Supreme Court puts new limits on Commerce Clause. But will it matter?

So the Supreme Court upheld the Affordable Care Act. But in doing so, Chief Justice John Roberts' majority opinion appears to have placed new limits on Congress's ability to regulate interstate commerce. Will this make future federal legislation harder to enact? Or does Congress still, in theory, have the power to make everyone buy broccoli? That's a key question legal scholars are now mulling as they pick through the decision.

But can Congress still make you buy broccoli? (Flickr photo credit: hulagway)

In its decision Thursday, five justices, including Roberts, ruled that the health reform law's requirement for all Americans to purchase health insurance runs afoul of the Constitution's Commerce Clause. Basically, the court ruled that Congress can regulate existing interstate commercial activity, but it can't directly force people to enter into a market (by, say, requiring them to purchase health insurance). "The power to regulate commerce," Roberts wrote, "presupposes the existence of commercial activity to be regulated."

This subtle distinction between regulating activity and inactivity is one that libertarian legal scholar Randy Barnett had developed and pushed into the mainstream. It's a new concept. Yet for the purposes of the Affordable Care Act, it ended up not mattering. Roberts ruled that the individual mandate was akin to a tax — Americans can either purchase health insurance or pay a fine through the IRS. And, since taxes are perfectly within Congress' powers to levy, the law was upheld.

Now what about for future laws? Some observers think that this new distinction between activity and inactivity could prove quite significant. "The rejection of the Commerce Clause," wrote SCOTUSblog's Lyle Denniston, "should be understood as a major blow to Congress's authority to pass social welfare laws."

Other legal scholars, however, aren't so sure that this curtails Congress' power. Douglas Laycock, a constitutional law professor at the University of Virginia, says it was unexpected that the Supreme Court made a distinction between activity and inactivity. But, he says, it's hard to think of a situation where this will matter much.

Congress, after all, has never needed to write a law regulating inactivity before. And that's because health care is a special case, a market in which not buying health insurance has adverse impacts on everyone else. "Congress has never done this for any other industry because it hasn't needed to," says Laycock. "[The ruling is] a huge win for Randy Barnett, but it's practical impact is likely to be limited."

What's more, the fact that the individual mandate has been interpreted as a tax still gives lawmakers plenty of leeway. Congress might not be able to compel all Americans to purchase broccoli under the Commerce Clause. But, Laycock says, Roberts' ruling has shown a way around this. "If Congress ever does need to mandate purchase of a product or service again," he notes, "it can impose a tax for failing to buy it."

Some conservatives seem to agree that the impact will be small. "Holding the mandate exceeds the scope of the Commerce and Necessary and Proper Clauses poses no threat to any other existing federal program or law that was not already in jeopardy," writes Jonathan Adler, a law professor at Case Western Reserve University. (What could prove more significant, Adler notes, is that the Supreme Court placed limits on Congress’ ability to withhold Medicaid funds from states that refuse to expand the program.)

Yale law professor Akhil Reed Amar has a slightly different take. Even if the restriction on the Commerce Clause doesn't have any immediate practical effects, it still signals that the Court is moving in a more conservative direction. "The underlying logic here is they’re considerably more skeptical of innovative or ancillary uses of federal power," Amar told my colleague Ezra Klein. "Is this now a fundamentally new and important precedent to treat federal power generally more skeptically? That’s what it might be. It’s not about broccoli or mandates. It’s about reading federal powers more skeptically than a year ago."

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