The Incidental Unconstitutionality of the Individual Mandate

Gary S. Lawson & David B. Kopel

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The Solicitor General’s recent brief to the Supreme Court arguing for the constitutionality of the Patient Protection and Affordable Care Act (PPACA) confidently concludes that the Constitution’s Necessary and Proper Clause confers broad authority upon Congress to enact the so-called “individual mandate” (or “minimum coverage provision”1). According to the Solicitor General, “[t]he minimum coverage provision is necessary to make effective the Act’s core reforms of the insurance market.”2 Moreover, “requiring individuals to maintain health insurance is a proper means of regulating payment . . . for health care services.”3 Academic commentators assert this claim even more assuredly.4 In The Yale Law Journal Online, Professor Andrew Koppelman goes so far as to suggest that the Necessary and Proper Clause so clearly validates PPACA that arguments to the contrary are “silly,” “radical,” and “destructive.”5 But careful study of the Clause’s origin, purpose, and meaning leads to a contrary conclusion. If the individual mandate is constitutional, it is not by virtue of the Necessary and Proper Clause.


I. The Common Law of Agency in the Eighteenth Century

To understand why the Necessary and Proper Clause does not authorize the individual mandate, one must understand the Clause’s origins in agency law. Those origins, as illuminated in pioneering research by Robert G. Natelson,6 demonstrate that the first question to ask is not whether the mandate is useful  to the accomplishment of some permissible governmental end .Under the original meaning of “necessary and proper,” the only implied power which can qualify as “necessary” is a power which is “incidental”—in other words, a power inferior or subordinate to an enumerated principal power.

The law of agency was central to legal and economic life in the Founding era. Ordinary citizens often employed agents such as managers and brokers in their business affairs, and citizens themselves frequently acted as agents, such as executors or guardians. Accordingly, the general contours of agency law were familiar to a wide range of eighteenth-century Americans.

The bedrock obligation of the eighteenth-century agent was to act only within granted authority. Unless the agency instrument clearly specified otherwise, the background assumption was that grants of authority carried with them certain incidental or implied powers for executing the express powers. To determine the scope of an agent’s implied powers, the law employed the doctrine of principals and incidents. To be an incident, “an interest had to be less important or less valuable than its principal.”7 For example, a power to manage lands might carry as an incident a power to make short-term leases but would not carry as an incident a power to sell a portion of the property.8 The power to sell was independent of, or as “worthy” as, the power to manage.

Being dependent upon or inferior to a principal right or power was a precondition to being an incident but was not itself sufficient. An additional touchstone for determining the existence of incidents, or incidental powers, was necessity.

The term “necessity,” in this context, had a conventional and well-understood meaning in eighteenth-century agency law. There were three separate ways in which an incidental, inferior power could qualify as “necessary.” First, a right or power was “necessary” if it was indispensable to the use of the principal. Second, a right or power was necessary if its absence would seriously impair the value of the principal. Third, a right or power was necessary if it customarily accompanied the principal. The doctrine of necessity made good sense, as these three circumstances reasonably approximated the situations in which parties would likely have intended the incidental right or power to accompany the principal grant.

By the eighteenth century, there was a wide array of adjectives available to drafters of agency instruments to describe an agent’s incidental power: “necessary,” “necessary or useful,” “necessary and proper,” and so on.9 The use of the words “necessary and proper” was, grammatically, the most restrictive formula readily available to a drafter in the late eighteenth century because it imposed the separate and simultaneous requirements of necessity and propriety. In this context, necessity described the requisite attachment of the incidental power to its principal end, while propriety described conformance with other fiduciary norms, such as the duty of impartiality, the duty of good faith, and the primary duty to stay within the scope of granted authority.


II. The Necessary and Proper Clause: Its Origins and Early Years

This common law background of the law of agency informed—and indeed drove—the drafting and ratification of the Necessary and Proper Clause. The Clause was drafted by a five-person Committee of Detail; four members (Oliver Ellsworth, Edmund Randolph, John Rutledge, and James Wilson) were private-law lawyers and the fifth (Nathaniel Gorham) was a businessman whose experience included serving as a business agent. An early draft from the Committee of Detail, in Randolph’s handwriting, included a supremacy clause that expressly invoked the doctrine of principals and incidents as a tool of judicial interpretation.10 After several more drafts, the final result was to attach a clause to Article I, Section 8 specifying that “Congress shall have the Power . . . [t]o make all Laws which shall be necessary and proper for carrying into Execution the . . . Powers vested by this Constitution in the Government of the United States . . . .”11 This language was approved by both the Committee and the Convention without significant controversy.

It is easy to see how a Convention filled with lawyers and citizens who dealt regularly with agency law would create the Necessary and Proper Clause with little fanfare. The provision would have been recognizable to anyone familiar with agency law as a clause incorporating the principle of incidental powers and the full range of fiduciary norms limiting those powers. Importantly, there is nothing in the language, origin, or purpose of the Necessary and Proper Clause suggesting that its embodiment of the incidental powers principle was intended to be broader than the common law baseline of incidents. Quite to the contrary, the choice of the relatively restrictive “necessary and proper” language indicates that the common law represents the upper rather than the lower boundary of the range of incidental powers conferred by the Clause.

The analysis above explains, and justifies, the Federalists’ repeated claims that the Necessary and Proper Clause added no new powers to the federal government.12 It also helps to explain the Supreme Court’s most important decision construing the Necessary and Proper Clause—McCulloch v. Maryland.13 In McCulloch, the Chief Justice Marshall emphasized that the power to incorporate a national bank would only be a “necessary and proper” exercise of Congress’s enumerated powers if it was “a means not less usual, not of higher dignity,” than the principal powers set forth in Article I.14 Chief Justice Marshall concluded that since corporations are always a means to an end rather than an end in themselves, the power to incorporate does not have the high dignity or superior status of the powers enumerated in Article I, Section 8; therefore, incorporation can be an incident. If there were any doubt about the criteria for incidence employed in McCulloch, Marshall himself resolved it later the same year, when explaining McCulloch to the general public. He specifically affirmed, as a test of incidence, the requirement that an incident be less “worthy” than the enumerated powers it supported.15 The fact that incorporation was lesser to the commerce or borrowing power was, as Chief Justice Marshall recognized, a threshold requirement before inquiry could proceed on questions of necessity and propriety.


III. The Individual Mandate Is Not an Incident

The Necessary and Proper Clause grants Congress incidental powers for executing the principal powers granted elsewhere in the Constitution. As McCulloch illustrates, for a power to fall under the Necessary and Proper Clause, it must truly be incidental. However, the power to compel the purchase of a product from another private party is not a “less worthy” or less substantial power than the power to regulate commerce—just as the power to sell real estate is not “less worthy” or less substantial than the power to manage the property. The power to compel involuntary commerce will not follow, as a mere incident, from the principal power to regulate voluntary interstate commerce. Accordingly, it is unnecessary to analyze whether the individual mandate is an important or customary (“necessary”) and fiduciarily sound (“proper”) means for implementing federal powers. Such analysis is only required when one is dealing with an incidental power. (Nonetheless, in the Yale Law Journal Online essay on which this op-ed is based, we consider whether the individual mandate would meet the additional tests of necessity and propriety, and we conclude that it would not.16

The power to compel the purchase of a commercial product is fundamentally different than the power to create a corporation. It is an extraordinary power of independent significance, or “high[] dignity,” that would be enumerated as a principal power if it were granted at all to the federal government. If the point is not obvious, one need only compare it to the one limited circumstance in which the Necessary and Proper Clause does, in fact, authorize Congress to force people to engage in “commercial” transactions: exercises of the power of eminent domain.

During the Founding era—and for nearly a century afterwards—there was substantial doubt whether the federal government had an independent power of eminent domain at all. The power to condemn property is a very substantial, significant power. It is certainly plausible that eminent domain power is too substantial and significant to be considered an incidental rather than principal power. When, starting in 1876, the Court finally did recognize a federal power of eminent domain, it emphasized that eminent domain has always been a traditional aspect of sovereign power.17 Indeed, one might fairly say that eminent domain has been an incident of sovereign power by custom.

While post-1876 cases affirm that Congress has the power to compel commercial transactions with the federal government, it is still a giant leap to conclude that Congress has the power to compel commercial transactions among private parties. Indeed, if there was an open question for a century whether the federal government had a power of eminent domain, there cannot plausibly be an open question whether the federal government has a general incidental power to force purchases of commercial products by one private citizen from another. Eminent domain represents the outer reaches of the power to coerce transactions under the Necessary and Proper Clause—and the Clause reaches that far only because of the unique role of eminent domain as a customary incident of sovereignty.

More recent cases no longer use the language of principals and incidents to describe analysis under the Necessary and Proper Clause, but their holdings are broadly consistent with that framework. For example, in United States v. Comstock, Justice Breyer—writing for the majority—points to five “considerations” in determining whether the law in question fell within the Necessary and Proper Clause’s ambit: “(1) the breadth of the Necessary and Proper Clause, (2) the long history of federal involvement in this arena, (3) the sound reasons for the statute’s enactment . . . , (4) the statute’s accommodation of state interests, and (5) the statute’s narrow scope.”18 In other words: (1) What does the meaning of the words of the Clause indicate? (2) Is the statute a long-understood traditional incident of an enumerated power? (3) Is the statute a reasoned exercise of public fiduciary authority? (4) Does the statute adhere to the state-federal balance created by Article I’s system of enumerated, limited powers? (5) Is the statute of the magnitude of an incidental power, or of a greater power? Whether Justice Breyer had agency principles in mind when he wrote the Comstock opinion, the Court’s holding—and its modern case law more generally—are consistent with our originalist analysis of the Necessary and Proper Clause.


Conclusion

In sum, the individual mandate of the PPACA cannot be justified under the Necessary and Proper Clause. The original meaning of the Clause shows that it can, at most, be used to recognize an incidental power—that is, a power which is “less worthy” than the expressly granted, enumerated powers that it purportedly implements. The power to compel a private individual to engage in commerce with a private corporation is not lesser than the power to regulate voluntary commerce; it is a far greater power. Chief Justice Marshall’s analysis in McCulloch v. Maryland confirms that the Necessary and Proper Clause includes only incidental powers; if the power is not incidental, then the constitutional inquiry ends there, and it does not matter whether the asserted power may be useful. Again, if the individual mandate is constitutional, it is not by virtue of the Necessary and Proper Clause.

Acknowledgments:

Copyright © 2012 The Yale Law Journal Company, Inc.

Gary Lawson is Professor of Law and Michaels Faculty Research Scholar at Boston University School of Law. David B. Kopel is Research Director at the Independence Institute, an Associate Policy Analyst at Cato Institute, and an Adjunct Professor of Advanced Constitutional Law at Denver University, Sturm College of Law.

This Legal Workshop article is based on Gary Lawson & David B. Kopel, Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, 121 YALE L.J. ONLINE 267 (2011), http://yalelawjournal.org/2011/11/08/lawson&kopel.html. That article was written as a reply to Andrew Koppelman, Bad News for Mail Robbers: The Obvious Constitutionality of Health Care Reform, 121 YALE L.J. ONLINE 1 (2011), http://yalelawjournal.org/2011/04/26/koppelman.html. For subsequent installments in this series, see Andrew Koppelman, Bad News for Everybody: Lawson and Kopel on Health Care Reform and Originalism, 121 YALE L.J. ONLINE 515 (forthcoming March 2012); and Gary Lawson & David B. Kopel, Bad News for John Marshall, 121 YALE L.J. ONLINE 529 (forthcoming March 2012).

  1. Pub. L. No. 111-148, § 1501, 124 Stat. 119, 242-49 (2010), amended by Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029 (to be codified at 26 U.S.C. § 5000A).
  2. Brief for Petitioners (Minimum Coverage Provision) at 24, Dep’t of Health & Human Servs. v. Florida, No. 11-398 (U.S. filed Jan. 6, 2012), available at http://sblog.s3.amazonaws.com/wp-content/uploads/2012/01/11-398tsUnitedStates.filed_..pdf (emphasis added).
  3. Id. at 37 (emphasis added).
  4. See, e.g., Laurence H. Tribe, On Health Care, Justice Will Prevail, N.Y. Times, Feb. 7, 2011, http://www.nytimes.com/2011/02/08/opinion/08tribe.html (suggesting that a Justice who struck down the individual mandate on constitutional grounds would be “abandon{ing} the fundamental understanding of the Constitution’s necessary and proper clause”).
  5. Andrew Koppelman, Bad News for Mail Robbers: The Obvious Constitutionality of Health Care Reform, 121 Yale L.J. Online 1 (2011), http://yalelawjournal.org/2011/04/26/koppelman.html.
  6. See Robert G. Natelson, The Agency Law Origins of the Necessary and Proper Clause, 55 Case W. Res. L. Rev. 243 (2004).
  7. See Robert G. Natelson, The Legal Origins of the Necessary and Proper Clause, in Gary Lawson, Geoffrey P. Miller,  Robert G. Natelson & Guy I. Seidman, The Origins of the Necessary and Proper Clause 52, 56 (2010).
  8. See 3 Charles Viner, A General Abridgement of Law and Equity 538-40 (London, Charles Viner 1742).
  9. Natelson, supra note 6, at 70.
  10. See 2 The Records of the Federal Convention of 1787, at 144 (Max Farrand ed., rev. ed. 1937).
  11. U.S. Const. art. I, § 8, cls. 1, 18.
  12. See, e.g., The Federalist No. 33, at 170 (Alexander Hamilton) (Clinton Rossiter ed., 1961).
  13. 17 U.S. (4 Wheat.) 316 (1819).
  14. Id. at 421.
  15. John Marshall, A Friend of the Constitution III, Alexandria Gazette, July 2, 1819, reprinted in John Marshall’s Defense of McCulloch v. Maryland 167, 171 (Gerald Gunther ed., 1969).
  16. On the question of whether the individual mandate is “necessary” to prevent “free riders” from disrupting the market for health insurance, see Gary Lawson & David B. Kopel, Bad News for Professor Koppelman: The Incidental Unconstitutionality of the Individual Mandate, 121 Yale L.J. Online 267, 289 n.90 (2011), http://yalelawjournal.org/2011/11/08/lawson&kopel.html. On the question of whether the mandate is consistent with the fiduciary norms embodied in the Necessary and Proper Clause, see id. at 284-91.
  17. See, e.g., Kohl v. United States, 91 U.S. 367, 373-74 (1876).
  18. 130 S. Ct. 1949, 1965 (2010).

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