The BLS Advocate

The ObamaCare Decision: A Roadmap

Twenty-five states joined Florida in its challenge of the ACA: South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Colorado, Pennsylvania, Washington, Idaho, South Dakota, Indiana, North Dakota, Mississippi, Arizona, Nevada, Georgia, Alaska, Ohio, Kansas, Wyoming, Wisconsin, Maine, Michigan, and Iowa. Ultimately, the Court decided to uphold the law. Here, Christopher “Jack” Knorps breaks down the 180-page decision.

CHIEF JUSTICE ROBERTS’ MAJORITY OPINION
Intro: Marbury v. Madison, a brief history of the Court (1-7)
Part I: Procedural History* (7-11)
Part II: Anti-Injunction Act * (11-15)
Part III: Commerce Clause (“CC”) Intro (15)
Part III-A: Government’s Arguments Intro (CC + Necessary & Proper “N&P” Clause) (16-17)
Part III-A-1: CC Destruction (17-27)
Part III-A-2: N&P Clause Destruction (27-30)
Part III-B: Construing the Act as a Tax May Save It From Unconstitutionality (31-32)
Part III-C: Taxing Power is Broad* (33-44)
Part III-D: Ginsburg’s CC Analysis is Wrong (44-45)
Part IV-A: Medicaid Expansion Conscripts States into a National Bureaucratic Army/Coercive† (45-55)
Part IV-B: But States Can Still Sign Up for the ACA’s Medicaid Expansion If They Want† (55-59)
*Majority of the Court
†Roberts joined by Breyer and Kagan

JUSTICE GINSBURG’S CONCURRING OPINION
Part I: Intro to Economic and Social Welfare Reform Decisions! (1-3)
Part I-A: Backdrop of the ACA! (3-5)
Part I-B: More Problems Created by the Uninsured! (5-7)
Part I-C: Cost-Shifting! (7-8)
Part I-D: Congress could have instituted a Single-Payer System, but Chose the ACA instead! (8-12)
Part I-Conclusion: Deference to Congress under CC and N&P Clause! (12)
Part II-A: CC-Framer’s Intent! (12-14)
Part II-B: Only Should Be Struck Down if Congress Plainly Acted Irrationally! (14-16)
Part II-C: ACA Easily Meets the Criterion of the CC! (16-18)
Part II-D: CC Power Does Not Permit Congress to “Compel Individuals to Become Active in Commerce by Purchasing a Product”! (18)
Part II-D-1-a: Roberts is Wrong about Our CC Precedents! (18-23)
Part II-D-1-b: Case Law Does Not Toe the Activity Versus Inactivity Line! (23-27)
Part II-D-2: Roberts’ Fear of the “Broccoli Horrible” is Unfounded! (27-31)
Part II-D-3: Constriction of the CC Hinders Congress’s Ability to Adapt to New Realities! (31)
Part III-A: Guaranteed-Issue and Community-Rating Provisions Lend More Support for Constitutionality! (31-33)
Part III-B: Minimum Coverage Provision Acts Directly on Individuals, not States! (33-36)
Part IV: Taxing Power Broad; Roberts’s CC Analysis Puzzling Since Not Outcome-Determinative! (37)
Part V: Medicaid Expansion Does Not Violate Spending Power –1^st Time Struck Down on Such Grounds# (38-41)
Part V-A: Medicaid Expanded 50 Times Since 1965; Federal Spending Grew 631 MM to 269 BB# (41-45)
Part V-B: Discussion of the Spending Clause and South Dakota v. Dole, 483 U.S. 203 (1987)# (45-48)
Part V-C: Challenge to the Notion that Medicaid Expansion is Unconstitutionally Coercive# (48)
Part V-C-1: Medicaid Expansion is Not a “New” Medicaid Program# (48-51)
Part V-C-2: States Not Being “Surprised” by the Expansion; Look to Bowen, Not Pennhurst# (54-56)
Part V-C-3: Roberts Fails to Draw the Line Where Persuasion Gives Way to Coercion# (56-60)
Part V-D: Agrees with Roberts on Severability of Medicaid & Validity of Individual Mandate# (60-61)
!-Ginsburg joined by Sotomayor, Breyer, and Kagan
#-Ginsburg joined by Sotomayor

JUSTICE SCALIA’S DISSENTING OPINION (Joined by Kennedy, Thomas, and Alito)
Introduction: Concedes that Inactivity Could Come Under Criterion of CC, but Would Extend It Too Far (1-4)
Part I: Uphold Individual Mandate under the CC and Congress can regulate Breathing In-and-Out (4-5)
Part I-A: New York, Printz, Lopez, Morrison teach that CC does not give Congress Carte Blanche (5-10)
Part I-B: Wickard is #1 and Perez is #2 in CC Expansion—but They at Least Involved “Activity” (10-13)
Part I-C: “Activity” Must be Regulated, not “Inactivity,” Such as Failure to Buy Broccoli or Cars (13-16)
Part II: To Say That the Individual Mandate Merely Imposes a Tax is to Rewrite the Statute (16-26)
Part III: Anti-Injunction Act Inapplicable Since Act not Within Taxing Power; “Verbal Wizardry” (26-28)
Part IV: Medicaid Expansion Commands Too Severe a Sanction for States That Fail to Comply (28-29)
Part IV-A: Concedes that Court Gives Congress Wide Leeway in Spending Power since Butler (29-30)
Part IV-B: Cites Huge Growth of “Grants-in-Aid” from $20 BB (adj.) in 1950 to $608 BB in 2010 (30-31)
Part IV-C: If Conditions Attached to Federal Monetary Grants, States Must Have Real Choice (31-35)
Part IV-D-1: Distinguishes Dole: Minimum Drinking Age Act was Not “Coercive” (35-36)
Part IV-D-2: If States Opt-out of Medicaid Expansion, Tax Increases on Residents May Follow (36-38)
Part IV-E: Coercive Nature of an “Offer” Must be Unmistakably Clear (38)
Part IV-E-1: Medicaid Backdrop: States Have a Huge Reliance on Federal Funding for Medicaid (38-42)
Part IV-E-2: The ACA was Clearly Designed so that No State Could Possibly Refuse the “Offer” (42-46)
Part IV-F: Court finds Medicaid Expansion Unconstitutional, but Violates Severability Doctrine (46-48)
Part V: If Two Major Provisions of the Act are Unconstitutional, the Entire Act Must Fall (48-49)
Part V-A: Severability Analysis: 2-Part Test in Alaska Airlines Inc. v. Brock, 480 U.S. 678 (1987) (49-51)
Part V-B: The Evidence of “Togetherness” in the Statute (51-54)
Part V-C: A Quick Note on Standing Before We Apply the Severability Principles to the Act (54-55)
Part V-C-1: Absent Invalid Portions of the Act, Major Provisions could Pose a Threat to Nation (55-56)
Part V-C-1-a: Fears Increases in Premiums & Uncertainties Imposed on Insurance Companies (56-57)
Part V-C-1-b: Uncertainty in Hospital Reimbursements/Reducing Medicare Expenditures (57-59)
Part V-C-1-c: If Major Provisions Fall, Insurance “Exchanges” Cannot Operate as Planned (59-61)
Part V-C-1-d: Employer-Responsibility Assessment is Invalid for Two Reasons (61-62)
Part V-C-2: Unbelievable That Congress Would Have Enacted Minor Provisions Independently (62-64)
Conclusion: The Court Has Saved a Statute That Congress Did Not Write (64-65)

JUSTICE THOMAS’ DISSENT
Dissent: Rescind “Substantial Effects” Test (See separate opinions in Morrison, Lopez, and Raich) (1-2)

The Affordable Care Act Cases: An Analysis

For any incoming law student, the decision in National Federation of Independent Business, et al., v. Sebelius (The Affordable Care Act Cases) is an excellent primer for law school and a good option for summer reading. If you can read and understand all 180+ pages of this decision, then you will have a leg up when it comes time to take Constitutional Law. I would be surprised if Con Law professors do not include this decision in their syllabus, for it explicates the Roberts Court’s position on the Commerce Clause, its application, and its boundaries.

Although many students will not read the entire opinion because of its length, they may want to know what practical effects it has on them. There are two: (1) Students under 26 may remain on their parent’s health insurance plan (as they have been able to do since 2010); and (2) come January 1, 2014, they will be required to have health insurance or else pay a penalty on their next tax filing.

Some students may qualify for Medicaid, which may be the better option if you are over 26 and make less than $11,000 per year.

Brooklyn Law School offers students health insurance by Aetna through Gallagher-Koster. It costs about $1550 for the 2011-2012 academic year. At press time, rates for the 2012-2013 year had not been posted. While New York and New Mexico are very different states, the rate increases approved by the New Mexico Board of Regents for that state’s university system might provide guidance on possible cost increases in New York next year.

New Mexico has the second-highest number of uninsured people in the country at 21.7% (Texas is first with 26.7%) while New York is two percentage points below the national average at 14.8%. Until this year, the price of student health plans in both states was similar. Rates were previously $1,400 for the University of New Mexico until the Board of Regents voted on June 7, 2012, to increase the cost by 22%, or about $308. They said this increase was needed to put the school’s plan in compliance with the ACA, if passed. If the BLS Student Policy is raised by 22%, it will go up about $341, making it around $1,900 per year.

Some students may qualify for Medicaid, which may be the better option if you are over 26 and make less than $11,000 per year. Notably, the AccessNY health plan does not classify scholarships, grants, or work study as “income.” A student interested in either plan should note the differences between the two (for example, BLS does not cover dental care; Medicaid does).

The Effect on State Finances

On July 9, 2012, Texas Governor Rick Perry declared that the state would not “opt-in” to the Medicaid Expansion contemplated by the Affordable Care Act. As noted above, Texas has the highest percentage of uninsured individuals in the nation. So, what does this mean for the state of Texas and its residents?

The CBO projects that states will spend only 0.8% more than they would have, absent the ACA.

In his dissenting opinion, Justice Scalia uses Arizona to illustrate the increased burden states will face if they do not comply with the Medicaid Expansion, which requires states to offer Medicaid to all individuals under the age of 65 with an income at or below 133% of the federal poverty line. Justice Scalia notes that Arizona typically commits 12% of its state expenditures to Medicaid, and relies on the Federal Government to provide the rest, which amounts to $5.6 billion, or close to one-third of Arizona’s annual state expenditures. He then argues that if Arizona refuses to comply, it will lose all federal Medicaid funding, and will have to increase its state Medicaid funding by 33%. This means, essentially, that Arizona will put a whopping 45% of its state expenditures towards Medicaid.

Justice Ginsburg, on the other hand, notes in her concurring opinion the Congressional Budget Office’s estimate of state spending. The CBO projects that states will spend only 0.8% more than they would have, absent the ACA. Accordingly, Justice Ginsburg contends that the federal government will cover 100% of the cost for newly eligible beneficiaries beginning in 2014, decreasing to 90% of the cost by 2020.

Texas spent nearly $22.8 billion on Medicaid in 2009, or approximately 25.4% of its state budget. The state received roughly $25.9 billion in federal funding for the program in 2010-2011. Because of Texas’s refusal to opt in, it will need to spend $48.7 billion per year, instead of the cost of expanding its coverage to residents at-or-below 133% of the federal poverty line. This annual income threshold is approximately $15,000.

It’s difficult to project the actual cost of the Medicaid Expansion to states. Justice Ginsburg’s 0.8% figure underscores the similarity of this situation to Dole (another case that features prominently in the first year Constitutional Law curriculum), which is discussed thoroughly in all three ACA opinions. But this is not a Dole situation. The penalty for non-compliance is, in the Chief Justice’s words, “a gun to the head.”

Justice Ginsburg’s figure does not take into account administrative expenses, nor does it specify whether that 0.8% figure applies for 2013, or the seven year period between 2013 and 2020. It appears to be the latter because she stresses that the federal government will cover 100% of new Medicaid enrollees next year.

Individual Mandate Penalties

The Individual Mandate was upheld; the most controversial aspect of it is a potential broadening of the taxing power. Consider this hypothetical:

The year is 2016. Unfortunately, you do not have a job. You are a solo practitioner who takes the cases you can get and you live from paycheck to paycheck and you can barely make the rent for that $800/month three-bedroom apartment you share in Williamsburg. You’re single. You reject whatever health insurance the American or New York City or New York State or Brooklyn Bar Associations offer because you just can’t afford it. Perhaps you should be on Medicaid, but you actually make about $35,000 a year, so you don’t qualify. You’re paying off loans without the Loan Repayment Assistance Program. You like to go out on the weekends and you try to keep your body in excellent physical shape. You almost never get sick, and when you do, you never need to go to the hospital.

One may actually “save money” by paying the tax, but…other federal (and possibly state) taxes are likely to increase.

April comes around and you start thinking about how you’re going to declare your income. You’re an honest person, so you keep accurate records of your income. If you choose to “say no,” your penalty will be “determined by such familiar factors as taxable income, number of dependents, and joint filing status.” (Majority at 33)

“In 2016, for example, the penalty will be 2.5% of an individual’s household income, but no less than $695 and no more than the average yearly premium for insurance that covers 60% of the cost of 10 specified services (e.g., prescription drugs and hospitalization) § 5000A(c); 42 U.S.C. § 18022.” (Majority at 7)

• 2.5% of $35,000 is $875 per year.
• 2.5% of $45,000 is $1,125 per year.
• 2.5% of $55,000 is $1,375 per year.

Thus, one may actually “save money” by paying the tax, but as the dissent points out, other federal (and possibly state) taxes are likely to increase. It’s impossible to predict what the market will be like in 2016, or how the “exchanges” will truly operate. But if your income reaches the maximum level, and you’re beyond the 400% poverty level for “exchanges” ($44,680?), this provision may fix the price of minimum coverage in the market.

Conclusion

The Majority held that the Federal government does not have the power to order people to buy health insurance, but does have the power to tax those without insurance. Therefore, law students will have a few more sentences to write in their Constitutional Law exams. A brief outline may look like this:

• Lopez (1995): Gun-Free School Zones Act Unconstitutional under Commerce Clause (keeping guns away from schools does not have an effect on interstate commerce).
• Morrison (2000): Violence Against Women Act Unconstitutional under Commerce Clause (preventing the rape and abuse of women does not have an effect on interstate commerce).
• Raich (2005): Controlled Substances Act Constitutional under Commerce Clause (private growth of marijuana does have an effect on interstate commerce).
• The Affordable Care Act Cases (2012): Individual Mandate is Unconstitutional under Commerce Clause (failure to purchase health insurance does not have an effect on interstate commerce).

Similarly, a few more sentences will be needed to address the Medicaid Expansion in a separate line of cases:

• Dole (1987): Enforcing minimum drinking age Constitutional under the Spending Power (withholding a small amount of federal highway funds for failure to comply is not coercive).
• New York (1992): Low-Level Radioactive Waste Policy Act Constitutional under Spending Power (imposing a penalty on states that ship their waste to other states is not coercive).
• Printz (1997): Brady Handgun Violence Prevention Act Unconstitutional under State Sovereignty principles (Congress cannot command Chief Law Enforcement Officers to conduct background checks on all gun purchasers).
• The Affordable Care Acts Cases (2012): Medicaid Expansion is Unconstitutional under Spending Power (threatening to cut-off all federal Medicaid funding from a state if they do not comply is coercive).

This decision is unlikely to effect future Congressional action – none of these previous Court opinions have been overruled. Additionally, it is difficult to predict this decision’s effect on the upcoming presidential election. Since Governor Romney pioneered this kind of plan in Massachusetts (Justice Ginsburg takes pains to point out the success of that program, and the flocks of the uninsured making special trips to Massachusetts) it is hard for him to claim that he will immediately repeal the ACA without sounding like a hypocrite. President Obama could easily shoot him down in a debate by quoting from Ginsburg’s opinion: “In coupling the minimum coverage provision with guaranteed-issue and community-rating prescriptions, Congress followed Massachusetts’ lead.” (Concurring at 12)

*Editor’s Note: Jack read the entire 180-page decision during his summer vacation, so be sure to read through his roadmap! When you’re done, see what your fellow students think!

*Editor’s Note #2: BLS has posted 2012-2013 insurance rates, and Jack’s predictions were spot on. Annual coverage for students 30 and under will be $1,811; for those over 30 it will be $2,022. Spring 2013 coverage only will be $1,092 and $1,217 respectively.

Panel Debates Legality of Troy Davis Execution

Casey Anthony. Amanda Knox. Troy Davis. Recent popular crime cases have sparked discussion among the general public about law, justice, and the justice system. These cases have incited many heated conversations and questions: How is this legal? How is this possible? What is wrong with our criminal justice system? What is right about it? Who is innocent? Who is guilty? What are our constitutional rights?

Brooklyn Law School’s American Constitution Society (ACS) sought to tackle these questions on October 5th at its event, “Was the Execution of Troy Davis Legal?”

Troy Davis, a black man, was convicted of killing a white police officer in Savannah, GA. He was executed on September 21 despite much doubt surrounding his conviction, including witness recantations and new DNA evidence. Davis’ case garnered global attention, with many public figures condemning the sentencing and execution. After the case sparked such public interest in the subject of the death penalty, it became clear that the issue of capital punishment might need to be reexamined and reevaluated.

The ACS organized this event to address the facts of the Davis execution and put them into perspective within the larger debate. “People were just so shocked that [Davis] was put to death, and I think it’s good for people to learn about the process, about how it happens, why he was eventually executed,” said Margaret Garrett ’12, Vice President of the ACS and member of the Capital Defender and Federal Habeas Clinic.

Visiting Professor Stephen Landsman, who spoke at the event, pointed out the problematic aspects of Davis’ case. The first was the testimony of a jailhouse snitch, which has questionable reliability. The second is that this was an eyewitness case, in which the fast-paced events occurred in the middle of the night with bad lighting, and witness’ concerns for their own personal safety while observing the crime.

Another large problem with this case is that a man named Sylvester Coles was with Davis during the shooting and “is as likely to have been the murderer as Davis,” according to Prof. Landsman. Prof. Landsman believes that because Coles quickly hired a good lawyer and began to cooperate with police, he became a “self-interested witness who was the heart of the prosecution’s case.” This, of course, should give us reservations about his credibility.

Prof. Landsman poses the question, “I can’t tell you who’s right and who’s wrong, but if I can’t tell you, how can I act?” Expressing disdain for capital punishment, Professor Landsman, who teaches a course at BLS called “When Justice Fails,” gave an insightful perspective of the case.

Professor Ursula Bentele, who teaches the Capital Defender Clinic and a course on capital punishment, also spoke at the event. She is a defense lawyer to the core and is outspoken about her disapproval of capital punishment. Prof. Bentele said, “I was one of the naïve people who thought that the Georgia parole board would grant clemency in light of all of the doubt.”

Professor Bentele believes that if we are only focusing on whether we convicted the right person, then “we’re losing sight of what’s really going on.” She wonders why we are only troubled by the fact that someone might be innocent, rather than by the death penalty in general. Two aspects of capital punishment that most bother her are discrimination and arbitrariness. Prof. Bentele explains that the single combination in which the death penalty is most sought is when the defendant is black and the victim is white. “Seventy percent of cases where prosecutors sought the death penalty in Georgia were black on white crimes, even though 60% of the total crimes had black victims,” she said.

The administration of the death penalty is too arbitrary, according to Prof. Bentele. A person could be executed in a state one day, but the next day an execution could be stayed or commuted for some vague reason. She also explains that when we execute people 20 or 30 years after they were convicted, we are executing a different person than the person who committed the crime. Both this, and the length of time that we make people wait for their sentences to be carried out, constitute psychological torture, which should not be tolerated.

The ACS’s October 5th panel on the execution of Troy Davis was educational, interesting, and sparked an engaged conversation between students and professors. The ACS, a relatively new organization, does not yet have a specific future event planned, but Garrett said that the organization expects to hold future panels on gun control, stop-and-frisk, and other topics.

Ten Years After 9/11, Professors Reflect on Civil Liberties

From left, Profs. Fullerton, Bambauer, Tebbe and Herman watch Interim Dean Gerber at the podium at a discussion of civil liberties commemorating the tenth anniversary of 9/11.

In the ten years since 9/11, the American government’s willingness to sacrifice civil liberties to preserve security has provoked fierce debate. On September 15, just a few days after nationwide ceremonies commemorated the tenth anniversary of the attacks, a panel of Brooklyn Law School faculty gathered at the Subotnick Center to discuss what freedoms Americans had lost in the war on terror. At the same time, the discussion celebrated the publication of Professor Susan Herman’s new book, Taking Liberties: The War on Terror and the Erosion of American Democracy (Oxford University Press, 2011).

Professor Herman, who is also the president of the American Civil Liberties Union, began the discussion by sharing excerpts from her book, illustrating the dramatic impact this legislation has had on the day-to-day lives of Americans. “We started all this change in law after 9/11 without debate or discussion. There are lots of reasons to ask questions … and now is the time to start doing that.”

Professor Derek Bambauer shared his thoughts on the impact 9/11 has had on the Internet: “The Internet before 9/11 was the domain of Pets.com, and after 9/11 one of WikiLeaks.” And the ripple effect goes far beyond our Internet domains. As Professor Maryellen Fullerton explained, in commenting on a controversial provision in the Patriot Act that outlaws providing “material support” to a terrorist organization, “the standards of material support have defined terrorist organizations so broadly that almost any group may fall into that category.” Prof. Fullerton remarked that regardless of the immense impact these “material support” laws have had on immigration and the funding of non-profit groups worldwide, unfortunately, “Congress has shown no interest in narrowing the law.”

Professor Nelson Tebbe acted as moderator and discussed the effects of anti-terrorist legislation on the free exercise of religion: “How easy is it to tell if government is targeting terrorists or Muslims? … The power of [Professor Herman’s] book is that she shows through stories of real people … how difficult it is to [distinguish] between these two things.”

The well-attended discussion sparked a stimulating conversation between panel members as well as members of the audience. “It was a great mix of perspectives on a topic we’ve already heard so much about,” said Jason Stewart, ’13.

Sean Hymowitz, ’12, asked the panelists to comment on the TSA Secure Flights program. “Is it going to get better? Because I don’t like taking my shoes off,” he said, generating laughs from the audience. Prof. Herman responded by pointing out that she covered that topic in her book, and referred specifically to one story of one twenty-two year old who was interrogated for five hours by a TSA official because he carried Arabic-English flashcards onto the plane.

As the discussion drew to a close, Interim Dean Michael Gerber asked a poignant question: is there any optimistic outlook we can take from the current trend? The panelists looked to one another before Professor Bambauer spoke up: “It’s hard to tell anything but a pessimistic story … but perhaps our lens is not broad enough yet.” To this Professor Herman added, “if we can’t change these laws while we have a former Constitutional Law professor in office… it’s not going to happen. This doesn’t mean change isn’t possible [but] politicians are not going to do it. It’s up to us.”

Listen to a podcast with Prof. Herman about her new book, courtesy of the BLS Library Blog.