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Wednesday, March 28, 2012

Severability, the Plain Text of the Eighth Amendment and the Meaning of Judicial Restraint: The First Session in the Obamacare Argument Today

So we arrive at the hidden booby trap in all of this, severability.  That is the subject of the first of two oral arguments today, which you can listen to, here.

As you all know, Obamacare is a massive bill.  Indeed you will see a couple comments related to its massiveness as we go through the argument.  So what happens to the rest of the law if only one part of it is found to be unconstitutional?

I mean imagine for instance if we have a law that says 1) flag burning is hereby banned, and 2) we will appropriate $40,000 for more FBI agents.  That’s all in the same law.  Now after Texas v. Johnson, the first part is clearly unconstitutional but equally obvious that the second part is not.  So does that mean that you have to throw out appropriations part of that law?

One thing to get about this, also, is that this is not a matter of law but of equity.  I will say in all frankness that I had no idea what equity meant in the judicial context before I started my legal training, so I assume that most non-lawyers have no idea, either.  So let me give you a quick primer (and if you are a lawyer feel free to skip ahead):

It has to do with the dual nature of our judiciary.  You see in England they started with the courts of law, which followed the common law (judge-made law) and whatever statutes were applicable.  The rules were fairly rigid, and the only thing you got were damages—that is, money.  I mean that is a gross over-simplification of things, but it serves as a reasonable thumbnail sketch.

Well, over time it was felt that it was not enough to simply give a person money when their rights were violated.  So somewhere along the way people started going to the Church of England and asking for more.  So the Chancellor who heard those cases would listen to both sides and tell one person or another to do X or else they would go to Hell.  Yes, literally.

Now all the judicial history is a little fuzzy to me but what I do know is that by the time America broke off from England these ecclesiastical courts became more like regular courts, at least in America.  For instance, up until really recently in Virginia, the systems were still semi-separate.  You would have the same judges in the same courtrooms, but on some days they would be chancellors sitting in courts of equity and on other days they would be judges sitting in courts of law.  And this would result in confusion where a court of equity would tell you to go to a court of law and the court of law would tell you to go to a court of equity.  Over time most states merged the systems together—including Virginia—so that same cases would rightfully contain both law and equity.  And of course long ago they stopped sentencing you to Hell for disobeying their injunctions, but instead would send you to jail.

I think severability has to be understood as an equitable doctrine.  I say this based on my understanding of the doctrine of judicial review—that is the idea of striking down statutes that do not jibe with the constitution.  First that popular phrase “striking down statutes” is actually a misnomer.  It makes it sound like the United States Supreme Court is going into the statute books and ripping the statute out.  When I read Marbury v. Madison, for instance, what I see is almost like judicial civil disobedience, the way Martin Luther King understood the term.  They aren’t saying that the law isn’t on the books, but they are saying that they will not help the other branches enforce an unconstitutional rule.  Indeed there is a strong parallel between Martin Luther King’s logic in declaring that “an unjust law is no law at all” and Chief Justice John Marshall reasoning that an unconstitutional law is no law at all.

But that approach is self-limiting.  In my hypothetical flag burning/funding for the FBI statute, judicial review gives the courts the power to say “we aren’t going along with that flag burning part” and refuse to enforce that law, but that doesn’t justify, by itself, refusing to honor that appropriation to the FBI.  So I think you have to understand the idea of severability—or more precisely the idea that certain parts of a law cannot be severed from another—as a matter of equity.

And that is important, because equity is weird and its reasoning does not sound very much like traditional legal analysis.  Of course in a real way it has been part of the judiciary from the beginning and lawyers are expected to be as versed in equity as they are in law, but it still feels outside of the law.  For instance in most cases courts sitting in equity will consider “the public interest” before granting equity.  That is not an appropriate concern in a legal matter (although that is often considered).  You have to weigh the harms of one party against the harms of another in equity.  You have to consider many mushy factors that just don’t apply to legal claims.

So for instance in Brown v. Board of Education the Supreme Court declared that racial segregation in schools was illegal.  Did that mean that the very next day every school had to desegregate or even potentially integrate?  No.  Because when it came to issuing injunctions declaring that a school shall stop discriminating along the lines of race, that became a matter of equity.  So in fact in legal circles, there are two Brown decisions.  In Brown (I), the court famously stated that this situation was illegal and in Brown II, the Supreme Court gave some guidance to the lower courts on how to begin to end school segregation.

So when the Supreme Court talks about severability the courts are given permission to consider things that ordinarily are things I don’t rightfully think they should consider, such as what is the best policy (the public interest) and the like.

By the way, once you understand the distinction between law and equity you will never read the Constitution the same way again.  For instance, this understanding brings new meaning to the familiar line in Article III, Section 2 that “The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution...”  Or consider the Seventh Amendment, which states that “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved[.]”  Now, knowing about the courts of equity (if you didn’t before) you notice that by specifying the common law, as opposed to equity, they are implicitly saying that you do not have a right to a jury in a case at equity and that is precisely how the courts have read this provision.
 
Returning to the subject, I know that is a long introduction, but bluntly I am hoping it colors how you see this discussion going forward.

Now overall, I think on balance there is a weaker conservative majority favoring the idea that the entire law has to fall in this case.  And this seems to be a case where the courts would be “making new law” that is making a new rule.  This is not necessarily illegitimate even in a case at law, because the courts have always been allowed to make new law where the statute does not fill things in.  This is what we call the common law—judge made law.  And one of the best ways to convince a court to make new common law is to show them that their previous judge-made law did not adequately address the current circumstance.

As I discussed in my Patterico days the rule on severability was laid out in Buckley v. ValeoBuckley will come up several times during this discussion but in that case they struck down part of a campaign finance law and left the rest in place.  In that case, the Court said:

Unless it is evident that the Legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as a law.

And I summed up that rule as follows:

So it’s a two part test: does the rest of the law even work without the invalid portion?  And if it does, is it still the case it is evident that but for this provision, Congress would not have passed this law?

Well, what many of the conservatives seem to be saying is, “that’s all well and good if you are talking about a provision in a law that is in the periphery.  So if we are talking about a 2,000 page budget appropriation where one Congressman put in a rider banning flag burning, it makes sense to invalidate that rider without throwing out the entire budge of the United States.  But this provision goes to the heart of the law, and it’s a different thing entirely to cut that out and expect the statute to limp on.”  I don’t believe that was something they said before, so it would be a case of making new law, but it is a reasonable evolution of the federal common law.

So let’s jump into the interesting passages.  Again the only ordering here is chronological, with one exception.

So early on you see Scalia talking about the public interest.  He is talking about the concern for legislative intertia—that is, it’s hard to get anything done in Congress so where the courts leave something, is where it is most likely to remain.  And we also see the liberals arguing that if the mandate is struck down that it is somehow “activist” to strike down the whole law:

JUSTICE SCALIA: Well, there is such a thing as legislative inertia, isn't there?

MR. CLEMENT: That's exactly what I was going to say, Justice Scalia, which is, I think the question for this Court is, we all recognize there is legislative inertia. And then the question is: What is the best result in light of that reality?

JUSTICE SOTOMAYOR: Are you suggesting that we should take on more power to the Court?

MR. CLEMENT: No –

JUSTICE SOTOMAYOR: Because Congress would choose to take one path rather than another. That's sort of taking onto the Court more power than one I think would want.

MR. CLEMENT: And I agree. We are simply asking this Court to take on straight on the idea of the basic remedial inquiry into severability which looks to be intent of the Congress –

JUSTICE SCALIA: Mr. Clement, I want to ask you about that. Why -- why do we look to the -- are you sure we look to the intent of the Congress? I thought that, you know, sometimes Congress says that these provisions will -- all the provisions of this Act will be severable. And we ignore that when the Act really won't work. When the remaining provisions just won't work. Now how can you square that reality with the proposition that what we're looking for here is what would this Congress have wanted?

MR. CLEMENT: Well, two responses, Justice Scalia. We can look at this Court's cases on severability, and they all formulate the task a little bit differently.

And there toward the end you see a third thing going on there.  Scalia is famous for his belief in “plain language”—that is you do not follow the “spirit” of a law or the legislative intent.  You follow what the law says.  It’s an entire philosophy that I probably can’t sum up in a single post, but it is an important philosophy and Scalia is uniquely associated with that approach.  That is important going forward—indeed it’s the basis of a joke at one point.

And you can see Scalia gets into the public policy considerations of picking and choosing what is struck down, in this next passage.  You can also see how people were just funnier today:

JUSTICE SCALIA: All right. The consequence of your proposition, would Congress have enacted it without this provision, okay that's the consequence. That would mean that if we struck down nothing in this legislation but the -- what you call the corn husker kickback, okay, we find that to violate the constitutional proscription of venality, okay?

(Laughter.)  [Aaron: There is no such rule, hence the laughter.]

JUSTICE SCALIA: When we strike that down, it's clear that Congress would not have passed it without that. It was the means of getting the last necessary vote in the Senate. And you are telling us that the whole statute would fall because the corn husker kickback is bad. That can't be right.

And Ginsberg gets at the issue in another way:

JUSTICE GINSBURG: Mr. Clement, there are so many things in this Act that are unquestionably okay. I think you would concede that reauthorizing what is the Indian Healthcare Improvement Act changes to long benefits, why make Congress redo those? I mean it's a question of whether we say everything you do is no good, now start from scratch, or to say, yes, there are many things in here that have nothing to do frankly with the affordable healthcare and there are some that we think it's better to let Congress to decide whether it wants them in or out.

So why should we say it's a choice between a wrecking operation, which is what you are requesting, or a salvage job. And the more conservative approach would be salvage rather than throwing out everything.

Notice also the attempt to frame this as if you are a judicial “conservative” you would not strike it all down.

One argument that Clement made was that the court should see what provisions are directly dependent on the mandate, and then when they are left, if they have only a “hollow shell” left they should throw out the whole thing.  As you can see Roberts was skeptical of that:

CHIEF JUSTICE ROBERTS: Well, but it would have -- it would have passed parts of the hollow shell. I mean, a lot of this is reauthorization of appropriations that have been reauthorized for the previous 5 or 10 years and it was just more convenient for Congress to throw it in in the middle of the 2700 pages than to do it separately. I mean, can you really suggest -- I mean, they've cited the Black Lung Benefits Act and those have nothing to do with any of the things we are talking about.

MR. CLEMENT: Well, Mr. Chief Justice, they tried to make them germane. But I'm not here to tell you that -- some of their -- surely there are provisions that are just looking for the next legislative vehicle that is going to make it across the finish line and somebody's going to attach it to anything that is moving. I mean, I'll admit that.

But the question is when everything else from the center of the Act is interconnected and has to go, if you follow me that far, then the question is would you keep this hollowed-out shell?

JUSTICE SOTOMAYOR: Well, but it's not –

JUSTICE KENNEDY: But I'm still not sure, what is the test -- and this was the colloquy you had with Justice Scalia with the corn husker hypothetical. So I need to know what standard you are asking me to apply. Is it whether as a rational matter separate parts could still function, or does it focus on the intent of the Congress?

If you -- suppose you had party A wants proposal number 1, party B wants proposal number 2. Completely unrelated. One is airline rates, the other is milk regulation. And we -- and they decide them together. The procedural rules are these have to be voted on as one. They are both passed. Then one is declared unconstitutional. The other can operate completely independently. Now, we know that Congress would not have intended to pass one without the other. Is that the end of it, or is there some different test? Because we don't want to go into legislative history, that's intrusive, so we ask whether or not an objective -- as an objective rational matter one could function without -- I still don't know what the test is that we are supposed to apply. And this is the same question as Justice Scalia asked. Could you give me some help on that?

And to break in for a moment, Kennedy is definitely having trouble with the idea of picking and choosing parts of the law to keep.  Now that would be a good reason to skip the entire inquiry and just leave it all in place...  except as we will see even the liberal justices don’t want to see that.  Instead they advocated what you saw Sotomayor argue about—picking and choosing which parts would be thrown out.  But for the same analytical reasons, Kennedy might have a problem with that, too, and prefer to throw the whole law out over picking and choosing.

To continue the same exchange:

MR. CLEMENT: Sure. Justice Kennedy, the reality is I think this Court's opinions have at various times applied both strains of the analysis.

JUSTICE KENNEDY: And which one -- and what test do you suggest that we follow if we want to clarify our jurisprudence?

MR. CLEMENT: I'm -- I'm a big believer in objective tests, Justice Kennedy. I would be perfectly happy with you to apply a more textually based objective approach. I think there are certain justices that are more inclined to take more of a peek at legislative history, and I think if you look at the legislative history of this it would only fortify the conclusion that you would reach from a very objective textual inquiry. But I am happy to focus the Court on the objective textual inquiry.

Later on, Clement gave us a few examples where severability didn’t happen.  And he argues that Buckley could be cited as an example where the courts tried to use severability and it was a bad idea:

MR. CLEMENT:...I think there are more recent examples. A great example I think which sort of proves, and maybe is a segue to get to my broader point, is a case that involves a State statute, not a Federal statute, but I don't think anything turns on that, is Randall against Sorrell, where this Court struck down various provisions of the Vermont campaign finance law.

But there were other contribution provisions that were not touched by the theory that the Court used to strike down the contribution limits. But this Court at the end of the opinion said: There is no way to think that the Vermont legislator would have wanted these handful of provisions there on the contribution side, so we will strike down the whole thing.

And if I could make the broader point, I mean, I think the reason it makes sense in the democracy with separation of powers to in some cases sever the whole thing is because sometimes a half a loaf is worse. And a great example, if I dare say so, is Buckley. In Buckley this Court looked at a statute that tried to, in a coherent way, strike down limits on contributions and closely related expenditures.

This Court struck down the ban on expenditures, left the contribution ban in place, and for 4 decades Congress has tried to fix what's left of the statute, largely unsuccessfully, whereas it would have I think worked much better from a democratic and separation of powers standpoint if the Court would have said: Look, expenditures are -- you can't limit expenditures under the Constitution; the contribution provision is joined at the hip. Give Congress a chance to actually fix the problem [by striking down the entire law].

And as we will see several times there are references to the sheer massiveness of the law:

JUSTICE BREYER: Could I ask you one question, which is a practical question. I take as a given your answer to Justice Kennedy, you are saying let's look at it objectively and say what Congress has intended, okay? This is the mandate in the community, this is Titles I and II, the mandate, the community, pre-existing condition, okay? Here's the rest of it, you know, and when I look through the rest of it, I have all kinds of stuff in there. And I haven't read every word of that, I promise.

And that is a problem.  To jump a little ahead there is this exchange with Breyer:

JUSTICE BREYER: Could I ask you one question, which is a practical question. I take as a given your answer to Justice Kennedy, you are saying let's look at it objectively and say what Congress has intended, okay? This is the mandate in the community, this is Titles I and II, the mandate, the community, pre-existing condition, okay? Here's the rest of it, you know, and when I look through the rest of it, I have all kinds of stuff in there. And I haven't read every word of that, I promise. As you pointed out, there is biosimilarity, there is breast feeding, there is promoting nurses and doctors to serve underserved areas, there is the CLASS Act, etcetera.

What do you suggest we do? I mean, should we appoint a special master with an instruction? Should we go back to the district court? You haven't argued most of these. As I hear you now, you're pretty close to the SG. I mean, you'd like it all struck down, but we are supposed to apply the objective test. I don't know if you differ very much.

So what do you propose that we do other than spend a year reading all this and have you argument all this?

And they go on a bit about this, but you can see he is struggling himself with the enormity of the task.

And Roberts gets a little into the “sausage” of law making:

CHIEF JUSTICE ROBERTS: -- the -- the reality of the passage -- I mean, this was a piece of legislation which, there was -- had to be a concerted effort to gather enough votes so that it could be passed. And I suspect with a lot of these miscellaneous provisions that Justice Breyer was talking about, that was the price of the vote.

Put in the Indian health care provision and I will vote for the other 2700 pages. Put in the black lung provision, and I'll go along with it. That's why all -- many of these provisions I think were put in, not because they were unobjectionable. So presumably what Congress would have done is they wouldn't have been able to put together, cobble together, the votes to get it through.

Now here you get the first sign that Kennedy is leaning against severing any part of the law from the rest.  He is speaking now to Deputy Solicitor Genereal Kneedler

JUSTICE KENNEDY: 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 Act was -- 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 to strike -than striking the whole.

And we get a humorous reference to the size of the law and how it bears on the outcome of the case:

JUSTICE SCALIA: Mr. Kneedler, what happened to the Eighth Amendment? You really want us to go through these 2,700 pages?

(Laughter.)

Let me break in there and remind you that the Eighth Amendment is the prohibition on cruel and unusual punishment.  In case you didn’t know off hand.  Now you get the joke, although by now it probably isn’t funny anymore.

JUSTICE SCALIA: And do you really expect the Court to do that? Or do you expect us to -- to give this function to our law clerks?

Is this not totally unrealistic? That we are going to go through this enormous bill item by item and decide each one?

MR. KNEEDLER: Well –

JUSTICE SOTOMAYOR: I thought the answer was you don't have to because –

MR. KNEEDLER: Well, that is, that is the –

JUSTICE SOTOMAYOR: -- what we have to look at is what Congress said was essential, correct?

MR. KNEEDLER: That is correct, and I'd also like to -- going -- I just want to finish the thought I had about this being a matter of statutory interpretation. The Court's task, we submit, is not to look at the legislative process to see whether the bill would been -- would have passed or not based on the political situation at the time, which would basically convert the Court into a function such as a whip count. That is not the Court's –

JUSTICE KAGAN: And Mr. Kneedler, that would be a revolution –

MR. KNEEDLER: Yes.

JUSTICE KAGAN: -- in our severability law, wouldn't it?

MR. KNEEDLER: It would.

JUSTICE KAGAN: I mean, we have never suggested that we were going to say, look, this legislation was a brokered compromise and we are going to try to figure out exactly what would have happened in the complex parliamentary shenanigans that go on across the street and figure out whether they would have made a difference.

Instead, we look at the text that's actually given us. For some people, we look only at the text. It should be easy for Justice Scalia's clerks.

(Laughter.)

To break in again, that is a humorous reference to Scalia’s famous association with a “plain text” reading of the law that I mentioned above.  And do you see what I mean when I say they are funnier today?

The exchange concludes:

MR. KNEEDLER: I -- I think -- I think that -

JUSTICE SCALIA: I don't care whether it's easy for my clerks. I care whether it's easy for me.

(Laughter.)

Meanwhile, we learn that Justice Roberts may have actually read the entire law!  The poor man. He was asking the lawyer to tell him where he read that the law told him what was dependent on the mandate and what was not:

CHIEF JUSTICE ROBERTS: How do you know that? Where is this line? I looked through the whole Act, I didn't read -- well –

MR. KNEEDLER: It is in –

CHIEF JUSTICE ROBERTS: Where is the sharp line?

And it gets into another issue about information overload.  I cannot tell you how many times lay persons have asked me random questions about the law expecting me to know everything about everything, from wills and estates to real estate to contracts.  Folks, no lawyer knows all of the law.  They don’t even know all of the law applicable in their jurisdiction.  A lot of legal training isn’t teaching you the law so much as helping you learn to know out when it is time to look something up.  It is also about how to integrate what you learn about a specific area of the law into how one should think about the law.  It’s a bad cliché to say that law school teaches you how to think like a lawyer, but it is true.

But this particular statute is so enormous that it is almost impossible for anyone to really understand what all it does.  And that makes it difficult even picking and choosing what remains and what is thrown out.

And I think that bears on the next exchange:

JUSTICE SCALIA: Mr. Kneedler, can I -- can you give us a prior case in -- that -- that resembles this one in which we -- we are asked to strike down what the other side says is the heart of the Act and yet leave in -- as -- as you request, leave, in effect, the rest of it? Have we ever -- most of our severability cases, you know, involve one little aspect of the Act. The question is whether the rest. When have we ever really struck down what was the main purpose of the Act, and left the rest in effect?

MR. KNEEDLER: I think Booker is the best example of that. In -- in Booker the mandatory sentencing provisions were central to the act, but the Court said Congress would have preferred a statute without the mandatory provision in the Act, and the Court struck that but the rest of the sentencing guidelines remained.

JUSTICE SCALIA: I think the reason -- the reason the majority said that was they didn't think that what was essential to the Act was what had been stricken down, and that is the -- the ability of the judge to say on his own what -- what -- what the punishment would be. I don't think that's a case where we struck -- where we excised the heart of the statute.

To break in, I am not sure at this time what the Booker case is.  I might hunt it down and update this post withn an explanation.  But it probably relates to the upheaval in federal sentencing law when the Supreme Court ruled that the sentencing guidelines were unconstitutional (it’s a long story).  And if anyone knows, please share.

The exchange continues:

You have another one?

MR. KNEEDLER: There is no example –

JUSTICE SCALIA: There is no example. This is really –

MR. KNEEDLER: -- to our -- to our -- that we have found that suggests the contrary.

The sheer enormity of the task of picking and choosing what remains and what is thrown out leads Justice Breyer to a strange solution:

JUSTICE BREYER: I don't think it's not uncommon that Congress passes an act, and then there are many titles, and some of the titles have nothing to do with the other titles. That's a common thing. And you're saying you've never found an instance where they are all struck out when they have nothing to do with each other.

My question is, because I hear Mr. Clement saying something not too different from what you say. He talks about things at the periphery. We can't reject or accept an argument on severability because it's a lot of work for us. That's beside the point. But do you think that it's possible for you and Mr. Clement, on exploring this, to -- to get together and agree on –

(Laughter)

JUSTICE BREYER: -- I mean on -- on a list of things that are in both your opinions peripheral, then you would focus on those areas where one of you thinks it's peripheral and one of you thinks it's not peripheral. And at that point it might turn out to be far fewer than we are currently imagining. At which point we could hold an argument or figure out some way or somebody hold an argument and try to -- try to get those done.

Is -- is that a pipe dream or is that a –

And I think the answer is “yes, that was a complete non-starter.”  Just a gut feeling, but I think the idea fell utterly flat.  And I think if anything it hardened the belief of those who felt that this was not a task the courts were suited for—picking and choosing what remains.

And Mr. Keedler shows a dubious grasp of economics:

MR. KNEEDLER: Right. And -- and -- and I would like to discuss it again in terms of the text and structure of the Act. We have very important indications from the structure of this Act that the whole thing is not supposed to fall.

The -- the most basic one is, the notion that Congress would have intended the whole Act to fall if there couldn't be a minimum coverage provision is refuted by the fact that there are many, many provisions of this Act already in effect without a minimum coverage provision. Two point -- 2 and-a-half million people under 26 have gotten insurance by one of the insurance requirements. Three point two billion dollars –

JUSTICE SCALIA: Anticipation of the minimum coverage. That's going to bankrupt the insurance companies if not the States, unless this minimum coverage provision comes into effect.

MR. KNEEDLER: There is no reason to think it's going to -- it's going to bankrupt anyone. The costs will be set to cover those -- to cover those amounts.

JUSTICE SOTOMAYOR: I thought that the 26-year-olds were saying that they were healthy and didn't need insurance yesterday. So today they are going to bankrupt the –

And then it veers off subject for the time being, but it shows that Sotomayor gets the economic concern frankly better than Kneeler does.

Meanwhile, Roberts focuses on how to determine the purpose of a law.  And that is a bit of a term of art.  “Legislative intent” typically—though probably not strictly—refers to things like congressional reports, comments made in the debates (if any) and other extraneous material.  Meanwhile, when they talk about the “purpose” of a law, that is determined solely by looking at the text of a law and saying “looking at this text as evidence, what is Congress trying to do?”  And it appears that Roberts is respecting that nomenclature:

CHIEF JUSTICE ROBERTS: Well, that's right. But the problem is, straight from the title we have two complimentary purposes, patient protection and affordable care. And you can't look at something and say this promotes affordable care, therefore, it's consistent with Congress's intent. Because Congress had a balanced intent. You can't look at another provision and say this promotes patient protection without asking if it's affordable.

So, it seems to me what is going to promote Congress's purpose, that's just an inquiry that you can't carry out.

And once again, we see that Kneedler is having trouble with basic economics:

MR. KNEEDLER: No. Employer coverage -- 150 million people in this country already get their insurance through -- through their employers. What Congress did in seeking to augment that was to add a provision requiring employers to purchase insurance –

JUSTICE KENNEDY: Based on the assumption that the cost of those policies would be lowered by -by certain provisions which are by hypothesis -- we are not sure -- by hypothesis are in doubt.

MR. KNEEDLER: No, I -- I -- I think any cost assumptions -- there is no indication that Congress made any cost assumptions, but -- but there is no reason to think that the individual -- that the individual market, which is where the minimum coverage provision is directed, would affect that.

I would like to say -- I would point out why the other things would advance Congress's goal. The point here is that the package of three things would -would be contrary -- would run contrary to Congress's goal if you took out the minimum coverage provision. And here's why -- and this is reflected in the findings:

If you take out minimum coverage but leave in the guaranteed-issue and community-rating, you will make matters worse. Rates will go up, and people will be less -- fewer people covered in the individual market.

Next up we have Mr. Farr representing some amicus (essentially third parties).  I will be blunt and say I am not sure who he represents but it seems clear that he only wants the mandate struck down and nothing else, which was not a tenable position.  I didn’t hear any liberal support for that position.

And we get more economics, the liberals of the court really understanding that we can’t simply leave everything else in the law in place.  Which is important, because I really didn’t read the precedents as allowing them to pick and chose which parts to remain—my impression (and I could be wrong) was either all of it was severable, or none of it was.  And we also see that Mr. Farr doesn’t totally get the economics of it either.  Which is scary.  Look for the phrase “crashes and burns.”  To her credit, Kagan really gets the economics of the situation in a law that Mr. Farr doesn’t.

JUSTICE GINSBURG: One of the points that Mr. Kneedler made is that the price won't be affordable because -- he spoke of the adverse selection problem, that there would be so fewer people in there, the insurance companies are going to have to raise the premiums.

So it's nice that Congress made it possible for more people to be covered, but the reality is they won't because they won't be able to afford the premium.

MR. FARR: Well, Justice Ginsburg, let me say two things about that.

First of all, when we talk about premiums becoming less affordable, it's very important to keep in mind different groups of people, because it is not something that applies accurately to everybody.

For people who were not able to get insurance before, obviously, their insurance beforehand was -- the price was essentially infinite. They were not able to get it at any price. They will now be able to get it at a price that they can afford.

For people who are unhealthy and were able to get insurance, but perhaps not for the things that they were most concerned about, or only at very high rates, their rates will be lower under the system, even without the minimum coverage provision.

Also, you have a large number of people who, under the Act –

JUSTICE SCALIA: Excuse me, why do you say -- I didn't follow that. Why?

MR. FARR: Because –

JUSTICE SCALIA: Why would their rates be lower?

MR. FARR: Their rates are going to be lower than they were under the prior system because they are going into a pool of people, rather than -- some of whom are healthy, rather than having their rates set according to their individual health characteristics. That's why their rates were so high.

JUSTICE KAGAN: But the problem, Mr. Farr, isn't it, that they're going to a pool of people that will gradually get older and unhealthier. That's the way the thing works. Once you say that the insurance companies have to cover all of the sick people and all of the old people, the rates climb. More and more young people and healthy people say, why should we participate, we can just get it later when we get sick. So they leave the market, the rates go up further, more people leave the market, and the whole system crashes and burns, becomes unsustainable.

MR. FARR: Well –

JUSTICE KAGAN: And this is not –

MR. FARR: Certainly.

JUSTICE KAGAN: -- like what I think. What do I know? It's just what's reflected in Congress's findings, that it's look -- it looks at some states and says, this system crashed and burned. It looked at another state with the minimum coverage provision and said, this one seems to work. So we will package the minimum coverage provision with the nondiscrimination provisions.

But there is a dark side to her deep understanding of healthcare law and economics.  Does anyone really believe that she would not have been in on the discussion of the defense of Obamacare, if she understood that much about the law.  It’s not clear proof, but it bolsters the belief that she should have sat that out.  And I say that not wanting any justices to sit this out, believing that that a 4-4 split is actually worse than a loss.

And Scalia gets in a joke about the Federal Budget:

JUSTICE SCALIA: And there is nothing about federal support that is unsustainable, right? That is infinite.

It’s not noted, but there was an amount of laughter after that comment.

Here’s an example where Scalia brings out his attachment to a plain text approach.  Farr is arguing that the parts of the act that are claimed to be “essential” are not actually essential:

MR. FARR: The reason is because the word "essential" in the Commerce Clause context doesn't have the colloquial meaning. In the Commerce Clause context "essential" effectively means useful. So that when one says in Lopez, when the Court says section 922(q) is not an essential part of a larger regulatory scheme of economic activity, it goes on to say, in which the regulatory scheme would be undercut if we didn't have this provision.

Well, if that's all Congress means, I agree with that. The system will be undercut somewhat if you don't have the minimum coverage provision. It's like the word "necessary" in the Necessary and Proper Clause clause. It doesn't mean, as the Court has said on numerous occasions, absolutely necessary. It means conducive to, useful, advancing the objectives, advancing the aims. And it's easy to see, I think, that that's what Congress –

JUSTICE SCALIA: Is there any dictionary that gives that –

MR. FARR: I'm sorry, Justice Scalia?

JUSTICE SCALIA: -- that definition of "essential"? It's very imaginative. Just give me one dictionary.

MR. FARR: Well, but I think my point, Justice Scalia, is that they are not using it in the true dictionary sense.

JUSTICE SCALIA: How do we know that? When people speak, I assume they are speaking English.

But to be fair to Mr. Farr, Scalia himself will deviate to a degree from plain text.  For instance yesterday when talking about the necessary and proper clause, he admitted that “necessary” could mean merely “useful.”  But in that case Scalia was following what the Supreme Court itself said in McCulloch v. Maryland.  So in the constitutional context “necessary” had meant “useful” for well over 200 years and I think it is fair to say that Scalia will follow deeply ingrained precedent like that even when he disagrees with it.

Moving on, you can see that Kennedy is very troubled by the idea of leaving everything but the mandate in place:

JUSTICE KENNEDY: So do you want us to write an opinion saying we have concluded that there is an insignificant risk of a substantial adverse effect on the insurance companies, that's our economic conclusion, and therefore not severable? That's what you want me to say?

MR. FARR: It doesn't sound right the way you say it, Justice Kennedy.

(Laughter.)

Uh, no it doesn’t.

And in this exchange I saw the specter of extreme crony capitalism:

CHIEF JUSTICE ROBERTS: But if the challenge is what we're questioning today, whether -- if you're an insurance company and you don't believe that you can give the coverage in the way Congress mandated it without the individual mandate, what -- what type of action do you bring in a court?

MR. FARR: You -- if the Court follows the course that I'm advocating, you do not bring an action in court, you go to Congress and you seek a change from Congress to say the minimum coverage provision has been struck down by the Court, here is our -- here -- here's the information that we have to show you what the risks are going to be. Here are the adjustments you need to make.

One of the questions earlier pointed out that States have adjusted their systems as they've gone along, as they've seen things work or not work.

You know, as I was talking earlier about the -- the different ratio for -- for ages and insurance. The States have tended to change that, because they've found that having too narrow a band worked against the effectiveness of -- of their programs. But they did -except for in Massachusetts, they didn't enact mandates.

So to answer -- I think to answer your question directly, Mr. Chief Justice, the position I'm advocating would simply have those -- those pleas go to Congress, not in court.

The fact is that without the mandate this law will drive the insurance industry into bankruptcy.  Now every time I say that a few liberals say “good, the hell with them.”  But even if you don’t like the insurance industry, it is not a good idea to destroy that much wealth in the middle of a recession.

The danger here is that if the mandate is struck down, but all the industry-bankrupting provisions remain, then they will have to go to Congress and beg them to change the law.  And then in turn, Congress will ask for a pound of flesh.  The danger of corruption in such a circumstance is massive, because it is a life and death issue for an entire industry.

And Kagan gives some support for the “heart of the law” approach.

JUSTICE KAGAN: Mr. Farr, I understood that the answer that you gave to Justice Scalia was essentially that the minimum coverage provision was not the heart of the Act. Instead, the minimum coverage provision was a tool to make the nondiscrimination provisions, community rating guaranteed-issue, work.

So if you assume that, that all the minimum coverage is is a tool to make those provisions work, then I guess I would refocus Justice Scalia's question and say, if we know that something is just a tool to make other provisions work, shouldn't that be the case in which those other provisions are severed along with the tool?

And of course the realities of legislation crept in in another way, in this exchange:

MR. FARR: Well, Justice Breyer, I think what I would say is if one goes back to the, what I think is the proper severability standard and say, would Congress rather have not -- no bill as opposed to the bill with whatever is severed from it. It seems to me when you are talking about provisions that don't have anything to do with the minimum coverage provision, there is no reason to answer that question as any other way than yes, Congress would have wanted the –

JUSTICE KENNEDY: The -- the real Congress or a hypothetical Congress? (Laughter.)

MR. FARR: An objective Congress, Your Honor, not the -- specific not with a vote count.

It’s a false analysis.  When a law passes by one vote in the senate, then every single vote is determinative and every single “Cornhusker Kickback” is vital to getting the law passed.

Finally Clement gets up in rebuttal:

Now, that bring me to my first point in rebuttal, which is Mr. Kneedler says quite correctly, tells this Court, don't look at the budgetary implications. The problem with that, though, is once it's common ground, that the individual mandate is in the statute at least in part to make community rating and guaranteed-issue affordable, that really is all you have to identify. That establishes the essential link that it's there to pay for it. You don't have to figure out exactly how much that is and which box -- I mean, it clearly is a substantial part of it, because what they were trying to do was take healthy individuals and put them into the risk pool, and this is quoting their finding, which is in order -- they put people into the market "which will lower premiums." So that's what their intent was.

So you don't have to get to the -- the final number. You know that's what was going on here, and that's reason alone [not] to sever it.

And that is pretty much it.  Clement argued that once you took out the mandate, and the provisions dependent on the mandate, you had taken the heart out of the bill and therefore it was inappropriate to simply sever them out and keep the rest.

I think provisionally that the conservative justices were convinced.  I would even say that Breyer’s bad idea about appointing a special master actually harmed his case, because it demonstrated just where it leads when they try to pick and choose what is severable.

But let me get philosophical on one point before I close this out.  Should it even be severable?  The reality is that Congress passes these laws and in the middle of it is an earmark for this pork barrel project or that or just a provision on one Congressman’s pet concern or another.  On one hand, the severability doctrine is a way of dealing with that reality—the more stuff that is in a bill, the less likely it is for every single provision to be constitutional.  On the other hand, a severability rule helps make that kind of thing possible.  If one unconstitutional provision in a law made the whole thing crash down, then wouldn’t Congress pass simpler laws and make sure they stay more focused on the subject?

Plus to a certain degree it is not fair.  For instance a congressperson might strike a bargin where a law will include another congressperson’s pork barrel in exchange for a civil rights statute addressing violence against gay people based on their sexual preference.  Then the Supreme Court strikes down anti-gay violence provision, and severs it from the pork barrel, giving the arguably more corrupt politician the benefit of his or her bargain without the downside.  That hardly seems fair.

And indeed, it also encourages Congress not to do its job in ensuring that it only pass constitutional laws.  For instance a corrupt politician could agree to sign on to an anti-flag burning law, in exchange for some pork barrel spending, confident that the anti-flag burning provision will be struck down and severed from the stuff he wants.  And even when the congressperson has better motives, the belief that the courts will do their job for them emboldens Congress.  Nancy Pelosi was once shown to be so clueless about the Constitution that she didn’t even believe that the issue was a serious question.  Perhaps if we got rid of the severability doctrine and simply struck down all of a bill or none of it, she would have learned a little more about the Constitution and what the Supreme Court has said about it, and maybe they wouldn’t have even tried this in the first place.

But then again, sometimes a bill really does need to be legitimately big.  And again the chances that all of it would be constitutional gets smaller the larger the bill is.

And just tonight I was talking with Patrick Frey of Patterico and he made another point: that the fact that Congress failed to include a severability provision in the statute should mean it cannot be severed.  Of course there is a question of whether that was a mistake or not, and whether Congress should suffer the consequences of its own mistakes.  And we should consider the possibility that it was not a mistake, but as a signal to us that they wanted the whole thing to rise and fall as one.  I can see the merit in that approach, but I haven’t decided how I feel about it.

So I admit I am of two minds on the subject.

So on to the next one.  I kind of have it half written in my mind and I’ll give you a hint of my theme.  Ask yourself this: what movie starred Woody Harrelson, Demi Moore and Robert Redford?  The answer is a clue to my thinking on the next section.

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Follow me at Twitter @aaronworthing, mostly for snark and site updates.  And you can purchase my book (or borrow it for free if you have Amazon Prime), Archangel: A Novel of Alternate, Recent History here.  And you can read a little more about my novel, here.

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