ACA@Ct, Day 2 Surprises: Kennedy Hostile But Still Swingy? Gov’t Blew the “Tax” Argument? Sotomayor, Breakout Star?

Cross-posted from the blog Concurring Opinions.

posted by Scott Moss

Wow! Pre-Tuesday handicapping: only a subset of conservative Republican judges/commentators deem the law unconstitutional (e.g., Judges Sutton & Wilkinson; Charles Fried), so it’s hard to see the challengers “running the table” with all five Republican Justices — not only Justice Kennedy but also Justices Scalia & Roberts, who previously accepted that the “Commerce” power expands broadly to justify any “Necessary and Proper” supporting laws. Detailed Tuesday argument summaries are available elsewhere, so I’ll make just three key points: (1) Kennedy is not a foregone conclusion; (2) but the administration may have blown its “Tax power” argument; and (3) with each Justice serving largely as a well-prepared interrogator for one side, Sotomayor was the breakout star for supporting the government’s view – hinting she may be the Court’s most powerful voice on the left in the coming years.


(1) I disagree with Jeffrey Toobin (and others) declaring Kennedy now a “lost cause” for the government. Yes, Kennedy wore his heart on his sleeve rather than play devil’s advocate: “the reason this is concerning, is … it requires the individual to do an affirmative act. … the government is … tell[ing] the individual citizen that it must act, and that is different from what we have in previous cases and that changes the relationship of the Federal Government to the individual in [a] very fundamental way.” But Kennedy still could vote to uphold based on two arguments that, interestingly, the other notionally winnable vote for the government, Roberts, seemed to reject.

• First, Kennedy closed with cryptic receptiveness to the Commerce argument (which I now give SG Verrelli credit for stressing) that insurance is a unique market justifying uniquely intrusive regulation: “MR. CARVIN: … [F]ailure to buy health insurance doesn’t affect anyone. Defaulting on your payments … does. Congress chose … not to regulate the harmful activity of defaulting …. They used the 20 percent … among the uninsured as a leverage to regulate the 100 percent …. JUSTICE KENNEDY: … I agree …. And the government tells us that’s because the insurance market is unique. And in the next case, it’ll say the next market is unique. But I think it is true that if most questions in life are matters of degree, in the insurance and health care world, … the young person who is uninsured is uniquely proximately very close to affecting the rates of insurance and … medical care in a way that is not true in other industries. That’s my concern.” Notably, Roberts opined otherwise: “I don’t see how we can accept … in this case to say oh, it’s just insurance.”

• Second, most of Kennedy’s negativity was on the Commerce power; even more cryptically, he was arguably receptive to the Tax power argument that Congress could tax to create wholly governmental health care, and arguably “this is what the government is doing” here, so it should have “latitude” to structure the law as it did: “[L]et’s assume [Congress] can use the tax power to raise revenue and to just have a national health service…. [I]t can be argued that this is what the government is doing; it ought to be honest about the power that it’s using and use the correct power. On the other hand, it means that since … Congress can do it anyway, we give a certain amount of latitude.” But again, Roberts seemed to balk at this Kennedy argument: “You’re telling me they thought of it as a tax…. Why didn’t they say it was a tax?”

(2) The government may well lose because of its politically motivated refusal to espouse the it’s-a-tax view that would have let the government more clearly say that this law, like thousands of other tax subsidies, just makes your taxes lower if you buy health insurance, higher if you don’t. Justices across the spectrum pounded the government’s politically motivated denials that the mandate “penalty” is a “tax”: Roberts, “why didn’t they say it was a tax?”; Scalia, “the President said it wasn’t a tax, didn’t he?; Kagan, “Congress determinedly said this is not a tax, and the question is why should that be irrelevant?”; Ginsburg, “But yesterday you told me — you listed a number of penalties that are enforced through the tax code that are not taxes and they are not penalties related to taxes.” Notably, only Alito and Scalia expressed any skepticism of the Tax power argument beyond this why-not-say-“tax” point, so we still have little feedback on the Tax power –other than that the government increased its risk of losing by only half-embracing that argument.

(3) Justice Sotomayor was a stellar interrogator, not only giving effectively succinct summaries of the government’s views, but peppering the challengers with questions forcing them into concessions that, while not dispositive, are quite helpful to the government:

• Concession that Congress can mandate insurance for those who consume health services — and that “virtually everyone” does so consume: “JUSTICE SOTOMAYOR: Do you accept … [the government’s] position that you have conceded that Congress could say, if you’re going to consume health services, you have to pay by way of insurance? MR. CLEMENT: That’s right ….” JUSTICE SOTOMAYOR: But … the given is that virtually everyone … will use health care. MR. CLEMENT: At some point, that’s right ….”

• Concession that Congress might change individuals’ tax burden based on whether they buy health insurance: “JUSTICE SOTOMAYOR: … Could the government say, everybody pays a shared health care responsibility payment to offset all the money that we are forced to spend on health care … ; but, anybody who has an insurance policy is exempt … ? MR. CLEMENT: The government might be able to do that. I think it might raise some issues about whether or not that would be a valid exercise of the taxing power. … JUSTICE SOTOMAYOR: We get tax credits for having solar-powered homes. We get tax credits for using fuel efficient cars. Why couldn’t we get a tax credit for having health insurance and saving the government from caring for us…[?]”

Two other concessions Justice Sotomayor procured seem smartly targeted to Justice Kennedy’s concerns:

• Concession that “Congress can tax everybody and set up a public health care system,” paralleling Justice Kennedy, who mused that that Congress could tax to create pure government-run health care, so it should have “latitude” with this law: “JUSTICE SOTOMAYOR: … I want to understand the choices you’re saying Congress has. Congress can tax everybody and set up a public health care system. MR. CARVIN: Yes. …

• Concession that “states could pass this mandate,” which undercuts Kennedy’s concern that “when you are changing the relation of the individual to the government in … , I think, a unique way”: “JUSTICE SOTOMAYOR: … [D]o you think the States could pass this mandate[?] MR. CLEMENT: I represent 26 States. I do think the States could pass this mandate….”

Sotomayor has drawn loudly whispered criticisms of her skills. But having litigated a fair bit in Sotomayor’s old court (the Second Circuit), I was more bullish on her from the start, and I’m heartened by today’s argument; she may already be emerging as the judicial left’s most powerful interrogator and voice.

At the risk of sounding picky, I’ll close by noting that Paul Clement, golden child of the conservative legal movement, showed odd inability to speak with proper subject-verb agreement, having answered two of the first few questions with, “there is two points to make on that,” and, shortly thereafter, “there is at least two problems.” Admittedly, transcripts can be unkind to even the best advocates; in the heat of argument, half-finished sentences give way to new thoughts, mangling sentence structure in the interest of swiftly switching to new points. But quickly repeated singular-versus-plural disagreement – “there is two” – is striking enough to be surprisingly disappointing from a pro, and notional rising star, like Clement.