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April 01, 2013

Advance Sheet: A Conservative by Any Other Name

Despite the outcome, it is hard to view Chief Justice Roberts's reasoning in the healthcare decision as anything other than conservative.

Robert E. Shapiro

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Some years ago, so the story goes, a young Chicago lawyer of exceptional promise received a telephone call from a friend, congratulating the young lawyer on his victory that morning in a case he had pending in the U.S. Supreme Court. Nonplussed at first by the kudos—the decision had gone against him—the young lawyer soon realized what the problem was. “Read the rest of the decision,” he advised his friend. In the first parts of the opinion, the Court’s reasoning had gone squarely the young lawyer’s way, ticking off point after point in his favor just as he had written those points in his brief. Victory seemed at hand. But it was not to be. In a final stroke, the Court suddenly reversed direction. Its initial rulings did not decide the case; one other, mostly unargued, ground doomed the young lawyer’s cause. And so the case was lost.

Something like the bewilderment, not to say annoyance, of this young lawyer in fielding his friend’s congratulatory call must have been felt in more than one state capital on the morning of June 28, 2012, at least if any of the denizens happened to be tuned into CNN News. Newscasters from this venerable media outlet proclaimed loudly that the Supreme Court had gutted the Obamacare legislation by voiding its most controversial provision, the individual mandate. As is now well known, however, a majority of the Court, 5–4, upheld the individual mandate, allowing the legislation, for the most part, to survive. What’s up with that?

CNN had failed to read the whole decision. Chief Justice Roberts, who famously turned out to be the swing vote, had issued an opinion rejecting the Commerce Clause as a sound basis for the federal government’s requirement that every person buy or have health insurance. The congressional power in Article I of the Constitution to regulate interstate and foreign commerce did not reach so far. But he thereafter ruled that the legislation could be upheld as an application of Congress’s taxing powers. The result was a landmark decision, said the commentators, not just for its specific result. It also put a dent in the chief justice’s previously impeccable credentials as a judicial “conservative” and, given the partisan divide on the Court, in the hopes of those who prefer a more conservative tribunal.

Health Care as a Market

Whether those observers were (or are) right requires a more thorough analysis of what really happened. Another thing commonly said about CNN’s gaffe was that it was a Dewey-Beats-Truman moment, which surely it was not. CNN had not assumed it knew what the outcome would be, as the Chicago Tribune notoriously did in 1948; it assumed only what issue would determine it. This was widely believed to be the proper scope of the Commerce Clause, plain and simple. When CNN saw that ground go down to defeat, it concluded the individual mandate was done for. It had its reasons. From the start, nearly every commentator on the case (including this author) viewed the scope and extent of the Commerce Clause as pivotal. And they did so advisedly. This is where Congress, the lower courts, and the parties before the high court had seemed to put it.

The argument in favor of a federal mandate had featured the claim that health care constitutes a market, given that everyone gets sick and needs medical care, if not right away, then at least eventually. Congress could therefore regulate that market, which clearly was interstate in character. Those opposed said Congress was creating a market to regulate it. The defining moment in the oral argument was Justice Alito’s question to the solicitor general regarding what the limiting principle was, whether there was anything that was now left untouched by the Commerce Clause and therefore unavailable to federal legislation. The response could have been, and was, short and simple: Why this far and no farther? See Advance Sheet, “Obamacare: Relevant Commentary and Limiting Principles,” Litigation, Vol. 38, No. 3 (Spring 2012). This seemed the critical decision.

The matter was (and is) one of great significance. During the presidential campaign, President Obama was heard to opine that earlier decisions on the Commerce Clause—from the 1930s, he said—had extended Congress’s commerce power at least this far, if not farther. Apparently, however gratifying might have been the upholding of the individual mandate law, the president at least thought the stakes were much higher than that. Victory needed to have been achieved on the proper grounds. And despite the right result, the Supreme Court majority had not used the right reasons, saying, contra the president, that the Commerce Clause had been extended quite far enough.

In this respect, the president may have grasped the ideological significance of Chief Justice Roberts’s decision better than most of the commentators. The practical impact of upholding the individual mandate was, of course, huge. But the result of limiting Congress’s power under the Commerce Clause was, from a theoretical standpoint, perhaps even greater. Far from departing from his conservative principles, Chief Justice Roberts cleaved closely to them. The opinion of the chief justice did not clearly explain why or how far the clause does extend. But he made clear that it did not cover “prophesied future activity” such as sickness and death and did not allow Congress to “anticipate [an] activity itself in order to regulate individuals not currently engaged in conduct.” In a final flourish, he noted that “[t]he Commerce Clause is not a general license to regulate an individual from cradle to grave, simply because he will predictably engage in particular transactions.” That power to regulate individual persons, he said, rested with the states. It is this that set the CNN observers running for their typewriters, or rather their BlackBerrys, to report the news of the individual mandate’s demise. Those who are expecting the future drift of the Court to be more liberal should equally well take note.

Perhaps less controversial but no less conservative was Chief Justice Roberts’s next salvo, where he took up the Necessary and Proper Clause, considering whether it might provide the necessary power in the federal government to regulate health care. But that ground was insufficient too because, as he said, “[e]ach of our prior cases upholding laws under that [c]lause involved exercises of authority derivative of, and in service to, a granted power.” If health care were already within the ambit of congressional control over commerce, the Necessary and Proper Clause might serve as the basis for upholding the particular law in question. But without the former, it could not do the latter.

Again, whatever one thinks of these grounds, it is hard to characterize them as anything but the stuff of judicial conservatism. In these respects at least, Chief Justice Roberts cannot be said to have changed his judicial stripes, thereby altering the ideological balance on the Court. But a final verdict on that question depends on a consideration of the chief justice’s actual reasons for upholding the individual mandate. Those reasons came back to life, phoenix-like, in the next two parts of Chief Justice Roberts’s opinion. Here, he noted several elements of the individual mandate that resembled a tax. Not least of these were that the sanction for nonperformance was a tax penalty and the whole mechanism was placed within the tax code.

What Is a Tax?

It is not difficult to understand why these elements were not given much play in the run-up to the oral argument. Members of Congress are ever-sensitive to the charge of creating new taxes or raising old ones. And the Obama administration was approaching a tough reelection battle with similar scruples in mind. Neither had likely wanted to focus on the tax characteristics, believing the interstate commerce nexus was enough. As a result, the battle in the lower courts had been joined on the Commerce Clause issue, rather than the taxing power. But Chief Justice Roberts found in his duty to grant deference to federal legislation a willingness to see whether there was any ground on which it could be upheld. The government had poised the tax issue as an additional ground of support. Was it really a tax?

The chief justice applied the most simple kind of reasoning. If it looks like a tax, operates like a tax, and collects money like a tax, it’s a tax, whatever else you might want to call it. Legally speaking, the consequences were thereafter almost automatic. The Constitution sets few limits on Congress’s authority to tax. The battle cry of the Revolution was “no taxation without representation,” not “no taxation.” As the representative body at the federal level, Congress itself, with the president’s approval, is exactly the means the founders provided to ensure the representation necessary. For a brief time after the Supreme Court’s decision in the 1890s to void the federal income tax, this power seemed less unbridled than it is now, but most scholars agree that the Court’s retrograde decision then was incorrect and the taxing power is almost plenary, even if it took a constitutional amendment to right the wrong in that particular case.

Once again, whatever the result, Chief Justice Roberts seemed to have taken the conservative approach, applying constitutional theory in a consistent and straightforward manner. Judicial deference and practical analysis are the essence of judicial restraint. Such an analysis also should put paid to the notion, briefly popular after the decision, that the chief justice had enjoyed a “Marbury v. Madison moment.” Chief Justice Marshall’s decision in that case applied a departure from custom—putting jurisdictional issues last—to pull the judicial review rabbit out of the constitutional hat. Chief Justice Roberts, by contrast, did absolutely nothing out of the ordinary. Like other “moments” the case has been said to represent, this one seems to be more rhetoric than reality.

Politics and Dissent

The final test of whether the chief justice was playing politics with his decision was to see what the dissenters had to offer to refute this reasoning. Put aside any idea that the dissenters were caught by surprise by the chief justice’s ruling. We know enough about the high court’s procedures to know that written decisions circulate among the justices well before they are released. Certainly, there was ample time for a complete review, as the decision was not rendered at the last minute but a week or so before the term ended. What then did the dissenters have to say against the chief justice’s conclusion?

Very little. First, they resisted the chief justice’s “it’s a duck” reasoning, protesting that no one had stood behind that principle in passing the legislation, reviewing the matter below, or arguing it to the high court. But so what? The question really is not what people call it but what it is. To elevate substance over form is something we recognize as a virtue in most contexts, including judicial ones, and it is often the heart of precise judicial reasoning. Think of the many occasions on which the Court has been asked to rule on the “what is” of a certain thing. No one doubts, for example, that the high court could tell us what a “security” is (and is not) as it did in Daniel v. International Brotherhood of Teamsters, for example. And it is a staple of judicial decision-making to resist evasions of the “what is” principle. Surely, one cannot get around the unconstitutionality of a law merely by labeling something as something it is not. The converse would also seem to be true. Labeling should not be allowed to defeat the upholding of a law that is otherwise permissible. In all cases, substance should prevail.

No more availing of the conservative-turned-liberal thesis was the dissenters’ argument distinguishing a tax from a penalty. To begin with, this hardly seems the stuff of a liberal/conservative divide. And taxes seem frequently to operate as penalties and to coerce certain kinds of conduct. Nor did the dissent help itself by raising the specter that calling the mandate a tax might open a Pandora’s box of possibilities. If the dissenters had good reasons to find that it was not a permissible tax, they should at least have told us what they were. That they could not do so was particularly telling. The specter that there might be an argument is no substitute for an actual one, particularly on a matter of such importance.

The one or two possibilities they did offer hardly suggested there might be more robust arguments still to come. They argued, for example, that the new “tax” might run afoul of the rules on “direct taxes,” which the Constitution requires be proportional to representation. Certainly, this is a memorable part of the Constitution. The wording of this provision was part of the “Grand Compromise” at the Constitutional Convention, giving many members comfort, or at least cover, that the small states’ equal representation in the Senate would not allow them to impose more onerous taxation on the larger states. Its precise meaning, to be sure, has always been a mystery—“famously unclear,” the dissenters called it—but that really has nothing to do with the issue here. As a protection against taxation of individual citizens, it seems to be a nullity.

Are these makeweight arguments the best the dissenters could do? Apparently so, and it hardly supports the thesis that Chief Justice Roberts was misapplying the fundamental principles of the Constitution or departing from a strict construction. Indeed, just the opposite would seem to be the case. The charge of political predeterminism might be better directed at the dissenters themselves, who would have struck down the law seemingly regardless of the merits of the substantive argument. This is not to absolve the rest of the Court majority, which embraced the chief justice’s argument despite a lack of enthusiasm for, or even opposition to, it. Nor does it spare those who cheered the chief justice’s seeming conversion, regardless of his reasons, for having achieved the results they wanted. In short, contrary to the prevailing wisdom, the chief justice seems to have been the least of those involved to be open to the charge of bending to the political winds. The only heterodoxy he can be accused of is a political one, forgoing his political preferences to ensure legal consistency.

Only time will tell, of course, if this reading is correct. But it sure beats the cynical assumption preferred by the great run of commentators who proceed on the assumption that the justices decide cases starting from their preferred outcome—liberal or conservative—and reasoning backward to get that result. There are cases, such as the recent gun control decision, that may make it seem reasonable to conclude that just such a dynamic was operating. But the soundness of such a conclusion on a general basis doesn’t seem to have gotten such a boost here. And rather than waste time pondering whether the chief justice has changed his political allegiances or whether the Court is now being steered in a new direction, we might more profitably ask an old question in a new context: In the case of a tax, is there any limiting principle? Along the way, we might always want to remember to read the whole decision.


Robert E. Shapiro

The author, an associate editor of Litigation, is with Barack Ferrazzano Kirschbaum & Nagelberg LLP, Chicago.