Just found some more great news regarding the resistance to Obamacare. According to the Colorado News Agency, the Colorado House passed a resolution yesterday calling for a constitutional convention to repeal Obamacare. Looks like were beating back this health care takeover on all fronts!

Keep it up everyone!

Obamacare is headed to the Supreme Court. Great news! The cherry on top is that The Independence Institute is filing not one, but TWO amicus briefs (amici) on behalf of liberty and against the health care takeover. Constitutional scholars Dave Kopel and Rob Natelson take on the Medicaid mandate in one and the individual mandate in the other. Before I get into the Obamacare briefs, let’s take a step back and understand what this means. Dave Kopel has a rich history of influencing major Supreme Court decisions. For example, both the Heller and McDonald decisions were influenced by Dave’s Second Amendment work. For Dave’s most recently submitted amici, visit his website DaveKopel.com and go to the “In the Courts” section. There’s a half dozen briefs listed there that are just from this past year. To say that Dave is prolific is an injustice. He’s more like Gandalf casting unconstitutional demons out of Mordor Washington, DC.

Ok, back on track. The first brief on how the Medicaid mandate is unconstitutional was filed earlier this week (PDF here). I won’t get into the details because, well, I’m not what you call a “reader,” but I was able to get through Rob Natelson’s summary on his blog. The gist of the argument is quite simple: the Feds are big bullies. If the country were a playground, they’d be going around giving all the state’s wedgies and stealing their milk money. But it’s actually worse than that. Rob makes the case that it’s not only bullying, but also hostage taking. In other words, a bully with a taste for kidnapping. Double bad. Built into the Medicaid mandate in Obamacare are requirements that the states expand their Medicaid programs… OR ELSE. The “or else” part is the threat of withholding federal Medicaid funding. Hence, a large sliver of each state’s budget held hostage. As Rob puts it,

Since federal Medicaid funds are a huge portion of all states’ budgets, the effect is to subordinate state fiscal policy to the whim of federal officials. This is clearly unconstitutional.

Stay tuned for details and PDF of the other amicus. It will focus on the unconstitutionality of the individual health insurance mandate. Word is, Rob and Dave work their magic on the Commerce Power and the Necessary and Proper Clause. I also hear that they plan to sit down for an iVoices.org podcast with my main minion Justin Longo on both briefs. I’ll post the brief and the podcast here when they come out.

Until then, say NO to bullying.

On behalf of the Independence Institute, Rob Natelson and I wrote an amicus brief on the Medicaid mandate currently before the Supreme Court. (The ACA requirement that states must drastically expand Medicaid eligibility, or lose all their federal matching funds for Medicaid.) Here’s the Summary of Argument:

By imposing the Medicaid mandates in the Affordable Care Act (“ACA”), Congress exceeded the scope of its enumerated powers. If allowed to stand, those mandates could be the death-knell for the Constitution’s finely calibrated system of federalism. The states truly would be little more than agencies for Congress to “commandeer” at will.

The Founders created and the People ratified a Constitution protecting the States’ role as limited “sovereigns.” As this Court has ruled repeatedly, the states’ sovereign “independence” entitles them to make decisions within their sphere based on their own policy judgments, free of federal coercion. As explained below, this rule and the closely-related principle of federal non-coercion is of particular constitutional importance in financing health and social services.

In sustaining the Medicaid mandates, the United States Court of Appeals for the Eleventh Circuit overlooked both Founding-Era constitutional principle and modern Supreme Court doctrine. It also overlooked aspects of the Medicaid mandates that particularly aggravate their coercive qualities. Insofar as the ACA authorizes withdrawal of all Medicaid funds from States that choose not to submit to the Medicaid mandates, that statute slashes at the heart of American federalism. It is unconstitutional and void.

Intelligent comments are welcome, although experience suggests that there will also be plenty of comments from twits who have not read the brief, yet proclaim their absolute certainty about supposedly fatal errors in its legal reasoning. Rob’s summary of brief is available on his blog.

A massive medical privacy invasion in Colorado, another lame attempt to control the Internet by Congress, and the case in favor of fracking are all topics of recently published works by Independence Institute writers.

First Independence Institute intern and president of the Denver chapter of Liberty on the Rocks Donovan Schafer explains why hydraulic fracturing (fracking) is nothing to panic over. Writes Donovan:

In a recent report, the EPA linked groundwater contamination in Pavillion, Wyoming to the controversial practice of hydraulic fracturing (“fracking”) used to extract oil and gas. You can almost hear the collective “Hooray!” from anti-fracking advocates. But the actual data in the EPA report make it clear that fracking is safe.

Check out the whole thing here in the Colorado Springs Gazette.

Also be sure and check out II’s Amy Oliver Cooke and Linda Gorman in the Summit Daily as they point out the huge threat to medical privacy from Colorado’s “All-Payer Claim” database. According to Cooke and Gorman:

Colorado state government, and local foundations and health policy elites, have become so ideologically invested in failed health reform policies that they now see nothing wrong with forcing Colorado citizens to give their medical records to a centralized repository, free from scrutiny by state auditors, open records requests and open meeting requirements.

Read the whole thing here.

And don’t miss Senior Fellow in Technology Barry Fagin writing for the Colorado Springs Gazette’s editorial board on the Stop Online Piracy Act, which Barry calls a “bipartisan pile of waste making its way through the bowels of Congress…”

Check it out here.

So said the unanimous Supreme Court in United States v. Linder, 268 U.S. 5 (1925). The opinion was written by McReynolds, and joined by the progressive Justices Brandeis and Holmes, along with the rest of the Court.

At issue was the federal Harrison Anti-Narcotic Law, which taxed opium and coca leaves, and their derivatives. Ostensibly as part of the tax scheme, the Act also required registration of those drugs. A physician lawfully dispensed one tablet of morphine and three tablets of cocaine to a female patient who was an addict. The trial court instructed the jury that Dr. Linder’s actions would be lawful if the drugs were dispensed as painkillers for stomach cancer or an ulcer, but not simply because the patient was an addict. As the Supreme Court observed, the indictment “does not question the doctor’s good faith nor the wisdom or propriety of his action according to medical standards. It does not allege that he dispensed the drugs otherwise than to a patient in the course of his professional practice or for other than medical purposes. The facts disclosed indicate no conscious design to violate the law, no cause to suspect that the recipient intended to sell or otherwise dispose of the drugs, and no real probability that she would not consume them.”

The Court pointed out that “Congress cannot, under the pretext of executing delegated power [here, the Tax Power], pass laws for the accomplishment of objects not intrusted to the federal government. And we accept as established doctrine that any provision of an act of Congress ostensibly enacted under power granted by the Constitution, not naturally and reasonably adapted to the effective exercise of such power, but solely to the achievement of something plainly within power reserved to the states, is invalid and cannot be enforced.” This was supported by a string cite starting with McCulloch v. Maryland.

In the instant case, the power to tax cocaine and morphine carried with it incidental powers to effectuate that tax, and the effectuation of the tax was the sole legitimate use of incidental powers. Incidental powers could not be construed to control a physician’s decision about properly taxed and registered products:

“Obviously, direct control of medical practice in the states is beyond the power of the federal government. Incidental regulation of such practice by Congress through a taxing act cannot extend to matters plainly inappropriate and unnecessary to reasonable enforcement of a revenue measure. The enactment under consideration levies a tax, upheld by this court, upon every person who imports, manufactures, produces, compounds, sells, deals in, dispenses or gives away opium or coca leaves or derivatives therefrom, and may regulate medical practice in the states only so far as reasonably appropriate for or merely incidental to its enforcement. It says nothing of ‘addicts’ and does not undertake to prescribe methods for their medical treatment. They are diseased and proper subjects for such treatment, and we cannot possibly conclude that a physician acted improperly or unwisely or for other than medical purposes solely because he has dispensed to one of them in the ordinary course and in good faith, four small tablets of morphine or cocaine for relief of conditions incident to addiction. What constitutes bona fide medical practice must be determined upon consideration of evidence and attending circumstances. Mere pretense of such practice, of course, cannot legalize forbidden sales, or otherwise nullify valid provisions of the statute, or defeat such regulations as may be fairly appropriate to its enforcement within the proper limitations of a revenue measure.”

Thus, said the Court, Linder was different from previous cases in which the Court had upheld the prosecution of physicians whose prescription of large quantities of drugs was obviously a sham, for no medical purpose, and simply to serve as a conduit for drugs to the general public.

It is not surprising that Linder was relied in several cases finding that Congress had exceeded tax power. U.S. v. Butler (1936); Hopkins Federal Savings & Loan Ass’n v. Cleary (1935); U.S. v. Constantine (1935); Trusler v. Crooks (1926).

Significantly, after 1937, the Court continued to rely on Linder, and in upholding other statutes, to distinguish them from the mis-application of the statute in Linder. “While there has long been recognition of the authority of Congress to obtain incidental social, health or economic advantages from the exercise of constitutional powers, it has been said that such collateral results must be obtained from statutory provisions reasonably adapted to the constitutional objects of the legislation. Linder v. United States.” Cloverleaf Butter v. Patterson (1942).

Linder appears the very first paragraph of a case familiar to many VC readers, United States v. Miller (1939). Citing, inter alia, Linder, the Miller opinion says that the federal tax and tax registration system for certain firearms does not “usurp[] police power reserved to the States.”

In U.S. v. Kahriger (1953), Linder is a “But see” footnote for this sentence: “Unless there are provisions, extraneous to any tax need, courts are without authority to limit the exercise of the taxing power.” I think that’s a misreading of Linder. The Court’s point in Linder was that micro-managing a physician’s decision about when to write a prescription was in fact “extraneous to any tax need.” So Linder and Kahriger are not inconsistent.

In a case decided after Kahriger, the Court upheld a gambling device tax, expressly distinguishing it from Linder, because the gambling tax is “certainly not a mere ruse designed to invade areas of control reserved to the states.” U.S. v. Five Gambling Devices (1953).

The most important case which relies on Linder is Ashwander v. Tennessee Valley Authority (1936) (upholding the TVA). There, the majority opinion by Chief Justice Hughes affirms that “The Congress may not, ‘under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the government.’ Chief Justice Marshall, in McCulloch v. Maryland, 4 Wheat. 316, 423; Linder v. United States, 268 U.S. 5, 15, 17.”

Justice Brandeis’s concurrence in Ashwander is, to this day, regarded as the most important guidance for the judicial principles of abstention. Number 7 of the “Ashwander principles” is that a court should attempt to construe a statute so as to avoid a constitutional problem, and for this proposition, Justice Brandeis cited Linder, among other cases.

In short, even if one takes the view that cases upholding certain aspects of the New Deal and the Fair Deal enjoy some sort of supra-precedential status that earlier cases do not, Linder is part of the fabric of those privileged cases.

Ok, maybe my title is a bit of an overstatement. Granted, podcasts on issues surrounding the law are rarely outside the confines of “wonk,” somehow our resident Constitutional Law scholar Professor Rob Natelson makes constitutional law, legal matters and history consumable even at my level. His latest iVoices.org podcast is on judicial federalism. …Judicial whaaaattt?

Let me explain. Like the Founders themselves, the center-right today is a big fan of federalism – aka states’ rights. The Constitution is a document that outlines enumerated federal powers. Whatever not enumerated is left to the states and people. This way, we have 50 separate locations for testing public policies. 50 “test tubes of innovation” reveal what policies work and what policies fail miserably. (i.e. Romney-care in Massachusetts anyone?) Conservatives rightly point to federalism’s rich history and practical advantages when it comes to things like commerce and regulating economic affairs. However, federalism as it pertains to the law, civil justice, and the courts rarely, if ever, gets discussed. This is where Professor Rob Natelson comes in.

He argues in his blogpost that the Colonists were just as likely to be heard screaming, “leave our law alone” as they were “no taxation without representation!” The idea that the Crown ought not to interfere in Colonial civil justice matters was essential to the early patriots. Indeed, early pamphleteers mentioned among the many grievances against the King the injustice of British interference in strictly American judicial matters. Consequently, these early cries for judicial federalism were woven into our nation’s founding documents.

Today, “conservatives” in Congress are pushing for a federal medical malpractice reform bill – HR5. In other words, they like federalism and states rights – except when it comes to judicial matters. Then they want Washington, DC to impose its will on state law. Of course this is nonsense and Rob explains exactly why in this important paper, The Roots of American Judicial Federalism. As Rob says in the podcast, “what’s Constitutional isn’t always what I like. And what’s unconstitutional isn’t always what I don’t like.”

In the constant struggle for taxpayer dollars, there exists one big budget item that tends to get lost in shuffle: Medicaid.

Medicaid plays a particularly cruel trick on state budgets. As the economy takes a turn for the worse, revenues coming into the government decline. Coloradans are making less money and paying less in taxes. In turn, poorer Coloradans means more of us on government rolls – like Medicaid. With more people applying for Medicaid benefits, the strain on government’s smaller revenue stream becomes greater and greater. It’s a vicious cycle that doesn’t seem to excite newspaper reporters like declining funds for K-12 education seems to.

As rare as a good Medicaid lead story is, the Durango Herald’s Joe Hanel did a great job of reporting on what many consider a rather unsexy news story. Here is something to be concerned with,

An extra 281,000 people will join the Medicaid rolls between 2007, when the downturn began, and next year, the state predicts. That’s an increase of 72 percent in just six years.

Ouch. A 72% increase would require some extra funding right Joe?

Although next year’s budget is growing slightly, higher Medicaid expenses will eat up all of the growth and more, putting the squeeze on schools, colleges and the rest of government.

Double ouch! See, it’s a perpetuating cycle. The question is: what can we do about it? Some would suggest more taxes and fees. Some want more taxes masquerading as fees. But that only addresses the revenue side of the equation. And increasing revenues means taking more from the struggling private sector – the sector that actually creates jobs. What about the cost side of the equation? It is here where Hanel quotes our Health Care Policy Center director Linda Gorman,

Also, the state can ask for specific waivers from federal Medicaid rules, Gorman said. In fact, Colorado already has 11 waivers, but they usually let the state expand coverage in a more cost-effective way than federal rules allow, not reduce coverage. Gorman thinks the state needs to be more creative about asking for waivers that would let it run its programs more economically.

To hear more Linda Gorman on the crushing weight of Medicaid expansion, check out my TV show from a few weeks back.

Gary Lawson and I explain why, in an article published last week by Yale Law Journal Online.

In short, the Necessary and Proper Clause expressed the well-known agency law doctrine of principals and incidents. That is, the grant of power to an agent (and the federal government was an agent of the people, to exercise certain delegated powers) was considered to include incidental powers. (Unless the parties specified to the contrary.) To be an incidental power, a power had to be subsidiary to, inferior to, and “less worthy” (in the language of the time) than the principal power. So if A delegates to B the power to manage A’s farm for five years, B could lease part of the farm to C for a few years, but B could not sell the farm. The power to sell the farm is not an “incident” of the power to manage a farm. It is a power that is as great as the power to manage the farm.

Thus, the first half of Chief Justice Marshall’s opinion in McCulloch wrestles with the question of whether the power to establish a corporation (here, the 2d Bank of the United States) can be considered an “incident” of the enumerated congressional powers. This portion of the opinion is often expurgated from constitutional law textbooks. But not from Randy Barnett’s Constitutional Law: Cases in Context.

So is the power to order people to engage in commerce with certain corporations “incidental” to the enumerated power “to regulate Commerce . . .  among the several States”? Lawson and I argue that the power to compel intrastate commerce is of at least equal “dignity” as the power to regulate voluntary interstate commerce. Thus, the individual mandate cannot be justified a “necessary and proper” to the exercise of the power to regulate interstate commerce.

Further, the word “proper” affirms the agency/fiduciary law rule that an agent  must act reasonably, and when he is acting on behalf of several principals must treat the principals equally. So in Rooke’s Case, it was unreasonable that the entire costs of a water control project were imposed on a single landowner, when other landowners also benefited from the project. In Leader v. Moxon (1773) paving commissioners were unreasonable when they ordered a road repair that effectively buried the doors and windows of the plaintiff’s house, making plaintiff bear the entire burden of a project that was supposedly for the benefit of him and others. In the Founding era, government creation of a monopoly was the paradigm example of a government act that was not “proper,” because the monopolist was benefited to the detriment of everyone else.

In 1787, a consumer could at least choose not to buy the monopolist’s product.  ”The conclusion is clear: if a commercial monopoly—which citizens may avoid by not purchasing the product monopolized—is constitutionally void as ‘improper,’ then far more ‘improper’ is a mandate for the benefit of political favorites, which none but other political favorites may avoid. . . . [C]oerced commerce with congressionally favored oligopolists is constitutionally improper and void.”

Thus, if the Supreme Court follows the original meaning of the Necessary and Proper clause, and McCulloch v. Maryland‘s accurate exposition of that meaning, the Court will not rule in favor of the individual mandate as a necessary and proper exercise of the power to regulate interstate commerce.

AG Suthers on the Obamacare lawsuit:

Colorado state treasurer Walker Stapleton on PERA:

It’s a simple law of economics: when you prevent prices from rationing goods and services, something else must ration them. During the Nixon administration’s price controls, it was long lines and waiting that rationed gasoline. When you expand “free” medical services – like Obamacare does – price is no longer a factor. Therefore, something (or someone) else must do the rationing.

Washington state knows a thing or two about rationing medical services. According to this Investor’s Business Daily article, Washington has had to put a cap on how many times they allow Medicaid recipients to visit the emergency room each year. In this case, it is the political class who is doing the rationing.

Our Health Care Policy Center director Linda Gorman reminds us in the article that our health care system is politically controlled. Thus, politicians are in control of medical decisions and they are the ones doing the rationing like in Washington state.

When health care systems are politically controlled, politicians direct resources away from the seriously ill who need expensive advanced medical care, to the healthy voter,” said Linda Gorman, a senior fellow at the conservative Independence Institute. “Relatively few voters need advanced care, so catering to the healthy makes political sense.

Good point Linda. When you allow the political class to make medical decisions, you have to be honest who they have in mind when making those decisions.

Makes you sick, doesn’t it. (pun intended)