Opinion ID: 223249
Heading Depth: 3
Heading Rank: 8

Heading: Areas of Traditional State Concern

Text: Before examining the states' traditional role in regulating insurance and health care, we fully recognize that Congress has the power under the Commerce Clause to regulate broadly in those arenas. In fact, Congress has legislated expansively and constitutionally in the fields of insurance and health care. See, e.g., Health Insurance Portability and Accountability Act of 1996 (HIPAA), Pub.L. No. 104-191, 110 Stat. 1936 (1996); Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Pub.L. No. 99-272, 100 Stat. 82 (1986); Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. 93-406, 88 Stat. 829 (1974); Social Security Amendments of 1965, Pub. L. No. 89-97, 79 Stat. 286 (1965) (establishing Medicare and Medicaid); Federal Food, Drug, and Cosmetic Act, Pub. L. No. 75-717, 52 Stat. 1040 (1938). It is clear that Congress has enacted comprehensive legislation regarding health insurance and health care. The Act is another such example. Yet, the narrow constitutional question here is whether one provision§ 5000Ain that massive regulation goes too far. For the individual mandate to be sustained, it must be enacted pursuant to a valid exercise of Article I power. It simply will not suffice to say that, because Congress has regulated broadly in a field, it may regulate in any fashion it pleases. The Constitution supplies Congress with various tools to effectuate its legislative power, but it also denies others. In assessing Congress's exercise of power, courts recognize that the structural limits embedded in the Constitution are of equal dignity to the express prohibitionsand may even be a more prevalent source of limitation. See, e.g., Comstock, 560 U.S. at ___, 130 S.Ct. at 1968 (Kennedy, J., concurring) (rejecting notion that the Constitution's express prohibitions are the only, or even the principal, constraints on the exercise of congressional power (emphasis added)). [120] The Supreme Court's Commerce Clause jurisprudence emphasizes that, in assessing the constitutionality of Congress's exercise of its commerce authority, a relevant factor is whether a particular federal regulation trenches on an area of traditional state concern. See Morrison, 529 U.S. at 611, 613, 615-16, 120 S.Ct. at 1750-51, 1753; Lopez, 514 U.S. at 561 n. 3, 564-68, 115 S.Ct. at 1631 n. 3, 1632-34. The Supreme Court has expressed concern that Congress might use the Commerce Clause to completely obliterate the Constitution's distinction between national and local authority. Morrison, 529 U.S. at 615, 120 S.Ct. at 1752; see also Raich, 545 U.S. at 35-36, 125 S.Ct. at 2216-17 (Scalia, J., concurring); Lopez, 514 U.S. at 557, 567-68, 115 S.Ct. at 1628-29, 1634; id. at 577, 115 S.Ct. at 1638-39 (Kennedy, J., concurring) (stating that if Congress were to assume control over areas of traditional state concern, the boundaries between the spheres of federal and state authority would blur and political responsibility would become illusory. The resultant inability to hold either branch of the government answerable to the citizens is more dangerous even than devolving too much authority to the remote central power (citation omitted)). Coupled with this consideration, the Supreme Court recognizes that the Constitution withhold[s] from Congress a plenary police power. Lopez, 514 U.S. at 566, 115 S.Ct. at 1633; see also Morrison, 529 U.S. at 618-19, 120 S.Ct. at 1754; cf. Comstock, 560 U.S. at ___, 130 S.Ct. at 1964; id. at ___, 130 S.Ct. at 1967 (Kennedy, J., concurring) (stating that the police power belongs to the States and the States alone). In addition, whether the regulated subject matter is an area of traditional state concern impacts three of the five Comstock factors pertinent to a Necessary and Proper Clause analysis: (1) whether there is a long history of federal involvement in this arena, (2) whether the statute accommodates or supplants state interests, and (3) the statute's narrow scope. 560 U.S. at ___, 130 S.Ct. at 1965. With these principles in mind, we examine whether insurance and health care qualify as areas of traditional state concern. Prior to the Supreme Court's 1944 decision in South-Eastern Underwriters, the States enjoyed a virtually exclusive domain over the insurance industry. St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 539, 98 S.Ct. 2923, 2928, 57 L.Ed.2d 932 (1978). Thus, South-Eastern Underwriters was widely perceived as a threat to state power to tax and regulate the insurance industry. United States Dep't of Treasury v. Fabe, 508 U.S. 491, 499-500, 113 S.Ct. 2202, 2207, 124 L.Ed.2d 449 (1993); see also Cantor v. Detroit Edison Co., 428 U.S. 579, 608 n. 4, 96 S.Ct. 3110, 3126 n. 4, 49 L.Ed.2d 1141 (1976) (Blackmun, J., concurring) (Congress' expressed concern [was that the result in South-Eastern Underwriters ] would `greatly impair or nullify the regulation of insurance by the States,' bringing to a halt their `experimentation and investigation in the area.'). To allay those fears, Congress moved quickly to restore the supremacy of the States in the realm of insurance regulation . Fabe, 508 U.S. at 500, 113 S.Ct. at 2207 (emphasis added). In 1945, a year after South-Eastern Underwriters, Congress passed the McCarran-Ferguson Act, 59 Stat. 33, ch. 20, 15 U.S.C. §§ 1011-1015. [121] The McCarran-Ferguson Act preserved state regulatory control over insurance, which was largely considered by Congress to be a local matter. W. & S. Life Ins. Co. v. State Bd. of Equalization, 451 U.S. 648, 653, 101 S.Ct. 2070, 2075, 68 L.Ed.2d 514 (1981) (quoting H.R.Rep. No. 143, at 2 (1945)). The passage of the McCarran-Ferguson Act signaled Congress's recognition of the states' historical role in regulating insurance within their boundariesand its unwillingness to supplant their vital function as a source of experimentation. Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 429, 66 S.Ct. 1142, 1155, 90 L.Ed. 1342 (1946) (Obviously Congress' purpose [in passing the McCarran-Ferguson Act] was broadly to give support to the existing and future state systems for regulating and taxing the business of insurance.); see also Ne. Bancorp, Inc. v. Bd. of Governors of Fed. Reserve Sys., 472 U.S. 159, 179, 105 S.Ct. 2545, 2556, 86 L.Ed.2d 112 (1985) (O'Connor, J., concurring) (The business of insurance is also of uniquely local concern. . . . [and] historically ha[s] been regulated by the States in recognition of the critical part [it] play[s] in securing the financial well-being of local citizens and businesses. (citations omitted)). Our Circuit has reached a similar conclusion. Blue Cross & Blue Shield v. Nielsen, 116 F.3d 1406, 1413 (11th Cir. 1997) (Adjustment of the rights and interests of insurers, health care providers, and insureds is a subject matter that falls squarely within the zone of traditional state regulatory concerns.). Thus, insurance qualifies as an area of traditional state regulation. This recognition counsels caution, and supplies reviewing courts with even greater cause for doubt when faced with an unprecedented economic mandate of dubious constitutional status. Cf. Lopez, 514 U.S. at 583, 115 S.Ct. at 1641 (Kennedy, J., concurring) (The statute now before us forecloses the States from experimenting and exercising their own judgment in an area to which States lay claim by right of history and expertise, and it does so by regulating an activity beyond the realm of commerce in the ordinary and usual sense of that term.). The health care industry also falls within the sphere of traditional state regulation. A state's role in safeguarding the health of its citizens is a quintessential component of its sovereign powers. The Supreme Court has declared that the structure and limitations of federalism . . . allow the States great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons. Gonzales v. Oregon, 546 U.S. 243, 270, 126 S.Ct. 904, 923, 163 L.Ed.2d 748 (2006) (quotation marks and citation omitted). Numerous Supreme Court decisions have identified the regulation of health matters as a core facet of a state's police powers. See, e.g., Hill v. Colorado, 530 U.S. 703, 715, 120 S.Ct. 2480, 2489, 147 L.Ed.2d 597 (2000) (It is a traditional exercise of the States' police powers to protect the health and safety of their citizens. (quotation marks and citation omitted)); Barnes v. Glen Theatre, Inc., 501 U.S. 560, 569, 111 S.Ct. 2456, 2462, 115 L.Ed.2d 504 (1991) (The traditional police power of the States is defined as the authority to provide for the public health, safety, and morals.); Head v. N.M. Bd. of Exam'rs in Optometry, 374 U.S. 424, 428, 83 S.Ct. 1759, 1762, 10 L.Ed.2d 983 (1963) ([T]he statute here involved is a measure directly addressed to protection of the public health, and the statute thus falls within the most traditional concept of what is compendiously known as the police power.); Barsky v. Bd. of Regents, 347 U.S. 442, 449, 74 S.Ct. 650, 654, 98 L.Ed. 829 (1954) (It is elemental that a state has broad power to establish and enforce standards of conduct within its borders relative to the health of everyone there. It is a vital part of a state's police power.); Jacobson v. Massachusetts, 197 U.S. 11, 25, 25 S.Ct. 358, 360, 49 L.Ed. 643 (1905) (According to settled principles, the police power of a state must be held to embrace, at least, such reasonable regulations established directly by legislative enactment as will protect the public health and the public safety.); see also Raich, 545 U.S. at 42, 125 S.Ct. at 2221 (O'Connor, J., dissenting) (This case exemplifies the role of States as laboratories. The States' core police powers have always included authority to define criminal law and to protect the health, safety, and welfare of their citizens.). [122] Although the states and the federal government both play indispensable roles in regulating matters of health, modern Supreme Court precedents have confirmed the view that the health of a state's citizens is predominantly a state-based concern: the regulation of health and safety matters is primarily, and historically, a matter of local concern. Hillsborough Cnty. v. Automated Med. Labs., Inc., 471 U.S. 707, 719, 105 S.Ct. 2371, 2378, 85 L.Ed.2d 714 (1985). The Supreme Court similarly has stated that the narrower category of health care is an area of traditional state concern. See, e.g., Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 387, 122 S.Ct. 2151, 2171, 153 L.Ed.2d 375 (2002) (referring to `the field of health care' as `a subject of traditional state regulation' (quoting Pegram v. Herdrich, 530 U.S. 211, 237, 120 S.Ct. 2143, 2158, 147 L.Ed.2d 164 (2000))); N.Y. State Conf. of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 661, 115 S.Ct. 1671, 1680, 131 L.Ed.2d 695 (1995) ([G]eneral health care regulation . . . historically has been a matter of local concern.). Here, it is undisputed that the individual mandate supersedes a multitude of the states' policy choices in these key areas of traditional state concern. Congress's encroachment upon these areas of traditional state concern is yet another factor that weighs in the plaintiffs' favor, and strengthens the inference that the individual mandate exceeds constitutional boundaries. The inference is particularly compelling here, where Congress has used an economic mandate to compel Americans to purchase and continuously maintain insurance from a private company. We recognize the argument that, if states can issue economic mandates, Congress should be able to do so as well. Yes, some states have exercised their general police power to require their citizens to buy certain productsmost pertinently, for our purposes, health insurance itself. [123] But if anything, this gives us greater constitutional concern, not less. Indeed, if the federal government possesses the asserted power to compel individuals to purchase insurance from a private company forever, it may impose such a mandate on individuals in states that have elected not to employ their police power in this manner. [124] After all, if and when Congress actually operates within its enumerated commerce power, Congress, by virtue of the Supremacy Clause, may ultimately supplant the states. When this occurs, a state is no longer permitted to tailor its policymaking goals to the specific needs of its citizenry. This is precisely why it is critical that courts preserve constitutional boundaries and ensure that Congress only operates within the proper scope of its enumerated commerce power. In sum, the fact that Congress has enacted this insurance mandate in an area of traditional state concern is a factor that strengthens the inference of a constitutional violation. When this federalism factor is added to the numerous indicia of constitutional infirmity delineated above, we must conclude that the individual mandate cannot be sustained as a valid exercise of Congress's power to regulate activities that substantially affect interstate commerce. We do not reach this conclusion lightly, and we recognize that [d]ue respect for the decisions of a coordinate branch of Government demands that we invalidate a congressional enactment only upon a plain showing that Congress has exceeded its constitutional bounds. Morrison, 529 U.S. at 607, 120 S.Ct. at 1748. But we believe a compelling showing has been made here, and the federal balance is too essential a part of our constitutional structure and plays too vital a role in securing freedom for us to admit inability to intervene when one or the other level of Government has tipped the scales too far. Lopez, 514 U.S. at 578, 115 S.Ct. at 1639 (Kennedy, J., concurring) (citations omitted).