Michigan District Court Expands Commerce Clause to Regulate Your Decisions

The opinion for Thomas More Law Center v. Obama was released earlier today.

First, we need to get a couple of things straight. This case only dealt with one argument the government has put forth, and that is that the individual mandate is constitutional under the Commerce Clause in light of Wickard v. Filburn, 317 U.S. 111 (1942) and Gonzalez v. Raich, 545 U.S. 1 (2005). It did not directly deal with the Necessary and Proper Clause argument, but made a passing reference to the Tax Clause argument.

In this case, TMLC argued that if the individual mandate were to be found constitutional, then Congress would be effectively granted the power to regulate nearly every aspect of an American's life through the Commerce Clause. The argument is that the individual mandate regulates economic inactivity.

The part of the current economic activity doctrine used to interpret the Commerce Clause that applies in this case is that Commerce Clause extends to "those activities that substantially affect interstate commerce." The interpretation is that local activities that are not directly involved in interstate commerce still "substantially affect" interstate commerce.

Under Raich, the Supreme Court concluded that only a "rational basis" needs to exist that concludes that a regulated activity substantially affects interstate commerce. In Raich in particular, that rational basis was that growing marijuana for personal use substantially affected interstate commerce because Raich was actively not purchasing marijuana from the illegal black market.

Sixty years prior, the Supreme Court ruled in Wickard that a farmer growing an amount of wheat for home consumption above the limit place by the government on what he was to grow for the market substantially affected interstate commerce because he was not purchasing that wheat from the price-controlled market.

However, both United States v. Lopez, 514 U.S. 549 (1995) and United States v. Morrison, 529 U.S. 598 (2000) limited the reach of Congress' power to regulate interstate commerce. In Lopez, the Supreme Court ruled that Congress could not "pile inference upon inference" to make the connection between an activity and interstate commerce (in that case, possessing guns in a school zone). In Morrison, the Supreme Court ruled the provision granting victims of gender-motivated violence the ability to sue in federal court as unconstitutional because the relationship to interstate commerce only existed under speculation.

So now that we've got the background out of the way, let's look at how Judge George Caram Steeh reached his conclusion.

To me, the first thing that is very interesting to note in on page 15 of the opinion.

"The Supreme Court has always required an economic or commercial component in order to uphold an act under the Commerce Clause. The Court has never needed to address the activity/inactivity distinction advanced by plaintiffs because in every Commerce Clause case presented thus far, there has been some sort of activity. In this regard, the Health Care Reform Act arguably presents an issue of first impression."

What Judge Steeh says here is that because the doctrine for Commerce Clause interpretation only addresses economic activity, this case presents an issue of first impression. What is typically regarded as the appropriate action at the district court level is to follow the existing precedent that the Commerce Clause only extends to activity substantially affecting interstate commerce and deny the claim that the government is trying to make.

As far as I know, only the Supreme Court has the power to expand its interpretations, and federal judges are bound by the doctrines that the Supreme Court sets forth. If there is an issue that may be of first impression, it should be required to wind its way through the appeals process until the Supreme Court decides to hear it. Of course, this case will now proceed to the 6th Circuit Court where it should be overturned.

Now we can get to the government's arguments for the Commerce Clause. The government argues that the individual mandate is within Congress' power to regulate interstate commerce for two reasons: the Act regulates economic decisions that have a direct and substantial impact on the interstate health care market; and the minimum coverage provision is essential to regulating interstate health insurance.

First, Judge Steeh writes that it is a rational basis that "decisions to forego insurance coverage in preference to attempting to pay for health care out of pocket drive up the cost of insurance." He states that this is far from economic inactivity as the decision to pay out of pocket effectively reduces the amount of money available in the insurance pool to collectively shift to other participants.

As expected Wickard and Raich are cited as precedents that even individuals who choose not to participate in interstate commerce are within reach of the Commerce Clause. Furthermore, he stretches a little bit to cite the Civil Rights case of Heart of Atlanta Motel v. United States, 379 U.S. 241 (1964) where the Supreme Court concluded that the "Commerce Clause allows Congress to regulate decisions not to engage in transactions with persons with whom plantiff did not wish to deal."

He finally ends his acceptance of the government's argument with this:

"While plaintiffs describe the Commerce Clause power as reaching economic activity, the government's characterization of the Commerce Clause reaching economic decisions is more accurate."

This is where Judge Steeh should have stopped. This is where he went wrong. This should have triggered the flag that said "first impression" and he should have denied the government's claim rather than attempting to create a new doctrine. After all, the "economic activity" is not just the plaintiff's description, it is the doctrine that the Supreme Court has applied in every single Commerce Clause case. Judge Steeh said so himself earlier in the opinion.

Next, Judge Steeh once again referenced Raich. This time, it was about the minimum coverage provision requiring all applicable persons to carry a minimum amount of insurance. The argument goes that with insurers being required to provide coverage to all people regardless of pre-existing conditions, there would be an incentive to wait until you got sick to purchase health insurance. Because of this, more than likely the people who cost the health insurance system the most would participate, while those who cost the least would not. Because this would undermine the cost-shifting that is essential to making an insurance pool work, Judge Steeh determined that the minimum coverage provision is indeed "essential to the larger regulatory scheme of the Act".

Keep in mind that this decision is not binding against the other district courts. Yes, they might reference it, but they are not binded by it. Like I said, I think Judge Steeh's ruling was out of line.

If Judge Steeh's ruling were to hold up all the way to through the Supreme Court, then America would be in a world of hurt. Judge Steeh's conclusion that the Commerce Clause covers "economic decisions" effectively expands the Commerce Clause to regulate any decision a person might make so long as it involves economic activity (or the lack thereof). For example, if economic decisions are included in Congress' power to regulate interstate commerce via the Commerce Clause, then Congress would have the power to tell you that you must buy a car, that you must buy a house, that you must buy a gym membership, that you must buy certain foods, that you must go to work (well, that one might not be so bad), that you must buy certain books, etc.