A message from “Law World” — What Chief Justice Roberts said about the individual mandate

Like Scott, I was skeptical that the Supreme Court would save us from Obamacare, although in light of the oral argument, I thought the chance of such “salvation” was close to 50 percent. In late April, at 15 to 20 person dinner organized by the Federalist Society, there was a show of hands of those who thought the Obamacare mandate would be upheld. My hand went up. I’m pretty sure it was the only one.

I’m disappointed that my prediction turned out to be right. But the decision confirms that “Law World” is a highly indeterminate place. It would be indeterminate enough if every member of the Court viewed the job as applying the words of the Constitution as they were originally understood. But that view of the job is rejected by a majority of the Justices and, with no other rule-based view of the job in its place, a range of plausible outcomes becomes possible in a great many cases.

Chief Justice Roberts’ opinion demonstrates this, I think. In this post, I summarize, without much commentary, my understanding of what Roberts wrote in reaching his conclusion, joined by the four liberal Justices, that the individual mandate is constitutional. Many of his arguments reflect well-established precedent and rules of construction, while the remaining ones seem plausible, at least facially, in Law World. However, I reserve the right to revise this conclusion after I have re-read the opinions and given the matter more thought.

Roberts found that the individual mandate in Obamacare cannot be upheld under the Commerce Clause. He did so essentially because the mandate regulates economic inactivity by individuals, which that Clause does not permit.

But the government argued, as an alternative theory, that the mandate can be upheld as a legitimate exercise of the federal government’s taxing power. For Roberts, resolving this claim required answers to two questions. First, is it reasonable to view the mandate as a tax; second, if so, is the mandate a valid exercise of the taxing power.

Notice how Roberts framed the first question. He didn’t ask whether the mandate is best viewed as a tax, rather than a penalty. He asked whether viewing it as a tax is reasonable – i.e., a “fairly possible” interpretation.

Here, the Chief Justice adopted the view, which appears often in constitutional jurisprudence, that before a court overturns a statute as unconstitutional, it must resort to every reasonable interpretation of the statutory language to see whether the statute can be saved. This is part of the “judicial modesty” that Roberts likes to talk about. In his view, and the view of many, this approach guards against a “judicial activism” in which judges are too aggressive in thwarting the will of popularly elected branches of the government.

To find it reasonable to view the mandate as a tax, Roberts had to overcome Congress’ own characterization of the mandate as a penalty, not a tax. Here, Roberts noted that congressional labeling doesn’t control the nature of its actions for purposes of constitutional adjudication. This view also has support in court precedent.

But earlier in the decision, Roberts found that the mandate is not tax for purposes of the Anti-Injunction Act precisely because Congress called the exaction a penalty. He defended this seeming contradiction by arguing that it is up to Congress to decide whether to apply the Anti-Injunction Act (its own creature) to its own legislation. But Congress cannot decide whether something is a tax for purposes of the Constitution.

Roberts then noted that the mandate looks like a tax as much as it does a penalty in some important respects. For example, the IRS collects it, and the levy is, for most people, much less exacting than the price of the insurance they are declining to buy. Thus, Roberts concluded that it is a reasonable view, though not necessarily the best one, to say that this is a tax.

While this portion of Roberts’ opinion is debatable, it should be noted that many critics of the mandate described it as a tax. Of course, as noted, the mandate’s defenders denied that it is. To the extent that these defenders are elected officials, the response to their hypocrisy, I imagine Roberts would say, is to “throw the bums out.”

For Roberts, the issue then became whether the mandate is a valid exercise of the taxing power. Dealing with the main argument raised by the plaintiff in the case, he found that the mandate is not a direct tax under the recognized definition, and therefore doesn’t need to be apportioned among the states.

But what about the fact that the government is taxing inactivity? This seemed to trouble Roberts a bit. However, he argued that, though the Constitution protects citizens from being forced into economic activity, it doesn’t provide a guarantee that inactivity won’t be taxed.

Roberts agreed that there are limits to the government’s ability to tax inaction. The tax cannot be overly punitive; the power to tax should not become the power to destroy. But Roberts found that the “tax” imposed by the mandate meets this test because, in essence, the amounts involve do not exceed, and usually are lower than, the cost of the insurance.

On its face, Roberts’ decision is not a shocking “missive” from Law World. But I’ll have more to say about the case after I’ve re-read the opinions and given things more thought.