                         RECOMMENDED FOR FULL-TEXT PUBLICATION
                              Pursuant to Sixth Circuit Rule 206
                                      File Name: 11a0168p.06

                 UNITED STATES COURT OF APPEALS
                                  FOR THE SIXTH CIRCUIT
                                    _________________


                                                  X
                                                   -
 THOMAS MORE LAW CENTER; JANN
                                                   -
 DEMARS;
 JOHN CECI; STEVEN HYDER; SALINA HYDER,            -
                           Plaintiffs-Appellants, -
                                                                 No. 10-2388

                                                   ,
                                                    >
                                                   -
                                                   -
            v.
                                                   -
                                                   -
 BARACK HUSSEIN OBAMA, in his official
 capacity as President of the United States;       -
                                                   -
                                                   -
 KATHLEEN SEBELIUS, in her official capacity
                                                   -
 as Secretary, United States Department of
                                                   -
 Health and Human Services; ERIC H.
 HOLDER, JR., in his official capacity as          -
                                                   -
                                                   -
 Attorney General of the United States;
                                                   -
 TIMOTHY F. GEITHNER, in his official
                                                   -
 capacity as Secretary, United States
 Department of Treasury,                           -
                         Defendants-Appellees. N

                        Appeal from the United States District Court
                       for the Eastern District of Michigan at Detroit.
                      No. 10-11156—George C. Steeh, District Judge.
                                     Argued: June 1, 2011
                             Decided and Filed: June 29, 2011
    Before: MARTIN and SUTTON, Circuit Judges; GRAHAM, District Judge.*

                                      _________________

                                           COUNSEL
ARGUED: Robert J. Muise, THOMAS MORE LAW CENTER, Ann Arbor, Michigan,
for Appellants. Neal Kumar Katyal, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C., for Appellees. ON BRIEF: Robert J. Muise, THOMAS MORE
LAW CENTER, Ann Arbor, Michigan, David Yerushalmi, LAW OFFICES OF DAVID
YERUSHALMI, P.C., Chandler, Arizona, for Appellants. Neal Kumar Katyal, Mark B.

        *
          The Honorable James L. Graham, Senior United States District Judge for the Southern District
of Ohio, sitting by designation.


                                                  1
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                   Page 2


Stern, Alisa B. Klein, Anisha Dasgupta, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellees. Edward L. White, AMERICAN CENTER
FOR LAW AND JUSTICE, Ann Arbor, Michigan, Steven J. Lechner, Joel M. Spector,
MOUNTAIN STATES LEGAL FOUNDATION, Lakewood, Colorado, Ilya Shapiro,
Robert A. Levy, David H. Rittgers, CATO INSTITUTE, Washington, D.C., Cory L.
Andrews, WASHINGTON LEGAL FOUNDATION, Washington, D.C., Steven J.
Willis, UNIVERSITY OF FLORIDA COLLEGE OF LAW, Gainesville, Florida,
Catherine E. Stetson, HOGAN LOVELLS US LLP, Washington, D.C., Kristin M.
Houser, SCHROETER, GOLDMARK & BENDER, Seattle, Washington, Keith S.
Dubanevich, OREGON DEPARTMENT OF JUSTICE, Salem, Oregon, Walter E.
Dellinger, Washington, D.C., Ian R. Millhiser, CENTER FOR AMERICAN
PROGRESS, Washington, D.C., John L. Longstreth, Molly K. Suda, K&L GATES LLP,
Washington, D.C., Rochelle Bobroff, NATIONAL SENIOR CITIZENS LAW CENTER,
Washington, D.C., Richard L. Rosen, ARNOLD & PORTER LLP, Washington, D.C.,
Charles A. Rothfeld, MAYER BROWN, Washington, D.C., for Amici Curiae.
        MARTIN, J., delivered the opinion of the court, in which SUTTON, J., and
GRAHAM, D. J., concurred as to Parts I (background) and II (subject matter
jurisdiction) and in which SUTTON, J., concurred in the judgment. SUTTON, J. (pp.
27–53), delivered the opinion of the court as to Part I (taxing power) of his opinion, in
which GRAHAM, D. J., joins. GRAHAM, D. J. (pp. 54–64), delivered a separate
opinion concurring in part and dissenting in part.
                                   _________________

                                        OPINION
                                   _________________

        BOYCE F. MARTIN, JR., Circuit Judge. This is an appeal from the district
court’s determination that the minimum coverage provision of the Patient Protection and
Affordable Care Act1 is constitutionally sound. Among the Act’s many changes to the
national markets in health care delivery and health insurance, the minimum coverage
provision requires all applicable individuals to maintain minimum essential health
insurance coverage or to pay a penalty. 26 U.S.C. § 5000A.




        1
          Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by the Health Care and Education
Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029.
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                  Page 3


        Plaintiffs include Thomas More Law Center, a public interest law firm, and four
individuals: Jann DeMars, John Ceci, Steven Hyder, and Salina Hyder.2 The individual
plaintiffs are United States citizens, Michigan residents, and federal taxpayers who claim
that the minimum coverage provision unconstitutionally compels them to purchase
health insurance. Thomas More does not assert any injury to itself as an organization
or employer, but rather objects to the provision on behalf of its members.

        Plaintiffs sought a declaration that Congress lacked authority under the
Commerce Clause to pass the minimum coverage provision, and alternatively a
declaration that the penalty is an unconstitutional tax. The district court held that the
minimum coverage provision falls within Congress’s authority under the Commerce
Clause for two principal reasons: (1) the provision regulates economic decisions
regarding how to pay for health care that have substantial effects on the interstate health
care market; and (2) the provision is essential to the Act’s larger regulation of the
interstate market for health insurance. Because the district court found the provision to
be authorized by the Commerce Clause, it declined to address whether it was a
permissible tax under the General Welfare Clause. The district court denied plaintiffs’
motion for a preliminary injunction, and they appeal.

        This opinion is divided into several parts. First, it provides background on the
Affordable Care Act and the minimum coverage provision. Second, it addresses this
Court’s jurisdiction. Third, it considers whether the provision is authorized by the
Commerce Clause of the Constitution. Fourth, it declines to address whether the
provision is authorized by the General Welfare Clause. We find that the minimum
coverage provision is a valid exercise of legislative power by Congress under the
Commerce Clause and therefore AFFIRM the decision of the district court.




        2
         Jann DeMars and Steven Hyder are members of Thomas More, while John Ceci and Salina
Hyder are not.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                 Page 4


                                 I. BACKGROUND

       Congress found that the minimum coverage provision is an essential cog in the
Affordable Care Act’s comprehensive scheme to reform the national markets in health
care delivery and health insurance. The Act contains five essential components designed
to improve access to the health care and health insurance markets, reduce the escalating
costs of health care, and minimize cost-shifting. First, the Act builds upon the existing
nationwide system of employer-based health insurance. It establishes tax incentives for
small businesses to purchase health insurance for their employees, 26 U.S.C. § 45R, and
requires certain large employers to offer health insurance to their employees, id.
§ 4980H. Second, the Act provides for the creation of state-operated “health benefit
exchanges.” These exchanges allow individuals and small businesses to leverage their
collective buying power to obtain price-competitive health insurance. 42 U.S.C.
§ 18031. Third, the Act expands federal programs to assist the poor with obtaining
health insurance. For eligible individuals who purchase insurance through an exchange,
the Act offers federal tax credits for payment of health insurance premiums, 26 U.S.C.
§ 36B, and authorizes federal payments to help cover out-of-pocket expenses, 42 U.S.C.
§ 18071. The Act also expands eligibility for Medicaid. Id. § 1396a(a)(10)(A)(i)(VIII).
Fourth, the Act bars certain practices in the insurance industry that have prevented
individuals from obtaining and maintaining health insurance. The guaranteed issue
requirement bars insurance companies from denying coverage to individuals with pre-
existing conditions, id. §§ 300gg-1(a), 300gg-3(a), and the community rating
requirement prohibits insurance companies from charging higher rates to individuals
based on their medical history, id. § 300gg.

       Finally, the Act’s “Requirement to Maintain Minimum Essential Coverage,”
26 U.S.C. § 5000A, takes effect in 2014 and requires every “applicable individual” to
obtain “minimum essential coverage” for each month. The Act directs the Secretary of
Health and Human Services in coordination with the Secretary of the Treasury to define
the required essential health benefits, which must include at least ten general categories
of services. 42 U.S.C. § 18022(b)(1).
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                  Page 5


       Applicable individuals who fail to obtain minimum essential coverage must
include with their annual federal tax payment a “shared responsibility payment,” which
is a “penalty” calculated based on household income. 26 U.S.C. § 5000A(b), (c). The
Act exempts from its penalty provision certain individuals, including those deemed to
suffer a hardship with respect to their capability to obtain coverage. Id. § 5000A(e).

       A number of Congressional findings accompany the minimum coverage
requirement. Congress determined that “the Federal Government has a significant role
in regulating health insurance,” and “[t]he requirement is an essential part of this larger
regulation of economic activity.” 42 U.S.C. § 18091(a)(2)(H). Congress found that
without the minimum coverage provision, other provisions in the Act, in particular the
guaranteed issue and community rating requirements, would increase the incentives for
individuals to “wait to purchase health insurance until they needed care.”              Id.
§ 18091(a)(2)(I). This would exacerbate the current problems in the markets for health
care delivery and health insurance. See id. Conversely, Congress found that “[b]y
significantly reducing the number of the uninsured, the [minimum coverage]
requirement, together with the other provisions of this Act, will lower health insurance
premiums.” Id. § 18091(a)(2)(F). Congress concluded that the minimum coverage
provision “is essential to creating effective health insurance markets in which improved
health insurance products that are guaranteed issue and do not exclude coverage of
pre-existing conditions can be sold.” Id. § 18091(a)(2)(I).

                 II. DOES THIS COURT HAVE JURISDICTION
                        OVER PLAINTIFFS’ CLAIM?

A. Standing and Ripeness

       Our first duty is to determine whether this is a “case or controversy” within the
meaning of Article III of the Constitution such that we have judicial power to review this
issue. Nat’l Rifle Ass’n of Am. v. Magaw, 132 F.3d 272, 279 (6th Cir. 1997). “We
review issues of justiciability pursuant to Article III de novo.” Id. at 278. Standing
requires plaintiffs to demonstrate “actual present harm or a significant possibility of
future harm.” Id. at 279. “[T]he presence of one party with standing is sufficient to
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.                Page 6


satisfy Article III’s case-or-controversy requirement.” Rumsfeld v. Forum for Academic
& Institutional Rights, Inc., 547 U.S. 47, 52 n.2 (2006). An issue must be ripe, or ready
for review, before we act. “Ripeness requires that the injury in fact be certainly
impending.” Nat’l Rifle Ass’n of Am., 132 F.3d at 280 (internal quotation marks and
citation omitted).

       Article III gives claimants standing to file a lawsuit in federal court if they
establish injury, causation, and redressability. Lujan v. Defenders of Wildlife, 504 U.S.
555, 560-61 (1992).       There is little to talk about with respect to the last two
requirements: The United States caused the alleged injury by enacting the minimum
coverage provision, and a favorable decision would redress the injury by invalidating the
provision. There is more to talk about with respect to the injury requirement.

       There are two potential theories of injury—“actual” present injury and
“imminent” future injury, id. at 560—and plaintiffs satisfy both of them. As to actual
injury, the declarations of Ceci and Steven Hyder show that the impending requirement
to buy medical insurance on the private market has changed their present spending and
saving habits. See John Ceci May 27, 2011 Decl. ¶¶ 7–8; Steven Hyder May 28, 2011
Decl. ¶ 8.

       Ceci and Steven Hyder filed these declarations, it is true, after a third plaintiff,
Jann DeMars, obtained private insurance during this appeal. These new declarations do
not contradict anything that Ceci and Steven Hyder said in their earlier declarations, and
there is nothing exceptional, or for that matter surprising, about the contents of them,
which largely parallel the original DeMars declaration. The United States concedes that
the original DeMars declaration established injury, Gov’t Letter Br. to this Court, at 3-5,
as the district court concluded and we agree.

       That leaves the objection to our consideration of the new declarations that they
were filed during the pendency of this appeal. This development, however, occurred in
response to another development during the appeal—the United States’s motion to
dismiss filed in the aftermath of DeMars’s disclosure that she had obtained medical
insurance. Out of an abundance of caution, we could remand the case to the district
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                  Page 7


court to permit testimony and cross-examination about the contents of the declarations.
However, the United States offers no reason to believe that anything in the declarations
is untrue, and we cannot think of any such reason ourselves. The Federal Rules of
Appellate Procedure permit the filing of affidavits on appeal, particularly in response to
a motion filed by an opposing party, and so do court decisions in settings similar to this
one. See Fed. R. App. P. 10(e); Ouachita Watch League v. Jacobs, 463 F.3d 1163, 1170-
71 (11th Cir. 2006); Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1554-55, 1560
(11th Cir. 1989); cf. United States v. Murdock, 398 F.3d 491, 500 (6th Cir. 2005).

        Summers v. Earth Island Institute, 555 U.S. 488, 129 S. Ct. 1142 (2009), does
not change matters. There, “[a]fter the District Court had entered judgment, and after
the Government had filed its notice of appeal, respondents submitted additional
affidavits to the District Court.” Id. at 1150 n.*. The Court did not consider the
affidavits because “respondents had not met the challenge to their standing at the time
of judgment [and] could not remedy the defect retroactively.” Id. No such problem
arose here. In this case, the plaintiffs “met the challenge to their standing at the time of
judgment,” and indeed the United States did not challenge that judgment on appeal.
Only after DeMars purchased insurance and after the appeal had been filed did the
United States file its motion to dismiss.

        In addition to establishing a present actual injury, plaintiffs have shown imminent
injury—“that the threatened injury is certainly impending.” Friends of the Earth, Inc.
v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 190 (2000). Imminence is a function
of probability. And probabilities can be measured by many things, including the
certainty that an event will come to pass. The uncertainty that the event will come to
pass may be based on developments that may occur during a gap in time between the
filing of a lawsuit and a threatened future injury. See 520 S. Mich. Ave. Assocs., Ltd. v.
Devine, 433 F.3d 961, 962 (7th Cir. 2006) (“Standing depends on the probability of
harm, not its temporal proximity.”).

        On March 23, 2010, Congress passed a law that goes into effect on January 1,
2014.   As the plaintiffs see it, the law requires them to do something that the
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                  Page 8


Constitution prohibits: require that they buy and maintain a minimum amount of medical
insurance. When the plaintiff is an object of the challenged action “there is ordinarily
little question that the action or inaction has caused him injury.” Defenders of Wildlife,
504 U.S. at 561-62.

       The only developments that could prevent this injury from occurring are not
probable and indeed themselves highly speculative. Plaintiffs, true enough, could leave
the country or die, and Congress could repeal the law. But these events are hardly
probable and not the kinds of future developments that enter into the imminence inquiry.
Riva v. Massachusetts, 61 F.3d 1003, 1011 (1st Cir. 1995) (“The demise of a party or the
repeal of a statute will always be possible in any case of delayed enforcement, yet it is
well settled that a time delay, without more, will not render a claim of statutory
invalidity unripe if the application of the statute is otherwise sufficiently probable.”).

       Plaintiffs also could buy insurance between the passage of the law and its
effective date. This is less speculative, as underscored by the reality that one of the
individual plaintiffs purchased insurance during the last year. But it makes no difference
to the imminence inquiry because one of plaintiffs’ theories is that Congress may not
force individuals to buy or maintain private insurance.

       Plaintiffs also could become exempt from the requirement because their income
could fall below the tax filing threshold or a disaster could befall them, making them
eligible for the hardship exception. This, too, is not probable, particularly when it comes
to all three individual plaintiffs, to say nothing of all of the members of Thomas More
Law Center.

       In settings like this one, the Supreme Court has permitted plaintiffs to challenge
laws well before their effective date. The Court has allowed challenges to go forward
even though the complaints were filed almost six years and roughly three years before
the laws went into effect. See New York v. United States, 505 U.S. 144, 153-54 (1992);
Pierce v. Soc’y of Sisters, 268 U.S. 510, 530, 536 (1925); see also Village of Bensenville
v. Fed. Aviation Admin., 376 F.3d 1114, 1119 (D.C. Cir. 2004) (over thirteen years).
While the point does not come up often, as most laws have immediate effective dates,
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.                  Page 9


these decisions establish that a lawsuit filed roughly three and a half years before the
effective date of the law is not out of the ordinary.

        Although Pierce and New York speak of justiciability only in terms of ripeness,
their reasoning applies equally to standing here. At least in this context, where the only
Article III question concerns the imminence of the plaintiffs’ injury, standing analysis
parallels ripeness analysis. See Duke Power Co. v. Carolina Envtl. Study Grp., Inc., 438
U.S. 59, 81 (1978) (“To the extent that issues of ripeness involve, at least in part, the
existence of a live ‘Case or Controversy,’ our conclusion that appellees will sustain
immediate injury . . . and that such injury would be redressed by the relief requested
would appear to satisfy this requirement.” (internal quotation marks omitted)); Warth v.
Seldin, 422 U.S. 490, 499 n.10 (1974) (“The standing question . . . bears close affinity
to questions of ripeness—whether the harm asserted has matured sufficiently to warrant
judicial intervention . . . .”). Indeed if a defendant’s “ripeness arguments concern only”
the “requirement that the injury be imminent rather than conjectural or hypothetical”
then “it follows that our analysis of [the defendant’s] standing challenge applies equally
and interchangeably to its ripeness challenge.” Brooklyn Legal Servs. Corp. v. Legal
Servs. Corp., 462 F.3d 219, 225 (2d Cir. 2006). Whether viewed through the lens of
standing or of ripeness, the plaintiffs’ challenge meets the requirements of Article III,
especially in the context of a pre-enforcement facial challenge.

        In view of the probability, indeed virtual certainty, that the minimum coverage
provision will apply to the plaintiffs on January 1, 2014, no function of standing law is
advanced by requiring plaintiffs to wait until six months or one year before the effective
date to file this lawsuit. There is no reason to think that plaintiffs’ situation will change.
And there is no reason to think the law will change. By permitting this lawsuit to be
filed three and one-half years before the effective date, as opposed to one year before the
effective date, the only thing that changes is that all three layers of the federal judiciary
will be able to reach considered merits decisions, as opposed to rushed interim (e.g.,
stay) decisions, before the law takes effect. The former is certainly preferable to the
latter, at least in the current setting of this case.
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.              Page 10


         Nor is their claim insufficiently “concrete and particularized.” Defenders of
Wildlife, 504 U.S. at 560. While “‘some day’ intentions” to travel somewhere or to do
something that might implicate a federal law “do not support a finding of the ‘actual or
imminent’ injury” that the cases demand, id. at 564, plaintiffs’ situations are not nearly
so ephemeral. There is no trip that must be taken, no ticket that must be purchased,
before the injury occurs. See id. at 564 n.2. The plaintiffs claim a constitutional right
to be free of the minimum coverage provision, and the only thing saving them from it
at this point is two and a half more years and an exceedingly concrete “some day”:
January 1, 2014. See 26 U.S.C. § 5000A(a).

         McConnell v. Federal Election Commission, 540 U.S. 93 (2003), does not
undermine this conclusion. There the Court ruled that several plaintiffs did not have
standing to challenge a provision of the Bipartisan Campaign Reform Act because their
“alleged injury . . . [was] too remote temporally.” Id. at 226. The McConnell plaintiffs
filed a lawsuit in March 2002, 251 F. Supp. 2d 176, 206 (D.D.C. 2003), and “the earliest
day [McConnell] could be affected by [the challenged provision was] 45 days before the
Republican primary in 2008.” 540 U.S. at 226. The Court, however, could not know
whether the plaintiffs would even suffer an injury six years later. Id. The challenged
provision would affect the McConnell plaintiffs only if the following things happened
in an election six years later: (1) a challenger ran in the primary or election; (2) the
plaintiff created an advertisement mentioning the challenger; (3) the advertisement did
not identify the plaintiff by name; and (4) the broadcasters attempted to charge
McConnell more than their lowest unit rate for his ads. Id. at 224-25. A candidate
cannot guarantee (much less prove) that another person will run against him six years
down the road or that a broadcaster will offer him a less than favorable price, and it is
unknowable what type of political advertisements the candidate will run when the time
comes.

         The plaintiffs have no similar problem in this case. The Act itself proves they
will be required to purchase insurance and maintain it when the time comes. Unlike the
McConnell plaintiffs, who had not taken any action that would subject them to the Act,
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 11


the plaintiffs need not do anything to become subject to the Act. That, indeed, is their
key theory—that mere “existence” should not be a basis for requiring someone to buy
health insurance on the private market. Plaintiffs have standing to bring this claim.

B. Anti-Injunction Act

       The United States and the plaintiffs now agree that the Anti-Injunction Act does
not bar this action. Yet because this limitation goes to the subject matter jurisdiction of
the federal courts, the parties’ agreement by itself does not permit us to review this
challenge. 26 U.S.C. § 7421(a); see Arbaugh v. Y & H Corp., 546 U.S. 500, 515-16 &
n.11 (2006).

       The Anti-Injunction Act says that “no suit for the purpose of restraining the
assessment or collection of any tax shall be maintained in any court.” 26 U.S.C.
§ 7421(a). In language “at least as broad as the Anti-Injunction Act,” Bob Jones Univ.
v. Simon, 416 U.S. 725, 732 n.7 (1974), the Declaratory Judgment Act forbids
declaratory judgment actions “with respect to Federal taxes.” 28 U.S.C. § 2201(a).

       The relevant terminology suggests that we may hear this action. While the Anti-
Injunction Act applies only to “tax[es],” 26 U.S.C. § 7421(a), Congress called the
shared-responsibility payment a “penalty.” See id. § 5000A. In many contexts, the law
treats “taxes” and “penalties” as mutually exclusive. See, e.g., United States v.
Reorganized CF & I Fabricators of Utah, Inc., 518 U.S. 213, 220 (1996) (determining
whether, under section 507(a)(7) of the Bankruptcy Code, a particular exaction was “a
‘tax’ []as distinct from a . . . penalty”); Dep’t of Revenue of Mont. v. Kurth Ranch, 511
U.S. 767, 784 (1994) (determining that a provision labeled a “tax” was a penalty and
therefore barred by the Double Jeopardy Clause); Bailey v. Drexel Furniture Co., 259
U.S. 20, 38 (1922) (construing Congress’s taxing power under Article I, § 8, cl. 1, based
on “[t]he difference between a tax and a penalty”). Congress’s choice of words—barring
litigation over “tax[es]” in section 7421 but imposing a “penalty” in
section 5000A—suggests that the former does not cover the latter.
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 12


        Other provisions of the Internal Revenue Code, to be sure, show that some
“penalties” amount to “taxes” for purposes of the Anti-Injunction Act. Not surprisingly,
for example, chapter 68 of the Revenue Code imposes “penalties” on individuals who
fail to pay their “taxes.” 26 U.S.C. § 6651. Less obviously, but to similar effect,
subchapter B of chapter 68 of the Revenue Code imposes other “penalties” related to the
enforcement of traditional taxes. See, e.g., id. § 6676 (penalty for erroneously claiming
refunds); id. § 6704 (penalty for failing to keep certain records). Under section 6671,
“any reference in this title to ‘tax’ imposed by this title shall be deemed also to refer to
the penalties and liabilities provided by [subchapter B of chapter 68].” See also id.
§§ 6201; 6665(a)(2). All of these “penalties” thus count as “taxes,” including for
purposes of the Anti-Injunction Act. See Herring v. Moore, 735 F.2d 797, 798 (5th Cir.
1984) (per curiam); Souther v. Mihlbachler, 701 F.2d 131, 132 (10th Cir. 1983) (per
curiam); Prof’l Eng’rs, Inc. v. United States, 527 F.2d 597, 599 (4th Cir. 1975).
Otherwise, the recalcitrant tax protester could sue to preempt collection of a substantial
monetary charge (accumulated penalties and interest) but not what will often be a
smaller charge (the tax owed).

        None of this affects the shared-responsibility payment, a penalty triggered by
failure to comply with the minimum coverage provision. Section 5000A is not a penalty
“provided by” chapter 68 of the Revenue Code. Congress placed the penalty in chapter
48 of the Revenue Code, and it did not include a provision treating the penalty as a “tax”
in the title, as it did with penalties provided in chapter 68. Distinct words have distinct
meanings. Congress said one thing in sections 6665(a)(2) and 6671(a), and something
else in section 5000A, and we should respect the difference. That is particularly so
where, as here, Congress had a reason for creating a difference: Unlike the penalties
listed in chapter 68, the shared responsibility payment has nothing to do with tax
enforcement. Cf. Mobile Republican Assembly v. United States, 353 F.3d 1357, 1362
n.5 (11th Cir. 2003) (holding that “tax penalties imposed for substantive violations of
laws not directly related to the tax code” do not implicate the Anti-Injunction Act).
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 13


        Section 5000A(g)(1), it is true, says that “[t]he penalty provided by this section
shall be paid upon notice and demand by the Secretary, and . . . shall be assessed and
collected in the same manner as an assessable penalty under subchapter B of chapter
68.” 26 U.S.C. § 5000A(g)(1) (emphasis added). The assessable penalties under
subchapter B in turn “shall be paid upon notice and demand by the Secretary, and shall
be assessed and collected in the same manner as taxes.” Id. § 6671(a). In the context
of a shared-responsibility payment to the United States for failing to buy medical
insurance, however, the most natural reading of the provision is that the “manner” of
assessment and collection mentioned in sections 5000A(g)(1) and 6671(a) refers to the
mechanisms the Internal Revenue Service employs to enforce penalties, not to the bar
against pre-enforcement challenges to taxes.

        The same is true of other provisions in the Code treating penalties as taxes. All
that section 6665(a)(2) and section 6671(a) show is that Congress intended to treat
certain penalties as “taxes” in certain contexts. To read these provisions loosely to
suggest that every penalty is a “tax” would render each particular provision superfluous.
That conclusion makes all the more sense in the context of the Affordable Care Act,
which prohibits the Internal Revenue Service from using the customary tools available
for collecting taxes and penalties, the very tools the Anti-Injunction Act was enacted to
protect. See Bob Jones Univ., 416 U.S. at 736. In collecting the health care penalty, the
Internal Revenue Service may not impose liens on an individual’s property, place levies
on an individual’s pay, or bring criminal charges. 26 U.S.C. § 5000A(g)(2)(B). All that
the Internal Revenue Service may do is one of two things. It may deduct past-due
penalties from future tax refunds, a form of enforcement exceedingly unlikely to
implicate the Anti-Injunction Act. Or it may bring a collection action, which most
individuals would be unlikely to preempt—in truth invite—by bringing their own
lawsuit. Last of all, because the minimum coverage provision does not come into effect
until 2014 (and the penalty could not be assessed or collected until at least a year later),
this lawsuit will hardly interfere with the “Government’s need to assess and collect taxes
as expeditiously as possible.” Bob Jones Univ., 416 U.S. at 736. Here, the Anti-
Injunction Act does not remove our jurisdiction to consider this claim.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 14


  III. IS THE MINIMUM COVERAGE PROVISION A CONSTITUTIONAL
            EXERCISE OF CONGRESS’S COMMERCE POWER?
        The question squarely presented here is whether the minimum coverage
provision is consistent with the Commerce Clause of the Constitution. We review de
novo plaintiffs’ constitutional challenge to the provision. See United States v. Bowers,
594 F.3d 522, 527 (6th Cir. 2010). At the outset, it is important to note that our elected
officials and the public hotly debated the merits and weaknesses of the Act before
Congress voted, and will undoubtedly continue to in the future. However, it is not this
Court’s role to pass on the wisdom of Congress’s choice. See, e.g., Gibbons v. Ogden,
22 U.S. (9 Wheat.) 1, 197 (1824) (“The wisdom and the discretion of Congress, their
identity with the people, and the influence which their constituents possess at elections[]
are . . . the sole restraints on which they have relied, to secure them from its abuse.”).
We consider only whether the Constitution grants Congress the power to enact this
legislation.

        The minimum coverage provision, like all congressional enactments, is entitled
to a “presumption of constitutionality,” and will be invalidated only upon a “plain
showing that Congress has exceeded its constitutional bounds.” United States v.
Morrison, 529 U.S. 598, 607 (2000). The presumption that the minimum coverage
provision is valid is “not a mere polite gesture. It is a deference due to deliberate
judgment by constitutional majorities of the two Houses of Congress that an Act is
within their delegated power . . . .” United States v. Five Gambling Devices, 346 U.S.
441, 449 (1953).

A. The Supreme Court’s Commerce Clause Jurisprudence

        In our dual system of government, the federal government is limited to its
enumerated powers, while all other powers are reserved to the states or to the people.
U.S. Const. amend. X. States have authority under their general police powers to enact
minimum coverage provisions similar to the one in the Affordable Care Act. See Mass.
Gen. Laws Ann. ch. 111M, § 2 (West 2011). However, the federal government has no
police power and may enact such a law only if it is authorized by one of its enumerated
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                 Page 15


powers. See, e.g., United States v. Lopez, 514 U.S. 549, 566 (1995). Our task is to
review the district court’s conclusion that Congress properly relied on its authority under
the Commerce Clause to enact the minimum coverage provision.

        Recognizing that uniform federal regulation is necessary in some instances, the
Commerce Clause of the Constitution grants Congress the power “[t]o regulate
commerce with foreign Nations, and among the several States, and with the Indian
Tribes.” U.S. Const. Art. I, § 8, cl. 3. The Supreme Court has held that Congress has
broad authority to regulate under the Commerce Clause. From 1937 to 1994 it did not
invalidate a single law as unconstitutional for exceeding the scope of Congress’s
Commerce Power. The Court has explained that Congress’s Commerce Clause power
encompasses three broad spheres: (1) “the use of the channels of interstate commerce”;
(2) “the instrumentalities of interstate commerce, or persons or things in interstate
commerce”; and (3) “those activities having a substantial relation to interstate
commerce, . . . i.e., those activities that substantially affect interstate commerce.” Lopez,
514 U.S. at 558-59.

        Because the United States does not contend that the minimum coverage provision
falls within either of the first two categories, we proceed to consider whether the
provision falls within Congress’s power to regulate activities that substantially affect
interstate commerce. Current Supreme Court jurisprudence reveals that Congress may
use this category of its Commerce Power to regulate two related classes of activity.
First, it has long been established that Congress may regulate economic activity, even
if wholly intrastate, if it substantially affects interstate commerce. See Gonzales v.
Raich, 545 U.S. 1, 25 (2005); Morrison, 529 U.S. at 610; Lopez, 514 U.S. at 560.

        Second, Congress may also regulate even non-economic intrastate activity if
doing so is essential to a larger scheme that regulates economic activity. For example,
in Wickard v. Filburn, 317 U.S. 111 (1942), the Court upheld regulations limiting the
amount of wheat that farmers could grow, even for non-commercial purposes. Even
though producing and consuming home-grown wheat is non-economic intrastate activity,
Congress rationally concluded that the failure to regulate this class of activities would
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 16


undercut its broader regulation of the interstate wheat market. Id. at 127-28. This is
because individuals would be fulfilling their own demand for wheat rather than resorting
to the market, which would thwart Congress’s efforts to stabilize prices. Id. at 128-29.
Similarly, in Gonzales v. Raich, the Court held that the federal Controlled Substances
Act could be applied to prohibit the local cultivation and possession of marijuana
authorized under California law. 545 U.S. at 19. Leaving home-grown and home-
consumed marijuana outside federal control would undercut Congress’s broader
regulation of interstate economic activity. Id. Thus, Wickard and Raich establish that
“Congress can regulate purely intrastate activity that is not itself ‘commercial,’ in that
it is not produced for sale, if it concludes that failure to regulate that class of activity
would undercut the regulation of the interstate market in that commodity.” Id. at 18.

        Despite the Supreme Court’s broad interpretation of the Commerce Power, it has
emphasized in two recent cases that this power is subject to real limits. In United States
v. Lopez and United States v. Morrison, the Court struck down single-subject criminal
statutes as beyond Congress’s power under the Commerce Clause. The Supreme Court
held that the statutes at issue in these cases, the Gun Free School Zones Act and the
Violence Against Women Act, exceeded Congress’s Commerce Clause power based on
four main factors: (1) the statutes regulated non-economic, criminal activity and were
not part of a larger regulation of economic activity; (2) the statutes contained no
jurisdictional hook limiting their application to interstate commerce; (3) any
Congressional findings regarding the effects of the regulated activity on interstate
commerce were not sufficient to sustain constitutionality of the legislation; and (4) the
link between the regulated activity and interstate commerce was too attenuated. See
Morrison, 529 U.S. at 601-15; Lopez, 514 U.S. at 561-67. The Court found that
accepting Congress’s proffered reasons for the statutes would have paved the way for
Congress to regulate those quintessentially local actions that the Constitution left within
the purview of the states. Morrison, 529 U.S. at 615-16.
No. 10-2388           Thomas More Law Center, et al. v. Obama, et al.                       Page 17


B. Whether the Minimum Coverage Provision is a Valid Exercise of the Commerce
Power under Lopez, Morrison, and Raich
        In applying this jurisprudence, our first duty is to determine the class of activities
that the minimum coverage provision regulates. See, e.g., Perez v. United States, 402
U.S. 146, 153-54 (1971) (directing courts to determine first whether the class of
activities regulated by a statute is within the reach of Congress’s power). There is debate
over whether the provision regulates activity in the market of health insurance or in the
market of health care. In the most literal, narrow sense, the provision might be said to
regulate conduct in the health insurance market by requiring individuals to maintain a
minimum level of coverage. However, Congress’s intent and the broader statutory
scheme may help to illuminate the class of activities that a provision regulates. See, e.g.,
Swift & Co. v. United States, 196 U.S. 375, 398 (1905) (“[C]ommerce among the states
is not a technical legal conception, but a practical one, drawn from the course of
business.”); United States v. Ambert, 561 F.3d 1202, 1212 (11th Cir. 2009) (“Congress
did not focus on individual local registration as an end in itself, but rather as part of its
goal to create a system to track and regulate the movement of sex offenders from one
jurisdiction to another.”). The Act considered as a whole makes clear that Congress was
concerned that individuals maintain minimum coverage not as an end in itself, but
because of the economic implications on the broader health care market. Virtually
everyone participates in the market for health care delivery, and they finance these
services by either purchasing an insurance policy or by self-insuring. Through the
practice of self-insuring, individuals make an assessment of their own risk and to what
extent they must set aside funds or arrange their affairs to compensate for probable
future health care needs.3 Thus, set against the Act’s broader statutory scheme, the
minimum coverage provision reveals itself as a regulation on the activity of participating
in the national market for health care delivery, and specifically the activity of self-
insuring for the cost of these services.




        3
        We use the term self-insurance for ease of discussion. We note, however, that it is actually a
misnomer because no insurance is involved, and might be better described as risk retention.
No. 10-2388             Thomas More Law Center, et al. v. Obama, et al.                              Page 18


         Plaintiffs challenge the minimum coverage provision on its face as an
unconstitutional exercise of congressional authority. They accept the class of activities
that the provision purports to reach: participating in the national market for health care
services without maintaining insurance that meets the minimum coverage requirement.
Unlike the plaintiffs in Raich, they do not attempt to carve out a subset class of activities
and to deny that their conduct has substantial effects on interstate commerce. Rather,
like the plaintiffs in Lopez and Morrison, they claim that the entire class of activities that
the provision attempts to reach is beyond Congress’s power to regulate.4 In this Circuit,
“[f]acial invalidation of a statute . . . is reserved only for when there are no set of
circumstances in which the statute’s application would be constitutional.” United States
v. Faasse, 265 F.3d 475, 487 n.10 (6th Cir. 2001) (en banc); see also United States v.
Salerno, 481 U.S. 739, 745 (1987).

         By regulating the practice of self-insuring for the cost of health care delivery, the
minimum coverage provision is facially constitutional under the Commerce Clause for
two independent reasons. First, the provision regulates economic activity that Congress
had a rational basis to believe has substantial effects on interstate commerce. In
addition, Congress had a rational basis to believe that the provision was essential to its
larger economic scheme reforming the interstate markets in health care and health
insurance.

1. The minimum coverage provision regulates economic activity with a substantial
effect on interstate commerce
         Congress may regulate economic activity, even if wholly intrastate, that
substantially affects interstate commerce. See Raich, 545 U.S. at 25; Morrison, 529 U.S.
at 610; Lopez, 514 U.S. at 560. Additionally, “[w]e need not determine whether [the]


         4
           If a group of plaintiffs brought an as-applied challenge, in contrast, they would claim that their
conduct does not have substantial effects on interstate commerce, either because they never access the
health care market or because they are fully capable of paying for any health care services that they
consume. We have no occasion to address these situations in detail but note only that if the minimum
coverage provision is facially constitutional, then it is difficult to imagine a circumstance under which an
as-applied Commerce Clause challenge to the provision would succeed. See, e.g., United States v.
Maxwell, 446 F.3d 1210, 1215 n.5 (11th Cir. 2006) (“[Raich] leaves some doubt as to whether, in the
Commerce Clause context, an as-applied challenge may ever be sustained so long as Congress may
constitutionally regulate the broader class of activities of which the intrastate activity is a part . . . .”).
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.              Page 19


activities, taken in the aggregate, substantially affect interstate commerce in fact, but
only whether a ‘rational basis’ exists for so concluding.” Raich, 545 U.S. at 22 (citing
Lopez, 514 U.S. at 557). Thus, our task is to determine whether self-insuring for the cost
of health care services is an economic activity, and whether Congress had a rational
basis to conclude that, in the aggregate, this activity substantially affects interstate
commerce.

       The minimum coverage provision regulates activity that is decidedly economic.
In Raich, the Supreme Court explained that “‘[e]conomics’ refers to ‘the production,
distribution, and consumption of commodities.’” Id. at 25 (quoting Webster’s Third
New International Dictionary 720 (1966)). Consumption of health care falls squarely
within Raich’s definition of economics, and virtually every individual in this country
consumes these services. Individuals must finance the cost of health care by purchasing
an insurance policy or by self-insuring, cognizant of the backstop of free services
required by law. By requiring individuals to maintain a certain level of coverage, the
minimum coverage provision regulates the financing of health care services, and
specifically the practice of self-insuring for the cost of care. The activity of foregoing
health insurance and attempting to cover the cost of health care needs by self-insuring
is no less economic than the activity of purchasing an insurance plan. Thus, the
financing of health care services, and specifically the practice of self-insuring, is
economic activity.

       Furthermore, Congress had a rational basis to believe that the practice of self-
insuring for the cost of health care, in the aggregate, substantially affects interstate
commerce. An estimated 18.8% of the non-elderly United States population (about 50
million people) had no form of health insurance for 2009. U.S. Census Bureau, Income,
Poverty, and Health Insurance Coverage in the United States: 2009, at 23, table 8 (2010).
Virtually everyone requires health care services at some point, and unlike nearly all other
industries, the health care market is governed by federal and state laws requiring
institutions to provide services regardless of a patient’s ability to pay. The uninsured
cannot avoid the need for health care, and they consume over $100 billion in health care
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 20


services annually. Families USA, Hidden Health Tax: Americans Pay a Premium, at 2
(2009). The high cost of health care means that those who self-insure, as a class, are
unable to pay for the health care services that they receive. Congress found that the
aggregate cost of providing uncompensated care to the uninsured in 2008 was $43
billion. 42 U.S.C. § 18091(a)(2)(F). Congress also determined that the cost of
uncompensated care is passed on from providers “to private insurers, which pass on the
cost to families.” Id. This cost-shifting inflates the premiums that families must pay for
their health insurance “by on average over $1,000 a year.” Id. Rising premiums push
even more individuals out of the health insurance market, further increasing the cost of
health insurance and perpetuating the cycle. See 47 Million and Counting: Why the
Health Care Marketplace Is Broken: Hearing Before the S. Comm. on Finance, 110th
Cong. 49 (2008) (Statement of Mark A. Hall). Thus, the practice of self-insuring
substantially affects interstate commerce by driving up the cost of health care as well as
by shifting costs to third parties.

        Self-insuring for the cost of health care directly affects the interstate market for
health care delivery and health insurance. These effects are not at all attenuated as were
the links between the regulated activities and interstate commerce in Lopez and
Morrison. Similar to the causal relationship in Wickard, self-insuring individuals are
attempting to fulfill their own demand for a commodity rather than resort to the market
and are thereby thwarting Congress’s efforts to stabilize prices. Therefore, the minimum
coverage provision is a valid exercise of the Commerce Power because Congress had a
rational basis for concluding that, in the aggregate, the practice of self-insuring for the
cost of health care substantially affects interstate commerce.

2. The minimum coverage provision is an essential part of a broader economic
regulatory scheme
        Alternatively, even if self-insuring for the cost of health care were not economic
activity with a substantial effect on interstate commerce, Congress could still properly
regulate the practice because the failure to do so would undercut its regulation of the
larger interstate markets in health care delivery and health insurance. In Raich, the
Supreme Court explained that Congress can regulate non-commercial intrastate activity
No. 10-2388            Thomas More Law Center, et al. v. Obama, et al.                             Page 21


if it concludes that it is necessary in order to regulate a larger interstate market. 545 U.S.
at 18. The Court found relevant that unlike the single-subject criminal statutes at issue
in Morrison and Lopez, the classification of marijuana at issue in Raich was “merely one
of many ‘essential part[s] of a larger regulation of economic activity, in which the
regulatory scheme could be undercut unless the intrastate activity were regulated.’” Id.
at 24-25 (alteration in original) (quoting Lopez, 514 U.S. at 561). The Raich Court
highlighted two aspects of Congress’s broad power under the Commerce Clause. First,
Congress may aggregate the effects of non-commercial activity and assess the overall
effect on the interstate market. Id. at 22. Second, the rational basis test applies to
Congress’s judgment that regulating intrastate non-economic activity is essential to its
broader regulatory scheme. Id. at 19. Thus, where Congress comprehensively regulates
interstate economic activity, it may regulate non-economic intrastate activity if it
rationally believes that, in the aggregate, the failure to do so would undermine the
effectiveness of the overlying regulatory scheme.5

         We have applied this doctrine to uphold laws prohibiting intrastate possession
of child pornography and intrastate transfer of firearms that are part of broader economic
regulatory schemes. See, e.g., Bowers, 594 F.3d at 529 (“Raich indicates that Congress
has the ability to regulate wholly intrastate manufacture and possession of child
pornography, regardless of whether it was made or possessed for commercial purposes,
that it rationally believes, if left unregulated in the aggregate, could work to undermine
Congress’s ability to regulate the larger interstate commercial activity.”); United States
v. Rose, 522 F.3d 710, 719 (6th Cir. 2008) (“Congress had a rational basis for concluding
that the intrastate transfer of firearms would undercut its regulation of the interstate
firearms market . . . .”). In addition, our sister circuits have applied this rationale in
upholding laws requiring sex offender registration. See, e.g., United States v. Gould, 568
F.3d 459, 475 (4th Cir. 2009) (“Requiring all sex offenders to register is an integral part

         5
           The Supreme Court has applied this larger regulatory scheme doctrine only in Raich, which
addressed an as-applied challenge, while this case involves a facial challenge. However, because the larger
regulatory scheme doctrine was articulated in Lopez, which addressed a facial challenge, it applies to facial
challenges as well. See Lopez, 514 U.S. at 561 (“[The Gun-Free School Zones Act] is not an essential part
of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the
intrastate activity were regulated.”).
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.               Page 22


of Congress’ regulatory effort and the regulatory scheme could be undercut unless the
intrastate activity were regulated.” (internal quotation marks and citation omitted));
Ambert, 561 F.3d at 1211; United States v. Howell, 552 F.3d 709, 717 (8th Cir. 2009).
Similarly, Congress had a rational basis to conclude that failing to regulate those who
self-insure would undermine its regulation of the interstate markets in health care
delivery and health insurance.

       As plaintiffs concede, Congress has the power under the Commerce Clause to
regulate the interstate markets in health care delivery and health insurance. It has long
been settled that “Congress plainly has power to regulate the price of [products]
distributed through the medium of interstate commerce . . . [and] it possesses every
power needed to make that regulation effective.” United States v. Wrightwood Dairy
Co., 315 U.S. 110, 118-19 (1942); see United States v. South-Eastern Underwriters
Ass’n, 322 U.S. 533, 552-53 (1944). In doing so, Congress may decide “to give
protection to sellers or purchasers or both.” Currin v. Wallace, 306 U.S. 1, 11 (1939).
The Act uses this power to regulate prices and protect purchasers by banning certain
practices in the insurance industry that have prevented individuals from obtaining and
maintaining insurance coverage. Under the process of “medical underwriting,”
insurance companies review each applicant’s medical history and health status to
determine eligibility and premium levels. As a result of this practice, approximately
thirty-six percent of applicants in the market for individual health insurance are denied
coverage, charged a substantially higher premium, or offered only limited coverage that
excludes pre-existing conditions. Department of Health and Human Services, Coverage
Denied: How the Current Health Insurance System Leaves Millions Behind, at 1 (2009).
The Act bans this practice through a guaranteed issue requirement, which bars insurance
companies from denying coverage to individuals with pre-existing conditions; and a
community rating requirement, which prohibits insurance companies from charging
higher rates to individuals based on their medical history. 42 U.S.C. §§ 300gg, 300gg-
1(a), 300gg-3(a). No one denies that Congress properly enacted these reforms as part
of its power to regulate the interstate markets in health care delivery and health
insurance.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 23


       Furthermore, Congress had a rational basis for concluding that leaving those
individuals who self-insure for the cost of health care outside federal control would
undercut its overlying economic regulatory scheme. Congress found that without the
minimum coverage provision, the guaranteed issue and community rating provisions
would increase existing incentives for individuals to delay purchasing health insurance
until they need care. Id. § 18091(a)(2)(I). The legislative record demonstrated that the
seven states that had enacted guaranteed issue reforms without minimum coverage
provisions suffered detrimental effects to their insurance markets, such as escalating
costs and insurance companies exiting the market. In contrast, Congress found that “[i]n
Massachusetts, a [minimum coverage] requirement has strengthened private
employer-based coverage: despite the economic downturn, the number of workers
offered employer-based coverage has actually increased.” Id. § 18091(a)(2)(D). It was
reasonable for Congress to conclude that failing to regulate those who self-insure would
“leave a gaping hole” in the Act. Cf. Raich, 545 U.S. at 22 (holding that Congress had
a rational basis to conclude that failing to regulate intrastate manufacture and possession
of marijuana would “leave a gaping hole” in the Controlled Substances Act). Congress
rationally found that the minimum coverage provision “is essential to creating effective
health insurance markets in which improved health insurance products that are
guaranteed issue and do not exclude coverage of pre-existing conditions can be sold.”
42 U.S.C. § 18091(a)(2)(I). Congress had a rational basis for concluding that the
minimum coverage requirement is essential to its broader reforms to the national markets
in health care delivery and health insurance. Therefore, the minimum coverage
provision is a valid exercise of the Commerce Clause power.

C. Whether the Minimum Coverage Provision Impermissibly Regulates Inactivity

       Thomas More argues that the minimum coverage provision exceeds Congress’s
power under the Commerce Clause because it regulates inactivity. However, the text of
the Commerce Clause does not acknowledge a constitutional distinction between activity
and inactivity, and neither does the Supreme Court. Furthermore, far from regulating
inactivity, the provision regulates active participation in the health care market.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 24


       As long as Congress does not exceed the established limits of its Commerce
Power, there is no constitutional impediment to enacting legislation that could be
characterized as regulating inactivity. The Supreme Court has never directly addressed
whether Congress may use its Commerce Clause power to regulate inactivity, and it has
not defined activity or inactivity in this context. However, it has eschewed defining the
scope of the Commerce Power by reference to flexible labels, and it consistently stresses
that Congress’s authority to legislate under this grant of power is informed by “broad
principles of economic practicality.” Lopez, 514 U.S. at 571 (Kennedy, J., concurring);
see Wickard, 317 U.S. at 120 (explaining that Congress’s power cannot be determined
“by reference to any formula which would give controlling force to nomenclature such
as ‘production’ and ‘indirect’ and foreclose consideration of the actual effects of the
activity in question upon interstate commerce”).

       Similarly, this Court has also refused to focus on imprecise labels when
determining whether a statute falls within Congress’s Commerce Power. For example,
we rejected the argument that the Child Support Recovery Act is unconstitutional
because it regulates an individual’s failure to place an item in commerce. Instead, we
held that Congress had a rational basis for concluding that a non-custodial spouse’s
failure to send court-ordered child support payments across state lines substantially
affects interstate commerce. Faasse, 265 F.3d at 490-91; accord United States v. Black,
125 F.3d 454, 462 (7th Cir. 1997); United States v. Parker, 108 F.3d 28, 30 (3d Cir.
1997); United States v. Hampshire, 95 F.3d 999, 1004 (10th Cir. 1996). Focusing on the
broader economic landscape of the legislation revealed the unworkability of relying on
inexact labels because there was “no principled distinction between the parent who fails
to send any child support through commerce and the parent who sends only a fraction
of the amount owed.” Faasse, 265 F.3d at 487 n.9. Here, too, the constitutionality of
the minimum coverage provision cannot be resolved with a myopic focus on a malleable
label. Congress had a rational basis for concluding that the practice of self-insuring for
the cost of health care has a substantial effect on interstate commerce, and that the
minimum coverage provision is an essential part of a broader economic regulatory
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 25


scheme. Thus, the provision is constitutional notwithstanding the fact that it could be
labeled as regulating inactivity.

       Furthermore, far from regulating inactivity, the minimum coverage provision
regulates individuals who are, in the aggregate, active in the health care market. The
Supreme Court has stated that “when it is necessary in order to prevent an evil to make
the law embrace more than the precise thing to be prevented [Congress] may do so.”
Westfall v. United States, 274 U.S. 256, 259 (1927). The vast majority of individuals are
active in the market for health care delivery because of two unique characteristics of this
market: (1) virtually everyone requires health care services at some unpredictable point;
and (2) individuals receive health care services regardless of ability to pay.

       Virtually everyone will need health care services at some point, including, in the
aggregate, those without health insurance. Even dramatic attempts to protect one’s
health and minimize the need for health care will not always be successful, and the
health care market is characterized by unpredictable and unavoidable needs for care.
The ubiquity and unpredictability of the need for medical care is born out by the
statistics. More than eighty percent of adults nationwide visited a doctor or other health
care professional one or more times in 2009. Centers for Disease Control and Prevention
National Center for Health Statistics, Summary Health Statistics for U.S. Adults:
National Health Interview Survey, 2009, table 35 (2010). Additionally, individuals
receive health care services regardless of whether they can afford the treatment. The
obligation to provide treatment regardless of ability to pay is imposed by the Emergency
Medical Treatment and Active Labor Act, 42 U.S.C. § 1395dd, state laws, and many
institutions’ charitable missions. The unavoidable need for health care coupled with the
obligation to provide treatment make it virtually certain that all individuals will require
and receive health care at some point. Thus, although there is no firm, constitutional bar
that prohibits Congress from placing regulations on what could be described as
inactivity, even if there were it would not impact this case due to the unique aspects of
health care that make all individuals active in this market.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 26


  IV. IS THE MINIMUM COVERAGE PROVISION A CONSTITUTIONAL
             EXERCISE OF CONGRESS’S TAXING POWER?
       In light of the conclusion that the minimum coverage provision is a valid exercise
of Congress’s power under the Commerce Clause, it is not necessary to resolve whether
the provision could also be sustained as a proper exercise of Congress’s power to tax and
spend under the General Welfare Clause, U.S. Const. Art. I, § 8, cl. 1.

                                  V. CONCLUSION

       Congress had a rational basis for concluding that, in the aggregate, the practice
of self-insuring for the cost of health care substantially affects interstate commerce.
Furthermore, Congress had a rational basis for concluding that the minimum coverage
provision is essential to the Affordable Care Act’s larger reforms to the national markets
in health care delivery and health insurance. Finally, the provision regulates active
participation in the health care market, and in any case, the Constitution imposes no
categorical bar on regulating inactivity. Thus, the minimum coverage provision is a
valid exercise of Congress’s authority under the Commerce Clause, and the decision of
the district court is AFFIRMED.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 27


         _______________________________________________________

                       CONCURRING IN PART AND
           DELIVERING THE OPINION OF THE COURT IN PART
         _______________________________________________________

       SUTTON, Circuit Judge. The National Government is “one of enumerated” and
limited “powers,” a feature of the United States Constitution “universally admitted” in
1819, McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 405, and still largely accepted
today. “But the question respecting the extent of the powers actually granted, is
perpetually arising, and will probably continue to arise, as long as our system shall
exist.” Id.

       So it has. Section 1501 of the Patient Protection and Affordable Care Act of
2010 requires most Americans to buy a minimum level of medical insurance and, if they
do not, to pay a monetary penalty instead. Today’s “question” about the “extent of the
powers” granted to Congress goes primarily to its commerce power to compel
individuals to buy something they do not want (medical insurance) as part of a regulatory
system that a majority of elected representatives do want (national health care).

       The claimants’ case. As the claimants see it, Congress’s authority to “regulate”
interstate “commerce” extends only to individuals already in the stream of the relevant
commercial market, in this instance health insurance. It no more permits Congress to
conscript an individual to enter that market on the buy side than it permits Congress to
require a company that manufactures cars to peddle health insurance on the sell side.
Not only the words of the Commerce Clause undercut the validity of the individual
mandate, so too does custom. Congress has never exercised its commerce power in this
way, and nothing suggests that this tradition reflects 220 years of self-restraint. If the
commerce power permits Congress to force individuals to enter whatever markets it
chooses, any remaining hold on national power will evaporate, leaving future limits to
the whims of legislative restraint, the epitome of a system without restrictions, balance
or any other constraints on power. If Congress does not have a “blank check” in passing
war-on-terror legislation, Hamdi v. Rumsfeld, 542 U.S. 507, 536 (2004) (plurality
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 28


opinion), it should not have a blank check in passing healthcare legislation. Even if the
commerce power has “evolved over time” in favor of greater congressional power,
Gonzales v. Raich, 545 U.S. 1, 15–16 (2005), that need not invariably be the case, lest
each expansion of federal power beget another, piling one inference of an unlimited
national police power onto another.

       The federal government’s case. The issue is not that simple, the government
responds. What has principally changed over the last two centuries is commerce. As
means of travel and communication have advanced, any meaningful distinction between
local and national commerce has essentially disappeared, and the Court’s tolerance of
congressional regulation of local activity reflects this modern reality as much as it
reflects a changeable conception of the commerce power. The minimum-essential-
coverage mandate fits within the Supreme Court’s commerce clause jurisprudence. Even
accepting the claimants’ characterization of the law as regulating “non-activity,” the law
still concerns individual decisions that, when aggregated, have a substantial effect on
interstate commerce. Individuals cannot disclaim the need to obtain health care and to
pay for it, as virtually everyone at some point will consume healthcare services. In this
sense, it is hard to characterize self-insurance as non-action, as opposed to one of many
possible actions an individual may take in determining how to pay for health care.
Whether looked at as a mechanism for providing affordable medical care for all or an
unprecedented act of national paternalism, both characterizations of the individual
mandate go to a policy debate that the American people and their representatives have
had, and will continue to have, over the appropriate role of the national government in
our lives, the merits of which do not by themselves provide a cognizable basis for
invalidating the law.

                                            I.

       Before refereeing this complex debate, it is worth asking whether there is another
way to resolve it—whether the insurance mandate can be sustained under a different
source of authority: Congress’s power “To lay and collect Taxes . . . to . . . provide for
the . . . general Welfare of the United States.” U.S. Const. art. I, § 8, cl. 1. Would that
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.               Page 29


it were so. That would simplify our task, as it is easy to envision a system of national
health care, including one with a minimum-essential-coverage provision, permissibly
premised on the taxing power. Congress might have raised taxes on everyone in an
amount equivalent to the current penalty, then offered credits to those with minimum
essential insurance. Or it might have imposed a lower tax rate on people with health
insurance than those without it. But Congress did neither of these things, and that makes
a difference.

       Under the taxing power, a “‘tax’ is an enforced contribution to provide for the
support of government.” United States v. La Franca, 282 U.S. 563, 572 (1930). The
central objective of a tax is to “obtain[] revenue.” Child Labor Tax Case, 259 U.S. 20,
38 (1922). A “penalty,” by contrast, regulates conduct by establishing “criteria of
wrongdoing and imposing its principal consequence on those who transgress its
standard.” Id. In placing a law on one side or the other of this divide, courts consider
“the intent and meaning of the legislature” based on “the language of the act.” A.
Magnano Co. v. Hamilton, 292 U.S. 40, 46 (1934).

       The individual mandate is a regulatory penalty, not a revenue-raising tax, for
several reasons. First, that is what Congress said. It called the sanction for failing to
obtain medical insurance a “penalty,” not a tax. Words matter, and it is fair to assume
that Congress knows the difference between a tax and a penalty, between its taxing and
commerce powers, making it appropriate to take Congress at its word. That is all the
more true in an era when elected officials are not known for casually discussing, much
less casually increasing, taxes. When was the last time a candidate for elective office
promised not to raise “penalties”?

       Second, the legislative findings in the Act show that Congress invoked its
commerce power, not its taxing authority. “The individual responsibility requirement,”
Congress explained, “is commercial and economic in nature, and substantially affects
interstate commerce . . . . ” 42 U.S.C. § 18091(a)(1). Other findings come to the same
end. See id. § 18091(a)(2)(A) (“The requirement regulates activity that is commercial
and economic in nature: economic and financial decisions about how and when health
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.               Page 30


care is paid for, and when health insurance is purchased.”); § 18091(a)(2)(B) (“Health
insurance and health care services are a significant part of the national economy.”);
§ 18091(a)(3) (“In United States v. South-Eastern Underwriters Ass’n (322 U.S. 533
(1944)), the Supreme Court of the United States ruled that insurance is interstate
commerce subject to Federal regulation.”). The findings say nothing about, or even
suggestive of, the taxing power.

          Third, Congress showed throughout the Act that it understood the difference
between these terms and concepts, using “tax” in some places and “penalty” in others.
The statute not only says that the consequence of failing to obtain healthcare coverage
leads to a “penalty,” but it also proceeds to use the word at least 17 other times in the
individual mandate provision, see 26 U.S.C. § 5000A, and by our rough count 180 or so
times in the rest of the Act. In other parts of the law, Congress imposed “taxes,” using
that word 620 or so times. Congress respected the distinction between the words
throughout the Act, and so should we. See Russello v. United States, 464 U.S. 16, 23
(1983).

          Fourth, the central function of the mandate was not to raise revenue. It was to
change individual behavior by requiring all qualified Americans to obtain medical
insurance. As Congress explained in its findings, a key objective of the Act is to
broaden the health-insurance risk pool by requiring more Americans to participate in it
before, not after, they need medical care. See, e.g., 42 U.S.C. § 18091(a)(2)(I). That is
why the Act generally requires uninsured individuals to buy private insurance, a
requirement that will not raise any revenue for the government. And that is why the
penalty is capped at an amount pegged to the price of private health insurance. See 26
U.S.C. § 5000A(c)(1). The penalty provision, to be sure, will raise revenue. But it
strains credulity to say that the proponents of the Act will call it a success if the
individuals affected by the mandate simply pay penalties rather than buy private
insurance.

          Other legislative findings bear this out. They say nothing about raising revenue,
the central objective of imposing taxes. They instead focus on the law’s regulatory
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                 Page 31


motive—to “achieve[] near-universal coverage” by adding “millions of new consumers
to the health insurance market.” 42 U.S.C. § 18091(a)(2)(C). While describing the
requirement as “commercial and economic in nature, and substantially affect[ing]
commerce,” there is no mention of a desire to “provide for the support of government,”
La Franca, 282 U.S. at 572. The Act, indeed, seeks to do the opposite: to encourage
everyone to carry health insurance, leaving no one subject to the penalty (and no revenue
to boot).

        Fifth, case law supports this conclusion. The Act operates by starting with a
substantive provision that “adopt[s] the criteria of wrongdoing,” Child Labor Tax Case,
259 U.S. at 20, which states that every “applicable individual shall” have health
insurance. 26 U.S.C. § 5000A(a). The Act then spells out the “principal consequence
on those who transgress its standard,” Child Labor Tax Case, 259 U.S. at 38, which is
to impose a penalty on an individual who “fails to meet the requirement of” § 5000A(a),
giving the minimum-coverage mandate the “characteristics of regulation and
punishment,” Dep’t of Revenue v. Kurth Ranch, 511 U.S. 767, 779 (1994), not taxation.

        The government offers several contrary arguments, all unconvincing. That the
minimum-coverage requirement will raise revenue when individuals fail to obtain
coverage—at a rate of $4 billion a year, predicts the government, U.S. Br. at
59–60—does not convert the penalty into a tax. Otherwise, every monetary penalty, no
matter how regulatory or punitive, would be a tax. Cf. Kurth Ranch, 511 U.S. at 778
(“Criminal fines, civil penalties, civil forfeitures, and taxes all . . . generate government
revenues, impose fiscal burdens on individuals, and deter certain behavior.”).

        That Congress placed responsibility for enforcing the penalty with the IRS does
not make the minimum-coverage provision a tax. The IRS enforces other regulatory
penalties, see, e.g., 26 U.S.C. § 9707 (penalty for mining operators who fail to pay
retirement health benefit premiums); § 5761(c) (penalty for domestic sales of tobacco
labeled for export); § 527(j) (penalty for failure to make required election-related
disclosures), yet that does not transform them all into taxes. Congress, at any rate, had
practical reasons for housing enforcement of the mandate in the IRS. The IRS already
No. 10-2388           Thomas More Law Center, et al. v. Obama, et al.              Page 32


has an enforcement regime in place, under which individuals must file returns once a
year, creating a ready-made vehicle for annual reports about whether they have
purchased the requisite insurance. Whenever Congress creates a new penalty, it need not
create a new federal agency to enforce it.

        Even then, the Act does not treat the mandate like a tax, as it prohibits the IRS
from using its most salient enforcement tools in collecting the penalty. The IRS may not
place a lien on the property of an individual who does not comply with the mandate and
does not pay a penalty. See id. § 5000A(g)(2)(B). Not so for individuals who fail to pay
their taxes. See id. § 6321. The IRS may not use its “levy” authority, prohibiting it from
garnishing wages or seizing property from individuals who fail to obtain insurance. See
id. § 5000A(g)(2)(B). Not so for individuals who fail to pay their taxes. See id. § 6331.
And the IRS may not initiate a criminal prosecution against individuals who fail to buy
insurance. See id. § 5000A(g)(2)(A). Not so for individuals who fail to pay their taxes.
See id. § 7201. As it turns out, all the IRS may do to enforce the penalty is set off unpaid
penalties against an individual’s refund (if there is one) or launch a civil action against
the individual. See id. §§ 6402(a), 6502(a), 7401 et seq. The government does not
traditionally collect taxes in this way.

        That Congress has a “comprehensive” and “plenary” power to tax, U.S. Br. at 58,
shows that, if the legislature had used taxes in this part of the Affordable Care Act, the
Act likely would be constitutional. But that does not tell us whether Congress invoked
this power or whether the penalty is a “Tax[]” under Article I of the Constitution. It did
not, and it is not.

        That the constitutionality of a law “does not depend on recitals of the power
which it undertakes to exercise,” Woods v. Cloyd W. Miller Co., 333 U.S. 138, 144
(1948), changes nothing. In enumerated-power cases, there often will be a question
whether Congress invoked its powers under the Commerce Clause, § 5 of the Fourteenth
Amendment, the Spending Clause or the Taxing Clause, and Woods establishes that
congressional recitals provide sufficient grounds for invoking a power but not the
exclusive means for doing so. None of this alters the reality that each power has distinct
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                  Page 33


substantive predicates and distinct substantive terms, and the courts may not simply label
a law something it is not.

        That the penalty in its “practical operation,” U.S. Br. at 58, shares traits of a tax
and that the opposite is sometimes true—taxes occasionally resemble regulatory
penalties—do not change things either. From an economic standpoint, the line between
regulatory penalties and taxes may sometimes blur: Taxes and penalties both extract
money from individuals; both shape behavior as a result; and every tax penalizes people
by imposing an “economic impediment” on one person “as compared with others not
taxed.” Sonzinsky v. United States, 400 U.S. 506, 513 (1937). Many penalties, indeed,
might have been enacted in the form and substance of taxes, as indeed could have been
the case here. But none of this makes a penalty a “Tax[]” under Article I in a given case,
and it does not make it so here.

        Pressing the point, the government goes one step further. It submits that there
no longer is a tenable distinction between Congress’s taxing and commerce powers in
this setting, invoking the Supreme Court’s statement that it has “abandoned” the
“distinction[] between regulatory and revenue-raising taxes.” Bob Jones Univ. v. Simon,
416 U.S. 725, 741 n.12 (1974). But it is premature, and assuredly not the job of a
middle-management judge, to abandon the distinction between taxes and penalties. The
language from Bob Jones is the purest of dicta, as the case involved the Anti-Injunction
Act, not the taxing power, and was not even necessary to the statutory holding. The
taxing-power cases, it is true, are old. Yet cases of a certain age are just as likely to rest
on venerable principles as stale ones, particularly when there is a good explanation for
their vintage. All of these decisions, as it turns out, pre-date the Court’s expansion of
the commerce power, which largely “rendered moot” the need to worry about the
tax/penalty distinction. Laurence H. Tribe, 1 American Constitutional Law 846.
Nonetheless, the line between “revenue production and mere regulation,” described by
Chief Justice Taft in the Child Labor Tax Case, 259 U.S. at 38, retains force today.
Look no further than Kurth Ranch, a 1994 decision that post-dated Bob Jones and that
relied on the Child Labor Tax Case to hold that what Congress had labeled a tax
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.              Page 34


amounted to an unconstitutional penalty under the Double Jeopardy Clause. See 511
U.S. at 779–83.

       Before giving this distinction a premature burial, moreover, it is worth
remembering that it parallels other constitutional inquiries. Courts must distinguish
taxes from fees when construing the Export Clause, see United States v. U.S. Shoe Corp.,
523 U.S. 360, 367–70 (1998), the States’ implied immunity from federal taxation, see
Massachusetts v. United States, 435 U.S. 444, 462 (1978), and the National
Government’s immunity from state taxation, see United States v. City of Huntington, 999
F.2d 71, 73 (4th Cir. 1993). The inquiry also is a kissing cousin of statutory questions
frequently raised about the tax/penalty and tax/fee distinctions under the Anti-Injunction
Act, see Mobile Republican Assembly v. United States, 353 F.3d 1357, 1362 & n.5 (11th
Cir. 2003), the Tax Injunction Act, see San Juan Cellular Tel. v. Pub. Serv. Comm’n,
967 F.2d 683, 685 (1st Cir. 1992) (Breyer, J.), and the Bankruptcy Act, see United States
v. Reorganized CF & I Fabricators of Utah, Inc., 518 U.S. 213, 226 (1996).

       That the constitutional-avoidance doctrine permits courts to construe statutes to
sidestep difficult constitutional questions also makes no difference. The doctrine does
not allow a court to avoid a difficult constitutional question by diluting the meaning of
another constitutional provision—the meaning of “Taxes” under Article I. It allows
courts only to choose between a decision with a constitutional ruling and one without a
constitutional ruling, see Clark v. Martinez, 543 U.S. 371, 381 (2005), not between two
constitutional questions of varying degrees of difficulty. At the end of the day, this
penalty is not a “Tax[]” under Article I of the Constitution, and Congress’s taxing power
thus cannot sustain it.

                                           II.

                                           A.

       The Constitution empowers Congress “[t]o regulate Commerce with foreign
Nations, and among the several States, and with the Indian Tribes.” U.S. Const. art. I,
§ 8, cl. 3. And it permits Congress “[t]o make all Laws which shall be necessary and
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                  Page 35


proper for carrying into Execution” the commerce power. U.S. Const. art. I, § 8, cl. 18.
Taken together, these grants of power permit Congress to regulate (1) the channels of
interstate commerce (e.g., rivers and roads), (2) the instrumentalities of interstate
commerce (e.g., ships and cars) as well as persons or things in it, and (3) those other
economic activities, even wholly intrastate activities, that “substantially affect” interstate
commerce. United States v. Lopez, 514 U.S. 549, 558–59 (1995).

        A short history of decisions in this area shows that the Court has given Congress
wide berth in regulating commerce, frequently adopting limits on that authority and just
as frequently abandoning them, all while continuing to deny that Congress has unlimited
national police powers.

        Congress may create a national bank. In 1819, the Court held that, even
        though no enumerated power authorized Congress to create a national
        bank, the Necessary and Proper Clause gave Congress “incidental [and]
        implied powers” to do so. McCulloch, 17 U.S. at 406, 421. Still, “[w]e
        admit, as all must admit, that the powers of the government are limited,
        and that its limits are not to be transcended.” Id. at 421.
        Congress may regulate intrastate activities—relations between workers
        and employers—that have a substantial relation to interstate commerce.
        In 1937, the Court held that Congress could regulate intrastate
        employment activities that had “a close and substantial relation to
        interstate commerce.” NLRB v. Jones & Laughlin Steel Corp., 301 U.S.
        1, 37. Still, the commerce power does not “embrace effects . . . so
        indirect and remote that to embrace them . . . would effectually obliterate
        the distinction between what is national and what is local and create a
        completely centralized government.” Id.
        Congress may regulate activities—growing wheat for on-the-farm
        consumption—that do not involve the production, manufacture or mining
        of products and materials and that have only indirect effects on interstate
        commerce. In 1942, the Court abandoned any distinction between
        activities that had “direct” and “indirect” effects on interstate commerce
        and between “commerce,” which Congress could regulate, and
        “commercial activities” such as production, manufacturing and mining,
        which it could not. Wickard v. Filburn, 317 U.S. 111, 119–20, 124.
        Still, the Court did not deny that “[t]he subject of federal power
        is . . . ‘commerce’ and not all commerce but commerce . . . among the
        several states.” Santa Cruz Fruit Packing Co. v. NLRB, 303 U.S. 453,
        466 (1938).
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                  Page 36


        Congress may not regulate non-economic activities—possession of
        firearms in school zones and gender-motivated violence. In 1995 and in
        2000, the Court held that Congress may not “regulate noneconomic . . .
        conduct based solely on that conduct’s aggregate effect on interstate
        commerce.” United States v. Morrison, 529 U.S. 598, 617 (2000); see
        also Lopez, 514 U.S. at 567. But the force of these decisions remains
        unclear in view of two subsequent developments. First, soon after Lopez,
        Congress modified the Gun-Free School Zones Act, 18 U.S.C. § 922(q),
        to proscribe “knowingly . . . possess[ing] a firearm that has moved in or
        that otherwise affects interstate . . . commerce . . . [in] a school zone.”
        See Pub. L. No. 104-208, § 657, 110 Stat. 3009, 3009-370 (1996)
        (codified at 18 U.S.C. § 922(q)(2)(A)). All of the courts of appeals to
        consider the question have upheld the amended statute against commerce
        clause challenges. See, e.g., United States v. Dorsey, 418 F.3d 1038,
        1046 (9th Cir. 2005); United States v. Danks, 221 F.3d 1037, 1039 (8th
        Cir. 1999) (per curiam). Second, in 2005, the Court held that Congress
        could regulate home-grown and home-consumed marijuana, even when
        state law prohibited it from entering any markets. Raich, 545 U.S. at
        28–29.

        This abridged history captures the difficulty of the task at hand. At one level,
past is precedent, and one tilts at hopeless causes in proposing new categorical limits on
the commerce power. But there is another way to look at these precedents—that the
Court either should stop saying that a meaningful limit on Congress’s commerce powers
exists or prove that it is so. The stakes of identifying such a limit are high because the
congressional power to regulate is the power to preempt, a power not just to regulate a
subject co-extensively with the States but also to wipe out any contrary state laws on the
subject. U.S. Const. art. VI, cl. 2. The plaintiffs present a plausible limiting principle,
claiming that a mandate to buy medical insurance crosses a line between regulating
action and inaction, between regulating those who have entered a market and those who
have not, one that the Court and Congress have never crossed before.

                                             B.

        In my opinion, the government has the better of the arguments. Mindful that we
at the court of appeals are not just fallible but utterly non-final in this case, let me start
by explaining why existing precedents support the government.
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 37


                                            1.

        The nature of this challenge—a pre-enforcement facial attack on the individual
mandate in all of its settings, as opposed to just some of them—favors the government.
In most constitutional cases, the claimant challenges the constitutionality of a statute “as
applied” to specific parties and circumstances. That is “the preferred route” for litigation
because it confines judicial review to a “discrete factual setting.” Warshak v. United
States, 532 F.3d 521, 529–30 (6th Cir. 2008) (en banc); see Gonzales v. Carhart, 550
U.S 124, 168 (2007).

        Facial challenges, by contrast, seek “to leave nothing standing”—to prevent any
application of the law no matter the setting, “no matter the circumstances.” Warshak,
532 F.3d at 528. They are “disfavored” because: (1) “they raise the risk of premature
interpretation of statutes on the basis of factually barebones records,” Wash. State
Grange v. Wash. State Republican Party, 552 U.S. 442, 450 (2008); (2) they undermine
“the fundamental principle of judicial restraint,” which counsels that “courts should
neither anticipate a question of constitutional law in advance of the necessity of deciding
it nor formulate a rule of constitutional law broader than is required by the precise facts
to which it is to be applied,” id.; and (3) they run the risk of “a judicial trespass,” in
which the court strikes down a law “in all of its applications even though the legislature
has the prerogative and presumed objective to regulate some of them,” Connection
Distrib. Co. v. Holder, 557 F.3d 321, 335 (6th Cir. 2009) (en banc). For these reasons,
a facial attack is “the most difficult challenge to mount successfully,” requiring the
plaintiff to establish “no set of circumstances exists under which the Act would be
valid.” United States v. Salerno, 481 U.S. 739, 745 (1987).

        The judicial-constraint values underlying this doctrine apply equally to
enumerated-power cases (like this one) and individual-liberty cases (like Salerno). The
Court has said as much, noting that this “demanding standard” governs challenges to
Congress’s exercise of enumerated powers under Article I, § 8. Sabri v. United States,
541 U.S. 600, 604–05, 608–09 (2004). None of this means that the distinction makes a
difference in every case or with respect to every argument. Some theories of invalidity
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 38


necessarily apply to all applications of a law. Others do not. This case, as shown at
various points below, falls in the latter category, as some of plaintiffs’ theories of
invalidity—particularly their proposed action/inaction limitation on congressional
power—do not cover many applications of the mandate.

                                            2.

       On the merits, this case presents two distinct questions: Does the individual
mandate survive the substantial-effects test? And, if so, is there something about the
novelty of this law—compelling the purchase of health insurance—that warrants striking
it down nonetheless?

       The initial question is the easier of the two, as the breadth of the substantial-
effects doctrine and the nature of modern health care favor the validity of this law. No
matter how you slice the relevant market—as obtaining health care, as paying for health
care, as insuring for health care—all of these activities affect interstate commerce, in a
substantial way. Start with obtaining medical care. Few people escape the need to
obtain health care at some point in their lives, and most need it regularly. That explains
why health-related spending amounted to 17.6% of the national economy, or $2.5
trillion, in 2009. 42 U.S.C. § 18091(a)(2)(B). Virtually all of this market affects
interstate commerce, and many aspects of it—medical supplies, drugs and
equipment—are directly linked to interstate commerce. Id.

       What then of paying for health care or insuring to pay for it? These are two sides
of the same coin. Life is filled with risks, and one of them is not having the money to
pay for food, shelter, transportation and health care when you need it. Unlike most of
these expenses, however, the costs of health care can vary substantially from year to
year. The individual can count on incurring some healthcare costs each year (e.g., an
annual check-up, insulin for a diabetic) but cannot predict others (e.g., a cancer
diagnosis, a serious accident). That is why most Americans manage the risk of not
having the assets to pay for health care by purchasing medical insurance. See id.
§ 18091(a)(2)(D). The medical insurance market is large, id. § 18091(a)(2)(D), (J), and
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                 Page 39


is inextricably linked to interstate commerce, see id. § 18091(a)(2)(B); United States v.
South-Eastern Underwriters Ass’n, 322 U.S. 533, 541 (1944).

        The rub is the other method of paying for medical care: self-insurance. There
are two ways to self-insure, and both, when aggregated, substantially affect interstate
commerce. One option is to save money so that it is there when the need for health care
arises. The other is to save nothing and to rely on something else—good fortune or the
good graces of others—when the need arises.              Congress found that providing
uncompensated medical care to the uninsured cost $43 billion in 2008 and that these
costs were shifted to others through higher premiums. See 42 U.S.C. § 18091(a)(2)(F).
Based on these findings, Congress could reasonably conclude that the decisions and
actions of the self-insured substantially affect interstate commerce.

        In choosing how to regulate this group, Congress also did not exceed its power.
The basic policy idea, for better or worse (and courts must assume better), is to compel
individuals with the requisite income to pay now rather than later for health care. Faced
with $43 billion in uncompensated care, Congress reasonably could require all covered
individuals to pay for health care now so that money would be available later to pay for
all care as the need arises. Call this mandate what you will—an affront to individual
autonomy or an imperative of national health care—it meets the requirement of
regulating activities that substantially affect interstate commerce.

        The Court has upheld other federal laws that involved equally substantial, if not
more substantial, incursions on the general police powers of the States and the autonomy
of individuals. If, as Wickard shows, Congress could regulate the most self-sufficient
of individuals—the American farmer—when he grew wheat destined for no location
other than his family farm, the same is true for those who inevitably will seek health care
and who must have a way to pay for it. And if Congress could regulate Angel Raich
when she grew marijuana on her property for self-consumption, indeed for self-
medication, Raich, 545 U.S. at 6–7, and if it could do so even when California law
prohibited that marijuana from entering any state or national markets, it is difficult to see
why Congress may not regulate the 50 million Americans who self-finance their medical
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.               Page 40


care. See U.S. Census Bureau, Income, Poverty, and Health Insurance Coverage in the
United States: 2009, at 23 tbl. 8.

       The individual mandate also steers clear of the central defect in the laws at issue
in Lopez and Morrison. Health care and the means of paying for it are “quintessentially
economic” in a way that possessing guns near schools, see Lopez, 514 U.S. 549, and
domestic violence, see Morrison, 529 U.S. 598, are not. No one must “pile inference
upon inference,” Lopez, 514 U.S. at 567, to recognize that the national regulation of a
$2.5 trillion industry, much of which is financed through “health insurance . . . sold by
national or regional health insurance companies,” 42 U.S.C. § 18091(a)(2)(B), is
economic in nature. Nor does this approach remove all limits on the commerce power.
As Lopez and Morrison suggest, a majority of the Court still appears to accept the line
between regulating economic and non-economic conduct, which is why a general murder
or assault statute would exceed congressional power. Measured by these conventional
commerce clause benchmarks, the minimum-essential-coverage provision passes.

                                           C.

       None of this matters, plaintiffs claim. However broad Congress’s commerce
power may be, it is not unlimited, and one limit on that power is that it applies only to
individuals already engaged in commerce. The Clause permits the legislature to
“regulate” commerce, not to create it. Put another way, it empowers Congress to
regulate economic “activities” and “actions,” not inaction—not in other words
individuals who have never entered a given market and who prize that most American
of freedoms: to be left alone.

                                           1.

       Of all the arguments auditioning to invalidate the individual mandate, this is the
most compelling. The Court, for one, has never considered the validity of this type of
mandate before, at least under the commerce power. True enough, Heart of Atlanta
Motel, Inc. v. United States, 379 U.S. 241 (1964), sustained Congress’s power to compel
affirmative acts—to require the owner of any “inn, hotel, motel or other establishment
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.              Page 41


which provides lodging to transient guests” to offer lodging to all on non-discriminatory
grounds. Id. at 247. But the Civil Rights Act of 1964 applies only to service providers
already in the relevant interstate market. If covered entities offer lodging in interstate
commerce, Congress tells them how to do so and requires action in the process.
Congress did not try to solve this policy problem by compelling individuals to open inns
in the first instance.

        The same is true of the Wickard and Raich plaintiffs. The laws regulated
individuals who chose to grow wheat and marijuana on their own—by punishing
individuals who grew too much of one product (wheat) and any of the other (marijuana).
In Wickard and Raich, it is true, the Court permitted Congress to regulate individuals
who did not offer to buy or sell anything, who merely raised their crops and plants at
home, who consumed them at home and who in one instance (Raich) were prohibited
from buying and selling the product in any market. Yet that reality confirms only the
breadth of the substantial-effects doctrine. It does not show that Congress may compel
individuals to buy products they do not want.

        Not only has the Court never crossed this line, neither has Congress, as the
reports of two federal agencies confirm:

        (1) “The government has never required people to buy any good or
        service as a condition of lawful residence in the United States.” CBO
        Memorandum, The Budgetary Treatment of an Individual Mandate to
        Buy Health Insurance, at 1 (Aug. 1994);
        (2) “[W]hether the individual responsibility requirement would be
        constitutional under the [Commerce Clause] is a challenging question, as
        it is a novel issue whether Congress may use the clause to require an
        individual to purchase a good or a service.” Congressional Research
        Service, Requiring Individuals to Obtain Health Insurance: A
        Constitutional Analysis, at 8–9 (Oct. 15, 2010).

        The efforts of the government and its amici to counter this point serve only to
confirm it. That Congress may conscript individuals to serve in the military, 50 U.S.C.
app. § 453(a), or to pay taxes, see 26 U.S.C. §§ 7201 et seq., proves only that Congress
may require individuals to undertake tasks under other enumerated powers, not under the
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.                Page 42


commerce power. That the Second Congress not only required certain individuals to
serve in the military but to arm themselves as well (by purchasing a gun and
ammunition), Second Militia Act of 1792, 1 Stat. 271, § 1, comes to the same end: It
amounts to a necessary, proper and utterly sensible means of implementing Congress’s
authority to raise an army. To argue that Congress’s power to enlist individuals to
defend the country’s borders proves that it may enlist individuals to improve the
availability of medical care gives analogy a bad name. There is a difference between
drafting a citizen to join the military and forcing him to respond to a price quote from
Aetna.

         One other point dignifies the plaintiffs’ argument. Legislative novelty typically
is not a constitutional virtue. More than once, and quite often in separation-of-powers
cases, the Court has said that a “[l]ack of historical precedent can indicate a
constitutional infirmity” in a congressional act. Va. Office for Prot. & Advocacy v.
Stewart, 563 U.S. __, 131 S. Ct. 1632, 1641 (2011); see also Free Enter. Fund v. Pub.
Co. Accounting Oversight Bd., 561 U.S. __, 130 S. Ct. 3138, 3159 (2010) (“Perhaps the
most telling indication of the severe constitutional problem with the PCAOB is the lack
of historical precedent for this entity.”); Printz v. United States, 521 U.S. 898, 905
(1997) (“[I]f . . . earlier Congresses avoided use of this highly attractive power, we
would have reason to believe that the power was thought not to exist.”).

                                             2.

         The plaintiffs thus present (1) a theory of constitutional invalidity that the Court
has never considered before, (2) a legislative line that Congress has never crossed before,
and (3) a theory of commerce power that has the potential to succeed where others have
failed: by placing a categorical cap on congressional power. Why not accept the
invitation?

         The first point proves only that the Supreme Court has considerable discretion
in resolving this dispute. It does not free lower court judges from the duty to respect the
language and direction of the Court’s precedents, particularly in view of the reality that
this law has the purpose and effect of regulating commerce and in view of the save-
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                 Page 43


before-destroy imperatives of reviewing facial challenges. The Supreme Court can
decide that the legend of Wickard has outstripped the facts of Wickard—that a farmer’s
production only of more than 200 bushels of wheat a year substantially affected
interstate commerce. See Wickard, 317 U.S. at 114. A court of appeals cannot. The
Supreme Court can decide that Raich was a case only about the fungibility of marijuana,
see Raich, 545 U.S. at 18–19, not a decision that makes broader and more extravagant
assertions of legislative power more impervious to challenge. A court of appeals cannot.

        The second point favors the claimants, but it does not dispose of the case. The
novelty of the individual mandate may indeed suggest it is a bridge too far, but it also
may offer one more example of a policy necessity giving birth to an inventive (and
constitutional) congressional solution. The substantial-effects doctrine invites, rather
than discourages, unconventional laws, making it difficult to draw conclusions from a
legislative effort to shoehorn a new policy initiative into such a capacious theory of
federal power.

        The third point is the critical one: Does the Commerce Clause contain an
action/inaction dichotomy that limits congressional power? No—for several reasons.
First, the relevant text of the Constitution does not contain such a limitation. To the
extent “regulate,” “commerce,” “necessary” and “proper” might be words of
confinement, the Court has not treated them that way, as long as the objects of federal
legislation are economic and substantially affect commerce. All three methods of paying
for medical care (private insurance, public insurance and self-insurance) meet this
modest requirement. And if Congress may prescribe rules for some of these methods of
payments, as plaintiffs seem to agree, it is difficult to see why these words prohibit it
from doing the same for all three.

        Second, the promise offered by the action/inaction dichotomy—of establishing
a principled and categorical limit on the commerce power—seems unlikely to deliver in
practice. Level of generality is destiny in interpretive disputes, and it remains unclear
at what level plaintiffs mean to pitch their action/inaction line of constitutional authority
or indeed whether a workable level exists. Does this test apply to individuals who have
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.               Page 44


purchased medical insurance before? Those individuals have not been inactive in any
sense of the word when it comes to the medical-insurance market, yet plaintiffs say that
Congress may not regulate them.

        What of individuals who voluntarily have insurance on the day the mandate goes
into effect? One of the plaintiffs in this case, Jann DeMars, now has insurance, yet she
claims Congress has no right to require her to maintain that coverage. It is not clear
what the action/inaction line means in a setting in which an individual voluntarily (and
actively) obtains coverage and is required only to maintain it thereafter. As to this group
of individuals, why can’t Congress regulate them, even under plaintiffs’ theory of the
case? We no longer are talking about a mandate imposed on the mere status of
“existence” in the United States but on individuals who have voluntarily purchased
medical insurance in an interstate market and who must maintain only what they chose
to buy. At a minimum, this application of the law is constitutional.

        How would the action/inaction line have applied to Roscoe Filburn? Might he
have responded to the Agricultural Adjustment Act of 1938 by claiming that the
prohibition on planting more than 11.1 acres of wheat on his farm compelled him to
action—to buy wheat in the interstate market so that he could feed all of his animals?
And is it any more offensive to individual autonomy to prevent a farmer from being self-
sufficient when it comes to supplying feed to his animals than an individual when it
comes to paying for health care? It seems doubtful that the Wickard Court would have
thought so. See Wickard, 317 U.S. at 129 (acknowledging that the law “forc[ed] some
farmers into the market to buy wheat they could provide for themselves”). How would
the action/inaction line apply if someone like Angel Raich sold her house, marijuana
plants and all? The Controlled Substances Act would obligate the new owner to act (by
removing the plants), see 21 U.S.C. § 844, but it seems doubtful that he could sidestep
this obligation on the ground that the law forced him to act rather than leaving him alone
to enjoy the fruits of inaction.

        There is another linguistic problem with the action/inaction line. The power to
regulate includes the power to prescribe and proscribe. See Lottery Case, 188 U.S. 321,
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 45


359–60 (1903). Legislative prescriptions set forth rules of conduct, some of which
require action. See, e.g., 18 U.S.C. § 2250 (sex-offender registration); id. § 228 (child-
support payments); see also United States v. Faasse, 265 F.3d 475, 486–87 (6th Cir.
2001) (en banc). The same is true for legislative proscriptions. Take the drug laws at
issue in Raich, where Congress regulated by prohibiting individuals from possessing
certain drugs. A drug-possession law amounts to forced inaction in some settings (those
who do not have drugs must not get them), and forced action in other settings (those who
have drugs must get rid of them).

        An enforceable line is even more difficult to discern when it comes to health
insurance and the point of buying it: financial risk. Risk is not having money when you
need it. And the mandate is one way of ensuring that all Americans have money to pay
for health care when they inevitably need it. In this context, the notion that self-insuring
amounts to inaction and buying insurance amounts to action is not self-evident. If done
responsibly, the former requires more action (affirmatively saving money on a regular
basis and managing the assets over time) than the latter (writing a check once or twice
a year or never writing one at all if the employer withholds the premiums). What is
more, inaction is action, sometimes for better, sometimes for worse, when it comes to
financial risk. When Warren Buffett tells shareholders that “[w]e continue to make more
money when snoring than when active” or that “[i]nactivity strikes us as intelligent
behavior,” Chairman’s Letter to Shareholders (Feb. 28, 1997), ¶¶ 72–73, available at
http://www.berkshirehathaway.com/letters/1996.html, he is not urging the Board of
Directors to place him in a Rip Van Winkle-like stupor for the next year. He is saying
that, of the many buy and sell recommendations that came across his desk that year, the
best thing he could have done is the informed, even masterful, inaction of saying no to
all of them.

        No one is inactive when deciding how to pay for health care, as self-insurance
and private insurance are two forms of action for addressing the same risk. Each
requires affirmative choices; one is no less active than the other; and both affect
commerce. In affidavits filed in this case, the individual plaintiffs all mention the need
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 46


to make current changes in their spending and saving practices to account for the need
to pay for medical insurance in the future. Saving to buy insurance or to self-insure, as
these affidavits attest, involves action. E.g., Ceci May 27, 2011 Decl., ¶ 7 (“Due to the
added financial pressure [of the mandate], I have cut back on discretionary spending,
such as costs associated with entertainment, like going to the movies, a restaurant, or
sporting events.”); Hyder May 28, 2011 Decl., ¶ 8 (same).

       How, moreover, would an action/inaction line work with respect to individuals
living in States that already mandate the purchase of medical insurance or States that
conceivably might do so in the future if the mandate is invalidated? One of the central
premises of the claimants’ argument is that, under the Framers’ design, the regulation
of health care and health insurance is primarily, if not exclusively, a prerogative of the
States. That is why the claimants presumably believe that, when the States exercise this
power, they have broad discretion to try out different ways to regulate health care. And
that is why the claimants apparently have no constitutional objection to States that seek
to solve this problem with individual mandates or something similar. Yet individuals
in such States already would have entered the health-insurance market, permitting
Congress to regulate them further by increasing the minimum coverage already required
by state law or by requiring them to comply with other components of the Affordable
Care Act. How strange that individuals who live in States with mandates would be
subject to federal regulation but others would not be—with the difference in treatment
having little to do with the concerns about federal intrusions on individual autonomy that
led to this challenge in the first place. How strange, too, that, if other States opted to
enact individual mandates in the future, the federal commerce power would spring into
existence as to individuals living there.

       Strange or not, this theory of commerce power at a minimum creates a serious
hurdle for a facial challenge. If nothing else, it suggests that the minimum-essential-
coverage provision is constitutional as applied to individuals living in States with
mandates, undermining the notion that the mandate is unconstitutional in all of its
applications.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.               Page 47


       What of individuals who voluntarily purchased bare-bones insurance before the
mandate’s effective date—e.g., catastrophic-care insurance or high-deductible
insurance—but are required by the minimum-essential-coverage provision to obtain
more insurance? The action/inaction line means nothing to them, establishing another
class of individuals against whom Congress could apply the law and presenting another
impediment to a facial challenge.

       Third, a variation on the action/inaction line—between regulating individuals
already in markets and those outside of them—does not seem to work, at least in view
of Raich and Filburn. Angel Raich and Roscoe Filburn never entered any markets,
whether interstate or intrastate, yet Congress regulated them nonetheless. That is why
the decisions upholding this regulatory authority are so far-reaching. To the extent both
individuals still did something (grew wheat or marijuana), that takes us back to the
action/inaction line and the problems associated with it.

       Fourth, still another variation on the action/inaction line—that forced purchases
of medical insurance do not amount to “proper” means of regulation, even if Congress
could reasonably find them “necessary”—does not seem to work either. One component
of the Act and one alternative way of addressing the topic suggest why. Instead of
requiring Americans to obtain general medical insurance, the legislature might have
required them to buy just catastrophic-care insurance. Here we have a problem—a
serious illness or accident—that most people will experience directly themselves or
indirectly through a family member at some point in their lives, and one that virtually
no one can afford based on current income and savings. One federal law, the Emergency
Medical Treatment and Active Labor Act (EMTALA), 42 U.S.C. § 1395dd, and several
state laws, see, e.g., Wash. Rev. Code § 70.170.060; Walling v. Allstate Ins. Co., 455
N.W.2d 736, 738 (Mich. Ct. App. 1990), require hospitals to accept many of these
patients without regard to their capacity to pay, and a culture of compassion leads
hospitals and doctors to treat many others in the same way. Through EMTALA,
Congress subsidizes some of these costs. 42 U.S.C. §§ 1395cc, 1395dd. Hospitals and
No. 10-2388            Thomas More Law Center, et al. v. Obama, et al.                         Page 48


doctors internalize other costs, and they share still others by raising prices. See id. § 18091(a)(2)(F).

         If Congress has the power to regulate the national healthcare market, as all seem
to agree, it is difficult to see why it lacks authority to regulate a unique feature of that
market by requiring all to pay now in affordable premiums for what virtually none can
pay later in the form of, say, $100,000 (or more) of medical bills prompted by a medical
emergency. Still more difficult to see is the idea that the word “proper” imposes such
a limitation. When Congress guarantees a benefit for all (by securing certain types of
medical care), it may regulate that benefit (by requiring some to pay for it). One
component of the Affordable Care Act, as it turns out, does this very thing: It allows
those under 30 to purchase catastrophic-care insurance, and nothing more. See 42 U.S.C.
§ 18022(e); 26 U.S.C. § 5000A(f)(1). This feature of the law does not exceed
congressional power, further showing that the mandate is not unconstitutional in all of
its applications.

         Congress also would have acted within its commerce power had it opted to
regulate insurance coverage at the point of sale, and the word “proper” would not have
gotten in the way. The legislature could have said that when non-exempt individuals
obtain health care, they are put to a choice: either pay for the care or buy medical
insurance from then on. This approach would impose a federal condition (ability to pay)
on the consumption of a service bound up in federal commerce (medical care). Yet such
a law would be at least as coercive as the individual mandate, and arguably more so. An
individual in need of acute medical care, but without the resources to pay for it, is not
apt to refuse to buy future medical insurance in order to obtain present care, and a family
member (if responsible for the choice) is even less likely to do so. The Act, by contrast,
does not regulate individuals at a time of crisis. And it does not compel individuals to
buy insurance or even use insurance. They may pay a penalty instead, which in the first
several years of the Act, if not throughout its existence, normally will cost less than
medical insurance. See 26 U.S.C. § 5000A(c). If one of these laws is legitimate, so it
would seem is the other. Requiring insurance today and requiring it at a future point of
sale amount to policy differences in degree, not kind, and not the sort of policy
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 49


differences removed from the political branches by the word “proper” or for that matter
“necessary” or “regulate” or “commerce.”

       Fifth, the plaintiffs target the breadth of the mandate and Congress’s decision to
regulate all of the self-insured together rather than only those who demonstrate an
incapacity to pay for medical care and only those who are responsible for the cost-
spreading and free-riding at which the Act takes aim. They have a point. Why apply the
law to those who can pay for health care and those who have paid for health care in the
past? Why impose a “penalty” on those who take care of themselves physically and
financially? And why eliminate healthcare free-riding of one sort by compelling free-
riding of another sort—by requiring those who paid for their health care in the past to
subsidize the healthcare costs of others in the future? Instead of eliminating free-riding,
the Act seems to lock it in place.

       These objections, however, do not appear to establish a constitutional defect.
Congress generally has broad authority under the commerce power to choose the class
of people it wishes to regulate, see Raich, 545 U.S. at 26–27, permitting it to group all
of the self-insured together, whether they have many assets available for medical care,
very few, or something in between, particularly since the financial wherewithal of the
self-insured is unlikely to stay put. Individuals lose jobs and obtain jobs, and the value
of their assets goes up and goes down, making it appropriate (if perhaps unfair) to
regulate this entire group together. The courts do not apply strict scrutiny to commerce
clause legislation and require only an “appropriate” or “reasonable” “fit” between means
and ends. United States v. Comstock, 560 U.S. __, 130 S. Ct. 1949, 1956–57 (2010).
Regulating all of the self-insured together does not cross these lines. The Commerce
Clause permits Congress to make flawed generalizations, and that at most is what might
be said about the overbreadth of this law.

       But even if that were not the case, even if the Constitution prohibited Congress
from regulating all of the self-insured together, that would not require a court to
invalidate the individual mandate in its entirety. It would show only that the law may
be unconstitutional as applied to some individuals, not to all of them, and that suffices
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                 Page 50


to defeat a facial challenge. Nothing prevents such individuals from bringing as-applied
challenges to the mandate down the road. As to the plaintiffs in today’s case, they have
filed only a pre-enforcement facial challenge, the very point of which is to make the
particulars of their situation irrelevant to the constitutional inquiry. See Doe v. Reed, 561
U.S. __, 130 S. Ct. 2811, 2817 (2010).

        Sixth, the anti-commandeering principle of the Tenth Amendment adds nothing
new to this case. True, the Tenth Amendment reserves those powers not delegated to the
National Government “to the States” and “to the people.” True also, a critical guarantee
of individual liberty is structural and judicially enforceable—preserving a horizontal
separation of powers among the branches of the National Government, INS v. Chadha,
462 U.S. 919, 957–58 (1983), and a vertical separation of powers between the National
Government and the States, New York, 505 U.S. at 181. Odd though it may seem in light
of American history, States’ rights sometimes are individual rights. See Bond v. United
States, 564 U.S. __, No. 09-1227, slip op. at 9 (June 16, 2011). Doubt it? Go to any
federal prison in the country to see how a broad conception of the commerce power has
affected individual liberty through the passage of federal gun-possession and drug-
possession laws and sentencing mandates.

        But to the extent plaintiffs mean to argue that the Tenth Amendment contains its
own anti-commandeering principle applicable to individuals and to all of Congress’s
enumerated powers, that is hard to square with the taxing power, which regularly
commandeers individuals—in equally coercive ways—to spend money on things they
may not need and to support policies they do not like. And to the extent plaintiffs mean
to argue that such a principle captures (or reinstates) limitations on the meaning of
“proper[ly]” “regulat[ing]” interstate “commerce,” that takes us back to the points
already made about Congress’s delegated power in this area.
No. 10-2388          Thomas More Law Center, et al. v. Obama, et al.               Page 51


                                           * * *

         That brings me to the lingering intuition—shared by most Americans, I
suspect—that Congress should not be able to compel citizens to buy products they do
not want. If Congress can require Americans to buy medical insurance today, what of
tomorrow? Could it compel individuals to buy health care itself in the form of an annual
check-up or for that matter a health-club membership? Could it require computer
companies to sell medical-insurance policies in the open market in order to widen the
asset pool available to pay insurance claims? And if Congress can do this in the
healthcare field, what of other fields of commerce and other products?

         These are good questions, but there are some answers. In most respects, a
mandate to purchase health insurance does not parallel these other settings or markets.
Regulating how citizens pay for what they already receive (health care), never quite
know when they will need, and in the case of severe illnesses or emergencies generally
will not be able to afford, has few (if any) parallels in modern life. Not every intrusive
law is an unconstitutionally intrusive law. And even the most powerful intuition about
the meaning of the Constitution must be matched with a textual and enforceable theory
of constitutional limits, and the activity/inactivity dichotomy does not work with respect
to health insurance in many settings, if any of them.

         The very force of the intuition also helps to undo it, as one is left to wonder why
the Commerce Clause does the work of establishing this limitation. Few doubt that
Congress could pass an equally coercive law under its taxing power by imposing a
healthcare tax on everyone and freeing them from the tax if they purchased
health    insurance.       If   Congress     may    engage     in   the   same    type   of
compelling/conscripting/commandeering of individuals to buy products under the taxing
power, is it not strange that only the broadest of congressional powers carves out a limit
on this same type of regulation?

         Why construe the Constitution, moreover, to place this limitation—that citizens
cannot be forced to buy insurance, vegetables, cars and so on—solely in a grant of power
to Congress, as opposed to due process limitations on power with respect to all American
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                Page 52


legislative bodies? Few doubt that the States may require individuals to buy medical
insurance, and indeed at least two of them have. See Mass. Gen. Laws 111M § 2; N.J.
Stat. Ann. § 26:15-2. The same goes for a related and familiar mandate of the
States—that most adults must purchase car insurance. Yet no court has invalidated these
kinds of mandates under the Due Process Clause or any other liberty-based guarantee of
the Constitution. That means one of two things: either compelled purchases of medical
insurance are different from compelled purchases of other goods and services, or the
States, even under plaintiffs’ theory of the case, may compel purchases of insurance,
vegetables, cars and so on. Sometimes an intuition is just an intuition.

        For now, whatever else may be said about plaintiffs’ activity/inactivity theory of
commerce power, they have not shown that the individual mandate exceeds that power
in all of its applications. Congress may apply the mandate in at least four settings: (1) to
individuals who already have purchased insurance voluntarily and who want to maintain
coverage, but who will be required to obtain more insurance in order to comply with the
minimum-essential-coverage requirement; (2) to individuals who voluntarily obtained
coverage but do not wish to be forced (at some indeterminate point in the future) to
maintain it; (3) to individuals who live in States that already require them to obtain
insurance and who may have to obtain more coverage to comply with the mandate or
abide by other requirements of the Affordable Care Act; and (4) to individuals under 30,
no matter where they live and no matter whether they have purchased health care before,
who may satisfy the law by obtaining only catastrophic-care coverage. The valid
application of the law to these groups of people suffices to uphold the law against this
facial challenge.

        While future challenges to the law have hills to climb, nothing about this view
of the case precludes individuals from bringing as-applied challenges to the mandate as
the relevant agencies implement it, and as the “lessons taught by the particular,” Sabri,
541 U.S. at 608–09, prove (or disprove) that Congress crossed a constitutional line in
imposing this unprecedented requirement. Just as courts should refrain from needlessly
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                  Page 53


pre-judging the invalidity of a law’s many applications, they should refrain from doing
the same with respect to their validity.

        Any remaining doubt about rejecting this facial challenge is alleviated by the
most enduring lesson of McCulloch, which remains an historical, not a doctrinal, one.
No debate in the forty years after the country’s birth stirred the people more than the
conflict between the federalists and anti-federalists over the role of the National
Government in relation to the States. And no issue was more bound up in that debate
than the wisdom of creating a national bank. In upholding the constitutionality of a
second national bank, not a foregone conclusion, the Supreme Court erred on the side
of allowing the political branches to resolve the conflict. Right or wrong, that decision
presented the challengers with a short-term loss (by upholding the bank) and set the
platform for a potential long-term victory (by allowing them to argue that Congress
should not make the same mistake again). There was no third national bank. But see
Federal Reserve Act, ch. 6, 38 Stat. 251 (1913).

        Today’s debate about the individual mandate is just as stirring, no less essential
to the appropriate role of the National Government and no less capable of political
resolution. Time assuredly will bring to light the policy strengths and weaknesses of
using the individual mandate as part of this national legislation, allowing the peoples’
political representatives, rather than their judges, to have the primary say over its utility.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.               Page 54


        ________________________________________________________

            CONCURRING IN PART AND DISSENTING IN PART
        ________________________________________________________

       GRAHAM, Senior District Judge. I concur with the majority’s opinion as to
standing and the Anti-Injunction Act, as well with Judge Sutton’s opinion that the
challenged statute is not an exercise of Congress’s taxing power. I write separately
because I disagree with Judge Martin’s Commerce Clause analysis and do not share
Judge Sutton’s view that plaintiffs’ challenge is undone by United States v. Salerno, 481
U.S. 739, 745 (1987).

       If Congress exceeded its authority by enacting the mandate, then the mandate is
“legally stillborn” and cannot be valid in any application. Virginia v. Sebelius, 728
F.Supp.2d 768, 774 (E.D. Va. 2010). “There is no position which depends on clearer
principles, than that every act of a delegated authority, contrary to the tenor of the
commission under which it is exercised, is void. No legislative act, therefore, contrary
to the Constitution can be valid.” The Federalist No. 78 (A. Hamilton). As cases in
point, Lopez and Morrison struck down statutes as facially unconstitutional under the
Commerce Clause and did so without reference to Salerno. United States v. Lopez, 514
U.S. 549 (1995); United States v. Morrison, 529 U.S. 598 (2000).

                                           I.

       This case presents the issue whether Congress acted within its powers under the
Commerce Clause when it passed legislation requiring nearly all citizens to maintain
health insurance coverage beginning in 2014. See Patient Protection and Affordable
Care Act (“ACA”) § 1501 (codified at 26 U.S.C. § 5000A(a)). Individuals who fail to
satisfy the “individual responsibility requirement” must pay a monetary penalty. 26
U.S.C. § 5000A(b)(1).

       The mandate is a novel exercise of Commerce Clause power. No prior exercise
of that power has required individuals to purchase a good or service. This fact alone
does not answer the constitutional question, but it does highlight the need for judicial
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.              Page 55


scrutiny. Federal courts have the duty to construe and enforce the “outer limits” of
congressional power. Lopez, 514 U.S. at 556-57 (finding the Gun-Free School Zones
Act unconstitutional).

       The Commerce Clause authorizes Congress “[t]o regulate Commerce . . . among
the several States.” U.S. Const., Art. I, § 8, cl. 3. The Supreme Court has interpreted
the power as reaching three areas: (1) the channels of interstate commerce, (2) the
instrumentalities of interstate commerce, and (3) “activities that substantially affect
interstate commerce.” Lopez, 514 U.S. at 558-59.

       Because the mandate regulates decisions not to purchase health insurance –
conduct falling outside the ordinary sense of the word “commerce” (the trade or
exchange of a good, see Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 72 (1824)) – Congress
expressly invoked the third category of Commerce Clause power as its authority for
enacting the mandate. See ACA § 1501(a)(1). And in various suits across the nation
challenging the constitutionality of the mandate, the government has consistently
defended the mandate under Congress’s power to regulate activities that substantially
affect interstate commerce.

                                          II.

       In evaluating the mandate’s validity, one must identify what market or conduct
it regulates. Plaintiffs argue that the health insurance market is the immediate subject
of the mandate, while the government contends that the mandate represents but one
component of the ACA’s broader regulation of the market for health care services.

       The challenged statute is a requirement to obtain health insurance. The text of
§ 1501 reflects Congress’s view that it was regulating the insurance market when it
enacted the statute. In the legislative findings, Congress found that the insurance
requirement is what “substantially affects interstate commerce,” ACA § 1501(a)(1), and
it specifically noted that “insurance is interstate commerce subject to Federal
regulation.” § 1501(a)(3) (emphasis added) (citing United States v. South-Eastern
Underwriters Ass’n, 322 U.S. 533 (1944)). The findings further state that the federal
No. 10-2388            Thomas More Law Center, et al. v. Obama, et al.                          Page 56


government “has a significant role in regulating health insurance,” § 1501(a)(2)(F), and
the mandate will serve to “broaden the health insurance risk pool to include healthy
individuals, which will lower health insurance premiums.” § 1501(a)(2)(G). Moreover,
the findings provide that “[t]he requirement is essential to creating effective health
insurance markets that do not require underwriting and eliminate its associated
administrative costs.” § 1501(a)(2)(H).1

         The government now attempts to recast the exercise of power as regulating the
market for health care services. The ACA’s numerous provisions seek to widen access
to health care services and improve the quality of those services. The mandate itself
rests among provisions aimed at reforming the health insurance market. See ACA,
§§ 1001-1563. Other parts of the Act make changes to public programs like Medicaid,
see §§ 2001-2955, and enact reforms intended to improve the quality and efficiency of
health care, see §§ 3001-3602, strengthen the health care workforce, see §§ 5001-5701,
and encourage innovative medical therapies, see §§ 7001-7103. The government argues
that the mandate is best viewed as regulating one aspect – financing – of the overall
health care market.

         The government’s argument for viewing the mandate as regulating health care
in general suffers from many flaws. First, it gives “Congress a perverse incentive to
legislate broadly pursuant to the Commerce Clause – nestling questionable assertions of
its authority into comprehensive regulatory schemes – rather than with precision.”
Gonzales v. Raich, 545 U.S. 1, 43 (2005) (O’Connor, J., dissenting). Within the ACA
as a whole, the mandate represents a separate exercise of congressional power. To say
that the mandate simply concerns the financing end of health care proves the point – it
is insurance that the mandate requires of all citizens.

         Second, the government’s argument ignores what Congress itself said about the
mandate.      Congress found that the insurance requirement in particular is what
substantially affects interstate commerce, and it referenced a Supreme Court ruling that

         1
          Congress has since amended the statutory section in which the legislative findings are codified,
42 U.S.C. § 18091, but the language quoted above remains unchanged.
No. 10-2388         Thomas More Law Center, et al. v. Obama, et al.                 Page 57


the insurance industry is subject to Congress’s Commerce Clause powers. As noted
above, other findings in § 1501 demonstrate that Congress had its sights on the health
insurance market. When Congress has spoken so clearly on the basis for its attempted
exercise of power, the exercise should be judged on those terms, even if its ultimate
conclusion need not be accepted at face value. See Hodel v. Virginia Surface Mining &
Reclamation Ass’n, Inc., 452 U.S. 264, 311 (1981) (Rehnquist, J., concurring in
judgment) (“Moreover, simply because Congress may conclude that a particular activity
substantially affects interstate commerce does not necessarily make it so.”).

        Third, the government’s argument turns the mandate into something it is not.
The requirement that all citizens obtain health insurance does not depend on them
receiving health care services in the first place. Individuals must carry insurance each
and every month regardless of whether they have actually entered the market for health
services. Simply put, the mandate does not regulate the commercial activity of obtaining
health care. It regulates the status of being uninsured.

                                            III.

        Congress’s legislative finding that the “individual responsibility requirement . . .
substantially affects interstate commerce” turns the analysis on its head.             ACA
§ 1501(a)(1). Without question, forcing all individuals to purchase a product that not
everyone would otherwise purchase will have an effect on commerce. But Congress
cannot be tolerated to justify its exercise of power by creating its own substantial effects.
In determining whether the substantial effects test is satisfied, the focus must be on the
existing economic activity Congress seeks to regulate, not on the impact the regulation
would have. See Wickard v. Filburn, 317 U.S. 111, 125 (1942) (examining whether
“appellee’s activity,” together with the activities of those similarly situated, “exerts a
substantial economic effect on interstate commerce”); Lopez, 514 U.S. at 558-59
(holding that Congress may regulate an activity that substantially affects interstate
commerce).

        The inquiry then is whether plaintiffs’ “activity,” as it were, substantially affects
interstate commerce. Much has been made in this litigation of the distinction between
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 58


activity and inactivity. The Supreme Court has often employed the word “activity” to
describe the regulatory subjects of Congress’s power over interstate commerce. See
Wickard, 317 U.S. at 125; Lopez, 514 U.S. at 559; Morrison, 529 U.S. at 609-10; Raich,
545 U.S. at 17. Yet I do not interpret those cases as drawing a constitutional line
between activity and inactivity. That distinction would suffer from the same failings as
the “direct” and “indirect” effects test of prior Commerce Clause jurisprudence. See
NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 36-38 (1937) (rejecting the
direct/indirect distinction and stating that the question of Congress’s authority is
“necessarily one of degree”); Lopez, 514 U.S. at 579 (Kennedy, J., concurring) (noting
that questions of constitutional law are often “not susceptible to the mechanical
application of bright and clear lines”). Imposing an activity/inactivity line could hinder
Congress in future cases from removing burdens on commerce that certain classes of
individuals have passively enabled. See United States v. Faasse, 265 F.3d 475, 487 (6th
Cir. 2001) (upholding the constitutionality of the Child Support Recovery Act and
rejecting the argument that the willful failure to make a court-ordered, out-of-state child
support payment from California to Michigan was insufficient for Commerce Clause
purposes).

       The inquiry should start by considering the “economic nature of the regulated
activity.” Morrison, 529 U.S. at 610; see also Lopez, 514 U.S. at 559-61 (finding that
possession of a gun in a school zone was not an economic activity); Raich, 545 U.S. at
25 (finding that growing and consuming a crop was “quintessentially economic”).
Congress here attempts to regulate a class of individuals who have refrained from
purchasing health insurance. The conduct being regulated is the decision not to enter the
market for insurance. Plaintiffs have not bought or sold a good or service, nor have they
manufactured, distributed, or consumed a commodity. See Raich, 545 U.S. at 25-26
(defining “economics” as the “production, distribution, and consumption of
commodities”). Rather, they are strangers to the health insurance market. This readily
differentiates the present case from others cited by the government. See Wickard, 317
U.S. at 128 (Filburn cultivated wheat); Raich, 545 U.S. at 19 (Raich cultivated
marijuana); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 243 (1964)
No. 10-2388           Thomas More Law Center, et al. v. Obama, et al.                         Page 59


(appellant operated a motel). Certainly there is an interstate market for health insurance,
but, unlike the plaintiffs in Wickard and Raich, plaintiffs here have not entered the
market. In no other instance has Congress before attempted to force a non-participant
into a market.

        The government contends that virtually every American has or will participate
in the market for health care services. The timing of the need for health care can be
unpredictable and the costs substantial. By not purchasing insurance, individuals like
the plaintiffs have made a decision to accept risk. In the government’s view, plaintiffs’
financial planning choices and position on risk are quintessentially economic in nature
because they inevitably lead to cost-shifting when the uninsured obtain care they cannot
afford. The mandate concerns a failure to pay for services obtained, argues the
government, not a failure to engage in economic activity.

        This argument deftly switches the focus from the private, non-commercial nature
of plaintiffs’ conduct (the decision to be uninsured) to the perceived economic effects
of their absence from the insurance market. Certainly, plaintiffs’ conduct may be
considered in the aggregate with the conduct of similarly-situated individuals, see Raich,
545 U.S. at 20; however, the Commerce Clause cannot be satisfied when economic
activity is lacking in the first instance.2 “Where economic activity substantially affects
interstate commerce, legislation regulating that activity will be sustained.” Lopez, 514
U.S. at 560; see also Morrison, 529 U.S. at 611 (“[I]n those cases where we have
sustained federal regulation of intrastate activity based upon the activity’s substantial
effects on interstate commerce, the activity in question has been some sort of economic
endeavor.”); Raich, 545 U.S. at 17 (Congress may regulate “purely local activities that




         2
            Justice Scalia has stated that under the Necessary and Proper Clause, “Congress may regulate
even noneconomic local activity if that regulation is a necessary part of a more general regulation of
interstate commerce.” Raich, 545 U.S. at 37 (Scalia, J., concurring).
          I do not believe that this view of the Necessary and Proper Clause would save the mandate. As
Judge Vinson correctly explained, an attempted exercise of power – the mandate – cannot be justified
because it is “necessary” to cure the economic disruption caused another part of the legislation – the
“guaranteed issue” provision, ACA § 1001. See Florida v. United States Dep’t of Health and Human
Services, __ F.Supp.2d __, 2011 WL 285683, at *31 (N.D. Fla. Jan. 31, 2011).
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 60


are part of an economic ‘class of activities’ that have a substantial effect on interstate
commerce”).

       It is true that decisions not to purchase insurance are in some sense economic
ones. They are choices about risk and finances. When viewed in the aggregate, these
decisions have economic consequences. Congress, for instance, has found that:

       The cost of providing uncompensated care to the uninsured was
       $43,000,000,000 in 2008. To pay for this cost, health care providers pass
       on the cost to private insurers, which pass on the cost to families. This
       cost-shifting increases family premiums by on average over $1,000 a
       year. By significantly reducing the number of the uninsured, the
       requirement, together with the other provisions of this Act, will lower
       health insurance premiums.

42 U.S.C. § 18091(F). In an amicus brief, certain economic scholars point to other cost-
shifting effects caused by decisions to be uninsured. The first relates to adverse
selection, or the positive correlation between demand for insurance and the risk of loss.
When healthy individuals opt not to buy insurance, the pool of insured persons is smaller
and less healthy as a whole, thus raising premiums. Second, when previously uninsured
individuals do obtain insurance, they tend to do so when they have a significant medical
need and thereby consume more and costlier services.

       Lopez and Morrison rejected a view of causation whereby the cost-shifting to
society caused by violent conduct can satisfy the substantial effects test. See Lopez, 514
U.S. at 564 (rejecting the government’s “costs of crime” and loss of “national
productivity” reasoning); Morrison, 529 U.S. at 615 (same). The government fails to
show why a view of cost-shifting caused by risky conduct should fare any better. The
problem with the government’s line of reasoning here is that it has no logical end point,
and it illustrates precisely Justice Thomas’s concerns with the substantial effects test.
See Morrison, 529 U.S. at 627 (Thomas, J., concurring) (calling the test “rootless and
malleable”). That test, when paired with the aggregation principle, invites manipulation
and “draw[ing] the circle broadly enough to cover an activity that, when taken in
isolation, would not have substantial effects on commerce.” Lopez, 514 U.S. at 600
(Thomas, J., concurring).
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 61


       The government insists that a decision not to buy insurance is more clearly
financial in nature than the acts of crime at issue in Lopez and Morrison. But the statutes
struck down in Lopez and Morrison at least waited to impose their criminal penalties
until the commission of the acts that allegedly caused the cost-shifting. Here, several
layers of inferences must materialize for the government’s cost-shifting reasoning to
work, but the mandate waits for none of them. See Lopez, 514 U.S. 567 (rejecting as too
attenuated a substantial effects theory that “pile[s] inference upon inference”). The
mandate and its penalty are not conditioned on the failure to pay for health care services,
or, for that matter, conditioned on the consumption of health care. Congress instead
choose a more coercive and intrusive regulation. The proper object of Congress’s power
is interstate commerce, not private decisions to refrain from commerce.

       The ACA represents Congress’s attempt to solve national problems in the health
insurance market. That problems are felt nationwide does not mean that Congress can
try to solve them in any fashion it pleases. Congress must choose from the limited
powers granted to it by the Constitution, and federal courts have a duty to uphold the
Constitution when Congress has exceeded its authority. Marbury v. Madison, 5 U.S. (1
Cranch) 137, 178 (1803) (“This is of the very essence of judicial duty.”). Lopez and
Morrison firmly establish that the Commerce Clause power is “not without effective
bounds.” Morrison, 529 U.S. at 608 (citing Lopez, 514 U.S. at 557)); see also Lopez,
514 U.S. at 574 (Kennedy, J., concurring) (“[T]he Court as an institution and the legal
system as a whole have an immense stake in the stability of our Commerce Clause
jurisprudence as it has evolved to this point.”).

       The “hard work for courts” is identifying “objective markers for confining the
analysis in Commerce Clause cases.” Raich, 545 U.S. at 47 (O’Connor, J., dissenting).
When dealing with the outer limits of Congress’s powers, “first principles” must be
heeded. See Lopez, 514 U.S. at 552. The federal government is one of enumerated
powers. Congress’s authority must have limits, lest the Tenth Amendment’s reservation
of powers to the States and the people be without meaning. Principles of federalism thus
should guide a court’s examination of novel exercises of Commerce Clause power. See
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.                Page 62


id. at 580 (Kennedy, J., concurring) (“[W]e must inquire whether the exercise of national
power seeks to intrude upon an area of traditional state concern.”); Raich, 545 U.S. at
48 (O’Connor, J., dissenting) (noting that “fundamental structural concerns about dual
sovereignty animate our Commerce Clause cases”).

        Here, Congress’s exercise of power intrudes on both the States and the people.
It brings an end to state experimentation and overrides the expressed legislative will of
several states that have guaranteed to their citizens the freedom to choose not to purchase
health insurance. See Idaho Code Ann. § 39-9003; Utah Code Ann. § 63M-1-2505.5;
Va. Code Ann. § 38.2-3430.1:1. The mandate forces law-abiding individuals to
purchase a product – an expensive product, no less – and thereby invades the realm of
an individual’s financial planning decisions. Cf. Maryland v. Wirtz, 392 U.S. 183, 196
n.27 (1968) (“Neither here nor in Wickard had the Court declared that Congress may use
a relatively trivial impact on commerce as an excuse for broad general regulation of state
or private activities.”). In the absence of the mandate, individuals have the right to
decide how to finance medical expenses. The mandate extinguishes that right.

        Congress may of course provide incentives (in the Tax and Bankruptcy Codes,
for instance) to steer behavior, and it may impose certain requirements or prohibitions
once an individual decides to engage in a commercial activity. See, e.g., Wickard, supra
(Congress had power to impose a harvesting limit on farmer who grew wheat); Heart of
Atlanta Motel, supra (Congress had power to impose anti-discrimination requirement on
individual who operated a motel). It is a different matter entirely to force an individual
to engage in commercial activity that he would not otherwise undertake of his own
volition.

        The government recites the common refrain that the health insurance market is
unique and attributes this to some blend of free-riding, adverse selection, universal
participation, and unpredictability as to when and how much care might be needed. This
should comfort the court, the government says, because Congress will not need to resort
to such measures as the mandate again, or at least not very often.
No. 10-2388              Thomas More Law Center, et al. v. Obama, et al.                           Page 63


         This assurance is troubling on many levels and should hardly be heard to come
from a body with limited powers. The uniqueness that justifies one exercise of power
becomes precedent for the next contemplated exercise. And permitting the mandate
would clear the path for Congress to cause or contribute to certain “unique” factors, such
as free-riding and adverse selection,3 and then impose a solution that is ill-fitted to the
others.4

         To the fatalistic view that Congress will always prevail and courts should step
back and let the people, if offended, speak through their political representatives, I say
that “courts were designed to be an intermediate body between the people and the
legislature, in order, among other things, to keep the latter within the limits assigned to
their authority.” The Federalist No. 78 (A. Hamilton). In this arena, the “public force”
is entrusted to the courts. Oliver Wendell Holmes, The Path of the Law, 10 Harv. L.
Rev. 457, 457 (1897). “[W]here the will of the legislature, declared in its statutes, stands
in opposition to that of the people, declared in the Constitution, the judges ought to be
governed by the latter rather than the former.” The Federalist No. 78.

         This is the “hard work” Justice O’Connor referred to in her dissent in Raich. It
is hard work in part because it can place a federal court in the position of choosing
between powerful competing political ideologies with the risk that the court’s judgment
may be branded as “political.” We must not lose sight of the fact however that the
Constitution we interpret and apply itself embodies a resolution of powerful competing
political ideologies, including the extent of the power of the federal government – a
resolution that the States and the people accepted in the ratification process. See The
Federalist No. 45 (J. Madison) (“The powers delegated by the proposed Constitution to



         3
           The free-riding problem is substantially one of Congress’s own creation, see Emergency Medical
Treatment and Active Labor Act, 42 U.S.C. § 1395dd (requiring hospitals with emergency departments
to provide the care necessary to stabilize patients with emergency medical conditions, without regard to
a patient’s ability to pay for the care received), and the adverse selection problem will be exacerbated by
the guaranteed issue provision, in that supply will be guaranteed to high-risk individuals. Though these
policies might be reasonable, Congress’s compassion does not allow it to exceed the limits of its
constitutional powers.
         4
             Again, the mandate does not wait until an individual participates in the market for health care.
No. 10-2388        Thomas More Law Center, et al. v. Obama, et al.               Page 64


the federal government are few and defined. Those which are to remain in the State
governments are numerous and indefinite.”).

       In Lopez the Supreme Court recognized that the direction of its existing
Commerce Clause jurisprudence threatened the principle of a federal government of
defined and limited powers, and it began the process of developing a new jurisprudence
more compatible with the Constitution. That process was interrupted by Raich, where
a majority of the Court was unwilling to expressly overrule a landmark Commere Clause
case in Wickard, which had been the law of the land for over sixty years.

       Notwithstanding Raich, I believe the Court remains committed to the path laid
down by Chief Justice Rehnquist and Justices O’Connor, Scalia, Kennedy, and Thomas
to establish a framework of meaningful limitations on congressional power under the
Commerce Clause. The current case is an opportunity to prove it so.

       If the exercise of power is allowed and the mandate upheld, it is difficult to see
what the limits on Congress’s Commerce Clause authority would be. What aspect of
human activity would escape federal power? The ultimate issue in this case is this: Does
the notion of federalism still have vitality? To approve the exercise of power would arm
Congress with the authority to force individuals to do whatever it sees fit (within
boundaries like the First Amendment and Due Process Clause), as long as the regulation
concerns an activity or decision that, when aggregated, can be said to have some loose,
but-for type of economic connection, which nearly all human activity does. See Lopez,
514 U.S. at 565 (“[D]epending on the level of generality, any activity can be looked
upon as commercial.”). Such a power feels very much like the general police power that
the Tenth Amendment reserves to the States and the people. A structural shift of that
magnitude can be accomplished legitimately only through constitutional amendment.
