The Ghost of <i>Lochner</i> Sits on the Supreme Court and Haunts the Land

The ghost ofis alive and well on the Roberts Court, which has been busily dismantling laws that stand in the way of total corporate freedom.
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Philosophical "conservatism" on today's Supreme Court has nothing to do with constitutional method. It does not mean that the Justices defer to Congress or the states. It does not mean respect for precedent or existing doctrine or the original meaning of constitutional language. All it means is that the five Justices who imposed Citizens United on our country find a way to line up with the political arguments being advanced on Fox News, by the Heritage Foundation and by the most right-wing forces in the Chamber of Commerce. This is a Court that isn't just dominated by the politics of the Republican Party; this is a Court dominated by the politics of the Tea Party. What an embarrassment.

The Supreme Court's performance on the bench in the health care case last week is instructive. The remarkable thing is that everyone, including the conservatives, concede that the mammoth health care industry, which represents one-sixth of our national economy, substantially affects interstate commerce. This is all that needs to be shown under the 1995 U.S. v. Lopez decision, which found that Congress under the Commerce Clause can regulate the channels of interstate commerce, the things moving in interstate commerce, and any activity that has a "substantial effect" on interstate commerce. With 40 million uninsured people whose uncompensated health care costs the rest of us billions of dollars a year, it's a simple case. This is why intellectually honest conservatives, like my first-year Contracts professor, Charles Fried, a serious conservative at Harvard Law School who was President Ronald Reagan's Solicitor General, are declaring that the current constitutional attack on Obamacare is "just a canard that's been invented by the tea party, and I was astonished to hear it coming out of the mouths of the people on the bench."

In truth, this has nothing to do with the Commerce Clause. What right-wing conservatives are saying now is that the individual insurance mandate (which they concocted at the Heritage Foundation and put into practice in Massachusetts under Governor Romney, all with the enthusiastic support of Newt Gingrich) goes "too far." It threatens a "fundamental shift in the relationship between government and the individual." It actually "makes people do something." It forces people to "enter into a contract."

No, these "don't tread on me" arguments have nothing to do with the Commerce Clause and everything to do with the revival of the 1905 Lochner v. New York decision. In Lochner, a similarly Right-leaning Supreme Court struck down a law regulating the working hours and condition of bakeshop employees in New York. The theory was that the Due Process Clause creates a sacrosanct invisible shield around business and employment contracts that cannot be pierced by economic and social legislation. For decades the Lochner Court proceeded to wipe out legislation regulating child labor, occupational safety, the right to organize, collective bargaining, and consumer rights, all in the name of protecting the Due Process freedom of contract. Justices would give the thumbs-up or thumbs-down depending on whether they felt a law had gone too far in regulating commercial activity. The Court's self-appointment as a super-legislature reviewing the wisdom of laws affecting business provoked the famous political clash with President Roosevelt, who advanced a plan to change the composition of the Court. Although FDR did not succeed in changing the size of the Supreme Court, the Court did change its ways and abandon the radical doctrine that government could not regulate private contracts affecting employment and consumer rights.

The ghost of Lochner is alive and well on the Roberts Court, which has been busily dismantling laws that stand in the way of total corporate freedom. Just last Term, Justice Breyer dissented sharply in Sorrell v. IMS Health, Inc. (2011), in which the conservatives invalidated on free speech grounds Vermont's Prescription Confidentiality law, which provided that health insurance companies and pharmacies could not, without doctors' consent, sell information to pharmaceutical companies about what drugs their patients were using and what illnesses they were facing. The majority ruled that this confidentiality protection violates the First Amendment rights of corporations involved in the buying and selling of patient information. Justice Breyer observed that the Court was using the First Amendment in the same way that the Lochner Court used Due Process: to strike down ordinary laws regulating economic life and business, shifting the locus of real power from the legislative branch to the judiciary. Justice Breyer, who has never been a Ralph Nader-style radical when it comes to consumer rights, admonished the Court for opening up a 'Pandora's Box':

Given the sheer quantity of regulatory initiatives that touch upon commercial messages, the Court's vision of its reviewing task threatens to return us to a happily bygone era when judges scrutinized legislation for its interference with economic liberty. History shows that the power was much abused and resulted in the constitutionalization of economic theories preferred by individual jurists.

-- See Lochner v. New York, 198 U.S. 45, 75-76 (1905) (Holmes, J., dissenting).

The health care case threatens a full-blown revival of Lochner under the guise of the Court preventing some vaguely identified "overreach" by Congress under the Commerce Clause. This rhetoric is phony-baloney because the idea that government never forces anyone to do anything is laughable, as anyone who recalls the existence of military conscription, compulsory public education, and forced deduction of Social Security taxes might realize. It does not improve the new right-wing argument to say that the (Republican) individual insurance mandate is unprecedented or a radical break from prior tradition because it "forces people to buy something or to enter into a contract." That, too, is a familiar design for government laws, as you will know if you are forced to buy auto insurance in order to drive.

Indeed, most of the landmark Commerce Clause decisions that establish the lawfulness of Obamacare involved people being forced to enter into contracts they would have preferred not to enter. In NLRB v. Jones & Laughlin Steel Corp. (1937), the Court upheld Congress' power to pass the National Labor Relations Act, which forbade the dismissal of employees for organizing unions and forced business employers to rehire (and repay) workers who had been unlawfully fired for that reason. What is that if not forcing someone into a contract?

In Wickard v. Filburn (1942), the Court affirmed a $117 penalty imposed on an Ohio dairy farmer who harvested 16 bushels of wheat more than he was allowed to under a wheat harvesting quota set by the Agriculture Secretary under the Agricultural Adjustment Act of 1938. Filburn the farmer made an especially compelling case (and a far more sympathetic plaintiff than the politically driven AGs bringing the Obamacare suit), since the wheat he harvested went not to market but to feed his livestock and family and to create seed for planting. Yet Justice Jackson wrote for a unanimous Court that it was perfectly reasonable and valid under the Act to seek to increase the price of wheat by limiting the volume produced. Home-consumed wheat, he wrote, "would have a substantial influence on price and market conditions."

Even if the farmer's wheat never goes to market, Justice Jackson wrote, "it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market." In this sense, home-grown wheat "competes with wheat in commerce" by keeping people who would otherwise be consumers from purchasing wheat on the open market. That is, Congress essentially wanted to force people in Filburn's situation to go out and buy wheat. Furthermore, even if Filburn's individual "contribution to the demand for wheat may be trivial by itself," the key point from the Commerce Clause perspective is that "taken together with that of many others similarly situated," his contribution to demand "is far from trivial." This kind of analysis is what has given rise to the "aggregation" approach to analyzing the substantiality of effects on interstate commerce; what matters is not the economic effect on interstate commerce of a single actor who wants to opt out of a national regulatory scheme but the "aggregate" effect of all persons or businesses similarly situated. In the case of health insurance and uncompensated care, that aggregate effect is many billions of dollars a year.

Take the final example of the public accommodations provisions of the Civil Rights Act of 1964, which the Supreme Court upheld under the Commerce Clause in Heart of Atlanta Motel v. U.S. (1964). The Act compelled white restaurant, lunch counter and hotel and motel owners to serve and do business with African Americans and other racial minorities over their diehard opposition. In other words it forced people into business contracts. Similarly, Title VII of the Civil Rights Act forbids race and sex discrimination in hiring, thus forcing racist and sexist employers to hire people they would prefer not to.

Every case is different, and what lawyers get paid to do is distinguish this situation from that. But what has really changed today is the political culture of conservatism, which is so shameless that it can invent a health care policy -- the individual insurance mandate -- and promote it widely as the alternative to the clearly superior single-payer plan that prevails in most of the world, and then come back later and declare that the whole idea is really unconstitutional the minute it is adopted by a political opponent seeking a compromise with conservatives.

But, since everyone concedes that it relates to interstate commerce, if it is going to be struck down, the individual insurance mandate will have to be declared unconstitutional because government cannot go "so far." Yet, if government cannot go so far at the national level because it violates individual rights, surely it cannot go so far in Massachusetts, either. Does this mean that Romneycare in Massachusetts is unconstitutional, too? Will the Republican standard-bearer in 2012 have to run against the constitutionality of his own plan?

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