Faculty Notes

Ronald J. Krotoszynski, Jr.

PATIENT PROTECTION AND AFFORDABLE CARE ACT UPHELD
IMPORTANT PRECEDENTS SET ON SCOPE OF COMMERCE POWER
AND ON FEDERAL ENTITLEMENT PROGRAM CHANGES

In a 5-4 decision, the Supreme Court has upheld the individual mandate, a central provision of the Patient Protection and Affordable Care Act.  Writing for the majority, Chief Justice Roberts explained that “the shared responsibility payment may for constitutional purposes be considered a tax, not a penalty.”  He added that “[o]ur precedent demonstrates that Congress had the power to impose the exaction in §5000A under the taxing power, and that §5000A need not be read to do more than impose a tax. That is sufficient to sustain it.”  He was joined in this reasoning by Justices Ginsburg, Breyer, Sotomayor, and Kagan.

With respect to the Commerce Clause question, however, the Supreme Court has established new limits on the scope of federal regulatory power; Chief Justice Roberts held, for a different 5-4 majority (consisting of Chief Justice Roberts and Justices Scalia, Kennedy, Thomas, and Alito), that in the absence of a commercial or economic activity, the Commerce Power may not be used to regulate individual conduct.  Chief Justice Roberts observed that “[c]onstruing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority.”  The majority embraced a more narrow construction of the commerce power that excludes regulations that seek to force individuals to engage in economic or commercial activity:  “The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our decisions and Congress’s actions have reflected this understanding. There is no reason to depart from that understanding now.”

Finally, the Supreme Court, by a 7-2 vote, required that changes to Medicaid eligibility be implemented on a prospective and voluntary basis.  Roberts explained that “Congress may not simply ‘conscript state [agencies] into the national bu­reaucratic army,’ FERC v. Mississippi, 456 U. S. 742, 775 (1982) (O’Connor, J., concurring in judgment in part and dissenting in part), and that is what it is attempting to do with the Medicaid expansion.” Accordingly, he concluded that Congress may not “penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.”  Only Justices Ginsburg and Kagan dissented from this part of the Supreme Court’s holding.

In the short term, the decision will likely be noted for sustaining the mandate, and hence the lynchpin of the PPACA.  However, the longer term implications of the ruling will likely relate to new and clearer limits on the federal government’s ability to use the commerce power to regulate individual conduct unrelated to commercial or economic activity, and enhanced protections for the state governments that elect to participate in federal welfare programs.  More specifically, Congress may not use the Commerce Clause to regulate inactivity.  Nor may Congress adopt a “bait and switch” approach to existing federal entitlement programs by establishing programs with one set of participation guidelines and then replacing those guidelines without giving the states a free and fair choice to participate or not in the new program. Although the immediate impact of these holdings is less obvious than the decision to sustain the mandate as a tax, their long term importance equals, and perhaps exceeds, the importance of the mandate ruling.

Ronald J. Krotoszynski, Jr.
John S. Stone Chair, Director of Faculty Research, and Professor of Law
University of Alabama School of Law
(317) 908-2807
SUPREME COURT HOLDS INTENTIONAL FALSE STATEMENTS ARE 
PROTECTED UNDER FIRST AMENDEMNT 

In United States v.Alvarez, No. 11-210, the Supreme Court has held that false statements, even if made intentionally and knowingly, enjoy First Amendment protection and can be regulated or proscribed only if they cause harms that government otherwise has the constitutional power to prevent.  The Stolen Valor Act criminalized knowingly false statements about a person’s military background and history, including false claims about awards and medals associated with military service.

Writing for himself and three other members of the Supreme Court (Chief Justice Roberts and Justices Ginsburg and Sotomayor), Justice Anthony Kennedy explained that “Absent from those few categories where the law allows content-based regulation of speech is any general excep­tion to the First Amendment for false statements.”  The First Amendment protects false speech in order to avoid self-censorship and a chilling effect on speech that criminal punishments for allegedly false, intentional speech might create.  The Court held that this outcome “comports with the common understanding that some false statements are inevitable if there is to be an open and vigorous expression of views in public and private con­versation, expression the First Amendment seeks to guar­antee.”

Justice Stephen Breyer, joined by Justice Elena Kagan, concurred in the result, but offered a more narrow rationale for the outcome.  Applying a less demanding form of scrutiny, Justice Breyer found that the government had failed to establish that the Stolen Valor Act was a sufficiently narrowly tailored law to address the problem of intentionally false statements about military service:  “The Government has provided no convincing explana­tion as to why a more finely tailored statute would not work. In my own view, such a statute could significantly reduce the threat of First Amendment harm while permit­ting the statute to achieve its important protective objec­tive.”

Justice Alito, joined by Justices Scalia and Thomas, dissented.  He wrote that “These lies have no value in and of themselves, and proscribing them does not chill any valuable speech.”

Alvarez is an important, indeed landmark, First Amendment precedent; the Supreme Court has reaffirmed its commitment to the proposition that government rules regulating speech based on its content are presumptively invalid.  As Justice Kennedy argues, “Society has the right and civic duty to engage in open, dynamic, rational discourse. These ends are not well served when the government seeks to orches­trate public discussion through content-based mandates.”

Ronald J. Krotoszynski, Jr.
John S. Stone Chair, Director of Faculty Research, and Professor of Law
University of Alabama School of Law
(317) 908-2807

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