he's here today having argued the case before the supreme court on behalf of the nfib. please welcome to the stage mike carvin. [ applause ] >> thanks. i'll try and make this relatively painless and brief. you guys are already glutons for punishment on this beautiful day sit hearing talking about the commerce clause. i will kind of walk through it and then i'd be happy to answer any questions. as you undoubtedly know the issue we did argue a few weeks ago was for the first time in american history the federal government had compelled their citizens to buy a product, insurance. they were required to buy this product, even though it was economically disadvantageous to these people, with is not my opinion but the express opinion of the congress that imposed it. they found because you were making healthy 30-year-olds buy health insurance they didn't really need because they rarely went to the doctor, this would lower everyone else's premiums by 15% to 20% or 28 to $39

billion annually. that was the purpose of the individual mandate since congress had required insurers to sell below cost insurance to sick people, which would obviously drive up premiums, they wanted to bring in a bunch of healthy people in the risk pool in order to drive down the cost of insurance. so the question is where does congress get this power to force american citizens to buy products that they don't want, don't need and are economically counterproductive? it a relatively simple case for people who, you know, read the constituti constitution. the fusion only gives congress limited power and the power it gave them was the power to regulate commercial. when you're sitting at home not buying insurance you're not involved in commercial. can they compel you?

sin they can regulate your transaction, when you go out to buy a gm car, can they require to you buy a gm car? since the word regulate doesn't mean compel the answer is pretty obvious. even the government didn't really push that argument. their argument was a series of cases that you guys undoubt udly know about from the 1930s, most notably wicker against phil burn said congress can reach and get at local production of goods, it can get at people who substantially affect interstate commerce and it can regulate people who are only selling or involved in a small amount of -- that's the famous whiker against phil bert case. our point was wickander say you could get at people who were only approach duesing a small am of wheat. what it didn't say or imply was that you could require americans to buy wheat, that people who are in the market, even though they're in at a very local

level, are analogous to local bootleggers and congress regulating the interstate market allows them to get at bootleggers. it doesn't allow them to get at tea tollers. and that was the key point that we made which is if you're not in the market, you can't possibly adversely affect market participants. supply and demand will be precisely the same as it was. you're in no way engaged in the kind of activity that has always been the rational for congress to regulate local people like wicker. the government's next argument was, okay, even if you don't negatively affect commerce, you negatively affect commerce regulation. this plan, this act wouldn't work unless we can conscript all these healthy people in to buy insurance and we really need their money because if we don't

get them to insurance and we're requiring insurers to insure all of these sick people, premiums will go through the roof and we won't be able to keep premiums april fordable. and our point was that under the necessary and proper clause, congress does certainly have the ability to eliminate people who are creating problems for regul regulation. if you have a small amount of marijuana, you're creating a problem in terms of congress's effort to extra patriot all marijuana. but we're not creating any problems between the insurers and the government. they're going to regulate the insurance companies and the insurance companies aren't going to deny people with preexisting any care. we don't have anything to do with that. we're not -- we're being brought in not because we're a problem in terms of regulating the insurance companies, we're being brought in because we're a solution to the problem that congress has already created

through its fully executed law. if that is a pop-upper that congress has under the necessary and proper clause, that means every time they impose a burden some regulation on a consider company or and drives up the cost of, again, cars, that means they can bring you in to offset the costs of their burdensome regulations and require you to buy gm sox and that can't possibly be the law. whenever we have told pretty companies like this case that they've got to take action for the public welfare, in this case because of charitable reasons we're requiring them to go below cost insurance to sick people, when we've done that, when we required hospitals to provide care to sick people, we don't conscript some other group of the citizenry and say you pay

for the public good they've just done. weep pay for it out of the tax lol dars or the public treasury that we all contribute to. we give tax if congress can get away with this knows, not on have they violated the terms of the constitution, they given congress a brand new power where they can continue to spend well beyond their means and never have to face the political accountability of raising taxes. they can just scapegoat certain people in society, call them the problem and make them buy the products in order to offset the costs of their burdensome regulation. the government's basic response to all of that was to say, yeah, but health care is really different. it's unique because there's a lot of free riders out there who are not paying for their doctors and our point was if you want to regulate free riders, regulate

them but there's the vast majority of the uninsured pay their doctors, they go, they pay it out of their own pocket. it doesn't make any economic sense for them to have insurance, again, if you're a 30-year-old. really the only economically sensible thing for to you do if you're a healthy 30-year-old is to buy catastrophic insurance in case you get hit by a bus or get an unexpected disease. what's the one product that obamacare prevents you from buying? it's catastrophic insure. it requires you to buy the whole boat. again, the purpose of this was they need the money. they need the money now. if they're going to drive up insurance company costs in 2014, they need an immediate huge infusion of cash from these

people so that they can keep the premiums within some relevant range of affordability. the other argument they made was everybody goes to the doctor. that's 100% of the people in the united states will at some point in their lives engage in health care. our base being response to this and all of the other things is that's an economic and policy argument that may distinguish health care from some other industry but it's not a judicially limiting principle where the judiciary can tell congress based on constitutional grounds that they can't do something. all of these economic and policy arguments are by definition committed to congress's discretion, the court is never going to second guess congress's policy judgments about what the appropriate course of action is so these are fake limiting principles and require the same ad hoc case-by-case

adjudication. so all of these things are fake. but our other point is what difference does it really make that everybody eav's going to g the doctor at some point? point number one is nobody said going to the doctor is a problem. they didn't regulate going to the doctor. you only become a problem if you have don't pay the doctor. the amount of people who don't pay the doctor is a very small subset of the uninsured and a very small subset of the people who go to the doctor. the other point is even if you are a participant in a market that everybody participate in, everybody uses phones but even the solicitor general during the argument conceded to chief justice roberts that even though everybody uses phones, they couldn't require to you buy a cell phone so could you call for emergency aid. everybody eats food but their constant refrain is they can't require you to buy broccoli. regardless of whether or not you're participating in the market, the relevant question is whether or not the government can require you to buy five

gallons are milk or five bushels of wheat and make purchasing decisions for you that neither serve your needs nor serve your economic interests and again that can't possibly come within the commerce power or necessary or proper power. finally of course and the major point of the arguments i think in the supreme court was the justices constantly asking the solicitor general if you can require americans to buy this product, what limiting principle do you have, what product can't you force them to buy? and solicitor general veriliy has been criticized for not having a good answer. i think that's more or less killing the messenger. it's not that the solicitor general is a bad advocate or unintelligent or unprepared guy but the reason he couldn't give a comprehensive answer to this is because there is no comprehensive answer to this and

the liberal intelligentsia talk themselves into this notion that it's this tea party fantasy that didn't make any sense so when the solicitor general had a tough time asking the very pointed and obvious questions that the republican appointed justices were asking him, rather than concede they really had a weak case, they had to of course blame him for being a bad lawyer. i don't think that either that's true -- and i'm not going to make any predictions in terms of the outcome of the case given the tone of the argument. i can't say the argument went quite well and it went quite well for the reasons i said, solicitor general was unable to alay any reasonable person's concerns about if we grant congress this power for this particular emergency, what's going to stop them from using it for the next emergency or the next time they decide it will be a all right bill better to use

the mandate power than the taxing power for all the obvious political reasons. and since he was unable to allay i think in any intelligible way the court's concerns in this regard, i do hope and think optimistically we have a very good chance of having the individual mandate struck down. with that i'll be happy to either answer any questions or chat about other aspects of the case. thank you. [ applause ] >> craig? >> [ inaudible ]. >> so what craig is referring to is obviously what we -- well, everybody in this room knows what severability is.

the justice department department took a very unusual position. normally they say just the individual mandate goes down. but here they took the position, yes, you must strike down this preexisting condition ban and this community ratings provision, which essentially say that insurers have to ignore the health status of their customers. they we they were agreeing there were other parts of the law that why so inextricably intertwined with the mandate you have to shut that down. i know why they took that position, which is what i was talking about before. the individual mandate was put in the law for a very specific purpose, when was to offset the cost of the preexisting condition ban and you'd have the worst of all worlds in you puck down the mandate and left the preexisting ban in place. that tactical discussion created tremendous difficulties for them

in explaining if these two provisions go down, what about all these other provisions that no cap on how much you have to pay out, all these other taxes and burdensome regulations on insurers that were also part of the deal and basically the insurance companies, you know, as many aren't seekers in washington do came in and said look, we'd like a law you require all americans to buy our products. who wouldn't like that law. and in exchange you can basically do whatever else you want to us, tax us, preexisting condition ban, that's fine. as long as we get this law it's illegal not to buy my product, we can kind of cut any deal you want. once they take out the requirement that 30 million people buy their products, then the deal doesn't look so good. so the government's problem was they couldn't really distinguishes why these two provisions that they agreed went down were any any material way different from all these other

provisions that added to the insurance company's cost. and the other point we kept stressing was, look, you've ripped the heart out of the act. the whole point -- it called the patient protection and affordable care act, the patient protection part is the preexisting ban and the affordable part is the individual mandate that makes all of these regulations affordable. if you've done that, the tax on tanning salons and toilet papers and stuff may be able to work but it sure can't work in the way congress intended. i was gratified at the argument that the justices were saying, look, sometimes we'll ask the counter facts of what would congress have done if they'd known this part of the play law was not in play. but this kind of hypothetical when you've take the very guts of of the law is like asking what would happen in europe today if hitler had been killed in 1922. you're not -- you're just guessing, you're making all kind

of policy judgments, you're creating this law that nobody would have ever voted for or at least weep have no idea if they would have voted for it. so they came away with the notion, i call it baseball ash administration which is if there's no principal ground between striking down the manned day, if we can't figure out where in between these those twoks treems we're going to decide to do things, then the best course, the one most respectful of congress and the one making power is to strike the whole act down and let congress figure it out from here. it doesn't make much sense to create in village of an act that doesn't make any sense. as a patriot i hope they do that. as a partisan republican, i wouldn't mind this insane law going for three or four years because i don't think you'd ever elect a democrat again in the united states. [ laughter ] >> i think they'll be hunting him down with dogs in 2018.

so, again, i have to put my patriotism before my party but we'll see what happens. anyway, thanks. anybody else? paul. >> [ inaudible ]. the catastrophic illness issue, when it came up in the argument, justice kagan asking about that, you go to the emergency room and so forth and there's that free rider issue like you said. is it possible that the court as a matter of law could split the baby in this regard saying that the mandate is unconstitutional to the extent exceeds coverage for catastrophic, et cetera, and use that as severability or is it an all-or-nothing proposition? >> i it has to be all or nothing. they're not going to rewrite the

law to do something congress didn't intend to do. i don't think they can require you to buy cough drops. i don't think they can require you to buy catastrophic health insurance or require to you buy anything. when i was discussing this with justice kennedy he was saving i understand your point about they'll come back and the next argument will be this is unique and this is unique and he's saying isn't this really unique these healthy 30-year-olds can come into the market and all of a sudden be this big burden on society, doesn't that differentiate them. and among the other point i was making was if we're going to create exception, sort of compelling needs, uniquely compelling need arguments where we're going to bend the rules and language of the commercial laws, sure live congress has got to show us they are trying to address the union aspects of this, and then i made the point which i made earlier if congress was worried about healthy 30-year-olds aulg of a sudden

become wards of the state because they were hit by a bus, as opposed to lowering everybody else's premiums, they would have allowed them to do the only economical option, for $400, $500 a year, i'll take care of all my medical needs except if i get hit by a bus and then if i do my insurance will cover it and i never will become a ward of the state. since they didn't do that, i think that vividly illustrate from a policy and applausibility perspective, a, that is no what they were trying to get at and, b, if you let them get away with this, katie bar the door because they can establish whatever implausible rationale. >> a little off top being but what did you think with the

arguments with regards to the fact that the states were being coerced into the medicaid portion? how did that go on the last day? >> you know what, i was represent being the private private respondents. while i had an academic interest in the medicaid stuff, it was purely academic. the dilemma, of course, in all of this, as the federal government becomes more and more involved in things that we think of as traditional areas of state regulation, obviously, health care and the like, the states become, in many ways, dependent on the federal government's largess. there a case that says, look, you can condition federal monies on the state's doing things, technically you're not forcing them to do it, you're just offer -- making them an offer they can't refuse, like the godfather. i think paul ably argued for the states, look, if this isn't coercion, what can be? because we're literally talking about hundreds of billions of

dollars and not participating in this program would create horrific budget problems for the state. i don't know how to handicap that, in candor i didn't try to because that was paul's argument, not mine. the argument went well. people were asking them a lot of questions. solicitor general was worried, he made a jury summation speech to the supreme court, talking about how men need to be able to pay for their wives' breast cancer and people are on dialysis machines and all of these -- as if the issue in front of the court whether we throw all of the sick people out on streets or adhere to what they're doing and the liberal justices were sitting there with their mouths open going where this this coming from? it was a relatively odd moment during the argument, yeah.

>> without asking you to engage in crass legal realism, what are your thoughts on the president setting up the supreme court as a foyle both in the state of the union address several years allege and post-argument comments. >> look, there's an obvious distinction between the citizens united states of the union and this. they already written citizens united. if you're going to yell at these guys i wouldn't do it while they're writing the opinion. there's always the chance that they might be changing their mind and i don't know -- it was a relatively odd thing for a president to do. i was sitting there, going, keep talking. because i think at the end of the day it can only help us. and at the end of the day it was silly, right? as fis thif this -- i don't thi will have effect.

it will be negative. we've heard from your solicitor general, we've heard your briefs, we don't need you lecturing us in public. >> [ inaudible ]. someone in your office graciously guided me to the goldwater institute, which was writing a brief basically on behalf of states that passed health care freedom acts. i want to thank you for your guidance on that and say it seems to meet tenth amendment is a very important piece of the puzzle because you have to, like any statutory or contractual construction, you have to read the four corners of the document. if you're asking yourself what are the limits on congress' power under the commerce clause

or the improper clause, the tenth amendment has to go right into that. it's my understanding there's not a real expectation that the tenth amendment is going to be a big part of the court's reasoning on this. is there any comment you can make about that? >> it depends -- in one way saying the tenth amendment won't enter into it is not in any way a criticism of the tenth amendment. the tenth amendment says, as you undoubtedly know, every power not given to the for example, i.e., the commerce clause, reserved to the states and to the people respectively. in my optimistic days i don't think they'll get to the tenth amendment because they'll say this power's never granted to them so we don't need to get to the tenth amendment. it does come in this way. if the justices think in some circumstances we could require something that regulating nonmarket participants, there is the necessary improper clause, and as justice scalia emphasized it says necessary and proper.

even if we thought regulating nonmarket participants in some ways was okay, surely compelling them to transfer their property would be analogous to compelling in this preince case, state government employees to enforce federal law. in prince they said it might be okay but not proper because it's -- you've never used it historically and it really does exceed the powers that had gone to the federal government. and the government's response was sort of, oh, that's when you're taking care of states, that's a problem when your commandeering states. we said, no, no, commandeering citizen is on the say constitutional footing. the tenth amendment reserves powers to the states and to the people to deprivations of individual liberty are problematical as interferences with state autonomy. it might come up that way.

>> thank you. >> support -- >> to support it? the question is, what would my opinion look like if i was writing something in favor of the law. it would be an extraordinarily short opinion. you know, it's not law, it's not limiting principle. it's not -- i guess it would look not unlike the solicitor general's, gee, people are really sick, we've got to do something, and these damn states can't take care of these sick people, so let's ignore the constitution. usually they're not quite that candid. there are no legal argument dpsh there were i sure wouldn't be telling you -- there are no legal arguments in support of obama care. and na is why it's not a coan coincidence that congress for 230 years never tried this

before. they've had millions of opportunities where all kinds of crisis, height of the new deal, all -- you know, nobody required you to buy war bonds during world war ii, and that was because it was literally unthinkable that, in a nation postulated on the principle that the people are sovereign to the government, that the government can commandeer the people to do something and they're merely required to salute and say, yes, sir, particularly when it's the federal government which, by definition, had its powers limited and enumerated, prie pry because they couldn't cause the ter ran cal police power. he kept saying, look, the way the act, it's much more efficient way of getting money into the insurance company's coffers than if we had followed this commerce clause thing and

conditioned access to health care providers, and then made you buy insurance. and i was like, yeah, that's exactly right. i can't conceive of a system, more badly equipped to force citizen aid to give this property to citizen b than the system the framers came up with. that simply reflects the fact that the framers didn't want to make wealth transfers between the citizenry easy. they wanted to make it impossible. it doesn't reflect any flaw in our reasoning. it reflects only the fact that the paradigmic example of the framers trying to deny the federal government was wealth transfers among citizenry and that's precisely why they didn't give them the police power. so you can use that as my dissenting opinion from the -- from the -- i just wowed you with my eloquence, there's no

further questions? with that, thank you very much. enjoy the rest of the day. >> thanks, mike. what a great way to end the day. before we adjourn, i want to remind everyone about the election law seminar tomorrow. it is not here, it is the great firm of mcguire woods, 2001 k street. if people are not coming to the work shot they need to turn their cle forms into ashley carter today. those coming to the workshop should keep them and turn them into n. tomorrow. before we adjourn to the reception, i want to recognize david waggi warrington here on of attorneys for ron paul. david? somewhere? steffan pasantino, on behalf of lawyers