And over at Volokh...

Georgetown Law Professor Randy Barnett is doing some heavy-duty legal lifting:

Eight Things to Know About Yesterday’s Sixth Circuit Decision
Volokh readers will remember when two widely-respected conservative Court of Appeals judges, Judge Easterbrook and Judge Posner were on a unanimous Seventh Circuit panel denying both the Due Process and Privileges or Immunities challenge to Chicago’s hand-gun ban. One year later, the Due Process challenge was upheld 5–4 in McDonald v. Chicago. My friend and current adversary, Walter Delliger said yesterday that the opinion by Judge Jeff Sutton to uphold the individual mandate “is a complete vindication of the constitutionality of the Affordable Care Act.” Not so fast.
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4. The Court rejected the objections to standing 3–0. Some of the same folks who are so confidently opining on the scope of the commerce and tax powers – including the government – were also questioning the claimants’ standing to challenge the ACA. The court unanimously rejected their view and reached the merits.

5. Judge Martin accepted the requirement the Congress must regulate activity. Unlike the passage from Judge Sutton quoted by Orin, Judge Martin did not question the activity-inactivity distinction. “In applying this jurisprudence, our first duty is to determine the class of activities that the minimum coverage provision regulates.” And “[t]he minimum coverage provision regulates activity that is decidedly economic.” Later he writes, “far from regulating inactivity, the provision regulates active participation in the health care market.” For his Commerce Clause Analysis, he accepted the government’s characterization of the activity reached by the statute:

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.

In short, the majority accepts the “class of activities” framework that I have advanced since December of 2009, and found the “practice of self-insurance” to be the relevant activity. Having been advanced by the government, this theory of the relevant “class of activities” was neither new or surprising. The first step in any Commerce Clause analysis is to define the relevant “class of activities” and the litigants disagree about this definition.

6. The use of “self-insurance” by the majority was problematic. Neither Judge Martin or Sutton spend much time explaining the concept of “self-insurance” upon which their opinions vitally depend. Wikipedia summarizes the conventional technical meaning of this activity: “Self insurance is a risk management method in which a calculated amount of money is set aside to compensate for the potential future loss.” In other words, companies “self-insure,” when instead of entering a risk pool provided by an “insurance” company, they create their own pool of funds from which to handle future losses. This is a genuine activity. Doing nothing and waiting to pay for something later – perhaps best called “self-financing” – is simply not the same thing. The key about “self-financing” is that it happens when you receive services and are called upon to pay. But this is not the class of activities defined by the statute. In this way, by misusing the term “self-insurance,” both judges convert inactivity into a “class of activities.” But that is merely semantic not substantive. It would only convince someone who really did not care whether Congress has the power to mandate activity or not. It would not convince anyone concerned about granting this new power to Congress. Judge Martin gives up considerable ground in a footnote, where he concedes: “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.” “Risk retention” is a somewhat more transparent way to describe doing nothing, but it is still seeking to use semantics to create a “class of activities” from nonactivity.

7. The swing vote depended on a “Roach Motel” theory of facial challenges. According to Judge Sutton’s view of facial challenges, the mandate is constitutional as applied to anyone who already has insurance. Having once voluntarily chosen to get insurance, they can be mandated never to stop. Like the Roach Motel, once citizens check into the health insurance market, they can never check out. This implication of Judge Sutton’s analysis is a sign of its weakness, and why it won’t be adopted the Supreme Court. Ilya and Jonathan have already ably explained some of the substantive difficulties with this approach. But the key is that his view of facial challenges was crucial to his decision, because it allowed him to avoid the hardest issues posed by the mandate: compelling citizens into a market – here the insurance market – who are not currently in that market. (I realize that the government claims the “relevant market” is the health care market, but this rewriting of the statute has other problems.) If Judge Sutton is right about “facial challenges,” and Judge Martin and others are right about the unavailability of “as applied challenges” after Raich (as I think they are), then there is really no justiciable way to adjudicate whether Congress has exceeded its Commerce Clause powers. Here is the basic logic:

“Facial” challenges will be denied so long as there are any constitutional applications of the law.

But, so long Congress can reach a “class of activities,” the courts will not carve out subclasses in an “as applied” challenge to see if they may beyond Congress’s power.

This would be a radical conclusion I doubt the Supreme Court will adopt. By the time it reaches the Supreme Court, Judge Sutton’s analysis of facial challenges will have been thoroughly vetted. In the end, the choices for the justices will be between something like Judge Martin’s opinion or Judge Graham’s. The “center” will not hold.
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Judge Sutton issues his own poignant challenge to the Supreme Court:

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. . . . A court of appeals cannot. The Supreme Court can decide that Raich was a case only about the fungibility of marijuana, . . . not a decision that makes broader and more extravagant assertions of legislative power more impervious to challenge. A court of appeals cannot.

Whether or not an inferior court may, the Supreme Court not only can, but must decide these questions. And so it will. About a year from now.