timing alone, and we think it has very substantive effects. Because if Congress tried to regulate at the point of sale, the one group that it wouldn’t capture at all are the people who don’t want to purchase health insurance and also have no plans of using health care services in the near term. And Congress very much wanted to capture those people. I mean, those people are essentially the golden geese that pay for the entire lowering of the premium.

AMK asks about actuarial realities:

JUSTICE KENNEDY: Was the government’s argument this — and maybe I won’t state it accurately — it is true that the noninsured young adult is, in fact, an actuarial reality insofar as our allocation of health services, insofar as the way health  insurance companies figure risks?

That person who is sitting at home in his or her living room doing nothing is an actuarial reality that can and must be measured for health service purposes; is that their argument?

RBG asks about Social Security, harkening back to the 1930s:

JUSTICE GINSBURG: Mr. Clement, doesn’t that work — that work the way Social Security does?
Let me put it this way. Congress, in the ’30s, saw a real problem of people needing to have old age and survivor’s insurance. And yes, they did it through a tax, but they said everybody has got to be in it because if we don’t have the healthy in it, there’s not going to be the money to pay for the ones who become old or disabled or widowed. So they required everyone to contribute.
It was a big fuss about that in the beginning because a lot of people said — maybe some people still do today — I could do much better if the government left me alone. I’d go into the private market, I’d buy an annuity, I’d make a great investment, and they’re forcing me to paying for this Social Security that I don’t want; but, that’s constitutional.
So if Congress could see this as a problem when we need to have a group that will subsidize the ones who are going to get the benefits, it seems to me you are saying the only way that could be done is if the government does it itself; it can’t involve the private market, it can’t involve the private insurers. If it wants to do this, Social Security is its model. The government has to do — has to be government takeover. We can’t have the insurance industry in it. Is that your position?

Yes, this is one of the ironies. Striking down the mandate may one day lead to single-payer health care (I think we’d get there anyway).

After some questions about Sotomayor about the taxing power, Clement turns to what the framers thought!

And the one thing I think the framers would have clearly identified as a direct tax is a tax on not having something.
I mean, the framing generation was divided over whether a tax on carriages was a direct tax or not. Hamilton thought that was a indirect tax; Madison thought it was a direct tax. I have little doubt that both of them would have agreed that a tax on not having a carriage would have clearly been a direct tax. I also think they would have thought it clearly wasn’t a valid regulation of the market in carriages.

I’m glad Clement checked with Zombie Madison and Hamilton.”

Then Breyer takes us down the path of not deciding how good the bill is (Lochner):

BREYER: Let me ask — can I go back for a step, because I don’t want to get into a discussion of whether this is a good bill or not. Some people think it’s going to save a lot of money. Some people think it won’t.
So I’m focusing just on the Commerce Clause; not on the Due Process Clause, the Commerce Clause. And I look back into history, and I think if we look back into history we see sometimes Congress can create commerce out of nothing. That’s the national bank, which was created out of nothing to create other commerce out of nothing.
I look back into history, and I see it seems pretty clear that if there are substantial effects on interstate commerce, Congress can act.
And I look at the person who’s growing marijuana in her house, or I look at the farmer who is growing the wheat for home consumption. This seems to have more substantial effects.
Is this commerce? Well, it seems to me more

commerce than marijuana. I mean, is it, in fact, a regulation? Well, why not? If creating a bank is, why isn’t this?
And then you say, ah, but one thing here out of all those things is different, and that is you’re making somebody do something.
I say, hey, can’t Congress make people drive faster than 45 — 40 miles an hour on a road? Didn’t they make that man growing his own wheat go into the market and buy other wheat for his — for his cows? Didn’t they make Mrs. — if she married somebody who had marijuana in her basement, wouldn’t she have to go and get rid of it? Affirmative action?
I mean, where does this distinction come from? It sounds like sometimes you can, and sometimes you can’t.
So what is argued here is there is a large group of — what about a person that we discover that there are — a disease is sweeping the United States, and 40 million people are susceptible, of whom 10 million will die; can’t the Federal Government say all 40 million get inoculation?
So here, we have a group of 40 million, and 57 percent of those people visit emergency care or other care, which we are paying for. And 22 percent of those

pay more than $100,000 for that. And Congress says they are in the midst of this big thing. We just want to rationalize this system they are already in.
So, there, you got the whole argument, and I would like you to tell me -JUSTICE
SCALIA: We’ll get to those questions in inverse order.

[I heard lots of LAUGHTER]
JUSTICE BREYER: Well, no, it’s one question. It’s looking back at that — looking back at that history.
The thing I can see that you say to some people, go buy; why does that make a difference in terms of the Commerce Clause?.

Commerce all the way down.

Clement says that McCullough was not a Commerce clause case.

What, of course, the Court didn’t say, and I think the Court would have had a very different reaction to, is, you know, we are not just going to have the

bank, because that wouldn’t be necessary and proper, we are going to force the citizenry to put all of their money in the bank, because, if we do that, then we know the Bank of the United States will be secure.
I think the framers would have identified the difference between those two scenarios, and I don’t think that the great Chief Justice would have said that forcing people to put their deposits in the Bank of the United States was necessary and proper.

Now, if you look through all the cases you mentioned, I do not think you will find a case like this. And I think it’s telling that you won’t. I mean, the regulation of the wheat market in Wickard against Filburn, all this effort to address the supply side and what producers could do, what Congress was trying to do was support the price of wheat. It would have been much more efficient to just make everybody in America buy 10 loaves of bread. That would have had a much more direct effect on the price of wheat in the prevailing market.
But we didn’t do that. We didn’t say when we had problems in the automobile industry that we are not just going to give you incentives, not just cash for clunkers, we are going to actually have ever everybody over 100,000 has to buy a new car

Clement is so, so, so good. It is scary how effectively he bullied Breyer.

JGR asks about the fact that everyone is in the market:

JUSTICE ROBERTS: Well, Mr. Clement,

the key to the government’s argument to the contrary is that everybody is in this market. It’s all right to regulate Wickard — again, in Wickard against Filburn, because that’s a particular market in which the farmer had been participating.
Everybody is in this market, so that makes it very different than the market for cars or the other hypotheticals that you came up with, and all they’re regulating is how you pay for it.
MR. CLEMENT: Well, with respect, Mr. Chief Justice, I suppose the first thing you have to say is what market are we talking about? Because the government — this statute undeniably operates in the health insurance market. And the government can’t say that everybody is in that market. The whole problem is that everybody is not in that market, and they want to make everybody get into that market.

Sotomayor asks if the Feds could impose car insurance requirements that somehow goes to Lochner.

SOTOMAYOR: But we don’t in car insurance, meaning we tell people, buy car — not we, the states do, although you’re going to — I’ll ask you the question, do you think that if some states decided not to impose an insurance requirement, that the Federal Government would be without power to legislate and require every individual to buy car insurance?
MR. CLEMENT: Well, Justice Sotomayor, let me say this, which is to say — you’re right in the first point to say that it’s the states that do it, which makes it different right there. But it’s also -JUSTICE
SOTOMAYOR: Well, that goes back to the substantive due process question. Is this a Lochner era argument that only the states can do this, even though it affects commerce? Cars indisputably affect commerce. So are you arguing that because the states have done it all along, the Federal Government is no longer permitted to legislate in this area?

And what a great example for the New Yorker!

MR. CLEMENT: But, Justice Sotomayor, what I think is different is there is lots of people in Manhattan, for example, that don’t have car insurance because they don’t have cars. And so they have the option of withdrawing from that market. It’s not a direct imposition from the government.
So even the car market is difference from this market, where there is no way to get outside of the regulatory web. And that’s, I think, one of the real problems with this because, I mean, we take as a given –

Sotomayor looks to the heavens for an example:

SOTOMAYOR: But you’re — but the given is that virtually everyone, absent some intervention from above, meaning that someone’s life will be cut short in a fatal way, virtually everyone will use health care.
MR. CLEMENT: At some point, that’s right, but all sorts of people will not, say, use health care in the next year, which is the relevant period for the insurance.

That’s  a good point. Premiums are limited to one year, not indefinitely.

Then Breyer drones on about knowing better than experts:

JUSTICE BREYER: But do you think you can, better than the actuaries or better than the members of Congress who worked on it, look at the 40 million people who are not insured and say which ones next year will or will not use, say, emergency care?
Can you do that any better than if we knew that 40 million people were suffering, about to suffer a contagious disease, and only 10 million would get sick . . .

The question that’s a proper question for this Court, though, is whether or not, for the first time ever in our history, Congress also has the power to compel people into commerce, because, it turns out, that would be a very efficient things for purposes of Congress’ optimal regulation of that market

Kagan alludes to the freedom of conscience issue of people who do not want insurance for religious reasons:

JUSTICE KAGAN: But, Mr. Clement, this goes back to the Chief Justice’s question. But, of course, the theory behind, not just the government’s case, but the theory behind this law is that people are in this market right now, and they are in this market because people do get sick, and because when people get sick, we provide them with care without making them pay.
And it that would be different, you know, if you were up here saying, I represent a class of Christian scientists. Then you might be able to say, look, you know, why are they bothering me. But absent that, you’re in this market. You’re an economic actor.

Clement argues that if Congress took a different path, “we wouldn’t be here.” I would respectfully disagree. They’d just have to cook up another argument:

MR. CLEMENT: And with respect to the health insurance market that’s designed to have payment in the health care market, everybody is not in the market. And that’s the premise of the statute, and that’s the problem Congress is trying to solve.
And if it tried to solve it through incentives, we wouldn’t be here; but, it’s trying to solve it in a way that nobody has ever tried to solve an economic problem before, which is saying, you know, it would be so much more efficient if you were just in this market

AMK asked about being in the market by creating risk:

MR. CLEMENT: Well, Justice Kennedy, I don’t think that’s right, certainly in any way that distinguishes this from any other context. When I’m sitting in my house deciding I’m not to buy a car, I am causing the labor market in Detroit to go south. I am causing maybe somebody to lose their job, and for everybody to have to pay for it under welfare. So the cost shifting that the government tries to uniquely to associate with this market, it is everywhere.

Breyer was getting really, really pedantic.

JUSTICE BREYER: Of course we do know that there are a few people, more in New York City than there are in Wyoming, who never will buy a car. But we also know here, and we don’t like to admit it, that because we are human beings we all suffer from the risk of getting sick. And we also all know that we’ll get seriously sick. And we also know that we can’t predict when. And we also know that when we do, there will be our fellow taxpayers through the Federal Government who will pay for this. If we do not buy insurance, we will pay nothing. And that happens with a large number of people in this group of 40 million, none of whom can be picked out in advance.
Now, that’s quite different from a car situation, and it’s different in only this respect. It shows there is a national problem, and it shows there is a national problem that involves money, cost insurance. So if Congress could do this, should there be a disease that strikes the United States and they want every one inoculated even though ten million will be hurt, it’s hard for me to decide why that isn’t interstate commerce, even more so where we know it affects everybody.

Some more originalist-ish arguments from Clement:

In Federalist 45, Madison says the commerce power. That’s a new power, but it’s not one anyone has any apprehension about.
The reason they didn’t have any apprehension about it is because it’s a power that only operated once people were already in commerce. You see that from the text of the clause. The first kind of commerce Congress gets to regulate is commerce with foreign nations. Did anybody think the fledgling Republic had the power to compel some other nation into commerce with us? Of course not. And in the same way, I think if the framers had understood the commerce power to include the power to compel people to engage in commerce

Whenever Kagan asked about aggregate effects, Clement turns to limiting principle:

KAGAN: Well, once again though, who’s in commerce and what are they in commerce?
If the effect of all these uninsured people is to raise everybody’s premiums, not just when they get sick, if they get sick, but right now in the aggregate, and Wickard and Raich tell us we should look at the aggregate, and the aggregate of all these uninsured

people are increasing the normal family premium, Congress says, by a thousand dollars a year. Those people are in commerce. They are making decisions that are affecting the price that everybody pays for this service.
MR. CLEMENT: Justice Kagan, again, with all due respect, I don’t think that’s a limiting principle. My unwillingness to buy an electric car is forcing up the price of an electric car. If only more people demanded an electric car there would be economies of scale, and the price would go down.

Kagan wasn’t so quick to buy it. Clement turned to the fact that the statute covers more than emergency care:

If all we were concerned about is the cost sharing that took place because of uncompensated care in emergency rooms, presumably we have before us a statute that only addressed emergency care and catastrophic insurance coverage. But it covers everything, soup to nuts, and all sorts of other things.
And that gets at the idea that there is two kinds of cost shifting that are going on here. One is the concern about emergency care and that somehow somebody who gets sick is going to shift costs back to other policy areas — holders. But there is a much bigger cost shifting going on here, and that’s the cost shifting that goes on when you force healthy people into an insurance market precisely because they are healthy, precisely because they are not likely to go to the emergency room, precisely because they are not likely to use the insurance they are forced to buy in the health care insurance. That creates a huge windfall. It lowers the price of premiums. And again, this is not just some lawyer up here telling you that’s what it does and trying to second-guess the congressional economic decisions. This is Congress’s findings, findings I on page 43 A of the appendix to the government’s –

Breyer is not a fan of broccoli:

JUSTICE BREYER: All that sounds like you’re
debating the merits of the bill. You ask really for limiting principles so we don’t get into a matter that I think has nothing to do with this case: broccoli, okay?
And the limiting principles, you’ve heard three. First, the Solicitor General came up with a couple joined, very narrow ones. You’ve seen in Lopez this Court say that we cannot, Congress cannot get into purely local affairs, particularly where they are noncommercial. And, of course, the greatest limiting principle of all, which not too many accept, so I’m not going to emphasize that, is the limiting principle derived from the fact that members of Congress are elected from States and that 95 percent of the law of the United States is State law. That is a principle though enforced by the legislature.
The other two are principles, one written into Lopez and one you just heard. It seems to me all of those eliminate the broccoli possibility, and none of them eliminates the possibility that we are trying to take the 40 million people who do have the medical cost, who do affect interstate commerce and provide a system that you may like or not like. That’s where we are in limiting principles

Ha! Clement turned Garcia into a verb!

MR. CLEMENT: Well, Justice Breyer, let me take them in turn. I would encourage this Court not to Garcia-ize the Commerce Clause and just simply say it’s up to Congress to police the Commerce Clause. So I don’t think that is a limiting principle.


MR. CLEMENT: I’d be delighted to, which is — I mean, I — you are absolutely right. Once you’re in the commerce power, there is not — this Court is not going to police that subject maybe to the Lopez limit. And that’s exactly why I think it’s very important for this Court to think seriously about taking an unprecedented step of saying that the commerce power not only includes the power to regulate, prescribe the rule by which commerce is governed, the rule of Gibbons v. Ogden. But to go further and say it’s not just prescribing the rule for commerce that exists but is the power to compel people to enter into commerce in the first place.

And at the end, Clement just shooes away Sotomayor:

SOTOMAYOR: Would you tell me, do you think the States could pass this mandate.
MR. CLEMENT: I represent 26 States. I do think the States could pass this mandate, but I -JUSTICE
SOTOMAYOR: Is there any other area of commerce, business, where we have held that there is a concurrent power between the State and the Federal Government to protect the welfare of commerce?
MR. CLEMENT: Well, Justice Sotomayor, I have to resist your premise, because I didn’t answer yes, the States can do it because it would be a valid regulation of intrastate commerce. I said yes, the States can do it because they have a police power, and that is the fundamental difference between the States on the one hand and the limited, enumerated Federal Government on the other.




Carvin opens up with policy argument:

I’d like to begin with the Solicitor General’s main premise, which is that they can compel the purchase of health insurance in order to promote commerce in the health market because it will reduce uncompensated care. If you accept that argument, you have to fundamentally alter the text of the Constitution and give Congress plenary power.
It simply doesn’t matter whether or not this regulation will promote health care commerce by reducing uncompensated care; all that matters is whether the activity actually being regulated by the act negatively affects Congress or negatively affects commerce regulation, so that it’s within the commerce power. If you agree with us that this is — exceeds commerce power, the law doesn’t somehow become redeemed because it has beneficial policy effects in the health care market.
In other words, Congress does not have the power to promote commerce. Congress has — Congress has the power to regulate commerce. And if the power exceeds their permissible regulatory authority, then the law is invalid.

The Chief asks about promoting commerce v. regulating commerce:


regulation includes the power to promote. Since the New Deal we’ve said that regulation in — there is a market agricultural products; Congress has the power to subsidize, to limit production, all sorts of things.
MR. CARVIN: Absolutely, Chief Justice, and that’s the distinction I’m trying to draw. When they are acting within their enumerated power then obviously they are promoting commerce, but the Solicitor General wants to turn it into a different power. He wants to say we have the power to promote commerce, to regulate anything to promote commerce, and if they have the power to promote commerce then they have the power to regulate everything, right? Because

OK, Carvin’s entire argument is about slippery slopes.

So the question is whether or not you can regulate activity because it has a statistical connection to an activity that harms Congress. And my basic point to you is this: the Constitution only gives Congress the power to regulate things that negatively affect commerce or commerce regulation. It doesn’t give them the power to regulate things that are statistically connected to things that negatively affect the commerce MR. CARVIN: I was just going to say, because if they have that power, then they obviously have the power to regulate everything because everything in the aggregate is statistically connected to something that negatively affects commerce, and every compelled purchase promotes commerce.

Breyer asks him about the innoculation question:

JUSTICE BREYER: I’m just picking on something. I’d like to just — if it turned out there was some terrible epidemic sweeping the United States, and we couldn’t say that more than 40 or 50 percent — I can make the number as high as I want — but the — the — you’d say the Federal Government doesn’t have the power to get people inoculated, to require them to be inoculated, because that’s just statistical.
MR. CARVIN: Well, in all candor, I think Morrison must have decided that issue, right? Because people who commit violence against -JUSTICE
BREYER: Is your answer to that yes or no?

MR. CARVIN: Oh, I’m sorry; my answer is no,
they couldn’t do it, because Morrison -JUSTICE BREYER: No, they could not do it. MR. CARVIN: Yes. JUSTICE BREYER: They cannot require people
even if this disease is sweeping the country to be inoculated. The Federal Government has no power, and if there’s — okay, fine. Go ahead.

Breyer gets all snarky that he was in dissent in Morrison:

MR. CARVIN: May I just please explain why? JUSTICE BREYER: Yes. MR. CARVIN: Violence against women
obviously creates the same negative impression on fellow citizens as this communicable disease, but the –and it has huge effects on the health care of our country. Congress found that it increased health care costs by -JUSTICE
BREYER: I agree with you that -MR. CARVIN: Well, but -JUSTICE BREYER: — that it had huge
negative effects but the majority thought that was a
local matter. JUSTICE SCALIA: I think that’s his point. (Laughter.)

Quote of the day out of context:

MR. CARVIN: I — I don’t know why having a
disease is any more local than — that beating up a woman.

Breyer asks about all humans involuntarily entering the health care market:

JUSTICE BREYER: Now we — now you’ve changed the ground of argument, which I accept as — as totally legitimate. And then the question is when you are born, and you don’t have insurance, and you will in fact get sick, and you will in fact impose costs, have you perhaps involuntarily — perhaps simply because you are a human being — entered this particular market, which is a market for health care?
MR. CARVIN: If being born is entering the market, then I can’t think of a more plenary power Congress can have, because that literally means they can regulate every human activity from cradle to grave. thought that’s what distinguished the plenary police power from the very limited commerce power.
I don’t disagree that giving the Congress plenary power to mandate property transfers from A to B would be a very efficient way of helping B and of accomplishing Congress’s objectives. But the framers

That’s Calder v. Bull.

Breyer’s hypo was so long, that everyone forgot the previous question!

BREYER: I see the point. You can go back to, go back to Justice Kagan. Don’t forget her question.
JUSTICE KAGAN: I’ve forgotten my question.
MR. CARVIN: I — I was facing the same

dilemma, Justice Kagan.
JUSTICE GINSBURG: Let me — let me ask a question I asked Mr. Clement. It just seems -JUSTICE
KAGAN: See what it means to be the junior justice?


RBG goes back to social security:

JUSTICE GINSBURG: It just seems very strange to me that there’s no question we can have a Social Security system besides all the people who say: I’m being forced to pay for something I don’t want. And this it seems to me, to try to get care for the ones who need it by having everyone in the pool, but is also trying to preserve a role for the private sector, for the private insurers. There’s something very odd about that, that the government can take over the whole thing and we all say, oh, yes, that’s fine, but if the government wants to get — to preserve private insurers, it can’t do that.

I can’t stop laughing!

MR. CARVIN: Well I don’t think the test of a law’s constitutionality is whether it more adheres to the libertarian principles of the Cato Institute or the statist principles of someone else. I think the test of a law’s constitutionality is not those policy questions; it’s whether or not the law is regulating things that negatively affect commerce or don’t.

And since obviously the failure to purchase an item doesn’t create the kind of effects on supply and demand that the market participants in Wickard and Raich did and doesn’t in any way interfere with regulation of the insurance companies, I don’t think it can pass the basic

Kagan asks about the (lack of) constitutional faces:

JUSTICE KAGAN: That’s why I suggested, Mr. Carvin, that it might be different if you were raising an as-applied challenge and presenting a class of people whom you could say clearly would not be in the health care market. But you’re raising a facial challenge and we can’t really know which, which of the many, many, people that this law addresses in fact will not participate in the health care market and in fact will not impose costs on all the rest of us.
So the question is can Congress respond to those facts, that we have no crystal ball, that we can’t tell who is and isn’t going to be in the health insurance market, and say most of these people will be and most of these people will thereby impose costs on the rest of us and that’s a problem that we can deal with on a class-wide basis?

I think bans on unpasteurized goods are bogus:

MR. CARVIN: You are not forced to buy a product you don’t want. And I agree with you that since the government regulates all markets there is no limiting principle on their compelled purchase. When they put these environmental controls on the –

Breyer calls out Judge Sutton. Carvin is not impressed:

BREYER: What about — the simplest counter-example for me to suggest is you’ve undoubtedly read Judge Sutton’s concurring opinion. He has about two pages, it seemed to me, of examples where everyone accepts the facts that under these kinds of regulations the government can compel people to buy things they don’t otherwise want to buy.
For example, he gives, even in that farm case, the farmer who was being forced to go out and buy grain to feed to his animals because he couldn’t raise it at home. You know and he goes through one example after another. So what — what is your response to that, which you’ve read?
MR. CARVIN: Judge Sutton is wrong in each and every example. {Laughter] There was no — there was no compulsion in Raich for him to buy wheat. He could have gotten wheat substitutes or he could have not sold wheat, which is actually what he was doing. There is a huge difference between conditioning regulation, i.e., conditioning access to the health care market and saying you must buy a product, and forcing you to buy a product. And that, that — I’m sorry.

Soto shows some empathy:

SOTOMAYOR: Do you think that there’s — what percentage of the American people who took their son or daughter to an emergency room and that child was turned away because the parent didn’t have insurance — do you think there’s a large percentage of

the American population who would stand for the death of
that child -MR.
CARVIN: One of the most -JUSTICE
SOTOMAYOR: They had an allergic reaction and a simple shot would have saved the child?
MR. CARVIN: One of the more pernicious, misleading impressions that the government has made is that we are somehow advocating that people be — could get thrown out of emergency rooms, or that this alternative that they’ve hypothesized is going to be enforced by throwing people out of emergency rooms. This alternative; i.e. conditioned access to health care on buying health insurance, is enforced in precisely the same way that the Act does. You either buy health insurance or you pay a penalty of $695. You don’t have doctors throwing people out on the street. And — and so the only

Sotomayor asks an interesting line of questions about the difference between making someone pay a penalty for not buying health insurance v. giving a tax credit for buying health insurance. This was the argument in the Arizona Tax Credit case last term:

SOTOMAYOR: So how is this different than this Act which says if a taxpayer fails to meet the requirement of having minimum coverage, then they are responsible for paying the shared responsibility payment?

MR. CARVIN: The difference is that the taxpayer is not given a choice. It’s the difference between banning cigarettes and saying I’m going to enforce that legal ban through a $5 a pack penalty, and saying look, if you want to sell cigarettes, fine. I’m going to charge you a tax of $5 a pack. And that’s

SOTOMAYOR: I think — I think that’s what’s happening, isn’t it?

SOTOMAYOR: We’re paying — I thought that everybody was paying, what is it, $10 a pack now? I don’t even know the price. It’s pretty high.
MR. CARVIN: Right. And everyone understands -JUSTICE
SOTOMAYOR: I think everybody recognizes that it’s all taxation for the purposes of dissuading you to buy it.

AMK has a concern:

JUSTICE KENNEDY: And the government tells us that’s because the insurance market is unique. And in the next case, it’ll say the next market is unique. But I think it is true that if most questions in life are matters of degree, in the insurance and health care world, both markets — stipulate two markets — the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and the costs of providing medical care in a way that is not true in other industries.
That’s my concern in the case.

Finally, Kagan gets to the activity/inactivity distinction:

JUSTICE KAGAN: Mr. Carvin, a large part of
this argument has concerned the question of whether certain kinds of people are active participants in a market or not active participants in a market. In your test, which is a test that focuses on this activity/inactivity distinction, would force one to confront that problem all the time.
Now, if you look over the history of the Commerce Clause, what you see is that there were sort of unhappy periods when the Court used tests like this -direct versus indirect, commerce versus manufacturing. I think most people would say that those things didn’t really work. And the question is, why should this test, inactive versus active, work any better?
MR. CARVIN: The problem you identify is exactly the problem you would create if you bought the government’s bogus limiting principles. You’d have to draw distinctions between the insurance industry and the car industry and all of that.
We turn you to the Commerce Clause jurisprudence that bedeviled the Court before the 1930s, where they were drawing all these kinds of distinctions among industries; whereas our test is really very simple. Are you buying the product or is Congress compelling you to buy the product? I can’t think of a

brighter line.
And again, if Congress has the power to compel you to buy this product, then obviously, they have got the power to provide you — to compel you to buy any product, because any purchase is going to benefit commerce, and this Court is never going to second-guess Congress’s policy judgments on how important it is this product versus that product.

JUSTICE ALITO: Do you think they are drawing a line between commerce and everything else that is not commerce is drawing an artificial line, drawing a line between Congress and manufacturing?
MR. CARVIN: The words “inactivity” and “activity” are not in the Constitution. The words “commerce” and “noncommerce” are. And again, it’s a distinction that comes, Justice Kagan, directly from the text of the Constitution.
The Framers consciously gave Congress the ability to regulate commerce, because that’s not a particularly threatening activity that deprives you of individual freedom. If you were required, if you were authorized to require A to transfer property to B, you have, as the early cases put it, a monster in legislation which is against all reason in justice, because everyone intuitively understands that regulating people who voluntarily enter into contracts in setting changing conditions does not create the possibility of Congress compelling wealth transfers among the citizenry. And that is precisely why the Framers denied them the power to compel commerce, and precisely why they didn’t give them plenary power.

Calder v. Bull!


No questions. Just a closing argument. Oh, and a shout-out to Romneycare!

Think about how much it would cost to get the insurance when you are at the hospital or at the doctor. It would be — it would be unfathomably high, that will never work. Congress understood that. It chose a means that will work. The means that it saw work in the States and in the State of Massachusetts and that, and that it had every reason to think would work on a national basis.

Boy, I’m done. That was draining to follow. But amazing.

CHIEF JUSTICE ROBERTS: Thank you, General. Counsel, we’ll see you tomorrow.

Sane time, same place tomorrow.