Thursday, January 20, 2011

Summary of the parties’ handling of the activity-inactivity issue in TMLC v. Obama

In Thomas More Law Center v. Obama, the parties’ handling of the activity-inactivity distinction offers a fascinating glimpse into the crux of one of the most contentious issues raised in the ACA litigation: whether, by mandating that all Americans purchase basic health insurance coverage, Congress is seeking to regulate an activity that has a substantial affect on interstate commerce. How the Sixth Circuit resolves this issue will likely influence the rest of the suits that have been filed across the country, so we are providing a summary of the parties’ respective arguments concerning the activity-inactivity distinction.

The appellants argue that for the ACA’s individual mandate to fit into Lopez’s third category, Congress must seek to regulate an activity that substantially affects interstate commerce. (Appellant’s brief at 40.) They argue that Lopez and Morrison require that, at a minimum, Congress must seek to regulate an activity or “economic endeavor” for it to properly trigger its Commerce Clause authority. According to the appellants, the ACA does not satisfy this standard because, “[i]n this case, the Act attempts to regulate inactivity—by definition a non-event cannot be classified in any respect, let alone as an ‘economic endeavor’” (Id. at 41.) This, they argue, is problematic because “the Act does not identify any class of activities, but rather simply asserts that individuals’ inactivity is the basis for Congress’s exercise of Commerce Clause power.” (Id. at 42.)

According to the appellants, Congress has employed a “trick” as a means of triggering its Commerce Clause authority. (Id. at 44.) They argue that, “before Congress can regulate an activity, such activity must already exist; thus, in the Act, Congress commands all citizens to engage in economic activity (i.e. purchase health insurance), then Congress regulates that activity.” (Id.) The appellants argue that ratifying such an exercise of congressional power presents an “obvious danger” because “it would alter the relationship of the federal government to the states and the people.” (Id.) Furthermore, they contend, “such an alteration to Article I, § 8 would constitute an amendment to the Constitution in contravention of Article V.” (Id.)

In its brief, the U.S. writes that the appellants argument “disregards their participation in the health care market and the teachings of the Supreme Court, which focus on whether Congress seeks to regulate interstate commerce, and if so, what it may do in furtherance of that regulation.” (Appellee’s brief at 45.) The U.S. argues that in Raich, the Supreme Court “found it irrelevant that the plaintiffs were not engaged in commercial activity and that they did not buy, sell, or distribute any portion of the marijuana that they possessed,” because “Congress had a rational basis for concluding that leaving home-consumed marijuana outside federal control would . . . affect price and market conditions.” (Id. at 46.) This, they argue, is in line with the Court’s pre-and post-Raich holdings concerning the effect of non-economic activities on Congress’s ability to regulate certain national markets. (See id. at 46–47.)

The U.S. writes that by attempting to distinguish the matter at hand from Wickard and Raich, the appellants “focus on the wrong market and ignore what Congress sought to regulate” with the individual mandate. (Id. at 47–48.) The U.S. argues that, “Even if plaintiffs do not currently participate in the insurance market, they indisputably participate in the market for health care services.” (Id. at 48.) Accordingly, “Requirements to obtain insurance are not imposed because of participation in the insurance market itself; they are imposed because of concerns that individuals or corporations may be unable to meet costs resulting from activities in other markets.” (Id.)

Finally, the U.S. argues that the “Plaintiffs’ attempt to draw an impermeable line separating participation in the health market from the maintenance of insurance coverage ignores the fundamental feature of health insurance—its function as the principal means of payment for health care services in the United States.” (Id. at 49.) The U.S. cites to various academics as well as the district court’s findings in this matter to support its position that deciding whether to purchase health insurance coverage is economic. (See id. at 49–51.) With this, the U.S. argues that if the plaintiffs “or any other person” who decides not to purchase health insurance coverage “encounters unexpected expenses for which they cannot pay, those costs will be externalized and borne by other consumers.” (Id. at 51.) Thus, “Congress acted well within its Commerce Clause power in regulating this economic decision that has profound economic effects on interstate commerce.” (Id. at 51–52.)