How NFIB V. Sebelius affects the constitutional gestalt.
This Essay examines the effects of the Supreme Court's decision in National Federation of Independent Business v. Sebelius, (1) in which the Court addressed the constitutionality of the Affordable Care Act. (2) More precisely, what effects will NFIB have on the law--especially constitutional law? We can divide these effects into two general categories, direct and indirect. "Direct legal effects" are those created by and through legal norms. They include the operation of legal orders (the mandate in an appellate opinion) and legal rules (stare decisis and the doctrine of law of the case). "Indirect legal effects" are mediated by causal processes that are not themselves instantiations of legal rules. For example, if a legal decision affects politics, and then the political change affects the law, that change would constitute an indirect legal effect.
The Supreme Court's decision in NFIB v. Sebelius has already had important direct legal consequences--The Patient Protection and Affordable Care Act (ACA) has gone into effect, but with a significant alteration in the incentive provided to the states to expand Medicaid coverage and eligibility. (3) Via the doctrine of vertical stare decisis, NFIB could have direct effects in future lower-court cases involving the Anti-Injunction Act (4) and the spending power. (5) On the Commerce Clause and Necessary and Proper Clause issues, the direct legal effects are complex and likely to be disputed. The strongest argument for a Commerce Clause holding postulates that NFIB has stare decisis effects in cases in which another individual mandate (relevantly similar to the mandate in the ACA) is enforced by a criminal penalty--or other penalty that could not be fairly characterized as a tax via a saving construction.
Whatever direct legal effects the Court's decision ultimately produces, the thesis of this Essay is that the most important and far-reaching legal effects of NFIB are likely to be indirect. NFIB destabilizes what we can call the "constitutional gestalt" (6) regarding the meaning and implications of what is referred to as the "New Deal Settlement." (7) The idea of a constitutional gestalt will be explored in depth below, (8) but the basic idea is that the gestalt is an interpretive framework that organizes our understanding of cases, theories, and narratives; we can think of the constitutional gestalt as a very general and abstract map of the constitutional landscape. Before NFIB, the consensus understanding was that the New Deal and Warren Court cases had established a constitutional regime of plenary and virtually unlimited national legislative power under the Commerce Clause, (9) although the regime might also contain narrow and limited carve-outs protective of the core of state sovereignty. (10) After NFIB, the constitutional gestalt is unsettled.
In NFIB, five Justices of the Supreme Court endorsed a view of the Commerce Clause (11) that is inconsistent with the prevailing understanding of the constitutional gestalt associated with the New Deal Settlement. (12) Endorsement of this view by a majority of the Court opens a fissure in constitutional politics, creating space for an alternative constitutional gestalt. The core idea of the alternative view is that the New Deal Settlement did not create plenary and virtually unlimited legislative power. Instead, the alternative understanding is that the New Deal and Warren Court cases establish only the constitutionality of particular federal programs, specific zones of federal power, and particular modes of federal regulation. The most important indirect effect of NFIB is that it enables constitutional contestation (13) over the content of the gestalt and the meaning of the New Deal Settlement.
The remainder of this Essay is organized as follows. Part II analyzes the structure of the opinions in NFIB, and Part III examines the direct legal effects that these opinions will produce. This discussion may seem dry and technical, even to Supreme Court enthusiasts. We will examine what is called the "mandate"--the direct legal command contained in the opinion of the Court and its implications for the vertical law-of-the-case effects of NFIB. We then will turn to the doctrine of vertical stare decisis, which will require us to examine the convoluted structure of the various opinions in the case. That will lead to the doctrine of horizontal stare decisis--the precedential effect of NFIB on future decisions of the Supreme Court itself.
Readers who are familiar with the complex structure of the opinions in NFIB may wish to proceed directly to Part III on page 16, discussing direct legal effects, including the vertical and horizontal stare decisis effects of the decision. Other readers may wish to proceed directly to Part IV on page 37, which discusses the effect of the decision on the constitutional gestalt.
The technical analysis in Part III leads to the conclusion that on the Commerce Clause issue, NFIB is unlikely to produce stare decisis effects that are clear and uncontested--one way or the other. That conclusion has an implication: NFIB opens up space for constitutional contestation. That space is then examined in Part IV, which is about the indirect legal effects of NFIB. We begin by examining the idea of a constitutional gestalt--a highly abstract feature of constitutional thought and discourse that unifies constitutional theories, narratives, and doctrines. We then turn to the effects of NFIB on the stability of the constitutional gestalt associated with the New Deal Settlement. This leads to the core idea of the essay--that NFIB destabilizes the constitutional gestalt, potentially (but not necessarily) enabling a constitutional gestalt shift. Part V integrates the discussion of direct and indirect effects and draws some speculative conclusions about the future of constitutional discourse and politics.
II. THE CASE AND THE OPINIONS
Before we examine the effects of the Supreme Court's decision of NFIB v. Sebelius, it is necessary to unpack the issues and opinions. The first step is the usual, but hopefully brief, recitation of the facts and procedural history. (14)
A. The Facts and Procedural History
The ACA was enacted by Congress in 2010. It is a complex statute--hundreds of provisions and some nine hundred pages in length. Two provisions of the ACA were challenged. The first was the individual mandate, which required certain individuals to purchase qualifying health insurance. (15) The second challenged provision was the Medicaid expansion, a portion of which effectively required states to provide Medicaid coverage to adults with incomes up to 133 percent of the federal poverty level by withdrawing all federal Medicaid funds from noncomplying states. (16)
The day the ACA was signed into law, thirteen states filed a complaint in the United States District Court for the Northern District of Florida. The original plaintiffs were later joined by an additional thirteen states, the National Federation of Independent Business, and several individuals. (17) The District Court held that Congress lacked legislative power to enact the individual mandate, and that the mandate could not be severed--resulting in an order that struck down the Act in its entirety. (18) The United States Court of Appeals for the Eleventh Circuit affirmed the determination that Congress lacked legislative power to enact the individual mandate, but reversed the determination that the mandate was not severable. (19) The Eleventh Circuit also rejected the challenge to the Medicaid expansion provisions. (20) Two other circuits rejected challenges to the individual mandate. (21) One circuit held that the Anti-Injunction Act created a jurisdictional bar to the challenge. (22) The United States Supreme Court granted certiorari in the Eleventh Circuit cases. (23)
The Supreme Court held that the Anti-Injunction Act was not a barrier to the challenge to the mandate and upheld the related penalty provision of the ACA on the basis of the tax power. (24) In addition, a portion of Justice Roberts's opinion that was joined by Justices Breyer and Kagan, (25) in conjunction with the joint dissent by Justices Kennedy, Scalia, Thomas, and Alito, (26) effectively establishes the unconstitutionality of the ACA's Medicaid expansion provisions to the extent that these provisions threaten states with the loss of existing Medicaid funding.
Formally, there are four opinions in NFIB v. Sebelius, but different constellations of Justices join different portions of these four opinions. Functionally, we can identify seven distinct opinions--each joined by a different set of Justices. These seven functional opinions address five distinct issues. The clearest way to reduce the opinions' complexity is to outline their structure and relationship to the issues.
B. Functionally, Seven Opinions on Five Issues
The following overview will identify the seven opinions and the five issues. To understand the opinions, it is necessary first to identify the five issues addressed by the Court, presented as Table 1: Issues in NFIB v. Sebelius.
Step two is to identify the distinct opinions. There are four formal opinions with six authors; they function, however, as seven distinct opinions. Justice Roberts authored an opinion, portions of which were the opinion of the Court. Justice Ginsburg authored an opinion, different parts of which were joined by different Justices. There was a joint dissenting opinion authored by Kennedy, Scalia, Thomas, and Alito. Finally, Justice Thomas had a separate dissenting opinion. (27)
This complex structure of the opinions can be unpacked as a table:
C. The Seven Functionally Distinct Opinions
The next step is to summarize each of the seven functionally distinct opinions with respect to the five issues.
1. The Opinion of the Court
The opinion of the Court is contained in Parts I, II, and III-C of the opinion authored by Chief Justice Roberts. Part I is simply a summary of the facts and procedural history. (28) This part of the Court's opinion is not decisive in determing of the direct or indirect legal effects, with the obvious exception that the facts may limit the reach of the holding.
Part II addresses the Anti-Injunction Act, which provides, "[N]o suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." (29) The Court's conclusion was straightforward: "The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Act. The Anti-Injunction Act therefore does not apply to this suit, and we may proceed to the merits." (30) The only complexity to be noted is that the holding that the ACA was not a tax for purposes of the Anti-Injunction Act might be thought to be in some tension with the holding that the individual mandate was a tax for the purposes of Congress's tax power.
Part III-C of the opinion of the Court addresses the tax power. There are two steps to the argument: (1) the shared responsibility payment enforcing the individual mandates can be characterized as a tax supported by the power conferred by Article I, Section 8 of the Constitution;31 and (2) so characterized, the provision is not a direct tax in violation of Article I, Section 9, Clause 4. (32) The upshot of Part III-C is that the shared responsibility payment associated with the individual mandate is within Congress's Article I legislative power.
2. Justice Roberts's Separate Opinion on the Commerce Clause and the Necessary and Proper Clause
Some portions of Justice Roberts's opinion are entirely his own, joined by no other members of the Court. Structurally, these portions are contained in five distinct parts of his opinion:
1. a preface, addressing the role of the Supreme Court;
2. Part III-A, addressing the argument that the individual mandate is supported by the Commerce Clause and the Necessary and Proper Clause;
3. Part III-B, addressing the avoidance canon in relationship to the tax power;
4. Part III-D, addressing the necessity of the Commerce Clause and Necessary and Proper Clause analyses to the Court's disposition of the case; and
5. A conclusion, addressing the holding and mandate.
Three of these distinct parts are critical to understanding the legal effects of Justice Roberts's opinion. Part III-A contains his analysis of the Commerce Clause: he concludes that the individual mandate (construed as a legal requirement enforced by a penalty) is not a regulation of interstate commerce. (33) Justice Roberts articulated the key distinction between permissible regulations of activity and impermissible mandates premised on inactivity as follows:
The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Every day individuals do not do an infinite number of things. In some cases they decide not to do something; in others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and--under the Government's theory--empower Congress to make those decisions for him. (34)
In other words, because the individual mandate was not predicated on some form of activity, it did not qualify as a regulation of commerce.
Justice Roberts then turned to the government's Necessary and Proper Clause argument. Roberts's reasoning flows from the activity-inactivity distinction. The individual mandate provisions of the ACA do not regulate economic activity; instead they require individuals to engage in the purchase of health insurance: (35)
Applying these principles, the individual mandate cannot be sustained under the Necessary and Proper Clause as an essential component of the insurance reforms. Each of our prior cases upholding laws under that Clause involved exercises of authority derivative of, and in service to, a granted power.... The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power. (36)
And if the mandate were constitutional:
No longer would Congress be limited to regulating under the Commerce Clause those who by some preexisting activity bring themselves within the sphere of federal regulation. Instead, Congress could reach beyond the natural limit of its authority and draw within its regulatory scope those who otherwise would be outside of it. Even if the individual mandate is "necessary" to the Act's insurance reforms, such an expansion of federal power is not a "proper" means for making those reforms effective. (37)
Thus, the individual mandate was neither a regulation of interstate commerce nor a proper means of carrying other provisions of the ACA into effect.
3. Justice Roberts's Separate Opinion on the Spending Clause, Joined by Justices Breyer and Kagan
Part IV of Justice Roberts's opinion, addressing the Spending Clause issue, was joined by Justices Breyer and Kagan. The core of the reasoning is contained in the following passage:
In this case, the financial "inducement" Congress has chosen is much more than "relatively mild encouragement"--it is a gun to the head. Section 1396c of the Medicaid Act provides that if a State's Medicaid plan does not comply with the Act's requirements, the Secretary of Health and Human Services may declare that "further payments will not be made to the State." A State that opts out of the Affordable Care Act's expansion in health care coverage thus stands to lose not merely "a relatively small percentage" of its existing Medicaid funding, but all of it. Medicaid spending accounts for over 20 percent of the average State's total budget, with federal funds covering 50 to 83 percent of those costs.... The threatened loss of over 10 percent of a State's overall budget ... is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion. (38)
Justice Roberts's opinion extends South Dakota v. Dole, (39) which upheld under the spending power a provision authorizing the Secretary of Transportation to withhold five percent of federal transportation funds from any state that failed to set its minimum drinking age at twenty-one. (40) Chief Justice Rehnquist's opinion for the Court stated, "[I]n some circumstances the financial inducement offered by Congress might be so coercive as to pass the point at which 'pressure turns into compulsion.'" (41)
There is already substantial controversy about the best reading of this portion of the opinion. Because four Justices would have held the Medicaid expansion provisions invalid in their entirety, this portion of Justice Roberts's opinion is clearly controlling under the narrowest grounds rule. (42) What is not so clear is what the vertical stare decisis effects will be--an issue that is discussed below.
4. Justice Ginsburg's Opinion on the Commerce Clause, Necessary and Proper Clause, and Tax Power Issues
The entirety of Justice Ginsburg's concurring and dissenting opinion was joined by Justice Sotomayor. (43) Parts I, II, III, and IV were also joined by Justices Breyer and Kagan (44): these sections address the national power issues (Commerce, Tax, and the Necessary and Proper Clause). Justice Ginsburg's analysis of the national power issues begins with the Commerce Clause, about which she makes two observations: "First, Congress has the power to regulate economic activities 'that substantially affect interstate commerce.'" (45) And, "[s]econd, we owe a large measure of respect to Congress when it frames and enacts economic and social legislation." (46) Applying these observations to the facts of NFIB, Ginsburg concludes:
Straightforward application of these principles would require the Court to hold that the minimum coverage provision is proper Commerce Clause legislation. Beyond dispute, Congress had a rational basis for concluding that the uninsured, as a class, substantially affect interstate commerce. Those without insurance consume billions of dollars of health-care products and services each year. Those goods are produced, sold, and delivered largely by national and regional companies who routinely transact business across state lines. The uninsured also cross state lines to receive care. Some have medical emergencies while away from home. Others, when sick, go to a neighboring State that provides better care for those who have not prepaid for care. (47)
Most of the remainder of her opinion consists of responses to and criticisms of the reasoning in Justice Roberts's opinion. But notably, in responding to Justice Roberts's contention that allowing Congress to mandate purchases is necessary to avoid an interpretation of the Commerce Clause that would be unlimited, Justice Ginsburg endorses the Court's decisions in Lopez and Morrison because they exclude "regulation] [of] noneconomic conduct that has only an attenuated effect on interstate commerce and is traditionally left to state law" from the commerce power. (48)
Justice Ginsburg also argues that the individual mandate would be sustainable under the Necessary and Proper Clause, even if it were not itself a regulation of interstate commerce. (49) Part IV of her opinion addresses the larger implications of Justice Roberts's opinion:
In the early 20th century, this Court regularly struck down economic regulation enacted by the peoples' representatives in both the States and the Federal Government. THE CHIEF JUSTICE'S Commerce Clause opinion, and even more so the joint dissenters' reasoning, bear a disquieting resemblance to those long-overruled decisions. (50)
This portion of Justice Ginsburg's opinion suggests that the Chief Justice's approach undermines the New Deal Settlement--a theme to which we shall return below. (51)
5. Justice Ginsburg's Opinion on the Spending Power Issue
Part V of Justice Ginsburg's opinion, joined only by Justice Sotomayor, addresses the Medicaid expansion and the Spending Clause. (52) Of the nine members of the Court, only Ginsburg and Sotomayor would uphold the conditioning of Medicaid funds on state cooperation with the Medicaid expansion required by the ACA. (53)
One theme in this portion of Justice Ginsburg's opinion is cooperative federalism. In this context, the suggestion is that the alternative to conditional spending is federalization, which would provide a constricted role for the states. (54) Ginsburg argues that the Court's conditional spending precedents do not support the Chief Justice's distinction between old and new Medicaid funds. (55) Justice Ginsburg also argues that coercion was not present because conditioned funds were only Medicaid funds (and not unrelated funds) (56) and because there is no judicially manageable standard for "coercion." (57)
6. The Joint Dissent
The joint dissenting opinion, authored by Justices Scalia, Kennedy, Thomas, and Alito, addresses the Commerce Clause, tax power, Anti-Injunction Act, and Medicaid expansion issues, as well as severability, concluding that the entire ACA should be struck down. (58)
The joint dissent argues that the individual mandate exceeds Congress's power under the Commerce Clause and the Necessary and Proper Clause for reasons that are similar to, but distinct from, those offered by the Chief Justice. Adopting the premise that Congress's legislative power must be limited, the joint dissent argues that extending the power to include mandates to participate in the market would create power without limits. (59) This limit applies to the Necessary and Proper Clause as well: "[T]he scope of the Necessary and Proper Clause is exceeded not only when the congressional action directly violates the sovereignty of the States but also when it violates the background principle of enumerated (and hence limited) federal power." (60)
On the tax power issue, the joint dissent's key move is the argument that the penalty provision could not fairly be interpreted as a tax because it is triggered by a violation of the law. (61) On the Anti-Injunction Act, the joint dissent argued that its analysis of the tax power question essentially disposed of the jurisdictional question as well. (62) On the Medicaid expansion issue, the reasoning of the joint dissent is very close to that of the Chief Justice, emphasizing that the sheer size of Medicaid funding makes any condition on its receipt coercive. (63) The joint dissent's discussion of the severability issue is complex and will not be summarized here. (64)
7. Justice Thomas's Opinion
The final opinion was authored by Justice Thomas. The sole point of this opinion was to restate Justice Thomas's longstanding objection to the substantial effects doctrine and to express his belief that the reasoning of Wickard v. Filburn (65) should be explicitly repudiated by the Court. (66)
In summary, there are seven, functionally distinct opinions. These amount to an opinion of the Court on the Anti-Injunction Act and the tax power. Additionally, a majority of Justices align on the invalidity of the individual mandate under the Commerce Clause and the Necessary and Proper Clause, albeit in two distinct opinions. Given that a total of three Justices support the invalidation of conditioning of new funds on state acceptance of Medicaid expansion and that four Justices support the invalidation of so-conditioning any funds, it follows that seven Justices would support the narrower outcome (striking down the new funds condition) in the Chief Justice's opinion.
III. DIRECT LEGAL EFFECTS: THE MANDATE AND STARE DECISIS
What are the direct legal effects of NFIB? Direct legal effects are the legal norms created by the Supreme Court's decision and the Justices' opinions. We can divide direct effects into three categories. The first and most immediate legal effects are the result of what is called the "mandate" and the associated doctrine of law of the case. (67) A second set of legal effects is created by the doctrine of vertical stare decisis as it affects the lower federal courts and the courts of the several states. (68) A third set of legal effects is created by the doctrine of horizontal stare decisis--the doctrine of precedent applied by the Supreme Court to its own prior decisions. (69)
A. The Mandate and Law of the Case
The most direct legal effect of a Supreme Court decision is achieved via the mandate--the formal direction the Court gives to the lower federal courts in the case. (70) (The discussion that follows uses the term "mandate" in this sense--not to be confused with the "individual mandate," to which I shall always refer by using the whole two-word phrase.) In Supreme Court decisions, the mandate is a function of the judgment, which is announced at the end of the opinion. (71) Because of the fragmented nature of the opinions, the precise content of the mandate in NFIB requires a careful parsing of the various opinions. It has at least three distinct components: (1) affirming the Eleventh Circuit's rejection of the Anti-Injunction Act challenge to the district court's jurisdiction; (2) reversing the Eleventh Circuit's decision that the penalty provision enforcing the individual mandate of the ACA was beyond the legislative power of Congress; and (3) affirming in part and reversing in part the Eleventh Circuit's determination that the Medicaid expansion provision was within Congress's power. Formally, this portion of the opinion is expressed in the final passages of Justice Roberts's opinion, "The judgment of the Court of Appeals for the Eleventh Circuit is affirmed in part and reversed in part. It is so ordered." (72)
Because we need to refer to the various portions of Justice Roberts's opinion, it may be helpful to briefly summarize the sections in the form of a chart:
The first component of the mandate follows directly from Part II of Justice Roberts's opinion; this Part was joined by Justices Ginsburg, Breyer, Sotomayor, and Kagan and hence constitutes the opinion of the Court. (73) This Part directly affirms the Eleventh Circuit on the Anti-Injunction Act issue. (74) The second component of the mandate follows from Part III-C of Justice Roberts's opinion joined by the same four Justices, which reverses the Eleventh Circuit's decision insofar as it failed to adopt a saving construction of the individual mandate. (75) The third component of the mandate is more complex. Part IV of Justice Roberts's opinion, joined by Justices Breyer and Kagan, concludes that the Medicaid expansion, which threatened states with the loss of their existing Medicaid funding if they declined to comply with the provisions of the ACA that expanded the scope of the Medicaid program and increased the number of individuals the states must cover as a condition of their receipt of federal funds, violates the Constitution. (76) Because four Justices (Kennedy, Scalia, Thomas, and Alito) would have struck down the entire ACA, (77) Part IV of Justice Roberts's opinion would control in subsequent proceedings in the lower federal courts. (78) The consequence is that preexisting Medicaid funding cannot be denied to states that do not implement the Medicaid expansion provisions of the ACA.
The immediate legal effect of the mandate is accompanied by additional legal consequences that flow from the closely related doctrine called the "law of the case." (79) The law-of-the-case doctrine has two dimensions, which we can call "vertical" and "horizontal." (80) The vertical dimension of the law-of-the-case doctrine requires any lower court in subsequent proceedings in the NFIB case itself to follow the Supreme Court's determinations. (81) The horizontal dimension of the law-of-the-case doctrine would apply to the Supreme Court itself if any portion of NFIB should return to the Court on a subsequent appeal, but is not binding: the Court has the power to reverse itself on issues determined in a prior decision in the same case. (82)
The law-of-the-case doctrine (a cousin of the doctrine of issue preclusion or collateral estoppel) only applies to issues that were actually decided, (83) and hence has no relevance to issues not presented to the Court in NFIB, including, for example, the question of whether the penalty provision enforcing the individual mandate violates the Origination Clause of Article I.
In practice, the most important, direct, and immediate effects of the Supreme Court's decision in NFIB are produced by the mandate and the vertical law-of-the-case doctrine. As a consequence of the mandate, the penalty provisions will go into effect, absent the success of a legal challenge on some basis not considered by the Court in NFIB. If any state chooses not to accept Congress's offer of Medicaid funding for the new beneficiary classes, that state will not be subject to the possible withdrawal of funding for the pre-2010 classes of beneficiaries. (84)
B. Vertical Stare Decisis
Supreme Court decisions create a second kind of direct legal effect as a consequence of the doctrine of vertical stare decisis, or precedent. Vertical stare decisis operates with respect to issues of federal law and binds courts that are lower than the Supreme Court in the hierarchy of authority--that is, the lower federal courts and the courts of the several states. By contrast, horizontal stare decisis operates within a court. The Supreme Court is not bound by horizontal stare decisis--more on this below. (85)
In many cases, the precedential effect of a Supreme Court decision is relatively clear--the rule, as implied by the rationale necessary for the result, is stated unambiguously in a majority opinion, perhaps in a sentence that begins with the words, "we hold that." In other cases, the vertical stare decisis effect of a Supreme Court decision may be quite murky. There may be no "opinion of the Court" on a particular issue, and the relationship between elements of the reasoning and the outcome may not be clear. There is another factor that clouds the doctrine of vertical stare decisis: the content of the doctrine is contested both at the surface level of detail and the deep level of theory. (86)
In the case of NFIB, some of the vertical stare decisis effects are relatively clear. The Anti-Injunction Act holding, for example, would seem to apply to any financial exaction that Congress describes as a penalty and does not describe as a tax. It may be more difficult, however, to formulate the holding with respect to the unconstitutionality of conditioning "old" Medicaid funding to states on the states' compliance with the expansion of Medicaid benefits and eligibility criteria. Perhaps the withdrawal of funding of the same magnitude (ten percent of the states' total budgets) would be subject to the same restriction under a variety of reasonable formulations of the holding. (87)
1. Vertical Stare Decisis Effects of the Opinion of the Court
The most difficult vertical stare decisis question concerns the Commerce Clause and the Necessary and Proper Clause. (88) The opinion of the Court contains a passage that, on the surface, asserts that the invalidity of the individual mandate under the Commerce Clause is part of the holding. The Court writes: "The Court today holds that our Constitution protects us from federal regulation under the Commerce Clause so long as we abstain from the regulated activity." (89)
Repetition may be important for clarity: the passage quoted above is in the opinion of the Court, not the separate opinion of Justice Roberts. In the initial wave of reaction to NFIB, this passage went mostly unnoticed. (90) At a minimum, statements that use language like "the Court today holds" are evidence of what the holding actually is. (91) In practice, lower courts and brief writers frequently treat such statements as if they have enactment force that binds the lower courts. (92) Let's call such statements, "we-hold-that statements."
The fact that lower courts treat we-hold-that statements as having enactment force does not mean that they do. Because the mandate reverses the Eleventh Circuit on the congressional power issue, the we-hold-that statement, on the surface, appears to be unnecessary to the decision: the result (affirmance) flows from the opinion of the Court on the basis of its tax power reasoning. Hence, this statement seems to be obiter dictum.
But things are more complicated than the surface of the opinion of the Court suggests. One complication arises from the incompletely theorized nature of the doctrine of vertical stare decisis. This is not the occasion for a full rehearsal of the current state of the law and the theoretical debates about the nature of stare decisis that raged in past decades. (93) I will simply observe that many important questions are not clearly resolved.
For present purposes, the important point is that the doctrine of vertical stare decisis is not as clear as many legal practitioners and academics may believe. There is, to be sure, a formalist version of the doctrine that is rooted in the idea of the ratio decidendi (94): the holding of a case is the rule that is logically implied by the stated reasons necessary to the resolution of the case on the facts before the appellate court and the legal arguments presented by the parties. But there is another tradition of thinking about stare decisis that views the holding of a case as the rule that best predicts the future behavior of a court from the opinions expressed by the judges. (95) This predictive theory normally affords great weight to we-hold-that statements on the theory that judges themselves do not sign on to such statements unless they are willing to back them up in future cases. Judges may say other things, but many of these statements are "cheap talk" because they do not clearly communicate a commitment to future action.
If we return to the opinion of the Court in NFIB, the two theories seem, on the surface, to lead to different conclusions regarding the scope of the holding. If holdings are limited to the ratio decidendi, then the self-identified "holding" quoted above would be mere dicta--it was not necessary to the resolution of the congressional power issue. But if holdings are predictions, then the passage quoted could be important evidence that the Justices have committed themselves to the stated rule of law.
Even under the predictive theory of holdings, the quoted passage may be outweighed by other evidence predictive of future behavior by the Justices who joined Part III-C. The quoted passage is isolated within Part III-C, which does not provide reasoning that would support the holding. That reasoning is provided in Part III-A, but that part is the opinion of Justice Roberts alone. Extrinsic evidence suggests that the four Justices who joined Roberts in Part III-C do not view themselves as committed on the Commerce Clause issue: Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan, explicitly and forcefully expressed their disagreement with Justice Roberts's Commerce Clause reasoning. Of course, four other Justices (Kennedy, Scalia, Thomas, and Alito) authored the joint dissent that agrees in spirit with Part III-A. But they pointedly did not join Part III-A.
These complexities are likely to lead to speculation. For example, it is possible that the quoted passage was written on the assumption that Kennedy, Scalia, Thomas, and Alito would join Part III-A of Justice Roberts's opinion. If they had, that portion of the opinion would have been denominated an "opinion of the Court." But they did not join Part III-A. One might speculate that the quoted passage was left in the opinion by accident, or that Justices Ginsburg, Breyer, Sotomayor, and Kagan knowingly agreed to this passage--as part of a compromise reached with Justice Roberts. Of course, either of these scenarios would be odd. A compromise is unlikely given that the four Justices who joined the purported holding statement also joined a dissent on the very same point. A mistake is unlikely because Supreme Court Justices and their clerks surely know that we-hold-that statements are important. In any event, odd things do happen.
Some might think that the extrinsic evidence deprives the quoted passage of evidentiary value, and hence that it cannot serve as the basis of a prediction. That argument would be decisive if Justices Kennedy, Scalia, Thomas, and Alito substantially disagreed with the reasoning of Part III-A of Justice Roberts's opinion, but they do not. What they do say suggests that, functionally and substantively, they are mostly on board with Part III-A. From the perspective of the predictive theory, the extrinsic evidence actually supports the claim that the passage in the opinion of the Court predicts the future behavior of the Justices.
The view that we-hold-that statements are particularly important in making predictions is a view about their evidentiary function. If there is contradictory evidence (and there is), the balance of evidence should control: we can call this idea, the "balance of evidence standard." The balance-of-evidence standard leads to another evidentiary heuristic for the predictive theory--the so-called "rule of five." (96) If you can count five votes for a position, that position has predictive value. Of course, the quality of the evidence counts. One might attempt to predict the future behavior of the Court based on the general ideological characteristics of the individual justices. From the point of view of the predictive theory, that kind of evidence is likely to be unsatisfactory because this sort of prediction does not produce the level of confidence required by the predictive theory of precedent. Lower federal courts are not entitled to disregard Supreme Court holdings on the basis of educated guesses about the future behavior of the Supreme Court--the Court itself has said that. (97) The predictive theory of precedent requires that the predictions flow from strong evidence found within Supreme Court decisions. So the holding of a case is a prediction made from evidence that is internal to the opinions of the Justices.
2. Vertical Stare Decisis Effects of All the Opinions Under the Narrowest Grounds Rule
Once we have all the opinions in view, we need to consider the possible effects of the narrowest grounds rule. (98) The content of that rule is unclear, (99) but we can tease out some of the implications without a precise version of the rule. We are going to begin with the formalist version--the narrowest grounds rule as it would be formulated within the general approach of the ratio decidendi theory of precedent. The rule was stated in Marks v. United States as follows: "[w]hen a fragmented Court decides a case and no single rationale explaining the result enjoys the assent of five Justices, 'the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.'" (100) The Ninth Circuit suggested that Marks requires the lower federal courts to find the "legal standard which, when applied, will necessarily produce results with which a majority of the Court from that case would agree." (101) If there is no such opinion, "the only binding aspect of a splintered decision is its specific result." (102)
What are the criteria for "narrowest"? Michael Abramowicz and Maxwell Steams suggest that narrowness is defined relevant to the effect produced:
[w]hen the Court strikes down a law on constitutional grounds, the rule seeks the opinion consistent with the outcome that would strike down the fewest laws. Conversely, when the Court sustains a law against a constitutional challenge, the narrowest grounds opinion is that opinion consistent with the outcome that would sustain the fewest laws. (103)
How does the narrowest grounds rule apply to NFIB? Consider first the implications of Part III-D of Justice Roberts's opinion:
Justice GINSBURG questions the necessity of rejecting the Government's commerce power argument, given that [section] 5000A can be upheld under the taxing power. But the statute reads more naturally as a command to buy insurance than as a tax, and I would uphold it as a command if the Constitution allowed it. It is only because the Commerce Clause does not authorize such a command that it is necessary to reach the taxing power question. And it is only because we have a duty to construe a statute to save it, if fairly possible, that [section] 5000A can be interpreted as a tax. Without deciding the Commerce Clause question, I would find no basis to adopt such a saving construction. The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. (104)
The ground articulated by Chief Justice Roberts would be narrowest, in that it would only sustain laws that were taxes or that could reasonably be construed as taxes, and it would not sustain laws that could only be upheld under the Commerce Clause. The rationale in Justice Ginsburg's opinion would be broader because it would sustain laws of both types.
Even if Justice Roberts's rationale is narrowest, is it necessary? One might argue that even given the ratio decidendi theory of the doctrine of vertical stare decisis, the Commerce Clause reasoning is in fact necessary to the validation of congressional power to enact the penalty provisions of the ACA. How would that argument go? It might begin with the observation that the reasoning concerning the Commerce Clause in Part III-A and Part III-D of Justice Roberts's opinion is necessary to the chain of reasoning that produced the outcome, because absent the Commerce Clause reasoning, Roberts would not have even reached the tax power issue.
This reasoning might be challenged by arguing that Justice Roberts would not have reached the Commerce Clause issue if he had used the modern version of the avoidance canon. Mark Tushnet made precisely this argument shortly after the decision in NFIB was made:
There is a "canon" of statutory construction known as the "constitutional avoidance" canon. It comes in two versions, now labeled the "classical" version and the "modern" one. On the modern version, a judge faced with a statute that, most naturally read, raises difficult constitutional questions, should adopt instead a construction--if one is fairly available--that does not raise such questions. On the modern version, then, the Chief Justice didn't have to address the Commerce Clause question; all he needed to do was to note that the question was difficult and that construing the statute to impose a tax was an available reading. (105)
Tushnet's conclusion is that Chief Justice Roberts's Commerce Clause reasoning was unnecessary, but his argument for that conclusion is not fully developed. A fuller analysis requires a more precise formulation of what we can call the "necessity component" of the narrowest grounds rule.
This need arises because of the distinction between (1) reasons that are necessary to the result and (2) reasons that are necessary elements of a set of actually articulated reasons that are jointly sufficient to support the result.
This distinction may sound technical, but it is crucially important. Few reasons are absolutely necessary to a decision; in many cases the outcome could have been reached on the basis of many different reasons--and hence no single reason is necessary.
The alternative conception of necessity focuses on the actually articulated reasons and asks which of these are necessary members of a set of reasons that are jointly sufficient to justify the outcome. The alternative conception captures the ordinary lawyer's distinction between holding and obiter dictum. Of all the reasons presented, only those that are required to produce the outcome are eligible as "holdings"; reasons that are could be eliminated without changing the result are "dicta."
These two distinct conceptions of what "necessary" means can be translated into two formulations of the necessity component of the narrowest grounds rule.
For the purposes of the narrowest grounds rule, a reason is deemed "necessary to the outcome" if and only if:
Formulation One: The outcome could not have been reached absent the reason.
Formulation Two: The reason is actually articulated in one of the opinions, and the reason forms a necessary element of a set of reasons that are jointly sufficient to produce the result.
If holdings are limited by Formulation One, then the set of holdings will be very small indeed. For any given case, there will be a set of possible chains of reasoning, each of which would be sufficient to justify the outcome actually reached. If the fact that a given reason is not included in every possible outcome-justifying chain of reason entailed the conclusion that the reason was not "necessary" and hence not eligible for inclusion in the holding of the case, then many (and perhaps most or even all) cases would not have holdings at all, an obviously absurd consequence. The point of the reductio ad abdurdum is to show that the Formulation One of the necessity criterion for status as a holding cannot be correct.
For the ratio decidendi theory to be plausible, it must focus on the reasons actually provided; the theoretical availability of a reason not actually articulated in opinions of the judges in the case does negate the necessity of a premise in the chain or reasons that are actually offered. Formulation Two is also consistent with an actual statement of the Marks rule: "the holding of the Court may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds." (106) It is the "position taken" and not "the narrowest position that could have been taken" that provides the holding. When more than one chain of reasoning is actually offered and sufficient to support the result, the result is alternative holdings. Formulation Two takes these complexities into account.
In light of these points about necessity, consider again the argument that the Commerce Clause reasoning in Justice Roberts's opinion is dicta because he could have relied on the modern version of the avoidance canon. (107) This argument works perfectly on Formulation One. Justice Roberts could have reasoned differently, by relying on the modern formulation of the avoidance canon, and therefore, this discussion of the Commerce Clause is dicta. But Formulation One suggests an even simpler basis for the argument that the interstate commerce reasoning is dicta. Justice Roberts could simply have accepted the tax power argument endorsed by Justice Ginsburg; if he had done that, he would not even have had to mention the Commerce Clause. By the same reasoning, the tax power discussion is also unnecessary, since Roberts could have decided the case on the basis of the Commerce Clause. Formulation One is very stringent indeed, and if we accept it, then it is not clear that there is any holding on the federal power issue in NFIB.
Formulation Two, on the other hand, suggests a more precise version of the argument that Roberts's Commerce Clause reasoning was necessary. The Commerce Clause reasoning in Part III-A and Part III-D of Justice Roberts's opinion is a necessary element in a chain of reasoning that was articulated and is itself sufficient to support the result. It is a necessary element because the chain of reasoning actually offered by Justice Roberts depends on it. That chain of reasoning (contained in Parts III-A, III-B & III-C) is sufficient to produce the outcome on the question of whether Congress had power to enact the ACA. Hence the Commerce Clause reasoning satisfies the standard set in Formulation Two.
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|Title Annotation:||Introduction: Direct and Indirect Legal Effects through III. Direct Legal Effects: The Mandate and Stare Decisis B. Vertical Stare Decisis 2. Vertical Stare Decisis Effects of All the Opinions Under the Narrowest Grounds Rule, p. 1-28|
|Author:||Solum, Lawrence B.|
|Publication:||Washington University Law Review|
|Date:||Dec 1, 2013|
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