they are adding a republican to the strong democrats and their staffs in washington. >> comcast hired a variety of folks from both parties. head of the regulatory office is -- the head of the regulatory office is a democrat. so, it is actually one of the offices in town that is known for being very bipartisan. they have a good collection on both sides. >> can you tell us how you found out? >> i really can. >> and he might be the replacement? is there any word out there yet? >> no one has been talking about her leaving. i am sure within days we will have plenty of people floating their names out there. . .

>> the obama administration faced its first appeals court challenge to the new health

care law. oral argument was heard in liberty university versus timothy geithner. it's a religious college in lynxburg, virginia, it says that mandating individuals to buy health insurance is a violation of the clause. >> our first argument, 10-23-47, liberty versus geithner. mr. hayden. >> good morning, europeans. play it -- your honors. play it please the court. we respectfully request this court to find that the mandates aren constitutional for several reasons. the mandate finally the plaintiffs' constitutional rights. this law redistributes wealth among private parties to promote an ideal that is

humanitarian in nature. however, the act goes far beyond the limits of the constitution for seeking to regulate for the first time in history noneconomic activity. there are three reasons. >> the first time none knick in-- economic activity. >> that is the first time to regulate inability under the commerce clause. first the commerce clause. >> mr. staver, like your brief, even in the first couple of minutes here, you have said what i perceive to be two different things and i want to make sure we're with you. is it your contention that congress lacks the authority to enact a statute, which is one way you have put it, or is it your contention that congress lacks the authority to enact a

mandate as you referred to it? >> our challenge is to the mandate and that's what we say congress lacks the authority to pass. >> so you don't question in any way, shape, or form, the authority of congress to address the challenge of health care delivery and cost facing the country? >> well, we don't concede that this entire act is from the mandate or the constitution or under the commerce law. for example, the guaranteed issue or the community rating system, that is a pervasive regulation that has never been before enacted -- >> you challenge that is >> we don't challenge that. our challenge is for the individual mandates, not to this interior areas -- >> [inaudible] >> our challenge is today to the individual. that is what our focus is. this act as relates to the mandates forces inactive

bystanders into the stream of commerce and it compels the employers to contract with private insurance companies to provide a benefit that has never been bargained for. the act doesn't regulate the channels of commerce or even the activities that would substantially effect congress. >> [inaudible] >> well, in every single case, your honor, that has dealt with the commerce clause and the outer edges including the wikrard case and the race case regarding the growing of marijuana. there is always some kind of act of participation on behalf of the individual that is under the regulation. in wickard, for example, he could have avoided regulation if he had not planted, cultivated and grown and harvested and consumed weed. >> i thank you for that rendition. what is your definition of activity, for example?

you suggests that mental activity because you have to report this to the internal revenue code and filing a tax return would be sufficient activity. what is your definition of activity? >> my definition would be a standard definition that you have to be doing something. >> [inaudible] >> but, as it relates to commerce, you have to be some kind of production, trade, exchange. >> filing your federal income tax return is not acting in [inaudible] >> i'm talking about as it relates to reaching the activity. >> an act, is it not, is it not an activity? >> it's an act, that's correct -- >> i'm trying to get you to differentiate. >> what we have you here are individuals who want to remain out of the stream of commerce. they don't want to act at all. >> that's not what your complaint says or your pleading

says is that she has made a personal choice that she does in fact use health care, but she has made a personal choice that she doesn't want to be insured. it sounds like she has a lot of activity about it. >> mental choices, however, is not an activity. >> that's not what she says in her complaint. she doesn't say she is idle. she does, in fact, partake in the mental health field. >> i don't think that she necessarily partakes in -- certainly not the insurance market and not the -- >> you're quite right. it says she doesn't want to do it for insurance, but she does want to and has used health care. >> managing your own physical being by eating properly is not an activity that would be regulateable under the commerce clause or managing her own activity by simply having natural remedies. >> what i'm trying to do is

find that dividing line. it's crucial for your argument. >> it is critical to the argument but the fact of the matter is when you have someone who is literally outside of the stream of commerce and choose not to put themselves into that stream which is what the plaintiffs have done in the particular case, they want to be left alone -- >> ask about that, because that is an interesting point that you make. the choice here is not to put yourself in a state commerce stream. how different is that from, the case, weed has been grown on the farm, the choice has been made not to put that weed into the interstate market, but rather to have it at home and are the choices being made in the case of marijuana not to put that marijuana into the interstate commerce market, but

to have it at home? why is it not different here that the choice that is being made is simply not to put your money into insurance premium so that you don't have to be put into the interstate market? >> it's critically different because in wickard and rash, they could have remained outside the customers clause had they chosen to do nothing, had they chosen not to grow weed or consume it for personal consumption. >> how about the neighbor? is the recipient of a gift engaged in activity when she receives a gift? >> it could be. certainly if your -- >> so if she delivers marijuana to her neighbor, the neighbor is just sitting there, hasn't even asked for it, but is now in knowing possession of it in violation of federal law, has there been activity by that neighbor? >> that neighbor would have

made a conscience choice to retain a particular commodity that is regulateable. >> possession of it requires her to do something, doesn't it. >> here we're not possessing anything. in this particular case -- >> the question i'm getting at and i think my colleagues are trying to get you to address is how -- look, there is a demarcation. you have wickard, we have raich on one side of the divide. we have morrison, lopez on the other side of the divide. if i understand your submission here, what identifies that divide is solely activity versus inactivity, and yet on the wickard-raich side of the divide, there seems to be an awful lot of a lot of people would regard as inactivity but nonetheless subject to congressional regulation. so we're inviting you to help us think this through. >> certainly, judge davis. in those cases, there is

clearly a commonity and that there are individuals although interstate and having perhaps less commercial nature to it is still activity. they are engaged in production, growing, and consumption of what they have actually grown. >> but not her neighbor. she hasn't grown anything. she hasn't produced anything. she hasn't even asked for anything. is she now in knowing possession of what congress has prohibited? >> she has made a choice, if that is the case to retain something that is otherwise regulateable. >> so the mental process of making a choice is activity under your submission? >> no, it's not. clearly it's not. the physical retention of something would be, but certainly if you are refusing to -- >> excuse me, i'm sorry. when this person has insurance and makes the decision to either keep the insurance or not keep the insurance, is that

an activity? >> well, that may be a choice, but it's certainly not the facts of this case. >> you see what we're trying to get. we're tying to get help from you on defining these requirements that you think are so important in activity. does that have a constitutional basis? >> i think it does. i think you go all the way back -- >> where does the commerce clause require an activity? >> the commerce clause has every single case described by the supreme court, the cases have required some kind of physical activity, some kind of production, some kind of manufacturer, some kind of trade whether it's interstate or intrastate? >> the cases were deciding at founding when webster sat on the supreme court for four days, i'm sure he wishes we were back there. the cases don't talk about activity at all. >> they don't talk about

activity. >> the constitution doesn't talk about activity. >> they talk about what -- >> the constitution, the constitutional provision that you rely talks about activity? >> it's inherit in regulating commerce and what the definition and understanding of commerce is. >> is commerce activity? >> yes, from the very history from the foundings to the present, congress is some kind of activity inherent in that very nature. commerce has never been extended to regulate simply idleness, choosing to avoid health insurance or choosing to avoid an economic transaction. >> did you ask what they were doing? >> no, he was choosing -- >> not to go on the market to buy the weed so he grew -- the secretary of agriculture says he could grow. >> there is a critical difference, judge davis. he could have avoided

regulation if he had just simply said i don't want to do anything. >> would the question be would use in your perspective, they can avoid growing in the interstate commerce market? >> yes, your honor. >> even though from an aggregate perspective, you look at this and determine if there is a substantial or at least essential part of a general regulatory scheme. i think you started out by saying, of course, you're not challenging on this appeal in items of the part of the act, there is this authority or general regulatory scheme. the question then becomes, is there an essential part of it, of a scheme that ultimately, the aggregate population will have to participate in? >> your honor, if you had an otherwise valid and comprehensive regulation, the

difference in raich, they said the overall statutory constitutional, they wanted to be exempted out of it itself. you still need at least three components this is in raich. even if you're going to regulate something that is substantial to the overall and interstate and has less noncommercial activity, you know three opponents. first, it needs to an have an activity. second, it needs to be involved in the producing, distributing or the consuming of an tangible commodity and an established interstate market. it doesn't meet the criteria to regular lay something on the edges that would be essential to a comprehensive scheme. again you don't have an activity. we're not involved in distributing, producing or consuming a tangible product, in this case it's the insurance

product. >> where does the word tangible appear in the commerce clause? >> it appears in raich. what you see in the commerce clause is something that you can literally see, touch, or understand or there is an activity to provide commerce to have intercourse, to have trade, to have some kind -- >> you're describing a commodity clause rather than a commerce clause? >> no, your honor, that's the commerce clause in terms of the fact that congress has never -- in fact the government cannot point at any single case or idleness, a choice to not engage in an economic transaction has been found reachable under the commerce clause. those cases represent the outer edges of the commerce clause, but this case goes beyond those cases because unlike those cases, our clients cannot choose to be not regulated under this particular act. they are forced by --

>> explain this statement to me and justice scalia, a regulation of an interesting activity may be essential to a comprehensive regulation of interstate commerce, even though the interstate activity does not itself substantially effect interstate commerce. >> yes, that's true. >> so if you have an act here that you say is inactivity, it does not substantially effect interstate commerce, nonetheless, it is essential to the comprehensive regulation, is that not the issue here as to whether this inactivity or act, is it essential for a comprehensive regulation? >> no, your honor, raich clearly is in plaintiff's favor because first of all you have to have a comprehensive scheme. >> comprehensive scheme. >> what do you mean by outer

limit? >> that's as far as those cases, those are the farthest reach thus far that the supreme court has decided with respect to commerce clause the that's what i mean by the outer limits. no case has beyond them. this case would take it beyond raich and wickard? >> are the comprehensive regulations requireable? the activities are part of that comprehensive regulation? >> i think what we have pardon me? >> you don't say there is a comprehensive scheme, dispute it? >> i don't dispute there is a comprehensive statute. we're not challenging the statute but the mandates. >> lacking in lopez was the fact that there was not a comprehensive regulation. those were totally intrastate activities. >> but morrisson and lopez required economic activity.

they also required a limited jurisdiction state which i cannot find required in this statute. >> those were factors the court should be looked to. i remember one of the things with legislative history was a factor in lopez and then was apparently no longer a very critical factor in morrisson. so we have a massive hearing, don't we, to meet that fact. there is no doubt about it. there are kinds of congressional hearings about this legislation. >> we do, we also have a lot of history in the morrison case as well. >> that's what i just said. we have that and the morrison case it didn't seem so important. in lopez, it was set out as one of the factors. >> that's correct. let me as i'm reaching the time for me rebuttal. >> you can receive questions as long as we ask. >> thank you. let me go back to your question and this is critical.

that is nothing new. we go back to -- >> you don't disagree with that statement? >> i don't disagree with that's what he said in that statement or that's what other supreme court cases have said. if you go back to pages 18 and 19 which is the majority opinion, his says that when you go to those, which you regulate intrastate activity that has less of a commercial nature, that in and of themselves might not be regulateable inside of a comprehensive scheme, that has to have at least a qualifying limiter. those are the three things on 18 and 19, an activity that produces, that distributes or consumes a tangible commodity and also that there is an established interstate market for that. >> but raich absolutely, flatly, without question was noneconomic, noncommercial. do you agree or disagree? >> i agree that it was noncommercial, yes.

>> so you agree? flatly noncommercial, noneconomic? >> the difference in raich, european, they indicated they were on the edge of being able to go into the stream of commerce at any time. it would be inconceivable to keep marijuana outside of the scheme that the statute wanted to regulate. raich also says it has to be an activity. raich is an active pearmings by the marijuana growers in their home and consuming marijuana. if they had not done so, they would not be regular labble and be outside of the nature of the commerce clause. we have something different, unique, something novel as the congressional service said in 1994 and 2009. the commerce clause had mandates and had the fedex tension to require every individual to perfect health care insurance or pay a penalty. that is beyond the outer edges of raich.

>> i was very surprised we hadn't brought this up, the question, there is an amount of talk in the papers if congress can do this, it can require people to drop. >> yes, certainly the court in this case and virginia and northern georgia said that as well. >> let me ask you this. could congress prohibit people from buying broccoli or to make it a little more real world, people from buying transfat because of it? >> according to someone who testified in the hearing, congress could actually cause people to join health clubs. >> would you have a problem with that? >> certainly i would. >> it would already be there. there wouldn't be another choice. >> not to prohibit the

production of it but to -- >> the purchase. >> but to force the consumption of it is completely different. >> why is that? >> i think if you were to allow congress the force, the purchase of health insurance on the private market, then you would therefore have to allow congress to regulate the food industry to force certain kinds of food to be consumed because it would be do misscally grown and help our economy. >> is there any constitutional problem with the purchase of broccoli or prohibiting them from purchasing? >> prohibiting them and taking it off the market is different. i would respectfully suggest that is forcing consumption. >> first of all, is there a constitutional problem with that in your view? >> perhaps. >> well then, why is that?

>> because the -- they are engaged in an activity. the farmers growing broccoli, the distributors distributing broccoli. >> it's the same, isn't it? >> no, the difference is someone may choose not to eat broccoli. the government would say you must eat broccoli. it's the same where he would say i don't want to grow weed, i don't want to be regulated. >> you choose the broccoli, the -- the facts are the same. >> it says in wickard that stimulation and prohibition equally are with congress regulatory authority. is that what you're asking to address? >> what that would be is congress forcing wicker to consume wheat.

congress forcing anyone to consume a particular product because it's good for the market and puts up prices and it's healthy and would relief stress on health care. that is an unprecedented reach of the congress clause where congress would force individuals to actually perfect or consume a particular product -- >> we hear a lot more about due process before we ever heard about commerce clause. >> european, i would suggest that we haven't heard about that because it's beyond the outer reach of the constitution. it's certainly something -- >> i appreciate, i want to be sure i understand what you're saying, though. you acknowledge that a prohibition on transfat would not violate the commerce clause or prohibition. >> regulating the producers and the distributors of it to take it off the market, yes, but to force it into -- >> i'm sorry, would it violate the commerce clause or would it

not? >> perhaps it wouldn't violate the commerce clause, but it would violate the commerce clause if you went the other way. and someone who is sitting there idly in their home and now therefore because of a federal law is required to consume broccoli but they don't want to consume. to consume or grow wheat that they don't want to consume or grow. >> can i ask you about this argument, again, this is on my team. -- time. i couldn't understand why you didn't qualify for the lidge conscience extension. could you explain that? >> the difference is our documents that, it violates the clause -- >> about that. >> the reason we don't qualify for that is because that particular language is basically focused on the amish, old order amish. >> doesn't it say established

tenets for teaching, you say you're christians. that means you're people that have established tenets or teaching since 15950. >> yeah. >> that would seem to fit right in that -- >> it doesn't fit into the history of the way that language has ever been used. >> it's the plain language. >> perhaps it fits into the plain language, but it's not going to fit into the reason why it was actually put there. it's actually referring to an extension in -- exemption and unemployment. placing a penalty because they don't belong to a particularly recognized sect or religion. >> the plain language you might be under, but because the history of it, amish wouldn't fall in that. >> this language is exactly the same language, i would say that's true, your honor. the way this language has been

used and all used in a very, very narrow perspective and never just for religions in general. anyone that has attempted to do that has not been successful except the old order amish or christian scientists. outside of that, there is very, very limited exemptions. we are penalized because we don't belong to a recognized religious sect. >> mr. staver, you talk about inactivity and i have been trying to find out where in the cases that you use inactivity, you correct me, activity is used. and i take it that -- i understand you have determined what is activity would be necessary and you therefore have come to the conclusion this is an inactivity. >> yes, every case that has

referred to commerce uses the word economic or certainly activity or activities. >> but never inactive. >> never inactivities and the context -- >> the early cases don't talk about inactivity at all. >> back to the very early cases. >> we are supposed to go back to those cases. those people were around when the constitution was written. >> i would say that we go back to them and we go back to the intent of article i. the very definition -- >> you're just not claiming that they're crazy. >> no. those cases inherent in the definition and discussion of what was at issue there is an act of voluntary choice, that's an activity that effects commerce in some way. now it may be interstate in the early cases and intrastate in some of the later cases, but it's still an activity. and if you remove out those

specific factual situations and you then transfer it into the wicker case, someone is just sitting there doing nothing, they would not even at the united states supreme court. in raich if they were not growing, there would be no supreme court case. >> is that just going up and down the extraction ladder? >> the cases wicker and raich and lopez and justice kennedy's opinion in lopez, they all emphasize several things. but the practical, the very practical character of congress' power and the requirement that courts defer when appropriate to the expanse of congress's power on this. in wicker emphasizes, there is no formula. there is no mathematical precision.

so when you -- again if you could address, why doesn't it test in abstraction to say that inactivity is unreefable? >> i think it's critical to having some kind of defineable end or understanding of the reach of the commerce clause. >> so you want a formula? >> i would say that in essence, there would have to be some kind of activity that would be involved. and, in fact, if you removed activity as a requirement or as a significant component, then there would be no defineable limits on the commerce clause. it would turn the federal government into a police power intruding on the individual activities of the states. there would be literally no reach or end or limit to what congress could do under article i. >> let me ask the question because i need you to connect the dots for me again. i want to go back to this

activity question because as i understand it, basically we have been talking about the commerce clause that when you're looking at the third prong, you need to have activities to be commerce, it's really commerce you're talking about. you're talking about things that affect commerce and the way we get there, if i understand it, correct me if i'm wrong is the necessary and proper clause. and through the necessary and proper clause, we then can extrapolate that it is enough if there is a national problem that congress can correct. and given that basis, does it matter whether it's an activity or inactivity or that we look at it from that perspective? i'm stuck on that. >> certainly i think it does matter. if you go to the necessary and proper clause, it doesn't give an independent ground of authorities beyond the commerce clause. the commerce clause does not say necessary and proper clause cannot salvage an otherwise

unconstitutional reach beyond the commerce clause. i think if you look at the necessary and proper clause, it gives congress the authority to regulate anything that is necessary to the underlying otherwise constitutional regulation. comstock is one of the most recent commerce clause cases. it looks at five components. several of those failed here. one is the federal involvement has been limited with regards to -- >> i'm glad you brought up comstock because that's an interesting application of the necessary and proper clause in the context of here and i'm still having some trouble determining what the right was there in that case. but that's another question. here i talk about the right in a comprehensive scheme that exists here why not in this context, it's an activity-inactivity if it's part of this necessary and proper clause and congress has the authority to do this?

>> if you look at justice kennedy's concurrence in the case. there was no designated enumerated power in the first case. if you look with respect to the adam walsh act that allowed the federal government to retain dangerous prisoners beyond incarceration, congress has been involved in the federal industry for a long time in the district of columbia. because of the postal service and so forth, they have to be able to prosecute crimes. therefore they need under the necessary and proper clause, prisons to be able to house them. they have been involved in the federal prison business since the beginning of the founding of this country. now, they already have in their sin car ration -- incarceration, they are still sexually dangerous. they have a choice to make. first of all, they defer to the states. they don't override -- >> that's true. >> they give up the right of

first refusal. >> no, they are in prison first and then the state. >> certainly they were in prison. once they are coming to the end of their term and they're now ready to be released -- >> there is not a requirement that they ask the states. >> no, they would actually -- one of the factors in that particular case is he had doesn't override the power of the particular state. they did give some notice to the states. they gave a notice to the states to see if they want to take that prisoner. if they didn't take it, they would reclaim it. >> i think you're getting a little far afield. >> let me look at the five factors of comstock that several of which are right here. one of the factors there was they had a long history of federal involvement in the prisons. here there is no such thing. >> there is certainly an enormous amount of federal activity in health care, is there not? >> well, we have a 1944 supreme court case followed bit 1945 act which says --

>> health care? >> health insurance would be later than insurance in general. >> you have health insurance, i'm talking about health care. there is an enormous amount of involvement by the federal government in health care. >> there is certainly involvement in the health care industry and so forth. this act says that congress will primarily allow states to regulate and license insurance and defer to the states. that's what we have done since 1945. >> it is congress' determination, you recognize that there is a supreme court case that congress under the commerce clause has the authority to regulate insurance. you don't challenge that, do you? congress doesn't have the authority to regulate commerce? >> not in interstate there are other commerce related insurance. certainly not. i don't challenge that.

going back to the points in comstock -- >> congress does have the authority to regulate health insurance, does it not? >> it has the authority to regulate those who participate in health insurance. comstock has a couple of other matters that are different. there you had a reasonable extension of an otherwise preexisting practice. you retain a prisoner longer than what that prisoner's term is. there is not a extension of a reasonable practice. it operates contrary to comstock. you have unprecedented states across the country that are making that claim. the power is brought with no limit. in comstock it was a very narrow extension of a power that was very narrow. this is a very broad application and expansion. if there is federal involvement, it goes beyond anything conceivable. >> if we move past the commerce

clause contextually, the necessary and power clause, on necessary, this case is clearly a slam-dunk for the government, isn't it? there is no question that the individual mandate is necessary for the achievement of congressional aims here? >> i would say it's not necessary. >> ok, that is an advocate's answer and i accept that advocate's answer. assuming that the court were to conclude that necessary is easily satisfied here, then it really comes down, doesn't it to whether the individual mandate is proper under justice scalia's analysis of the necessary and proper clause. would you agree with that conditionally subject to your earlier disagreement? >> i would say if it's within

congress authority and let the end be legitimate -- >> we are told in wicker that the commerce classen actments is to permit congress to exercise that authority unfeltered by anything other than what other division of the constitution might limit. it's right there in wicker. it's right there in wicker. i know you know that. so do you agree that we come down to is this court authorized to conclude that congress had a rational basis for concluding in the exercise of its authority under the commerce clause and the necessary and proper clause that the individual mandate was a proper element of this comprehensive regulation of the

health insurance and health care market? i would say we don't get there. but if we got there, then certainly this court could look at whether there is a rational fit and i think it looks more towards kennedy's concurrence that says rationale basis as it relates to commerce clause or necessary and proper clause is a more rigorous review than a typical rational basis test. >> so four 20 something working in virginia, graduated college and earning some money decides to take a summer weekend to ocean city, maryland, they're too long down route 50 on their way to the beach and the unthinkable happens and maryland state police bring in four medevacs. they're all taken back to shock trauma where the health care

professionals in baltimore do this wonderful miraculous job, not bringing just back to life but to a full and complete life. the bill is hundreds and hundreds of thousands of dollars. is it your submission that congress has no power to address an aggregate what we know happens every day in this country in the way they just described? >> your honor, certainly that is a compelling, emotional story of something that happens, a tragedy that happens on a regular basis. however, to reach that case or other cases cannot do so by the individual mandate. and, in fact, if you look at the individual mandate, looking at it from the rational review, it doesn't accomplish what congress says it will accomplish. the idea is you're going to have the guaranteed issue and

the rating. in order to have that, that will implode the insurance industry, seven states have tried it and seven states have realized the catastrophe. you bring in the forced individual mandate to increase the pool. >> so your argument now it's not wise? >> it's not even not wise, it's not even related to the overall goal because, for example, under this particular act, you can pay the penalty and not have insurance and you can go and be in the hospital and buy insurance while you're there on the operating table. >> won't those additional revenues whether they're tax revenues or penalties, i understand that's an issue, but won't those additional revenues going to the federal treasury help to offset the baseline costs? >> i think it doesn't. >> the federal government pays 35% of the costs for health care in this country. >> $95 in 2014 is not going to

offset that kind of health costs that you're talking about. >> it depends on how $95 are paid to the u.s. treasury. >> you also have this mandate that is in place -- >> you can use clause all you want. you got to know the other side. it would require many page answers to this question, that's fine. be sure you understand. >> let me wrap up with one other thing. you mentioned the taxing and spending clause, the government did not appeal an adverse rule in the district of columbia. they had 60 days to appeal that. that appeal ended april 25. they have allowed the taxing and spending clause to come to final order in the district of columbia. now they're raising it here. they realize they have no taxing and spending authority and they have dropped their

anti-injunction defense. >> why isn't this wrong? help me with that. you file a tax return that go to the secretary of the treasury. >> with regards to the individual mandates, the mandates are penalties. you look at the -- >> if congress instead called them a pact, exactlyly the same. it's not called a penalty. it's exactly the same, no other difference. >> if it was a revenue-generating -- >> it generates revenue. there is is $4 billion. >> even penalties generate revenue. >> indeed. >> but the fact is here what you have is legislative history that you look at the -- >> i understand that. i understand the history. i'm asking a different question. if we had legislative history and we had this provision, you call this a pact and not a penalty, would you concede it wasn't? >> no, your honor, i wouldn't.

>> why is it so important to call it a penalty? >> if you look at it consistent with what it does. it's not primarily to raise money for the government. >> how come it doesn't matter? >> it certainly has weight. no question about that. >> we don't weigh that heavily or would we -- >> you would weigh that heavyly, certainly you would. there are some things called a pacts and they're called a penalty. >> they didn't call it a tax, they called today penalty. >> thank you very much. >> thank you. >> on my clock you have 45 minutes. >> you're not required to use it all? >> i'm sorry. i take that back. 40 minutes. >> thank you very much, judge motz and play it plea the court, after years of study and debate and effort hearing tragic stories like the one

judge davis talked about about the sad road trip and after reviewing a lot of hard evidence about the health care markets, congress has the affordable act. congress made specific findings in the act including first that the minimum coverage provision requirement regulates activity that is commercial and economic in nature, economic and financial -- >> [inaudible] >> that is how congress said it was. it was financial decisions about how and when health care is paid for and here are convention to you is that the activity is participation in the health care market and that is what is going on at an unprecedented, at a huge rate, it's virtually universal. >> what we want to do is not participate in the health care market. that activity doesn't reach us. >> i am saying and i think congress was saying that it's almost a universal feature, judge motz, of our existence

that we do use health care regardless whether we think we might not want to or in your mind decide not to. one cannot opt out of it on an individual basis because we don't know the chance of getting hit by a bus, get struck by cancer and providers can't opt out of it -- >> there is a comprehensive regulation out here. we want to get to the issue that seems like -- he says this is an inactivity, the decision of a person not to dip into the market, not to buy insurance and that that in and of itself does not meet that third prong of being substantially affected commerce. >> to be more careful than ordinarily one would in crossing street. >> i'll start by saying, judge wynn, that there are different

sources of authorities that the government is invocing. >> the choice there is is i want to know what is -- where are the two of you differing on this? as i understand it, it is inactivity and the characterization of this inactivity on the reich case, there are conditions to be an inactivity. and do you agree or disagree with that characterization? >> i generally disagree, but let me first set out what the three bases of authority that are congress is invoking here and get to the specific question that you have of activity versus inactivity. does it substantially affect commerce and that's the congressional finding and whether or not the decision to insure affects commerce. the necessary and proper clause, even if it doesn't itself constitute activity, is it incidental to an overall scheme that it itself is

justified by the commerce and justice sca lela's opinion and the like. the third is the tax power. those are the three independent bases. congress made specific findings on each of them. you have asked whether or not we have a different definition of activity or inactivity and i guess what we're saying here, judge wynn, congress is regulating activity. the activity is participation in the health care markets. as i was saying to judge motz that, is a virtually universal feature of human existence. everyone is going to seek health care. nobody can know precisely when. providers can't opt out of providing it. if you show up destitute, there is still a duty to treat. and it's sporadic and unknowable. this makes this market different than some of the fancyful things. >> you have gone beyond the initial step, first, before we

get to the participating health care saying i guess you don't need at this point, basically making a choice as to whether you're going to get health insurance and the characterization there is that is an inactivity to require someone to do something they don't have to do, that is to get insurance is a characterization. the issue there as opposed to the choice for whether to participate in the system. >> i guess maybe the best way of putting our arguments is we're not focusing on inactivity or activity. those words they eventually can break down semantically. we're asking what the commerce clause is about. we're asking does the conduct that is being regulated have a substantial effect on commerce? here congress made specific findings that when people self-finance their health care, it raises the cost to you and me. it increases the total for uncompensated costs is $43

billion according to congress in a specific finding. that raises the average family premium by $1,000 a year, that prices an untold number of people out of the insurance markets all together. what congress was doing was regulating the means of payment, the method of payment by which health care, something that everyone seeks, is going to be paid for. >> so it's about the payment? >> exactly. >> we go back to the broccoli example, it wasn't about con situation, it was about the payment for the broccoli, is that where you're going with this? >> the broccoli example, demonstrating on the way it's served up, excuse the phrase, is that if it is, if the question is can congress force someone to buy broccoli? well, that's not the question you all are dealing with. that may be a very interesting question. the congress is not asking people to buy something they wouldn't otherwise buy. everyone uses health care.

>> even though there is always a concern if we make a ruling here, does this then mean that. that's why it comes up. we're not dealing with broccoli, but the question is are we dealing with it by a ruling that will go in your direction that would end up making that position. >> i quite agree, judge wynn, it's important to check the logic of the government's position. i'm saying that the logic is not as mr. staver says, forcing someone to buy something they wouldn't buy, broccoli or health care and the like. >> are we talking about health care or health insurance? the government wants to roll all of those things into one. you are in fact, the statute does in fact require people to buy health insurance or you pay a premium, tax, penalty,

whatever, you pay something, right? >> absolutely. it does force that, is there another time in which congress is invoking its power under the commerce clause as required equal to take some action? >> i think the answer to that is yes. let me first answer the predicate to your question which is congress is acting on the insurance market as opposed to the health care market. i think that is an artificial distinction -- congress saw these as an artificial distinction. it is two related markets. >> that might be true. but isn't it a fact that health insurance as opposed to other kinds of insurance is mostly regulated in this country by state? >> it's regulated in part by state and the federal. >> insurance can be regulated under the commerce clause by

congress, you know that from the supreme court, but in fact that hasn't been much of a position except for the relatively new statute, congressional regulation of either health care or -- how do you put it? >> in 1954. the internal revenue code -- >> in the 1800's? >> absolutely. the health care market is something that really does be in the middle half of the 20th century. >> there aren't any 1800 cases? >> with respect to health care insurance -- >> with respect to commerce clause regulation of health care or health insurance. >> the government has been involved in health care in a number of ways from the start. >> what? >> quarantine statutes, ship masters, but here my

fundamental point is congress isn't regulated the health insurance as an end. it's regulated it as a means. the end is more affordable health care for everyone for the reasons that judge davis was speaking of and congress i don't think under the supreme court's precedence will review them under the strict commerce clause precedence like lopez or morrison or under the necessary and proper ones like comstock. it's limited to simply one means of trying to solve a problem. congress has a variety of ways. there is a flexibility which as davis called an economic practicality as to what congress is able to do when responding to a massive problem, 15 million uninsured right now and millions of americans who are priced out of the insurance market that are excluded all together. >> with regard to the finding, i'm curious what morrison has

done to congressional findings in commerce clause cases. can you address that? it's important, but i'm not sure how important it remains after morrisson? >> they talk about the role in congressional findings and our position is the congressional findings are helpful but not necessary. it is, of course, the province of this court to be able to review those findings, applying federal principals of law to them and here, judge motz asked before about the precedence and so on. i think the question about unprecedented is really one about them. there is a strong presumption of constitutionality, here they are coming in and saying that congress is unable to deal with it, the massive interstate

economic problem, that it is powerless to deal with it because it violates the commerce clause. >> the first time that congress has relied on the third prong. it's an affirmative obligation on people. do you disagree with that >> the first time to impose an affirmative obligation on people relying on the commerce clause? >> is there a predicate? >> it depends on how you characterize it. as judge wynn was saying to my friend earlier, some of the commerce clause cases could be characterized as forcing people into the market, forcing people to buy wheat in wicker, forcing people who refused to serve in part of the hotel. if the question is this landmark and in some ways unprecedented legislation, i think the answer is yes. it's dealing with a massive social problem on a big scale

and resolved by settled legal principles. >> what about your militia example, was that raising an army or commerce clause? >> president washington didn't specify which power he invoked with that act. it does provide an example for the court to use in seeing the government, requiring the purchase and as was said, the test is not which specific clause was invoked, it's rather in deciding what is necessary and proper the court can look to all sorts of enumerated powers and the means were that were used. if you were only talking about the means, only talking about the end, everyone agrees is legitimate, the removal of the barriers to help insurance in the market. and then on the means question, the supreme court has been absolutely clear that that is a

question to which this court must give substantial deference to congress. i said there were three different arguments. one we have been talking about thus far which is whether or not the decision to self-insure substantially affects interstate commerce. there is a second argument that judge wynn was getting at was the necessary and proper clause argument. >> when i read the government's brief, it seemed to me that the government regarded the necessary and proper clause as sort of congruent with one portion of the commerce law and is that the government's position, or do you think that something could be unconstitutional or not past commerce clause analysis and could still be saved by the necessary and proper clause. you come into this problem