Friday night means the Independence Institute’s public affairs television show Devil’s Advocate on Colorado Public Television 12. First, Independence Institute constitutional scholar Rob Natelson sits down with host Jon Caldara to discuss his amicus brief on the Necessary and Proper Clause of the U.S. Constitution in the recent Obamacare Supreme Court case and how that clause affected the rulings. Then Colorado Springs Gazette editorial page editor Wayne Laugesen swings by to talk about the Waldo Canyon wildfire. That’s tonight at 8:30PM on Colorado Public Television 12.
Archive for the 'Necessary and Proper' Category
McCulloch v. Maryland had a very good day at the Supreme Court yesterday, with NFIB relying on and applying McCulloch‘s rules for when an enactment violates the Necessary and Proper Clause. What happened after the McCulloch decision also shows the next steps in battle over the individual mandate, as I suggest in an essay this morning for National Review Online.
In refusing to hold the Second Bank of the United States unconstitutional, the McCulloch Court gave Congress broad latitude in Congress’s own evaluation of whether the Bank was “necessary” in a constitutional sense. Relying on and quoting McCulloch, President Andrew Jackson made his own judgment of constitutional necessity when he vetoed the recharter of the Bank in 1832. After a titanic political struggle, the Bank was gone, and a new term created by Jackson, “equal protection,” had become part of what the American People were coming to believe the Constitution was supposed to mean.
President Jackson dealt the Bank a fatal blow by withdrawing federal deposits from the Bank, and moving them to state banks. President Romney can follow Jackson’s lead on his first day in office, instructing the Acting Secretary of Health and Human Services to use the waiver powers in the ACA statute to issue waivers to everyone for the individual mandate. Because the individual mandate is (supposedly) a tax, it can then be repealed through the budget reconciliation process, which cannot be filibustered.
I predict that the individual mandate will never mandate anyone. Yet the mandate will be long remembered as one of the most consequential laws enacted by a Congress. The result of the “bank battle” was that even though a central bank was judicially permissible, central banking was politically toxic for the rest of the century. The “mandate battle” may have the same effect in deterring any future thoughts of congressionally-imposed mandates. (Putting aside the obvious exception for mandates that have a solid basis in the constitutional text, such as jury service.)
The enactment of the mandate has also significantly increased the probability that the next Supreme Court appointments will be made by a President and confirmed by a Senate which denounces the mandate as unconstitutional, and that the new Justices will be the kind who are inclined to vigorously enforce the many strong constitutional limits on congressional over-reaching which are articulated in NFIB v. Sebelius.
I would have preferred that the mandate had met its end yesterday morning, but the fact that the mandate will have to be finished off by the People in November and their elected officials in January may lead to even better long-term results for advocates of a constitutionally limited federal government.
Necessary and Proper Clause returned to the Original Understanding. Podcast with Ilya Somin, and more
Yesterday I interviewed Ilya Somin about the NFIB decision, particularly the portion involving the Necessary and Proper Clause. Here’s the link for the 28 minute episode on iVoices.org. As Ilya details, the decision strongly restates and applies a principle from McCulloch v. Maryland: that whether a law is “proper” is an entirely different question from whether it is “necessary.” And CJ Roberts’ opinion is the first in Supreme Court history to find that a law which is “necessary” is not proper. Ilya’s amicus brief was the key brief on the necessity of making separate inquiries into “necessary” and “proper.”
That’s not the only way in which the Roberts opinion brings interpretation of the Necessary and Proper Clause back to the proper, originalist understanding which was explicated in McCulloch. The Roberts opinion explains that the NP Clause grants Congress no additional powers; the clause merely expresses the default legal rule that when an enumerated power is granted, the grant also includes lesser powers which are “incidental” to the enumerated power. In McCulloch, Chief Justice Marshall found it necessary to spend many pages applying the doctrine of incidental powers before he could reach the other issues about the constitutionality of the Second Bank of the United States.
The Roberts opinion is one of many, many post-McCulloch opinions to utilize the doctrine of incidental powers, but it is the first opinion to hold that a particular law is not valid because it is not an incident of an enumerated power. The originalist, Marshallian understanding of the doctrine of incidental powers was the subject of the amicus brief which Rob Natelson, Gary Lawson, and I wrote. The brief is based on the book The Origins of the Necessary and Proper Clause, published by Cambridge University in 2010, and co-authored by Natelson, Lawson, Geoffrey P. Miller and Guy I. Seidman.
The brief devotes much attention to the newspaper essays which John Marshall wrote defending the McCulloch decision. These essays were collected in the book John Marshall’s Defense of McCulloch v. Maryland, published in 1969 and edited by Gerald Gunther. The Roberts opinion is the first in Supreme Court history to cite this book, and the first to cite Marshall’s essays.
The Roberts opinion joins McCulloch v. Maryland as an essential case in any law school textbook that covers the Necessary and Proper Clause. While the Roberts opinion on the Commerce Clause and the Spending Clause brings current interpretation of those clauses closer to the original understanding, current interpretation remains a long way from original meaning. For the Necessary and Proper Clause, however, the Roberts opinion goes all the way. As of yesterday, Supreme Court doctrine about the Necessary and Proper Clause has fully returned to 1791/1819. The originalist victory is complete.
For some background on the doctrine of incidental powers, one starting point is the Lawson/Kopel article Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, 121 Yale Law Journal Online 267 (2011). A follow-up article, Bad News for John Marshall, 121 Yale Law Journal Online 529 (2012), replies to Andrew Koppelman’s warning that following McCulloch‘s originalist doctrine will cause national catastrophe. It looks like we’ll find out if he’s right. If you’re assuming that he is, and thus time is short before The End, a condensed version of our Yale article is available on Legal Workshop.
Held at Denver University, Sturm College of Law, on April 11. Debaters were University of Colorado Prof. Scott Moss and me. Moderator is DU Prof. Ann Scales. WMV, via ftp.
With the Supreme Court probably voting on the constitutionality of Obamacare (a term the President proudly embraces) on Friday, the health control law’s academic friends are diligently attempting to do what the entire United States Department of Justice could not do after two years of litigation: articulate plausible limiting principles for the individual mandate. Over at Balkinization, Neil Siegel offers Five Limiting Principles. They are:
1. The Necessary and Proper Clause. “Unlike other purchase mandates, including every hypothetical at oral argument on Tuesday, the minimum coverage provision prevents the unraveling of a market that Congress has clear authority to regulate.” This is no limitation at all. Under modern doctrine, Congress has the authority to regulate almost every market. If Congress enacts regulations that are extremely harmful to that market, such as imposing price controls (a/k/a “community rating”) or requiring sellers to sell products at far below cost to some customers (e.g., “guaranteed issue”) then the market will probably “unravel” (that is, the companies will lose so much money that they go out of business). So to prevent the companies from being destroyed, Congress forces other consumers to buy products from those companies at vastly excessive prices (e.g., $5,000 for an individual policy for a health 35-year-old whose actuarial expenditures for health care of all sorts during a year is $845).
So Siegel’s argument is really an anti-limiting principle: if Congress imposes ruinous price controls on a market, to help favored consumers, then Congress can try to save the market’s producers by mandating that disfavored consumers buy overpriced products from those producers.
2. The Commerce Clause. “The minimum coverage provision addresses economic problems, not merely social problems that do not involve markets.” This is true, and is, as Siegel points out, a distinction from Lopez (carrying guns) and Morrison (gender-related violence). However, it’s pretty clear under long-established doctrine that the Commerce power can be used to address “social problems that do not involve markets.” E.g., Caminetti v. United States, 242 U.S. 470 (1917) (Congress can use the interstate commerce power to criminalize interstate travel by people intending to engage in non-commercial extra-marital sex); Champion v. Ames, 188 U.S. 321 (1903) (“What clause can be cited which, in any degree, countenances the suggestion that one may, of right, carry or cause to be carried from one state to another that which will harm the public morals?”). Personally, I thought that Chief Justice Fuller’s dissent in Champion had the better argument, but Champion and its progeny are well-established precedents, so proposed limiting principle number two does not work, unless we overrule a century of precedent.
Besides that, #2 does not work for the same reason that #1 does not work. If Congress forced food producers to sell products to some consumers at far below cost, then Congress could (for economic, not social/moral motives) force other consumers to buy overpriced food, so that the producers do not go bankrupt. Imagine that instead of the Food Stamp program (general tax revenue given to 1/6 of the U.S. population to help them buy food), Congress forced grocery stores to sell food to poor people at far below cost. And instead of raising taxes in order to give money to the grocery stores to make up for their losses on the coerced sales, Congress instead forced other consumers to spend thousands of dollars on food from those same stores, which would be sold to those consumers at far above its free market price.
If there’s a limiting principle, the only one seems to be that in order to mandate the purchase of a product, Congress must also inflict some other harm on the producers of the product, which the coerced purchases will ameliorate.
3. “Collective action failures and interstate externalities impede the ability of the states to guarantee access to health insurance, prevent adverse selection, and prevent cost shifting by acting on their own. Insurers operate in multiple states and have fled from states that guarantee access to states that do not.” This is really a policy argument for Obamacare. Hypothesizing that it’s a good policy argument, it’s not a limiting principle. That the advocates of Obamacare think that the policy arguments for their mandate is better than the policy arguments for other mandates does not provide courts with a limiting principle of law.
Moreover, the policy argument is wrong. It’s true that some insurance companies stop operating in states where the law forces them to sell insurance to legislatively-favored purchasers at far below the actuarial cost of the insurance, with the legislature failing to compensate the companies for the enormous resulting losses. If you make it difficult for companies to operate profitably in your state, then they will eventually stop operating in your state. It’s not a collective action problem; it’s just a problem of several states enacting laws that prevent companies from covering their costs. Any state with guaranteed issue and other price controls can solve the problem immediately by simply using tax revenues pay compensation for the subsidy which the state law forces the insurance companies to provide to certain consumers.
Obamacare is a particularly weak case in which to argue that the federal government is riding the rescue of the states to solve a collective action problem. For the first time in American history, a majority of the States are suing to ask that a federal law be declared unconstitutional. These states are taking collective action to stop the federal government from imposing a problem on them.
4. The Tax Power. “[T]he minimum coverage provision respects the limits on the tax power. The difference between a tax and a penalty is the difference between the minimum coverage provision and a required payment of say, $10,000 that has a scienter requirement and increases with each month that an individual remains uninsured. Unlike the minimum coverage provision, such an exaction would be so coercive that it would raise little or no revenue. It would thus be beyond the scope of the tax power.”
Let’s put aside the fact that, however ingenious the progressive professoriate’s tax arguments have been, the chances that the individual mandate is going to be upheld under the tax power appear to be at most 1% greater than the chance the Buddy Roemer will be the next President of the United States.
Presuming that Siegel’s tax justification for the individual mandate is valid, it is an anti-limiting principle. Congress can indeed mandate eating hamburgers, smoking, not smoking, not eating hamburgers, or anything else Congress wants to mandate, as long as Congress sets the “tax” at level that will raise a moderate amount of revenue, does not include a scienter requirement, and does not make the “tax” increase each month that the individual refuses to do what Congress mandates.
5. Liberty. “The minimum coverage provision does not violate any individual rights, including bodily integrity and substantive due process more generally. These rights would be violated by a mandate to eat broccoli or exercise a certain amount.” Pointing to the existence of the Bill of Rights is not an example of a limiting principle for an enumerated federal power. The Constitution does not say that Congress may do whatever it wishes as long as the Bill of Rights protections of Liberty are not violated. Ordering New York State to take title to low-level radioactive waste generated within the state (New York v. United States) did not violate any person’s substantive due process rights, but the order was nonetheless unconstitutional because it exceeded Congress’s powers. The federal Gun-Free School Zones Act did not, as applied, violate the Second Amendment rights of Alfonso Lopez, who was carrying the gun to deliver it to a criminal gang. Yet the Act still exceeded Congress’s commerce power. A limiting principle must limit the exercise of the power itself, not merely point out that the Bill of Rights protects some islands of Liberty which the infinitely vast sea of federal power might not cover.
Finally, I certainly agree with Professor Siegel that the Fifth Amendment’s liberty guarantee (and its 14th Amendment analogue for the states) should be interpreted to say that no American government can order people to consume a certain amount of healthy food, or to exercise. But there is no major case that is on point for this. The argument for a new unenumerated right “not to eat the minimum quantity of nutritious food which government scientists have determined is essential for good health” is something that would have to be built almost entirely by extrapolation from cases that have nothing to do with food. I hope that courts would accept the argument; but if the political culture ever moved far enough so that a nutrition mandate could pass a legislature, I’m not as certain as Prof. Siegel that courts would overturn the mandate. The odds of winning a case against a nutrition mandate will be better if the judges who decide that case have not grown up in a nation where a federal health control mandate is the law of the land.
That’s the title of a new article by Gary Lawson and me, forthcoming in a symposium issue of Boston University’s American Journal of Law & Medicine. The Journal has a large readership among medical professionals who are interested in legal issues relating to medicine. Accordingly, if you have been following the VC’s debate on the ACA over the past couple years, most of what is in the article will already be familiar to you. Here is the abstract:
The question whether the Patient Protection and Affordable Care Act (“PPACA”) is “unconstitutional” is thorny, not simply because it presents intriguing issues of interpretation but also because it starkly illustrates the ambiguity that often accompanies the word “unconstitutional.” The term can be, and often is, used to mean a wide range of things, from inconsistency with the Constitution’s text to inconsistency with a set of policy preferences. In this article, we briefly explore the range of meanings that attach to the term “unconstitutional,” as well as the problem of determining the “constitutionality” of a lengthy statute when only some portions of the statute are challenged. We then, using “unconstitutional” to mean” inconsistent with an original social understanding of the Constitution’s text (with a bit of a nod to judicial precedents),” show that the individual mandate in the PPACA is not authorized by the federal taxing power, the federal commerce power, or the Necessary and Proper Clause and is therefore unconstitutional.
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.
Constitutional scholar and Senior Fellow in Constitutional Jurisprudence Rob Natelson released a fantastic book last year called The Original Constitution: What It Actually Said and Meant. The book was and is a huge hit. What the book did was fill a gap that was left by constitutional scholars who never got around to writing a comprehensive look at our nation’s founding document aimed at the lay person. Sure there are a lot of books out there on particular parts of the Constitution, but none that cover the whole shebang and none of them were written with your average Joe (or Jane) in mind. Rob Natelson stepped up and filled that gap.
Turns out however that Rob was not satisfied the first time around. He went back and re-worked his first edition and created and even bigger and better second edition to his book. You can find the second edition both on Amazon.com and the Tenth Amendment Center’s store. So how is this second edition different than the already fantastic first edition? Rob explains all that in this iVoices.org podcast with one of my minions Justin Longo. You can also go to Rob’s blog – constitution.i2i.org – to see what Rob has to say about his second edition.
It’s difficult to improve upon a great thing. But somehow Rob did it with this new book. Thank you for all your hard work Rob. You are doing an incredible job educating us mere mortals on our nation’s founding era history.
Speaking of education… don’t forget that THIS FRIDAY is our huge Constitution event down in Colorado Springs at the Antlers Hilton. There are a few spots remaining, so please RSVP as soon as you can. Do not miss this opportunity to see constitution scholars Rob Natelson and Dave Kopel in action!
A recent Yale Law Journal Online article by Northwestern law professor Andrew Koppelman argues that the Obamacare individual mandate is obviously constitutional, especially in light of how McCulloch v. Maryland construed the Necessary and Proper clause. Bad News for Mail Robbers: The Obvious Constitutionality of Health Care Reform (April 2011).
Gary Lawson (Boston Univ.) and I partially agree:
Professor Koppelman evidently believes that the constitutionality of the individual mandate begins and ends with McCulloch v. Maryland. He is absolutely right about that. He simply has the wrong beginning and ending.
Professor Koppelman gets the beginning wrong because he starts his analysis in the middle of the McCulloch opinion instead of where John Marshall began. Chief Justice Marshall‘s famous discussion in McCulloch of the causal connection required by the word “necessary” was preceded by a seven-page analysis of the constitutionality of a federal corporation under the Necessary and Proper Clause. Those seven pages dealt with an issue that Marshall recognized had to be addressed before he decided whether a corporation was a causally “necessary” (or otherwise “proper”) means for implementing federal powers. The threshold question was whether the power to incorporate was incidental or principal.
Our article, Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, elucidates the original meaning of the Necessary and Proper clause, which Chief Justice Marshall considered so important, but which professor Koppelman overlooked:
The Necessary and Proper Clause incorporates basic norms drawn from eighteenth-century agency law, administrative law, and corporate law. From agency law, the clause embodies the venerable doctrine of principals and incidents: a law enacted under the clause must exercise a subsidiary rather than an independent power, must be important or customary to achievement of a principal end, and must conform to standard fiduciary obligations.
From administrative law, the Necessary and Proper Clause embodies the closely-related principle of reasonableness in the exercise of delegated power, which independently requires conformance with a similar set of fiduciary norms, including the norms of acting only within delegated jurisdiction and of treating all persons subject to a public agent‘s power impartially.
Evidence from eighteenth-century corporate law – and the Constitution was widely recognized in the founding era as a type of corporate charter – confirms these conclusions about the meaning of the phrase “necessary and proper for carrying into Execution . . . .”
The power to order someone to purchase a product is not a power subordinate or inferior to other powers, such as the power to regulate voluntary commerce. The power to compel commerce is at least as significant – or, in eighteenth-century language, as “worthy” or of the same “dignity” – as the power to regulate insurance pricing and rating practices. It is therefore not incidental to other powers exercised by Congress in the PPACA and must be separately enumerated if it is to exist.
Second, the doctrine of principals and incidents and the principle of reasonableness both embody the fiduciary norm that agents exercising delegated power must treat multiple principals subject to those agents’ power impartially. Interpreting the Necessary and Proper Clause to allow Congress to force private dealings with preferred sellers of products fails that basic fiduciary norm, as illustrated by founding-era concerns about Congress invalidly using the Necessary and Proper Clause power to create monopolies.
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The Constitution: Does the Necessary and Proper Clause Grant “Broad Authority” to Congress? Actually, None at All
Probably no part of the Constitution has been so misunderstood as the Necessary and Proper Clause, which is located at Article I, Section 8, Clause 18. The Necessary and Proper Clause has been called both an “elastic clause” and a “sweeping clause,” and many have claimed it grants vast power to Congress. For example, a recent Supreme Court case, United States v. Comstock, stated that the “Necessary and Proper Clause grants Congress broad authority to enact federal legislation.”
In fact, most federal regulations today are justified by the Necessary and Proper Clause. They are said to be within Congress’s Interstate Commerce Power— but within not the core Commerce Clause (“The Congress shall have Power . . . To regulate Commerce . . . among the several States”). Rather, they are said to be supported by the accompanying authority to “make all Laws which shall be necessary and proper for carrying into Execution” the power to regulate commerce.
Now, here’s the irony of the situation: Far from granting “broad authority” to Congress, the truth is that Necessary and Proper Clause grants no power at all. It is placed at the end of Article I, Section 8 as an explanation—that is, a “recital.” A recital is a passage in a legal document that has no substantive legal effect, but serves to inform the reader of assumptions or facts behind the document. Another example of a recital in the Constitution is the Preamble.
In recent years, several constitutional scholars have investigated the true meaning of the Clause, and have worked to correct the record. The process began with an article written by Professor Gary L. Lawson and Patricia B. Granger: The Proper Scope of Federal Power: A Jurisdictional Interpretation of the Sweeping Clause, 43 Duke L. J. 267 (1994). It focused on the meaning of “proper.” A decade later, I delved into the historical record. I found that wording of this kind was extremely common in eighteenth-century documents granting power from one person to another. I also found the courts had issued cases interpreting this language, and that the Founders had adopted the courts’ interpretation. See articles here and here.
Finally, Professors Lawson and I teamed up with two other noted scholars, Geoff Miller, and Guy Seidman, and wrote a book on the subject. (We all have differing political views, by the way.) The book is called The Origins of the Necessary and Proper Clause, and it was published last year by Cambridge University Press.
Here’s what we found:
* The Clause is a mere recital. It informs the reader how to interpret congressional authority. It does not grant any power.
* The term “necessary” tells the reader that congressional authority is interpreted according to the intent behind the document, rather than very strictly (as the Articles of Confederation required).
* The Clause does this by telling the reader that the legal “doctrine of incidental powers” applies to the Constitution. This means that Congress can regulate certain activities outside the strict reading of its powers, but ONLY IF this ancillary regulation is (1) subordinate to an express power, and (2) a customary or necessary way of carrying out the express power. For example, in regulating commerce, Congress can require accurate labels on goods to be shipped in interstate commerce. But Congress cannot regulate the entire manufacturing process.
* The word “proper” means that a law must comply with Congress’s fiduciary (public trust) responsibilities. A law is not “proper”—and is therefore unconstitutional— if it invidiously discriminates among people, violates individual rights, is utterly irrational, or exceeds congressional authority.
* Contrary to prevailing legal mythology, Chief Justice Marshall’s famous case of McCulloch v. Maryland (1819) did not stretch the Clause, but applied it properly and with due regard for its limitations.
Recently, Dave Kopel, the Independence Institute Research Director, filed an amicus curiae brief in the most important anti-Obamacare lawsuit. He did so on behalf of Professors Lawson, Seidman, and me. The goal? To correct the record and inform the courts what the Necessary and Proper Clause REALLY means.