Supreme Court Decisions That Affect Our Lives OLLI at Vanderbilt Spring Term 2013

Transcription

1 Supreme Court Decisions That Affect Our Lives OLLI at Vanderbilt Spring Term 2013

2 Session One Historical background; The Court as a Check on Congress and the Executive (the Affordable Health Care Act litigation). [Bob Covington] Session Two Constitution and Family. [Mark Brandon, Professor of Law and Professor of Political Science] Session Three Death Penalty Issues. [Susan Kay, Associate Dean for Clinical Legal Education]

3 Session Four The First Amendment (Thomas R. McCoy, Professor of Law, Emeritus) Session Five The First Amendment (David Hudson, Adjunct Professor of Law) Session Six Discrimination (Bob Covington)

4 Committees of correspondence Formed both at colony and town level, often by legislative action; at first had only a short-term existence, but from 1772 on many became permanent until superseded by state governments. Earliest: Probably Massachusetts in 1764 Usual functions: Exchange information with other communities and colonies about steps being taken in response to various actions by the British parliament; slowly the range of authority grew until some constituted virtual shadow governments.

5 Stamp Act Congress, 1765 Met as response to New York and Massachusetts Bay resolutions Nine of 18 British North American colonies present Petitions sent to King, House of Lords, House of Commons; not all delegates felt authorized to sign Declaration of Rights language: 4 th. That the people of these colonies are not, and... cannot be represented in the House of Commons th That the only representatives of these colonies are persons chosen therein, by themselves; and that no taxes... can be constitutionally imposed on them but by their respective legislatures.

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7 NO: Automobiles, cycles Railroads Canals Steamships Hotels AVAILABLE: Roads, suitable for horse traffic, some for carriages and wagons; First stagecoach service began 1766 between Philadelphia and New York (three days) Rivers (flat-bottom bateaus ) Inns/taverns

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9 NO: Telephone, telegraph, et cetera AVAILABLE: Postal service (smaller communities once a month; larger communities once a week or more, depending on how fast the mailbag filled. Newspapers (often more advertising, poetry, diatribe than news, but becoming more newsy over time); 37 at the time of Independence

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12 September 1774: The first Continental Congress meets in Philadelphia; in October it adopts the provisions known as the Continental Association. These articles: (a) impose trade boycotts until Britain repeals a variety of laws; (b) call for action by each colony s government to enforce such bans; (c) recognize the function of the committee of correspondence in each colony; and (d) assume the continued existence of the Continental Congress. Signers include future Presidents John Adams and George Washington and future Chief Justice John Jay.

13 One nation or many? our Charters,... our most valuable Laws,... the Forms of our Governments,... our Legislatures We, therefore, the Representatives of the united States of America, in general Congress, Assembled,... Declare that these United Colonies are and of right ought to be Free and Independent States. Includes protests against: Quartering of troops Suspension of trial by jury Abolition of courts and refusal to apply English law

14 Create a union of states, each of which retains its sovereignty, freedom and independence and every power... not... expressly delegated to the United States. Provide for a Congress to meet every November, each state to have from two to seven delegates and one vote. Limit the power of each state to negotiate treaties, declare war, or engage in military action, reserving these to the United States in Congress assembled.

15 Create no executive branch as such, but a president of the Congress. With a one-year term Provide for two types of courts [Article IX]: for the trial of piracies and felonies committed in the high seas and for receiving and determining finally appeals in all cases of captures To determine boundary disputes (a sort of subcommittee of the Congress itself) Call for each state to give full faith and credit to the decisions of courts in other states

16 Drafted 1787; effective March 4,1789 Structure: Preamble Article I: The Congress Article II: The Executive Article III: The Judiciary Article IV: Full Faith and Credit clause; citizens entitled to move about freely from one state to another; governance of Territories and admission of new States Article V: Amendment procedures Article VI: The supremacy clause ; recognition of existing debts Article VII: Ratification procedure

17 Amendments I-X: The Bill of Rights [First Congress][Effective December 1791] I: Freedom of assembly, petition, religion, speech II: Well-regulated militia; Right to bear arms III: No quartering of soldiers in private homes IV: Limits on search and seizure; warrants V: No conviction save through due process of law; self-incrimination not required; government takings of property limited

18 Amendments (cont.) VI: Right to speedy trial; right to counsel VII: Trial by jury preserved VIII: No cruel or unusual punishment; no excessive bail IX: The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people. X: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

19 XI: Federal courts not empowered to hear suits brought against a State by citizens of another State or nation. [1795] XII: Electoral college to vote for President and Vice-President separately [1804] XIII: Slavery abolished [1865] XIV: No state to abridge the privileges and immunities of any citizen of the United States ; no deprivation of life, liberty or property without due process of law; all persons entitled to equal protection [1868]

20 XV: Right to vote not to be denied on basis of race, color or prior status as slave [1870] XVI: Congress empowered to tax incomes [1913] XVII: Popular election of Senators [1913] XVIII: Prohibition of sale of alcoholic beverages [1919] XIX: Right to vote not to be denied on basis of gender [1920] XX: Fixes new dates for inauguration of Congress, President, Vice-president [1933]

21 XXI: Prohibition Amendment repealed [1933] XXII: President to serve no more than two terms [1951] XXIII: District of Columbia to participate in election of President [1961] XXIV: No poll tax [1964] XXV: Presidential succession; selection of Vice-president in case of vacancy [1967] XXVI: 18-year old vote [1971] XXVII: No change in salaries of sitting Congress [1992]

22 Created by Article III, Judiciary Act of 1789 Justices nominated by President (Article II, 2); Originally one Chief Justice, five Associate Justices After varying from five to ten, the Court has consisted of nine Justices since 1869 Each original Justice would ride circuit much of the year, coming together for four to six weeks each February and August (limited mandatory circuit participation continued until 1891)

23 Chief Justice: John G. Roberts, Jr. (appointed 2005)(b. 1955) Associate Justices: Antonin Scalia (1986)(b. 1936) Anthony M. Kennedy (1988)(b. 1936) Clarence Thomas (1991)(b. 1948) Ruth Bader Ginsburg (1993)(b. 1933) Stephen Breyer (1994)(b. 1938) Samuel Alito (2006)(b. 1950) Sonia Sotomayor (2009)(b. 1954) Elena Kagan (2010)(b. 1960)

24 Original jurisdiction In all cases affecting Ambassadors, other public ministers and consuls and those in which a state shall be a party [Article III, section 2] Typically, the Court appoints a special master to handle the actual development of the factual basis of these cases (such as boundary disputes), and [sometimes] recommend a resolution Appellate jurisdiction All other cases Appeals Grants of writs of certiorari

25 Courts find law; legislatures make law. Stare decisis: the importance of precedent Differentiating holding from dictum What makes a case different enough to refuse to apply earlier holdings? When is a court justified in overruling a prior case? Obvious cases: Constitutional amendments, statutes that require different outcomes [Dred Scott; XIIIth, IVth, XVth Amendments; ] Less obvious cases: changes in society [admission of women to the bar; Bradwell v. Illinois, 84 U.S. 130 (1873)]

26 Early days of American politics: the emerging party system Federalist President John Adams loses to Democratic-Republican candidate Thomas Jefferson in the election of The lame duck Congress, with a Federalist majority, creates a number of judgeships and Adams appoints the persons to serve. The appointments become fully effective on delivery of a commission, that delivery being the duty of the Secretary of State.

27 William Marbury had not received his commission as a justice of the peace when Jefferson took office on March 5, Jefferson ordered his Secretary of State, James Madison, not to deliver the commission. Marbury sued, filing his action in the United States Supreme Court. Marbury sought a writ of mandamus, which would order Madison to deliver the commission.

28 A unanimous court ruled that it would not issue the requested writ, after analyzing three issues: First, was the failure to deliver the commission illegal? [Answer: Yes] Second, does the wrong done to Marbury justify a legal remedy? [Answer: Yes] Third, may this Court provide the writ of mandamus remedy? [Answer: No] The answer to the third issue flows from the Court s reading of section 13 of the Judiciary Act of 1789 as compared to Article III, 2, of the Constitution.

29 It is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each. So if a law be in opposition to the constitution... The court must decide that case conformably to the law, disregarding the constitution; or conformably to the constitution, disregarding the law.

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31 Chief Justice, January 31, 1801-July 6, 1835 Nominated by John Adams Former Secretary of State under Adams ( ) Many major decisions concerning federalstate relationship McCulloch v. Maryland: States may not tax federal agencies Gibbons v. Ogden: Federal statute governing steamship licensing preempts state power to govern the same activity

32 The Congress has used a power too broadly (typical Article I, section 8 case). The Congress has violated a specific prohibition in the Constitution (typical Art. I, 9 or First Amendment case). A state has acted on issues entrusted entirely to the national government. (Art. 1 10) A state has enacted laws inconsistent with Congressional action. (Art. VI, 2) A state has violated a specific Constitutional prohibition. (E.g., the XIVth Amendment Due Process clause.)

33 A challenge to particular provisions of the Patient Protection and Affordable Care Act, enacted in The mandate that most adult individuals purchase health insurance coverage or pay a shared responsibility payment for failing to do so The requirement that individual states expand their Medicaid programs or potentially lose some anticipated federal funds Three cases, consolidated into one

34 National Federation of Independent Business, alleging that its members will be adversely affected in a variety of ways by the mandate requirement and related provisions Twenty-six states, protesting the impact of broadened Medicaid eligibility Individuals, protesting the mandate on various grounds Lead defendant: Kathleen Sebelius, Secretary of Health and Human Services

35 Lengthy and complex Table of contents: 16 pages Certified text (with a bit of white space here and there) runs 2,409 pages; an ordinary print 900+ pages Ten broad divisions: Title I: Quality, Affordable Health Care for All Americans Title II: Role of Public Programs Title III: Improving the Quality and Efficiency of Health Care Title IV: Prevention of Chronic Disease and Improving Public Health

36 Title V: Health Care Workforce Title VI: Transparency and Program Integrity Title VII: Improving Access to Innovative Medical Therapies Title VIII: CLASS Act (Community Living Assistance Services and Support) Title IX: Revenue Provisions Title X: Strengthening Quality, Affordable Health Care for All Americans

37 Overall approach highlights: Maintains many existing programs, particularly employment-based health insurance; no single payer although Medicaid grows in significance Adds a new player in the form of health insurance exchanges probably often internet-based Increases the proportion of Americans covered by health insurance, both private and public Requires a high proportion of health insurance premiums to be used for actual provision of health care services, by limiting administrative costs (including salaries, dividends) to 15 or 20 per cent (depending on nature of insurer)

38 Why such a central focus: Those not covered Often untreated until a condition is both serious and expensive to treat Usually lack a primary care physician and so are likely to use an emergency room for care, at relatively higher cost Often are unable to pay for treatment, so that the cost of their treatment is shared in some way between those providing care and other patients who use the same care providers

39 Reasons why many are not insured The adverse selection problem those who choose no coverage are often those likely to need care only in exceptional cases (e.g. accidents) The cherry picking and inside limits problems individuals with pre-existing conditions unable to get meaningful coverage at affordable rates Very low income thresholds for Medicaid eligibility The statute s solutions Eliminate cherry picking and inside limits Require almost all adults to obtain insurance Require states to use a different income threshold

40 (a) Requirement to maintain minimum essential coverage An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.

41 (b) Shared responsibility payment (1) In general If a taxpayer who is an applicable individual... fails to meet the requirement of subsection (a) for 1 or more months, then, except as provided in subsection (e), there is hereby imposed on the taxpayer a penalty with respect to such failures in the amount determined under subsection (c).... (2) Inclusion with return Any penalty imposed by this section with respect to any month shall be included with a taxpayer s return under chapter 1 for the taxable year which includes such month.

42 (d) Applicable individual For purposes of this section (1) In general The term applicable individual means, with respect to any month, an individual other than an individual described in paragraph (2), (3), or (4). (2) Religious exemptions... Religious conscience exemption Health care sharing ministry (3) Individuals not lawfully present... (4) Incarcerated individuals...

43 (e) Exemptions (1) Individuals who cannot afford coverage... (2) Taxpayers with income below filing threshold.. (3) Members of Indian tribes... (4) Months during short coverage gaps... (5) Hardships...

44 (a) Contents A State plan for medical assistance must... (10) provide... (A) for making medical assistance available... to (i) all individuals... (VIII) beginning January 1, 2014, who are under 65 years of age, not pregnant, not entitled to, or enrolled for, benefits under [other provisions of this statute].... and whose income (as determined under subsection (e)(14)) does not exceed 133 percent of the poverty line (as defined in section 1397jj(c)(5) of this title) applicable to a family of the size involved....

45 42 U.S.C. 1397jj(c)(5): The term poverty line has the meaning given such term in section 9902(2) of this title U.S.C. 9902(2) The term poverty line means the official poverty line defined by the Office of Management and Budget..... The Secretary shall revise annually... the poverty line....

46 From the Federal Register, January 20, 2011: Due to confusing legislative language dating back to 1972, the poverty guidelines have sometimes been mistakenly referred to as the OMB... guidelines.... In fact, the OMB has never issued the guidelines; the guidelines are issued each year by the Department of Health and Human Services.... Under the authority of 42 U.S.C. 9902(2).

47 Persons in household Poverty guideline 1 $11, , , , , , , ,890 For households with more than 8 persons, add $3,960 for each

48 In addition to the original petition for a writ of certiorari (request that the Court hear the case), eighteen briefs submitted Oral argument held on three successive days, March 26, March 27, March 28 in 2012

49 Chief Justice Roberts, joined in part by Justices Ginsburg, Breyer, Sotomayor, and Kagan (59 pages) Justice Ginsburg, joined by Justice Sotomayor, and joined in part by Justices Breyer and Kagan (61 pages) Justice Scalia, joined by Justices Kennedy, Thomas, and Alito (65 pages) Justice Thomas (2 pages)

50 Does the Anti-Injunction Act apply? Is the Medicaid Expansion justified under the spending power granted the Congress? Is the mandate that individuals purchase health insurance within the power of Congress under the commerce clause? In enacting the mandate did the Congress act within its powers under the taxing authority granted by the Constitution? If the Court strikes down either or both, does the statute as a whole fail?

51 Internal Revenue Code [26 U.S.C.] 7421(a): Except as provided in [sections not relevant here], no suit for the purposes of restraining the assessment or collection of any tax shall be maintained in any court by any person.... In other words: Pay first, then sue to get it back Strictly a statutory interpretation question; the Constitution is not directly involved

52 Since this suit seeks to prevent the Affordable Care Act from ever taking effect, if the mandate penalty is a tax for the purposes of the Anti-Injunction Act, the Court would dismiss the suit. HELD: (All Nine Justices): The Anti-Injunction Act does not apply. Five Justices (Roberts opinion) reason that if the Congress wished this to be a tax for Anti-Injunction Act purposes, the word tax would have been used. The four dissenters reason this penalty is not a tax at all.

53 Article I, section 8 The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States... ; To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes; And To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

54 The Constitutional language: The spending clause of Article I, section 8: to pay the debts... and provide for the general welfare The precedents: cooperative federalism cases, particularly Steward Machine Co. v. Davis (unemployment insurance) and South Dakota v. Dole (21-year old drinking age)

55 Existing program eligibility Pregnant women Children Needy families [States vary with respect to income level required. On average: unemployed parents with income below 37% of poverty threshold; employed parents with income below 63% of poverty threshold] Blind Persons over 65 years of age Disabled Affordable Care Act eligibility All legally present persons with income below 133% of poverty threshold

56 The carrot: In years , the federal government will cover 100% of the cost of the expansion; the percentage then decreases gradually to 90% of the additional cost. The stick: 42 U.S.C. 1396c: If the Secretary finds... that the [State s Medicaid] plan... no longer complies with the provisions of... this title, the Secretary shall notify such State agency that further payments will not be made to the State (or, in his discretion, the payments will be limited to categories under... the State plan not affected by such failure )....

57 The Unemployment Insurance part of the Social Security Act imposed a payroll tax on all employers, but gave a credit to employers in those states that enacted unemployment insurance schemes that met certain federal standards; those states would also receive some federal monetary assistance to administer their statutes. A closely divided Court (5-4) upheld the statute as not an improper invasion of the power of the individual states.

58 For the statute to be unconstitutional under the Xth Amendment there must be a showing that the tax and the credit in combination are weapons of coercion, destroying or impairing the autonomy of the states. We do not say that a tax is valid, when imposed by act of Congress, if it is laid upon the condition that a state may escape its operation through the adoption of a statute unrelated in subject-matter to activities fairly within the scope of national policy and power.

59 Under the challenged statute, federal highway aid funds otherwise payable to a state would be reduced if that state failed to enact a statute making 21 the legal age limit for the purchase and consumption of alcohol. Upheld 7-2 (Justice Scalia joined majority) Dissents by Justices Brennan, O Connor, stress that the XXIst Amendment entrusts regulation of sale and consumption of alcohol to the states.

60 The spending power is... not unlimited,... but is instead subject to several general restrictions.... The first of these limitations is derived from the language of the Constitution itself: the exercise of the spending power must be in pursuit of the general welfare. In considering whether a particular expenditure is intended to serve general public purposes, courts should defer substantially to the judgment of Congress. Second, we have required that if Congress desires to condition the States' receipt of federal funds, it must do so unambiguously.... Third,... conditions on federal grants might be illegitimate if they are unrelated to the federal interest in particular national projects or programs. Finally, we have noted that other constitutional provisions may provide an independent bar to the conditional grant of federal funds.

61 For supporters of the statute: Beginning with Steward Machine Co., several opinions have said that someday a given scheme might be coercive and therefore unconstitutional. The stick provision is problematic. For opponents of the statute: No prior case has actually struck down a spending power cooperative federalism statute as coercive or an undue interference with a state s authority. Applying the language of South Dakota v. Dole, this statute arguably meets all the four tests.

62 Seven Justices find that the Medicaid Expansion is coercive, because of the threat that current Medicaid support might be taken away from individual states. Of these, three find that only the provision permitting the Secretary (of HHS) to take away all or part of existing Medicaid funding need be struck. Four would say that that provision is so integral to the whole scheme of the statute that the entire expansion plan must be struck. Two Justices argue that both the carrot and the stick provisions are proper, since future federal funds are not owed, only anticipated.

63 Since there are only four votes for overturning the voluntary participation ( carrot ) provisions of the ACA, those survive, unless the statute as a whole fails. A significant problem, highlighted in the dissenting opinion of Justice Ginsburg, is created for federal courts in the future: Where is the coercion dividing line to be set?

64 Justice Potter Stewart I shall not today attempt further to define the kinds of material I understand to embraced within that shorthand description [ hard core pornography ]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it and the motion picture involved in this case is not that. (concurring opinion in Jacobellis v. Ohio, 378 U.S. 184 at 197 (1964))

65 Total Medicaid expenditures, Fiscal Year 2010, United States: $ 389,084,333,952 Federal funds: $ 263,376,784,409 State funds: $ 125,707,549,543 Tennessee, Fiscal Year 2010 Federal funds: $ 6,406,407,017 State funds: $ 2,111,707,010 Total $ 8,518,114,027 Source: Kaiser Family Foundation, State Health Facts

66 Tennessee Budget , Department of Transportation State Revenue Federal Revenue Total Sources Sources (recurring) $885,625,000 $860,318,000 $1,788,707,000 [Mass transit: $142,119,000; Air & Rail $85,000,000] A 5% loss of highway funds, thus somewhere between $30,000,000 and $40,000,000

67 Tennessee Budget, K-12 (general) State funds (excluding Lottery) $3,707,630,600 Federal funds $1,484,904,300 The next case: Assume: The Congress were to impose a new condition for the receipt of federal funding for K-12 education: The curriculum for all public schools and all approved home schooling texts must include (a) the teaching of geological dating techniques and Darwinian-based evolutionary theories, and (b) the use of safe sex techniques. Failing to do this would result in a discretionary loss of some percentage of federal funds: What of: 5%; 25%? 50%? 75%?

68 The textual arguments for its constitutionality are based on: Congressional power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;.... Congressional power to lay and collect Taxes, Duties, Imposts and Excises.... Congressional power to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

69 18 th century dictionaries indicate that regulate does not include the power to require that an individual undertake to engage in commerce, when that individual has not taken any action of that sort [e.g., Johnson, A Dictionary of the English Language (7 th ed. 1785): to adjust, to direct according to rule ] Prior cases demonstrate reluctance to allow Congress to order states into action, much less individuals, even when dealing with serious problems. [New York v. United States, 505 U.S. 144 (1992): States may not be required to take title to nuclear waste.]

70 The mandate covers not just those who failed to purchase insurance but then obtained health care services, but also those who both failed to obtain insurance and never entered the health care market at all. Thus the mandate is over broad, since it seeks to require individuals to engage in activity when they have an individual right not to do so. The necessary and proper clause does not call for a different outcome. The basic scheme is too far removed from regulation. Moreover, less intrusive schemes were available to the Congress.

71 Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product. Legislative novelty is not necessarily fatal; there is a first time for everything. But sometimes the most telling indication of [a] severe constitutional problem... is the lack of historical precedent for Congress's action. Every day individuals do not do an infinite number of things. In some cases they decide not to do something; in others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and under the Government's theory empower Congress to make those decisions for him.

72 The opinions of the Chief Justice and of Justice Scalia take the wrong perspective. The Congress is entitled to view the health insurance marketplace as a whole, not simply as an adding together of individual transactions.

73 The health care market place problems the Congress addressed in this statute are broad societal problems, and the Congress is entitled to legislate broadly to address them. The reading of the commerce clause by the Chief Justice and the other four is a throwback to views now generally discarded (citing pre-1936 cases and contrasting them with decisions since then), and this approach unduly limits the Congress s ability to deal adequately with such problems.

74 Those without insurance affect the cost of health care: In 2008, uninsured persons were recipients of $116 billion in health care; they were able to pay only $73 billion. Health care providers pass along the bulk of this cost to those who pay reliably: the government and private insurers. Those insurers therefore raise their premiums. The net result: Those with health insurance subsidize the medical care of those without. Individual states are unlikely to be able to restore balance on their own (citing the Massachusetts experience, where emergency rooms served thousands of uninsured out-of-state residents. )

75 It is not sensible to treat those who fail to purchase insurance as non-participants in the health care market. First, more than 50% of those without insurance visit a hospital or doctor s office each year.... Nearly 90% will within five years. An uninsured s consumption of health care is thus quite proximate. It is virtually certain to occur in the next five years and more likely than not to occur this year. In addition, there is no sensible way to identify those uninsureds who will not be consumers of health care in the near future.

76 Therefore, given that 1. The health care market is clearly commerce. 2. The uninsured are a major force in that market. 3. Which uninsured persons are most likely to be near-term consumers of health care is an unknown Does it not make sense to treat the individual mandate as a justified exercise of the commerce power? Moreover, government does require citizens to act (e.g., serve as jurors).

77 The Constitutional Text: Article I, 8: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises The statute (26 U.S.C. 5000A) (a) Requirement to maintain minimum essential coverage An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.

78 The statute (continued)(26 U.S.C. 5000A) (b) Shared responsibility payment (1) In general If a taxpayer who is an applicable individual... fails to meet the requirement of subsection (a) for 1 or more months, then, except as provided in subsection (e), there is hereby imposed on the taxpayer a penalty with respect to such failures in the amount determined under subsection (c).... (2) Inclusion with return Any penalty imposed by this section with respect to any month shall be included with a taxpayer s return under chapter 1 for the taxable year which includes such month.

79 Is the shared responsibility payment or penalty a tax authorized by Article I, section 8? Chief Justice Roberts and Justices Ginsburg, Breyer, Sotomayor and Kagan say yes. Justices Scalia, Kennedy, Thomas and Alito say no.

80 The shared responsibility payment or penalty looks like a tax (the duck test): Filed and paid with tax return Provides significant revenue to the government The amount to be paid is determined by reference to tax-like factors taxable income, number of dependents, joint or single filing status The label of penalty is not determinative Earlier cases have upheld license fees and surcharges as valid under the taxing power, and have struck down taxes that were in effect fines (for violations of child labor laws, for example).

81 There is a clear line between tax and penalty ; quoting an earlier case: A tax is an enforced contribution to provide for the support of government; a penalty... is an exaction imposed by statute as punishment for an unlawful act. This is clearly a penalty from the way the Congress structured the exaction. Buying coverage is labeled requirement ; moreover some are exempt from the tax who are not exempt from the mandate.

82 Penalty Tax Fine

83 Penalty Tax

84 The 5-Justice majority, in Chief Justice Roberts opinion: The determinative question here is whether Congress would have wanted the rest of the Act to stand, had it known that States would have a genuine choice whether to participate in the new Medicaid expansion.... We are confident that Congress would have wanted to preserve the rest of the Act. (citing the inclusion of a saving clause)

85 The four in dissent confront a different problem, since they would invalidate both the Medicaid expansion (entirely, both the voluntary carrot provisions and the power of the Secretary to withhold funds for traditional Medicaid) and also the individual mandate. With both of those coverage expansion provisions gone, the dissenters argue that much of the rest of the statute makes no sense, and the entire statute must fall.

86 Issue One (Anti-Injunction Act) Roberts+Ginsburg+Breyer+Sotomayor+Kagan It s up to the Congress to pick what exactions are subject to the Act Scalia+Kennedy+Thomas+Alito The exaction here is by its nature not a tax.

87 Issue Two (Medicaid expansion) Roberts+Breyer+Kagan Accepting all prior cooperative federalism majorities as precedent, the stick provision here is coercive on the states and must fail Scalia+Kennedy+Thomas+Alito The stick provision is coercive, and some earlier cases may not have been decided properly Ginsburg+Sotomayor Because funding of Medicaid is year-at-a-time, the stick provision is only an inducement, not coercion, and the post-1936 precedents call for this to be a proper use of the spending power

88 Issue Three: Constitutionality of the mandate as an exercise of the power to regulate commerce Roberts+Scalia+Kennedy+Thomas+Alito Requiring an individual to initiate a commercial transaction goes beyond the regulation of commerce and is beyond Congressional authority Ginsburg+Breyer+Sotomayor+Kagan Congress took a sensible view of how the health care market actually operates and of its problems with the uninsured. Given that impact, a requirement that taxpayers purchase insurance is a reasonable exercise of the commerce power.

89 Issue four: Constitutionality of the mandate as an exercise of the taxing power Roberts+Ginsburg+Breyer+Sotomayor+Kagan Since the shared responsibility payment or penalty looks like a tax in many ways, and is an important potential revenue source, this exaction of money is constitutional. Scalia+Kennedy+Thomas+Alito Penalty and tax are two different categories, and this looks much more like the former.

90 Issue Five: Can the rest of the statute survive the excision of what is not constitutional? Robert+Ginsburg+Breyer+Sotomayor+Kagan Since only the stick portion of the Medicaid expansion fails, and there is likelihood many states will expand anyhow, given the carrot, it seems clear Congress would want the rest of the statute to survive. Scalia+Kennedy+Thomas+Alito Since the mandate as well as the Medicaid expansion should be held unconstitutional, too little of the statute would remain to allow it to go forward without further Congressional action.

91 Think of poker but with different winners Two pair [Justices Ginsburg+Sotomayor] [Justices Breyer+Kagan] Four of a kind [Justices Scalia+Kennedy+Thomas+Alito] Ace high [Chief Justice Roberts]

92 National political question: If the statute had been struck down would the present Administration and Congress be able to rebuild a national health care program from scratch? State political questions: Create exchanges? Expand Medicaid?

93 As of February 22, 2013: 23 states and the District of Columbia have said they will accept funds and expand their programs 13 states have announced they will not participate in the expansion 14 states have not yet made a formal decision The choice to opt in or out remains available until the start of 2014; legislatures may still go along with or reverse governors decisions in some states. Source: The Guardian

94 Friday, February 1, 2013: The Internal Revenue Service issues its proposed regulations for implementing the minimum essential coverage and shared responsibility payment provisions of the statute [78 Federal Register pp ]

95 February 20, 2013: The Department of Health and Human Services issued a final rule defining essential health benefits to be provided by health plans, and setting up procedures for updating those standards. [78 Federal Register pp ]. The regulations appear as 45 Code of Federal Regulations, parts 147, 155, 156.