April 18, 2014

Is ObamaCare Legal? Here’s How the Constitutional Battle is Shaping Up – Part 1

Nine people you never met or voted for will soon decide America's fate. Speak to them.

Are you serious?  Are you serious?
Nancy Pelosi (Note 1)

This is the first in a seven-part series tracking the legal battle between ObamaCare and the Constitution.  The stakes are very high.  America’s future hangs in the balance.

Each part in this series tracks the next round of legal battles.  ObamaCare’s fate must wind its way through various stages of the court system.  Each stage will frame and refine the legal principles necessary to ultimately decide ObamaCare in the Supreme Court.

Follow these reports.  They will inform you about the key legal issues, the courtroom strategies, the shifting tactics, the good and the bad trial arguments, and what to expect next.

Part 1 of this series describes why the stakes are high.  The legal landscape is overviewed.  Seven legal stages leading to the Supreme Court are defined.

The first round of ObamaCare’s  challenge was decided in October 2010.  ObamaCare won.  Part 1 explains why.  But this is a hollow victory.  ObamaCare’s first round victory may actually sow the seeds of its ultimate demise.  Stay tuned.

Background

Tyranny you can believe in.

The Patient Protection and Affordable Care Act, otherwise known as ObamaCare (Note 2), has been the Law of the Land for about nine months.  The most important feature of ObamaCare is the “individual mandate”.  This requires all adults to purchase health insurance or pay a yearly penalty.  Citizens must purchase insurance containing coverage levels mandated by the Federal government (Note 3).

The Individual Mandate is required to make ObamaCare work.  Without it, ObamaCare falls apart.  Here’s why.  The ultimate aim of ObamaCare is Single Payer – a scheme whereby the Federal government forces private insurers from the marketplace.  This positions ObamaCare to be the sole insurance provider – the single payer of everyone’s medical bills.  The House version of ObamaCare contained a Single Payer provision (Note 4) but the final version did not.  The issue was too controversial and could not pass the Senate.

However, ObamaCare contains a number of provisions that are hostile to the insurance industry, with the intent of driving them out of the market.  In addition, the Obama administration has undertaken a public campaign to discredit and demonize the insurance industry to coerce complicity or encourage flight.  The administration has even gone so far as to threaten insurance companies who criticize ObamaCare and punish those who raise rates in response to the program (Note 5).  Government control of the insurance market will take time.  But ObamaCare will eventually achieve its Single Payer goal unless legally overturned or crippled.

Single Payer enables the government to essentially nationalize the health-care industry by dictating medical standards, treatments, and reimbursement rates.  The government’s intent is supposedly to reduce escalating medical costs.  It aims to do this by controlling the market.  Its ulterior motive is to dramatically grow the size and power of the Federal bureaucracy.

Your future under ObamaCare.

Consider the case of the United Kingdom.  The UK nationalized its healthcare system in 1949.  Today, its National Health System headquartered in London is the third-largest employer in the world with 1.63 million government workers.  This makes the size of the NHS about 14% larger than the entire US government civilian workforce.  This is astonishing – frightening is a better word – because the the United States population is five times larger than the UK.  It is also pertinent to note that, despite the colossal resources consumed by the UK healthcare system, its mortality rate is 12% worse than the US (Note 6).

If ObamaCare is unchecked, it will eventually morph into its own, much larger version of the NHS.  However, this can only occur if ObamaCare attains Single Payer status.  Single Payer, in turn, is attainable only if ObamaCare’s Individual Mandate is preserved.  Without the Individual Mandate, Americans would be able to not buy insurance until they got sick and needed insurance.  Then they could buy insurance from the government to cover their medical expenses, greatly increasing the cost of ObamaCare.  This is because the people who most consume care are the ones who pay the least into the insurance system.

Without the Individual Mandate, ObamaCare is not economically viable.  Government health care costs would escalate – can you spell NHS? – worsening our already bad fiscal situation.  Taxes would have to be increased and medical benefits reduced to offset rising costs.  This would spell political disaster for those in power.  Thus, the key to challenging the legality of ObamaCare is to invalidate or cripple the Individual Mandate.

The Supreme Court

Legal Landscape

The legality of ObamaCare has been challenged in different venues.  The first lawsuit was filed on the same day ObamaCare became law.  The objective of these challenges is to have the entire law struck down as unconstitutional.  Failing this, the next most important priority is to have the Individual Mandate component of ObamaCare ruled unconstitutional.  This would be a lethal blow to the overall program.  ObamaCare cannot survive without the Individual Mandate.

Four legal challenges have emerged as important battles.  These cases will all be appealed.  Some or all of the appeals will inevitably lead to a showdown in the Supreme Court.  Ultimately, the Supreme Court will decide the fate of ObamaCare.  The Court’s ruling will undoubtedly be its most important ruling since the 1960s.  The stakes are high on both sides.

The key stages in this monumental legal battle are:

Round One: Thomas More Law Center v. Barack Hussein Obama
This case was decided October 7, 2010 in US District Court, 6th Circuit,  Michigan.  ObamaCare won.

Round Two: Liberty University v. Geithner (Department of Treasury)
This case was decided on November 30, 2010 inUS District Court, 4th Circuit, Virginia.  ObamaCare won.

Round Three: Virginia v. Sebelius (Department of Health & Human Services)
This case was decided on December 13, 2010 in US District Court, 4th Circuit, Virginia. The Constitution won.

Round Four: Texas, Florida and Other States v. United States
This case is currently pending in US District Court, 11th Circuit, Florida .  A decision should be made within the next few months.

Round Five: The Appeals

Round Six: The Supreme Court

Round Seven: Congressional Response

The final phase of this legal drama rests with Congress, not the Supreme Court.  Congress can respond to the Court’s ObamaCare ruling in various ways.  The Senate, where the Democrats have a small majority, will undoubtedly attempt to repair any damage done by the Court.  These efforts will go nowhere because of the large Republican majority recently elected in the House.

The House will undoubtedly attempt to dismantle whatever remains standing of ObamaCare after the Court’s decision.  This can be done by amending what remains of the law or by de-funding important bureaucratic aspects of ObamaCare.  Indeed, these efforts will begin well in advance of the Supreme Court’s ruling.  However, due to a divided Congress and the certainty of a presidential veto to anything legislatively harmful to ObamaCare, congressional actions are likely to go nowhere until the law is adjudicated by the Supreme Court.  Then, we might see some fireworks.

Leading up to the Supreme Court decision, de-funding ObamaCare in the House is the most likely fruitful course of action for its opponents.  This would deprive ObamaCare of funding in critical areas.  ObamaCare’s development can be slowed or impaired by depriving it of money until permanent measures can be taken.  This would presumably occur after the 2012 elections.  Meanwhile, supporters of ObamaCare should be able to easily block any harmful legislative changes, apart from funding issues.   The most critical aspect of ObamaCare – the Individual Mandate – does not go into effect until 2014 (Note 7).

There are two additional pending cases against ObamaCare which are interesting. A Missouri challenge and a Mississippi challenge involve individual people claiming damages under the new healthcare measure. The Missouri case is a class-action lawsuit. These two cases are different from all the others because they do not challenge the constitutionality of ObamaCare. Rather, they are what are called “applied cases” meaning that ObamaCare, as it applies to these individuals, unfairly penalizes them versus other citizens.

Plaintiffs seek ObamaCare’s invalidation on the grounds that their rights to due process and to equal protection under the law are violated. We will report on developments here, if warranted.

Below, we discuss the legal issues and implications for Round One.

Round One Analysis

Round One

The first legal ruling came on October 7, 2010 in Detroit, Michigan.  Federal Judge George Steeh, a Clinton appointee, upheld the constitutionality of ObamaCare.  This dealt the first setback to opponents of Obama’s healthcare law.  Or did it?

The plaintiffs alleged the following (Note 8).  (1) ObamaCare is unconstitutional under the Interstate Commerce Clause.  (2) Congress has no constitutional authority to selectively impose a tax on some people but not others.  (3) Congress has no authority to regulate health care under the Tenth Amendment’s enumerated powers.  (4) Forcing taxpayers fund abortions under ObamaCare violates the First Amendment rights of conscientious objectors.  (5) Some religious exemptions provided in ObamaCare violate the Equal Protection Clause and Due Process Clause of the Constitution (Note 9).  (6) Use of Federal revenues to fund abortions under ObamaCare violates the Fifth Amendment.

The judge’s ruling is interesting.  In upholding the constitutionality of the law, he basically ignored the Constitution.  Judge Steeh’s “constitutional” ruling is based, not on law or the Constitution, but on economics.  The judge rationalized the Individual Mandate as follows (Note 10):

“Congress was trying to lower the overall cost of insurance by requiring participation. Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times. As a result, the most costly individuals would be in the insurance system and the least costly would be outside it.  In turn, this would aggravate current problems with cost-shifting and lead to even higher premiums…”

This argument is absolutely correct.  Unless people are compelled to join a mandatory insurance system – or pay a penalty – the system is economically unsustainable, as the judge points out.  However, this argument says nothing about whether ObamaCare is constitutional.  Yes, the Federal government has a good reason to force everyone to buy health insurance.  So what?  Just because the government has a good reason for action does not mean the action is legally permitted.

Suppose the government could make a convincing case that the only effective way to prevent terrorists from committing violent, destructive acts was to install a surveillance system in everyone’s house.  Using Judge Steeh’s reasoning this would be justified under the Constitution even though it clearly violates constitutional fundamentals.  The claim that something is necessary or beneficial does not make it constitutional.

Moreover, according to Judge Steeh, the government does not even have to make a convincing argument under the Commerce Clause.  All the government must do, according to this doctrine of judicial activism, is demonstrate a plausible rationale that something has a commercial impact.  If so, the government can claim power under the Commerce Clause to regulate it.  In throwing out the challenge to ObamaCare, Judge Steeh says (Note 10):

“The court need not itself determine whether the regulated activities, taken in the aggregate, substantially affect interstate commerce in fact, but only whether a rational basis exists for so concluding.”

This is a pretty low hurdle for usurping power from the People and the States.  It does not matter whether something actually has a commercial impact – this is irrelevant to the judicial activists.  All that matters is that one can plausibly imagine that it has an impact.  In other words, all you need to claim power under the Interstate Commerce Clause is a sympathetic judge.  This is how individual liberty is diminished.

In dismissing the challenge to ObamaCare, Judge Steeh used a 1942 Supreme Court case to justify his ruling (Note 11):

“The Supreme Court [in 1942] sustained Congress’s power to impose obligations on individuals who claimed not to participate in interstate commerce, because those obligations were components of broad schemes regulating interstate commerce.”

The 1942 case is, in itself, a remarkable and ironic choice of precedents.  The case involved a single farmer who chose not to participate in the Federal government’s price support scheme for wheat.  Instead of growing wheat for the government program, he chose to grow wheat for his own family’s personal consumption.  In response, the Federal government assessed a penalty against the farmer, which he contested.  The case was ultimately appealed to the Supreme Court.

Chief Justice Harlan Stone, 1941-1946

Amazingly, the Court upheld the constitutionality of the penalty – even though the farmer’s total wheat production comprised a miniscule percentage of all wheat grown nationally under the Federal program.  If the farmer had elected to grow no wheat at all, there would have been no case against him, according to the Court.  This is because he would have been forced to purchase his wheat from government stocks at the officially supported price.  Thus, the farmer’s non-participation in the Federal program did not undermine the broader price scheme.  This is an important point to remember.

Another important point to consider is the 1942 Court’s reasoning.  Instead of doing nothing, the farmer chose to grow his own wheat.  The Court acknowledged that the farmer’s individual action did not threaten to undermine its price support scheme.  The amount of wheat he produced was too small to affect official prices.  However, the Court reasoned, if all farmers “similarly situated” behaved the same way, the Federal price scheme might be undermined.  This is because a potentially large demand for wheat would be removed from the market by virtue of subsistence farming.  This could plausibly cause the Federal price scheme to fail.  Specifically, the 1942 Court argued (Note 11):

“The wheat marketing quota and attendant penalty provisions of the Agricultural Adjustment Act of 1938 (Note 12), as amended by the Act of May 26, 1941, when applied to wheat not intended in any part for commerce but wholly for consumption on the farm, are within the commerce power of Congress.

“The effect of the Act is to restrict the amount of wheat which may be produced for market and the extent as well to which one may forestall resort to the market by producing for his own needs.

“That the production of wheat for consumption on the farm may be trivial in this particular case is not enough to remove the grower from the scope of federal regulation where his contribution, taken with that of many others similarly situated, is far from trivial.”

So here we have the Supreme Court telling a small farmer in Ohio that he can’t grow food for himself and his family on his own land.  The farmer can’t do it because the Constitution says so.  It says so because of the Interstate Commerce Clause.  The Commerce Clause invalidates your individual rights because some judge thinks there is a “plausible” conflict between an insignificant farmer with 11.1 acres and a nationwide price control scheme involving 49.8 million acres (Note 13).

Of course, this is all nonsense.  As a Supreme Court precedent, it is more than nonsense.  It is outrageous and despicable.  But then again, these are the kinds of rulings issued by the Supreme Court during the later 1930s and 1940s, after Franklin Roosevelt packed it with a near-unanimous majority of judicial activists.

Applying this dubious principle to the ObamaCare case, Judge Steeh reasons (Note 10):

“There is a rational basis to conclude that, in the aggregate, decisions to forego insurance coverage in preference to attempting to pay for health care out-of-pocket drive up the cost of insurance. The costs of caring for the uninsured who prove unable to pay are shifted to health care providers, to the insured population in the form of higher premiums, to governments, and to taxpayers. The decision whether to purchase insurance or to attempt to pay for health care out-of-pocket, is plainly economic. These decisions, viewed in the aggregate, have clear and direct impacts on health care providers, taxpayers, and the insured population who ultimately pay for the care provided to those who go without insurance. These are the economic effects addressed by Congress in enacting the Act and its minimum coverage provision.”

By this interpretation, the Federal government is able to regulate anything it wants under the Interstate Commerce Clause.  It can regulate commercial activity, inactivity, non-participation, and anything imaginable that plausibly might have a commercial impact.  It can regulate interstate and intrastate matters.  The States, on the other hand, have comparatively little authority to regulate commerce within their own borders.

This is clearly not what the Constitution intended.  The People and the States would never have granted such sweeping and unrestrained powers to a Federal government they inherently distrusted.

In Judge Steeh’s universe, however, the Federal government could mandate that everyone purchase only General Motors or Chrysler vehicles so taxpayers could recoup their bailout money. People who failed to comply could be penalized or jailed.  This would be permitted under his interpretation of the Commerce Clause.  In a Constitutional universe, the government has no power to mandate that citizens buy anything, much less specify a particular brand.

In the same vein, the Federal government could bar Americans from foreign travel on the grounds that it would improve the nation’s trade imbalance.  Violators could be fined and imprisoned.  This would also be constitutional in Judge Steeh’s universe.  There are numerous nightmare scenarios that result from his illegitimate interpretation.

The Interstate Commerce Clause

The government could even regulate Free Speech under the Commerce Clause.  Speech, after all, can definitely impact commerce.  If people started saying bad things about General Motors or ObamaCare – even if these things were true – violators could be fined and imprisoned for “plausibly” undermining a broader Federal commercial scheme.  In short, Judge Steeh’s reasoning will eventually take us to a place where the Constitution means nothing.

The 1942 precedent is a perfect illustration of the hypocrisy and fraud underlying judicial activism.  The Court used a hypothetical scenario and speculation – what if all farmers similarly situated acted as did Filburn? – to justify upholding the constitutionality of massive Federal intervention into the private sector.  This is a common theme of judicial activism, though not always so brazenly exercised (Note 14).

If something sounds like a good idea or a necessary, noble undertaking – like ObamaCare or Medicaid or Social Security – then activist judges rationalize its constitutionality.  If the activist judge wants something to be constitutional – or not constitutional – they will find a legal pretext to make it so.  Never mind that the pretext may be false or illegitimate or even contradictory – this does not matter to the activist.  Only the constitutional pretext matters.  This is how the Federal government has become so big, so expensive, so powerful and so dangerous.

Conclusion

There are five legal flaws in Judge Steeh’s ruling.  These flaws will become magnified as the constitutional battle progresses.  Surely, they will undermine ObamaCare in the end.

Legal Flaw #1

The first flaw, already mentioned, is simply this:  Good reasons and good effects of government actions have nothing to do with their constitutionality.  Just because government has a good cause to act, this is insufficient to establish the act’s constitutionality.  There is no correlation between the two.  If Judge Steeh’s argument were correct, then all the laws passed when government acted stupidly or without sound reasoning would have to be unconstitutional.  In fact, using Judge Steeh’s argument it would be possible for the same, identical act to be held constitutional today but unconstitutional tomorrow, depending upon the government’s mental or emotional competence at either moment.

The ridiculous nature of this argument is plainly revealed.  Indeed, Judge Steeh’s argument is more than ridiculous – it is irrelevant.  The constitutionality of Federal action has nothing to do with the government’s motivation or preparedness. The constitutionality of Federal action depends solely on whether the People and the States have granted a specific power to the government to act.  The Federal government has been delegated no such power, in this instance, except under a poorly reasoned judicial interpretation of the Commerce Clause.  The government derives this power from Judge Streeh, not from the People and not from the States.  The power is illegitimate.

Legal Flaw #2

The second problem for ObamaCare, also already mentioned, is Judge Steeh’s reliance on a fatally flawed legal precedent from 1942.  Judge Steeh cites this precedent because it upholds the constitutionality of penalizing an individual for not participating in a government commercial scheme.  The scheme was part of a broader Federal effort to regulate interstate commerce.  Judge Steeh argues that this precedent-setting principle applies to ObamaCare.  Thus, the constitutionality of the Individual Mandate is similarly constitutional, as are penalties assessed against people who do not purchase health insurance.  The Judge’s reasoning is wrong in two important ways.

In the first instance, Judge Steeh simply misread the 1942 decision.  This is not a question of interpretation.  Judge Steeh made a factual error in applying the precedent to ObamaCare.  Not only did the Judge error in this regard, but the precedent he cites may actually undermine ObamaCare rather than support it.

Here’s why.  The 1942 Court ruled it was unconstitutional for an individual to not participate in a government mandate, if the mandate was a legitimate extension of government power under the Interstate Commerce Clause.  This is very straightforward.  You may disagree with this opinion, as many do, but its meaning is clear and unmistakable.  Judge Steeh applies this to ObamaCare and logically upholds it as constitutional.  However, the Judge is wrong because he considers only part of the 1942 Court’s ruling.

The 1942 Court ruled that an individual could be penalized for not participating in a government mandate if – and this is the key part Judge Steeh missed or ignored – if the individual undertook action that could plausibly undermine the government mandate.  In other words, passive non-participation in the government mandate is an insufficient basis to penalize an individual.  The individual must both not participate and take some tangible action that could plausibly undermine the government’s mandate.

This shines a whole new light on the 1942 individual mandate ruling.  Assume the ObamaCare Individual Mandate is constitutional – it is not, but this is a legal battle that has yet to be won.  Even if it is constitutional, it has no teeth.  An individual who does nothing other than passively not participate in the government insurance program cannot be penalized.  Without the penalty, the mandate fails and ObamaCare dies.  This would be the ultimate outcome if the 1942 precedent were correctly applied in this case.

But wait, you say, the very fact of non-participation undermines the mandate.  Therefore, according to the 1942 precedent, even passive non-participation must also be penalized.  Right?  Wrong – and this is the best part.  The 1942 ruling specifically stated that if the individual had done nothing, had he just passively not participated in the mandate, the law could not have penalized him.  This is because the Court itself mistakenly assumed that the individual had no practical choice except to participate in the mandate, one way or another.   This leads to the third flaw in Judge Steeh’s ruling.

Legal Flaw #3

Consider for a moment the ill-fated wheat farmer in Ohio.  The Supreme Court, in rendering its 1942 decision to penalize him, assumed that the farmer had only four possible actions in response to the Federal price support scheme.  First, the farmer could cooperate with the scheme by producing wheat for sale only to the government.  Alternatively, the farmer could cooperate with the scheme by not growing wheat but consuming wheat at government prices.  Thirdly, the farmer could resist the government’s scheme by growing wheat for his own consumption.  Finally – and this is the alternative upon which the 1942 Court based its judgment – the farmer, by example, could directly or indirectly induce other “similarly situated” farmers to grow their own wheat and not participate in the government scheme.

In this last scenario, the Court concluded it was plausible that the farmer could undermine the government’s broader commercial scheme by growing wheat for his family instead of for the government mandate.  In this scenario, the government price control scheme would be undermined because a large amount of demand would be lost due to subsistence farming, thus undermining the price support scheme.  The government’s scheme was judged to be more important than the individual’s liberty.  On this basis, the penalty was upheld as constitutional.  It is in this context that Judge Steeh applies the 1942 judgment to ObamaCare and upholds it as constitutional too.

But the 1942 Court also argued that if the farmer had not planted wheat for his family’s consumption, if he had simply done nothing but passively not participate in the mandate, the law would not have been able to penalize him in any way.  This is because the Court wrongly assumed that if the farmer did not grow any wheat, he would be forced to buy wheat from the government program at the officially supported price.  Therefore, even though he passively did not participate in the mandate, he did not undermine it.  Thus, he was exempt from any penalty.  This is the crux of Legal Flaw #2 in Round One.

In making this argument, the Court assumed that the farmer had limited options other than participation.  But what if the 1942 Court and Judge Steeh made a crucial error in their analysis?  The error, in fact, is quite obvious.  What if the farmer had more than the four options considered by the Court?  What if the Court’s decision might not be applicable to some of these other options?  This matter cuts to the heart of whether ObamaCare is unconstitutional.

Judge Steeh and the 1942 Court failed to comprehend a simple fact.  The Ohio farmer had at least seven additional options in reacting to the government mandate.  No one thought to consider them.  This is why the 1942 precedent is a bad way to rationalize the constitutionality of ObamaCare.  Indeed, it may well be ObamaCare’s undoing.

Consider the obvious.  What if the farmer chooses to participate in the wheat-growing mandate and consume no wheat?  What if he participates and consumes rice or corn instead of wheat?  What if he participates and consumes Canadian wheat instead of American?  The 1942 Court ruled that failure to consume wheat from the government program, according to the dubious principles of plausible “rational basis” and hypothetical “others similarly situated,” would undermine the mandate.

Eat wheat!

So now the Court finds itself in a precarious situation.  The farmer is fully complying with the mandate to grow wheat for the government program.  He is, at the same time, undermining the program – intentionally or unintentionally, no one can say – by not consuming wheat from the same program.  Can the farmer be penalized for not consuming?  How would the government even know whether the farmer stopped consuming wheat?  What if the farmer consumed wheat but at a lesser quantity than before?  How would the government even know this?

The 1942 Court’s decision begins to unravel.  Is the Court prepared to require that everyone consume wheat?  Is the Court prepared to require that everyone consume at least as much wheat every year as last year?  Isn’t this impossible to measure, in any case?  Is the Court prepared to say that no one can substitute rice or corn for wheat consumption?  Wouldn’t such a ruling infringe the due-process and equal protection rights of rice and corn producers?  Is the Court prepared to make the importing of Canadian wheat illegal?  If so, isn’t it “plausible” to assume that Canada would retaliate by prohibiting consumption of American wheat?  Wouldn’t this “plausibly” undermine the Federal government’s wheat scheme?  The Court is now confronted with numerous practical and legal problems.

In all of the foregoing scenarios, the farmer is actively participating in the Federal scheme to produce wheat.  However, the farmer has an equal number of options in passively not participating in the scheme.  What if the farmer chooses to grow no wheat and consume no wheat?  Or what if the farmer chooses to grow no wheat and buy Canadian wheat?  Or what if he chooses to grow no wheat and consume rice or corn instead?  Of course, the farmer has these same three options even if he decides to participate and grow wheat for the government scheme. The farmer’s seventh option is to sell everything and move himself, his family and his capital to Australia.

Viewed in this light, the 1942 precedent becomes an unmanageable mess.  It also ceases to be a precedent for the Individual Mandate.  This is because the 1942 Court only addressed the production side of the mandate.  If the farmer produced for the mandate or simply did nothing, the law could not penalize him.  But ObamaCare’s Individual Mandate does not deal with production – it deals only with consumption.  The 1942 Court made no rulings concerning the consumption side of the Individual Mandate.  Or rather, the Court chose to make no rulings.  It did not say that failure to consume was illegal and punishable.  It did not say that substituting one consumable for another was illegal and punishable.

When you strip away all the veneer, the 1942 ruling says nothing to uphold the constitutionality of ObamaCare’s Individual Mandate.  If anything, it points in the other direction.  This leads to the fourth legal flaw in Judge Steeh’s ObamaCare ruling.

Legal Flaw #4

The simple, unavoidable fact is this:  There is no precedent in American legal history for the Federal government compelling citizens to buy a product or to consume something.  This is, in fact, a preposterous and dangerous notion.  By what authority does the Federal government compel someone to purchase a product they don’t need?  What if the person doesn’t like the product?  What if they can’t afford it?  What if they would rather save the money for college?  What if they would rather spend their money on a new car or a lawn mower or a refrigerator?  What if a thousand things?  And what difference does their reason make?  And why is any of this the government’s business?

In deciding ObamaCare’s fate, the Supreme Court justices will have to ask themselves a very simple question.  Irrespective of the circumstances, does the Federal government have the authority to compel citizens to buy a product?  Does the Federal government have the authority to require a person to consume something?  Where does this authority come from?  And if the Federal government has the power to compel this, then doesn’t it also have the power to compel citizens to buy – or not buy – almost anything?  And if the Federal government has this power, then doesn’t it also have the power to tell citizens how to spend their money?  And if it has this power, then where is the limit?  Is there a limit?  Who decides the limit?

These are troubling questions.  If the Supreme Court decides that the Federal government has the power to require an individual to buy health insurance, then the Court had better be prepared to require that people must buy wheat if the government says so.  After wheat, then what?

Legal Flaw #5

The fifth legal flaw in Judge Steeh’s rule pertains to the Interstate Commerce Clause.  Again, he cites the 1942 Court decision as precedent.

The Court created two dubious principles for justifying authority for Federal action under the commerce clause.  First, the Court decided that the Federal government may regulate an activity if there is a plausible “rational basis” to believe it affects commercial activity.  Of course, a plausible or rational argument can be made for or against almost anything – just ask any debate team.  For instance, we can easily demonstrate a plausible and rational argument – indeed a most convincing argument – to show that 1 + 1 = 0 (Note 15).  By this yardstick, the Federal government can claim authority to regulate anything that moves – even anything that doesn’t move – under the Interstate Commerce Clause.

317 US 111

Mind you, the argument does not have to be correct or even accurate.  It does not have to be true or even convincing.  It does not even have to be about something that actually exists.  It only needs to seem plausible or have a “rational basis”.  One may as well use voodoo to conjure up Federal authority under the Commerce Clause.  The 1942 Court’s plausible “rational basis” test is nonsense and should be invalidated.

In the same vein, the Court employs another precedent-setting and dubious mechanism to judge commercial impact.  This is the so-called “others similarly situated” test.  According to this method, if everyone similarly situated as X acted in the same way as X and it was plausible to believe, in aggregate, there would be a commercial impact, then X’s act can be regulated by the Federal government under the Interstate Commerce Clause.

This so-called method, of course, relies on a hypothetical condition and speculation about its effect.  Of course, there is no way of knowing whether everyone “similarly situated” would act in the same way as X or, if they did, what the impact would be.  This ordinarily requires an ability to predict the future.  But such a practical limitation is of no importance to the judicial activist.  All that matters is that a plausible or ”rational basis” exists to assert the hypotheticals and speculations.  If they can be asserted – regardless of whether or not they are true, accurate or even convincing – then the Federal government may claim power to act under the Commerce Clause.  Heads, the government wins.  Tails, you lose.

This is not constitutional law – this is sorcery.  And to what end?  All to justify a vast expenditure of scarce resources to compel people to buy a product.  All to justify penalizing people who do not comply.  Or to compel people to eat wheat.  Or to penalize people for eating rice or corn instead of wheat.  It is inconceivable that the United States government is constitutionally permitted to act in these various ways.

If the Supreme Court upholds the ObamaCare Individual Mandate, if it upholds the government’s authority to mandate consumption under the Commerce Clause, then the door to tyranny will be opened.  The door will be wide open, thanks to the Supreme Court.  And these nine men and women will have betrayed the People and the States who, it should be remembered, originally created the Supreme Court for the sole purpose of protecting them.  Then there will come a day when these justices will be called to account for their actions.

Stay tuned for Part 2.  The legal flaws described here will persist into the Second Round of ObamaCare versus the Constitution.  Indeed, new flaws will emerge to put the measure on shakier ground.

___________________________________________________________________________________________________________________________

Speaker Pelosi

1       Speaker Pelosi’s response to the question:  “Where, specifically, does the Constitution grant Congress the authority to enact an individual health insurance mandate?”  The question was posed by a CNS News reporter at a November 8, 2009 morning press conference following passage of ObamaCare in the House, as the Patient Protection and Affordable Care Act, HR3960, around midnight.  The bill narrowly passed 220-215 as 39 Democrats and all but one Republican opposed it.  The bill passed the Senate on Christmas Eve, as the Health Care Reform Act.  All 60 Democrats supported the bill and all 40 Republicans opposed it with one abstention.  There were significant differences between the two versions.  A reconciled bill passed three months later.  President Obama signed the measure into law on March 23, 2010.  Hear Speaker Pelosi at http://www.frugal-cafe.com/public_html/frugal-blog/frugal-cafe-blogzone/2010/12/13/big-loss-for-obamacare-unconstitutional-us-health-care-law-requirement-struck-down-by-federal-judge/.   Speaker Pelosi’s response shows the arrogance of tyranny.  See Roll Call 887 for the House at http://clerk.house.gov/evs/2009/roll887.xml.  See Roll Call for the Senate 396 at http://www.google.com/search?hl=en&q=roll+call+senate+dec+24%2C+2009&aq=f&aqi=&aql=&oq=&gs_rfai=.

2       Public Law 111-148, 124 Stat. 119, HR 3590.  ObamaCare has come to be regarded somewhat as a pejorative.  The full text of the bill can be read at http://www.govtrack.us/congress/billtext.xpd?bill=h111-3590.

3       As detailed in Section 1301, “Qualified Health Plan Defined,” and Section 1302, “Essential Health Benefit Requirements,” of the final Act.

4       Also called Universal Health Care or the Public Option, better described as the Government Option.  HR3960, which did not survive in the Senate, contained this provision under Division A, Title III(B), “Public Health Insurance Option.”

Secretary Kathleen Sebelius, HHS

5       For example, ObamaCare delegated broad powers to the Secretary of Health and Human Services to devise rules and regulations concerning insurance company profitability.  One rule already drafted requires insurance companies to pay out a minimum 80% of premiums to beneficiaries, regardless of operating costs.  The formula also limits executive compensation amounts.  In other words, Secretary Sebelius is dictating slim insurance company profit margins and remuneration levels.  For employer health plans covering 50 or less people, the payout requirement is 85%.  Associated Press, “ObamaCare:  Health Plans Must Spend Premiums on Health Care,” by Richard Alonso-Zaldivar, November 22, 2010.  The administration’s thuggish behavior toward insurance companies is well documented.  Washington Times, “Gangster Government Stiffles Criticism of ObamaCare,” by Michael Barone, September 10, 2010.  Forbes, “The Heavy Hand of Kathleen Sebelius,” by Merrill Matthews, September 30, 2010.  Washington Examiner, “Sebelius’ Chilling Warning to Insurers,” September 15, 2010.  The American Spectator, “The Criminal Intent of ObamaCare,” by David Catron, October 8, 2010.  The Wall Street Journal, “Department of Disinformation,” September 30, 2010, p.15.

6       Consider this.  The United Kingdom nationalized its healthcare system in 1949.  Sixty years later, the National Health Service is the world’s third largest employer with 1.63 million workers.  The NHS is larger than the entire United States government, which has 1.43 million civilian employees.  The UK population is 62.4 million and the average mortality rate is 9.3 deaths per thousand people.  The US population is 310.2 million with a mortality rate of 8.4 deaths per thousand.  If Obama gets his way and ObamaCare devolves into a US version of the NHS, it would employ about 7.0 million workers.  To put these numbers in perspective, the world’s single largest employer – the Chinese military – employs 2.3 million. The next largest employers are Wal-Mart, 2.1 million employees; China National Petroleum Corp., 1.63 million; Indian State Railways, 1.62 million; and China State Power Grid Corp., 1.53 million;   China Military News, December 26, 2009.  Daily Mail, “Number of NHS Bureaucrats Increases Six Times Faster Than Number of Nurses,” by Daniel Martin, March 26, 2010.  Washington Times, “Largest Ever Federal Payroll in 2010,” by Stephen Dinan, February 2, 2010.  CIA World Factbook, “United Kingdom” and “USA”, 2010.  Rediff_business.com, “The Worlds Largest Employers,” December 13, 2010 at http://www.rediff.com/business/slide-show/slide-show-1-the-worlds-biggest-employers/20101207.htm.

7       Section 1105.  Delaying implementation of the Individual Mandate was necessary for two reasons.  The large costs and systemic negative disruptions associated with ObamaCare begin with the Individual Mandate.  Its political supporters sought to insulate themselves from voter backlash by pushing the negative consequences of ObamaCare past the 2012 presidential election.  Second, in order to keep the cumulative 10-year cost of ObamaCare below the politically sensitive threshold of $1 trillion, the costly Individual Mandate had to be deferred.  Of course, this is merely an accounting gimmick to push outlays into the second ten-year period, during which time ObamaCare costs will reach astronomical proportions.  However, by then, supporters correctly and cynically reasoned, it will be too late to do anything about it.  Ideally, supporters would have liked the Individual Mandate to take immediate effect in 2010.  However, this would have pushed the first ten-year cost well above the $1 trillion threshold, making the proposed bill even more toxic than it already was.  Congressional Budget Office, Budget Report on HR3960, November 18, 2009.  The full report can be viewed at http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf.

8       The Thomas More Law Center is a conservative Christian organization based in Ann Arbor, Michigan.  The complaint, case #2:10-cv-11156-GCS-RSW, was filed within hours of ObamaCare becoming law and can be viewed at http://healthcarelawsuits.net/pdf/ThomasMorevObama.pdf.

9       Some religious groups, such as Christian Scientists, Mennonites and others, conscientiously object to many forms of medical treatment or believe only in herbal and organic remedies.  These groups are exempt from the Individual Mandate they don’t need insurance and do not use medical services.

10     Associated Press (Newser), “Federal Judge Rejects Challenge to ObamaCare:  Says the Insurance Mandate is Legal,” October 7, 2010.  For a complete version of Steeh’s ruling see http://ThomasMore v. ObamaRulingOct_7.pdf. Case citations are from pp.12-16 of the Court’s verdict.

11     Wickard (Secretary, US Department of Agriculture) v. Filburn, 317 U.S. 111.  The Supreme Court upheld a penalty on wheat grown for home consumption despite the farmer’s protest that he did not intend to sell the commodity on the market. For purposes of Congress invoking its Commerce Clause power, the Court held it was sufficient that the existence of home-grown wheat, in the aggregate, “supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market,” thus undermining the efficacy of the federal price stabilization scheme.  Citations from the case reference Ibid., 118 and 127.

12     Another supreme – no pun intended – irony.  The original Agricultural Adjustment Act of 1933, passed during the first 100 days of Roosevelt’s presidency, and the first New Deal centerpiece, was struck down as unconstitutional in 1935 (United States v. Butler, 297 US 1).  The Supreme Court ruled 6-3 that the Federal government had no authority under the Interstate Commerce Clause to regulate farm commodity prices – only the individual States could do this.  The government’s scheme to manipulate farm prices thus instantly collapsed.  The original Act was reincarnated as the Agricultural Adjustment Act of 1938.  Government price controls were again the main purpose of the new version.  However, by the time a constitutional challenge of the new Act reached the Supreme Court in 1942 – seven years after the original Act was found unconstitutional, Roosevelt, now in his third term as president, had appointed seven new justices to the Supreme Court.  All the original judicial opponents of the Act had retired and were replaced by loyal New Deal advocates.  Constitutionality of the 1938 Act was upheld 8-0.

13     United States Department of Commerce, Bureau of the Census, Historical Statistics of the United States from Colonial Times to 1970, Parts 1-2, Bicentennial Edition, US Government Printing Office, Washington DC, 1975, Data Series K 502-563, pp.511-517.

14     See “Twelve Constitutional Amendments to Save America – Part I, Constitutional Issues,” posted on this website.  Part I deals with the role of judicial activism in abusing the Constitution via the Commerce Clause and the General Welfare Clause.

15     Observe carefully.  1 + 1 = 0 is proved as follows.  Let a = 1 and let b = 1.  Therefore, a = b.  Therefore, a2 = b2.  Therefore, a – b = 0.  Therefore, a2 – b2 = 0.  Therefore, (a – b)(a + b) = 0.  Therefore, (a – b)(a + b)/(a – b) = 0/(a-b).  Therefore, 1(a + b) = 0.  Therefore, (a + b) = 0.  Therefore, 1 + 1 = 0.   How’s that for a rational argument?   The fallacy is that this proof employs an illegal but disguised mathematical operation in one step.  Even so, according to the 1942 Supreme Court opinion, the argument for Federal power under the Commerce Clause needs only to be rational.  It does not need to be correct.  To discover the illegal operation in the above proof, go to http://www. themathforum.com.

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