Notice & Comment

Beyond an Originalist Consensus: Our Chief Justice and the Importance of Careful Legal Reasoning, by Robert R. Gasaway

Professor Adrian Vermeule’s recent essay, “Beyond Originalism,” has sparked an effervescent response from myriad points of view. With a notable exception, the response has been disapproving, whether written from a perspective of linguistic originalismrights originalism, or anti-originalism. Compared with such reproaches, an appraisal appears favorable in (mis)reading the essay as a one big spoof.

This essay does not add to the burgeoning literature of “Beyond Originalism” criticism. It emphasizes, rather, that criticisms must be fair-minded enough to appreciate opposing views and that rejoinders hit their mark only when supported by sound reasoning and sufficient evidence. As we originalists (I count myself in their number) man rhetorical ramparts to repel a takeover by an anti-originalist conservatism, I aim to offer perspective by calling to mind another occasion on which originalists similarly stood almost unanimous in disapproval. I refer of course to the widespread assessment of the Roberts Court’s most prominent decision thus far—NFIB v. Sebelius.  

Sebelius, you recall, is the 2012 decision upholding the Affordable Care Act’s so-called individual-mandate. In enacting this signature legislation of the Obama Administration, Congress initially framed the ACA as imposing a regulatory mandate requiring individuals to buy health insurance. After finding that framing infirm as a purported exercise of Congress’s commerce power, an opinion by Chief Justice Roberts reframed the mandate as a substantively equivalent tax and upheld it under the taxing power.  

Read properly, Chief Justice Roberts’s opinion shows itself an underappreciated masterpiece. More important, the opinion’s undeserved reputation as mere political theater has spawned vital misunderstandings, especially among originalists. In the standard originalist account, Sebelius lays bare the truth of Chief Justice’s jurisprudential commitments—that they, like those of the academic left, and Professor Vermeule, are importantly Dworkinian in method and approach. Now, after a change in administration, and an interval for tempers to cool, it may be time at last for reviewing Sebelius by its own true lights. 

Failing Your Own Test 

The crux of Chief Justice Roberts’s taxing-power analysis in Sebelius is specification of four or so (depends on how you count) criteria for distinguishing taxes from regulatory provisions. Building on this terra firma, the Chief Justice emphasizes that “the question of the constitutionality of action taken by Congress does not depend on recitals of the power which it undertakes to exercise” and that it is the substantive operation of a law that matters for purposes of enumerated-powers analysis, not “labels” and “designations.”  

On this basis, and after finding the ACA’s mandate satisfies all criteria found in prior cases for distinguishing taxes from non-tax regulations, and candidly acknowledging that the ACA exaction was initially framed as a health-insurance mandate, the Chief Justice reframes the mandate as an  absence-of-health-insurance tax to save it from invalidation.    

A four-justice joint dissent (signed by Justices Scalia, Kennedy, Thomas, and Alito) responds to this analysis, but not by contesting links in its chain of reasoning. Instead, it forwards an alternative paradigm rooted in a supposed mutual exclusivity between “a penalty for constitutional purposes” and “tax for constitutional purposes.” The opinion opens with a memorable paragraph pronounced in the voice of Justice Scalia: 

The Government contends[,] as expressed in the caption to Part II of its brief, that ‘‘THE MINIMUM COVERAGE PROVISION IS INDEPENDENTLY AUTHORIZED BY CONGRESS’S TAXING POWER.’’ [The] phrase ‘‘independently authorized’’ suggests the existence of a creature never hitherto seen in the United States Reports:  A penalty for constitutional purposes that is also a tax for constitutional purposes.  In all our cases the two are mutually exclusive.  The provision challenged under the Constitution is either a penalty or else a tax.  

The most surprising thing about this opening is not the novelty of justices suggesting edits for a party’s briefing. Even more surprising is the uneven quality of the suggested edits. Without reference—either in the opening or elsewhere—to previously articulated constitutional principle, historical evidence, or even constitutional text, the dissent contends, a “provision challenged under the Constitution is either a penalty or else a tax” because “the two are mutually exclusive.” That assertion, as explained below, is never properly vindicated. 

The dissent’s opening closes with an observation, “The issue is not whether Congress had the power to frame the minimum-coverage provision as a tax, but whether it did so.” That proposition, it happens, is congruent with grounds seized by the Roberts opinion. The Chief Justice could not say more emphatically that substance, not “designations” and “labels,” controls the framing inquiry on which the dissent insists. 

And the legitimacy of the reframing performed by the Roberts opinion turns on an absolute, substantive preservation of Congress’s initial framing of the mandate in the Court’s reframed tax. The Chief Justice picks up the dissent’s gauntlet and essentially passes the dissent’s test. 

Ipse Dixit

We tarry now to appreciate how unexpected it is that eminent justices should suggest in any fashion that the enumeration of powers of Article, I Section 8 constitutes a “mutually exclusive” listing. 

Such either/or exclusivity is refuted, as an initial matter, by the dissent’s own insistence in an earlier Commerce Clause discussion that the Constitution “enumerates not federally soluble problems, but federally available powers” (emphasis in original). As the passage explains, “the Federal Government can address whatever problems it wants but can bring to their solution only those powers [plural] that the Constitution confers, among which is the power to regulate commerce” (emphasis in original).

Just so. Article I, Section 8’s enumeration enables Congress, as a matter of discretion, to “bring to the solution” of healthcare-availability problems “the power to regulate commerce,” the power “to lay and collect taxes,” and any other “powers [plural] that the Constitution confers,” in that section or elsewhere. And, should it so desire, Congress may wield any or all of those powers—as many as ever it might want—simultaneously in the same statute or set of statutory provisions.

Consider, as an example, a GI Bill-type student-loan program providing that delinquent balances may not be discharged in bankruptcy. Such a program, and its provisions, could be sustained under the constitutional powers to raise armies, tax and spend, and (or) establish uniform rules for bankruptcies. If subject to challenge, the government would not have to rest a defense on one and only one source of constitutional authority.  

There remains a possibility that there could be some real-world, as distinct from constitutional, “mutual exclusivity” between taxes and commercial regulations. In fact, however, regulatory taxation of commercial activity not only exists, it bears its own name, “Pigouvian taxation,” after economist A.C. Pigou. The Chief Justice’s opinion appeals to this concept, without invoking the technical term: “Today, federal and state taxes can compose more than half the retail price of cigarettes, not just to raise more money, but to encourage people to quit smoking.”  

A more pointed formulation of the same idea might say the following: “Today, federal and state taxes can compose more than half the retail price of cigarettes—quite possibly discouraging sales and encouraging tax evasion to the point where tax revenues are sacrificed—all in a perfectly reasonable, constitutionally unexceptional effort to encourage people to quit smoking.” Either way, the upshot is that something the dissent appears to describe as an impossible “mutual exclusivity” may well be exemplified around every corner, just behind the counter at the convenience store.

Consider also, just to drive the nail deeper, a case where legislators decide that emissions from sources releasing 100 tons of pollutant should be cut in half. Suppose analysis convinces our legislators that 80 tons would be emitted at a revenue-maximizing rate of taxation imposed on these sources. Our legislators decide nonetheless—consciously, deliberately—to tax at a higher rate so that emission of only 50 tons is expected.  What kind of “creature” is this?  

Surely, it’s a tax, for it is not subject to a scienter limitation (a limitation to those who knowingly emit); or collateral consequences beyond making payment (say, liability for environmental crimes); and the requirement to make payment will bring money to government coffers. Surely, also, it is a commercial regulation. Legislators chose to “regulate” emissions to a level of around 50 tons by “paying” the difference between the maximum potential revenue from this kind of tax on these sources and the smaller sum anticipated at a higher, less lucrative, more disincentivizing rate. Yes indeed, there is such a creature as a regulatory tax.          

Nor, finally, is it worrisome that a chain of constitutional logic unspooled by the Chief Justice may have been a Supreme Court debutante on June 28, 2012. The dissent insists that as of that date regulatory taxes were “a creature never hitherto seen in the United States Reports.” If so, so what? Those creatures are valid under the Article I taxing power. The fact such a program, or reasoning vindicating it, first appeared in Sebelius would mean at most that in one more respect Sebelius presents what the dissent elsewhere calls “questions of first impression.” An issue of first impression cannot excuse the dissent’s crucial ipse dixit: “a penalty for constitutional purposes [and] a tax for constitutional purposes [are] mutually exclusive.”  

Not a Rewrite

So much for the inexcusable. Now for the notorious; namely, the “rewrite” accusation that resonates with many originalists. That charge was first advanced in the dissent’s insistence that “to say that the Individual Mandate merely imposes a tax is not to interpret the statute but to rewrite it.”  Can that be totally wrong?  

Yes, it can. The defect of the charge is this: The reframed tax operates in each and every instance exactly like the enacted mandate. That is no rewrite. The next time a superstar bulldozes his way to the front office demanding a “rewrite” of his contract, he won’t be referring to non-substantive changes.

A convenient way to pose the rewrite question in legal terms is to ask, is this judicial legislation? Courts address the problem of identifying what is and is not legislation by ascertaining whether a challenged action altered legal rights, duties, or relations of government officers or private persons.  

According to this definition, the dissent fails to substantiate its accusation. To prove an act of judicial legislation, it was incumbent on the dissent to identify at least one instance where private legal duties, liabilities, or relations, or else binding requirements on government practices, were changed in the process of reframing the ACA exaction from mandate to tax. The dissent fails to undertake, much less complete, this task. It fails to substantiate its denunciation.  

Apparent Confusion

Seen from a different angle, the dissent’s confusion is evident in this pronouncement:

In a few cases, this Court has held that a ‘‘tax’’ imposed upon private conduct was so onerous as to be in effect a penalty. But we have never held—never—that a penalty imposed for violation of the law was so trivial as to be in effect a tax.  

But the Roberts opinion never claims—never—that the penalty attached to the mandate is “so trivial as to be in effect a tax.” In terms of a quantification, the opinion says essentially that “the penalty will be 2.5 percent of an individual’s household income” and is “expected to raise about $4 billion per year.” No judge would deem trivial such an exaction.  

To be fair to the dissent, it is trying in this passage to elicit principles of law from a string of precedent and not to respond to the majority opinion. But although backlit by being thrice emphasized (by italicization, word-repetition and dashed set-off), the relevance of the dissent’s reference to penalties “so trivial” remains underdeveloped and unclear. What the dissent denounces—briefly, curiously, emphatically—is an argument not made.

Vexing Trilemma 

In contrast to most originalists, a minority is prepared to believe that Congress, acting on expert advice, deftly framed its health-care exaction as an amphibious reform vehicle capable of landing on whatever constitutional grounds the Justices made available.  

On this view, the taxing-power outcome was foreseeable. And the case was bound to be won and lost on the ensuing issue of direct-tax apportionment. Chief Justice Roberts tees the issue up as follows: 

Plaintiffs argue [the individual mandate does not comply with] Article I, § 9, clause 4 [which] means that any “direct Tax” must be apportioned so that each State pays in proportion to its population. According to the plaintiffs, if the individual mandate imposes a tax, it is a direct tax, and it is unconstitutional.

What the Chief Justice in all politeness does not say is that the direct-tax argument, buried deep under layers of (high-quality) advocacy on other issues, was presented too equivocally and perfunctorily to provide a pivot for a landmark decision. Now what?   

On one hand, the Court might have found that plaintiffs had waived claims arising under Article I, Section 9, clause 4. The problem with finding waiver was that only the rare novelty and complexity of the question made plaintiffs’ arguments inadequate, not their treatment of the issue per se. To find waiver would have been grossly unfair and perhaps would have invited unmeritorious waiver contentions in future cases.

On a second hand, the Court might have resolved the issue on its own devices. The problem with self-help was that Sebelius was argued late in the Term; involved difficult, momentous issues; and closely divided the Court. The chances of hurriedly finding a five-justice resolution capable of withstanding scrutiny would have been small.  

On a third hand, the Court might have requested supplemental briefing limited to the direct-tax issue—an option favored by the dissent. The problem with this approach was guaranteed delay, likely for a full year, in resolving a case foundational for a sector accounting for one sixth of America’s economy.      

534-Word Melody

The Chief Justice’s resolution of the waiver trilemma is a judicial lullaby worthy of a successor to the Great Chief Justice. The basic notion is that parties that raise issues without developing them may pursue their claims, but they will carry the day only if the claim is a lay-down winner. The direct-tax discussion concludes as follows:

A tax on going without health insurance does not fall within any recognized category of direct tax. [The] shared responsibility payment is thus not a direct tax that must be apportioned among the several States.

Of the 534 words in the complete discussion, fully 533 are nearly beyond disputing; only the pregnant “thus” in the last sentence might be a subject of fervent objection. Softly, gently, challengers are reminded that they must carry the full burden of invalidating a federal statute. Subtly, imperceptibly, the Court’s predicament is defused.   

Janus Face

Justice Ginsburg, contesting the Roberts analysis from an opposite direction, contends that the Chief Justice ought to have proceeded straight to the dispositive taxing-power question, omitting analysis under other theories. 

The Chief Justice responds:

It is only because the Commerce Clause does not authorize [a command to buy insurance] that it is necessary to reach the taxing power question.  And it is only because we have a duty to construe a statute to save it, if fairly possible, that [the exaction] can be interpreted as a tax. Without deciding the Commerce Clause question, I would find no basis to adopt such a saving construction. 

As a rejoinder, Justice Ginsburg protests, “I see no reason to undertake a Commerce Clause analysis that is not outcome determinative.” 

The flaw in the rejoinder is the word “undertake.” Where alternative theories are before the Court, and a law need pass muster under only one, a theory can become “outcome determinative” only after the law has been scrutinized and found wanting under all sibling theories. In Sebelius, without actually “undertaking” “Commerce Clause analysis,” there was no way to know whether or not the analysis would determine the outcome. Its outcome-non-determinativeness became clear only after it had been undertaken. 

Moreover, it is uncertain what Justice Ginsburg proposes. It would be unthinkable to dive headlong, without explanation, into taxing-power analysis of provisions so clearly framed as a mandate. And surely she would not suggest performing behind-the-scenes Commerce Clause analysis that is omitted from a published opinion. The Court’s review had to start someplace and proceed in the light of day by tackling one or the other sibling theory.  Chief Justice Roberts rightly begins with the one that leaps from the page of the statute book.

Who Is this Guy?

Now, the patient reader may protest: Are we truly to understand that, while eight other justices wander off in multiple directions, the Chief, even-temperedly works through issue after tricky issue, dispensing Platonic justice, and softly, gently composing melodies for his glorious predecessor?  Who is he, Solomon?

Not quite. Our Chief Justice does make missteps, including, it would appear, in devising a hypothetical example of an exaction similar to an absence-of-insurance tax. Surprisingly, the hypothetical the Chief posits may well be a targeted tax on certain real-property improvements; hence, an invalid direct tax on real estate. If so, this would undercut the Chief’s purposes of establishing that one can readily imagine levies on inactivity that comply with the Constitution. 

Although this apparent lapse does not undermine his opinion—it goes mostly to the strength of direct-tax arguments rejected as underdeveloped—it does tend to show that, like his colleagues, the Chief Justice is not immune from the occasional oversight.  

Vital Trichotomy

The Sebelius case is over. The mandate is zeroed out. The follow-on case coming up next term will likely go nowhere. Why replow old ground? Why do we care?

The answer begins with improving the lawyerly discernment of even the most experienced observers of the Court. The Sebelius outcome, as far as the individual mandate is concerned, hinged on four key words that only a handful of readers are likely to have identified. Now everyone can know them: “undertake,” “thus,” “mutually exclusive.” 

More crucial, however, is Sebelius’s perceptual trichotomy. If you are familiar with Sebelius in any detail—and especially if you are concerned with it deeply—your perception of its outcome will fall in one of three directions.    

         Perhaps you conclude the statutory elements furnishing the occasion for reframing the mandate as a tax, and thus saving it, were all embedded in statute by happenstance, and skilled lawyers discovered and exploited these happy accidents only in the course of litigation. This is the Lucky Lawyers theory.

         Alternatively, you might think those elements were baked deliberately into the statute, awaiting exploitation by skilled lawyers who knew all along they were there. This is the Amphibious Reform theory.

Finally, you could think that there was no legitimate occasion for a reframing, and the reframing that occurred reflects mistake, weakness of will, political calculus, or the like. This is the Chief Justice Found Wanting theory.

Wherever one lands within this trichotomy, that place becomes, quite literally, vital. It lives, it begets other opinions. If, for whatever reasons, you subscribe to Found Wanting theory—the default position for originalists—you to tend believe related things about the Court that may or may not be true. You may even lose confidence in the Court as an institution and embrace that dangerous misconception, widely believed by politicians, political scientists, and elite attorneys, that law in the eyes of judges is at bottom politics.  

One objective of this essay is to change minds among the brotherhood of Found Wanting theorists. The Chief Justice’s opinion is not perfect. But it has the incalculable virtue, unique among nine justices, of being right on both the taxing-power question and the order-of-adjudication question, notwithstanding its execution under extreme time-pressure in a case of landmark importance.

Mr. Chief Justice, we salute you.

Robert R. Gasaway is the James L. Buckley Distinguished Fellow at the Smith Institute for Political Economy and Philosophy at Chapman University.  Rob spent twenty-five years at Kirkland & Ellis LLP, where he served as lead attorney in many important matters, and has served as Lecturer in Law at the University of Chicago Law School.  He holds a J.D. from the University of Chicago, an M.A. and M.Phil from Yale, and a B.A. in economics from Northwestern.

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