Prelude to Next Week’s Oral Argument: Henry and Stearns on Commerce Games and the Individual Mandate

In preparation for Monday’s oral argument on the constitutionality of the Affordable Care Act’s individual mandate (and our online symposium), I wanted to recommend an insightful article written by my colleagues Leslie Meltzer Henry and Maxwell Stearns (both of whom I’ve blogged about here, here, and here) entitled Commerce Games and the Individual Mandate, 100 Georgetown Law Journal 1117 (2012).  I’m going to include the abstract below.  Yesterday, Professors Henry and Stearns published a terrific op ed in the Baltimore Sun arguing for the constitutionality of the individual mandate.

While the Supreme Court declined an early invitation to resolve challenges to the Patient Protection and Affordable Care Act (ACA or the Act), a split between the United States Courts of Appeals for the Sixth Circuit (sustaining the ACA’s “individual mandate”) and the Eleventh Circuit (striking it down) ultimately compelled the Court to grant certiorari in a series of cases challenging the constitutional validity of the new federal health care law. In addition to deciding the fate of this centerpiece of the Obama Administration’s regulatory agenda, the Court’s decision will likely affect Commerce Clause doctrine—and related doctrines—for years or even decades to come.

Litigants, judges, and academic commentators have focused on whether the Court’s “economic activity” test, as set forth in United States v. Lopez, permits the individual mandate. This Article approaches the constitutionality of that provision from a novel perspective, one that proves essential in applying past Commerce Clause decisions, including Lopez, to the ACA and in appreciating the real stakes involved in upending the individual mandate. By analyzing the Court’s Commerce Clause jurisprudence through the lens of game theory, we expose common features of games that have resulted in limiting state powers on the dormant side of Commerce Clause doctrine, and in sustaining and restricting congressional powers on the affirmative side. Applying such games as “the prisoners’ dilemma,” “the driving game,” and “the battle of the sexes” yields critical insights about the nature and limits of state and federal regulatory powers.

Our game-theoretical analysis shows that although debates have centered on the role of the individual mandate in solving a micro-level separating game among low-risk individuals who do not purchase insurance and high-risk individuals who cannot afford it, a more compelling account focuses on the Act’s role in solving a macro-level separating game played among the states. By comparing the ACA to several important historical policy splits among states—public accommodations laws, abortion funding, the death penalty, civil remedies for violent crimes against women, and same-sex marriage—we demonstrate that the Act, including the individual mandate, fits well within those cases for which congressional commerce power is justified to avoid the risk that competing state policies will force other states into a problematic separating game, thereby undermining the selected regulatory policy. Our analysis reconciles congressional power to implement the ACA with the post-New Deal expansions and recent retrenchments of Congress’s Commerce Clause powers, and compellingly reconciles the dormant and affirmative sides of the Supreme Court’s Commerce Clause jurisprudence.

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2 Responses

  1. Amanda Pustilnik says:

    I valued – and highly recommend – this article for a few reasons. The first is the timely subject matter on ACA, of course. But the game theoretical analysis made me conceive of Commerce Clause jurisprudence in an entirely new way. The game theory piece is accessible and quite compelling. Thanks for posting, Danielle!

  2. A.J. Sutter says:

    Conclusions based on game theory don’t suddenly become more reliable just because they’re conclusions with which one might agree. See, e.g., the diverse criticisms of game theory in the economics literature, such as by Kreps (1990), Mirowski (2002), and Kirman (2010). The game theory in the paper is also rather simplistic, since the examples used all rely on binary choices, when far more nuanced options are available to policy. But the authors deserve credit for employing a clever rhetorical strategy to support their favored arguments, since many readers will find game theory persuasive (though if these readers don’t include Supreme Court Justices, the effort might turn out to be fruitless). As the authors put it @ 1122,

    Our approach accomplishes three simultaneous goals. First, it reconciles the historical expansion of congressional post-New Deal Commerce Clause powers with the Rehnquist Court’s retrenchments on those powers. [Footnote omitted] Second, it shows why recent doctrinal limits do not mandate striking down the individual man- date. And third, it demonstrates doctrinal coherence, not merely doctrinal convenience or creativity. [Emphasis added]

    At least they’re up-front about these being their a priori goals, instead of conclusions that fall out of some pseudo-objective analysis.