Source: http://www.millerpolitics.com/NFIBcaseII.htm
Timestamp: 2019-01-20 19:34:16
Document Index: 206378055

Matched Legal Cases: ['§8', '§8', '§8', '§8', '§5000', '§5000', '§5000', '§5000', '§5000', '§18022', '§5000', '§5000', '§5000', '§8', '§7421', '§1396', '§1395', '§395', '§18091', '§300', '§8']

In our federal system, the National Government pos­sesses only limited powers; the States and the people retain the remainder. Nearly two centuries ago, Chief Justice Marshall observed that “the question respecting the extent of the powers actually granted” to the Federal Government “is perpetually arising, and will probably continue to arise, as long as our system shall exist.” McCulloch v. Maryland, 4 Wheat. 316, 405 (1819). In this case we must again determine whether the Constitution grants Congress powers it now asserts, but which many States and individuals believe it does not possess. Resolv­ing this controversy requires us to examine both the limits of the Government’s power, and our own limited role in policing those boundaries.
The Federal Government “is acknowledged by all to be one of enumerated powers.” Ibid. That is, rather than granting general authority to perform all the conceiv­able functions of government, the Constitution lists, or enumerates, the Federal Government’s powers. Congress may, for example, “coin Money,” “establish Post Offices,” and “raise and support Armies.” Art. I, §8, cls. 5, 7, 12. The enumeration of powers is also a limitation of pow­ers, because “[t]he enumeration presupposes something not enumerated.” Gibbons v. Ogden, 9 Wheat. 1, 195 (1824).The Constitution’s express conferral of some powers makes clear that it does not grant others. And the Federal Government “can exercise only the powers granted to it.” McCulloch, supra, at 405.
“State sovereignty is not just an end in itself: Rather, federalism secures to citizens the liberties that derive from the diffusion of sovereign power.” New York v. United States, 505 U. S. 144, 181 (1992) (internal quotation marks omitted). Because the police power is controlled by50 different States instead of one national sovereign, the facets of governing that touch on citizens’ daily lives are normally administered by smaller governments closer to the governed. The Framers thus ensured that powers which “in the ordinary course of affairs, concern the lives, liberties, and properties of the people” were held by gov­ernments more local and more accountable than a distant federal bureaucracy. The Federalist No. 45, at 293 (J. Madison). The independent power of the States also serves as a check on the power of the Federal Government: “By denying any one government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power.” Bond v. United States, 564 U. S. ___, ___ (2011) (slip op., at 9–10).
This case concerns two powers that the Constitution does grant the Federal Government, but which must be read carefully to avoid creating a general federal authority akin to the police power. The Constitution authorizes Congress to “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.” Art. I, §8, cl. 3. Our precedents read that to mean that Congress may regulate “the channels of interstate com­merce,” “persons or things in interstate commerce,” and “those activities that substantially affect interstate com­merce.” Morrison, supra, at 609 (internal quotation marks omitted). The power over activities that substantially affect interstate commerce can be expansive. That power has been held to authorize federal regulation of such seem­ingly local matters as a farmer’s decision to grow wheat for himself and his livestock, and a loan shark’s extor­tionate collections from a neighborhood butcher shop. See Wickard v. Filburn, 317 U. S. 111 (1942); Perez v. United States, 402 U. S. 146 (1971).
Congress may also “lay and collect Taxes, Duties, Im­posts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” U. S. Const., Art. I, §8, cl. 1. Put simply, Con­gress may tax and spend. This grant gives the Federal Government considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid, or otherwise control. See, e.g., License Tax Cases, 5 Wall. 462, 471 (1867). And in exercising its spending power, Congress may offer funds to the States, and may condition those offers on compliance with specified conditions. See, e.g., College Savings Bank v. Florida Prepaid Postsecond­ary Ed. Expense Bd., 527 U. S. 666, 686 (1999). These offers may well induce the States to adopt policies that the Federal Government itself could not impose. See, e.g., South Dakota v. Dole, 483 U. S. 203, 205–206 (1987) (con­ditioning federal highway funds on States raising their drinking age to 21).
The reach of the Federal Government’s enumerated powers is broader still because the Constitution authorizes Congress to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.” Art. I, §8, cl. 18. We have long read this provision to give Congress great latitude in exercising its powers: “Let the end be legitimate, let it be within the scope of the constitu­tion, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.” McCulloch, 4 Wheat., at 421.
Our permissive reading of these powers is explained in part by a general reticence to invalidate the acts of the Nation’s elected leaders. “Proper respect for a co-ordinate branch of the government” requires that we strike down an Act of Congress only if “the lack of constitutional authority to pass [the] act in question is clearly demon­strated.” United States v. Harris, 106 U. S. 629, 635 (1883).Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.
Our deference in matters of policy cannot, however, become abdication in matters of law. “The powers of the legislature are defined and limited; and that those limits may not be mistaken, or forgotten, the constitution is written.” Marbury v. Madison, 1 Cranch 137, 176 (1803). Our respect for Congress’s policy judgments thus can never extend so far as to disavow restraints on federal power that the Constitution carefully constructed. “The peculiar circumstances of the moment may render a measure more or less wise, but cannot render it more or less constitutional.” Chief Justice John Marshall, A Friend of the Constitution No. V, Alexandria Gazette, July 5, 1819, in John Marshall’s Defense of McCulloch v. Mary­land 190–191 (G. Gunther ed. 1969). And there can be no question that it is the responsibility of this Court to en­force the limits on federal power by striking down acts of Congress that transgress those limits. Marbury v. Madi­son, supra, at 175–176.
In 2010, Congress enacted the Patient Protection and Affordable Care Act, 124 Stat. 119. The Act aims to in­crease the number of Americans covered by health in­surance and decrease the cost of health care. The Act’s 10 titles stretch over 900 pages and contain hundreds of provisions. This case concerns constitutional challenges to two key provisions, commonly referred to as the individual mandate and the Medicaid expansion. The individual mandate requires most Americans to maintain “minimum essential” health insurance coverage.26 U. S. C. §5000A. The mandate does not apply to some individuals, such as prisoners and undocumented aliens. §5000A(d). Many individuals will receive the required cov­erage through their employer, or from a government pro­gram such as Medicaid or Medicare. See §5000A(f). But for individuals who are not exempt and do not receive health insurance through a third party, the means of satisfying the requirement is to purchase insurance from a private company. Beginning in 2014, those who do not comply with the mandate must make a “[s]hared responsibility payment” to the Federal Government. §5000A(b)(1). That payment, which the Act describes as a “penalty,” is calculated as a percentage of household income, subject to a floor based on a specified dollar amount and a ceiling based on the aver­age annual premium the individual would have to pay for qualifying private health insurance. §5000A(c). In 2016, for example, the penalty will be 2.5 percent of an individ­ual’s household income, but no less than $695 and no more than the average yearly premium for insurance that co­vers 60 percent of the cost of 10 specified services (e.g., prescription drugs and hospitalization). Ibid.; 42 U. S. C. §18022. The Act provides that the penalty will be paid to the Internal Revenue Service with an individual’s taxes, and “shall be assessed and collected in the same manner” as tax penalties, such as the penalty for claiming too large an income tax refund. 26 U. S. C. §5000A(g)(1). The Act, however, bars the IRS from using several of its nor­mal enforcement tools, such as criminal prosecutions and levies. §5000A(g)(2). And some individuals who are sub­ject to the mandate are nonetheless exempt from the penalty—for example, those with income below a certain threshold and members of Indian tribes. §5000A(e).
On the day the President signed the Act into law, Flor­ida and 12 other States filed a complaint in the Federal District Court for the Northern District of Florida. Those plaintiffs—who are both respondents and petitioners here, depending on the issue—were subsequently joined by 13more States, several individuals, and the National Fed­eration of Independent Business. The plaintiffs alleged, among other things, that the individual mandate provi­sions of the Act exceeded Congress’s powers under Article I of the Constitution. The District Court agreed, holding that Congress lacked constitutional power to enact the individual mandate. 780 F. Supp. 2d 1256 (ND Fla. 2011).The District Court determined that the individual man­date could not be severed from the remainder of the Act, and therefore struck down the Act in its entirety. Id., at 1305–1306.
The Court of Appeals for the Eleventh Circuit affirmed in part and reversed in part. The court affirmed the Dis­trict Court’s holding that the individual mandate exceeds Congress’s power. 648 F. 3d 1235 (2011). The panel unanimously agreed that the individual mandate did not impose a tax, and thus could not be authorized by Con­gress’s power to “lay and collect Taxes.” U. S. Const., Art. I, §8, cl. 1. A majority also held that the individual mandate was not supported by Congress’s power to “regu­late Commerce . . . among the several States.” Id., cl. 3. According to the majority, the Commerce Clause does not empower the Federal Government to order individuals to engage in commerce, and the Government’s efforts to cast the individual mandate in a different light were unpersua­sive. Judge Marcus dissented, reasoning that the individ­ual mandate regulates economic activity that has a clear effect on interstate commerce.
Having held the individual mandate to be unconstitu­tional, the majority examined whether that provision could be severed from the remainder of the Act. The ma­jority determined that, contrary to the District Court’s view, it could. The court thus struck down only the indi­vidual mandate, leaving the Act’s other provisions intact.648 F. 3d, at 1328.
Other Courts of Appeals have also heard challenges to the individual mandate. The Sixth Circuit and the D. C. Circuit upheld the mandate as a valid exercise of Con­gress’s commerce power. See Thomas More Law Center v. Obama, 651 F. 3d 529 (CA6 2011); Seven-Sky v. Holder, 661 F. 3d 1 (CADC 2011). The Fourth Circuit determined that the Anti-Injunction Act prevents courts from consid­ering the merits of that question. See Liberty Univ., Inc. v. Geithner, 671 F. 3d 391 (2011). That statute bars suits “for the purpose of restraining the assessment or collection of any tax.” 26 U. S. C. §7421(a). A majority of the Fourth Circuit panel reasoned that the individual mandate’s penalty is a tax within the meaning of the Anti-Injunction Act, because it is a financial assessment collected by the IRS through the normal means of taxation. The majority therefore determined that the plaintiffs could not chal­lenge the individual mandate until after they paid the penalty.1
—————— 1The Eleventh Circuit did not consider whether the Anti-Injunction Act bars challenges to the individual mandate. The District Court had determined that it did not, and neither side challenged that holding on appeal. The same was true in the Fourth Circuit, but that court examined the question sua sponte because it viewed the Anti-InjunctionAct as a limit on its subject matter jurisdiction. See Liberty Univ., 671 F. 3d, at 400–401. The Sixth Circuit and the D. C. Circuit considered the question but determined that the Anti-Injunction Act did not apply. See Thomas More, 651 F. 3d, at 539–540 (CA6); Seven-Sky, 661 F. 3d, at 5–14 (CADC).——————
The second provision of the Affordable Care Act directly challenged here is the Medicaid expansion. Enacted in 1965, Medicaid offers federal funding to States to assist pregnant women, children, needy families, the blind, the elderly, and the disabled in obtaining medical care. See 42 U. S. C. §1396a(a)(10). In order to receive that funding, States must comply with federal criteria governing mat­ters such as who receives care and what services are pro­vided at what cost. By 1982 every State had chosen to participate in Medicaid. Federal funds received through the Medicaid program have become a substantial part of state budgets, now constituting over 10 percent of most States’ total revenue.
The Government’s first argument is that the individual mandate is a valid exercise of Congress’s power under the Commerce Clause and the Necessary and Proper Clause. According to the Government, the health care market is characterized by a significant cost-shifting problem. Every­one will eventually need health care at a time and to an extent they cannot predict, but if they do not have insur­ance, they often will not be able to pay for it. Because state and federal laws nonetheless require hospitals to provide a certain degree of care to individuals without regard to their ability to pay, see, e.g., 42 U. S. C. §1395dd; Fla. Stat. Ann. §395.1041, hospitals end up receiving compensation for only a portion of the services they pro­vide. To recoup the losses, hospitals pass on the cost to insurers through higher rates, and insurers, in turn, pass on the cost to policy holders in the form of higher pre­miums. Congress estimated that the cost of uncompen­sated care raises family health insurance premiums, on average, by over $1,000 per year. 42 U. S. C. §18091(2)(F).In the Affordable Care Act, Congress addressed the problem of those who cannot obtain insurance coverage because of preexisting conditions or other health issues. It did so through the Act’s “guaranteed-issue” and “community- rating” provisions. These provisions together prohibit in­surance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals. See §§300gg, 300gg–1, 300gg–3, 300gg–4. The guaranteed-issue and community-rating reforms do not, however, address the issue of healthy individuals who choose not to purchase insurance to cover potential healthcare needs. In fact, the reforms sharply exacerbate that problem, by providing an incentive for individuals to delay purchasing health insurance until they become sick, rely­ing on the promise of guaranteed and affordable coverage. The reforms also threaten to impose massive new costs on insurers, who are required to accept unhealthy individuals but prohibited from charging them rates necessary to pay for their coverage. This will lead insurers to significantly increase premiums on everyone. See Brief for America’s Health Insurance Plans et al. as Amici Curiae in No. 11– 393 etc. 8–9.
The power to “make all Laws which shall be necessary and proper for carrying into Execution” the powers enumerated in the Constitution, Art. I, §8, cl. 18, vests Congress with authority to enact provisions “incidental to the [enumerated] power, and conducive to its beneficial exercise,” McCulloch, 4 Wheat., at 418. Although the Clause gives Congress authority to “legislate on that vast mass of incidental powers which must be involved in the constitution,” it does not license the exercise of any “great substantive and independent power[s]” beyond those specifically enumerated. Id., at 411, 421. Instead, the Clause is “ ‘merely a declaration, for the removal of all uncertainty, that the means of carrying into execution those [powers] otherwise granted are included in the grant.’ ” Kinsella v. United States ex rel. Singleton, 361 U. S. 234, 247 (1960) (quoting VI Writings of James Madison 383 (G. Hunt ed. 1906)).
As our jurisprudence under the Necessary and Proper Clause has developed, we have been very deferential to Congress’s determination that a regulation is “necessary.” We have thus upheld laws that are “ ‘convenient, or useful’ or ‘conducive’ to the authority’s ‘beneficial exercise.’ ” Comstock, 560 U. S., at ___ (slip op., at 5) (quoting McCulloch, supra, at 413, 418). But we have also carried out our responsibility to declare unconstitutional those laws that undermine the structure of government established by the Constitution. Such laws, which are not “consist[ent] with the letter and spirit of the constitution,” McCulloch, supra, at 421, are not “proper [means] for carrying into Execution” Congress’s enumerated powers. Rather, they are, “in the words of The Federalist, ‘merely acts of usurpation’ which ‘deserve to be treated as such.’ ” Printz v. United States, 521 U. S. 898, 924 (1997) (alterations omitted) (quoting The Federalist No. 33, at 204 (A. Hamilton)); see also New York, 505 U. S., at 177; Comstock, supra, at ___ (slip op., at 5) (Kennedy, J., concurring in judgment) (“It is of fundamental importance to consider whether essential attributes of state sovereignty are compromised by the assertion of federal power under the Necessary and Proper Clause . . .”).
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. For example, we have upheld provisions permitting continued confinement of those already in federal custody when they could not be safely released, Comstock, supra, at ___ (slip op., at 1–2); criminalizing bribes involving organizations receiving federal funds, Sabri v. United States, 541 U. S. 600, 602, 605 (2004) ; and tolling state statutes of limitations while cases are pending in federal court, Jinks v. Richland County, 538U. S. 456, 459, 462 (2003). The individual mandate, by contrast, vests Congress with the extraordinary ability to create the necessary predicate to the exercise of an enumerated power.