1/26(TH) The Commerce Clause Contd.
National Federation of Independent Business (Business group) v. Sebelius (govt official)
Reasoning:
- CJ Roberts (majority):
o Govt argues (1): individual mandate is valid exercise within Cong’s CC & N&P
clause power
 Everyone will need health care at any point in his life, however
unpredictable  without insurance, can’t pay  hospitals are required
to provide a certain degree of care even if they can’t afford, making the
hospitals undercompensated for their service  charge insurers instead,
who in turn charge higher premiums to the policy holders.
 “guaranteed-issue” and “community-rating” provisions of the Act
prohibit insurance companies from denying coverage to people with
certain pre-existing conditions or charging unhealthy individuals higher
than healthy individuals.
 Roberts:
o This actually make things worse, by creating an incentive
for people to delay purchasing health insurance until they
actually become sick, because they can get healthcare at
lower cost due to those provisions.
o Huge new costs to insurance companies because they
can’t charge unhealthy individuals higher now, so that cost
would be borne by everyone else who hold policies.
o So, the mandate prevents cost-shifting by those who
would otherwise go without the insurance.
o *Govt argues (2): individual mandate is within Cong. power b/c the failure to buy
insurance has a “substantial and harmful effect on IC” by creating, rather than
solving cost-shifting problem.
 Roberts: Congress has NEVER relied on the commerce power to force
individuals who are NOT engaged in commerce to buy something they do
not want.
 For there to be the power to regulate commerce, there has to be
some kind of commercial activity to be regulated (neither
commercial nor activity).
o Power to regulate doesn’t mean power to create
 First, it’s not “commercial” because they haven’t bought anything
yet.
 Second, it’s not even an “activity” – although previous decisions
in other cases would disagree on whether a certain activity was
economic/noneconomic/commercial/noncommercial, there was
always at least an “activity”.
o The mandate does not regulate any existing activity.

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Govt goes even further than Wickard (farmer growing wheat – activity of
raising MORE wheat being regulated here, if the govt argument would be
allowed, we could’ve just ordered Wickard to buy extra wheat from the
market, not regulate)
 Cong. essentially establishing that individuals can be compelled
under CC whenever enough of them are not doing sth Govt would
want them to do.  CANT possibly be what the Framers had in
mind. (anti-democratic?)
o Ex. healthy diet analogy. There are more people who don’t
eat healthy than those who eat healthy. The failure of the
unhealthy group to eat healthy increases healthcare cost
to a greater degree than the failure of the uninsured to
purchase insurance. But Cong. is obviously not forcing
them to eat healthy. So, Cong’s argument is weak here.
 Slippery-slope argument made by majority
o Govt (3): although an uninsured individual may not be active in the healthcare
market, the uninsured “AS A CLASS” are active in the market regularly.
 Roberts: Just as Cong. cannot compel individuals to buy specific products
(like food/clothing, etc.) that they don’t have right now, but will likely
need in the future, Cong. cannot force individuals to purchase insurance
just because they will unavoidably need it in the future.
 This kind of police power is reserved for the States.
Scalia, Kennedy, Thomas, Alito (dissenting)
o To say Cong.’s commerce power reaches inactivity would be to permit Cong. to
regulate virtually every aspect of human activity AND inactivity.
o A. Govt presents the Mandate as a part of the broader regulatory scheme.
 Dilemma: If insurance companies were to comply by not increasing
premiums, they will go out of business. And if they don’t comply, their
products will be relatively more expensive and undesirable.
 Cost is spread into third party, innocent healthy individuals to
offset this regulation.
 Motivation behind this regulation is the fact that healthy individuals are
further removed from the interstate healthcare market than unhealthy
individuals, if this were true  it would virtually mean Cong.’s unlimited
power.
 Gonzales not an applicable precedent
 Gonzalez didn’t represent the expansion of the federal power to
direct into a broad new field.
 Those prohibitions were the only practical means there, but here
there are other alternatives than the mandate.
o Ex. those who don’t purchase insurance can be subjected
to surcharge when they DO purchase.
o B. Govt: it directs the manner in which individuals purchase healthcare services
and related goods – thus valid exercise of CC.

The mandate applies to those whose choose not to participate in
interstate market, a decision that can’t aptly be said as “commercial
activity” (another activity argument, same reasoning)
 Congress can subject individuals to CC authority just because they will
one day engage in commerce.
o C. unhealthy people will receive services at the expense of another. No showing
that health insurance market is any different than everyday market for things
like broccoli, etc.
- Ginsburg (dissenting in part)
o Agree with Congress
o health insurance market is UNIQUE
o market for healthcare products and services is HUGE
o other markets, you can choose not to participate permanently – participation in
healthcare market is inevitable.  healthcare spending expected to double, high
costs
o Congress is regulating an economic activity, regulating HOW (you pay for it) not
WHEN
o free-riding problem. Collective action problem. Same with Roberts.
o States can’t handle this alone
 They will have to raise taxes and insurance companies charge higher
premiums  people will leave the state. Not in the interest of the States,
either.
 Thus, federal govt’s intervention is necessary.
o Other potential alternative, so-call tax-and-spend strategy would leave little
room for private company and state governments to operate. (single-payer
system)
o The two provisions  incentive for people to delay until they become sick to buy
insurance. Insurance companies either would have to pay v. high premiums or go
out of business  (“adverse selection”) problem
 Followed MA’s lead in incorporating minimum coverage and guaranteedissue problem to solve adverse selection problem – insurance not left
only with those who are sick
o Rational basis, practical considerations
o Making the case that this Congress power should be understood in “practical”
terms
o The check is POLITICAL – let the Congress govern.
NFIB v. Sebelius
- Commerce power independently vs. commerce power in conjunction with N&P clause
- Roberts:
o Govt’s regulating an “INACTIVITY”
 Always beyond congressional power?
- Roberts focusing on the word “proper”; maybe necessary, but not proper
-
4/6 Exam Review
Background:
States (set out the what the “state law” is, what it entails, first – what exactly it is regulating for
what purpose/affecting whom)
- Marriage license proposal
- Physician regulations
o Annual testing
 Homosexual men
 Drug users
o Information
May bring these regulations, taken together, as part of a “broader” regulation (narrow vs.
broad)
Regulating patient indirectly who has done nothing? How to characterize the activity being
regulated is important. Mandating physician to do something.
- Gonzales v. Raich case – marijuana case
- civil rights cases. They are “required” to serve them equally
- medical practice as a type of economic activity, serving particular people for a fee
(seeing medical practices/clinics as a “business”)
(a) Commerce Clause
- Set out the whole framework briefly, Lopez three possible zones.
- but not about flowing, stopping. Not #1, or #2, so move on. Should be noted but not that
relevant
- #3: issue on whether this can be justified
“Means” of Regulation
- Matters “in” IC / commerce-prohibiting power
- Instrumentalities; activities impeding movement “in” IC
- Other matters substantially affecting IC
o Economic activities (hard to make case that the marriage license proposal is an
economic activity  probable invalidation)
 Aggregation theory
Rational-basis test (Congress)
 Class theory
o Non-economic activities  generally beyond congressional power
 Lopez factors
 Tradition
o Traditionally state concern (Bergebell) – Congress cannot
regulate – difficult to say this is an exception
 Congressional findings
o Might help in a “close” case (Morrison discounted
voluminous findings. Might not help anyway. “maybe”)
o Inactivity  always beyond congressional power? (NFIB)
 Regulation of “status” of being a homosexual man
 Cannot be regulated at all!
* Say things that are RELEVANT & HELPFUL
10th Amendment
- 1. 10th Amendment emphasizing federal govt is a govt of “enumerated powers” There
has to be some enumerated powers. Otherwise, cannot regulate
o refer to 14th Am. Sec. 5
o Bergefell – might be able to regulate
- Anti-Commandeering argument (Printz)
o Cannot simply force states to pass a state law. Or enforce a federal regime
o Can’t mandate states to adopt a law – clear violation of anti-commandeering
What if denied all federal funding?
- Argument would shift from commerce power to spending power
- “if this work under spending power (NFIB)”
o health-related grants
o cf. Medicaid
o “coercive”
- “clarity” needed so states can make informed decision – as to what is being threatened,
consequences
- there cannot be “independent constitutional bar”
o 10th Am  SDP & EP
[What is the governing standard & how do we apply that?]
Substantive Due Process (liberty? Privacy right?) – intrusion on privacy in the most basis
sense..bodily integrity – right to refuse medical treatment (Cruzaen?)
- End
- Means
o Effectiveness
o Alternatives
- Marriage license proposal almost certainly violate SDP
o Independent CST bar
o “right to marry” within the “fundamental right” triggering more than RB review
- Expanding SDP
- To dissuade someone from going to the doctor – intrusion upon physician relationship
- Ambiguity, vague
- Casey – since then, the SC hasn’t used the formal SOR
- Bakke (invoking formal SS? Or not)
-
Undue burden test, the law would not be effective
Alternatives? Cure, education/awareness campaigns, voluntary testing (all less intrusive)
Equal Protection
- End
- Means
o Effectiveness
o Congruence
 Targeting people who carry the AIDS virus, yet regulating all men  overinclusiveness
 Under-inclusiveness – people who are not homosexual men carrying AIDS
virus
o Alternative

- Suspect/Quasi-suspect arguments
o Singling out homosexual men
 Two types of discrimination
 “Men” not women – gender-based classification  intermediate
test, important government interest, + exceeding persuasive
language
 “homosexual” classification based on sexual orientation
o the SC hasn’t formally adopted the intermediate scrutiny
o how would the indicia of suspect classification apply?
 “Drug users”
 rational basis test
 The end of combating AIDS would sufficiently important
Rational basis test under CC and rational basis under SDP/EP different!!
- CC more like deference, than legitimate interests
Tackle everything “in the alternative” any reasonable argument
4/19 (Wed)
Shelby County (2013)
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