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Day 3 at the Court - Severability and Coercive Medicaid Conditions

Posted By Todd Gaziano On March 28, 2012 @ 5:08 pm In Featured,Obamacare | Comments Disabled

The Court’s morning session concentrated on whether, if the individual mandate is held unconstitutional (as looks increasingly likely after yesterday’s argument), it can be cleanly severed from the rest of ObamaCare, and if not, what other portions of the act must the Court strike down with it.

The Court’s afternoon session focused on whether Congress’s conditions on the states to continue to participate in the Medicaid program were constitutionally coercive.  The two sessions were largely distinct but had some overlapping aspects.

SEVERABILITY

In the morning’s arguments about severability, the government once again had a bad day.  The more liberal justices were clearly hostile to the arguments being made by Paul Clement on behalf of the challengers that the entire statute must be struck down. However, other justices, including Chief Justice Roberts and Justice Kennedy, were obviously concerned that the complex scheme designed by Congress will not work as intended by Congress without the individual mandate – which is the “heart” of the law as Justice Scalia and others later referred to it – and thus they may need to strike down the entire law if the mandate is unconstitutional.

In one of many funny moments during the morning, Justice Scalia asked Clement whether they should strike down the entire law if the Court threw out just the “Cornhusker kickback” because it violated the “constitutional proscription against venality?” But the justices kept returning to the more serious question of whether the mandate, together with the guaranteed issue and community rating provisions that even the government said must go with the mandate, were the heart and soul or “the crown jewels” of the statute.  If so, why should the Court retain a hollow shell of what was left?

Justice Sotomayor barely let Clement begin his opening statement before interrupting him with a question about the inadvisability of striking down the law if only one provision of it is unconstitutional.  She wanted to know if the simplest test for severability wouldn’t be to presume that any offending provision can be cleanly severed from the rest if there is no other indication from Congress.  But Clement cautioned that would be inconsistent with the Court’s prior practice and precedent and it would also be inconsistent with the Congress’s objectively determined intent in this and other statutes.

Justice Scalia turned the tables on Deputy Solicitor General Kneedler’s argument that Congress could simply fix any gaps in the law if the Court left the rest in place.  Justice Scalia explained that legislative inertia would prevent a bare majority from repealing the law or changing it with the mandate gone, even if that is what a majority wanted with the mandate gone.   Thus, the Court would put its thumb on the scale one way or the other, and it simply had to decide what the Congress that enacted ObamaCare would have wanted, not the next Congress.

Justice Kennedy several times expressed concerns for the risks the insurance industry would suffer if the Court did not strike down more of the law, asking if anyone could guarantee the insurance industry would not suffer great losses.  Justice Alito chimed in that there would be $350 billion losses without the mandate, and asked whether Congress wouldn’t want the entire law struck down.

Clement’s basic argument was that the individual mandate was the principal tool used to pay for the essential parts of law.  Without it, Obamacare is a “hollow shell.”  Justice Ginsburg disagreed, saying the issue was whether the court should wreck the law or try to salvage it, and Justice Kagan said that half a loaf was better than no loaf. Clement disagreed. Sometimes, he said, half a loaf was worse than none, and provided an example with a well-known campaign finance decision that took Congress 30 years to fix.

Several justices also expressed concern that striking down just the individual mandate would cause enormous economic costs that could damage the insurance market since the mandate is tied to a variety of other reforms, including the guaranteed issue and community ratings policies forced on health insurance companies.

In fact, Justice Scalia said that those provisions were in the law “in anticipation” of the mandate and that it would “bankrupt the insurance companies, if not the States, unless this minimum coverage provision comes into effect.”

Even Justice Sotomayor pointed out that “the congressional findings and all of the evidence Congress had before it that community ratings and guaranteed issuance would be a death spiral…without minimum coverage.”

Justice Scalia also joked about the idea that the Court should go through every provision of the law to decide what to keep and what to throw out rather than striking down the entire law if the mandate is unconstitutional:

“Mr. Kneedler, what happened to the Eighth Amendment [prohibition against cruel and unusual punishment]?  You really want us to go through these 2,700 pages? And do you really expect the Court to do that?  Or do you expect us to give this function to our law clerks? Is this not totally unrealistic?  That we’re going to go through this enormous bill item by item and decide each one?”

The government also argued that the Court should show “judicial restraint” in not throwing out the entire law if it finds part of it unconstitutional.  But Justice Kennedy, who is a key vote on this matter, disagreed:

When you say judicial restraint, you are echoing the earlier premise that it increases the judicial power if the judiciary strikes down other provisions of the Act. I suggest to you it might be quite the opposite. We would be exercising the judicial power if…one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended. By reason of this Court, we would have a new regime that Congress did not provide for, did not consider. That, it seems to me, can be argued at least to be a more extreme exercise of judicial power than…striking the whole [law].

Barton Farr was the third lawyer to argue before the Court today – the Court appointed him to argue the severability issue as a supplement to the government.  Although he made a good presentation, he got very few questions from the justices.  Part of the reason may have been that the argument he was assigned to make was that the individual mandate was not essential to any other part of the law.

Farr claimed that the guaranteed issue and community ratings policies were the “crown jewels” of the law and would work without the mandate was simply not credible to the justices, no matter which side of the constitutionality issue they were on.

Clement ended his rebuttal argument by telling the court that “the choice is to give Congress the task of fixing this statute…after some of it is struck down, or giving them the task of simply fixing the problem on a clean slate.”  Put in those stark terms, Clement said it wasn’t “a close choice.  If the individual mandate is unconstitutional, the rest of the Act should fall.”

COSTLY MEDICAID CONDITIONS

The afternoon session on the costly (or coercive) Medicaid spending conditions went into extra innings with Chief Justice Roberts giving each side an extra 15 minutes of argument time.  This is a much closer question under the Court’s unclear precedents.  The justices who would uphold the mandate would also uphold the Medicaid provision, but it is much harder to read Chief Justice Roberts and Justices Scalia and Thomas on this question (Justice Thomas did not ask any questions but his views in other areas cast doubt on how he might vote here).

But the biggest news was that Clement did an outstanding job making the difficult argument and that may have a beneficial effect even if he might not have five votes for his position.

It is possible the justices who vote to strike down the mandate would really not want to decide the complex constitutional question presented in the Medicaid challenge.  The Court’s “constitutional avoidance” doctrine teaches that the courts should not decide complex and close constitutional questions if a decision can be rendered on other grounds.  There is only one way in which the majority can avoid a ruling on this question:  if they first strike down the mandate and then determine that the rest of ObamaCare must be struck down with it.  Thus, there may be an additional incentive for the majority to strike the entire law down.

SKEPTICISM CONTINUES

There is no doubt that what has shocked supporters of ObamaCare over the past three days has been the skepticism that the justices have expressed over the constitutionality of ObamaCare.  Liberals are simply astonished at the idea that anyone would take the Constitution and the enumerated powers doctrine seriously.  But the best evidence in the courtroom over the last three days is that the justices will uphold the Constitution by striking down a clearly unconstitutional law.


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