States To Feds On Weed Policy: Cash Me Outside How Bow Dah?

‘Tis true, Jeff Sessions is a serious downer, a buzz killer for the ages. As long feared, Attorney General Jeff Sessions is revoking an Obama-era directive–the so-called ‘Cole memo’–that restrained enforcement of federal marijuana laws in states that had legalized it. But things are not going to be so easy for this dastardly ve-haf-ways-to-make-you-stop-smoking Sessions brigade; the proverbial genie has escaped the bottle. The national bowl has been packed and too many people–rich and white–are toking on it it. Morals and laws and principles and a great deal else often gives way in the face of lucre of the filthy kind. For a long time, the War on Drugs was prosecuted with as much zeal as it was because it was fueled by both racism and by the financial gains that flowed directly to law enforcement agencies’ budgets and operations. The tide turned on that front–thanks to a combination of fatigue, common sense, increased public awareness of the War on Drugs’ racist components, and finally, the plain, simple, uncontrovertible financial common sense of declaring a ceasefire and going over to a domain of decriminalization and legalization and subsequent tax revenue collection instead.

Several years on from Colorado’s landmark decision to legalize marijuana for recreational use, that financial common sense has been confirmed:

Marijuana Business Daily, an industry trade publication, estimated last year that legal marijuana employed between 165,000 and 230,000 workers, or between two and three times as many people as the coal mining industry. Last year a market research firm for the marijuana industry, Arcview Research, estimated that it generated $6.7 billion in revenue in 2016, and projected sales to climb to $21 billion by 2021. Those sales are generating significant tax revenue in states with legal recreational pot. In Colorado, for instance, marijuana sales between 2014 and 2017 brought in roughly $500 million in taxes, roughly half of which has gone to the state’s public school system. Washington state collected about $280 million in marijuana taxes in fiscal year 2017, with half of that money going to fund health-care services for people without insurance coverage.

Unsurprisingly, such numbers are backed up by popular opinion–close to sixty percent of Americans support legalization in some shape or form for marijuana, whether recreational or medical. But balance sheets speak far louder than opinion surveys, and this time around, the War on Drugs will be the War on Legal and Extremely Financially Lucrative Pot Business Run By Largely White Folk. Those whose interests will be affected by this new declaration of hostilities are considerably more financially and politically empowered than the ones targeted in the last legal crackdown on marijuana; those folks were darker, they lived in housing projects, and were easily made the target of a penal crackdown. This time around, the support is fueled by dollars and Democrats and the donor class alike. The official Twitter account of the Colorado State Senate Democratic Caucus should have the last word on this–and I suspect it will:

We’ll give Jeff Sessions our legal pot when he pries it from our warm, extremely interesting to look at hands.

Mass Incarceration And The ‘Overfederalization’ Of Crime

America’s mass incarceration is the bastard child of many. Among them: racism, the War on Drugs (itself a racist business), the evisceration of the Constitution through ideological interpretive strategies, prosecutorial misconduct, police brutality, and so on. Yet other culprits may be found elsewhere, in other precincts of the legal and political infrastructure of the nation.

In ‘The Balance of Power Between The Federal Government and the States’ (in: Alan Brinkley, Nelson W. Polsby, Kathleen M. Sullivan eds., New Federalist Papers: Essays in Defense of the Constitution, WW. Norton, New York, 1997), Kathleen M. Sullivan writes:

[T]here may be reason for the courts to draw outer limits to federal power when the structural, political, and cultural safeguards of federalism break down and the federal government encroaches needlessly upon areas traditionally and sensibly regulated by the states. The worst example in our recent politics is the overfederalization of crime. The Constitution names only three crimes: counterfeiting coins or securities, piracy on the high seas, and treason. But Congress has created more than three thousand federal crimes under the power to regulate interstate commerce. There are many crimes that should be federal, such as bombing federal buildings or sending explosives through the mail. But should it also be a federal crime to grow marijuana at home or to hijack a car around the corner? Federal crimes have proliferated not because it is good crime policy but because it is good politics: as Chief Justice Rehnquist has observed, “the political combination of creating a federal offense and attaching a mandatory minimum sentence has become a veritable siren song for Congress,” loud enough to drown out any careful consideration of the comparative advantages of state and federal crime control.

Shifting crime control from the states to the federal government in purely local cases diverts the work of federal investigators, prosecutors, and judges from areas of greater federal need. It also fills federal prisons with non-violent and first-time offenders who occupy space that could better be used for violent, career criminals whose operations cross state lines. There is no reason why the new federal crimes may not be handled by the states, as they have been traditionally, unless they involve multistate enterprises or intrastate enterprises so vast as to overwhelm the resources of state authorities.

The federalization of a particular crime acts as a ‘promotion’ of sorts: it elevates the perceived undesirability and dangerousness of the crime; it thus clears the way for harsher sentencing. As Rehnquist’s remark above suggests, the legal system’s response to a particular crime may be viewed as qualitatively and quantitatively inferior till the time it federalizes it and adds a harsh minimum sentence; only such a combination will assuage the retributivist impulse that so seems to animate the punishment policies of our penal system. Moreover, the current state of affairs lends itself to a situation where a conservatively inclined Supreme Court could, under the guise of tilting this balance of power back to the states, strike down progressive legislation. As Martin Garbus noted in Courting Disaster: The Supreme Court and the Unmaking of American Law (Henry Holt, New York, 2002, pp. 128-130) the Supreme Court struck down, precisely as part of an ideological anti-federalist strategy, in United States vs. Lopez“the first United States Supreme Court case since the New Deal to set limits to Congress’s power under the Commerce Clause of the United States Constitution“, an act of Congress criminalizing possession of a handgun at school.

The Supreme Court’s Commerce clause rulings helped unite the nation, but as the history of mass incarceration shows, it has helped create a nation within a nation too, one locked up and discriminated against for life.

 

Richard Epstein’s Overdetermined Critique of the Roberts Ruling

Richard Epstein offers an interesting critique–based on the alleged inseparability of the power to regulate commerce and the power to tax–of John Roberts’ ruling in the ACA case. If it’s not an activity the government can regulate, then it’s not something the government can tax either. Thus, Justice Roberts should have struck down the individual mandate:

As a matter of constitutional text, legal history and logic, the power to regulate commerce and the power to tax should not be separated. It is not good for the court or the country that the chief justice’s position in such an important case is confused at its core.

Epstein finds ample precedent for his understanding of the inseparability of the power to regulate and the power to tax:

In the Child Labor Tax case of 1922, the Supreme Court refused to uphold a tax equal to 10 percent of the net profits of any firm that shipped goods into interstate commerce if the firm used child labor anywhere in its plants. Chief Justice William Howard Taft noted that…Hammer v. Dagenhart (1918) forbade Congress to use its commerce power to prohibit outright the shipment of ordinary goods across state lines because they were made in factories that used child labor. A heavy tax…could not be used to mount an end run around this constitutional obstacle to its own power.

The same point was reinforced in 1936 in United States v. Butler, which struck down a tax on agricultural commodities because it sought to achieve the then unconstitutional regulatory aim of reducing the total acreage in agricultural production. After the 1942 case Wickard v. Filburn, when the Commerce Clause was held to permit such regulation, the tax became just as permissible as direct regulation. Wickard expanded the scope of federal power, but it did nothing to upset the constitutional parity between the taxing and commerce powers.

So Epstein only needs the inseparability doctrine for his argument to work. For having found the activity in question–non-participation in the healthcare market–was not something the government could regulate via the Commerce clause, then it failed to be an activity the government could tax either.

But Epstein seems to also think that the tax argument fails on its own merits. For he offers us an ‘originalist’ reading of the relevant Constitutional clause:

By giving Congress independent powers over taxation and other revenue sources, the Constitution ended that dependency. But as a quid pro quo, the Constitution also restricted the use of these revenues to classical public goods — benefits that must be given to all citizens, if given to any — like paying off national debts and paying for the nation’s defense. General welfare, mentioned in parallel with these two phrases, is best read as covering only matters that advance the welfare of the United States as a whole. The redistribution of income, or “transfer payments” among citizens, like those mandated under the Affordable Care Act, doesn’t qualify for taxation in this originalist reading of the Constitution.

This is a curious business now. Remember, this supposedly optimal reading is not required for Epstein’s argument to work. It does however, let him deploy some additional ideological machinery.  It suggests that ‘healthcare’ is not a ‘classical public good’ like the payment of national debts or the budgetary requirements of national defense.  It suggests that ‘healthcare’ cannot thus, be understood as ‘general welfare,’ which rather is to be understood in more abstract terms as that which might benefit the nation–but presumably, not its people–‘as a whole.’ (Note that provisions for healthcare are defined as ‘redistribution of income’–the horror!)

The real problem, it emerges, is not the separation of the powers to regulate and tax for which, in fact, there is a great deal of precedent; witness, for instance, the greater reliance on taxation, as opposed to direct regulation, of alcohol and tobacco consumption. The substantive issue for Epstein is that Roberts has suggested that ‘healthcare’ might have something to do with ‘public goods,’ with ‘general welfare.’ In short, it might be a business that government could concern itself with.

Justice Roberts is Playing a Long Game

Time now to tabulate the damage done by yesterday’s Supreme Court ruling in  National Federation of Independent Business et al. vs Sebelius, Secretary of Health and Human Services et al. While Justice Roberts has made himself look extremely distinguished, statesmanlike, non-partisan, and touchingly concerned about his place in posterity, an appraisal that I’m sure he was soaking up yesterday, he might be playing a long game, gutting the Commerce Clause as  a ‘fundamental lever of constitutional power for the left’–from Corey Robin, who I’m sure will hand out some contrarian commentary on this ruling pretty soon–, redefining  the relationship between Federal government and State administrations, and further problematizing the notion of judicial restraint. (I realize that Justice Roberts is only one of five who signed on to the majority ruling, but I suspect he had a great deal to do with its crafting.)

My unease was sparked by the first few comments I read on the SCOTUS live blog yesterday:

[T]he entire ACA is upheld, with the exception that the federal government’s power to terminate states’ Medicaid funds is narrowly read.

A reminder. Part of the majority opinion reads:

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.” (p. 55)

This is an interesting claim to make, for as Neal Katyal notes,

[U]ntil now, it had been understood that when the federal government gave money to a state in exchange for the state’s doing something, the federal government was free to do so as long as a reasonable relationship existed between the federal funds and the act the federal government wanted the state to perform.

In potentially ominous language, the decision says, for the first time, that such a threat is coercive and that the states cannot be penalized for not expanding their Medicaid coverage after receiving funds. And it does so in the context of Medicaid, which Congress created and can alter, amend or abolish at any time.

And in striking down the individual mandate under the commerce clause, especially by relying on the specious distinction between activity and inactivity in the healthcare market, the ruling is even more problematic.  (Pages 16-27 of the ruling are worth reading in their entirety.)

These aspects of the ruling have now been adequately commented on. Indeed, those opposed to the ACA see it as a strategic victory, one likely to have long-term repercussions, an especially significant factor given the long-term conservative bent this Court is likely to have. Randy Barnett, for instance, notes that,

Today, the Roberts Court reaffirmed the “first principle” announced by Chief Justice Rehnquist some 17 years ago in Lopez: the federal government is one of limited and enumerated powers. It accepted all of our arguments about why the individual insurance mandate exceeded the commerce power  “The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause,” wrote Chief Justice Roberts. “That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.”  Then the Court went farther to invalidate the withholding of existing Medicaid funding as coercive, thereby finding an enforceable limit on the Spending Power.

Lastly, and even more interestingly, the court reasoned its way to its conclusions in a way that is sure to raise questions about judicial restraint. Katyal again:

The court had to rewrite the statute to save it from a constitutional problem by eliminating the part of the law that permitted the federal government to withdraw Medicaid financing. The result, as Justice Anthony M. Kennedy warned, was effectively to leave in place a statute that Congress never enacted….[Thus] courts are given the power to rewrite legislation altogether, and leave legislation in place (like health care) in a form that Congress might never have approved and that would be difficult to ever repeal.

Of equal concern is the court’s analysis of the constitutionality of the individual mandate. While the court upheld the mandate, it did so by rejecting the federal government’s claim that it was regulating commerce. There is no judicial precedent or language in the Constitution that compelled that result; instead, the majority reasoned by constitutional inference.

The Supreme Court’s reliance on this ruling in other cases that require the relationship between the Center and states to be clarified will soon make clear what its true significance really is.